WILMINGTON, DE — In a significant financial turnaround, Acorn Energy, Inc. (OTCQB: ACFN) recently released its Q4’23 and full-year results ended December 31, 2023, which showcased the company’s surge into profitability for the first time. Fueling this landmark achievement were robust revenue growth rates of 22% and 15% recorded for Q4’23 and for the full year 2023, respectively.
“Through concerted efforts by the Acorn/OmniMetrix team, we emerged victorious in our 2023 mission—achieving sustainable profitability supported by persistent hardware and monitoring revenue growth,” stated Jan Loeb, Acorn’s CEO. He noted Acorn’s rise in net income to $84,000 ($0.03 per share) in Q4’23 and $119,000 ($0.05 per share) for the whole year, a stark contrast to previous period losses.
Despite a one-time expense of $102,000 for a 1-for-16 reverse stock-split, Mr. Loeb believes that the company is on an upward trajectory for improved bottom-line performance in 2024 and beyond. He further highlighted that, given the federal operating loss carryforwards (NOLs) of about $69M, the company’s profits are likely to be mostly tax-shielded, favoring Acorn’s future cash flows.
In the quest for an average annual top-line growth of 20%, Acorn is set to further its business development initiatives. The 2023 growth of 15.1% fell short of the target level, but Mr. Loeb is optimistic about dominant growth in 2024 and beyond due to strategic growth opportunities.
In terms of demand response and other initiatives, Acorn made meaningful strides in 2023. The company announced its first Demand Response (DR) customer signups in Q3, with more added in Q4’23 and Q1 2024. These programs are designed to aid electric grid operators during peak power demand periods by compensating backup generator owners willing to make their generators available for auto-activation when the grid requires support. The remote monitoring and control technology of OmniMetrix is key in facilitating DR functionality.
Although revenue contribution from DR is expected to be modest in 2024, Loeb expresses optimism about the promising long-term impact of DR on backup generator monitoring and control sales.
Acorn’s Q4’23 revenue ascended by 22.0% to $2,250,000, a leap from the previous Q4’22 revenue of $1,845,000. This impressive growth was primarily fueled by a 37.0% rise in hardware revenue and a 9.2% increment in monitoring revenue.
Notably, the company’s gross profit in Q4’23 saw a 21.9% rise to $1,648,000, reflecting a gross margin of 73.2%. This compares favorably to the gross profit of $1,352,000 and a gross margin of 73.3% in Q4’22. In tandem with the revenue growth, gross profit for the year rose by 18.4% to a solid $6,004,000, showcasing a gross margin of 74.5% vis-a-vis a gross margin of 72.4% in 2022.
Net income attributable to Acorn stockholders improved significantly- $84,000 ($0.03 per share) in Q4’23, compared to a net loss of $77,000 in Q4’22. Similarly, for the year, it leaped to $119,000 ($0.05 per share), from a remorseful net loss of $633,000 in 2022. This remarkable profitability was largely attributed to the 18.4% leap in gross profit outpacing the increase in operating expenses.
Clearly, Acorn’s profitable stride in 2023 has fortified its financial landscape, thereby setting the stage for growth and expansion in the years ahead.
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