Genasys (US:GNSS)2026-02-10 21:11Project Updates - Genasys reported completion of the first two groups under its Puerto Rico Early Warning System project, aligning with project plans and milestones [177]. - The company received a $1,000 international LRAD-RT order for bird and wildlife preservation and a $1,000 Genasys Acoustics order from a nuclear energy operator [181]. Product and Technology - Genasys Protect platform enables targeted emergency communication and data-driven decision making, enhancing preparedness and responsiveness against various threats [168]. - Genasys Acoustics systems feature the industry's highest Speech Transmission Index and are designed to operate during power outages and network failures [171]. - The LRAD product line is recognized as the leading Acoustic Hailing Device globally, capable of projecting messages clearly over distances up to 5,000 meters [174]. - Genasys Evertel platform provides secure, real-time communication for first responders, enhancing collaboration during critical events [169]. Financial Performance - Total revenues for the three months ended December 31, 2025, increased by $10,125, or 145.9%, to $17,065 compared to $6,940 in the same period of 2024 [186]. - Hardware revenue rose by $10,167, or 219.7%, to $14,794, while software revenue decreased by $42, or 1.8%, to $2,271 compared to the prior year [203]. - Gross profit increased by $5,005, or 157%, to $8,183, with gross profit as a percentage of sales rising to 48.0% from 45.8% in the prior year [188]. - Selling, general and administrative expenses decreased by $194, or 3%, to $6,640, primarily due to a reduction in professional service-related expenses [191]. - Research and development expenses decreased by $390, or 17%, to $1,895, driven by a reduction in employee expenses and professional services [193]. - Adjusted EBITDA for the three months ended December 31, 2025, was $749, compared to a loss of $4,813 in the prior year [200]. - The hardware segment reported an operating income of $1,897, a significant improvement from an operating loss of $3,151 in the prior year [203]. - The software segment experienced a decrease in revenue of $42, or 2%, primarily due to a reduction in non-recurring revenue compared to the prior year [204]. Cash Flow and Financial Position - Cash and cash equivalents as of December 31, 2025, were $10,286, an increase from $7,969 as of September 30, 2025 [205]. - For the three months ended December 31, 2025, net cash provided by operating activities was $7,200, despite a net loss of $817 [209]. - The increase in customer deposits was $10,636, primarily driven by the deposit received from the Puerto Rico EWS Project [209]. - Net cash provided by investing activities was $41, mainly due to proceeds from the maturities of investments in marketable securities [212]. - Net cash used in financing activities was $4,929, primarily due to the repayment of $4,000 on the First Amendment Term Loan [213]. - The company has sufficient capital to fund operations for the next twelve months, but may need to raise additional funds if conditions change [207]. Economic and Market Factors - The company has experienced price increases from suppliers and inflationary factors, which may impact future gross margins and operating expenses [178]. - Federal funding for U.S. government programs has declined, potentially affecting revenues from sales to government agencies [179]. - Genasys anticipates that sustained inflation could negatively affect its ability to achieve certain financial expectations if price adjustments are insufficient [178]. - Factors affecting financial health include government spending levels and timely collection of customer contract receivables [210]. Non-Cash Adjustments - Other expense, net was $340, a decrease of $2,203 compared to other income of $1,863 in the prior year, largely due to a loss from the change in fair value of Term Loans and warrants [195]. - Non-cash expense adjustments included a $771 loss on fair value of Term Loans and $682 in depreciation and amortization [209]. - The company experienced a $1,287 increase in accounts receivable and a $1,033 increase in contract assets [209]. Regulatory and Compliance - The company is electing scaled disclosure requirements available to Smaller Reporting Companies, limiting market risk disclosures [215].