NASDAQ:GNSS Genasys Q3 2025 Earnings Report $1.91 +0.04 (+2.14%) Closing price 08/22/2025 04:00 PM EasternExtended Trading$1.90 0.00 (-0.26%) As of 08/22/2025 07:11 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Genasys EPS ResultsActual EPS-$0.14Consensus EPS -$0.11Beat/MissMissed by -$0.03One Year Ago EPSN/AGenasys Revenue ResultsActual Revenue$9.86 millionExpected Revenue$9.16 millionBeat/MissBeat by +$700.00 thousandYoY Revenue GrowthN/AGenasys Announcement DetailsQuarterQ3 2025Date8/14/2025TimeAfter Market ClosesConference Call DateThursday, August 14, 2025Conference Call Time4:30PM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Genasys Q3 2025 Earnings Call TranscriptProvided by QuartrAugust 14, 2025 ShareLink copied to clipboard.Key Takeaways Positive Sentiment: Quarterly revenues were $9.9 million, up 42% sequentially and 38% year-over-year, driven by a 50% hardware increase and 7% software growth. Positive Sentiment: Puerto Rico Early Warning System ($75 million contract) saw group 3 deposit received, first dam acceptance, with margins expected above 50% and a strong Q4 revenue ramp. Positive Sentiment: CROWS/AHD program RFQ closed, finalizing an $8–8.5 million purchase order and unlocking multi-year CROSE funding targeting annual revenues of $10–15 million. Positive Sentiment: Software pipeline reached an all-time high, with over 25% of new opportunities east of the Rockies and a 12-month backlog exceeding $60 million (including $8.7 million in ARR). Negative Sentiment: Federal grant program freezes disrupted more than $2 billion in funding and delayed over $9 million of software bookings awaiting state and local disbursements. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallGenasys Q3 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipantsPresentationSkip to Participants Operator00:00:00Good day, ladies and gentlemen, and welcome to the Genesis Incorporated Fiscal Third Quarter twenty twenty five Conference Call. All lines have been placed on a listen only mode and the floor will be opened for questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to your host, Brian Alger, SVP of Senior Relations and Corporate Development. Sir, the floor is yours. Brian AlgerSVP - IR & Corporate Development at Genasys00:00:36Good afternoon. Welcome to Genesis' fiscal twenty twenty five third quarter results conference call. I am Brian Alger, SVP, Investor Relations and Corporate Development for Genesis. With me on the call today are Richard Danforth, our CEO and Cassandra Montion, the company's Interim CFO. During today's call, management will make forward looking statements regarding the company's plans, expectations, outlook and future financial performance that may involve certain risks and uncertainties. Brian AlgerSVP - IR & Corporate Development at Genasys00:01:04The company's results may differ materially from the projections described in these forward looking statements. Factors that might cause such differences and other potential risks and uncertainties can be found in the Risk Factors section of the company's Form 10 ks for the fiscal year ended 09/30/2024. Other than statements of historical facts, forward looking statements made on this call are based only on the information and management's expectations as of today, 08/14/2025. We explicitly disclaim any intent or obligation to update those forward looking statements except as otherwise specifically stated. We will also discuss non GAAP financial measures and operational metrics, including adjusted EBITDA, bookings and backlog, which we believe provide helpful information to investors with respect to evaluating the company's performance. Brian AlgerSVP - IR & Corporate Development at Genasys00:01:50For a reconciliation of the adjusted EBITDA to GAAP financial metrics, please see the table in the press release issued by the company at the close of the market today. We consider bookings and backlog leading indicators of future revenues and use these metrics to support production planning. Bookings is an internal operational metric that measures the total dollar value of customer purchase orders executed in a given period regardless of the timing of the related revenue recognition. Backlog is a measure of purchase orders received that are scheduled to ship within the next twelve months. Finally, a replay of this call will be available in approximately four hours through the Investor Relations page on the company's website. Brian AlgerSVP - IR & Corporate Development at Genasys00:02:30At this time, it's my pleasure to turn the call over to Genesis' CEO, Richard Danforth. Richard? Richard DanforthChief Executive Officer at Genasys00:02:38Thank you, Brian, and welcome, everyone. Fiscal Q3 revenues reflect the first material impact of the Puerto Rico Early Warning System project. Total revenues were $9,900,000 in the quarter, inclusive of 4,300,000.0 from Puerto Rico. Our software pipeline is at an all time high and is rapidly growing in response to our sales efforts and increased awareness of our offerings due to the LA fires, SignalGate, and more recently, the floods in Texas. International and domestic LRAD bookings continue to rebound, resulting in a growing 12 backlog of business that for Genesis as a whole, amounted to more than $60,000,000 at the June. Richard DanforthChief Executive Officer at Genasys00:03:21As you are aware, after invoicing the customer in March, we received a partial payment for the deposit on the third group of dams in Puerto Rico in May. The remaining portion has finally been transferred today. We believe the root cause of the payment delays has been identified and resolved, and future payments are now expected to be made in a timely manner similar to the first two groups deposits. The Crows AHD effort, part of the CROSE two tech refresh program of record, saw our initial research and development funding in fiscal twenty twenty two and 2023. The first production funding was included in the 2024 federal budget. Richard DanforthChief Executive Officer at Genasys00:04:03And following the successful completion of the design, test, and qualification of the LRAD four fifty XLRT, the US Army issued an RFQ in July 2025. The RFQ has since closed, and a purchase order of 8 to 8 and a half million dollars is being finalized. Genesis expects many more years of continued CROSE related revenue. The temporary funding freeze of the urban area security initiatives and the homeland security grant program as well as the cancellation of FEMA's hazard mitigation programs, building resilience infrastructure and communities that occurred at the beginning of this calendar year has delayed, disrupted, and in some cases, eliminated more than 2,000,000,000 in annual funding that state and local agencies