Genie Energy Ltd. Class B Stock

Good morning, and welcome to the Genie Energy Limited's Second Quarter 2026 Earnings Call. In today's presentation, Genie Energy management will discuss Genie's financial and operational results for the 3 months ended June 30, 2026. During prepared remarks by Genie Energy's Chief Executive Officer, Michael Stein; and Chief Financial Officer, Avi Goldin.

[Operator Instructions] Any forward-looking statements made during this conference call, either in the prepared remarks or in Q&A session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates. These risks and uncertainties include, but are not limited to the specific risks and uncertainties discussed in the reports that Genie Energy files periodically with the SEC. Genie Energy assumes no obligation either to update any forward-looking statements that they may have made or may make or to update the factors that may cause actual results to differ materially from those that they forecast.

In their presentation or in the Q&A session, Genie Energy's management may refer to adjusted EBITDA and other non-GAAP measures. The schedule provided in the Genie Energy earnings release reconciles adjusted EBITDA to the nearest corresponding GAAP measures. Please note that the Genie Energy earnings release is available on the Investor Relations page of the Genie website. The earnings release has also been filed on Form 8-K with the SEC. I will now turn the conference over to Michael Stein.

Thank you, operator. In the second quarter, Genie delivered strong bottom line results in both operating segments while continuing to invest in growth opportunities across our businesses and return value to shareholders. At Genie Retail Energy, relatively normalized wholesale energy market conditions enabled us to achieve gross margin on a level comparable to our long-term historical average, and that drove a significant year-over-year improvement in our bottom line results.

GRE's top line declined 5%, primarily reflecting the expiration of aggregation deals over the past year. The deals typically generate low-margin revenue, so the impact of their expiration on our bottom line was minimal. At quarter end, we served 345,000 RCEs and 363,000 meters compared to 413,000 RCEs and 419,000 meters a year earlier. During the second quarter, we added 65,000 gross new customers compared to 70,000 a year earlier. Total customer acquisition expense increased materially as we acquired a higher percentage of customers through higher cost of acquisition channels and fewer through lower-cost channels.

We approach these low-cost channels opportunistically as they generate lower margin customers compared to higher cost channels. We allowed low-cost channel acquisition volumes to fluctuate depending on how competitive market rates compare to the incumbent utilities offerings. In the second quarter, with these low-cost channels underperforming, we increased our investment in acquisitions through higher cost channels, increasing our base of higher lifetime value customers and building a tailwind that we expect to positively impact the coming quarters.

Acquisitions through high-cost channels also enabled us to prioritize further diversification of our customer base through strong growth in some of our newer markets, including Texas power market and California's gas market. At GREW, the top line was flat year-over-year. However, contributions from our Diversegy energy brokerage and Genie Solar businesses enabled the segment to achieve positive EBITDA. Diversegy had a particularly strong quarter as it continues to execute its growth strategy. Both Diversegy and Genie Solar are on track to further expand the bottom lines in the coming quarters.

Diversegy continues to build its book of business at a double-digit annualized growth rate. Even better because new business frequently entails upfront customer payments, growth from a cash perspective has been stronger than what is reflected in EBITDA. Moreover, this new business will drive revenue growth for several years to come as we earn revenue over the lifetime of the contracts. One of the key drivers for Diversegy's expansion has been our ability to leverage AI to optimize our customer acquisition efforts across channels, analyzing the energy requirements of our customers and their industries so that we can tailor our offerings to meet their needs with greater precision.

At Genie Solar, we turned on our second community solar project in New York State late in the second quarter, and that will positively impact results starting in the third quarter. GREW's second quarter's results also reflected our continued investment in several early-stage growth initiatives, most notably at Roded. As we've discussed previously, Roded utilizes a patented recycling technology to manufacture useful plastic products from agricultural and other plastic waste. At Roded, we made terrific progress during the quarter.

The company continued to expand production in Israel to meet strong local demand for its pallet products. In fact, we already are approaching the production capacity at our current facility and received a commitment from the Israeli Minister of Environment to underwrite a material portion of the cost of constructing a larger manufacturing plant. To diversify Roded's revenue, we are preparing to begin manufacturing a second product, utilizing the same recycled plastic feedstock. Also, the company was certified as a producer of plastic credits through Verra's Plastic Waste Reduced Standard program, a global platform to incentivize businesses to utilize the vast quantities of waste plastic that otherwise would end up in our oceans or our landfills. This certification will enable Roded to enhance profitability through the monetization of credits it receives for the plastic it collects and converts to finished product.

