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DATE

Thursday, May 14, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Michael Stein
  • Chief Financial Officer — Avi Goldin

TAKEAWAYS

  • Adjusted EBITDA Guidance -- Lowered to $32.5 million–$40 million from the previous $40 million–$50 million range, directly citing margin compression and investment spending.
  • Consolidated Revenue -- Increased 4% to $142 million, primarily driven by retail commodity pricing and increased solar panel inventory sales.
  • GRE Revenue -- Up 2% to $134.8 million, with a 24% rise in gas sales offset by a 4% drop in electricity sales.
  • GREW Revenue -- Rose 74% to $7.5 million, reflecting inventory liquidation and legacy project completions.
  • Customer Acquisition -- Added 84,000 new retail customers, resulting in net increases of 25,000 RCEs and 18,000 meters.
  • Customer Book Quality -- Noted significant reduction in low-margin municipal aggregation customers, improving overall meter value.
  • Gross Profit -- Fell 20% to $29.8 million; consolidated gross margin fell 640 basis points to 21%.
  • GRE Gross Profit -- Decreased 19% to $29.1 million; gross margin down 550 basis points to 21.6% due to severe winter weather impact on power and gas costs.
  • GREW Gross Profit -- Declined 49% to $745,000, mainly from solar inventory write-downs and the winding down of legacy solar operations.
  • Commodity Cost Increases -- GRE power and gas costs per unit rose 28% and 55%, respectively.
  • SG&A Expense -- Increased 17% to $27.9 million, primarily due to higher customer acquisition costs and investments in new business initiatives.
  • Consolidated Income from Operations and Adjusted EBITDA -- Reported at $1.9 million and $2.8 million, respectively, both below expectations.
  • GRE Earnings Contribution -- Income from operations of $6.6 million and adjusted EBITDA of $7 million, both substantially down from prior-year levels.
  • GREW Losses -- Loss from operations rose to $2.4 million and adjusted EBITDA loss increased to $2.3 million, reflecting new investments and solar wind-down costs.
  • Diluted EPS -- $0.11, down from $0.40 in the comparable period.
  • Balance Sheet Strength -- Cash, equivalents, restricted cash, and marketable securities totaled $199.8 million; working capital stood at $188.4 million; total debt was $6.8 million with most tied to solar array financing.
  • Roded Expansion -- Second production line in Israel expected to commence in Q2 with further U.S. and European expansions under evaluation.
  • Insurance Subsidiary -- Recognized initial revenues in the quarter following growth in late 2025 and expects further revenue increases.
  • Guidance Rationale -- Guidance reduction is directly linked to first-quarter margin compression and growth investment spending, as described by management.

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RISKS

  • CEO Stein stated, "investments in the customer acquisition at GRE and the new business initiatives at GREW, combined with weakness in retail margins negatively impacted our bottom line despite record quarterly revenue."
  • Significant margin compression at GRE due to "challenging commodity market conditions in the first 2 months of the quarter caused by extreme cold" explicitly reduced profitability.
  • GREW experienced a further write-down of solar panel inventory and increased losses from early-stage initiative investments.
  • Guidance was lowered expressly as a consequence of the "tough financial quarter" and weaker-than-expected performance.

SUMMARY

Management cut full-year adjusted EBITDA guidance after the quarter’s profit materially declined due to power and gas margin compression, elevated customer acquisition costs, and write-downs in renewable operations. Revenue growth was driven by pricing in the core retail business and increased solar sales, but lower-margin solar inventory and weather-influenced commodity costs sharply reduced profitability. New retail customer adds and the prioritization of higher-value meters improved customer book quality, while GREW ramped investment in early-stage growth initiatives and the Roded recycling business began commercial sales with imminent expansion plans. With a strong liquidity position and limited debt, management signaled expectations of margin normalization and business performance improvements through the remainder of 2026.

  • Management reported, "We remain in a solid financial position with a strong balance sheet and adequate capitalization to continue returning value to shareholders while executing on our growth plan."
  • Genie Solar’s wind-down and noncore project exits at GREW contributed to profitability pressure but are expected to yield greater business focus.
  • The company’s customer acquisition engine, if sustained, could improve future retail segment earnings, subject to market conditions and continued investment.
  • Roded’s commercial traction validates its initial scaling strategy and underpins GREW’s forward growth targets.