rely on. This has resulted in a slowdown of our software bookings. Richard DanforthChief Executive Officer at Genasys00:04:59As we detailed in our earnings release earlier today, more than $9,000,000 of software bookings are currently awaiting funding from various federal programs that flow down to state and local jurisdictions. Recent indications are that public safety and hazard mitigate mitigation grants are being solidified and funding is slowly starting to move, but it would be naive to think that everything will change instantaneously. Acknowledging this reality, we have recently completed a number of actions to reduce our operating expense levels while maintaining a strong sales effort for Genesys Protect. Included in those actions was a targeted headcount reduction. We expect to save 2 and a half million dollars annually as a result of the actions taken. Richard DanforthChief Executive Officer at Genasys00:05:44It is important for all of us to understand that despite the recent slowdown in software bookings, our traction and momentum are growing. As I've already mentioned, our pipeline of software business is at an all time high, and our geographic footprint is expanding. Historically, Genesys has seen most of its success West Of The Rockies. However, with new product feature sets and targeted sales effort, we have seen a massive improvement in the pipeline of business East Of The Rockies. So, much so that more than 25% of the software pipeline added in the past twelve months comes from the customers located East Of The Rocky Mountains. Richard DanforthChief Executive Officer at Genasys00:06:26In our c CRM system, many details in our software pipeline are labeled pending funding. These deals range from cities within LA County looking for their own evac licenses to large regional emergency managers eager to eager for precise zone based solutions to even federal agencies interested in Genesis unique and differentiated Genesis Protect. Though the recently reported top line results don't reflect this activity, our deal count diversity of customers and increasing deal size gives us increasing confidence that Genesys Protect meets the market demands. I would now like to spend a little time detailing our progress in Puerto Rico. As you know, this is a $75,000,000 contract with PREPA that is fully funded by FEMA. Richard DanforthChief Executive Officer at Genasys00:07:16The project covers 37 dams across the island of Puerto Rico that have been broken down into seven distinct groups. The first two groups, which have a total of roughly $17,000,000, are well underway. Within the first two groups, there are nine dams. Each dam has unique sensor and communication equipment requirements. Across the first two groups, 58 poles, 69 solar panels, kits, 51 sensors, 35 cameras, and nearly 400 l rad speakers will be installed. Richard DanforthChief Executive Officer at Genasys00:07:49As of this week, construction is underway on all nine dams, and essentially all of the equipment necessary to complete the installations for the first two groups is on the island. Moreover, sign off on the first DAM and the early warning system software has already been received. The significance of this acceptance cannot be overstated. The software and hardware development and integration is complete and operational on the first DAM. The third group is the largest of the seven groups, including installations at 10 dams valued with a value of $18,000,000 to Genesis. Richard DanforthChief Executive Officer at Genasys00:08:27Upon receipt of the remainder of the deposit, we will rapidly seek permits and finalize the production of the equipment and begin construction necessary to complete this group as quickly as possible. With tropical storm Aaron tracking down, towards Puerto Rico this week, we're reminded that the installation schedules are sometimes subject to forces outside our control. Thus far, the construction project has been going, going very well, and we will, we are tracking very close to plan. There is no guarantee that the weather will continue to cooperate, but regardless, we aim to complete the installations across all seven groups as quickly as possible. Whether it is natural disasters, geopolitical geopolitical unrest, or macroeconomic change, a lot of uncertainties continue to arise around the world, which in many cases creates new and evolving opportunities for Genesys solutions. Richard DanforthChief Executive Officer at Genasys00:09:27Genesys delivers products all over the world that save lives. From Africa to Singapore to Florida Central Florida, Genesys software and hardware is making a difference in protecting lives throughout the world. We know that we have products that the market wants. Exiting the June, Genesis has over $60,000,000 in its twelve month backlog. This does not include the $650,000 of ARR associated with Puerto Rico nor anything related to Crows. Richard DanforthChief Executive Officer at Genasys00:10:01While not a guarantee of outcome, the existing backlog and the growing pipeline of additional business provides us with confidence in the business and the strategic value of the company. In summary, fiscal twenty twenty five has been challenging on a number of levels. However, with an extremely strong backlog, growing pipeline and differentiated product portfolio, Genesis is in position to reap the rewards of its investments over the next several years. Now I will turn the call over to Cassandra to go through the financial outlook in greater detail. Cassandra? Cassandra Hernandez-MonteonCFO at Genasys00:10:35Good afternoon, everyone. In the 2025, Genesis generated $9,900,000 of revenues, up 42% sequentially and up 38% on a year over year basis. Hardware revenues grew approximately 50% year over year, reflecting the $4,300,000 of revenue from the Puerto Rico project Richard already discussed. Total software revenues in the quarter grew 7% year over year, but was flat flat sequentially as the limited bookings were offset by our slight churn. Gross profit margins for June came in at 26.3%, which is lower than both the prior year and the previous quarter. Cassandra Hernandez-MonteonCFO at Genasys00:11:15This This decline is primarily due to the percentage of completion accounting applied to our initial revenues from Puerto Rico, a less favorable hardware mix and higher tariff costs on certain imported components. As mentioned earlier in today's earnings release, we expect gross margins to improve as the Puerto Rico project progresses, owing to the delayed recognition of profits under the percentage of completion method. Operating expenses for the quarter came in at $8,500,000 down from $8,900,000 in March and $9,100,000 in the same quarter last year. This year over year and sequential