Genie Energy Increases Guidance, Reports Less Aggressive Customer Acquisition

November 6, 2023

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Genie Energy, Ltd. announced in reporting third quarter of 2023 earnings (quarter ending September 30, 2023) that it is increasing its previous consolidated 2023 Adjusted EBITDA guidance range of $47 to $55 million to $52 to $57 million.

"This range increase reflects our strong third quarter and continued optimism about the business as we head into winter," said Michael Stein, chief executive officer of Genie Energy

Genie Retail Energy (GRE) was less aggressive in terms of customer acquisition during the third quarter of 2023, executives said, versus the, "strong customer acquisitions during the first half of 2023".

Genie Retail Energy (GRE) meters were 385,000 as of September 30, 2023, versus 381,000 as of June 30, 2023 and 271,000 a year ago

GRE gross meter additions during the three months ending September 30, 2023 were 60,000, versus 75,000 during the three months ending June 30, 2023, and 33,000 a year ago

GRE RCEs were 375,000 as of September 30, 2023, versus 380,000 as of June 30, 2023, and 251,000 a year ago

GRE average monthly churn was 4.4% in 3Q23, versus 4.3% in 2Q23 in 4.7% in 3Q22. The churn data excludes expiration of low margin aggregation deals

GRE income from operations decreased 19.7% to $22.0 million, and Adjusted EBITDA decreased 19.5% to $22.3 million, "reflecting GRE's elevated gross margins in the year-ago quarter," the company said

GRE gross margin was 33.9% for the quarter ending September 30, 2023, versus 41.8% in the quarter ending June 30, 2023, and 54.1% a year ago. The year-ago gross margin reflects the year-ago decision to reduce customer load during a time of volatile commodity prices

Stein stated, "Our third quarter results were highlighted by record quarterly revenue and the strong bottom-line performance of our domestic energy supply business. In the year-ago quarter, in light of that period's unprecedented market volatility, we adjusted our commodity management strategy, curtailed customer acquisitions, and exited our European business to maximize profit and cash flow. This year's third-quarter results reflect the underlying strength of our domestic retail business under normalized market conditions and our successful efforts this year to add new retail customers with favorable economics."

Stein stated, "On a consolidated basis, our robust bottom-line results in the third quarter drove a 24% increase in cash flow from operations which further fortified our balance sheet. We closed the quarter with cash, restricted cash and marketable equity securities of $143.8 million."

On a consolidated basis, Genie Energy, Ltd. Adjusted EBITDA for the quarter ending September 30, 2023 decreased 24.3% to $18.5 million

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