Breaking Down Genie Energy Ltd. (GNE) Financial Health: Key Insights for Investors

You're looking at Genie Energy Ltd.'s latest third-quarter 2025 filing and seeing a very mixed picture, right? The headline revenue number is strong, but the bottom line is telling a different story, and you defintely need to know which trend wins. Honestly, the third quarter of 2025 was a classic energy-sector squeeze: they hit a record revenue of $138.3 million, a 23.6% jump year-over-year, but rising commodity costs absolutely crushed profitability, so net income attributable to common stockholders dropped to just $6.7 million, resulting in an Earnings Per Share (EPS) of $0.26, a miss against analyst expectations. Here's the quick math: strong top-line growth from a 5.4% increase in the electricity customer base to approximately 318,000 RCEs (Retail Customer Equivalents) is a huge operational win, but it was overshadowed by a 20.8% decline in gross profit to $30.0 million. Still, management is holding firm on their full-year 2025 Adjusted EBITDA guidance, expecting to land at the low end of the $40 million to $50 million range, suggesting they anticipate a margin rebound in the near-term. We need to dig into whether that customer growth momentum can finally outrun the wholesale cost volatility.

Revenue Analysis

You need a clear picture of where Genie Energy Ltd. (GNE) makes its money, especially with the latest 2025 numbers. The direct takeaway is that Genie Retail Energy (GRE) is the definitive engine of growth, driving a massive top-line increase, but the Renewables segment is undergoing a strategic shift that impacts its contribution.

Genie Energy Ltd.'s revenue structure is concentrated, which is a key risk to understand. For the third quarter of 2025, the company reported a record total revenue of $138.3 million, marking a significant year-over-year increase of 23.6%. This growth was largely fueled by higher electricity consumption per meter and rising commodity prices in the retail segment.

Here's the quick math on the segment contributions for Q3 2025:

• Genie Retail Energy (GRE): Contributed $132.4 million, or approximately 95.7% of total revenue.
• Genie Renewables (GREW): Contributed $6.0 million, or approximately 4.3% of total revenue.

The primary revenue stream, GRE, is the core business, supplying electricity and natural gas to residential and small business customers across the Eastern and Midwestern United States. This segment saw a 25.1% revenue increase in Q3 2025, reaching $132.4 million, driven by a 5.4% rise in the electricity customer base to approximately 318,000 Retail Customer Equivalents (RCEs). That's a solid customer acquisition strategy at work.

The Genie Renewables (GREW) segment, which includes Genie Solar (community and utility-scale solar) and Diversegy (energy brokerage and advisory), tells a more complex story. While its Q3 2025 revenue was $6.0 million, it represented a slight decrease of 2.7% year-over-year. This is a strategic change, not a failure. The company is moving away from commercial project development at Genie Solar, which has temporarily weighed on the segment's overall numbers. Still, the Diversegy brokerage business is performing well, increasing its revenue by 35% year-over-year in Q3 2025.

What this breakdown hides is the margin pressure. Despite the record revenue, rising commodity costs caused GRE's income from operations to decrease by 32.4% to $10.2 million in Q3 2025, so revenue growth is not defintely translating directly to proportional profit growth.

To fully grasp the dynamics behind these figures, you should review the deeper financial metrics in the full analysis: Breaking Down Genie Energy Ltd. (GNE) Financial Health: Key Insights for Investors.

Here is a quick summary of the recent quarterly performance:

Next step: Dig into the gross margin contraction to see if GRE can manage its wholesale costs better in Q4.

Profitability Metrics

You need to know if Genie Energy Ltd. (GNE) is translating its growing sales into real bottom-line profit, especially with the volatility in the energy markets. The short answer is: revenue is up, but margins are under significant pressure. For the third quarter of 2025 (3Q25), the company reported record revenue of $138.3 million, but profitability metrics showed a clear contraction due to rising commodity costs.