improvement reflects our continued focus on cost discipline and the absence of certain legal and professional service fees. In light of the dynamics Richard just outlined in our software business, we've recently completed a set of targeted cost reductions. Cassandra Hernandez-MonteonCFO at Genasys00:12:11These are expected to reduce our annualized operating expenses by $2,500,000 beginning in the 2026. As part of these actions, we made the difficult decision to reduce headcount by 19 full time employees, including 10 in Spain. On a GAAP basis, our third fiscal quarter operating loss was $5,900,000 compared to a loss of $5,400,000 in the prior year quarter and a a loss of $6,300,000 in the March. Adjusted EBITDA, which excludes noncash stock compensation, was a negative $4800000.0100000.0 dollars in the 2025, but down slightly from the negative $4,400,000 in June. GAAP net loss in this financial year's third quarter was $6,500,000 which compares to last year's third quarter net loss of $6,700,000 and last quarter's $6,100,000 net loss. Cassandra Hernandez-MonteonCFO at Genasys00:13:18Cash and cash equivalents and marketable securities at the June totaled $5,500,000 down sequentially from $7,200,000 on 03/31/2024. During the third fiscal quarter, cash used in operating activities was $5,900,000 which included a $750,000 use of cash resulting from changes in operating assets and liabilities to help offset the impact of our net loss and working capital shift, we secured $4,000,000 through the first amendment to our term loan, finalized just ahead of our last earnings call. Looking forward, in the fiscal fourth quarter, we anticipate a significant increase in both revenue and profit contributions from Puerto Rico. While some variables remain, we continue to project $1,520,000,000 dollars in total revenues from Puerto Rico for fiscal twenty twenty five. Additionally, we expect to report improving gross margins with operating expenses remaining consistent with those from the third quarter. Cassandra Hernandez-MonteonCFO at Genasys00:14:23Factoring in our installation schedule Puerto Rico, the remaining LRAD backlog and our software ARR of $8,700,000 we ended June 2025 with a twelve month backlog totaling $61,000,000 This positions us well for continued momentum heading into the next fiscal year. Now we would like to open up the call for Q and A. Operator? Operator00:14:49Thank you. The floor is now open for questions. And our first question comes from Scott Searle from ROTH Capital. Go ahead, Scott. Scott SearleMD & Senior Research Analyst at Roth Capital Partners, LLC00:15:06Hey, good afternoon. Thanks for taking the questions. Maybe to dive right in on PREPA, Richard, it sounds like now we'll finally start to get some revenue recognition that goes along with it. Could you give us some high level thoughts in terms of gross margins as we look out into the September and beyond. We've had, I think, percent gross margins in the first '2 quarters of the early prep or rev. Scott SearleMD & Senior Research Analyst at Roth Capital Partners, LLC00:15:29Could you remind us what gross margins look like over the course of the $75,000,000 contract and what we should be expecting over the next quarter or two? And along with that, maybe help us understand cash flow from operations with the give and takes of inflows as we move into the group three and some more payments on that front. Richard DanforthChief Executive Officer at Genasys00:15:51That's a lot, Scott. So if I miss one, ask me again. But from a total contract perspective, gross margin expectation on Puerto Rico, it is higher than normal LRAD gross margins. Normally, our hardware gross margins are in the 50% plus or minus. Puerto Rico is is likely going to be better than that. Richard DanforthChief Executive Officer at Genasys00:16:16As per q three and q four, there was actually some margin recorded on the on the Puerto Rico revenue in q three. It was approximately you know the number? Cassandra Hernandez-MonteonCFO at Genasys00:16:2827. Richard DanforthChief Executive Officer at Genasys00:16:31No. The absolute number. Cassandra Hernandez-MonteonCFO at Genasys00:16:32Oh, of total? Richard DanforthChief Executive Officer at Genasys00:16:33Yeah. Cassandra Hernandez-MonteonCFO at Genasys00:16:3526 No. Richard DanforthChief Executive Officer at Genasys00:16:36That's what it is. So But to answer your question, as we finish more work on the island, that's the trigger to bring the margin and the revenue record it. In q one, we were four plus in q three, excuse me, we're 4 plus million dollars in in revenue and approximately $700,000 in gross margin that was recorded. Q four should be substantially better than that. Richard DanforthChief Executive Officer at Genasys00:17:07As Cassandra mentioned, our revenue expectation in q four is substantially higher than our revenue expectation in q three. Scott SearleMD & Senior Research Analyst at Roth Capital Partners, LLC00:17:17Gotcha. And and Richard, just the from a cash flow perspective, it it's pretty complicated. You received a fair amount, I think, for group one and group two. How does that flow with group three, and and where are we in terms of the planning phases for the additional groups? Richard DanforthChief Executive Officer at Genasys00:17:32All three groups planning, engineering is done. The first two groups, as I said in my remarks, represent nine dams, and construction is in process on all nine. In fact, one has been accepted by the customer, which is also the software the overall software license was accepted as well. The third group, we we just received today the wire for the balance of the deposit they owed us. So we will begin in earnest to work on group three. Richard DanforthChief Executive Officer at Genasys00:18:08So from a cash flow perspective, Scott, as we complete dams, that will generate cash. As we kick off the third group, that will generate cash. So I think from that perspective, the cash flow from operations should be very healthy as compared to historically. Brian AlgerSVP - IR & Corporate Development at Genasys00:18:28And just as a reminder, Scott and others on the call, the way the contract was originally written and and is being executed, the customer will be paying us 60% of each group's value upfront as a deposit. And that's obviously what we just received the final payment on or at least we got notice of today. As we complete each DAM, and we're talking cash accounting, not accrual accounting that we have with GAP, but on a cash accounting basis, we are invoicing the customer on a DAM by DAM basis as each DAM's completion is accepted by the customer. Scott SearleMD & Senior Research Analyst at Roth Capital Partners, LLC00:19:06Got you. Very helpful. And two more if I