Good afternoon, everybody. Our next presentation is from Acorn Energy.
Thank you. Good afternoon, everyone. Thank you very much for coming. I'm Jan Loeb, the CEO of Acorn Energy, and with me to my right is Tracy Clifford, our CFO of Acorn Energy and the COO of Omnimetrics, our only operating subsidiary, of which we own 99%. Just to give you a little bit of background on myself, I'm not really your typical CEO. I was for 25 years a securities analyst at Gruntall, Ella Rothschild, Unterberg Tobin, Legg Mason, Jefferies, Wasserstein, Perella, and then I was a fund manager for 10 years. So for 35 years, basically, I've been telling management all the mistakes that they're doing and how they should run their company better and then I decided to actually try it myself and see how difficult it is. This is our safe harbor statement. Please read it and also please look at our 10K where we have all the things that you need to know about safe harbor and our risks. While I am really the most excited that I've ever been about Acorn Energy and its prospects, I do want to say to everybody something that we said at the end of our first quarter conference call and that is that our second quarter is, while it's going to be better than our first quarter, it is not going to be as good as the second quarter last year because we are cycling, for the people who know our story, a big $5 million telecom contract. And in this coming quarter will be the last quarter that we're cycling that quarter. So it will be negative relative to last year, but positive versus the first quarter. Having said that, let's go to a little overview of ACORN. We've been in business for 28 years. We were the pioneers in generator monitoring. We have a high margin business. That is half of our business, 50% is recurring revenue. The other half is new equipment sales. What we do is we sell a box, which we'll show you some pictures of, that goes into a generator. We have that equipment sale, and then we have the ongoing monitoring of that box. What's really exciting is our new Omni360 solution, which is used for cell tower monitoring. We now can monitor everything on a cell tower, and we'll go into more detail about that in the next couple of slides. This is ACORN at a glance. Right now we have a rough market cap of about $40 million. We have $4 million in cash, no debt, and what we say is we will grow at at least on average 20% a year. compared to our comps we're at 3.4 times revenue our comps are at 4.4 we think that we are certainly going to grow faster than our comps we have better gross margins than our comps and our ARR our renewable revenue is much greater than our comps so hopefully we will prove that we should have a higher multiple relative to our comps we have insider ownership of 35 percent I own 20 percent of the company other directors own another 15 percent so we are working for the shareholders because we are big shareholders um you see the long-term growth of our recurring revenue stream it's it's been strong it's been solid the one uh drop off between 21 and 22 was because of the switch over from 3G to LTE so during that period of time we lost a lot of generators you can see we've picked it up now and we continue on our growth rate we sell in our basic business two boxes one is called Omni one's called Omni Pro Omni is the for residential it has 50 alarms and 50 parameters the Omni Pro is for our consumer our for our commercial and industrial customers has a thousand parameters and alarms and the this was these products are refreshed from our older product which was a true guard to and a true guard this we put this out in 2025 it's smaller easier to install and our customers like it a lot. This is our software solution. It's called Omniview and basically as a customer you can see our dashboard everything you wanted to see on one page. You can put all your generators on it. So if you're a college and you have you know 30 generators you can see every all of the generators on on it, and as you can see, we have apps for it, for Apple and Android. And one of the important things that we'll talk about is that it not only monitors the generator, but it actually controls the generator as well. So we can remotely turn on a generator any place in the world. We actually, from our Atlanta headquarters, have turned on generators for Shell Oil in Italy. So we can actually control the generator besides monitoring it, which is important when we talk about demand response and what that can do for our company out into the future. And again, I want to point out because one of the things we say here is air quality index integration is we are a monitoring company versus some of our competitors such as Generac, controller who have their own monitoring solution, they are metal benders who sell a monitor. We are a monitoring company, and that's all we do. So therefore, our technology, not only do we think, we know is far superior than that of our competitors. Let's talk about remote monitoring in general. Why should somebody have a remote monitor on their generator is they need to know in advance that the generator is going to work. The whole reason you own a generator is, so to speak, insurance that when a storm comes that you will have power and electricity and you need to know that before the storm comes. So therefore, with our monitors, everything is monitored within the generator. We're talking about fuel, battery, spark plugs, pressure, volume, et cetera. And so, therefore, remote monitoring is important in the business. So that's point number one. Point number two about remote monitoring is that for our dealers, and we call dealers our customers because the people who usually buy our products are dealers. And I'm not talking about the commercial industrial side, which we'll talk about. and the dealers, a typical truck roll today costs about $300 for a truck roll. If a dealer can clear a problem remotely, which he can do with our monitor, or he knows in advance what the problem is and he can send out the right truck with the right equipment on the truck with the right technician, that's a big savings for the dealer. So therefore, not only is it good for the customer, it's good for the dealer, and remote monitoring is very critical. This is our diverse customer base. Besides our dealers, these are our commercial and industrial customers. We have 25 Fortune 500 companies who've been with us for many years, and this list is a constantly growing list, but just shows some of the quality customers that we have. This is a map showing