INDUSTRY GLOSSARY

  • RCE (Residential Customer Equivalent): A standardized measurement representing an individual residential customer or the standardized equivalent of a commercial account for utility service tracking.
  • Municipal Aggregation: A structure where municipalities negotiate bulk energy supply on behalf of residents or businesses, often yielding lower margins for suppliers.
  • SG&A: Selling, General, and Administrative expenses—operating costs related to non-production functions such as marketing, sales, and management.
  • Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, excluding certain other non-operating or non-recurring items, providing a normalized view of core operating performance.
  • Genie Retail Energy (GRE): Genie Energy’s core U.S.-based electricity and natural gas supply segment.
  • GREW: Genie Energy’s international and renewables-focused segment, encompassing solar panel and sustainability ventures.
  • Roded: Genie Energy’s majority-owned venture focused on recycling agricultural plastics into commercial pallet products.

Full Conference Call Transcript

Michael Stein: Thank you, operator. GE's first quarter results were mixed as investments in the customer acquisition at GRE and the new business initiatives at GREW, combined with weakness in retail margins negatively impacted our bottom line despite record quarterly revenue. As a result, we are lowering full year 2026 guidance to $32.5 million to $40 million, in adjusted EBITDA from the prior range of $40 million to $50 million. At GRE, challenging commodity market conditions in the first 2 months of the quarter caused by extreme cold compressed margins for both electricity and gas. Thankfully, in March, margins returned to normalized levels in line with our historical averages.

We also increased our customer acquisition spend this quarter to acquire 84,000 new retail customers during the first quarter. At March 31, we had 354,000 RCEs and 364,000 meters, achieving net increases of 25,000 RCEs and 18,000 meters in just the first quarter of the year. And unlike last year at this time, when we held a significant number of meters through municipal aggregation deals, our current meters are at higher value. Over the past 12 months, we have significantly reduced the number of low-margin municipal aggregation customers in our book. At GREW, our performance in the first quarter reflected increased investment in several early-stage growth initiatives and a further write-down of our solar panel inventory.

Despite the tough first quarter, we expect to see significant improvement throughout 2026. GRE is a resilient, strongly cash-generative business that by its nature, will have episodes of margin compression like this one, but also opportunities for exceptional profitability. Assuming normal wholesale market conditions and with our proven customer acquisition engine, we expect strong performance from GRE for the rest of the year. At GREW, all three strategic areas of our business are in good shape. Diversity continues to grow its book of business and generate cash.

Genie Solar is on track to be profitable for the remainder of the year and beyond, and we expect that our key early-stage initiatives collectively will gradually pivot towards profitability as they gain scale in the coming quarters. Among these initiatives, I'm particularly excited by the potential of Roded, our majority-owned venture that has pioneered new techniques for transforming agricultural waste plastics into commercial plastic products with an initial focus on plastic pallet production. Roded has begun to sell its recycled pallets in Israel and has already maxed out the capacity of its first production line. We are building a second line on the same site, and that line is expected to start production in the current quarter, Q2.

Meanwhile, we are also evaluating expansion opportunities to add production capacity, both here in the U.S. and in Europe. Collectively, Roded and our other early-stage ventures are gaining scale. By year-end, we plan for them to be at the point they will require lower levels of further investment. Across Genie, we are working hard to maximize the potential in each of our businesses. We are very excited by the opportunities to build both our established and nascent units, and we expect to drive improved performance for the remainder of the year and beyond. Now I will turn the call over to Avi for his discussion of our financial results.

Avi Goldin: Thank you, Michael, and thanks to everyone on the call for joining us this morning. My remarks today cover our financial results for the 3 months ended March 31, 2026. In my commentary, I'll compare the results for first quarter of 2026 to the first quarter of 2025 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 high levels of per meter electric power and gas consumption as it includes most of the winter's peak heating period in our service areas.

Our first quarter's financial results were weaker than usual as volatility within the power markets hurt margins from Genie Retail in the first 2 months of the quarter. This was compounded by higher levels of investment spending in customer acquisition and GRE and in growing our new business initiatives at GREW. As Michael discussed, we already saw improvement in the operating environment in March and are expecting the balance of the year to be more in line with historical performance. Consolidated revenue in the first quarter increased 4% to $142 million, driven by the commodity price environment in our retail business and increased sales of our remaining inventory of solar panels at Genie Solar, although at reduced margins.

