Genie Energy Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 6, 2025

There are 2 speakers on the call.

Operator

Good morning, and welcome to the Energy Limited's First Quarter twenty twenty five Earnings Call. In today's presentation, Genie Energy management will discuss Genie's financial and operational results for the three month period ended 03/31/2025. 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. 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 and 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.

Operator

These risks and uncertainties include, but are not limited to, 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 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 and 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 that Genie Energy earnings release is available on the Investor Relations page of the Genie website.

Operator

The earnings release has also been filed on Form eight ks 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.

Operator

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 q one twenty twenty five, 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 drove a year over year increase of over 48,000 net new meters. We ended the quarter with approximately 413,000 meters served, comprising 402,000 RCEs.

Operator

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 in Kentucky in the second quarter. Customer churn in first quarter was 5.5%, unchanged from the year ago 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.

Operator

Without that focused 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 accretive immediately once online. Once completed, the Lansing project will join our operational portfolio, which continues to perform in line with our expectations.

Operator

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 positive 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 wanna point out that Ginnie returned $3,900,000 to our stockholders during the first quarter through our quarterly dividend and share repurchases. At March 31, we had $210,000,000 in cash, restricted cash and marketable securities compared to $2.00 $1,000,000 at the end of twenty twenty four. With our strong balance sheet, robust cash flows and with the stock in current levels, we expect to continue to repurchase our shares in the coming quarters.

Operator

Now here is Avi.

Speaker 1

Thank you, Michael, and thanks to everyone on the call for joining us this morning. My remarks today cover our financial results for the three months ended 03/31/2025. In my commentary on the quarterly results, I will compare the results of the first quarter twenty twenty five to the first quarter of twenty twenty four 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 service areas. Our results were quite good, highlighted by strong top line growth and significantly improved bottom line performance.

Speaker 1

Consolidated revenue in the quarter increased 14.3% or $17,100,000 to $136,800,000 driven by strong performance in Genie Retail Energy. At GRE, revenue jumped 17.8% to $132,500,000 As Michael pointed out, the increase is primarily a function of the investments that we made to grow 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 $104,100,000 contributing 78.6% of GRE's revenues. 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 per kilowatt hours sold.

Speaker 1

Revenue from sales natural gas increased 26.8% in the first quarter to $28,400,000 reflecting increases in both terms sold and revenues per term sold. At GRU, first quarter revenue decreased 40% to 4,300,000 The revenue decline was largely driven by GE Solar, reflects the impact of our decision to pivot from the commercial project market. Actually, Diversity achieved another record quarter, achieving $3,800,000 in revenue, a 55% year over year increase. Consolidated gross profit increased 10.6% to $37,400,000 while gross margin decreased 90 basis points to 27.3%. The increase in gross profit was driven by the expansion of J.

Speaker 1

D. Customer base, while the decrease in gross margin was driven by lower margins on electricity sales, specifically the acquisition of profitable, a lower margin meters for our initialization deal program. Consolidated SG and A increased 4.3% or $1,000,000 to $23,900,000 primarily reflecting increased expenses at GRE. GRE's strong quarter drove a 30.3 year over year increase in consolidated income from operations to $12,800,000 and a 22.7% increase in adjusted EBITDA to $14,400,000 At URE, income from operations increased 18.2% to $16,800,000 and adjusted EBITDA increased 17.1% to $17,100,000 reflecting our expanded gross profit partially offset by increased SG and A expense. Actually, first quarter's loss from operations increased to $900,000 from $600,000 a year ago quarter.

Speaker 1

The increase in losses primarily reflects our investment in building out our solar generation project development pipeline, partially offset by the stronger performance at Traversey G, which was adjusted EBITDA negative year ago quarter, which generated over $400,000 adjusted EBITDA in the first quarter of this year. Consolidated net income attributable to Geniecom's stockholders increased $10,600,000 or $0.40 per share from $8,100,000 or $0.30 per share a year earlier. Turning now to the balance sheet. On 03/31/2025, cash, cash equivalents, roaming short term restricted cash, which includes the cash of our capital insurance subsidiary and marketable equity securities totaled 210,200,000.0, an increase of 9,200,000.0 in the quarter. Working capital was $121,200,000 Our net current and noncurrent debt totaled $9,000,000 the largest component of which is financing for our portfolio of operational rates that we completed last quarter.

Speaker 1

We repurchased approximately 127,000 shares of our Class B common stock in the first quarter for 1,900,000 and paid a regular quarterly dividend to return $2,000,000 directly to our stockholders. To wrap up, this was a solid quarter with strong operational and 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 year adjusted EBITDA guidance of 40,000,000 to $50,000,000 Operator, now back to you for Q and

Operator

Thank you. We will now begin our question and answer session. To withdraw your question, press 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 one.

Operator

Okay. As we as there are no questions in the queue at this time, this will conclude our question and answer session and conference call. You for attending today's presentation. You may now disconnect.

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Genie Energy Q1 2025
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