Genasys (US:GNSS)2026-02-10 22:32Financial Data and Key Metrics Changes - Genasys reported record quarterly revenue of $17.1 million, representing a 146% year-over-year increase [4][11] - Gross profit margins improved by 48%, or 220 basis points, from the year-ago period, with expectations of annualized gross margins reaching approximately 50% [11][12] - Operating expenses decreased by 6% to $8.1 million compared to the first quarter of 2025 [12] - Adjusted EBITDA was positive at $0.7 million, a significant improvement from a loss of $4.8 million in the prior year [13] - GAAP net loss narrowed to $0.8 million from a loss of $4.1 million in the first quarter of 2025 [13][14] Business Line Data and Key Metrics Changes - Hardware revenues grew approximately 220% year-over-year, including $9.6 million from the Puerto Rico project [11][12] - Software revenue remained flat at $2.3 million compared to the year-ago period, but increased sequentially by 5% [11][12] Market Data and Key Metrics Changes - The company experienced increased demand for its LRAD systems both domestically and internationally, particularly in the Middle Eastern and Asian markets [5][6] - The backlog at the end of fiscal Q1 was $58 million, indicating strong future revenue potential [10] Company Strategy and Development Direction - Genasys aims to enhance operational efficiency and maintain disciplined cost management while scaling revenues [14] - The company is focused on driving brand awareness and expanding market presence, particularly in public safety and emergency communication sectors [16] - Genasys is optimistic about pursuing large-scale projects and remains engaged in the bidding process for significant contracts [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving meaningful year-over-year revenue growth and profitability for both operating and GAAP net income in fiscal 2026 [16] - The company noted that while government budget cycles have created near-term challenges, they expect these constraints to resolve, leading to accelerated momentum [8][16] Other Important Information - The company fully repaid a $4 million term loan, enhancing its financial flexibility [5] - Genasys is actively pursuing several large-scale projects, including a significant contract under the CROWS AHD program, which has a total addressable market exceeding $175 million [9][10] Q&A Session Summary Question: Visibility in the immediate quarter and impact of government slowdown - Management indicated that the $58 million backlog insulates the company from federal budget uncertainties, although FY 2026 CROWS awards are unlikely to occur within the current fiscal year [19] Question: Updates on larger deals in Latin America and naval opportunities in Europe - Management confirmed ongoing pursuits in Europe with several naval programs and expected significant orders from the Middle East [22][24] Question: Changes in the sales cycle and pipeline growth - Management noted that the sales cycle had lengthened due to frozen federal grants but is beginning to improve, contributing to a robust pipeline [30] Question: Gross margin goals and balance between hardware and software - Management affirmed a target of 50% gross margins for the fiscal year, with expectations that hardware and software margins will balance out [32][38]