Genasys (US:GNSS)2026-02-10 22:32Financial Data and Key Metrics Changes - In Q1 of fiscal 2026, the company achieved record quarterly revenue of $17.1 million, representing a 146% year-over-year increase [5][13] - Gross profit margins improved by 48%, or 220 basis points, from the year-ago period, with expectations of annualized gross margins reaching approximately 50% [13][14] - Operating expenses decreased by 6% to $8.1 million compared to Q1 of 2025, primarily due to cost reduction initiatives [14] - The GAAP net loss for Q1 was $0.8 million, a significant improvement from a net loss of $4.1 million in the same quarter last year [14][15] Business Line Data and Key Metrics Changes - Hardware revenues grew approximately 220% year-over-year, including $9.6 million from the Puerto Rico project [13] - Software revenue remained flat at $2.3 million compared to the previous year, but increased sequentially by 5% [13][9] Market Data and Key Metrics Changes - The company reported a 12-month backlog of $58 million at the end of fiscal Q1, indicating strong demand and project engagement [12] - Increased interest in LRAD systems was noted in the Middle Eastern and Asian markets, with applications in crowd management, public safety, and border security [6][7] Company Strategy and Development Direction - The company aims to enhance operational efficiency and maintain disciplined cost management while scaling revenues [15][16] - There is a focus on driving brand awareness and expanding market presence, particularly in public safety and emergency communication sectors [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving meaningful year-over-year revenue growth and expanding gross margins to 50% for the fiscal year [17] - The company is optimistic about the quality and breadth of opportunities ahead, particularly in government contracts and large-scale projects [12][18] Other Important Information - The company fully repaid a $4 million term loan, maintaining a strong cash position of $10.3 million at the end of the quarter [6][15] - The CROWS initiative is expected to contribute significantly to revenue, with a total addressable market exceeding $175 million [11] Q&A Session Summary Question: Visibility in the immediate quarter and impact of government slowdown - Management indicated that a backlog of $57-58 million insulates the company from federal budget uncertainties, though the FY 2026 CROWS award may not occur within the current fiscal year [20][21] Question: Updates on larger deals in Latin America and European naval opportunities - Management confirmed ongoing pursuits in Europe with several naval programs and expected significant orders from the Middle East [22][25] Question: Changes in the sales cycle and pipeline growth - The sales cycle has lengthened due to federal grant freezes but is beginning to improve, with several contracts moving towards closure [31][32] Question: Gross margin goals and balance between hardware and software - Management believes they will achieve a gross margin of 50% for the full fiscal year, despite variability in deployment phases affecting immediate margins [33][39]