Core Viewpoint - Geospace Technologies Corporation (GEOS) has experienced significant stock declines following its earnings report, with a 38.7% drop since the end of September 2025, contrasting with a modest gain in the S&P 500 Index [1] Financial Performance - For the fourth quarter of fiscal 2025, Geospace reported revenues of $30.7 million, a decrease of 13.3% from $35.4 million in the same quarter last year [2] - The company recorded a net loss of $9.1 million, or $(0.71) per share, an improvement from a $12.9 million loss, or $(1.00) per share, in the prior-year quarter [2] - Gross profit fell 78.3% to $3.5 million from $15.9 million due to rising product costs and a shift in segment mix [2] Segment Performance - Smart Water revenue decreased by 28.1% to $8.5 million from $11.9 million year over year [3] - Energy Solutions revenue declined 10.9% to $15.7 million from $17.6 million [3] - Intelligent Industrial revenue increased by 8.9% to $6.4 million from $5.8 million [3] Annual Overview - Total revenue for fiscal 2025 was $110.8 million, down 18.3% from $135.6 million in fiscal 2024 [4] - The net loss widened to $9.7 million, or $(0.76) per share, compared to a $6.6 million loss, or $(0.50) per share, a year earlier [4] - Gross profit for the full fiscal year declined 37.4% to $32.9 million from $52.6 million [4] Operational Metrics - Segment profitability weakened, with Energy Solutions reporting an operating loss of $4.9 million compared to an operating income of $5.6 million in the prior-year quarter [5] - Smart Water's operating income fell 57.3% to $1.6 million from $3.8 million [5] - Intelligent Industrial's operating loss narrowed to $1.1 million from $4.5 million [5] Cash Flow and Financial Position - Cash and equivalents at the end of fiscal 2025 were $26.3 million, up from $6.9 million a year earlier [6] - Net cash used in operating activities was $22.2 million for fiscal 2025, compared to $9.1 million in fiscal 2024 [6] - The company reported $64.1 million of working capital and $8 million of undrawn credit availability at year-end [6] Management Insights - Management highlighted ongoing strategic diversification efforts, particularly in the Smart Water segment, which has shown consistent revenue growth [7] - The Energy Solutions segment faces challenges due to reduced offshore exploration and low oil prices, but secured a significant contract with Petrobras [7] - The Intelligent Industrial segment remains stable, supported by demand for industrial sensors and contract manufacturing [8] Challenges and Influences - Cost pressures significantly impacted quarterly performance, with higher product costs attributed to U.S. trade tariffs [9] - Lower utilization of the rental fleet led to a 61.6% drop in rental revenue, falling to $1.1 million from $2.8 million [10] - Delays related to government shutdowns disrupted project timelines, affecting near-term revenue potential [10] Future Outlook - Management did not provide specific revenue or earnings guidance for fiscal 2026 but expressed confidence in backlog strength and anticipated margin improvements [11] - Revenue recognition for the Petrobras PRM contract is expected to begin in the second quarter of fiscal 2026, potentially boosting future revenues [11] Recent Developments - Geospace acquired Geovox Security, enhancing its security offerings with the Heartbeat Detector product line [12] - The company also restructured its Exile product portfolio to improve revenue and margins [12] - No additional acquisitions or restructuring initiatives were disclosed for the quarter [13]

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Group 1 - The analyst team has a proven track record of outperforming across all market conditions, achieving an annualized return of almost 40% over the past decade with a long-only model portfolio return of over 23 times [1] - The focus includes income-oriented picks for lower-risk firms with steady dividend payouts, indicating a strategy that caters to conservative investors [1] - The research covers the energy, shipping, and offshore markets, highlighting the firm's expertise in these sectors [1] Group 2 - The analyst has a historical focus on tech stocks but has expanded coverage to include the offshore drilling and supply industry, as well as the shipping industry, which encompasses tankers, containers, and dry bulk [2] - The analyst is also monitoring the emerging fuel cell industry, suggesting a forward-looking approach to investment opportunities [2] - The analyst's background includes experience as an auditor for PricewaterhouseCoopers and navigating significant market events such as the dotcom bubble and the subprime crisis [2]

Core Insights - The analyst team has demonstrated a strong track record, achieving an annualized return of almost 40% over the past decade, with a long-only model portfolio return exceeding 23 times [1]. Group 1: Investment Focus - The company offers income-focused investment options for those preferring lower-risk firms with consistent dividend payouts [1]. - The analyst has expanded coverage to include the offshore drilling and supply industry, as well as the shipping industry, which encompasses tankers, containers, and dry bulk [2]. Group 2: Analyst Background - The analyst has a background in auditing with PricewaterhouseCoopers and has transitioned to day trading for nearly 20 years, successfully navigating significant market events such as the dotcom bubble and the subprime crisis [2].

