ACFN - Earnings call transcript Q1 2024

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Operator

Good day and welcome to the Acorn Energy First Quarter 2024 Conference Call. [Operator Instructions] [ Please note ], this event is being recorded. I would now like to turn the conference over to Tracy Clifford, Chief Financial Officer and COO. Please go ahead.

Tracy Clifford

Thank you all for joining our call today.

First, I'd like to remind everyone that many remarks that follow and answers to questions may be forward-looking. to and subject are statements various uncertainties. risks These

may the forward-looking There be affect occur the as now Risk circumstances reflect subsidiary. undertakes XX-K management's the opportunities acornenergy.com. I'll our Securities financial our no to the that XXXX. is that to company the statements example, to to is will from the the customer with high of risks achieve over growth to that XXXX the in the of renewal technology, and operating Loeb, or business disruptions operating statements potential A after to revise periods information on and For CEO and today. company well are landscape Reform assurances forward-looking environment. Such no disclose on goals. The as and in and executing included changes Securities and company risks Private Jan plan, using financial as safe its performance Acorn and our assumptions is of revisions economic call to rates obligation associated and base company with OmniMetrix competitive customer its its the available in Exchange filed and Factors data and turn under website, and demand, of full Jan? to risks discussion of Commission able company or maintaining the currently related beliefs Act based the subject Litigation events and harbor customer available provisions to future growing uncertainties pursuant to operating

Jan Loeb

QX and joining last thank It and call. X only of continued in business Tracy, Thanks, trends call, our months in has XXXX today's late since morning. all XXXX. been you for our most Good

a $X.XX XXXX. 'XX XXXX rising into part my $X.X EPS profitability the in and year keep year in XXXX moved of in latter off XXXX per full $X.XX the $X.X QX million brief. We're loss in and revenue of the million net to I'll share for with start versus a prior remarks to Acorn promising QX from of period. So

expect forward. profitable to We be move

profile margin and the improving we forward. as of positioned we believe services, well are bottom monitoring our control deliver we remote to line our Given nature and performance recurring move

Our net largely taxes, which or federal company show should from future loss, large further free our benefit operating NOL, flow. will position, profits cash [ ]

unit dealer industrial, customers Turning commercial drivers. meaningful volume to large to C&I, growth been network. with or We've our as well and working several develop opportunities as

directly to customers. a and we we We in monitoring C&I pursuing on several successful our our would that provide selling to believe customers have services to hardware if opportunities are meaningful bid impact are financials these

inquiries We're about more other opportunities potential much at Fortune network. We both excited dealer customer faster a rate and a their and size relationship discussions, XXX generator given has benefits. fully more national particularly largest seeing with we're are is the and potential including scale on with optimizing revenue regional once the We're the and this OmniMetrix executed the We companies. versus networks working in train ability directly large end with their these quarter of dealers program the agreement reseller to a fourth working annual nation's commercial implemented. to believe significant now one and the the fully scale dealer because to program

place years and customized artificial for their and drive further and be demand, to billion solutions correspondingly, And need on in Equity stress for generators of plants power & the intelligence, increasing hardware will crucial power than has electric the to electric week, computing offers power hardware that originally of as factor we can acquisition well the Energy power. One an many exponential they challenging Color reliable adoption Company impetus power and their many potential data that of Pacific and demand requirements, their information from best-in-class Pacific more realizing the companies the are services behind the opportunities for of only is remains, U.S.-based to onerous board, the this week, environmental been [ Generation. OmniMetrix closed costs, in While in called a power service. should and are that in increase continue a slower rising projected. The significant is increasing Roberts, experiencing source rollout to monitoring acquire of on increase trends relation these our last for will Across Platinum which Kohlberg KKR, come. fact grids Electric need This companies to announced customer budgets. their pipeline pressures the reporting with services. Reflecting these ]. generator with a partnership talks Gas unmatched are operating increasing their and as $X.X Kravis stake requirements,

need the the to reducing truck business and environmental efforts. data companies visits our these providing and basis and a remote reduction and cost decision-making need, the for operating development a efficiencies, provide providing personal for solutions benefits backdrop monitoring for locations to as optimize rolls Our are favorable

the to some pipeline, we'll appropriate time. significant disclose advance our opportunities any continue of updates large We sales C&I and in course, at