Here's the quick math on the core profitability ratios for 3Q25:

• Gross Profit Margin: 21.7% (Down from 33.9% in 3Q24)
• Operating Profit Margin: 5.0% (Down from 10.4% in 3Q24)
• Net Profit Margin: 4.84% (Based on net income of $6.7 million on $138.3 million in revenue)

This is a classic competitive energy retailer problem. You can grow the top line, but if the cost of wholesale power-your Cost of Goods Sold-jumps, your gross profit margin shrinks fast. That's exactly what happened in Q3 2025.

Trends in Profitability and Operational Efficiency

The trend is a clear headwind for profitability in the near term. Genie Energy Ltd.'s consolidated gross profit decreased by 20.8% to $30.0 million in 3Q25 compared to the prior year, despite the record revenue. This drop is largely attributed to higher wholesale commodity prices and a lower-margin municipal aggregation deal at the Genie Retail Energy (GRE) division. Honestly, commodity price spikes are defintely the biggest risk for REPs right now.

However, the company is showing some operational efficiency in other areas. Consolidated Selling, General, and Administrative (SG&A) expenses decreased by 10% in 3Q25, reflecting cost management efforts in payroll and customer acquisition. Plus, the Genie Renewables (GREW) segment is a bright spot, with its gross margin improving to 41.3% in 3Q25, reflecting a more profitable business mix as they focus on utility-scale solar and the accelerating profitability of their energy advisory business, Diversegy.

Industry Comparison: The Margin Reality Gap

When you compare Genie Energy Ltd.'s margins to the broader utilities sector, the competitive nature of their business becomes starkly clear. The S&P 500 Utilities sector reported an average net profit margin of 17.2% for Q3 2025. Genie Energy Ltd.'s 3Q25 net profit margin of 4.84% is significantly lower. This gap is normal because regulated utilities have guaranteed returns and much higher gross margins (historically around 66% for the sector), while competitive retailers like GNE operate on much thinner margins.

What this estimate hides is the potential for margin expansion if commodity prices normalize, which management expects to happen gradually in Q4 2025 and into 2026. Management is guiding for a full-year 2025 Adjusted EBITDA of $40 million to $50 million, but they anticipate hitting the low end of that range. For more on the market's view of this stock, you should be Exploring Genie Energy Ltd. (GNE) Investor Profile: Who's Buying and Why?

Your next step: Monitor the Q4 2025 gross margin carefully. A figure below 21.7% would signal further commodity cost absorption, but a recovery toward the 30% range would confirm management's outlook.

Debt vs. Equity Structure

You're looking at Genie Energy Ltd. (GNE) and wondering how they fund their operations, especially in a capital-intensive sector like energy. The direct takeaway is this: Genie Energy Ltd. is a rare bird in the utilities space, relying almost entirely on equity and cash, not debt, to finance its business. This gives them a massive cushion against rising interest rates and economic slowdowns.

Their balance sheet for the third quarter of 2025 (Q3 2025) shows a remarkably conservative financial structure. Total debt-which includes both current and non-current obligations-stood at just $8.8 million as of September 30, 2025. To put that in perspective, their cash, cash equivalents, and marketable securities totaled $206.6 million at the same time.

Here's the quick math on what that means for leverage (the use of borrowed money to finance assets):

• Total Debt (Q3 2025): $8.8 million
• Total Equity (Q3 2025, approximately): $188.8 million [cite: 8 in step 1]
• Debt-to-Equity Ratio: 0.05 [cite: 1 in step 1, 2 in step 1]

A Debt-to-Equity (D/E) ratio of 0.05 is defintely a standout. For a regulated utility, which is a capital-intensive industry, D/E ratios are typically much higher, often exceeding 1.0 or 1.5 because they can borrow cheaply against stable, regulated cash flows. A ratio below 0.5 is generally considered excellent, so Genie Energy Ltd.'s 0.05 signals minimal financial risk from leverage.

The small amount of debt they do carry is strategic, primarily financing their portfolio of operating solar arrays, which falls under their Genie Renewables segment. They are not relying on the debt markets for core operations or major expansion. This low-leverage model means the company has not had any significant debt issuances, credit ratings, or refinancing activity to report in 2025, simply because they don't need it. They are self-funding.