Looking a little further ahead, Roded is moving forward on an international expansion. The company has identified several potential manufacturing sites in the Southeastern U.S. and is now working to select the final site, hire key managers and design the initial pallets it will offer for the North American market. To wrap up, at Genie Energy, for the balance of the year, we're looking to boost cash generation across GRE, Diversegy and Genie Solar, make good operational progress in our growth initiatives and return value to shareholders through opportunistic stock purchases and our quarterly dividends.

Now I will turn the call over to Avi for his discussion of our financial results.

Thank you, Michael, and thanks to everyone on the call for joining us this morning. My remarks today cover our financial results for the 3 months ended June 30, 2026. In my commentary, I'll compare the results for the second quarter of 2026 to the second quarter of 2025 to remove from consideration the seasonal factors that impact our results, particularly our retail energy business. The second quarter, which includes spring and the early stages of the summer cooling season, is typically characterized by moderate levels of electricity consumption and low levels of natural gas consumption.

The quarter's financial results were highlighted by strong margin and adjusted EBITDA expansion at GRE and profitability at GREW, both of which helped to drive an increase in our consolidated bottom line performance. Consolidated revenue in the second quarter decreased 4.6% to $100.4 million. GRE revenue decreased 4.9% to $94.1 million as our customer base contracted due to the expiration of low-margin aggregation deals. The resulting decrease in consumption was partially offset by increased revenue per unit sold for both electricity and natural gas.

Sales of electricity, which contributed 89% of GRE's revenues decreased 7% to $83.6 million. Kilowatt hours sold decreased by 17%, while revenue per kilowatt hour sold increased 12%. Natural gas revenue decreased 16.2% to $10.6 million. Therm sold decreased 23%, while revenue per therm sold increased 50%. At GREW second quarter revenue was relatively unchanged at $6.3 million. Consolidated gross profit increased 43.4% to $33.7 million, while gross margin increased to 33.5%.

At GRE, gross profit increased 42.2% to $30.3 million and gross margin increased to 32.2%. GRE achieved a gross margin within historical range given normalized commodity market conditions. Note that the year ago second quarter was impacted by unusually low natural gas profitability. At GREW gross profit increased 55% to $3.3 million, driven by increased contribution from both Diversegy and Genie Solar, the two more mature businesses within the segment, both of which are already generating cash.

Consolidated SG&A increased 28% to $27.2 million, largely reflecting a mix shift to Genie Retail's customer acquisition channels towards higher per acquisition cost methods. Despite their higher costs upfront, these channels typically generate customer cohorts with higher customer lifetime values. The gross profit increase at GRE drove a $4.3 million year-over-year increase in consolidated income from operations to $6.5 million and a $4.5 million increase in adjusted EBITDA to $7.5 million.

At GRE, income from operations increased 108.3% to $8.3 million and adjusted EBITDA increased 96.7% to $8.7 million. Strong contributions from Diversegy and Genie Solar enabled GREW to achieve profitability. Income from operations increased to $100,000 from a loss from operations of $200,000 a year earlier, and adjusted EBITDA increased to $300,000 from an adjusted EBITDA loss of $97,000 in the second quarter of 2025. Consolidated net income attributable to Genie common stockholders was $11.4 million or $0.43 per diluted share compared to $2.3 million or $0.09 per share a year earlier.

Turning now to the balance sheet. At June 30, 2026, cash, cash equivalents, long-and-short-term restricted cash and marketable equity securities totaled $204.3 million. Working capital was $199.6 million. Our net debt totaled $6.8 million, the largest component of which is the financing of our portfolio of operational solar arrays. We repurchased approximately 47,000 shares of our Class B common stock in the second quarter for $659,000, and we paid our regular quarterly dividend, returning an additional $2 million directly to our stockholders.

