ACFN

• New Strategic Partnership: Announced a standard integration partnership with Champion Power Equipment for home standby generators. Acorn's Omnimetric monitoring/control solution will be the factory-standard option on Champion's popular Axis and Flex whole-home generator lines. Pricing is based on an assumed 3,000 unit annual purchase volume, with no minimum purchase obligation for Champion, and contributions to results are expected to begin in Q3 2026. The partnership leverages Champion's growing position in the residential standby generator market for long-term growth in monitored endpoints. • New Product Launch: Formally launched Omni360, a comprehensive all-in-one remote monitoring and control platform for cell tower campus security and critical infrastructure. The platform is offered in three capability tiers (Nova, Horizon, Zenith), and includes 24/7 network operations center support, AI-powered software, mobile access, unified environmental monitoring, security, power management, and energy optimization tools. Omni360 is differentiated from competing point solutions by combining all functions into a single integrated platform with full-time monitoring support. The company will showcase Omni360 at the upcoming ISE Expo in Nashville. • M&A and OEM Strategy: The company continues to pursue disciplined, accretive complementary M&A opportunities, but has lost multiple deals to bidders willing to pay prices that exceed Acorn's estimate of asset value, and Acorn will not accept unreasonable valuation risk. The company also continues to pursue additional OEM partnership opportunities to grow its monitored endpoint base. • Secular Tailwinds: Management highlighted ongoing supportive industry trends: increasing frequency of severe weather straining the US power grid, growing power demand from AI data centers, electrification and reshoring driving need for resilient infrastructure, rising attacks and copper/equipment theft on critical communications infrastructure (estimated at $500 million in industry-wide losses in 2026), and growing cell network traffic from AI increasing demand for infrastructure protection.

• After lapping the very large year-ago hardware shipments from the material cell phone contract, management expects more favorable year-over-year revenue and earnings comparisons in the second half of 2026. • Management reaffirmed the company's 3- to 5-year target of approximately 20% average annual revenue growth, which was first set prior to Q2 2026 and remains unchanged. • Blended gross margin is expected to average approximately 75% going forward as hardware deployments expand, down from the 82% Q2 2026 level which reflected a higher proportion of high-margin monitoring revenue in the quarter. • The only additional spending expected for Omni360 in coming quarters is moderate marketing and inventory costs, with no major additional product development capital outlays required as the product is already complete. • The company maintains a large base of net operating loss (NOL) and capital loss carryforwards to support future growth and M&A initiatives.

Acorn Energy operates through three product segments under its Omnimetric subsidiary: Power Generation (PG), Critical Power (CP), and Infrastructure Solutions (IS). Consolidated Q2 2026 total revenue was $2.49 million, down from $3.53 million in Q2 2025, due to lapping very large hardware shipments from a material cell phone contract in the year-ago quarter. Recurring monitoring revenue, the highest-margin segment, grew 8% year-over-year to $1.425 million, representing 57.2% of total Q2 2026 revenue, with a gross margin over 90%. Hardware revenue was $1.064 million (42.8% of total Q2 2026 revenue), down from $2.21 million in Q2 2025; only $263,000 of Q2 2026 hardware revenue came from the prior material cell phone contract, versus $1.3 million in the year-ago quarter. Overall consolidated gross margin improved 750 basis points to 82.4% in Q2 2026, driven by the higher share of high-margin monitoring revenue. Total Omnimetric segment operating income was $722,000 in Q2 2026, which absorbed $30,000 of operating expense for the pre-revenue Infrastructure Solutions (Omni360) segment. Consolidated Q2 2026 net income to Acorn stockholders was $294,000 ($0.12 per diluted share), down from $720,000 ($0.28 per diluted share) in Q2 2025. For the first half of 2026, consolidated net income was $217,000, and operating cash flow was $277,000.

• Large enterprise sales cycles for new products like Omni360 are inherently long, and outcomes are uncertain even with positive early feedback. • M&A deal outcomes are unpredictable, and the company has repeatedly lost potential acquisitions to competitors willing to pay valuations Acorn considers unjustified, creating execution risk for growth through M&A. • Monitoring revenue recognition can be impacted by variable timing of hardware installation by customers, leading to quarterly volatility in reported growth that does not reflect underlying demand. • Securing favorable pricing in negotiations with large potential customers is challenging, though management remains confident it can reach mutually acceptable terms for quality deals. • General risks include execution risk for the operating plan, maintaining customer renewal rates, expanding the customer base, changes in technology, competitive pressure, and shifts in macroeconomic and financial market conditions.

Q: Why is the Champion partnership not classified as an OEM deal, and what has been early market feedback on Omni360 from industry events? / A: The partnership is not called OEM because Champion chose to keep the Acorn Omnimetrics brand on the product rather than rebranding it under Champion's name, unlike traditional OEM arrangements where the OEM places their brand on the product. Structurally and economically, it acts similarly to an OEM deal, growing Acorn's monitored endpoint base incrementally as Champion sells new generators. For Omni360, Acorn only did informal outreach at the recent Rural Wireless Trade Show, and will showcase the full product at the upcoming ISE Expo in Nashville, with early contacts and feedback being positive so far.

Q: After completion of the large material cell phone hardware contract, will the installed base from that contract drive acceleration in recurring monitoring revenue? And what explains the slight quarterly deceleration in monitoring growth? / A: Yes, the installed base from the large contract is already contributing to recurring monitoring growth, as most original hardware sales include the first year of monitoring, and renewals are now underway with add-on orders continuing. Quarterly monitoring growth can vary due to variable renewal payment timing and deferred revenue recognition that does not commence until customers actually install hardware, which can lag hardware shipments by months. This means single-quarter growth deceleration does not reflect an underlying slowdown in demand.

Q: What are the key differentiators for Omni360 compared to established competitors in the telecom monitoring space? / A: The top differentiator is that Omni360 combines all required monitoring and security functions (generator monitoring, HVAC, cameras, access control, power management) into a single integrated platform and dashboard, while competitors typically only offer fragmented point solutions for individual functions. The second key differentiator is Acorn's superior integrated AI-powered software with predictive capabilities that have not been matched by existing competitors. Omni360 also offers flexible pricing across three tiers and both CapEx and OpEx payment models, and is positioned as a premium product, matching Acorn's existing successful generator monitoring pricing strategy.

Q: What is Omni360's expansion strategy for adjacent markets like data centers and utility substations, given the current high growth in data center construction? / A: Management has intentionally decided to prioritize full focus on the cell tower market first, and will not pursue adjacent markets in the near term. The North American cell tower market is already very large (over 235,000 towers), and reaching even a 10% market share would generate over $100 million in revenue, which represents enough opportunity for the company's current size. Management does not want to spread its limited resources too thin by pursuing multiple end markets at once.