Genie Energy Ltd. (NYSE:GNE) reported solid financial results for the first quarter of 2024, with record quarterly revenue and gross profit. The company's diversified business model, which includes its Retail Energy Supply (GRE) and Renewables (GREW) segments, delivered strong performance across key metrics.

Financials

In the first quarter of 2024, Genie Energy reported consolidated revenue of $119.7 million, up 14% from $105.3 million in the prior year period. This top-line growth was driven by a 10.9% increase in revenue at the GRE segment to $112.5 million, as well as an 86.9% surge in revenue at the GREW segment to $7.2 million. Consolidated gross profit increased 1.5% to $33.8 million, though the consolidated gross margin declined 340 basis points to 28.2% due to a decrease in GRE's electricity margins.

Genie Energy's net income for the full year 2023 was $19.5 million, with annual revenue of $428.7 million, operating cash flow of $62.5 million, and free cash flow of $53.5 million. In the first quarter of 2024, the company reported net income of $8.2 million.

GRE Segment Performance

The GRE segment, which owns and operates retail energy providers that resell electricity and natural gas to residential and small business customers, saw its first quarter revenue increase 10.9% year-over-year to $112.5 million. This was driven by a 20.0% rise in electricity revenue, partially offset by a 16.8% decline in natural gas revenue. The increase in electricity revenue was due to a 34.0% jump in consumption, reflecting an 18.4% increase in the average number of meters served and a 13.2% rise in average consumption per meter. However, the average electricity rate per kilowatt hour sold decreased 10.4%. Natural gas revenue declined due to a 22.6% drop in the average revenue per therm sold, partially offset by a 7.5% increase in natural gas consumption.

GRE's first quarter gross profit decreased 1.1% to $32.2 million, as the segment's gross margin contracted 350 basis points to 28.6%. This was driven by a decline in the gross margin on electricity sales, partially offset by an increase in the gross margin on natural gas sales. GRE's income from operations decreased 13.4% to $14.2 million, primarily due to higher selling, general and administrative (SG&A) expenses related to increased customer acquisition costs and utility purchase of receivable program fees.

GREW Segment Performance

Genie Renewables, the company's solar energy and energy services segment, reported a 86.9% surge in first quarter revenue to $7.2 million. This was driven by increased sales of solar projects by Genie Solar and growth in Diversegy's energy brokerage and advisory services. Genie Renewables' first quarter gross profit more than doubled to $1.6 million, and its loss from operations narrowed to $645,000 from $1.1 million in the prior year period.

Liquidity

On the balance sheet, Genie Energy ended the first quarter of 2024 with $162.4 million in cash, cash equivalents, restricted cash and marketable securities, providing ample liquidity to fund its growth initiatives. The company's working capital stood at $127.2 million. During the quarter, Genie repurchased 250,000 shares of its Class B common stock for $4.1 million and paid $2.1 million in quarterly dividends to shareholders.

Outlook

Looking ahead, Genie Energy remains confident in its ability to deliver $40 million to $50 million in consolidated adjusted EBITDA for the full year 2024. This guidance reflects the company's expanded customer base at GRE, its pivot away from international retail operations, and its focus on enhancing analytical and operational capabilities. At the GREW segment, the company expects to complete its Perry and Lansing solar farms in New York this year, while also expanding its project development pipeline.

Conclusion

Genie Energy's diversified business model, with its GRE retail energy supply and GREW renewable energy segments, has positioned the company for continued growth and value creation. The company's solid first quarter results, strong balance sheet, and positive outlook underscore its ability to execute on its strategic priorities and deliver for shareholders.