Wrapping up, normalized energy market conditions helped us to restore margins at GRE to their long-term range, while GREW generated positive EBITDA even as we continue to invest in early-stage growth initiatives. The improved performance has helped to significantly enhance our profitability, while our balance sheet remains strong with robust levels of cash and minimal debt. Operator, back to you for Q&A.

[Operator Instructions] First question today is coming from Matvey Tayts from Freedom Broker.

Congratulations for the strong results. So my question is about the other income, which is quite significantly impact the bottom line. So -- can you elaborate a little bit the breakdown of this other income? And how do you see it going forward towards the end of the year?

Sure. This is Avi. Thank you for the question. So the other income line reflects the change in value of other investments that we have, primarily when we invest balance sheet cash. So as you're aware, we have a very strong cash position. So when we make investments that are to use that cash position to get value, those flow through the other investment line. So it's difficult to predict what those are going to be, but we expect that to hopefully continue to be positive for the company.

Okay. Great. Yes. And one more question is the -- so we see that there is some sort of sensitivity of your profitability and the gas prices basically, which drives also electricity prices. So -- and now with the lower gas prices in second quarter, so we see positive impact also on your profitability and operating results. So how do you see it going forward towards the year-end? So do you expect also this trend to continue? Or is it something to be revised from this point of view?

Thanks for the question. It's hard to predict, obviously, what markets are going to do. But we feel like we're in a good position right now through the rest of the year to capitalize on where the market is and again, still achieve the guidance that we set out.

Yes. Okay. Great. So -- and again, this higher general expenses is, as you said, as you mentioned, it's more expensive acquisition of new clients. So we also see it kind of to be paid back in the future as it's more profitable sort of clients you're onboarding through this higher general expense. Is it correct, what I understood?

Yes. So our sales channels or our customer acquisition channels in general are a combination of our door-to-door telemarketing and digital marketing, direct mail and other kinds of marketing efforts that we do. And some of those channels generally yield higher-margin customers and some of those channels generally are lower cost, but yield and yield lower-margin customers.

So yes, what we were saying is that this quarter, let's say, versus last quarter, when we acquired a similar number of meters this quarter versus last year, the same quarter, the acquisition expense was significantly higher, and that's because the -- because most of the customer acquisition that was done this quarter was dominated by acquiring those higher-margin customers, whereas last year in the same quarter, there was a much higher percentage of that customer acquisition that was coming from the lower cost, the lower margin acquisition channels.

Yes, interesting. And the last one, if you for, about this -- your new plastic business, that's like -- maybe you can share with us like estimates what's the overall market value in Israel and Europe, like where you potentially could expand. So just a little bit more on this particular market for the product you now develop.

Yes, for sure. So without getting into specific numbers, what I can tell you is that we are currently, like you said, operating. And like we mentioned on the call, we intend to expand to the U.S., the U.S. being obviously a significantly larger market than Israel. And our plan is all along has been to start with selling pallets and pallets is a huge, huge market. I mean everything that gets shipped essentially goes out on pallets. And it is our hope and intention to take market share in that space. And because our cost of raw materials is significantly lower than that of our competitors who are also doing plastic pallets even for the same level of performance, we think we can take a good deal of market share.

Obviously, it takes time to manufacturing, but that. But what's great about the technology and the patents that we have is that the patent is not on creating pallets. The patent is on creating any finished product. And as we mentioned on this call, we're already starting to make our second product custom for our customer. We've already started designing it and working out the details with that customer, very interested. And we know another -- a whole bunch of customers who are also interested in that product. And our intention is to continue to diversify our portfolio of products using the same waste material and the same technology so that the market potential is as large as possible. But obviously, as this thing gets more mature, we intend to share more numbers.

As there are no more questions, this concludes our question-and-answer session and conference call. Thank you for attending today's presentation. You may now disconnect.

Good morning, and welcome to the Genie Energy Ltd's First Quarter 2026 Earnings Call. In today's presentation, Genie Energy management will discuss Genie's financial and operational results for the 3 months ended March 31, 2026. During prepared remarks by Genie's Chief Executive Officer, Michael Stein; and Chief Financial Officer, Avi Goldin. [Operators Instructions] After Avi Goldin's remarks, Michael and Avi will take questions from investors.

