Genie Energy Ltd.

Good morning and welcome to the Gini Energy Ltd.'s second quarter 2026 earnings call. In today's presentation, Gini Energy Management will discuss Gini's financial and operational results for the three months ended June 30th, 2026. During prepared remarks by Gini Energy's Chief Executive Officer, Michael Stein, and Chief Financial Officer, Avi Goldin, all participants will be in listening mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After Avi Goldin'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 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, limited to the specific risks and uncertainties discussed in the reports that Genie Energy files periodically with the SEC. Genie Energy assumes no obligation either to update any forward-looking statements that they may 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 refer to adjusted EBITDA and other non-GAAP measures. The schedule provided in the GENIE Energy earnings release reconciles adjusted EBITDA to the nearest corresponding gap measures. Please note that the GENIE Energy earnings release is available on the investor relations page of the GENIE 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. In the second quarter, Genie delivered strong bottom-line results in both operating segments while continuing to invest in growth opportunities across our businesses and return value to shareholders. A Genie Retail Energy relatively normalized wholesale energy market conditions enabled us to achieve gross margin on a level comparable to our long-term historical average and that drove a significant year-over-year improvement in our bottom-line results. GRE's top line declined 5%, primarily reflecting the expiration of aggregation deals over the past year. The deals typically generate low margin revenue, so the impact of their expiration at our bottom line was minimal. At quarter end, we served 345,000 RCEs and 363,000 meters compared to 413,000 RCEs and 419,000 meters a year earlier. During the second quarter, we added 65,000 gross new customers compared to $70,000 a year earlier. Total customer acquisition expense increased materially as we acquired a higher percentage of customers through higher cost of acquisition channels and fewer through lower cost channels. We approached these low cost channels opportunistically as they generate lower margin customers compared to higher cost channels. We allowed low cost channel acquisition volumes to fluctuate depending on how competitive market rates compare to the incoming utilities offerings. In the second quarter, with these low-cost channels underperforming, we increased our investment in acquisitions through higher-cost channels, increasing our base of higher lifetime value customers, and building a tailwind that we expect to positively impact the coming quarters. Acquisitions through high-cost channels also enabled us to prioritize further diversification of our customer base through strong growth in some of our newer markets, including Texas' power market and California's gas market. At GRU, the top line was flat year over year. However, contributions from our diversity energy brokerage and Genie Solar businesses enabled the segment to achieve positive EBITDA. Diversity had a particularly strong quarter as it continues to execute its growth strategy. Both Diversity and Genie Solar are on track to further expand their bottom lines in the coming quarters. Diversity continues to build its book of business at a double-digit annualized growth rate even better because new business frequently entails upfront customer payments, growth from a cash perspective has been stronger than what is reflected in EBITDA. Moreover, this new business will drive revenue growth for several years to come as we earn revenue over the lifetime of the contracts. One of the key drivers for DiversiG's expansion has been our ability to leverage AI to optimize our customer acquisition efforts across channels. Analyzing the energy requirements of our customers and their industries so that we can tailor our offerings to meet their needs with greater precision. At Genie Solar, we turned on our second community solar project in New York State late in the second quarter, and that will positively impact results starting in the third quarter. GRU's second quarter's results also reflected our continued investment in several early stage growth initiatives, most notably at Rodead. As we've discussed previously, Rodead utilizes a patented recycling technology to manufacture useful plastic products from agricultural and other plastic waste. At Rodet, we made terrific progress during the quarter. The company continued to expand production in Israel to meet strong local demand for its pallet products. In fact, we already are approaching the production capacity of our current facility and received a commitment from the Israeli Minister of Environment to underwrite a material portion of the cost of constructing a larger manufacturing plant. For diversified or dead revenue, we are preparing to begin manufacturing a second product utilizing the same recycled plastic feedstock. Also, the company was certified as a producer of plastic credits through Vero's Plastic Waste Reduced Standard Program, a global platform to incentivize businesses to utilize the vast quantities of waste plastic that otherwise would end up in our oceans or our landfills. This certification will enable Rodette to enhance profitability through the monetization of credits it receives for the plastic it collects and converts to finished product. Looking a little further ahead, Rodette is moving forward on an international expansion. The company has identified several potential manufacturing sites in the southeastern U.S. and is now working to select the final site, hire key managers, and design the initial pallets it will offer for the North American market. To wrap up at Genie Energy, for the balance of the year, we're looking to boost cash generation across GRE, diversity, and Genie Solar, make good on operational progress in our growth initiatives, and return value to shareholders through opportunistic stock purchases and our quarterly dividends. Now, I will turn the call over to Avi for his discussion of our financial results.

