Genie Energy Ltd.

Good morning and welcome to the Gini Energy Limited's first quarter 2025 earnings call. In today's presentation Gini Energy Management will discuss Gini's financial and operational results for the three-month period ended March 31st 2025. During prepared remarks by Genie Energy's Chief Executive Officer Michael Stein and Chief Financial Officer Avi Golden, all participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the spare key followed by zero. After Avi Golden's remarks, Michael and Avi will take questions from investors. Any forward-looking statements made during this conference call, either in the prepared remarks or in the Q&A session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates. These risks and uncertainties include, but are not limited to, specific risks and uncertainties discussed in the reports that Gini Energy filed periodically with the SEC. Gini Energy assumes no obligation either to update any forward-looking statements that they have made or may make, or to update the factors that may cause actual results to differ materially from those that they forecast. In their presentation or in the Q&A session, Genie Energy's management may make reference to non-GAAP measures, including adjusted EBITDA, non-GAAP net income, and non-GAAP earnings per share. The schedule provided in the Genie Energy earnings release reconciles adjusted EBITDA, non-GAAP net income, and non-GAAP earnings per share to the nearest corresponding GAAP measures. Please note, the GME Energy earnings release is available on the investor relations page of the GME website. The earnings release has also been filed on Form 8K with the SEC. I will now turn the conference over to Michael Stein.

Thank you, Operator. Our first quarter featured strong operational and financial results highlighted by robust increases in revenue, profitability, and cash generation compared to the year-ago quarter. This quarter, is the first quarter we have had in several years where the year-over-year comparative results for our retail energy business reflect what we consider to be normalized results in both periods. In 2022, and to a lesser extent in 2023, our retail energy business was able to achieve exceptional margins by optimizing our commodity market positions during relatively volatile energy markets. As a result, year-over-year growth rates, while strong, were disadvantaged during much of 2023 and 2024. For Q1 2025, GRE is back at a reasonable year-over-year comparative baseline, with margins in what we believe to be a sustainable range for both quarters. At GRE, the significant investments we made in 2024 to expand our customer base fueled a year-over-year increase of over 48,000 net new meters, The end of the quarter was approximately 413,000 meters served, comprising 402,000 RCEs. The meter increase, in combination with a stable commodity pricing environment, enabled GRE to increase both revenue and income from operations by 18% compared to the year-ago quarter. Our meter growth reflects deep penetration of our existing markets, supplemented by expansion to new states. As I mentioned last quarter, we recently began to market in California, and we expect to begin offering gas and consumption in the second quarter. Customer churn in first quarter was 5.5%, unchanged from the year of a quarter, and just a 10 basis point increase from the fourth quarter last year. I credit our comprehensive customer retention program for maintaining churn at these levels. Without that focus effort, the strong growth in our customer base over the last year would likely have pressured churn upward. At GRU, we continue to advance our pipeline of utility-scale development projects. The most mature project in our development pipeline, a community solar project in Lansing, New York, is on track for completion as early as the third quarter of this year. We expect it will become EBITDA-created immediately once online. Once completed, the Lansing project will join our operational portfolio, which continues to perform in line with our expectations. Also within GRU, our diversity energy brokerage business continues to perform very well. A year ago, this business was EBITDA-negative, and it is now generating profit cash flow and is on track to become an increasingly important contributor to our bottom-line results. Before turning the call over to Adi, I want to point out that Genie returned $3.9 million to our stockholders during the first quarter through our quarterly dividend and share repurchases. At March 31st, we had $210 million in cash restricted cash and marketable securities compared to $201 million at the end of 2024. With our strong balance sheet, robust cash flows, and with the stock at current levels, we expect to continue to repurchase our shares in the coming quarters. Now, here is Adi.

Thank you, Michael, and thanks to everyone on the call for joining us this morning. My remarks today cover financial results for the three-month end of March 31, 2025. In my commentary on the quarterly results, I will compare the results of the first quarter of 2025 to the first quarter of 2024 to remove from consideration the seasonal factors that impact our results, particularly within our retail energy business. The first quarter is typically characterized by relatively elevated levels of electricity and gas consumption, as it includes the majority of the winter's peak heating season within our surrogate areas. Our results were quite good, highlighted by strong top-line growth and significantly improved bottom-line performance. Compounded revenue in the quarter increased 14.3%, or $17.1 million, to $136.8 million, driven by strong performance in junior retail energy. At GRE, revenue jumped 17.8% to $132.5 million, As Michael pointed out, the increase was primarily a function of the investments that we made through our customer base last year, boosted by increased per-meter consumption of both electricity and natural gas during the quarter. Electricity revenue climbed 16.4% to $104.1 million, contributing 78.6% of Jerry's range. Kilowatt-hours sold increased 23.5%. The impact of that increase in consumption was partially offset by a 5.7% decrease in the average revenue for kilowatt-hours sold. Revenue from the sale of natural gas increased 26.8% in the first quarter to $28.4 million, reflecting increases in both therms sold and revenues for therms sold. ACRU first quarter revenue decreased 40% to $4.3 million. The revenue decline was largely driven by genius solar and reflects the impact of our decision to pivot from the commercial projects market. ACRU diversity achieved another record quarter, achieving $3.8 million in revenue, a 55% year-over-year increase. Consolidated gross profit increased 10.6% to $37.4 million, while gross margin decreased 90 basis points to 27.3%. The increase in gross profit was driven by the expansion of Jerry's customer base, while the decrease in gross margin was driven by lower margins on electricity sales, specifically the acquisition of profitable or lower-margin units for our industrial aggregation deal program. Consolidated FG may increase 4.3% or $1 million to $23.9 The fairly strong quarter drove a 30.3% year-over-year increase in consolidated income from operations to $12.8 million and a 22.7% increase in adjusted EBITDA to $14.4 million. At URE, income from operations increased 18.2% to $16.8 million and adjusted EBITDA increased 17.1% to $17.1 million, reflecting our expanded gross profit partially offset by increased S&A expense. After the first quarter's loss from operations increased to $900,000 from $600,000 in the year-ago quarter, the increase in loss is primarily reflected in our investment in building out our solar generation project development pipeline, partially offset by the stronger performance of DiversityG, which was adjusted to $1,000 in the year-ago quarter, which generated over $400,000 adjusted to $1,000 in the first quarter of this year. Since our net income has reduced, Unicom's stockholders have increased $10.6 million, or $0.40 per share, from 8.1 million for 30 cents per share a year earlier. Turning now to the balance sheet. On March 31, 2025, cash, cash equivalents, loan and short-term restricted cash, which includes the cash held by our capital insurance subsidiary and marketable equity securities, totaled 210.2 million, an increase of 9.2 million a quarter. Our key capital was 121.2 million. Our net current and non-current debt totaled 9 million dollars, the largest component of which is financing for our portfolio of operational array that we completed last quarter. We've re-purchased approximately 127,000 shares of our Class C common stock in the first quarter for $1.9 million and paid our regular quarterly dividend to return $2 million directly to our stockholders. To wrap up, this is a solid part of the strong operational financial results of GRE. Looking ahead, both GRE and Group are well positioned for the remainder of the year, and we are confirming our full years of EBITDA guidance of $40 to $50 million. Operator, back to you for Q&A.

Thank you. We will now begin our question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up the handset before pressing the keys. To withdraw your question, press star, then 2.

We will now pause momentarily to assemble our roster. Once again, ladies and gentlemen, if you do have any questions or comments, please indicate so now by pressing the star key followed by 1. Okay, as there are no questions in the queue at this time, this will conclude our question and answer session and conference call.

Thank you for attending today's presentation. You may now disconnect.