Any forward-looking statements made during this conference call, either in the prepared remarks or in the Q&A session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates. These risks and uncertainties include, but are not limited to the specific risks and uncertainties discussed in the reports that Genie Energy files periodically with the SEC.

Genie Energy assumes no obligation either to update any forward-looking statements that they have made or may make or to update the factors that may cause actual results to differ materially from those that they may forecast. In their presentation or in the Q&A session, Genie Energy's management may refer to adjusted EBITDA and other non-GAAP measures. The schedule provided in the Genie Energy earnings release reconciles adjusted EBITDA to the nearest corresponding GAAP measures.

Please note that the Genie Energy earnings release is available on the Investor Relations page of the Genie website. The earnings release has also been filed on a Form 8-K with the SEC. I will now turn the conference over to Michael Stein. Sir, you may begin.

Thank you, operator. GE's first quarter results were mixed as investments in the customer acquisition at GRE and the new business initiatives at GREW, combined with weakness in retail margins negatively impacted our bottom line despite record quarterly revenue. As a result, we are lowering full year 2026 guidance to $32.5 million to $40 million, in adjusted EBITDA from the prior range of $40 million to $50 million.

At GRE, challenging commodity market conditions in the first 2 months of the quarter caused by extreme cold compressed margins for both electricity and gas. Thankfully, in March, margins returned to normalized levels in line with our historical averages. We also increased our customer acquisition spend this quarter to acquire 84,000 new retail customers during the first quarter. At March 31, we had 354,000 RCEs and 364,000 meters, achieving net increases of 25,000 RCEs and 18,000 meters in just the first quarter of the year. And unlike last year at this time, when we held a significant number of meters through municipal aggregation deals, our current meters are at higher value.

Over the past 12 months, we have significantly reduced the number of low-margin municipal aggregation customers in our book. At GREW, our performance in the first quarter reflected increased investment in several early-stage growth initiatives and a further write-down of our solar panel inventory. Despite the tough first quarter, we expect to see significant improvement throughout 2026. GRE is a resilient, strongly cash-generative business that by its nature, will have episodes of margin compression like this one, but also opportunities for exceptional profitability.

Assuming normal wholesale market conditions and with our proven customer acquisition engine, we expect strong performance from GRE for the rest of the year. At GREW, all three strategic areas of our business are in good shape. Diversity continues to grow its book of business and generate cash. Genie Solar is on track to be profitable for the remainder of the year and beyond, and we expect that our key early-stage initiatives collectively will gradually pivot towards profitability as they gain scale in the coming quarters. Among these initiatives, I'm particularly excited by the potential of Roded, our majority-owned venture that has pioneered new techniques for transforming agricultural waste plastics into commercial plastic products with an initial focus on plastic pallet production.

Roded has begun to sell its recycled pallets in Israel and has already maxed out the capacity of its first production line. We are building a second line on the same site, and that line is expected to start production in the current quarter, Q2. Meanwhile, we are also evaluating expansion opportunities to add production capacity, both here in the U.S. and in Europe. Collectively, Roded and our other early-stage ventures are gaining scale. By year-end, we plan for them to be at the point they will require lower levels of further investment.

Across Genie, we are working hard to maximize the potential in each of our businesses. We are very excited by the opportunities to build both our established and nascent units, and we expect to drive improved performance for the remainder of the year and beyond. Now I will turn the call over to Avi for his discussion of our financial results.

Thank you, Michael, and thanks to everyone on the call for joining us this morning. My remarks today cover our financial results for the 3 months ended March 31, 2026. In my commentary, I'll compare the results for first quarter of 2026 to the first quarter of 2025 to remove from consideration the seasonal factors that impact our results, particularly within our retail energy business. The first quarter is typically characterized by relatively high levels of per meter electric power and gas consumption as it includes most of the winter's peak heating period in our service areas.

Our first quarter's financial results were weaker than usual as volatility within the power markets hurt margins from Genie Retail in the first 2 months of the quarter. This was compounded by higher levels of investment spending in customer acquisition and GRE and in growing our new business initiatives at GREW. As Michael discussed, we already saw improvement in the operating environment in March and are expecting the balance of the year to be more in line with historical performance. Consolidated revenue in the first quarter increased 4% to $142 million, driven by the commodity price environment in our retail business and increased sales of our remaining inventory of solar panels at Genie Solar, although at reduced margins. GRE revenue increased 2% to $134.8 million in the first quarter, driven by a 24% increase in gas sales, partially offset by a 4% decrease in electricity sales.