Revenue Performance - Consolidated revenue for fiscal year 2025 was $110.8 million, a decrease of $24.8 million, or 18.3%, from fiscal year 2024[149]. - Smart Water segment revenue increased by $3.4 million, or 10.4%, primarily due to higher demand for Hydroconn® cable and connector products[153]. - Energy Solutions segment revenue decreased by $27.3 million, or 35.0%, with product revenue down by $14.3 million, or 24.3%[155]. - Revenue from the Energy Solutions business segment in fiscal year 2025 was primarily derived from wireless product sales, with expectations for moderate growth in fiscal year 2026[180]. - Fiscal year 2026 revenue from Energy Solutions reservoir products is expected to significantly increase due to a PRM contract entered in Q3 2025, lasting approximately 18 months[181]. - Revenue from the Smart Water business segment is expected to increase slightly in fiscal year 2026, driven by demand for Hydroconn® and Aquana products[182]. - The acquisition of Geovox's Heartbeat Detector® is anticipated to boost revenue from the Intelligent Industrial business segment in fiscal year 2026[183]. Profitability and Expenses - Consolidated gross profit for fiscal year 2025 was $32.9 million, a decrease of $19.7 million, or 37.4%, from fiscal year 2024[150]. - Operating expenses for fiscal year 2025 were $48.8 million, an increase of $3.3 million, or 7.3%, from fiscal year 2024[151]. - Operating income from the Energy Solutions segment decreased by $18.2 million, or 97.9%, due to lower revenues and higher research and development expenses[156]. Financial Position - The company maintained a strong balance sheet with no debt and had $26.3 million in cash and cash equivalents as of September 30, 2025[148][159]. - The company's available cash and cash equivalents were $26.3 million as of September 30, 2025, which included $0.8 million held by foreign subsidiaries[164]. - As of September 30, 2025, the company had no outstanding borrowings under the credit agreement and could borrow approximately $8 million without violating any debt covenants[163]. Investments and Acquisitions - The company expects fiscal year 2026 cash investments in property, plant, and equipment to be approximately $7 million[160]. - The company completed a stock buy-back program authorized by the board of directors, repurchasing up to $7 million of common stock[161]. - The company amended its credit agreement with Woodforest National Bank, extending a revolving credit facility with a maximum availability of $25 million[162]. - The company acquired Geovox in August 2025, recording an initial contingent earn-out liability of $2.5 million, with a maximum potential of $3.3 million[167]. Market Strategy - The company is actively marketing its SADAR® technologies to security and oil and gas industry customers, expecting increased acceptance over time[184]. - The company recognized a gain of $4.6 million from the sale of real property during the third quarter of fiscal year 2025[152].

Financial Data and Key Metrics Changes - For Q4 2025, the company reported revenue of $30.7 million, down from $35.4 million in Q4 2024, representing a decrease of 19.7% [10] - The net loss for Q4 2025 was $9.1 million, or $0.71 per diluted share, compared to a net loss of $12.9 million, or $1 per diluted share in the same quarter last year [10] - For the full fiscal year 2025, revenue totaled $110.8 million, down from $135.6 million in fiscal year 2024, a decrease of 18.3% [10] - The net loss for the full year was $9.7 million, or $0.76 per diluted share, compared to a net loss of $6.6 million, or $0.50 per diluted share in the previous year [10] Business Line Data and Key Metrics Changes - Smart Water segment revenue for Q4 2025 was $8.5 million, down 28% from $11.9 million in Q4 2024; however, for the full year, it increased by 10% to $35.8 million from $32.4 million [11] - Energy Solutions segment revenue for Q4 2025 was $15.7 million, a decrease of 11% from $17.6 million in Q4 2024, and for the full year, it decreased by 35% to $50.7 million from $78 million [12] - Intelligent Industrial segment revenue for Q4 2025 was $6.4 million, up 9% from $5.8 million in Q4 2024, but for the full year, it decreased by 4% to $24 million from $24.9 million [12][13] Market Data and Key Metrics Changes - The company noted a mixed fiscal year performance across market segments, with the smart water segment showing strong growth while energy solutions faced challenges due to lower offshore exploration activity and oil price volatility [5][6] - The company is focusing on international markets, particularly addressing water scarcity and environmental changes, while also enhancing its municipal water management model in the U.S. [5] Company Strategy and Development Direction - The company aims to diversify and innovate, with a strong focus on the smart water and intelligent industrial segments, leveraging technology and manufacturing capabilities [9] - The acquisition of Geovox Security is part of the strategy to enhance recurring revenue through new solutions [8] - The company plans to continue pursuing growth through acquisitions that are immediately accretive to top-line revenue [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing trade disputes and tariffs impacting material costs, with expectations of similar impacts in fiscal year 2026 [17] - The company anticipates continued market demand for Hydrocon and Aquana solutions, despite short-term uncertainties in the exploration market due to low oil prices [6][9] - Long-term demand forecasts are expected to drive more favorable market conditions in future periods [7] Other Important Information - The company has a strong backlog going into the next fiscal year, which positions it well for future growth [9] - Cash investments for the rental fleet and property plant and equipment totaled $9.1 million, with an additional $1.8 million invested in the Heartbeat Detector product line [13][14] Q&A Session Summary Question: Can you elaborate on the margin pressure in the energy solutions segment? - Management indicated that margin pressure was due to ongoing price pressure and higher manufacturing costs, but they expect improved margins going forward as manufacturing inefficiencies are resolved [19][28] Question: How much of the margin impact is expected to be transitional? - Management did not provide specific percentages but noted that they are monitoring the situation closely and expect some improvements in margins [21][22] Question: What updates can you provide on government initiatives? - Management mentioned that feedback from Customs and Border Protection is anticipated early next year, while Navy projects are expected to be delayed until mid-next year [32] Question: Have the large projects announced earlier been shipped? - Management confirmed that shipments for the Petrobras project and the Mariner contract have not yet occurred, with expected revenue recognition in fiscal year 2027 [35][36]

