Acorn Energy (OTCMKTS:ACFN) executives used the company’s fourth-quarter and full-year 2025 earnings call to highlight record revenue, improved operating income, higher cash flow, and a third consecutive year of profitability, driven largely by growth in its high-margin monitoring business at OmniMetrix.
2025 performance driven by monitoring growth and installed-base expansion
CEO Jan Loeb said the company’s 2025 performance benefited from a 22% increase in high-margin monitoring revenue, which management attributed to continued expansion in the installed base of remote monitoring endpoints. CFO Tracy Clifford said the “key takeaway” from 2025 was “solid growth” in annual recurring monitoring revenue, which she said delivered a 95% growth margin during the year.
Hardware comparisons affected by large telecom contract and deferred revenue amortization
Management emphasized that year-over-year comparisons were influenced by a large national cell phone provider contract, described by Loeb as the largest in the company’s history. Loeb said most of the hardware revenue for that contract was recorded between Q3 2024 and Q2 2025, which contributed to lower year-over-year hardware revenue in the second half of 2025. The contract also includes one year of monitoring services recognized ratably over 12 months after each hardware unit is commissioned.
Loeb also said 2025 hardware revenue was “tempered” by an $885,000 decrease in non-cash deferred revenue amortization tied to units sold prior to September 2023, when a majority of hardware sales were deferred and amortized over three years. He said Acorn recorded $956,000 of revenue from amortization of deferred hardware revenue in 2025, down 48% from $1.84 million in 2024, which he said had no impact on cash generation. Loeb said the deferred hardware revenue balance of $168,000 is expected to be fully amortized by August 2026.
Clifford added that excluding the impact of the declining amortization of deferred hardware revenue, new hardware revenues rose approximately 8% in 2025 compared to 2024.
Residential generator market slowed; management expects potential rebound
Loeb said 2025 revenue was also pressured by an industry-wide slowdown in residential generator deployments, which he said industry participants have attributed to high interest rates, fewer major power outages related to hurricanes and other weather events during 2025, and inflation and economic uncertainty impacting consumers’ willingness to invest in backup generator installations that he pegged at approximately $15,000 per installation.
Management said it expects consumer generator demand to return toward historical levels as those factors moderate. Loeb said the company is optimistic for a rebound in 2026, citing potential stimulus from recent winter storms and moderating interest rates. He also pointed to a public comment from a large generator manufacturer expecting a 10% increase in residential generator sales in 2026, adding that Acorn expects to benefit if that occurs.
Growth initiatives: enterprise sales cycles, OEM discussions, product development, and M&A
Loeb outlined five core growth initiatives that were also referenced in the company’s press release, expanding on the strategic priorities behind 2025’s results:
- Pursuing larger commercial and industrial opportunities across sectors such as healthcare, telecom, real estate, retail, grocery, hospitality, government, and financial institutions. Loeb said these opportunities often require longer, more complex sales cycles and budget compliance.
- Seeking OEM and strategic partner relationships, including potential white-label arrangements. Loeb said the company is in dialogue with a few OEMs and believes its multi-brand monitoring capability and customer support positions it well, while cautioning that timing is difficult to predict.
- Expanding residential and small business penetration through a network of more than 600 generator dealers, despite what management described as a slower retail market in 2025.
- Continuing investment in R&D and engineering to enhance existing OmniMetrix products and develop new offerings.
- Evaluating accretive acquisitions focused on businesses with meaningful monitoring components. Loeb said management is motivated to identify and execute on a deal to enhance growth, operating leverage, and monetization of net operating losses, while maintaining discipline on terms and risk.
In the Q&A, Loeb said the company continues to believe it could secure at least one OEM relationship, while acknowledging the lengthy sales cycles. On acquisition activity, he said AIO emerged through the company’s M&A dialogue and that while two other opportunities remain “available,” Acorn and those parties remain “too far apart on price.”
