Acorn's 2024 Net Income Rises to $2.51 Per Share, Including $1.77 Per Share in Deferred Income Tax Benefit, vs. $0.05 Per Share in 2023, on 36% Revenue Increase; Announces Plan to Pursue Uplisting to Nasdaq Capital Market

Investor Call Today at 11am ET

WILMINGTON, Del., March 06, 2025 (GLOBE NEWSWIRE) -- Acorn Energy, Inc. (OTCQB: ACFN), a provider of remote monitoring and control IoT solutions for backup power generators, gas pipelines, air compressors and other mission critical assets, announced results for its fourth quarter (Q4'24) and full-year periods ended December 31, 2024, which included a $4.4M non-cash benefit for deferred income taxes. Acorn also announced that it plans to pursue an uplisting to the Nasdaq Capital Market in the first half of this year. Acorn will hold an investor call today at 11am ET (details below).

Summary Financial Results (1)

 
 
($ in thousands)    Q4'24       Q4'23      % Change        2024        2023         % Change 
Monitoring 
 revenue           $1,203      $1,090         +10.4%     $ 4,553      $4,262        +6.8% 
Hardware revenue   $2,326      $1,160        +100.5%     $ 6,433      $3,797       +69.4% 
                    -----       -----      --------       ------       -----      ------ 
Total revenue      $3,529      $2,250         +56.8%     $10,986      $8,059       +36.3% 
                    =====       =====      ========       ======       =====      ====== 
Gross margin         72.4%       73.2%          -80 bps     72.8%       74.5%       -170 bps 
Net income to 
 stockholders 
 (2)               $5,233      $   84            nm (3)  $ 6,294      $  119          nm (3) 
Net income per 
 diluted share 
 (2)               $ 2.08      $ 0.03            nm (3)  $  2.51      $ 0.05          nm (3) 
 
(1) All of Acorn's revenue is derived from its 99%-owned 
 operating subsidiary, OmniMetrix$(TM)$, LLC. 
 (2) Includes $4.4M deferred income tax benefit or 
 $1.77 per diluted share for Q4'24 and 2024. 
 (3) The percentage change is not meaningful because 
 net income in the prior-year periods was near zero. 
 
 

CEO Commentary

Jan Loeb, Acorn's CEO, commented, "I'm very proud of the revenue, net income and cash generation growth our team achieved in 2024. Net income, including the deferred income tax benefit of $4.4M, rose to $6.3M, or $2.51 per diluted share, in 2024, building on our achievement of modest profitability in 2023. Acorn's strong performance and outlook for ongoing profitability required the partial release of the valuation allowance against our deferred tax assets, resulting in the $4.4M non-cash benefit. This valuation benefit represents roughly 28% of our $15.9M in deferred tax assets, with $11.4M remaining in valuation allowance.

"We have built a very compelling business model with high margin, annually recurring monitoring revenue, monitoring hardware sales and a blended gross margin of over 70%. We have also been able to manage our cost structure so that over 50% of 2024 incremental revenue contributed directly to our pre-tax profit in 2024. From a balance sheet and cashflow perspective, we grew our cash position over 60% to $2.3M in 2024 from $1.5M in 2023, and working capital improved to $1.1M in 2024 from ($0.6M) in 2023, with no debt outstanding. Importantly, Acorn's stockholders' equity now exceeds $5M, meeting a critical metric that will let us pursue an uplisting to the Nasdaq Capital Market in the first half of this year.

"Q4'24 and full-year 2024 operating results benefited from revenues relating to a material contract with a leading cell phone provider. The contract value, initially estimated at approximately $5M, represents monitoring equipment and the first year of monitoring services for 5,000 to 10,000 cell tower generators in the U.S. The rollout is progressing well and we expect the pace of hardware shipments to accelerate in the next few quarters, enabling us to complete the statement of work in 2025.

"This is a transformational contract as our selection through a competitive bidding process demonstrates the strength of our technology, team, capabilities and customer service commitment. We are working very hard on the rollout and execution and hope our efforts position us for future opportunities with this customer as well as others with substantial remote monitoring needs.