could just follow-up. CROWS, it's exciting to see that finally happening. Could you what is the outlook in terms of the September? Scott SearleMD & Senior Research Analyst at Roth Capital Partners, LLC00:19:18Will some revenue from CROWS in that initial award potentially sneak into the September? And I think the number you talked about in this initial, tranche was 8 to 8 and a half million. Is that the annual run rate that we should be thinking about, or does the number change, potentially get larger as we look out into '26 and '27? Richard DanforthChief Executive Officer at Genasys00:19:38I think it will get larger. Our historic numbers for the old program of record were between 10 and $15,000,000. As to your question regarding the revenue expectations for the fourth quarter, I think you're gonna see the CRO's revenue in our fiscal twenty six first half. Scott SearleMD & Senior Research Analyst at Roth Capital Partners, LLC00:19:57Gotcha. And lastly, just, you know, from a macro standpoint in terms of federal budgets, the impact that that's pushing down onto local municipalities and spending. Certainly, it seems like it slowed up the first half of this year, and it doesn't seem like you're forecasting any sort of a major recovery on that front. But I'm wondering, is there a steady state level of business we should be thinking about that's relatively immune to federal funding and those sources that have been constrained? Thanks. Richard DanforthChief Executive Officer at Genasys00:20:31Most of our revenue is generated from state and local governments. So there's there isn't an immunity from the the sometimes chaos that we see in Washington DC. Operator00:20:49Thank you. I Richard DanforthChief Executive Officer at Genasys00:20:49think I will mention that oops. Did we lose you, Scott? Brian AlgerSVP - IR & Corporate Development at Genasys00:20:55I think you guys still talk. Go ahead go ahead and finish your answer. Richard DanforthChief Executive Officer at Genasys00:20:58The the we do, however, have some resilience against that chaos in in as much as a a a current active backlog, twelve month backlog of over $60,000,000 Operator00:21:13Thank Again, ladies and gentlemen, it's star one to ask a question. Our next question comes from Ed Woo from Ascendiant Capital. Go ahead, Ed. Edward WooDirector of Research & Senior Analyst at Ascendiant Capital00:21:23Yeah. There was some major weather flood event recently. What is your flood product, and have you noticed any increases in people's interest in the that type of product? Thank you. Richard DanforthChief Executive Officer at Genasys00:21:36We have. As I mentioned in my remarks at the East Of The Rockies has has grown the the interest in our product has grown a lot recently. We have teamed with a company named FloodMap, and we have their flood prediction models on our Genesis Protect platform. And simply put, we can look at the current weather, forecasted weather, and forecast when a river will will go over or when a when a dam might breach and then be able to draw a geo live geographic representations of where that water will go and get messages to everybody that might be in harm's way. So that's gotten traction on the East Coast. Richard DanforthChief Executive Officer at Genasys00:22:28It's gotten traction in a lot of areas, particularly what we're seeing with the floods in, North Carolina and in Texas. Brian AlgerSVP - IR & Corporate Development at Genasys00:22:35To add on that, Ed, the the value of having FloodMap integrated with our products, especially eBack, allows for a very targeted, a very precise message to be sent out to those that are being impacted. So if you think about what we just saw in California with the tsunami watches, instead of alerting all of Sonoma County, which goes quite a ways inland, utilizing flood map, emergency managers could very easily segment the coastal regions that may or may not be impacted and send messages to only those people along the coastline. The same would be true of somebody in a river basin, for instance. And that's part of the new feature set that our product team brought brought to the market this year is that layering capability within EVAC itself. Edward WooDirector of Research & Senior Analyst at Ascendiant Capital00:23:22That's a great product. I I got a tsunami warning in LA, and I was 20 miles in then. So thank you very much for answering my questions, and I wish you guys good luck. Thank you. Richard DanforthChief Executive Officer at Genasys00:23:31Yep. Operator00:23:36Again, ladies and gentlemen, that's star one to ask a question. There appear to be no further questions at this time. I would now like to turn it back to management for any closing remarks. Brian AlgerSVP - IR & Corporate Development at Genasys00:23:50Great. Thank you, Kat. Thank you, everyone, for participating in today's call. A replay of the call will be available on our website shortly. For additional information and up to date news and activity regarding Genesys, our products, and the customers we serve, we strongly recommend that you follow the company and Genesys Protect on your social networks, particularly LinkedIn and X, where we actively post and comment on events that are happening and those that are happening around the world. Brian AlgerSVP - IR & Corporate Development at Genasys00:24:14We look forward to speaking with you again next quarter when we report fiscal fourth quarter and full year 2025 results. Until then, good night. Operator00:24:24Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.Read moreParticipantsExecutivesBrian AlgerSVP - IR & Corporate DevelopmentRichard DanforthChief Executive OfficerCassandra Hernandez-MonteonCFOAnalystsScott SearleMD & Senior Research Analyst at Roth Capital Partners, LLCEdward WooDirector of Research & Senior Analyst at Ascendiant CapitalPowered by Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Genasys Earnings HeadlinesGenasys Backlog Hits 61 Million in Q3August 16, 2025 | theglobeandmail.comGenasys Inc. (NASDAQ:GNSS) Q3 2025 Earnings Call TranscriptAugust 16, 2025 | insidermonkey.comThis stock could leave NVDA in the dustInvesting Legend Hints the End May be Near for These 3 Iconic Stocks Futurist Eric Fry say Amazon, Tesla and Nvidia are all on the verge of major disruption. To help protect anyone with money invested in them, he's sharing three exciting stocks to replace them with. He gives away the names and tickers completely free in his brand-new "Sell This, Buy That" broadcast.August 23 at 2:00 AM | InvestorPlace (Ad)Genasys provides update on Puerto Rico dams early warnings system projectAugust 16, 2025 | msn.comGenasys Inc. Navigates Trade Policy Challenges Amid Declining Federal FundingAugust 16, 2025 | tipranks.comGenasys, Inc. Provides Second Update on Puerto Rico Dams Early Warning System ProjectAugust 15, 2025 | businesswire.comSee More Genasys Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Genasys? