Record Fourth Quarter and Full Year Revenue
Full-year 2023 Adjusted EBITDA1 exceeded upper range of prior guidance
Cash and cash equivalents, short and long-term restricted cash, and marketable equity securities increased 55% year-over-year to $163.4 million with no debt outstanding
Genie Energy, Ltd., a leading retail energy and renewable energy solutions provider, announced results for the fourth quarter and full year ended December 31, 2023.
Michael Stein, chief executive officer of Genie Energy, commented:
"Genie finished a strong year with record fourth quarter and full-year revenue. After reducing our retail customer exposure in 2022, which led to incredible but unsustainable profitability, we returned to customer acquisition mode in 2023, growing both RCEs and meters by over 30%. Through our portfolio management moves we made in 2022 and the customer growth in 2023, we increased our baseline Adjusted EBITDA from the $25 to $30 million level we generated just a few years ago to the $40 to $50 million level.
“We also continued to make progress at our Genie Renewables, or GREW, division. During the quarter, our Sunlight Energy subsidiary acquired a 9.4MW portfolio of operating assets while we continued to advance our development portfolio. Our third-party energy and renewables services businesses also performed well led by Diversegy, which generated strong levels of growth in its customer book.”
Fourth Quarter 2023 Highlights
(Compared to 4Q22 unless otherwise noted. Unless otherwise noted, results of Genie Retail Energy International (GREI) are included in discontinued operations for all periods.)
? Revenue increased 28.9% to $104.9 million from $81.4 million;
? Gross profit decreased 3.1% to $33.6 million and gross margin decreased to 32.1% from 42.7%;
? Loss from operations of $34.2 million compared to income from operations of $15.5 million;
? The loss in 4Q23 reflects a one-time $45.1 million non-cash charge for a loss reserve at Genie’s newly established captive insurance operations;
? Adjusted EBITDA1 decreased 38.0% to $11.4 million from $18.5 million;
? The decrease reflects both the strong gross margin achieved at Genie Retail in 4Q22 and increased investment in customer acquisitions in 4Q23;
? Net loss attributable to Genie common stockholders and loss per diluted share (EPS) attributable to Genie common stockholders of $24.5 million and $(0.90) compared to net income of $16.2 million and diluted earnings per share of $0.59, respectively;
? Non-GAAP1 net income and non-GAAP EPS1 attributable to Genie common stockholders, which excluded the impact of the insurance loss reserve, of $10.0 million and $0.37 compared to $16.2 million and $0.59, respectively;
? Cash and cash equivalents, short and long-term restricted cash, and marketable equity securities increased to $163.4 million at December 31, 2023, from $105.1 million at December 31, 2022;
? Genie Energy paid a $0.075 per share quarterly dividend to Class A and Class B common stockholders on February 28, 2024, with a record date of February 20, 2024.
Full Year 2023 Highlights
(versus 2022; excludes discontinued operations of GRE International for all periods)
? Revenue increased 35.9% to $428.7 million from $315.5 million;
? Gross profit decreased 5.5% to $146.2 million from $154.8 million; gross margin decreased to 34.1% from 49.1%;
? Income from operations decreased to $10.0 million from $77.8 million. The reduction reflects, in part, the $45.1 million non-cash charge for a reserve at Genie’s captive insurance operations;
? Adjusted EBITDA decreased to $58.2 million from $83.2 million;
? GRE generated income from operations and Adjusted EBITDA of $71.9 million and $73.3 million, compared to $92.6 million and $93.8 million, respectively;
? Net income attributable to Genie common stockholders and diluted EPS attributable to Genie common stockholders of $20.3 million and $0.74, respectively;
? Non-GAAP net income and non-GAAP EPS attributable to Genie common stockholders, which excluded the impact of the insurance loss reserve, of $53.7 million and $2.06, respectively;
? Redeemed and retired the remaining $8.4 million of outstanding preferred stock;
GRE's fourth quarter and full-year revenue increased 27.8% to $98.4 million and 34.8% to $409.9 million, from $77.0 million and $304.0 million, respectively. Both increases were driven by growth in the customer base during the year. Fourth quarter income from operations decreased 26.8% to $15.0 million from $20.6 million, and Adjusted EBITDA decreased 26.4% to $15.4 million from $20.9 million. Full-year income from operations decreased 22.3% to $71.9 million, and Adjusted EBITDA decreased 21.9% to $73.3 million, reflecting GRE's elevated gross margins in the year-ago quarter and the increased pace of customer acquisitions in 2023 compared to 2022.
Genie Renewables (GREW)
GREW increased fourth-quarter revenue by 48.4% year-over-year to $6.5 million, driven by growth at Diversegy and CityCom Solar. The same two businesses drove an increase in full-year 2023 revenue of 62.8% to $18.8 million.
Genie Solar continued to advance its project development pipeline during the fourth quarter. In addition to the movement of projects through its development pipeline, the Company acquired a portfolio of 12 operating assets totaling 9.4-MW. At December 31, 2023, Genie Solar's operating portfolio and development pipeline comprised:
Balance Sheet and Cash Flow Highlights
As of December 31, 2023, Genie Energy reported cash and cash equivalents, short and long-term restricted cash, and marketable equity securities of $163.4 million, an increase from $105.1 million at December 31, 2022 and from $143.8 million at September 30, 2023.
Total assets as of December 31, 2023 were $330.6 million. Liabilities totaled $146.0 million, and working capital (current assets less current liabilities) totaled $131.6 million. Non-current liabilities were $47.8 million.
Cash provided by operating activities was $62.5 million in 2023 compared to $80.7 million in 2022.
Trended Financial Information:*
2024 Commentary
Stein continued: “The Company's strong 2023 performance resulted from the measures we took in 2022 and 2023 to re-position the Company, and we expect that 2023's key trends will help us to deliver outstanding results in 2024. Our initial expectation is for Adjusted EBITDA to be within our new baseline range of $40 to $50 million, providing sufficient cash generation to continue building our cash reserves while investing judiciously in growth opportunities and continuing to pay a dividend.
"For GRE, we are likely to continue to grow our customer base and generate Adjusted EBITDA above historical norms. For GREW, we expect to initially fund the construction of our two current construction-stage solar projects with cash on hand, but eventually, we expect to take on project-level debt as our development-stage projects come closer to operational status. Additionally, we expect to benefit from the recent changes we implemented to upgrade our solar organization and improve overall efficiency and execution throughout the Company. We expect these organizational enhancements will also help improve our development pipeline moving forward. Finally, at Diversegy, we expect to see significant growth in recurring revenue.”