Although we acquired a large number of customers in this quarter, our customer base was still below the year ago level as we did not renew some municipal aggregation deals that expired during the year. At GREW, revenue increased 74% to $7.5 million, primarily reflecting the partial liquidation of Genie Solar panel inventory and the completion of certain legacy projects as we wind down noncore operations there. Consolidated gross profit decreased 20% to $29.8 million for a gross profit margin of 21%, a decrease of 640 basis points compared to the year ago quarter. At GRE, gross profit dipped 19% to $29.1 million and gross profit margin decreased 550 basis points to 21.6%. The decrease resulted from volatility in both our average power and gas costs, driven by the severe winter weather in the earlier part of the quarter.

Power and gas costs increased by 28% and 55% per unit, respectively, in the first quarter. We were able to partially mitigate the impact on our results through our hedging and pricing strategies. At GREW, gross profit decreased 49% to $745,000. The decrease primarily reflected the write-down in value and sell-off of our solar panel inventory that Michael mentioned and the impact of our continued wind down of legacy solar operations. Consolidated SG&A expense increased 17% to $27.9 million, driven primarily by the increased customer acquisition expense at GRE and investment in new initiatives in GREW. Consolidated income from operations and adjusted EBITDA, which totaled $1.9 million and $2.8 million on a consolidated basis, respectively, were below our expectations for the quarter for the reasons previously outlined. Diluted EPS for the quarter was $0.11 versus $0.40 a year ago.

GRE contributed $6.6 million of income from operations and $7 million in adjusted EBITDA compared to $16.8 million and $17.1 million, respectively, in the year ago quarter. GREW's loss from operations increased to $2.4 million from $855,000 a year ago. GREW's adjusted EBITDA loss increased to $2.3 million from $673,000. The increased loss reflected the impact of the Genie Solar wind down and increased investment in Roded and other early-stage business initiatives. Turning now to the balance sheet. At March 31, 2026, cash, cash equivalents, restricted cash and marketable securities totaled $199.8 million and working capital was $188.4 million.

Our debt current and noncurrent totaled $6.8 million, the largest component of which was financing for our portfolio of operational solar arrays. To wrap up, this was a tough financial quarter whose impact was reflected in our revised 2026 guidance. Looking forward, we expect margins to strengthen within retail and the investments they are making in growth to drive strong results. We remain in a solid financial position with a strong balance sheet and adequate capitalization to continue returning value to shareholders while executing on our growth plan. Operator, back to you for Q&A.

[Operator Instructions] We have a question from Matvey Tayts.

Can you hear me?

Yes, we hear you.

Okay. Great. So my question is about SG&A. To what extent it's related to the number of acquisitions that you have? And how do you see it going forward towards the end of the year? Will it be as expensive as in first quarter or probably there is some other like additional factor, which I have to take into consideration for looking forward?

Yes. So the additional sales expense is somewhere in the neighborhood of $3 million for the quarter for the additional meters that we were able to acquire. Whether or not it will continue throughout the year is dependent on if we can continue the accelerated pace of acquisition. So I can't answer that yet. But we believe -- if it does, we believe it's a good investment in the future of the company.

[Operator Instructions] We have a question from Jim Harden.

I'm a personal investor. Just a quick question on the insurance subsidiary side. Just wondered if you had any sort of update on the operations there.

Yes. So the operation has definitely grown primarily in the fourth quarter and the first quarter. A lot of the sales activity happened in the fourth quarter, and we're starting to recognize revenue. We started to recognize revenue in the first quarter. We think that the revenues will continue to grow there. We're excited about the prospects.

We have a question from Ibrahim Khan. Ibrahim, can you hear us? It appears we have lost Ibrahim's line for now. Okay. As we have -- as there are no further questions, this will conclude today's question-and-answer session and conference call. We thank you for attending today's presentation, and you may now disconnect.

