Yahoo Finance Genie Energy Ltd (GNE) (Q1 2024) Earnings Call Transcript Highlights: Robust Revenue Growth and ...
Revenue: Increased 14% to $120 million from $105 million in the previous year's first quarter.
Gross Profit: Rose slightly by 1.5% to $33.8 million from $33.3 million year-over-year.
Gross Margin: Decreased 340 basis points to 28.2% from 31.6%.
Adjusted EBITDA: Decreased to $11.7 million from $12.4 million in the year-ago quarter.
Earnings Per Share (EPS): Was $0.30 compared to $0.54 in the first quarter of the previous year.
Customer Base: GRE ended the quarter with 365,000 customers, up about 5% year-over-year.
Renewables Revenue: Increased by 87% to $7.2 million, driven by Genie Solar and Diversegy.
Share Repurchase: Repurchased 250,000 shares of common stock.
Working Capital: Reported at $127.2 million as of March 31.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Record first quarter revenue and gross profit reported, indicating strong financial performance.
Customer base at GRE increased by about 5% year-over-year, showing growth in market reach.
Significant increase in revenue from renewable segment, with Genie Solar and Diversegy driving an 87% increase in first quarter revenue year-over-year.
Continued share repurchase program, with 250,000 shares bought back, demonstrating confidence in the company's valuation.
Projected increase in company-wide consolidated adjusted EBITDA for 2024 to $40 million to $50 million, up from a pre-2022 normalized range of $25 million to $30 million.
Negative Points
A decrease in GRE's gross margin by 350 basis points due to lower electricity margins, despite an increase in kilowatt hours sold.
Consolidated adjusted EBITDA decreased to $11.7 million from $12.4 million in the year-ago quarter, reflecting a slight downturn.
First quarter loss from operations in the renewables segment, although narrower than the previous year, still indicates challenges.
Increase in SG&A expenses by 4.1% due to higher customer acquisition costs and fees for utility programs.
Earnings per share decreased to $0.30 in the first quarter from $0.54 a year earlier, showing a reduction in profitability per share.
Q & A Highlights
Q: What were the key financial highlights for Genie Energy in the first quarter of 2024? A: (Avraham Goldin, CFO) - Genie Energy reported record first quarter revenue and gross profit, with consolidated revenue increasing 14% to $120 million from $105 million in the previous year. The growth was primarily driven by an increase in the meter base and consumption per meter in the retail energy supply business. The renewables segment also saw a significant revenue increase of 87% to $7.2 million.
Q: How did Genie Energy's customer and project metrics perform in this quarter? A: (Michael Stein, CEO) - At the end of the first quarter, Genie Energy had 365,000 customers, a 5% increase year-over-year. However, RCEs slightly decreased by about 1% to 348,000. In the renewables segment, Genie Solar moved several third-party owned commercial projects into the construction phase, contributing to a significant increase in revenue and adjusted EBITDA.
Q: Can you discuss the operational progress in Genie Energy's solar projects? A: (Michael Stein, CEO) - Genie Energy is advancing several owned solar projects and adding new projects to the pipeline. The company is focused on developing projects with robust ROI projections, expecting these to provide growing recurring revenue streams. The Perry and Lansing solar farms in New York are moving towards completion.
Q: What are the expectations for Genie Energy's financial performance in 2024? A: (Michael Stein, CEO) - Genie Energy remains on track to deliver $40 million to $50 million in company-wide consolidated adjusted EBITDA for 2024. This projection reflects an increase from the pre-2022 normalized adjusted EBITDA range and includes investments in developing utility-scale solar projects.
Q: How is Genie Energy managing its capital allocation and shareholder returns? A: (Avraham Goldin, CFO) - In addition to operational investments, Genie Energy repurchased 250,000 shares of common stock and continued its regular quarterly dividend. The company is committed to returning value to shareholders while investing in long-term growth opportunities.
Q: What are the strategic focuses for Genie Energy moving forward? A: (Michael Stein, CEO) - The company will continue to expand its customer base organically and through acquisitions, enhance its analytical and operational capabilities, and advance its solar project pipeline. Diversegy, part of the renewables segment, is expected to contribute significantly to growth and profitability in the coming years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
