WILMINGTON, DE — Acorn Energy (Nasdaq: ACFN) reported a 28% decline in first-quarter revenue as hardware sales tied to a large cellphone provider deployment fell sharply, though recurring monitoring revenue continued to grow and gross margins improved.
Revenue for the quarter ended March 31 fell to $2.23 million from $3.10 million a year earlier, primarily reflecting a $1.02 million decline in hardware revenue after substantial shipments tied to a cellphone provider contract largely concluded, the company announced.
Monitoring revenue, which Acorn recognizes over customer service periods, increased 11.7% to $1.42 million as the company expanded its installed base of monitored endpoints. Monitoring services accounted for a larger share of total revenue during the quarter and helped lift gross margin to 80.2% from 75.1% a year earlier.
Acorn posted a net loss attributable to shareholders of $77,000, or $0.03 per diluted share, compared with net income of $464,000, or $0.19 per diluted share, in the prior-year quarter.
The results highlight Acorn’s transition toward a more recurring-revenue business model centered on remote infrastructure monitoring, while also exposing the volatility created by large enterprise hardware deployments.
Chief Executive Officer Jan Loeb noted that hardware revenue from the cellphone provider contract dropped to $93,000 in the quarter from $876,000 a year earlier, though the agreement continued generating monitoring revenue.
“Large enterprise deployments are likely to create material variability in our quarterly hardware revenue comparisons, while contributing to our growing base of high-margin, recurring, monitoring revenue,” Loeb said.
The company is also expanding into telecom tower, energy site, and data center monitoring through its partnership with AIO Systems, under which Acorn secured exclusive North American commercialization rights for an industrial IoT monitoring platform.
Loeb noted that the infrastructure monitoring platform could generate average revenue per site roughly five to six times larger than Acorn’s current average deployment, potentially broadening the company’s addressable market beyond backup generator monitoring.
Acorn reported operating expenses increased 11.2% to $1.91 million, driven largely by higher stock-based compensation and increased personnel and technology spending within its OmniMetrix unit.
The company spent $250,000 during the quarter to acquire exclusive distribution and commercialization rights tied to the AIO partnership.
Cash and equivalents totaled $4.26 million as of March 31, down from $4.45 million at the end of 2025. Net working capital, excluding deferred revenue and deferred cost of goods sold, stood at $6.02 million.
Loeb additionally stated that Acorn expects stronger performance later in the year, although second-quarter hardware comparisons are also expected to trail prior-year levels because of the earlier cellphone provider deployment cycle.
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