Geospace Technologies NASDAQ: GEOS reported first-quarter fiscal 2026 revenue of $25.6 million and a net loss of $9.8 million for the three months ended December 31, 2025, as management pointed to a challenging operating environment that included inflation-driven cost pressures, tariffs, and supply chain issues.
On the company’s earnings call, President and CEO Rich Kelley said Geospace faced higher material costs that rose faster than the company could adjust pricing, while supply chain challenges led to higher inventory costs. Despite those pressures, Kelley said the company remains focused on customer service, efficient operations, and “smart, long-term decisions.” CFO Robert Curda added that the company does not plan to provide specific revenue or earnings guidance.
Quarterly results and year-over-year comparison
Curda said quarterly revenue declined from $37.2 million in the year-ago period to $25.6 million. The company posted a net loss of $9.8 million, or $0.76 per diluted share, compared with net income of $8.4 million, or $0.65 per diluted share, in the prior-year first quarter.
Management detailed performance across Geospace’s three operating segments:
- Smart Water: Revenue was $5.8 million, down 21% from $7.3 million a year ago. Curda attributed the decline to lower demand for the company’s Hydroconn cable and connector products.
- Energy Solutions: Revenue was $14.6 million, down 40% from $24.3 million a year ago. Curda noted the quarter included $10.6 million of Pioneer and related equipment revenue tied to an order for Dawson Geophysical announced in August 2025. He also highlighted that the prior-year quarter included a $17 million OBX marine wireless product sale and said the current-year decline also reflected lower utilization of the OBX rental fleet.
- Intelligent Industrial: Revenue was $5.1 million, down 8% from $5.6 million a year ago. Curda said lower demand for industrial sensor products drove the decline, partially offset by increased demand for contract manufacturing services.
Market backdrop and segment commentary
Kelley described the Smart Water segment as stable but “increasingly demanding,” adding that first-quarter revenue typically runs lower due to seasonal deployment schedules and the timing of municipal budget cycles. He said long-term demand for water infrastructure and management remains strong, driven by population growth, urbanization, aging infrastructure, and regulatory and environmental standards. Kelley also said the company is expanding the geographic reach of its sales and marketing efforts where demand and the company’s technology align.
For Energy Solutions, Kelley said the environment is shaped by uncertainty and change, even as global energy demand remains resilient. He highlighted the company’s previously announced award of a large permanent reservoir monitoring (PRM) contract in fiscal 2025 and said the Pioneer land node solution continues to generate interest, with several sales completed and additional sales anticipated later in the year. At the same time, he cited volatility from geopolitical events, inflationary pressures, regulatory developments, and shifting investor expectations.
Within Intelligent Industrial, Kelley said Geospace continues to generate “steady, predictable” revenue from industrial sensors, imaging products, and contract manufacturing. He also discussed the company’s acquisition of Geovox Security, the exclusive licensee of a human heartbeat detection algorithm developed by Oak Ridge National Laboratory. Kelley said customer interest and engagement since the acquisition has exceeded historical levels, supported by a smaller product form factor and a monthly subscription model designed to simplify procurement.
Petrobras PRM contract revenue timing discussed
During the Q&A session, management provided additional detail on the timeline for the Petrobras PRM contract. In response to a question about revenue recognition, management said revenue will be recognized “over time,” similar to a percentage-of-completion model, based on costs incurred compared with total anticipated costs.
Management said it anticipates recognizing revenue for the first time beginning in the third quarter of fiscal 2026, with the goods portion of the project expected to be completed in the first quarter of fiscal 2027. Management also said a smaller portion related to installation through a Brazil-based consortium partner could extend later, with additional revenue recognition referenced for the fourth quarter of fiscal 2027. When asked about the contract size, management reiterated that the total value previously announced is in the “$90 million range,” and said the vast majority relates to the goods portion, with services representing a much smaller portion.
In a separate exchange, Kelley said Geospace is in discussions with “multiple” other companies regarding PRM opportunities but declined to identify parties or provide a more specific count due to confidentiality.
Geovox rollout, subscription model, and security market opportunities
On Geovox, Kelley said the company began shipping units during the quarter and expects revenue recognition in the current quarter, to be reported in the next earnings release. He said Geospace anticipates shipping “a couple of hundred units” this year, with volumes building in subsequent periods. Kelley characterized interest as strong both domestically and internationally.
When asked about the size of the broader market, Kelley said the market is “in the thousands” of units rather than “tens of thousands,” and he expects the company could approach a “close to saturable level” over the next couple of years.
Kelley said the near-term focus remains prisons and jails, with additional potential applications including border crossings and secured sites such as nuclear power facilities and power transfer stations. Discussing U.S. border opportunities, Kelley said Customs and Border Protection is interested in efficiency and timeliness improvements, and noted there are 300 border crossing points in the U.S. He said that if multiple units were deployed at each site, the opportunity could exceed 1,000 units for CBP.
Curda also addressed a question regarding an increase in contingent consideration of roughly $196,000 during the quarter, saying it related to the Heartbeat Detector business.
Balance sheet and capital spending outlook
Curda said Geospace ended the quarter with $10 million in cash and cash equivalents and working capital of $52.2 million, including $25.4 million of trade accounts and financing receivables. He added that the company owns unencumbered property and real estate in both domestic and international locations.
Looking ahead, Curda said management anticipates a capital expenditure budget of $5 million and does not expect additions to the rental fleet given current market conditions.
On the OBX rental fleet outlook, Kelley said ocean-bottom node activity was expected to be “flattish” based on last year’s expectations. He said Geospace has seen an increase in requests for quotations ahead of the summer season, though none had converted into orders at the time of the call.
About Geospace Technologies NASDAQ: GEOS
Geospace Technologies Corporation specializes in the design, manufacturing and marketing of geophysical instrumentation for seismic data acquisition. The company's solutions address the needs of oil and gas exploration and production companies by enabling detailed subsurface imaging through advanced sensor and acquisition systems. Geospace serves both land and marine seismic markets, offering equipment that meets the rigorous demands of contemporary seismic surveys.
In its Land Products segment, Geospace Technologies offers a range of components including geophones, accelerometers, cable and recorder accessories designed to collect high-quality seismic signals in onshore environments.
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