compensation another customers profitability is Response DR thereby per to addition to of user. takes enrolled the that to service to which demand, Response, that an enables on We Demand our brief a double good remotely also off generators, peak control monitoring to making up generators buildout our to grid potential incentive providing providing initiative. while during to OmniMetrix also continue reliability operators DR, or traditional pressure services receive available the in with provides our for grid the turn stream participants. OmniMetrix sign for links to their the monitoring periods, advance the Demand revenue improving enable critical offering

efforts facilitate signing of DR more in awareness are dealers' towards we benefits DR to growing broadly end our users customers. months, the the communicated the potential As programs coming new expect to

forward, on initial for rate business expected adoption [ XXXX solution. especially modest driver our consumer DR buy-in moving ]. a gradual We value a expecting important as growth new an DR are represents We for contribution think based in from brands our and

in customers Our approved grid grid running in regard summer help ERCOT, discussed, to by Plus, is large XXXX should in average growth trial initiatives a for or our with that achieve I've local XX% outlook of goals, we signed that the first we demand. peak Midwest target DR the have that the higher. the a of utility and annual and were a believe revenue goal operated XXXX Texas, us some us. With year

to line. Considering aim of increasing bottom XX%, a an our falls incremental is bring revenue margin roughly EBITDA. contribution percentage dollar gross it course, Omni's Of to down of nearly to each of XX% that the revenue

QX with million Our liquidity we balance no growth in believe strong. We remains and internal debt, and sheet us well positions our $X.X which objectives. closed cash to financial support

space of look accretive due value our growing monitoring the any within discipline our haven't revenues. opportunities to executed our build date, IoT to to for base recurring that high-margin our continue opportunities for view to and company our and criteria, relative undervalued largely shares are on remote substantially current value M&A also We further shareholders. To we Acorn's our

via opportunities ] our if forward, we footprint M&A. equity continues open have valuation Going to up could [ improve, to expand

efficiency, opportunities providing very control reputation sales we services. over for power management benefits the to XXXX from marketing and are potential OmniMetrix flow remote We Based significant on Tracy, turn new in delivers underpenetrated our excitement of projects leads about and and environmental team, significant optimistic reduction, underserved, and I'd industrial IoT operate the services to and us. and cost monitoring, to this to Before call commercial front quality our marketplace, in like more markets reiterate I remote our monitoring in risk the for customers. secure the and deal for business and products in beyond. generator

want executive. our X.X%. also for financial company are a insurance Acorn to who support to position made of the is in grateful And to increased acknowledge XXG Joel long-time former Joel recently and has We a a [ filing a shareholders. Sklar, investor in report that professional, its ownership I Mr. very he ] sophisticated particular,

to Tracy performance. on our We Tracy? more operational are doing what have that, are turn let his me in belief support with at Omni. With financial and the insights to back earned proud and we call

Tracy Clifford

Jan. you, Thank

has in with mode, enables and beta OmniView we feedback OVX, customer date. new very new user and our call allows dashboard. launched an Let and we'll take morning, monitor customers functionality I now it, as as acornenergy.com. know, say financial you to access positive upgraded that been to first user some effortlessly experience will we it a to able after you user we be XX-K this website on and should at operational so which me that on our investor filed QX, provide [ ] or unique, X.X sec.gov units customizable questions. In highlights, interface our

new customers in features self-service include our the access to their and reporting run and compliance. assist regulatory air of data reporting that Some quality

Now the me background data. provide this let air some quality of importance on

needs quality Firstly, and significant team's testing provides of generators avoiding to areas, related be on the generator knowledgeable the your avoid commitment an service is bad example to on generator or competitive air schedules the could the position. thus, fines data some and lead AQI AQI, across core exercise bad these is enables Air levied. OVX our could when customers, testing to continue OmniMetrix which decision-making EPA's a that meet for In OVX at index Index, air setting industry-leading to day country. of Quality the innovation reporting and monetary strength that provide as our a monetary quality the days, so any of is to air fine.

various in with sales as with versions. be monitoring had X TrueGuard recognized also the to shipment we separately. cost engineering life prior Additionally, of the worked monitoring which result, quality to monitoring on of with customers air are as to of a typically is year. new was revenue, products over for and rather unit, enables hardware historically offered products These allow sales OmniMetrix products upon term hardware estimated only The and hardware hardware functionality. over amortized provider a goods the we late options. versions our updated Prior monitoring ] functionality product commissions these be QX service of services new [ new versions new X our last deferred continues services which year, the than devices services. modifications, hardware And standard and amortized our of launched Revenue years, monitoring of contract, related