Instead of debt, Genie Energy Ltd. is balancing its capital structure by returning equity directly to shareholders. In Q3 2025 alone, they repurchased approximately 124,000 shares of Class B common stock for $2.0 million and paid a regular quarterly dividend of $0.075 per share. This is a clear signal of management's confidence and commitment to shareholder returns, which is only possible because of their highly liquid, equity-funded balance sheet. If you want to dive deeper into the strategic direction this balance sheet supports, you can review the Mission Statement, Vision, & Core Values of Genie Energy Ltd. (GNE).

Liquidity and Solvency

You want to know if Genie Energy Ltd. (GNE) has the cash to cover its near-term obligations and stay solvent for the long haul. The direct takeaway is that their liquidity position is excellent, backed by strong ratios and minimal debt, but you must watch the declining trend in operating cash flow.

Assessing Genie Energy Ltd.'s Liquidity

A quick look at the liquidity ratios for Genie Energy Ltd. (GNE) as of Q3 2025 shows a very healthy short-term financial position. The Current Ratio stands at a strong 1.99, and the Quick Ratio (Acid-Test Ratio) is nearly as robust at 1.85. Here's the quick math: a Current Ratio near 2.0 means the company has almost two dollars in current assets for every one dollar of current liabilities. This is defintely a sign of low immediate risk.

The Quick Ratio, which strips out less liquid assets like inventory, is also high. This tells me the company can cover its short-term debts even without having to sell off any inventory, which is a significant strength in the volatile energy retail sector. This is a very comfortable cushion.

• Current Ratio: 1.99 (Strong liquidity).
• Quick Ratio: 1.85 (Excellent ability to cover immediate debt).
• Total Debt: Just $8.8 million (Minimal leverage).

Working Capital and Cash Flow Trends

Working capital-current assets minus current liabilities-is the engine that powers daily operations. As of September 30, 2025, Genie Energy Ltd.'s working capital was a solid $113.3 million. This is more than enough to manage the day-to-day costs of their retail and renewables segments. Plus, the company holds a significant amount of cash and equivalents, totaling approximately $206.2 million.

However, the cash flow statement reveals a near-term risk. For the nine months ended September 30, 2025, Cash Flow from Operating Activities (CFO) was $28.1 million, which is a notable drop from the $49.2 million reported in the same period in 2024. This 2025 decline reflects the margin compression in the Genie Retail Energy segment due to increased wholesale commodity costs. It's a clear signal that while the balance sheet is strong, operational profitability is under pressure. You need to monitor this trend closely.

The company's cash movements are summarized below:

Liquidity Strengths and Actionable Insights

The main strength here is the fortress-like balance sheet. The company is virtually debt-free, with total debt at only $8.8 million, primarily related to solar array financing. This minimal leverage gives them immense flexibility to weather market volatility or fund new growth initiatives without resorting to expensive borrowing. They are returning capital to shareholders, too, paying $6.0 million in dividends year-to-date.

The risk is the operational cash flow. While the company has a massive cash hoard, a sustained decline in CFO will eventually erode that liquidity. Your clear action is to dig deeper into the drivers of the margin compression in the retail segment. For a comprehensive look at who is betting on this strong balance sheet, you should be Exploring Genie Energy Ltd. (GNE) Investor Profile: Who's Buying and Why?

Valuation Analysis

You're looking at Genie Energy Ltd. (GNE) and wondering if the market has it right, and honestly, the valuation metrics suggest a significant disconnect between its stock price and its recent earnings power. The short answer is that, based on trailing earnings, the stock appears overvalued compared to its industry peers, but the forward-looking picture is more nuanced.

The core issue lies in the Price-to-Earnings (P/E) ratio, which compares the current stock price to the company's earnings per share (EPS). As of late 2025, Genie Energy Ltd.'s trailing twelve months (TTM) P/E ratio is around 48.84. Here's the quick math: that's nearly three times the Utilities - Regulated industry median of 16.55. This high multiple signals that investors are pricing in massive future growth or that the stock is simply too expensive right now.

