ACORN ENERGY, INC. Q1 FY2023 earnings call

• Monitoring revenue returned to growth in Q1 2023 after negative year - over - year comparisons in 2022 due to 3G wireless technology sunsetting. - Hardware revenue decreased 4.7% in Q1 2023 compared to Q1 2022 because of customers not upgrading or switching to competitors. - Net loss was trimmed to $85,000 in Q1 2023 from $123,000 a year ago due to return to monitoring ARR growth. - Historically, Q1 is the slowest quarter, but 2022 was an anomaly; 2023 is expected to return to normal pattern with Q1 likely weakest and sales building in Q2 and Q3. - Optimistic about 20% annual cash basis revenue growth in 2023, expecting positive cash flow if growth goals met. - RAD product for gas pipelines went into customer trials in late 2022, hoping to convert trials to orders in 2023. - Demand response program in partnership with CPower Energy expected to begin in 2023 with initial deployments and growth in coming years, with added value expected to deliver roughly twice the profitability of traditional monitoring endpoints. - Secular trends like aging power grid, lack of investment in new power supplies, growth of electric vehicles, etc., benefit the business longer - term. - Hired a West Coast sales manager and added a new Director to the Board in March.

In Q1 2023, monitoring revenue returned to growth. Hardware revenue decreased 4.7% compared to Q1 2022. Acorn’s total revenue was flat at $1.75 million in Q1 2023. Monitoring revenue gross margins are approximately double those on hardware. Monitoring revenues are considered annual recurring revenues (ARRs) with over 90% of monitoring service plans typically renewing upon expiration. The return to monitoring ARR growth helped trim the Q1 2023 net loss to $85,000 from $123,000 a year ago.

• Expect 20% annual cash basis revenue growth in 2023. - If growth goals met, expect positive cash flow enabling to cover corporate overhead and achieve profitability on consolidated basis. - Expect 2023 to return to more normal quarter pattern with Q1 likely weakest quarter and sales building in Q2 and Q3.

• Operating and financial performance subject to risks associated with disruptions to business operations and customer demand resulting from executing operating strategy, maintaining high customer renewal rates and growing customer base. - Risks from changes in technology, competitive landscape and financial and economic environment. - Full discussion of risks in 10 - K under risk factors as filed with SEC.

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