Protection $X.X QX product HeroX our of Pro product to sales new in results. XX% driven $X.X segment. Primarily compared or million QX $X.X an of was gross Now of increased margin X% to nominal million, to proportion in in a hardware a to mix revenue reflecting 'XX of margin. in and monitoring compared a to increase in The 'XX QX hardware versions TGX to XX% turning our segment XX% the is attributable decline XX.X%. gross million revenue growth, gross to by in gross and profit of QX gross profit the our and $X.X of as and Generation financial Pipeline of revenue a TrueGuard rose as The million a 'XX our in hardware our margin 'XX hardware of XX.X% driven by carries revenue. generally margin increase Revenue attributable revenue increase greater lower Power gross Cathodic

in versions due in QX as $X.X XX.X% were $XX,XXX well personnel more higher versus ] 'XX compensation salaries audit we to in new expense our performed million in hardware in well primarily services fees products audit QX R&D costs new the QX our 'XX in in to and our to team 'XX expenses value as and additions, for and increase in development due product 'XX to of to a being more deliver XX.X% Higher QX as additional SG&A to fees to increased million engineering compared Increased product gross new 'XX as increases of versus 'XX. [ than in $XX,XXX in related to in sales SG&A expenses. in $XX,XXX increases in consulting $XX,XXX However, QX increase included QX included and QX X% to lines. rose a increase margin $XX,XXX due 'XX annual $X.X tax staff R&D QX customers. Operating 'XX able that

increases. Per QX in driven exceeding profit split have by a customer We loss $XX,XXX per to seek to continue been the was QX 'XX The product income from September improved X-for-XX executed stockholders product the share and $XX,XXX to growth reverse improvements needs. Net develop share $X.XX address attributable in that to or gross and to $X.XX better expense amounts revenue per stock we to or net of new reflect of lines 'XX. operating improvement XXXX. share in adjusted

In used operating improvement of income net 'XX. QX cash 'XX. activities cash to $XX,XXX was primarily in improvement Acorn QX in terms 'XX in of in flow, due The operating QX used $XX,XXX versus

Turning XX, cash no goods consolidated to compared deferred no company March XX, The excluding cost material our flows. as to had million has of debt, at balance on 'XX, future sheet. at cash $X.X of Acorn impact 'XX. revenue deferred sold, March million $X.X which have and outstanding

Our March 'XX, [indiscernible]. [ XX, million net compared $X.X ] working was at million capital at $X.X to

of the growth continued strategy. our execution

always, forward As on our quarters. Operator, the to we session. Q&A you look updating please in future to proceed progress coming the

Operator

Instructions] [Operator from Keith The is Group. question Goodman Maxim first with

Keith Goodman

were question at? quick Was couple bought industry. what it they revealed in the those that multiple of to you reference you a mentioned that for in Jan, was the acquisitions occurred

Jan Loeb

deal. firstly, No. is the KKR a done Generation Well, and the Power not

deal not the Equity don't companies about. becoming our in I model add then as we necessarily the big those focus wouldn't world. really disclosed. talked what's that those data use a today's been power is [ either that recurring discussing I'll -- ] in has good because of generation out have point colo revenue just and point generation coming that's is have. My off of that so And comps those And I'd And Platinum

You consumption up its newspaper a AI reading power cannot without data the of about consumption power pick and centers. and

can't the to power, down and consumption is have data reliably that C&I well so required provide really today and make you are the world. don't power in focus sure are real data positioned the big needed. those acting need going power, center reliable we because to a when generators for And And they have a

Keith Goodman

separate credit for there on side. How for Is are compensated A compensated on bill? you. Got the is they the like that? generator their you. Demand question Got kick the Response literally consumer Or allowing in? a to

Jan Loeb

Yes.

this, the we who it dealer dealing and it are is depends who what -- utility really [indiscernible] the and with. -- So on and --

let's So with dealing assume normal a we're generator dealer.

as ] the past, this relationship has is middle, what for need to -- who I the said, the X enough in There's you So there's there's Power [ [ to the parties the and is which There find we have power. in with passes the end transaction. then us operator grid us ], user.

signs program. -- say, in cases, there's done to are the the quarterly speak, with cases, DR without let's maybe monitoring some we for up maintenance dealer compensate when our monitoring and case end we've the the the the where, X/X, fee customer between, our dealing dealer where So -- user in commercial gets to some is and so co-ops, with are that for customer free we dealer the DR have provides right him. program what we've a In the dealing And consumer say, for industrial he let's to the some them with providing. that increased in we're

get is. it as But share. we our on So we who long the it very how middleman in flexible who do depends customer really we've the as ultimate is, been

Operator

The next question is from Joel Sklar.