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Genasys and other key companies, straight to your email. Email Address About GenasysGenasys (NASDAQ:GNSS) engages in the design, development, and commercialization of critical communications hardware and software solutions to alert, inform, and protect people principally in North and South America, Europe, the Middle East, Asia, and internationally. The company operates through two segments, Hardware and Software. It provides Genasys Protect ALERT, an interactive, cloud-based SaaS solution that is designed to enable SLED and enterprise customers to send critical information to at-risk individuals or groups when an emergency occurs using emails, voice calls, text messages, panic buttons, desktop alerts, TV, social media, and other; and Genasys Protect EVAC that enables responding agencies to determine and communicate the proper scope of a response or evacuation by replacing guesswork with data-driven intelligence; and Genasys Protect CONNECT, an instant communication platform that enables first responders and public safety personnel to collaborate and share information in a single space with text, videos, images, and audio from any location. The company also offers Genasys Protect ACOUSTICS, a mass notification speaker system with Genasys protect command-and-control software; and long range acoustic devices, such as acoustic hailing devices which are used to project alert tones and audible voice messages. It sells its products directly to governments, militaries, end-users, and commercial companies. The company was formerly known as LRAD Corporation. Genasys Inc. was incorporated in 1992 and is based in San Diego, California.View Genasys ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles After Earnings Miss, Walmart Is Still a Top Consumer Staples PlayRoyal Caribbean Earnings Beat Fuels Strong 2025 OutlookDLocal Stock Soars 43% After Earnings Beat and Raised GuidanceGreen Dot's 30% Rally: Turnaround Takes Off on Explosive EarningsElbit Systems Jumps on Record Earnings and a $1.6B ContractBrinker Serves Up Earnings Beat, Sidesteps Cost PressuresWhy BigBear.ai Stock's Dip on Earnings Can Be an Opportunity Upcoming Earnings PDD (8/25/2025)BHP Group (8/25/2025)Bank Of Montreal (8/26/2025)Bank of Nova Scotia (8/26/2025)CrowdStrike (8/27/2025)NVIDIA (8/27/2025)Royal Bank Of Canada (8/27/2025)Snowflake (8/27/2025)Autodesk (8/28/2025)Marvell Technology (8/28/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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PresentationSkip to Participants Operator00:00:00Good day, ladies and gentlemen, and welcome to the Genesis Incorporated Fiscal Third Quarter twenty twenty five Conference Call. All lines have been placed on a listen only mode and the floor will be opened for questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to your host, Brian Alger, SVP of Senior Relations and Corporate Development. Sir, the floor is yours. Brian AlgerSVP - IR & Corporate Development at Genasys00:00:36Good afternoon. Welcome to Genesis' fiscal twenty twenty five third quarter results conference call. I am Brian Alger, SVP, Investor Relations and Corporate Development for Genesis. With me on the call today are Richard Danforth, our CEO and Cassandra Montion, the company's Interim CFO. During today's call, management will make forward looking statements regarding the company's plans, expectations, outlook and future financial performance that may involve certain risks and uncertainties. Brian AlgerSVP - IR & Corporate Development at Genasys00:01:04The company's results may differ materially from the projections described in these forward looking statements. Factors that might cause such differences and other potential risks and uncertainties can be found in the Risk Factors section of the company's Form 10 ks for the fiscal year ended 09/30/2024. Other than statements of historical facts, forward looking statements made on this call are based only on the information and management's expectations as of today, 08/14/2025. We explicitly disclaim any intent or obligation to update those forward looking statements except as otherwise specifically stated. We will also discuss non GAAP financial measures and operational metrics, including adjusted EBITDA, bookings and backlog, which we believe provide helpful information to investors with respect to evaluating the company's performance. Brian AlgerSVP - IR & Corporate Development at Genasys00:01:50For a reconciliation of the adjusted EBITDA to GAAP financial metrics, please see the table in the press release issued by the company at the close of the market today. We consider bookings and backlog leading indicators of future revenues and use these metrics to support production planning. Bookings is an internal operational metric that measures the total dollar value of customer purchase orders executed in a given period regardless of the timing of the related revenue recognition. Backlog is a measure of purchase orders received that are scheduled to ship within the next twelve months. Finally, a replay of this call will be available in approximately four hours through the Investor Relations page on the company's website. Brian AlgerSVP - IR & Corporate Development at Genasys00:02:30At this time, it's my pleasure to turn the call over to Genesis' CEO, Richard Danforth. Richard? Richard DanforthChief Executive Officer at Genasys00:02:38Thank you, Brian, and welcome, everyone. Fiscal Q3 revenues reflect the first material impact of the Puerto Rico Early Warning System project. Total revenues were $9,900,000 in the quarter, inclusive of 4,300,000.0 from Puerto Rico. Our software pipeline is at an all time high and is rapidly growing in response to our sales efforts and increased awareness of our offerings due to the LA fires, SignalGate, and more recently, the floods in Texas. International and domestic LRAD bookings continue to rebound, resulting in a growing 12 backlog of business that for Genesis as a whole, amounted to more than $60,000,000 at the June. Richard DanforthChief Executive Officer at Genasys00:03:21As you are aware, after invoicing the customer in March, we received a partial payment for the deposit on the third group of dams in Puerto Rico in May. The remaining portion has finally been transferred today. We believe the root cause of the payment delays has been identified and resolved, and future payments are now expected to be made in a timely manner similar to the first two groups deposits. The Crows AHD effort, part of the CROSE two tech refresh program of record, saw our initial