iSun, Inc.

Greetings and welcome to the ISON Energy second quarter 2023 earnings conference call. At this time all participants are in a listen only mode and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Mary Conway. Ma'am, you may begin.

Thank you, operator, and good morning. We are pleased to welcome you to ISUN's conference call, where we will discuss financial and operating results for the second quarter of 2023. Jeffrey Pack, Chairman and Chief Executive Officer, will provide an update on our operating performance in the quarter, along with our outlook for 2023. John Sullivan, Chief Financial Officer, will provide an overview of the second quarter 2023 financial results. After our prepared remarks today, we will open the lines to address any questions. As a reminder, the earnings release that was issued this morning, and which can be found on ISUN's investors website at www.isunenergy.com, includes financial disclosures and reconciliations for non-GAAP financial measures. Any comments that we make on today's call may include forward-looking statements that refer to management's expectations or future predictions. These statements are made as of today and management undertakes no obligation to update these forward-looking statements in the future. Such statements are subject to risks and uncertainties that could cause actual results to differ from management's expectations. With that, I will now turn it over to our CEO, Jeff Peck. Jeff.

Thank you. Good morning, everyone, and thanks for joining us today. I'm pleased to share an update on Iceland's progress in the second quarter of 2023 and review our plans for the remainder of this year. We are pleased with the strong performance our team has generated in the second quarter of 2023. It was a terrific quarter. We had a robust beat on the top line with revenues up more than 50% year over year, well above the street's consensus, and importantly, we are doing precisely what we said we would do, scale the business, reduce our losses as we serve our customers and win new business. Our commercial and industrial group is driving excellent results, and our residential group, Sun Common, continues to see high customer satisfaction and referrals despite a short-term slowdown in residential demand. And we are seeing continued opportunities in the EV infrastructure segment and our origination team is helping to ensure that we continue to build backlog to sustain that growth. Our success in winning significant contracts in solar and EV infrastructure, as well as more residential business, despite some of the headwinds in that segment, provides us with heightened confidence in our ability to meet the annual financial targets that we shared earlier, and we are affirming those today, both in revenue and profitability. We remain dedicated to executing on our strategic plan to achieve our mission and help accelerate the adoption of solar energy. Today I want to touch on a few points that illustrate what makes ISUN different in the solar energy industry and what has been driving our recent success. I also want to share some thoughts on trends we are seeing and how we believe we are well-positioned for continued growth as we continue to scale our business. It starts with our platform approach. encompassing the full life cycle of providing solar energy solutions from origination and development to construction and management across industry segments. We maintain that this approach is a competitive differentiating advantage that positions us for long-term sustainable growth. We see the proof of this strategy and execution in the meaningful year-over-year revenue growth we have generated in the first half of this year, increasing revenues more than 34% compared to the first half of 2022. Quickly reviewing our second quarter results, revenue increased by 51.8% to 25 million. Gross margins rose by 90 basis points to 23.7%, up from 22.8% in 2022's second quarter. As our efficiency efforts have enabled more of the top line, it dropped to the bottom line. In the second quarter, 37% of our revenue came from the residential segment, where gross margin tends to be higher. We remain confident that as we scale and drive synergies and efficiencies throughout the organization, we will continue to expand our margins. As of June 30, 2023, our total backlog was 161.8 million, and our pipeline remained at 1.6 gigawatts of projects as of the end of the second quarter of 2023. The size of the backlog and pipeline underscore the increased customer demand we are experiencing, as well as the effectiveness of our efforts to originate more projects and expand to more states, all part of our ongoing strategic initiatives. Our success also reflects a high level of customer satisfaction, specifically in the residential segment, which generates strong referrals, creating a lower customer acquisition Similarly, we see a referral impact in our CNI group as developers elect to work with us again and again on their projects because they see how our involvement keeps them on track, reducing unnecessary delays and, of course, costs. Let me share a few words about the performance of our three divisions in the past quarter. The residential division did well despite the backdrop of a more sluggish residential segment across the industry, reflecting the impact of higher interest rates on home improvement loans. We continue to build more business and expect a heavy period of installations in the coming quarters as we move into continuous states beyond New England and New York. The commercial and industrial division, which we have combined as of the beginning of 2023, is generating very strong results this year. More than 62% of our revenue in the second quarter. Our origination team, which is based in our utility segment, is assisting in this effort. as it focuses on initiating projects that are then turned over to the CNI Division to execute. We are continuing to work through our backlog and adding more business to the backlog through contract wins. Based on the results we've seen thus far, including enhancing our labor utilization, we are quite pleased with the decision to combine the commercial and industrial segments. Our Utility and Development Division continues to face delays, once again something we've seen across the industry. Although we continue to increase the backlog, the group is addressing. These project delays around expected implementation depressed revenues generated in the second quarter. We continue to believe the projects will move forward beginning this year, enabling the resulting revenues to be recognized later on this year or early in 2024. The development and engineering team has provided invaluable support to our residential and C&I divisions as we continue to integrate and drive operating efficiency throughout the organization. Our teams bring proven expertise and knowledge, which is more valuable in these volatile times than ever before. This creates a strong customer relationship, leading to contract awards across our business. In the second quarter, we added $8 million in new business. In terms of the solar landscape, we remain optimistic and enthusiastic. We've seen strong evidence that the CNI segment is scaling nicely, responding effectively to increased customer demand with expanded teams while ensuring that our labor utilization is optimized. That customer demand is not slowing, and we are finding it all over the country. The residential segment has been more sluggish, as I described, but the back half of the year is typically a more intensive one for residential installs in our markets. And we have ample backlog to execute in this segment. Our origination team is producing more opportunities that will eventually be executed largely by our C&I segment, and the Utility and Development Division continue to push projects forward and provide valuable services throughout the organization. In sum, we remain convinced that the IRA legislation passed last year will afford Iceland and the industry genuine benefits, even as we wait to finalize language and rules from the Treasury Department regarding tax credits and other elements. We do expect more specific rules, and the removal of uncertainty will increase the value of solar assets, those in development as well as those under construction, which in our case will lead to a higher valuation of our pipeline as it spurs increased demand that we will address in 2024 and beyond. In 2023, considering all of the evolving macroeconomic factors, we expect to continue to demonstrate strong growth and attain operating profitability along with expanded margins. Thus, we are affirming our expectations for total revenues in fiscal year 2023 of between $95 and $100 million, reflecting a 24% to 31% increase over total revenues in 2022. along with gross margin expansion on an annual basis and full-year EBITDA profitability. With that, I'll now turn the floor over to John.