AIO partnership: expanded product suite, demo plans, and revenue timing
Loeb said Acorn’s strategic partnership with AIO (All In One) provides Acorn with exclusive North American rights to AIO’s product suite in exchange for what he described as a modest commitment to invest in building out the business. He said AIO is a global provider of remote monitoring and control solutions for critical infrastructure, with deployments at more than 110,000 sites in 15 countries and no prior U.S. business operations.
Loeb said AIO targets monitoring of the full cell tower campus as well as solutions for data centers and utility operations, including analytics and monitoring across environmental conditions, battery health, security breaches, energy optimization, and microgrids. He described the partnership as a way to substantially expand Acorn’s product offerings and addressable market by integrating AIO solutions with OmniMetrix technology and Acorn’s existing U.S. customer base.
Management said it expects the average sale of OmniMetrix-labeled AIO products to be approximately 5x to 6x the average current OmniMetrix sale. However, Loeb and Clifford said it is too early to project margins because Acorn expects to share SaaS revenue with AIO. Loeb said the company expects to have its first demo unit installed by the end of the month with a large existing telecom client, but added that Acorn does not expect any revenues from the partnership until the second half of 2026.
In Q&A, Loeb said it was too early to assess broader market receptivity because the company has not yet actively marketed the AIO solution beyond initial discussions and the planned demo. He also clarified that Acorn will be paid for hardware sales related to AIO products and will share in ongoing monitoring revenue, describing the structure as akin to a small upfront acquisition fee with an “earn-out” component through monitoring revenue share. He added that Acorn intends to go to market with both CapEx and OpEx models.
Loeb also said the agreement includes rights related to South and Latin America, which he said Acorn negotiated in part to preserve strategic flexibility, while emphasizing that the immediate focus remains execution in North America.
On the financial position, Clifford said cash flows from operations more than doubled to $2.09 million in 2025, and year-end cash increased by $2.1 million to $4.454 million. She said the company had $4.131 million in cash as of March 3, 2026, after investing $250,000 since December toward the AIO partnership and product launch, and noted the company remains debt-free.
Clifford also discussed tax-related items affecting earnings per share. She reported diluted EPS of $0.99 for 2025, including a $0.18 per share deferred income tax benefit, compared to diluted EPS of $2.51 for 2024, which included a $1.77 per share deferred income tax benefit. She said Acorn released an additional $464,000 of valuation allowance against deferred tax assets in 2025 as a result of the Build Back Better Act’s treatment of certain R&D expenses, compared with $4.4 million released in 2024. She added that the company still maintains a valuation allowance of $10.3 million, more than 70%, against $14.4 million in net operating loss and capital loss carryforwards, with most NOLs expiring in 2031 or later.
Operationally, Clifford said the company launched next-generation generator monitors in late 2025: the Omni for residential and the OmniPro for commercial and industrial applications. She said design innovations reduced installation time and service costs while improving reliability. She also noted the launch of RADex, an enhanced version of the company’s RAD Remote Alternating Current Mitigation disconnect product for the pipeline segment.
During the Q&A, management also addressed quarter-to-quarter monitoring revenue. Clifford attributed a sequential decline in fourth-quarter monitoring revenue versus the third quarter to a non-recurring revenue recognition impact in the third quarter stemming from a policy change related to recognizing first-year monitoring revenue on certain shipped units that had been paid for but not installed for 24 months or longer.
Loeb said the company continues discussions around demand response with utilities, but noted that program structures—such as requirements that payments go only to end customers—remain a key issue in determining how Acorn would participate economically.
About Acorn Energy (OTCMKTS:ACFN)
Acorn Energy is a diversified holding company that develops and invests in sensor-based technologies for monitoring, control and efficiency improvements of energy infrastructure. The company focuses on identifying and supporting early-stage and growth-stage enterprises that provide equipment and software solutions to utilities, industrial customers and other sectors engaged in distributing and managing power and energy resources.
Through its principal subsidiaries, including DSIT Solutions and GridSense, Acorn Energy delivers real-time condition monitoring and diagnostic services for critical assets.