Other key valuation multiples also point to a premium price tag:

• Price-to-Book (P/B): The P/B ratio is approximately 2.06, which is reasonable for a growing utility but still above the average for many mature energy companies.
• Enterprise Value-to-EBITDA (EV/EBITDA): At a high 43.60 as of November 22, 2025, this ratio is a major red flag. It suggests the company's total value (Enterprise Value) is extremely high relative to its core operating profit (Earnings Before Interest, Taxes, Depreciation, and Amortization, or EBITDA). This is defintely a number you need to see drop.

What this estimate hides is the volatility in the retail energy business, which can skew TTM earnings. The company's own full-year 2025 adjusted EBITDA guidance is a more stable target of $40 million to $50 million, which you should use for a forward-looking EV/EBITDA calculation to get a clearer picture.

The stock's performance over the last year has been challenging, reflecting this valuation pressure and recent mixed financial results. The stock price closed at $14.34 on November 21, 2025, but over the last 12 months, the price has decreased by 10.60%. The 52-week range of $13.05 to $28.47 shows the sharp correction the stock experienced after hitting its high.

When you look at the dividend, the situation gets even more interesting. Genie Energy Ltd. offers an annual dividend of $0.30 per share, giving a dividend yield of about 2.12%. But here's the kicker: the payout ratio is an unsustainable 164.21%. This means the company is paying out more than its net income to cover the dividend, which is a classic sign of a dividend that may be at risk of a cut if earnings don't improve quickly.

Analyst consensus is cautious, aligning with a 'wait-and-see' approach. The average one-year price target was recently revised to $16.32 per share, as of November 17, 2025. This target suggests an upside of about 11.78% from the recent price, but it's a modest target, not a strong 'Buy.' An AI-driven analyst has even flagged a Neutral sentiment. The market is waiting for the Renewables segment to truly drive earnings and justify the current valuation premium.

To dive deeper into who is holding the stock right now, you can check out Exploring Genie Energy Ltd. (GNE) Investor Profile: Who's Buying and Why?

Risk Factors

You're looking at Genie Energy Ltd. (GNE) and seeing that record $138.3 million in Q3 2025 revenue, but the real story, and the risk, is in the margins. The biggest near-term headache for GNE is the volatile wholesale energy market, which is crushing profitability in their core Genie Retail Energy (GRE) segment. That's an external, market-driven risk that directly hits the bottom line, so you need to understand how management is fighting back.

The recent Q3 2025 earnings report was a perfect example of this operational risk. While revenue was up 23.6%, gross profit fell 20.8% year-over-year to just $30.0 million. Here's the quick math: rising commodity costs squeezed the gross margin down to 21.7% from 33.9% a year ago. That margin compression drove Adjusted EBITDA down nearly 40% to $8.2 million for the quarter. Honestly, when your gas sales gross margins turn negative, you have a serious operational challenge on your hands.

External and Strategic Headwinds

Beyond commodity costs, GNE faces clear external and strategic risks that could temper future growth, particularly in the Genie Renewables (GREW) division. The energy sector is defintely a regulatory minefield, plus you have the ever-present threat of competition in the retail space.

• Regulatory Change: Accelerated sunset of solar generation tax incentives could impact early-stage solar projects, slowing down the GREW segment's growth trajectory.
• Market Concentration: Regulatory hurdles and market concentration may limit the pace of expansion for their distributed solar and advisory services.
• Valuation Pressure: The stock's high Price-to-Earnings (P/E) ratio of 53.5x-significantly above the industry average of 21.5x-means the market expects sustained, high earnings growth. If margin compression continues, this valuation is hard to justify.

Mitigation and Financial Strength

To be fair, GNE is not sitting still. They are actively deploying two clear mitigation strategies: operational cost control and financial fortification. The most positive sign is the strength of their balance sheet, which acts as a powerful buffer against market volatility.