"We see several factors that should increase commercial and consumer demand for backup power generation and our industry-leading solutions in the coming years. These factors include:

   -- Increasing frequency of severe weather events disrupting electricity 
      access for days, weeks or months, 
 
   -- Aging grid infrastructure and growing peak demand strains which should 
      support backup power deployments and demand response capabilities, 
 
   -- Growing energy demand due to the expansion of cloud computing, e-commerce, 
      quantum computing and artificial intelligence, all of which require 
      uninterrupted power access, 
 
   -- Expanding demand for operational data to drive efficiency and regulatory 
      compliance in commercial operation; and 
 
   -- Increasing mission-critical power needs in healthcare, food storage, 
      security, defense, infrastructure, etc. 

"While we are pursuing new revenue opportunities through our nationwide network of approximately 600 generator dealers, our internal sales team is focused on large enterprise accounts. We are also working to develop strategic relationships with power generator and other industrial equipment manufacturers and through our ongoing search to identify strong, complementary, and accretive merger and acquisition opportunities.

"In summary, we believe Acorn is very well positioned to achieve long-term growth and improving profitability. We deliver valuable, high ROI solutions that enable customers to meet their personal, operational, financial and environmental goals. We have industry-leading engineering, product development and customer service teams and an efficient cost structure that provides significant operating leverage on incremental revenue. Because of our lean operating structure, we are agile and are able to respond to customer requests such as customized reporting and additional data visibility in a time-efficient manner. Given these factors and continued strength expected in the coming year, we should be positioned to exceed our long-term annual revenue growth target of 20% again in 2025."

Financial Review

Q4'24 revenue rose 57% to $3,529,000 over Q4'23 revenue, due to a 101% increase in hardware revenue and a 10% increase in monitoring revenue. Hardware growth included $913,000 of TrueGuard generator monitor revenue related to the material contract with a leading cell phone provider, as well as to increased sales of new product versions. Excluding $913,000 realized under the material contract, hardware revenue grew 22% in Q4'24 vs. Q4'23. For the full year 2024, excluding $1,637,000 realized under the material contract, hardware revenue grew 26%.

Monitoring revenue, which is amortized over the term of the service period (typically one year), grew 10% in Q4'24 and 7% in the full year 2024, reflecting continued increases in the number of monitored end points.

Full year 2024 total revenue rose 36% to $10,986,000, due to the same factors described above for the quarterly improvement.

Driven by revenue growth, gross profit grew 55% to $2,556,000 in Q4'24 reflecting a gross margin of 72%, as compared to 73% in Q4'23. Gross profit grew 33% to $7,999,000 in 2024, reflecting a gross margin of 73% versus 75% in 2023. For both periods, the decrease in gross margin was primarily attributable to an increase in hardware sales, which carry a lower gross margin than monitoring services, as a percentage of total revenue.

Operating expenses increased 9% to $1,711,000 in Q4'24 vs. $1,570,000 in Q4'23, driven by an $88,000 increase in selling, general and administrative (SG&A) expense and a $53,000 increase in research and development (R&D) expense. The increase in SG&A expense is a result of increased personnel costs, including staff additions, promotions, merit increases and bonuses, third-party consulting and benefit costs. The increase in R&D expense is related to increases in wages, effective October 1, 2024, bonuses paid to our engineering personnel and the expenses and materials paid to third-party consultants in the continued development of next-generation monitoring products and exploration into potential new product lines.

2024 operating expenses increased only 2% or $132,000 to $6,062,000, as higher commissions, IT consulting and certain personnel expenses were offset by the consolidation and elimination of a vice president of sales position within the organization. For the corporate parent, higher professional, audit and legal fees were offset by the absence of non-recurring expenses incurred in 2023 related to a reverse stock split.

Acorn's strong performance and outlook for ongoing profitability required the release of a valuation allowance against its deferred tax assets, resulting in a deferred income tax benefit of $4,435,000 recorded in Q4'24.

Reflecting revenue growth, operational improvements and the deferred income tax benefit, net income attributable to Acorn stockholders improved to $5,233,000, or $2.08 per diluted share, in Q4'24, from $84,000, or $0.03 per diluted share, in Q4'23. The deferred income tax benefit of $4,435,000 contributed $1.77 to the earnings per diluted share in Q4'24.

Net income attributable to Acorn stockholders improved to $6,294,000, or $2.51 per diluted share, in 2024, as compared to $119,000, or $0.05 per diluted share, in 2023. The deferred income tax benefit of $4,435,000 also contributed $1.77 to the earnings per diluted share for the full year 2024.

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