Genasys NASDAQ: GNSS reported fiscal third-quarter 2026 revenue of $7.3 million, down from $9.9 million a year earlier, as supply-chain constraints affecting a defense program and a temporary work suspension in Puerto Rico shifted revenue recognition beyond the quarter.
Chief Executive Officer Richard Danforth said the revenue decline reflected timing issues rather than weaker demand. The company maintained its expectation for fiscal 2026 to be a record year for revenue and profitability, citing gross margins above 50%, a growing backlog and progress resolving the factors that affected the third quarter.
“Our backlog remains strong, our pipeline continues to grow, and the factors that delayed revenue recognition during the quarter are now being resolved,” Danforth said.
Supply Constraint Resolved, Puerto Rico Work Restarts
Danforth said a supply-chain constraint related to the CROWS program affected quarterly revenue. The constraint has been resolved, production has begun on an initial $9 million order, and Genasys expects to complete delivery within the fiscal year.
The company also paused work in Puerto Rico while awaiting customer payments. Chief Financial Officer Cassandra Hernandez-Monteon said the Puerto Rico project contributed $1.3 million of third-quarter revenue. Collections resumed after the quarter ended, and Genasys has remobilized project activity on the island.
Danforth said the company had collected $2.9 million from Puerto Rico in the four weeks following the quarter-end. Payments are being made against specific invoices, he said, as the customer works through a backlog of unpaid amounts.
Genasys had not originally planned Puerto Rico work during its fiscal fourth quarter because of hurricane season, Danforth said. However, the company is now conducting work there and intends to complete as much as possible during the quarter. He said the pause would not affect the project’s profitability.
Software Revenue and Backlog Increase
Software revenue totaled $2.7 million, up 21% from the prior-year period and 12% sequentially. Genasys generated about $2.5 million in software bookings during the quarter, including new customer contracts and renewals.
The company ended the quarter with approximately $69 million in 12-month backlog, compared with $58.2 million at the end of the fiscal second quarter. Hernandez-Monteon said the growth reflected continued order activity as well as the timing of certain programs, providing visibility into future revenue.
Among recent software wins, Genasys announced a multiyear Genasys Protect agreement with Ada County, Idaho, which has more than 550,000 residents and more than 3 million annual visitors. Danforth said Ada County was the second county in Idaho to replace an incumbent emergency-alert provider with Genasys.
During the question-and-answer session, Danforth said Genasys believes counties may increasingly move to its platform as contracts with existing suppliers expire, citing the platform’s ease of use. He said the company already covers most of Idaho’s population and intends to expand coverage throughout the state.
The company also announced integrations involving its software products. Genasys partnered with Intterra and CAL FIRE to connect the CAL FIRE AwareCA platform with Genasys Protect, allowing alerts issued through the platform to be shared statewide. Separately, Genasys integrated its Evertel platform with Peregrine, a public-safety data and analytics platform. The integration was tested by the Vacaville, California, Police Department, according to Danforth.
Genasys Protect now covers about 15% of the U.S. population and 20% of the country’s land area, Danforth said. The company described the platform as the nation’s leading platform for zone-based emergency alerting, evacuation management and secure real-time communications.
Hardware Demand Builds in Critical Infrastructure
On the hardware side, Genasys said demand is increasing for its LRAD 950NXT systems for critical-infrastructure sites including electrical substations, dams, ports and data centers. The company recently announced a $2.4 million order from one of the largest utilities in the United States.
The order expands an existing deployment that began with one substation installation and was later followed by a $2 million order. Danforth said the systems are integrated with physical-security infrastructure and perimeter-intrusion detection systems to help users detect, assess, communicate, respond to, delay and deter threats.
In response to an analyst question, Danforth said the utility customer had purchased $4.4 million of NXT systems during fiscal 2026, following approximately $1 million in purchases during the prior fiscal year. He also said the company’s nonmilitary hardware bookings are expected to reach their highest level to date this fiscal year.
Genasys also cited continued activity from defense customers, including the U.S. Army and international naval and defense agencies. Danforth said the company has sold the systems to the French, Spanish, Royal Canadian and U.S. navies, among other customers.
Margins Improve as Expenses Decline
Gross margin rose to 57.1% in the fiscal third quarter from 26.3% a year earlier. Hernandez-Monteon attributed the improvement primarily to revenue mix, as the prior-year quarter included a larger contribution from the lower-margin Puerto Rico project under percentage-of-completion accounting. The current quarter included a higher proportion of software revenue.
Operating expenses declined 3.8% year over year to $8.2 million. Selling, general and administrative expenses decreased 4.6% to $6.1 million, while research and development spending declined 1.2% to $2.1 million. The company said the reductions reflected steps to align spending with cash flow and near-term operating priorities.
Genasys reported a GAAP net loss of $4.7 million, or $0.10 per share, compared with a loss of $6.5 million, or $0.14 per share, in the prior-year quarter. Adjusted EBITDA loss narrowed to $3.1 million from $4.8 million.
Cash, cash equivalents and marketable securities totaled $3.1 million as of June 30, compared with $8 million at Sept. 30, 2025. In July, Genasys extended the maturity of its term loan to July 2027. Management said the extension provides additional working-capital flexibility and reduces reliance on payment timing from individual customers.
“The demand environment across both sides of our business is as robust as it has ever been,” Danforth said, adding that the company remains on pace for a record year supported by its backlog and expanding pipeline.
About Genasys (NASDAQ:GNSS)
Genasys, Inc NASDAQ: GNSS specializes in mission-critical communications and emergency mass notification solutions designed to keep organizations and communities connected during high-stress events. The company's core offerings include a multi-channel alerting platform that integrates SMS, email, voice, sirens, public address systems and social media outlets. By combining hardware and cloud-based software, Genasys delivers robust, scalable systems that can push targeted warnings and status updates to millions of recipients in seconds.
In addition to its flagship Smart Mass Notification System, Genasys provides hardened private LTE networks, satellite communications terminals and interoperable radio systems tailored for government agencies, defense customers, utilities, energy producers and remote industrial operations.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
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