research and development funding in fiscal twenty twenty two and 2023. The first production funding was included in the 2024 federal budget. Richard DanforthChief Executive Officer at Genasys00:04:03And following the successful completion of the design, test, and qualification of the LRAD four fifty XLRT, the US Army issued an RFQ in July 2025. The RFQ has since closed, and a purchase order of 8 to 8 and a half million dollars is being finalized. Genesis expects many more years of continued CROSE related revenue. The temporary funding freeze of the urban area security initiatives and the homeland security grant program as well as the cancellation of FEMA's hazard mitigation programs, building resilience infrastructure and communities that occurred at the beginning of this calendar year has delayed, disrupted, and in some cases, eliminated more than 2,000,000,000 in annual funding that state and local agencies rely on. This has resulted in a slowdown of our software bookings. Richard DanforthChief Executive Officer at Genasys00:04:59As we detailed in our earnings release earlier today, more than $9,000,000 of software bookings are currently awaiting funding from various federal programs that flow down to state and local jurisdictions. Recent indications are that public safety and hazard mitigate mitigation grants are being solidified and funding is slowly starting to move, but it would be naive to think that everything will change instantaneously. Acknowledging this reality, we have recently completed a number of actions to reduce our operating expense levels while maintaining a strong sales effort for Genesys Protect. Included in those actions was a targeted headcount reduction. We expect to save 2 and a half million dollars annually as a result of the actions taken. Richard DanforthChief Executive Officer at Genasys00:05:44It is important for all of us to understand that despite the recent slowdown in software bookings, our traction and momentum are growing. As I've already mentioned, our pipeline of software business is at an all time high, and our geographic footprint is expanding. Historically, Genesys has seen most of its success West Of The Rockies. However, with new product feature sets and targeted sales effort, we have seen a massive improvement in the pipeline of business East Of The Rockies. So, much so that more than 25% of the software pipeline added in the past twelve months comes from the customers located East Of The Rocky Mountains. Richard DanforthChief Executive Officer at Genasys00:06:26In our c CRM system, many details in our software pipeline are labeled pending funding. These deals range from cities within LA County looking for their own evac licenses to large regional emergency managers eager to eager for precise zone based solutions to even federal agencies interested in Genesis unique and differentiated Genesis Protect. Though the recently reported top line results don't reflect this activity, our deal count diversity of customers and increasing deal size gives us increasing confidence that Genesys Protect meets the market demands. I would now like to spend a little time detailing our progress in Puerto Rico. As you know, this is a $75,000,000 contract with PREPA that is fully funded by FEMA. Richard DanforthChief Executive Officer at Genasys00:07:16The project covers 37 dams across the island of Puerto Rico that have been broken down into seven distinct groups. The first two groups, which have a total of roughly $17,000,000, are well underway. Within the first two groups, there are nine dams. Each dam has unique sensor and communication equipment requirements. Across the first two groups, 58 poles, 69 solar panels, kits, 51 sensors, 35 cameras, and nearly 400 l rad speakers will be installed. Richard DanforthChief Executive Officer at Genasys00:07:49As of this week, construction is underway on all nine dams, and essentially all of the equipment necessary to complete the installations for the first two groups is on the island. Moreover, sign off on the first DAM and the early warning system software has already been received. The significance of this acceptance cannot be overstated. The software and hardware development and integration is complete and operational on the first DAM. The third group is the largest of the seven groups, including installations at 10 dams valued with a value of $18,000,000 to Genesis. Richard DanforthChief Executive Officer at Genasys00:08:27Upon receipt of the remainder of the deposit, we will rapidly seek permits and finalize the production of the equipment and begin construction necessary to complete this group as quickly as possible. With tropical storm Aaron tracking down, towards Puerto Rico this week, we're reminded that the installation schedules are sometimes subject to forces outside our control. Thus far, the construction project has been going, going very well, and we will, we are tracking very close to plan. There is no guarantee that the weather will continue to cooperate, but regardless, we aim to complete the installations across all seven groups as quickly as possible. Whether it is natural disasters, geopolitical geopolitical unrest, or macroeconomic change, a lot of uncertainties continue to arise around the world, which in many cases creates new and evolving opportunities for Genesys solutions. Richard DanforthChief Executive Officer at Genasys00:09:27Genesys delivers products all over the world that save lives. From Africa to Singapore to Florida Central Florida, Genesys software and hardware is making a difference in protecting lives throughout the world. We know that we have products that the market wants. Exiting the June, Genesis has over $60,000,000 in its twelve month backlog. This does not include the $650,000 of ARR associated with Puerto Rico nor anything related to Crows. Richard DanforthChief Executive Officer at Genasys00:10:01While not a guarantee of outcome, the existing backlog and the growing pipeline of additional business provides us with confidence in the business and the strategic value of the company. In summary, fiscal twenty twenty five has been challenging on a number of levels. However, with an extremely strong backlog, growing pipeline and differentiated product portfolio, Genesis is in position to reap the rewards of its investments over the next several years. Now I will turn the call over to Cassandra to go through the financial outlook in greater detail. Cassandra? Cassandra Hernandez-MonteonCFO at Genasys00:10:35Good afternoon, everyone. In the 2025, Genesis generated $9,900,000 of revenues, up 42% sequentially and up 38% on a year over year basis. Hardware revenues grew approximately 50% year over year, reflecting the $4,300,000 of revenue from the Puerto Rico project Richard