Good morning, and welcome to the Genie Energy Limited's Second Quarter 2025 Earnings Call. In today's presentation, Genie Energy management will discuss Genie's financial and operational results for the 3 months ended June 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 statements that 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 non-GAAP measures, including adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share. A schedule provided in the Genie Energy's 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 Michael Stein. Sir, the floor is yours.

Thank you, operator. Our second quarter yielded mixed results. On the one hand, it was highlighted by solid operational progress and double-digit top line growth. On the other hand, our bottom line was impacted by significant margin compression at GRE, which weighed on our bottom line results. At GRE, we expanded our customer base in the second quarter to approximately 419,000 meters served, comprising approximately 414,000 RCEs, representing a year-over-year increase of 15% and 20% in meters and RCEs, respectively. Churn in the second quarter dropped to 4.8% from 5.5% in the first quarter, and I think, we can and will continue to make progress as we further improve our customer retention operations. GRE's bottom line, however, was impacted by wholesale power price increases in some of the supply markets, most notably within the PJM and MISO interconnection zones. The volatility in the quarter was driven by policy concerns and by warmer-than-usual weather, particularly in June. There have been times over the past few years where wholesale price volatility has led to margin upside for the company. However, this quarter, the impact was against us. GREW delivered very strong results. Revenue increased 44% and the segment approached breakeven even as we invested in some of our newly developing businesses. At Diversegy, our brokerage and energy advisory business, revenue increased year-over-year by over 50% and profitability increased by almost 3,000%. At Genie Solar, revenue jumped over 6x the year ago level to $1 billion, reflecting a solid quarter from its portfolio of operating arrays and the bottom line loss decreased by 90% as we also significantly reduced SG&A. Turning now to Genie Solar's development pipeline. We are making good progress on the more advanced projects, including our Lansing Community Solar project, which I'm excited to say we expect to commission in…

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, 2025. In my commentary, I will compare the results for the second quarter of 2025 to the second quarter of 2024 to remove from consideration the seasonal factors that impact our results, particularly within our retail energy business. Second quarter is typically characterized by relatively low levels of electricity and gas consumption as it falls mostly between the first quarter's peak heating season and the third quarter's peak cooling season in many of our service areas. Our second quarter financial results were headlined by a challenging pricing environment in the retail energy business, we experienced higher-than-usual costs leading to margin pressure. Consolidated revenue in the second quarter increased 16% to $105.3 million, driven by growth at both Genie Retail and Genie Renewables. At GRE, revenue increased 14% to $99 million in the second quarter, reflecting the year-over-year growth of our customer base that Mike will detail for you. Per meter consumption was roughly in line with year ago levels. Electricity revenue climbed 15% to $89.9 million, representing 91% of GRE's revenues. Kilowatt hours sold increased by 17%, while our revenue per kilowatt hour sold decreased to 2%. Natural gas revenue increased 8% to $9.1 million. Therm sold increased 5%, while our revenue per therm sold increased 3%. At GREW, second quarter revenue increased 57% to $6.3 million. The revenue increase was led by continued strong growth within our retail brokerage and advisory service, Diversegy, and at Genie Solar. Consolidated gross profit decreased 30% to $23.5 million, while gross margin decreased 1,400 basis points to 22%. At GRE, gross profit declined 34% to $21.3 million, reflecting increases in our wholesale electricity and…

[Operator Instructions] Our first question is coming from [ Syed Zaid ], who is an investor. There appears to be nobody available on that line. We have a question from [ Scott ] who is a private investor.

Two questions. The first one, what gives you hope or confidence that your retail margins or rather your wholesale margins will return to normal? Obviously, the world has changed quite a bit over the last 6 months, and this is a relatively tough quarter for Genie. So maybe starting with that one, what gives you hope that your margins will return close to normal and reaffirming your guidance for the year?

Thank you for the question. So our margins were hurt in the quarter by definitely some political factors, but I think mostly by weather. It has been a particularly hot end of spring and beginning of summer, which kind of pushed prices higher. We think things are starting to calm down on the wholesale front, and that's what gives us confidence that we should be able to pull off our guidance.

So it's really just a hope on weather. Are there any hedging strategies or trading strategies you could take and hope on weather is not a great strategy.

So typically, the way we hedge, we hedge our business at a very high percentage, meaning we hedge out our expected load at a very high percentage, and it's just kind of a small percentage that we -- that could vary depending on very, very -- depending on weather. So there is some that is definitely out of our control. But by and large, the highest percent -- the vast majority of our power is already purchased.

So how are the margins -- I guess I'm just a little -- not depressed, but I'm a little confused then how does weather impact your margins so significantly if you're materially hedged. [indiscernible] amount make that big a difference?

Yes. So if weather is significantly different than historicals, then even that, call it, 15% to 20% can make a very big difference in the margins. And that's what happened to us over the last few months and how the market obviously reacts to the fact that it's very hot. So when it's very hot early in the season, typically, what you see is that the rest of the season or typically -- sorry, when it's very hot in the beginning of the season, the wholesale markets react in an uncertain kind of a way. But when you see heat toward the end of the season or when you expect to see that heat, usually, the market doesn't react as much as it did in the beginning of the season. So we feel pretty confident that the amount that we hedged and given that we're already in kind of middle toward the end of the summer where people expect the heat, we should be in good shape.

Okay. Got it. And then just on your solar projects, is there a viable path for new solar projects today, I understand the pause as everybody sorts through it. And maybe 2 questions on the solar. What's the amount of capital that's locked up in those projects that may not go forward as a potential loss? And is there a growth path currently without the tax credits?

So very little capital is locked up in the new projects. Generally, the way these projects work is that the development part where you're trying to get permits, interconnection approvals, engineering viability is the amount you spend on that is a very, very small percentage of the overall total spend on the project. Probably 95% of what you spend on the project is once you start construction. So very little capital is tied up in projects that we are not viable. In terms of new projects, like I said, we're pausing. We're trying to figure out if there is a path forward for future projects that have a time line that goes beyond when the Big Beautiful Bill dictated that the ITC credits go away. And we'll obviously be able to update you when we make those determinations.

Our next question is coming from [ Jim Hayden ] who is a private investor.

My question is around the captive insurance subsidiary. Just starting at a high level, how would you summarize performance there, that's policies sold or revenue or profit? What's generally the investment mix? And how does that compare -- both of those things, how does that compare to your expectations a few years ago?

We're very, very conservative with how we manage the cash in the captive, mostly sits in cash. We have a little bit in alternative investments. It's doing just fine.

And what lines are you selling? And what's -- my understanding this is a revenue opportunity, not just maybe a captive, it's for cost savings for employees. Is that accurate? And how are you -- what are you actually selling as far as lines of insurance?

We are starting -- we just started. It's still very early, as I alluded to in my remarks, but we are doing some health insurance sales, leveraging our existing marketing channels to sell some health insurance.

Is there any plans to expand from that?

Yes. We're still in early stages. I don't want to say what yet, but the plan is to get into more. But to be clear, the captive insurance at this stage is not underwriting the actual insurance risk behind those health insurance plans. Right now, we are acting as a broker. There is a possibility that, that will change at some point. But it will -- I think it will be a few years before we do something like that.

As we have no further questions on the lines at this time, this will conclude today's call. You may disconnect your lines at this time, and have a wonderful day, and we thank you for your participation.