where our monitors are. As you can see, they're generally in areas that are prone to weather events, Texas, Florida, up the East Coast, et cetera. The red dots are our generator monitors. The blue dots are our pipeline monitors. We also have a small business, which is about 10% of our revenue, and we monitor a product called a rectifier. Same type of thing. We have a box that sits on top of a rectifier. Rectifier controls the electricity on top of a gas pipeline, which prevents corrosion. So the blue represents our corrosion protection side of our business. The red is our generator monitoring side. And as you can see, we have a significant amount of units out in the field. It's approximately 40,000 units that we have in the field. The marketing opportunity for us and standby generators, there are approximately 4.2 million generators in North America, and it's growing about 300,000 a year. That's about a 7% growth in generators. The reason generators are growing, generator sales are growing, is that power is very important. People are using more and more electricity, and they can't live without electricity, whether Whether it's your cell phone, it's your laptop, we all need electricity. And the power, there's no, you know, it's not a secret that the grid is antiquated. And therefore, people want to own their own power generators. And so therefore, generator growth is very strong, 7%. And we are beneficiaries of that growth because monitoring is something that is growing as well. We thought about five years ago, did anybody have a Nest thermostat? But just in general, the monitoring and apps on your phone is something that people today don't find as a luxury but more as a necessity. So we have tailwinds of power and grid problems. We have tailwind of monitoring. We have a tailwind of weather events. More and more weather events seem to be stronger, more storms, which tend to knock out power. So therefore, you know, we think just in general, our base market continues to grow, and people like Omnimetrics for their monitoring solution. The reason why Omnimetrics is the go-to, and we are the largest independent, is our machines are agnostic to the generator. So therefore, you can put our monitor on anybody's generator, whether it's Generac, Kola, Briggs & Stratton, MTU. Our monitors go on everybody's generator. And therefore, the dealers like us better because, number one, they can carry less inventory. And number two is that there is a friction between the dealer and the OEM as to who actually owns the customer. The dealer actually put the generator in, has the technician that services the generator, and so therefore he feels that the customer is his customer. The OEM sells him the unit, the Generac unit, so to speak, and so the dealer really does not want to have the OEM in his customer's pants. So therefore there's some friction, and given the choice, which a lot of dealers don't have a choice because some of the OEMs force monitoring down onto them, But given the choice, 100% of the dealers in the United States would rather have an Omnometrix monitor on their machine than anybody else's. So that's our base business, what we've been known for for the last 28 years, generator monitoring. So this is our expansion, and what we're doing is we're expanding off of our monitoring DNA in the cell tower space. approximately 20 to 25 percent of our existing monitors are in cell towers because every cell tower has a generator and has multiple generators which we'll talk about and so therefore we are familiar with the cell tower space and the customers in the cell tower space and so therefore we've chosen to expand in the cell tower space which what we believe is the global best technology that is in the marketplace today now what I did here was just put up an ad that appeared in the April Wall Street Journal and this is from Brookfield so therefore you don't have to believe me about cell towers you know the CEO of a 40 million dollar company here you can hear it from a hundred billion dollar company CEO and that is own the thing behind the thing behind the next best thing so we all know that AI is the next best thing but how does AI get delivered to you the customers so today approximately only one year less than one year in 4% of all wireless and network traffic is AI and 60% of all people are using their mobile devices for AI so therefore we believe that over next 10 years, hopefully sooner than that, but there'll be a significant amount of infrastructure spending going to cell towers than there has been over the last 10 years, which is practically nothing. If anybody has been to a cell tower site, and I've been to many in the last year, basically they're 10 to 20 years old. And so we think that this is the next best thing for investment. This is what our product does. It can monitor everything in the cell tower in one spot. So what we say is it can monitor the HVAC system, the generator, which we already monitor, It has cameras, it monitors the environment, meaning for flood, smoke, everything that is in a cell tower today we monitor. We even can monitor solar. We don't have solar really in the United States, but we can monitor solar as well. This is a picture of a cell tower site, which we have two demos up running in the Atlanta area where our headquarters is. And so this is one of the sites, a picture of it. And what's interesting is that there are 235,000 approximately cell tower sites in North America, Of which, you can see, if you look closely on that picture, that the way a cell tower site in North America works is that there are a bunch of structures or huts around the cell tower. And so the cell tower operator, let's say American Tower or SBA, they don't operate the actual cell tower, but the telecom companies have huts in the cell tower. Basically, American Tower leases space on their tower to all the telecom companies. So if you're looking for what our TAM is, our total addressable market, so therefore, out of 235,000 cell towers, there's really at least four or five companies within the cell tower site that can use our services. So we think that in terms of cell towers alone, That's probably about a million cell towers that we can go after. There's also probably 500,000 small sites on top of roofs, which is not our main focus, but also could use some of our equipment. And so we think the addressable market is quite large. This is what our products can do. The main things are power monitoring, security, and environmental. So power, you have three sources of power in a cell