Good morning, and welcome to the Genie Energy Limited's Third Quarter 2025 Earnings Call. In today's presentation, Genie Energy management will discuss Genie's financial and operational results for the 3 months ended September 30, 2025. During prepared remarks by Genie Energy's Chief Executive Officer, Michael Stein; and Chief Financial Officer, Avi Goldin [Operator Instructions]. After Avi Goldin's remarks, Michael and Avi will take questions from investors.

Any forward-looking statements made during this conference call, either in the prepared remarks or in the Q&A session, whether general or specific in nature, are subject to risks and uncertainties that may cause actual results to differ materially from those which the company anticipates. These risks and uncertainties include, but are not limited to, the specific risks and uncertainties discussed in the reports that Genie Energy files periodically with the SEC.

Genie Energy assumes no obligation either to update any forward-looking statement that may have been made or may make or to update the factors that may cause actual results to differ materially from those that they forecast. In their presentation or in the Q&A session, Genie Energy's management may refer to non-GAAP measures, including adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share.

A schedule provided in the Genie Energy earnings release reconciles adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share to the nearest corresponding GAAP measures. Please note that the Genie Energy earnings release is available on the Investor Relations page of the Genie website. The earnings release has also been filed on Form 8-K with the SEC.

I will now turn the conference over to Mr. Michael Stein. Sir, the floor is yours.

Thank you, operator. Genie Energy achieved another quarter of double-digit top line growth, leading to record high third quarter revenue. The revenue increase was fueled by an increase in per meter electricity consumption, rising commodity prices and RCE-based growth at GRE. However, the challenging market conditions that impacted GRE's second quarter results persisted in the third quarter and again weighed on our bottom line with diluted EPS decreasing to $0.26 per share from $0.38 per share. Throughout 2023 and 2024, we were able to generate strong margins, thanks to favorable market conditions and our ability to monetize a portion of our forward hedge positions.

So far this year, the rapid run-up in energy commodity prices has cut against us and outstripped the protection afforded by our commodity hedges. The financial impact of this rapidly rising commodity price environment has been somewhat amplified by the increasing percentage of fixed price contracts in our retail book, most notably the large municipal aggregation deal that expires during Q4.

These negotiated fixed rate price contracts typically generate large sales volumes at significantly lower margins than the individual customer and small business accounts that comprise the balance of our retail book. Previous aggregation deals we won were reasonably profitable. This one has been less successful due to the market volatility. However, margin volatility is inherent in our retail business, and we do expect conditions to improve. In fact, we are seeing indications that, that process is underway now in Q4, and we expect that margins will continue to strengthen as we get further into 2026.

Our management team has successfully operated this business through a variety of different margin cycles, and I'm confident that this one will be no different. At GRE, we continue to prioritize the acquisition of high-consumption electric meters. In the third quarter, we grew our electricity customer base to approximately 318,000 RCEs, representing a year-over-year increase of 5.4%. While our gas book contracted on a combined basis for both electricity and gas, we increased total RCEs by 4.2% to 396,000, while total meters increased 0.8% to 402,000.

GRE's third quarter adjusted EBITDA decreased from the year ago level as increasing commodity costs continued to pressure margins. At Genie Renewables, GREW, we should be just days away from turning on Genie Solar's Lansing Community solar project, and we expect it to begin generating revenue in the fourth quarter. In addition, we made good progress on the build-out of our Perry, New York array. For the remainder of Genie Solar's generation pipeline, we continue to evaluate potential paths forward in light of the changes in federal energy policy enacted earlier this year. Meanwhile, our portfolio of operating solar projects is performing well.

Also at GREW Diversegy, our energy advisory and brokerage business continued its impressive growth in revenue, gross profit and profitability for the third straight quarter, and we expect that trend will continue. This business has a potential to contribute $5 million to $6 million to GREW's bottom line in 2026, twice its contribution this year.

GREW's financial results were also significantly impacted by investments in several very exciting early-stage growth initiatives. One of these, Roded, our recycled plastic pallet business based in Israel, is now starting to generate revenue. Based on our success to date, we are looking at options to scale manufacturing in Israel and expand internationally.

