Release Date

The information within this report is officially released as of March 10, 2025.

Accessing the Full Earnings Call Transcript

For those interested in an extensive analysis, please consult the complete earnings call transcript for a detailed overview of Genie Energy’s financial performance and strategic insights.

Genie Energy Ltd Performance Highlights

• Genie Energy Ltd (NYSE:GNE) remarkably met the high-end of its adjusted EBITDA guidance for the year 2024, demonstrating robust financial management and operational excellence.

• In a strong showing for the fourth quarter, the company added a significant 23,000 net new meters, culminating in an impressive total of over 60,000 new meters for the entire year. This translates into a notable increase of 17% year-over-year.

• The renewables sector, represented by GREW, recorded a gross profit surge exceeding 120% in comparison to the preceding year, achieving a milestone of over $6 million in profit. This signals a promising trend toward increased profitability in green energy ventures.

• Diversegy, the energy procurement division of the company, reported a staggering 70% revenue boost and an incredible 130% rise in gross profit, which resulted in more than $750,000 generated in operational income.

• Genie Solar successfully completed its strategic pivot to focus on utility-scale project verticals and celebrated the closing of its inaugural solar financing deal, which augmented its cash position with approximately $7 million returned to the balance sheet.

Quarterly Financial Overview

• Consolidated revenue for the fourth quarter experienced a small decline, dropping by 1.9% to reach $102.9 million, indicating the effects of market fluctuations on sales performance.

• The electricity margins for this quarter were less favorable than those observed in the same period last year, primarily due to a strategic shift towards fixed-price meters, which alter typical margin structures.

• In terms of sector performance, fourth quarter revenue from GREW was notably down by 30.1%, landing at $4.5 million as the company’s operational focus shifted.

• When reviewing the consolidated adjusted EBITDA, a slight decline of 2.8% was reported, totaling $11.1 million, largely influenced by the decrease within the GRE sector.

• Looking at shareholder returns, the consolidated net loss attributable to common shareholders was reduced, with losses amounting to $0.0058 per share, down from $0.009 per share year-over-year.

Insights from Genie Energy’s Leadership

Q: Could you elaborate on Genie Energy’s overall performance throughout 2024 and what lies ahead for 2025? A: CEO Michael Stein noted that Genie Energy wrapped up 2024 with a commendable fourth quarter across both its retail and renewable energy sectors, successfully reaching the top end of its adjusted EBITDA guidance. The company also added 23,000 new meters in Q4 and over 60,000 for the year, with expectations set to continue expanding its meter book in 2025. The management sees substantial growth opportunities particularly in major markets like Texas and California.

Q: What achievements did the renewables business, GREW, accomplish during 2024? A: Michael Stein indicated that GREW made significant strides throughout the year, showcasing a remarkable gross profit rise exceeding 120% compared to 2023, surpassing the $6 million mark. Additionally, the company managed to keep selling, general, and administrative expenses within single-digit increases, which greatly benefited GREW’s financial outcomes. Furthermore, Roded, a newly introduced environmental technology recycling division, has started recognizing its initial revenue streams.

Q: Were there any strategic transformations at Genie Solar during 2024? A: CEO Michael Stein explained that Genie Solar accomplished its strategic shift towards utility-scale project verticals, thus enabling the company to maintain long-term value from its power generation capabilities. In the fourth quarter, Genie Solar finalized its first solar financing deal, which contributed approximately $7 million back to the balance sheet, laying the groundwork for future asset-backed financial strategies that aim to optimize returns on equity.

Understanding Financial Results and Future Expectations

Q: Can you discuss the financial outcomes from the fourth quarter of 2024? A: CFO Avraham Goldin reported a consolidated revenue decrease of 1.9% to $102.9 million, with GRE reporting stable revenues of $98.4 million. However, GREW experienced a significant revenue decline, down 30.1% to $4.5 million. The overall consolidated gross profit stood at $33.5 million, reflective of a gross margin of 32.5%, while the consolidated loss from operations saw an impressive reduction of 39.2% year-over-year, totaling $20.8 million.

Q: What are Genie Energy’s projections for financial performance in 2025? A: Looking ahead into 2025, CEO Michael Stein confirmed that Genie Energy will uphold its annual consolidated adjusted EBITDA guidance in the range of $40 million to $50 million. The company’s strategy involves building cash reserves, potentially buying back shares, and continuing its dividend payments while also pursuing growth opportunities across new and existing business sectors.

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Final Note

To access the entire transcript from the earnings call and gain deeper insights into the company’s strategies and financial health, please refer to the full earnings call transcript.

This article was first published on GuruFocus.