tower. You have DC power, you have a generator, and then you have battery. What our system can do is we can move from any one of the three depending on automatically what's the cheapest source of power for that particular tower. Now, these things, power, environmental, and security, here in the United States has not been such a big issue. The technology we have today is sitting on 110,000 cell towers in Africa and Southeast Asia. That is where really these issues have been plaguing those cell tower operators for many years. It has not happened here in the United States, but we believe, and I'll give you some statistics soon to show it, that it is happening here now in the United States, and that's why we believe that this market is open to us and can be very exciting. And here, I'm not going to read you the whole slide, and by the way, these slides will be up on our website. All the things that we can do in the different areas, I'm just pointing out power, environmental, and security are really the top three areas that our customers are interested in. What are the key benefits to having our system? Similar to our base business, you have fewer truck rolls. You have a NOC. We provide a network operating center where the customer will be alerted immediately if there's something going on in the tower. We have full power stack visibility so they know everything that's going on from their power source. And, also, you'll see it's a lot cheaper from an insurance standpoint. If your cell tower is monitored, you get discounts on your insurance from the insurance carriers. This just shows you just a little screenshot of our dashboard on the power side, and, again, I don't know if you can read it all, but you can see it on our slides. This is the liability that a cell tower owner has. They have a liability to the carriers, so if you're Verizon or if you're T-Mobile, you can sue your operator, ATC, if the tower is down. So that's a cost. There's cost for the truck roll, there's insurance premium, and then there's equipment loss. So all of these things actually impact dramatically the cost of running a cell tower that we can mitigate, or we believe we can mitigate substantially. Protection inside and out, everything in the cell tower we can protect, Temperature, humidity, fuel, flood, smoke, battery, our system can do everything. And so let's talk a little bit about theft. In a minute, this is just a quote from the FCC commissioner. This was two weeks ago. When we allow a tax on our communications infrastructure to go inadequately deterred, investigating and prosecuting, we're sending the wrong message. We need to change that calculus. So we have had discussions with the technicians, a technician from one of the major carriers who's on the Theft and Loss Committee. In the first quarter of 2026, this one cell phone operator had $25 million of theft. That's documented theft. That means that, just extrapolate that, for a year, that's over $100 million of theft from this one operator. That means if you think about it industry-wide today, that's $500 million of theft going on from cell towers. The number one reason, copper. Copper prices today, copper is $13,000 a ton. That's up 40% from where it was last year. So that's the number one thing, but fuel is the second item, and our system, with our camera, live streaming, knock, and generator, we know everything that's going on and can report it immediately to the operator. and depending on how they want to set up their system, it can go directly to the police or their own technicians and their own security can go out and do it. Remember, these cell towers are not in my backyard, so they're out in the forest. So they're usually not really, they're perfect targets for theft. And so our security system, through locks, ticketing, letting only the people who are allowed to be in the cell tower to do that is really, we think, as I said, the best system in the marketplace. Let's talk about just a summary of ACORN, and as some of you might realize, I am doing this fairly rapidly to really allow you to ask questions. So we have a 25-plus track record. We've been in business for 28 years. As a company, we have a very large customer base. We believe we can grow at least, on average, 20% a year over the next three to five years. And we say that 50% of our incremental revenue falls to the bottom line. The fact that we have 90% margins on our monitoring business and 50% margins on our equipment business, we have roughly 70% gross margins. So 50 percent of incremental margin falls to our bottom line. We are now launching our Omni 360, so we have an addressable market that is significantly larger than our existing market. We believe we have the best product in the marketplace for that, and we're beginning to sell that next week. So the next week there's a rural wireless conference, which we will be at, and that's when we will start marketing our Omni360 solution. We have, as we said, shareholder alignment. We think we're cheap on a multiple basis, and we have a strong balance sheet. We generate free cash flow. We are really an asset-light company. And with that, I open up to questions.
Yes, sir.
Okay. So the question from the floor is, how would we balance, since I have, and I sound very excited about our Omni360 solution, how do I balance that with our existing business? And so my answer is that our existing business is our existing business and we're focused on our existing business. The reason why we chose cell towers as our initial, although this Omni 360 solution works for data centers and utility substations, but our focus is on cell towers because that is the customer base we know. We already sell into that base. They know us. They know the Omnimetrics name. We have a very good reputation in the field. So I think that we've hired some new people for Omni 360. So I don't think it's really a question of balance. I think we're going to do both, and we're hopefully going to do both very well. Any other questions? Yes, sir. Well we've had the average, the answer is yes on average. Remember it's 20% on average. Our business heretofore has been, because we have a small revenue base, we do roughly $11 million of revenue, so we had a $5 million contract from a big supplier, so therefore We tend to be very episodic in terms of our revenue, but on average, yes, we have grown over 20% a year.
Yes.
Thank you. Okay, thank you everybody for coming. If you have any other questions, you know where to find us, we're in 211, and we look forward to seeing you. Thank you.