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Genasys (GNSS) - 2025 Q1 - Quarterly Report
GNSSGenasys (GNSS)2025-02-11 22:04
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Financial Performance - Revenues for the first quarter of fiscal 2025 were 6,940,anincreasefrom6,940, an increase from 4,361 in the first quarter of fiscal 2024, with software revenue of 2,313increasingby2,313 increasing by 898 and hardware revenue of 4,627increasingby4,627 increasing by 1,681 over the prior year quarter[178]. - The company reported a net loss of 4,078forthefirstquarteroffiscal2025,or4,078 for the first quarter of fiscal 2025, or (0.09) per share, compared to a net loss of 6,724,or6,724, or (0.15) per share, for the same quarter in the prior year[178]. - Total revenues increased by 2,579,or592,579, or 59%, to 6,940,000 for the three months ended December 31, 2024, compared to 4,361,000forthesameperiodin2023[194].−Grossprofitroseby4,361,000 for the same period in 2023[194]. - Gross profit rose by 1,699, or 115%, to 3,178,000,withgrossprofitasapercentageofsalesincreasingduetoafavorablemixofhigherhardwareandsoftwarerevenue[197][198].−AdjustedEBITDAforQ42024was3,178,000, with gross profit as a percentage of sales increasing due to a favorable mix of higher hardware and software revenue[197][198]. - Adjusted EBITDA for Q4 2024 was (4,813) thousand, an improvement from (6,055)thousandinQ42023,reflectingareductioninnetlossandimprovedoperationalperformance[207].RevenueBreakdown−Productsalesaccountedfor(6,055) thousand in Q4 2023, reflecting a reduction in net loss and improved operational performance[207]. Revenue Breakdown - Product sales accounted for 4,144,000, representing 59.7% of total revenue, while contract and other revenues were 2,796,000,or40.32,796,000, or 40.3% of total revenue[194]. - Software segment revenue increased by 898 thousand, or 63.5%, compared to the prior year, driven by a 69% increase in recurring revenue[210]. - Hardware segment revenue rose by 1,681thousand,or57.11,681 thousand, or 57.1%, attributed to a higher backlog at the start of the fiscal year[211]. - International revenue surged by 209.2% to 2,279,000, while U.S. revenue increased by 28.6% to 4,661,000[194].ExpensesandCashFlow−OperatingexpensesinthequarterendedDecember31,2024,increasedby4.74,661,000[194]. Expenses and Cash Flow - Operating expenses in the quarter ended December 31, 2024, increased by 4.7% to 9,119 compared to 8,709inthesameperiodintheprioryear[178].−Researchanddevelopmentexpensesincreasedby8,709 in the same period in the prior year[178]. - Research and development expenses increased by 94, or 4%, totaling 2,285,000,reflectinganincreaseinengineeringresources[202].−Thecompanyused2,285,000, reflecting an increase in engineering resources[202]. - The company used 19,454 of cash in fiscal 2024 due to delays in hardware orders and continued investment in software[179]. - Cash and cash equivalents as of December 31, 2024, were 8,469thousand,upfrom8,469 thousand, up from 4,945 thousand as of September 30, 2024[212]. - Net cash provided by operating activities was 947thousandforthethreemonthsendedDecember31,2024,asignificantrecoveryfrom947 thousand for the three months ended December 31, 2024, a significant recovery from (5,729) thousand in the same period last year[215]. - Net cash provided by investing activities was 2,633thousand,primarilyduetomaturitiesofinvestmentsinmarketablesecurities[218].ContractsandAgreements−Thecompanysecuredathree−year,2,633 thousand, primarily due to maturities of investments in marketable securities[218]. Contracts and Agreements - The company secured a three-year, 3.35 million follow-on maintenance agreement for LRAD systems deployed by the Indian Navy[177]. - A new, larger multiyear program for Long Range Acoustic Devices was approved by Congress in late March 2024, with revenues anticipated to begin after the current fiscal year[179]. - The company anticipates a majority of revenue from a contract of up to 75,000toengineer,procure,andbuildanEarlyWarningSystemforPuertoRicowillberealizedinfiscalyears2025and2026[179].StrategicInvestmentsandMarketPosition−ThecompanycontinuestoinvestintheGenasysProtectsoftwareplatform,withsignificantwinsinmultiplecountiesincludingLosAngelesCounty[179].−Thecompanyplanstocontinuepursuingdomesticandinternationalbusinessopportunities,particularlyingovernmentandlawenforcementsectors[186].−ThecompanyisinvestinginenhancingitsGenasysProtectplatformtomeettheneedsoftargetmarketsandispursuingcertificationsforgovernmentcontracts[187][188].−Thecompanyhasahistoryofdeliveringinnovativeproductsandsolutionsformission−criticalsituations,pioneeringtheacoustichailingdevicemarketsince2002[158].ChallengesandRisks−Thecompanyisfacinginflationarypressures,includingincreasedcostsfromsuppliersandlogistics,whichmayimpactfuturegrossmarginsifnotoffsetbypriceadjustments[190].−Thecompanyanticipatesadditionalexpendituresfortoolingandequipmentduringtheremainderoffiscalyear2025[218].DeferredRevenueandAccountsReceivable−Thecompanyhadaggregatedeferredrevenueof75,000 to engineer, procure, and build an Early Warning System for Puerto Rico will be realized in fiscal years 2025 and 2026[179]. Strategic Investments and Market Position - The company continues to invest in the Genasys Protect software platform, with significant wins in multiple counties including Los Angeles County[179]. - The company plans to continue pursuing domestic and international business opportunities, particularly in government and law enforcement sectors[186]. - The company is investing in enhancing its Genasys Protect platform to meet the needs of target markets and is pursuing certifications for government contracts[187][188]. - The company has a history of delivering innovative products and solutions for mission-critical situations, pioneering the acoustic hailing device market since 2002[158]. Challenges and Risks - The company is facing inflationary pressures, including increased costs from suppliers and logistics, which may impact future gross margins if not offset by price adjustments[190]. - The company anticipates additional expenditures for tooling and equipment during the remainder of fiscal year 2025[218]. Deferred Revenue and Accounts Receivable - The company had aggregate deferred revenue of 3,192,000 for extended warranty obligations and software support agreements as of December 31, 2024[196]. - The company had accounts receivable of 3,017thousandasofDecember31,2024,whichcanvarysignificantlybasedonsalesvolumeandtimingofshipments[217].OperatingLosses−Operatinglossinthesoftwaresegmentdecreasedby3,017 thousand as of December 31, 2024, which can vary significantly based on sales volume and timing of shipments[217]. Operating Losses - Operating loss in the software segment decreased by 1,325 thousand, or 32.2%, due to increased revenue and lower operating expenses[210]. - Operating loss in the hardware segment increased by $36 thousand, or 1.2%, despite higher revenue due to increased professional services expenses[211].