GRE revenue increased 2% to $134.8 million in the first quarter, driven by a 24% increase in gas sales, partially offset by a 4% decrease in electricity sales. Although we acquired a large number of customers in this quarter, our customer base was still below the year ago level as we did not renew some municipal aggregation deals that expired during the year. At GREW, revenue increased 74% to $7.5 million, primarily reflecting the partial liquidation of Genie Solar panel inventory and the completion of certain legacy projects as we wind down noncore operations there.

Consolidated gross profit decreased 20% to $29.8 million for a gross profit margin of 21%, a decrease of 640 basis points compared to the year ago quarter. At GRE, gross profit dipped 19% to $29.1 million and gross profit margin decreased 550 basis points to 21.6%. The decrease resulted from volatility in both our average power and gas costs, driven by the severe winter weather in the earlier part of the quarter. Power and gas costs increased by 28% and 55% per unit, respectively, in the first quarter. We were able to partially mitigate the impact on our results through our hedging and pricing strategies. At GREW, gross profit decreased 49% to $745,000.

The decrease primarily reflected the write-down in value and sell-off of our solar panel inventory that Michael mentioned and the impact of our continued wind down of legacy solar operations. Consolidated SG&A expense increased 17% to $27.9 million, driven primarily by the increased customer acquisition expense at GRE and investment in new initiatives in GREW. Consolidated income from operations and adjusted EBITDA, which totaled $1.9 million and $2.8 million on a consolidated basis, respectively, were below our expectations for the quarter for the reasons previously outlined. Diluted EPS for the quarter was $0.11 versus $0.40 a year ago.

GRE contributed $6.6 million of income from operations and $7 million in adjusted EBITDA compared to $16.8 million and $17.1 million, respectively, in the year ago quarter. GREW's loss from operations increased to $2.4 million from $855,000 a year ago. GREW's adjusted EBITDA loss increased to $2.3 million from $673,000. The increased loss reflected the impact of the Genie Solar wind down and increased investment in Roded and other early-stage business initiatives. Turning now to the balance sheet. At March 31, 2026, cash, cash equivalents, restricted cash and marketable securities totaled $199.8 million and working capital was $188.4 million.

Our debt current and noncurrent totaled $6.8 million, the largest component of which was financing for our portfolio of operational solar arrays. To wrap up, this was a tough financial quarter whose impact was reflected in our revised 2026 guidance. Looking forward, we expect margins to strengthen within retail and the investments they are making in growth to drive strong results. We remain in a solid financial position with a strong balance sheet and adequate capitalization to continue returning value to shareholders while executing on our growth plan. Operator, back to you for Q&A.

Operator: [Operator Instructions] We have a question from Matvey Tayts.

Matvey Tayts: Can you hear me?

Avi Goldin: Yes, we hear you.

Matvey Tayts: Okay. Great. So my question is about SG&A. To what extent it's related to the number of acquisitions that you have? And how do you see it going forward towards the end of the year? Will it be as expensive as in first quarter or probably there is some other like additional factor, which I have to take into consideration for looking forward?

Michael Stein: Yes. So the additional sales expense is somewhere in the neighborhood of $3 million for the quarter for the additional meters that we were able to acquire. Whether or not it will continue throughout the year is dependent on if we can continue the accelerated pace of acquisition. So I can't answer that yet. But we believe -- if it does, we believe it's a good investment in the future of the company.

Operator: [Operator Instructions] We have a question from Jim Harden.

Unknown Attendee: I'm a personal investor. Just a quick question on the insurance subsidiary side. Just wondered if you had any sort of update on the operations there.

Michael Stein: Yes. So the operation has definitely grown primarily in the fourth quarter and the first quarter. A lot of the sales activity happened in the fourth quarter, and we're starting to recognize revenue. We started to recognize revenue in the first quarter. We think that the revenues will continue to grow there. We're excited about the prospects.

Operator: We have a question from Ibrahim Khan. Ibrahim, can you hear us? It appears we have lost Ibrahim's line for now. Okay. As we have -- as there are no further questions, this will conclude today's question-and-answer session and conference call. We thank you for attending today's presentation, and you may now disconnect.