The company is focused on internal efficiency, cutting consolidated Selling, General, and Administrative (SG&A) expenses by 10% to $22.6 million in Q3 2025. Also, they are using a robust hedging strategy to cover a high percentage of their expected load, which helps mitigate the extreme swings in wholesale prices, though it can't eliminate all weather-related risk.

What this estimate hides is the power of their balance sheet. GNE ended Q3 2025 with a cash, restricted cash, and marketable equity securities total of $206.6 million against modest total debt of just $8.8 million. That's a fortress balance sheet. They are also building a wholly-owned insurance subsidiary to further expand their risk management capabilities.

Here is a snapshot of the key financial risks and GNE's counter-measures:

If you want a deeper dive into the numbers that support this risk assessment, you can read the full analysis here: Breaking Down Genie Energy Ltd. (GNE) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at Genie Energy Ltd. (GNE) and seeing a mixed picture: record revenue but margin pressure from commodity costs. The core takeaway is that the company's future growth isn't just about selling more electricity; it's about their strategic pivot to renewables and diversification, a move that should drive a projected 37% annual earnings surge. That's more than double the US market average of 16.1%.

The Retail Energy segment (GRE) is the current engine, but the Renewables division (GREW) is the long-term play. For the full 2025 fiscal year, analysts project sales of approximately $487.30 million, with earnings per share (EPS) estimated at $0.58. Here's the quick math: the company is actively expanding its customer base, growing electricity Retail Customer Equivalents (RCEs) by 5.4% year-over-year to roughly 318,000. That's a solid foundation. Still, the real upside is in the strategic moves they are making to stabilize margins and diversify the revenue stream.

Diversification and Product Innovations

Genie Energy Ltd. is smartly using its existing infrastructure and customer base to launch new, higher-margin offerings. The move into Genie Renewables (GREW) is a clear bet on the future of energy, focusing on community and utility-scale solar solutions. They are defintely not sitting still.

• Solar Project Rollout: The Lansing community solar project is scheduled to start generating revenue in the fourth quarter of 2025, marking a tangible step in the GREW segment's growth.
• Brokerage and Advisory: The retail brokerage and energy advisory business, Diversegy, continues to see strong growth, helping to diversify earnings away from pure retail supply volatility.
• New Ventures: They are leveraging their expertise to offer tailored insurance products to retail customers and are optimistic about a majority-owned venture utilizing recycled plastic waste to make pallets.

In the Genie Retail Energy (GRE) segment, the focus is on higher-value customers, prioritizing the acquisition of high-consumption electric meters and expanding into new state markets, like offering gas in Kentucky. This is how you drive quality growth, not just volume.

Competitive Advantages and Financial Strength

The company's ability to execute on these growth drivers is grounded in two key competitive advantages: a strong balance sheet and a sophisticated risk management approach. They have the capital to invest in these new initiatives, and they know how to weather commodity cycles.

As of September 30, 2025, Genie Energy Ltd. held a substantial cash and equivalents position of $206.6 million, which provides a significant war chest for growth and acquisitions. Their core retail business utilizes a hedged customer book to mitigate the impact of volatile wholesale power prices, a crucial defense against the margin compression seen in Q3 2025. This financial discipline is why management reaffirmed its 2025 consolidated adjusted EBITDA guidance at a healthy range of $40 million to $50 million.

Here's a snapshot of the forward-looking financial picture:

What this estimate hides is the continued risk from commodity price volatility, which can still pressure gross margins, as we saw in Q3 2025 when the gross margin decreased to 21.7% from 33.9% a year earlier. The company needs to deliver on the margin recovery they are expecting to justify the premium valuation. For a deeper dive into who is betting on this strategy, you should check out Exploring Genie Energy Ltd. (GNE) Investor Profile: Who's Buying and Why?

Next Step: Check the Q4 2025 earnings release for updates on the Lansing solar project's revenue contribution and any new acquisitions in the GREW segment.