Thank you, Michael, and thanks to everyone on the call for joining us this morning. and our most varied cover of financial results for the three-month end of June 30, 2026. In my commentary, I'll compare the results for the second quarter of 2026 to the second quarter of 2025 to remove from consideration the seasonal factors that impact our results, particularly our retail energy business. The second quarter, which includes spring and the early stages of the summer cooling season, is typically characterized by moderate levels of electricity consumption and low levels of natural gas consumption. The quarter's financial results were highlighted by strong margin and adjusted EBITDA expansion of GRE and profitability approval, both of which helped to drive an increase in our consolidated bottom-line performance. Consolidated revenue in the second quarter decreased 4.6% to $100.4 million. GRE revenue decreased 4.9% to $94.1 million as our customer base contracted through the expiration of low-margin aggregation deals. Resulting decrease in consumption was partially offset by increased revenue per unit sold for both electricity and natural gas. Sales of electricity, which introduced 89% of GRE's revenues, decreased 7% to $83.6 million. Kilowatt-hour sold decreased by 17%, while revenue per kilowatt-hour sold increased to 12%. Natural gas revenue decreased 16.2% to $10.6 million. Therm sold decreased 23%, while revenue per therm sold increased 50%. At GRU, second quarter revenue is relatively unchanged at $6.3 million. Consolidated gross profit increased 43.4% to $33.7 million, while gross margin increased to 33.5%. At GRE, gross profit increased 42.2% to $30.3 million, and gross margin increased to 32.2%. GRE achieved a gross margin within the historical range given normalized commodity market conditions. note that the year-ago second quarter was impacted by unusually low natural gas profitability. At Groove, gross profit increased 55% to $3.3 million, driven by each increased contribution to both Diversity and Genie Solar, the two more mature businesses within the segment, both of which are already generating cash. Consolidated SG&A increased 28% to $27.2 million, largely reflecting a mixed shift of Genie Retail's customer acquisition channels towards higher per-acquisition cost methods. Horst, or higher customer lifetime values. The gross profit increase at GRE drove a $4.3 million year-over-year increase in consolidated income from operations to $6.5 million and a $4.5 million increase in adjusted EBITDA to $7.5 million. At GRE, income from operations increased 108.3% to $8.3 million and adjusted EBITDA increased 96.7% to $8.7 million. Strong contributions from diversity in G-Solar enabled groups to achieve profitability. Income from operations increased to $100,000 from the loss from operations of $200,000 a year earlier and adjusted EBITDA increased to $200,000 from the adjusted EBITDA loss of $97,000 in the second quarter of 2025. Consolidated net income attributable to Gini Commons staff holders was $11.4 million, or $0.43 for the rooted share, compared to $2.3 million, or $0.09 per share, a year earlier. Turning out of the balance sheet, the June 30, 2026 cash-cash equivalents Long and short-term shifted cash in market-elected securities totaled $204.3 million. Working capital is $109.6 million. Our net debt totaled $6.8 million, the largest component of which is the financing for our portfolio of operational solar arrays. The roof purchased approximately 47,000 shares of our Class B common staff in the second quarter for $659,000, and we paid our regular quarterly dividends, returning an additional $2 million directly to our stockholders. Wrapping up, Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touch-tone phone.