already discussed. Total software revenues in the quarter grew 7% year over year, but was flat flat sequentially as the limited bookings were offset by our slight churn. Gross profit margins for June came in at 26.3%, which is lower than both the prior year and the previous quarter. Cassandra Hernandez-MonteonCFO at Genasys00:11:15This This decline is primarily due to the percentage of completion accounting applied to our initial revenues from Puerto Rico, a less favorable hardware mix and higher tariff costs on certain imported components. As mentioned earlier in today's earnings release, we expect gross margins to improve as the Puerto Rico project progresses, owing to the delayed recognition of profits under the percentage of completion method. Operating expenses for the quarter came in at $8,500,000 down from $8,900,000 in March and $9,100,000 in the same quarter last year. This year over year and sequential improvement reflects our continued focus on cost discipline and the absence of certain legal and professional service fees. In light of the dynamics Richard just outlined in our software business, we've recently completed a set of targeted cost reductions. Cassandra Hernandez-MonteonCFO at Genasys00:12:11These are expected to reduce our annualized operating expenses by $2,500,000 beginning in the 2026. As part of these actions, we made the difficult decision to reduce headcount by 19 full time employees, including 10 in Spain. On a GAAP basis, our third fiscal quarter operating loss was $5,900,000 compared to a loss of $5,400,000 in the prior year quarter and a a loss of $6,300,000 in the March. Adjusted EBITDA, which excludes noncash stock compensation, was a negative $4800000.0100000.0 dollars in the 2025, but down slightly from the negative $4,400,000 in June. GAAP net loss in this financial year's third quarter was $6,500,000 which compares to last year's third quarter net loss of $6,700,000 and last quarter's $6,100,000 net loss. Cassandra Hernandez-MonteonCFO at Genasys00:13:18Cash and cash equivalents and marketable securities at the June totaled $5,500,000 down sequentially from $7,200,000 on 03/31/2024. During the third fiscal quarter, cash used in operating activities was $5,900,000 which included a $750,000 use of cash resulting from changes in operating assets and liabilities to help offset the impact of our net loss and working capital shift, we secured $4,000,000 through the first amendment to our term loan, finalized just ahead of our last earnings call. Looking forward, in the fiscal fourth quarter, we anticipate a significant increase in both revenue and profit contributions from Puerto Rico. While some variables remain, we continue to project $1,520,000,000 dollars in total revenues from Puerto Rico for fiscal twenty twenty five. Additionally, we expect to report improving gross margins with operating expenses remaining consistent with those from the third quarter. Cassandra Hernandez-MonteonCFO at Genasys00:14:23Factoring in our installation schedule Puerto Rico, the remaining LRAD backlog and our software ARR of $8,700,000 we ended June 2025 with a twelve month backlog totaling $61,000,000 This positions us well for continued momentum heading into the next fiscal year. Now we would like to open up the call for Q and A. Operator? Operator00:14:49Thank you. The floor is now open for questions. And our first question comes from Scott Searle from ROTH Capital. Go ahead, Scott. Scott SearleMD & Senior Research Analyst at Roth Capital Partners, LLC00:15:06Hey, good afternoon. Thanks for taking the questions. Maybe to dive right in on PREPA, Richard, it sounds like now we'll finally start to get some revenue recognition that goes along with it. Could you give us some high level thoughts in terms of gross margins as we look out into the September and beyond. We've had, I think, percent gross margins in the first '2 quarters of the early prep or rev. Scott SearleMD & Senior Research Analyst at Roth Capital Partners, LLC00:15:29Could you remind us what gross margins look like over the course of the $75,000,000 contract and what we should be expecting over the next quarter or two? And along with that, maybe help us understand cash flow from operations with the give and takes of inflows as we move into the group three and some more payments on that front. Richard DanforthChief Executive Officer at Genasys00:15:51That's a lot, Scott. So if I miss one, ask me again. But from a total contract perspective, gross margin expectation on Puerto Rico, it is higher than normal LRAD gross margins. Normally, our hardware gross margins are in the 50% plus or minus. Puerto Rico is is likely going to be better than that. Richard DanforthChief Executive Officer at Genasys00:16:16As per q three and q four, there was actually some margin recorded on the on the Puerto Rico revenue in q three. It was approximately you know the number? Cassandra Hernandez-MonteonCFO at Genasys00:16:2827. Richard DanforthChief Executive Officer at Genasys00:16:31No. The absolute number. Cassandra Hernandez-MonteonCFO at Genasys00:16:32Oh, of total? Richard DanforthChief Executive Officer at Genasys00:16:33Yeah. Cassandra Hernandez-MonteonCFO at Genasys00:16:3526 No. Richard DanforthChief Executive Officer at Genasys00:16:36That's what it is. So But to answer your question, as we finish more work on the island, that's the trigger to bring the margin and the revenue record it. In q one, we were four plus in q three, excuse me, we're 4 plus million dollars in in revenue and approximately $700,000 in gross margin that was recorded. Q four should be substantially better than that. Richard DanforthChief Executive Officer at Genasys00:17:07As Cassandra mentioned, our revenue expectation in q four is substantially higher than our revenue expectation in q three. Scott SearleMD & Senior Research Analyst at Roth Capital Partners, LLC00:17:17Gotcha. And and Richard, just the from a cash flow perspective, it it's pretty complicated. You received a fair amount, I think, for group one and group two. How does that flow with group three, and and where are we in terms of the planning phases for the additional groups? Richard DanforthChief Executive Officer at Genasys00:17:32All three groups planning, engineering is done. The first two groups, as I said in my remarks, represent nine dams, and construction is in process on all nine. In fact, one has been accepted by the customer, which is also the software the overall software license was accepted as well. The third group, we we just received today the wire for the balance of the deposit they owed us. So we will begin in earnest to work on group three. Richard DanforthChief Executive Officer at Genasys00:18:08So from a cash flow perspective, Scott, as we complete dams, that