During the third quarter, we continued to return value to our shareholders, repurchasing approximately 124,000 shares for $2 million and paying our regular quarterly dividend of $0.075 per share, while further strengthening our balance sheet. For the full year 2025, we expect to achieve our annual guidance range of $40 million to $50 million in adjusted EBITDA, albeit at the lower end of the range as GRE's margin environment gradually improves. Now here is Avi.

Thank you, Michael, and thanks to everyone on the call for joining us this morning. My remarks today cover our financial results for the 3 months ended September 30, 2025. In my commentary, I will compare the results for the third quarter of 2025 to the third quarter of 2024 to remove from consideration the seasonal factors that impact our results, particularly within our retail energy business.

The third quarter is typically characterized by relatively high levels of electricity consumption as it includes most of the summer's peak cooling season. Our financial results this quarter were highlighted by record revenue, continued margin compression in our retail business and investment in growth initiatives in our Renewables segment.

Consolidated revenue in the third quarter increased 24% to $138.3 million, driven by sales at our retail supply business, GRE. GRE's revenue increased 25% to $132.4 million in the third quarter, reflecting several factors. They included an increase in the average electricity consumption per meter, the year-over-year growth of our customer base as measured in RCEs that Michael mentioned and a slight increase in revenue per kilowatt hour sold.

Electricity revenue increased 26% to $126.6 million, contributing 96% of GRE's revenues. Kilowatt hours sold increased by 21%, while our revenue per kilowatt hour sold increased 4%. Natural gas revenue increased 15% to $5.8 million. Therm sold were substantially unchanged, while revenue per therm sold increased 14%.

At GREW, third quarter revenue decreased slightly to $6 million. Continued strong growth from our retail brokerage and advisory business diversity was substantially offset by top line declines in other lines of business. Consolidated gross profit decreased 21% to $30 million, while gross margin decreased from 33.9% to 21.7%.

At GRE, gross profit declined 23% to $27.6 million, reflecting significant increases in our wholesale electricity and natural gas costs. Essentially, the challenges that we discussed that impacted our results last quarter continued and in some respects, intensified for much of the remainder of the summer.

Our cost of electricity per kilowatt hour increased 20% compared to the year ago quarter with record prices and high weather-driven consumption that outpaced the protection of our forward hedge positions. Our cost per thermal gas increased even more steeply, up 137% year-over-year and gross margins on gas sales turned negative. Gas costs in the quarter were negatively impacted by a mark-to-market on the gas position related to our winter supply. Consolidated SG&A decreased 10% to $22.6 million and reduced payroll and customer acquisition expense. The gross profit reduction in GRE drove a 41% year-over-year decrease in consolidated income from operations to $6.9 million and a 40% decrease in adjusted EBITDA to $8.2 million. At GRE, income from operations decreased 32% to $10.2 million. Adjusted EBITDA also decreased 32% to $10.5 million.

At GREW, the third quarter loss from operations increased to $345,000 from $243,000 in the year ago quarter, while adjusted EBITDA loss increased to a negative $201,000 from negative $24,000 in the year ago quarter. The increased losses reflect investment in new business initiatives, substantially offset by accelerating profitability of Diversity and lower spending in solar. Consolidated net income attributable to Genie common stockholders was $6.7 million or $0.26 per share compared to $10.2 million or $0.38 per share a year earlier.

Turning now to the balance sheet. At September 30, 2025, cash, cash equivalents, long and short-term restricted cash, which includes cash held by our captive insurance subsidiary and marketable equity securities totaled $206.6 million, an increase compared to the $201.6 million 3 months earlier.

Working capital was $113.3 million. Our debt, current and noncurrent totaled $8.8 million, the largest component of which was financing for our portfolio of operating solar arrays that was completed earlier this year. We repurchased approximately 124,000 shares of our Class B common stock in the third quarter for $2 million and paid our regular quarterly dividend, returning an additional $2 million directly to our stockholders.

Wrapping up, while results did not meet our expectations, we do expect to achieve the low end of our full year guidance of $40 million to $50 million in consolidated adjusted EBITDA. As Michael mentioned in his remarks, we have successfully navigated this business through other margin cycles and are confident in its long-term profitability. Operator, back to you for Q&A.

[Operator Instructions] Okay. As we have no questions on the lines at this time, this will conclude the question-and-answer session and today's call. We thank you for attending today's presentation, and you may now disconnect.