Genie Energy Ltd.'s GNE third-quarter 2024 earnings results reveal a mixed landscape, showcasing challenges and advancements as the company adapts to shifting market conditions. While GNE continues to navigate variable demand in the energy sector, its focus on expanding its renewables segment and optimizing customer acquisition strategies has set the stage for growth. With strategic shifts in key areas, particularly in the renewables sector, Genie Energy is positioning itself to capitalize on emerging opportunities in the retail and utility-scale markets.
Q3 Results
The company's earnings per share for third-quarter 2024 were 38 cents, a 28.3% decrease from 53 cents in the prior-year quarter.
Total quarterly revenues of $111.9 million declined 10.5% from $125 million in the year-ago quarter.
The quarterly results were affected by reduced electricity consumption per meter due to milder summer and increased customer acquisition costs in the retail segment.
Genie Energy Ltd. Price, Consensus and EPS Surprise
Genie Energy Ltd. Price, Consensus and EPS Surprise
Genie Energy Ltd. price-consensus-eps-surprise-chart | Genie Energy Ltd. Quote
Segmental Performances
The company specializes in energy services, managing its operations through two primary segments:
Genie Retail Energy (GRE): The segment — the company's retail energy arm — saw a 12.1% year-over-year decrease in revenues in the third quarter of 2024 to $105.8 million from $120.3 million in the previous-year quarter. This resulted from lower electricity consumption per meter, attributed to milder summer and an increase in customer acquisition costs.
Operating income in this segment dropped 31.6% to $15 million in the third quarter of 2024 from $22 million in the prior-year quarter. Adjusted EBITDA fell 30.7% to $15.5 million in the reported quarter from $22.3 million a year ago.
Genie Renewables (GREW): The renewables segment performed strongly, with revenue growth of 29.2% to $6.1 million in the third quarter of 2024 from $4.7 million in the prior-year quarter. The rise stemmed from higher contributions from Diversegy — the company’s energy advisory and brokerage service — which nearly doubled its revenues. Additionally, revenue gains were realized from Genie Solar's projects, shifting the segment’s focus toward utility-scale solar and away from commercial or industrial projects.
The operating loss in GREW narrowed from $2.1 million in third-quarter 2023 to $0.2 million in the third quarter of 2024, reflecting improved cost management and a more profitable project mix. Adjusted EBITDA loss in this division saw a notable improvement, narrowing the loss to $24,000 in the reported quarter from $2 million a year ago.
Profitability Metrics
Gross profit for the quarter was $37.9 million, down 7.7% from $41.1 million in third-quarter 2023. The company's gross margin improved to 33.9% in the third quarter of 2024 from 32.9% in the previous year, supported by margin improvements in the renewables segment.
Operating income fell 34.7% to $11.7 million in the third quarter of 2024 from $17.9 million in the prior-year quarter. The decline reflects increased customer acquisition costs and reduced electricity consumption in the retail energy segment.
Adjusted EBITDA for the third quarter was $13.6 million, a 26.7% decrease from $18.5 million in the prior-year period. The decline in EBITDA underscores the company’s increased selling and administrative expenses, and slightly lower revenues.
Cost Analysis
The cost of revenues decreased to $74 million in the third quarter of 2024 from $84 million in the prior-year quarter, in line with the reduced electricity consumption in the retail segment.Selling, general and administrative SG&A costs rose to $25.2 million in the third quarter of 2024 from $23.2 million in the prior-year quarter, reflecting increased costs associated with GRE’s customer acquisition activities.
The company also reported $0.99 million in charges related to captive insurance liability in third-quarter 2024, which are non-recurring costs affecting overall profitability.
Cash & Debt
Genie Energy’s cash and cash equivalents, short and long-term restricted cash, and marketable equity securities totaled $191.7 million as of Sept. 30, 2024, up from $178.3 million as of June 30, 2024.
Total liabilities at the end of the quarter were $141.4 million, with notable improvements in cash flow management. Cash provided by operating activities for continuing operations reached $22.9 million in the third quarter of 2024, an 18.4% decline from $28 million in third-quarter 2023, reflecting increased operating costs.
Management Guidance
Genie Energy reaffirmed its 2024 adjusted EBITDA guidance of $40-$50 million, expecting performance to align with the higher end of this range, supported by robust operational results and adjustments in GREW. The company has identified growth opportunities in California's gas market and expects favorable conditions for continued meter expansion across retail markets.
Other Developments
In the quarter, Genie repurchased approximately 123,000 shares of Class B Common stock, amounting to a $2 million outlay, and maintained a quarterly dividend of 7.5 cents per share, payable to Class A and Class B shareholders.
GRE’s customer acquisition boosted the meter count by 36,000. Yet, higher acquisition costs and decreased per-meter electricity use impacted The segment's revenues and profitability. Meanwhile, GREW’s reorientation toward utility-scale solar projects is expected to enhance the gross margin and reduce SG&A costs, setting the segment on a sustainable growth path.
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