will generate cash. As we kick off the third group, that will generate cash. So I think from that perspective, the cash flow from operations should be very healthy as compared to historically. Brian AlgerSVP - IR & Corporate Development at Genasys00:18:28And just as a reminder, Scott and others on the call, the way the contract was originally written and and is being executed, the customer will be paying us 60% of each group's value upfront as a deposit. And that's obviously what we just received the final payment on or at least we got notice of today. As we complete each DAM, and we're talking cash accounting, not accrual accounting that we have with GAP, but on a cash accounting basis, we are invoicing the customer on a DAM by DAM basis as each DAM's completion is accepted by the customer. Scott SearleMD & Senior Research Analyst at Roth Capital Partners, LLC00:19:06Got you. Very helpful. And two more if I could just follow-up. CROWS, it's exciting to see that finally happening. Could you what is the outlook in terms of the September? Scott SearleMD & Senior Research Analyst at Roth Capital Partners, LLC00:19:18Will some revenue from CROWS in that initial award potentially sneak into the September? And I think the number you talked about in this initial, tranche was 8 to 8 and a half million. Is that the annual run rate that we should be thinking about, or does the number change, potentially get larger as we look out into '26 and '27? Richard DanforthChief Executive Officer at Genasys00:19:38I think it will get larger. Our historic numbers for the old program of record were between 10 and $15,000,000. As to your question regarding the revenue expectations for the fourth quarter, I think you're gonna see the CRO's revenue in our fiscal twenty six first half. Scott SearleMD & Senior Research Analyst at Roth Capital Partners, LLC00:19:57Gotcha. And lastly, just, you know, from a macro standpoint in terms of federal budgets, the impact that that's pushing down onto local municipalities and spending. Certainly, it seems like it slowed up the first half of this year, and it doesn't seem like you're forecasting any sort of a major recovery on that front. But I'm wondering, is there a steady state level of business we should be thinking about that's relatively immune to federal funding and those sources that have been constrained? Thanks. Richard DanforthChief Executive Officer at Genasys00:20:31Most of our revenue is generated from state and local governments. So there's there isn't an immunity from the the sometimes chaos that we see in Washington DC. Operator00:20:49Thank you. I Richard DanforthChief Executive Officer at Genasys00:20:49think I will mention that oops. Did we lose you, Scott? Brian AlgerSVP - IR & Corporate Development at Genasys00:20:55I think you guys still talk. Go ahead go ahead and finish your answer. Richard DanforthChief Executive Officer at Genasys00:20:58The the we do, however, have some resilience against that chaos in in as much as a a a current active backlog, twelve month backlog of over $60,000,000 Operator00:21:13Thank Again, ladies and gentlemen, it's star one to ask a question. Our next question comes from Ed Woo from Ascendiant Capital. Go ahead, Ed. Edward WooDirector of Research & Senior Analyst at Ascendiant Capital00:21:23Yeah. There was some major weather flood event recently. What is your flood product, and have you noticed any increases in people's interest in the that type of product? Thank you. Richard DanforthChief Executive Officer at Genasys00:21:36We have. As I mentioned in my remarks at the East Of The Rockies has has grown the the interest in our product has grown a lot recently. We have teamed with a company named FloodMap, and we have their flood prediction models on our Genesis Protect platform. And simply put, we can look at the current weather, forecasted weather, and forecast when a river will will go over or when a when a dam might breach and then be able to draw a geo live geographic representations of where that water will go and get messages to everybody that might be in harm's way. So that's gotten traction on the East Coast. Richard DanforthChief Executive Officer at Genasys00:22:28It's gotten traction in a lot of areas, particularly what we're seeing with the floods in, North Carolina and in Texas. Brian AlgerSVP - IR & Corporate Development at Genasys00:22:35To add on that, Ed, the the value of having FloodMap integrated with our products, especially eBack, allows for a very targeted, a very precise message to be sent out to those that are being impacted. So if you think about what we just saw in California with the tsunami watches, instead of alerting all of Sonoma County, which goes quite a ways inland, utilizing flood map, emergency managers could very easily segment the coastal regions that may or may not be impacted and send messages to only those people along the coastline. The same would be true of somebody in a river basin, for instance. And that's part of the new feature set that our product team brought brought to the market this year is that layering capability within EVAC itself. Edward WooDirector of Research & Senior Analyst at Ascendiant Capital00:23:22That's a great product. I I got a tsunami warning in LA, and I was 20 miles in then. So thank you very much for answering my questions, and I wish you guys good luck. Thank you. Richard DanforthChief Executive Officer at Genasys00:23:31Yep. Operator00:23:36Again, ladies and gentlemen, that's star one to ask a question. There appear to be no further questions at this time. I would now like to turn it back to management for any closing remarks. Brian AlgerSVP - IR & Corporate Development at Genasys00:23:50Great. Thank you, Kat. Thank you, everyone, for participating in today's call. A replay of the call will be available on our website shortly. For additional information and up to date news and activity regarding Genesys, our products, and the customers we serve, we strongly recommend that you follow the company and Genesys Protect on your social networks, particularly LinkedIn and X, where we actively post and comment on events that are happening and those that are happening around the world. Brian AlgerSVP - IR & Corporate Development at Genasys00:24:14We look forward to speaking with you again next quarter when we report fiscal fourth quarter and full year 2025 results. Until then, good night. Operator00:24:24Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.Read moreParticipantsExecutivesBrian AlgerSVP - IR & Corporate DevelopmentRichard DanforthChief Executive OfficerCassandra Hernandez-MonteonCFOAnalystsScott SearleMD & Senior Research Analyst at Roth Capital Partners, LLCEdward WooDirector of Research & Senior Analyst at Ascendiant CapitalPowered by