Genasys (US:GNSS)2024-05-15 17:11Financial Performance - Revenues for the second quarter of fiscal 2024 were $5.739 million, a decrease from $11.213 million in the same quarter of fiscal 2023, with software revenue increasing by $887, while hardware revenue decreased by $6.361 million [195]. - The company reported a net loss of $6.938 million for the second quarter of fiscal 2024, or $(0.16) per share, compared to a net loss of $3.403 million, or $(0.09) per share, for the same quarter in the prior year [195]. - Total revenues decreased by $5,474, or 49%, to $5,739 in Q2 FY2024 compared to $11,213 in Q2 FY2023 [214]. - Product sales dropped to $3,209, representing 55.9% of total revenues, down from $9,940, or 88.6%, in the prior year [214]. - Gross profit fell by $2,748, or 56%, to $2,177, with gross profit margin decreasing to 37.9% from 43.9% [216]. - Net loss for Q2 FY2024 was $6,938, compared to a net loss of $3,403 in Q2 FY2023, attributed to lower revenues [222]. - Total revenues for the six months ended March 31, 2024, decreased by $11,600, or 53.5%, to $10,100 compared to $21,700 in the same period of 2023 [224]. - Net loss for the first six months of fiscal 2024 was $13,662, compared to a net loss of $6,910 in the prior year, reflecting lower revenue and higher operating expenses [232]. - Adjusted EBITDA for the six months ended March 31, 2024, was $(11,794), compared to $(4,683) in the same period of 2023 [235]. Revenue Breakdown - Hardware revenue decreased by $6,361, while software revenue increased by $887, with a 123% rise in recurring software revenue [215]. - Hardware revenue decreased by $13,000, or 65.2%, while software revenue increased by $1,400, or 79.8% [225]. - Software segment revenue increased by 104% year-over-year, driven by a 123% increase in recurring revenue [238]. - Hardware segment revenue decreased by $6,361, or 61%, primarily due to lower backlog compared to the previous year [239]. - Software segment revenue increased 80% year-over-year, with a 105% increase in recurring revenue compared to the same period last year [243]. - Hardware segment revenue decreased by $13,000, or 65%, primarily due to lower backlog compared to the previous year [245]. Expenses - Selling, general and administrative expenses increased by $586, or 10%, totaling $6,640, primarily due to higher compensation and commission expenses [218]. - Research and development expenses rose by $250, or 11%, to $2,531, reflecting an increase in engineering personnel [220]. - Selling, general and administrative expenses increased by $719, or 4.3%, primarily due to higher compensation-related costs and amortization expenses from the Evertel acquisition [228]. - Research and development expenses increased by $506, or 12.0%, due to increased compensation-related costs associated with hiring more engineers [230]. - Operating loss increased by $1,081 in the six-month period due to higher compensation costs and amortization expenses from the Evertel acquisition [244]. Contracts and Opportunities - The company has recognized revenue under a $110 million U.S. Army program for long-range acoustical devices, with final deliveries completed in the fourth quarter of fiscal 2023 [196]. - A new contract of up to $75 million was awarded to engineer, procure, and build an emergency notification system for Puerto Rico, with anticipated revenue beginning in fiscal year 2025 [196]. - The company expanded Genasys Protect EVAC coverage to include all of Los Angeles County, CA, under a five-year contract [196]. - The company completed the acquisition of Evertel Technologies, now rebranded as Genasys Protect CONNECT, enhancing its cross-agency collaboration capabilities [196]. - A $2 million contract was awarded under a multi-phase program to deploy LRADs on naval ships and shore installations of a Middle Eastern country [196]. - The company partnered with Ladris Technologies, Inc. to deliver comprehensive disaster evacuation modeling solutions across North America and Europe [196]. - The company believes there are strong market opportunities for its products in defense, public safety, emergency warning, and critical event management sectors due to increasing threats [197]. - The company plans to pursue domestic and international business opportunities, including U.S. military contracts and emergency management systems [202]. - The company is investing in enhancing its Genasys Protect platform and pursuing certifications for government bidding opportunities [204]. Cash Flow and Financial Position - Cash and cash equivalents decreased to $3,544 as of March 31, 2024, down from $8,665 as of September 30, 2023 [247]. - Net cash used in operating activities was $(12,496) for the six months ended March 31, 2024, compared to $(7,466) for the same period in 2023 [249]. - The company had accounts receivable of $2,820 as of March 31, 2024, down from $5,952 as of September 30, 2023 [252]. - Working capital decreased to $10,331 as of March 31, 2024, from $13,949 as of September 30, 2023, primarily due to net loss and decreased accounts receivable [253]. - Net cash used in investing activities was $3,347 for the six months ended March 31, 2024, compared to net cash provided of $918 for the same period in 2023 [254]. - The company received $10,318 through financing activities for the six months ended March 31, 2024, compared to $41 for the same period in 2023 [255]. - As of March 31, 2024, $3.0 million was available for share repurchase under the company's buyback program [257].