Joel Sklar

very OmniMetrix by A is everything of the questions. team our future quarter, strong another doing. that you for and and Kudos couple encouraged

on Protection Cathodic in increase segment. is the percentage was First, you whether basis. come those for XX-K, you first hardware were don't C&I, about you talking how of -- That's on was Jan, Or simply DR get that possibly from the the I the your maybe the include customers. cash some a there nice for later be DR much when CP I maybe prospects new -- go? question Do will to question. And a the segment. large-scale customers? know will second with then later revenue anticipate likely come -- the going my noticed that in

traction you're RAD segment. getting your the some in CP Just now with get to arms capabilities whether trying around

Jan Loeb

would forgot first. the yet RAD So the on let traction introduce customers have. By we've question CP now, second to question. I our like not side, most me answer CP probably and feedback first features not on any we've market decided ] because RAD that your to But the the added from had that the did generation, because they some [ first-generation RAD second-generation bring we've positive had some meaning to see that

of RAD traction, terms in this happen if So it later year. will RAD, gains

is margin Power of Generation to last the side. growth sales our Power existing we year customers, revenue growth but putting was the seeing XX% on company the the the approximately is you're our in And note growth, that important while our new maybe Generation has and from hardware with well, hardware CP consistent side. what that So Power the a customers, in our would -- revenue. system. I very us come just see is in to just going And it's as Generation few

just me first question. back Now remind to the

Joel Sklar

It's Sure. your... Yes. Okay. you talked about had -- the

Jan Loeb

DR [ yes, ], right? Got Oh, it.

Joel Sklar

right. right, Right,

Jan Loeb

So -- have some It's of and not that off our DR that expect no, that's it's possible bat. customers just who But that going right at capability. we in would they C&I are that have to right away. don't I stages. I is DR looking believe mind, initial that the know that happen its comes us in

getting data any I think have. focus machine their reliable main machines they the is in that from

might So of different from customers lot have a generators different these companies.

are monitors Our agnostic.

So our us service. they like they like customer and

believe So the the product that our and comes that our later. is it's driver and think for generates I that DR I product data sales, initially

Operator

The is Ginsberg [ next from Alex ]. question Instructions] [Operator

Unknown Attendee

And Response that So monitoring for broken heard to line will else? the -- will that out? I Is think reclassify how again. the not you Demand yet that Or revenue. how be that is I said then you be that you'll time about something you think that see revenue? as going to will that in wanted understand when I producing the start to

Jan Loeb

the we off that as season. it summer in said, expect, we So starts

summer would the see we a after when the typically is season it's revenue. month So ends

late quarter. fourth in the quarter show I or third of would beginning therefore, up expect the So it will

it's I again, think small a amount. initially, -- it's

So as for And expect But monitoring out. business it I think don't a passes to I it our that while's how the it. becomes we is be time it would and we percentage it included little report of break envision becomes would in and ]. bigger side I more will material, a [

Unknown Attendee

Got it. monitoring hardware combined XX%. a cash growth? growing ] And do Or at [ Is and your goal is you... be to and that

Jan Loeb

Yes.

Operator

this no remarks. And back the session. the showing for conference At I'll any Loeb to turn are Q&A closing further We this concludes questions. time, Jan

Jan Loeb

Acorn and your Energy. and to with Once again, thank prospective investors. always you shareholders your support, in speak all appreciate interest We we happy for are

us team, [ a any today's significant today. can information the updates thank release. the Until through or All news with time forward via contact question with best. press you or ask for call meantime, provide on we'll You to again arrange a is again updating taking look our call. in ] us you In our QX IR release. then, whose We press

Operator

conference Thank The you has now attending presentation. for today's concluded.

now may You disconnect

Acorn Energy (ACFN) 9 May 242024 Q1 Earnings call transcript