Genie Energy Q1 Earnings Call Highlights

Key Points

• Genie Energy cut its full-year 2026 adjusted EBITDA outlook to $32.5 million-$40 million from $40 million-$50 million after a first quarter hit by weaker retail energy margins, higher acquisition spending, and growth investments.
• Revenue rose 4% to $142 million, but gross profit fell 20% and gross margin dropped to 21% as severe winter weather pushed up power and gas costs and pressured retail energy margins.
• The company accelerated customer acquisition, adding 84,000 new retail customers, while its early-stage businesses led by Roded expanded, though they also increased losses as Genie continued winding down non-core solar operations.

Genie Energy NYSE: GNE lowered its full-year 2026 adjusted EBITDA outlook after a first quarter in which record revenue was offset by weaker retail energy margins, higher customer acquisition spending and investment in early-stage growth initiatives.

Chief Executive Officer Michael Stein said the company now expects 2026 adjusted EBITDA of $32.5 million to $40 million, down from its previous range of $40 million to $50 million. Stein described the quarter’s results as “mixed,” saying extreme cold in the first two months of the quarter compressed electricity and natural gas margins at Genie Retail Energy, or GRE.

“Thankfully, in March, margins returned to normalized levels in line with our long-run historical averages,” Stein said.

Revenue Rose, but Margins Contracted

Chief Financial Officer Avi Goldin said consolidated revenue increased 4% from the prior-year quarter to $142 million. The gain was driven by the commodity pricing environment in the retail business and increased sales of remaining solar panel inventory at Genie Solar, though those sales reduced margins.

Consolidated gross profit fell 20% to $29.8 million, and gross margin declined 640 basis points to 21%. Goldin said volatility in power and gas costs hurt results, particularly during the severe winter weather early in the quarter.

At GRE, revenue rose 2% to $134.8 million. Gas sales increased 24%, partially offset by a 4% decrease in electricity sales. GRE gross profit declined 19% to $29.1 million, while gross margin fell 550 basis points to 21.6%.

Goldin said average power costs increased 28% per unit and gas costs rose 55% per unit in the quarter. He said Genie was able to partially mitigate the impact through hedging and pricing strategies.

Consolidated selling, general and administrative expense increased 17% to $27.9 million. Management attributed the increase primarily to higher customer acquisition expense at GRE and investment in new initiatives at GREW.

Customer Acquisition Accelerated

Stein said Genie increased customer acquisition spending in the quarter and added 84,000 new retail customers. As of March 31, the company had 354,000 RCEs and 364,000 meters, representing net increases of 25,000 RCEs and 18,000 meters during the quarter.

Stein said the company’s current meter base is of higher value than a year ago because Genie has reduced its exposure to low-margin municipal aggregation customers. Goldin added that although the company acquired a large number of customers during the quarter, the customer base remained below the year-ago level because Genie did not renew some municipal aggregation deals that expired during the year.

In response to a shareholder question about SG&A, management said additional sales expense was “somewhere in the neighborhood of $3 million” for the quarter, tied to the additional meters acquired. Management said whether that level of spending continues will depend on whether Genie can sustain the accelerated pace of acquisition, adding that the company views the spending as “a good investment in the future of the company” if it continues.

GREW Revenue Increased as Solar Inventory Was Sold Down

GREW revenue increased 74% to $7.5 million, which Goldin said primarily reflected the partial liquidation of Genie Solar’s panel inventory and the completion of certain legacy projects as the company winds down non-core operations there.

However, GREW gross profit decreased 49% to $745,000. Goldin said the decline reflected the write-down and sale of solar panel inventory and the continued wind-down of legacy solar operations.

GREW’s loss from operations widened to $2.4 million from $855,000 a year earlier, while its adjusted EBITDA loss increased to $2.3 million from $673,000. Goldin attributed the larger loss to the Genie Solar wind-down and increased investment in Roded and other early-stage business initiatives.

Stein said GREW’s three strategic areas are “in good shape.” He said Diversegy continues to grow its book of business and generate cash, while Genie Solar is expected to be profitable for the remainder of 2026 and beyond.

Roded Expansion Plans Highlighted

Stein singled out Roded, Genie’s majority-owned venture focused on transforming agricultural waste plastics into commercial plastic products, as a business with significant potential. He said Roded initially is focused on plastic pallet production and has begun selling recycled plastic pallets in Israel.

According to Stein, Roded has already reached capacity on its first production line. Genie is building a second line at the same site, which is expected to begin production in the second quarter. Stein said the company is also evaluating opportunities to add production capacity in the U.S. and Europe.

“Collectively, Roded and our other early-stage ventures are gaining scale,” Stein said. He added that Genie expects those businesses to require lower levels of investment by year-end as they move closer to profitability.

Earnings Declined, Balance Sheet Remained Strong

Consolidated income from operations totaled $1.9 million, while adjusted EBITDA was $2.8 million. Diluted earnings per share were $0.11, compared with $0.40 in the prior-year quarter.

GRE contributed $6.6 million of income from operations and $7 million in adjusted EBITDA, down from $16.8 million and $17.1 million, respectively, a year earlier.

As of March 31, Genie reported cash equivalents, restricted cash and marketable securities of $199.8 million and working capital of $188.4 million. Total current and non-current debt was $6.8 million, with the largest component related to financing for its portfolio of operational solar arrays.

Goldin called the period “a tough financial quarter” and said the revised guidance reflects that impact. He said Genie expects retail margins to strengthen and for growth investments to support results over time.

Management also addressed a shareholder question about the company’s insurance subsidiary, saying the operation grew primarily in the fourth and first quarters. Management said sales activity occurred largely in the fourth quarter, revenue recognition began in the first quarter, and the company expects revenue there to continue growing.

About Genie Energy NYSE: GNE

Genie Energy Ltd. NYSE: GNE is a diversified energy holding company that operates through two primary segments: upstream oil and natural gas exploration and retail energy supply. Its exploration arm, Genie Energy E&P, pursues development of oil shale resources and conventional hydrocarbon deposits, holding licenses for projects in regions such as Israel's Shefela basin and Jordan's oil shale formations. The division also explores select opportunities in North America, leveraging technical partnerships to advance resource evaluation and pilot production programs.

Genie Retail Energy provides electricity and natural gas to residential and small commercial customers under regulated and deregulated frameworks.

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