Revenue Performance - Revenue for Q4 2025 was $30.7 million, a decrease of 13.3% from $35.4 million in Q4 2024[2] - For the fiscal year 2025, total revenue was $110.8 million, down 18.3% from $135.6 million in fiscal year 2024[3] - The Smart Water segment generated $8.5 million in Q4 2025, a decrease of 28% from $11.9 million in Q4 2024, but annual revenue increased by 10% to $35.8 million[9] - Revenue from the Energy Solutions segment for Q4 2025 was $15.7 million, an 11% decrease from $17.6 million in Q4 2024, with a 35% annual decline to $50.7 million[10] - The Intelligent Industrial segment reported $6.4 million in Q4 2025, a 9% increase from $5.8 million in Q4 2024, while annual revenue decreased by 4% to $24.0 million[11] - Total revenue for the year ended September 30, 2025, was $110.803 million, a decrease of 18.3% compared to $135.598 million in 2024[25] - The Smart Water segment generated revenue of $35.816 million for the year ended September 30, 2025, an increase of 10.4% from $32.434 million in 2024[25] - The Energy Solutions segment reported a revenue decline of 35% to $50.706 million in 2025, down from $77.977 million in 2024[25] Net Loss and Financial Position - Net loss for Q4 2025 was $9.1 million, or $(0.71) per diluted share, compared to a net loss of $12.9 million, or $(1.00) per diluted share in Q4 2024[2] - The net loss for the year ended September 30, 2025, was $9.724 million, compared to a net loss of $6.578 million in 2024[23] - The company used $22.2 million in cash from operating activities for the twelve-month period ended September 30, 2025[12] - Cash and cash equivalents increased to $26.338 million as of September 30, 2025, from $6.895 million in 2024, representing a significant increase of 282.5%[23] - Total current liabilities rose to $24.430 million in 2025, up from $17.197 million in 2024, indicating a 42.5% increase[21] Assets and Inventory - Total assets increased slightly to $153.037 million as of September 30, 2025, compared to $152.194 million in 2024[21] - The company reported a significant inventory obsolescence expense of $3.071 million for the year ended September 30, 2025[23] Strategic Initiatives - The company anticipates continued market demand for Hydroconn and Aquana solutions, particularly in international markets[5] - Geospace Technologies acquired Geovox Security, Inc. to enhance its Intelligent Industrial segment and increase recurring revenue[7] Operating Performance - Operating loss from the Energy Solutions segment was $4.992 million for the three months ended September 30, 2025, compared to an operating income of $5.567 million in the same period of 2024[25] - The company made a payment of $1.750 million for a business acquisition during the year[23]

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Nov 20, 2025 4:45 PM Eastern Standard Time Geospace Technologies Corporation Reports Fourth Quarter and Fiscal Year 2025 Results Share HOUSTON--(BUSINESS WIRE)--Geospace Technologies Corporation (NASDAQ: GEOS) ("the "Company") today reported revenue for the fourth quarter ended September 30, 2025, of $30.7 million compared to revenue of $35.4 million for the comparable year-ago period. Net loss for the fourth quarter ended September 30, 2025 was $9.1 million, or $(0.71) per diluted share, compared to a net ...

Geospace Technologies Corporation ( GEOS ) is an interesting paradox: for decades, the company was a chronic stock market underperformer, trapped in the boom-and-bust cycle of energy exploration. However, in the last five years, the company has become a stock marketAn economics graduate with a passion for financial history; I apply my knowledge to markets in an effort to hopelessly predict trends and spot value. All opinions are my own and should not be taken seriously.Analyst’s Disclosure:I/we have no stoc ...