SAN DIEGO – The electronics company Genasys (Nasdaq: GNSS) had a mixed bag report for its third quarter, with software revenue up 120% and hardware revenue plunging 62%.
The report released Aug. 6 saw the company’s third quarter revenue at $7.2 million, down 50% from $14.3 at last year’s third quarter.
Within software, quarterly recurring revenue increased 138% year over year, and annual recurring revenue finished the quarter at $7.6 million, up 120%.
CEO
Genasys
The Rancho Bernardo-based company makes electronics for militaries, industry and local governments. It closed its 2023 fiscal year in December with revenue of $46.7 million.
During an Aug. 6 call about the Q3 report, CEO Richard Danforth acknowledged that the company’s hardware sales during fiscal years 2023 and 2024 “have been challenging, to say the least.”
Danforth said several forecasted opportunities from 2023 had been delayed, but this year’s booking activity is on a record pace.
Coincidentally, Danforth was calling from Puerto Rico, where he was finalizing contracts with the Puerto Rico Electric Power Authority (PREPA) to implement Genasys’ Emergency Warning System across 37 dams intended to safeguard hundreds of thousands of residents and visitors from potential flood threats.
The agreement was signed the next day and is fully funded by the U.S. Federal Emergency Management Agency (FEMA). Genasys expects to receive approximately $75 million in revenue over the term of the project.
“The significance of the Puerto Rico Early Warning System goes beyond the favorable financial implication,” Danforth said. “This project is the most significant and public demonstration of how Genasys Protects software is able to unlock and enable much larger hardware opportunities.
“With a growing pipeline of critical infrastructure protection opportunities, we believe the Puerto Rico Dam project is just the beginning of Genasys realizing a significant return on the deliberate software investments we have made over the past three years,” he said.
For the third quarter report, the company saw a generally accepted accounting principles operating loss of $5.4 million compared to a $1.4 GAAP loss in 3Q 2023.
Genasys had a GAAP net loss of $6.7 million versus a $1.4 million loss in 3Q 2023 and a GAAP net loss per share of $0.15 versus $0.04 in 3Q 2023.
LRAD Orders Boost Bottom Line
Business highlights include an increased market share and expanded Genasys CONNECT communication security and Long Range Acoustic Devices across the United States. The LRADs are used internationally for public safety, defense, law enforcement, border and homeland security, critical infrastructure protection, fire rescue, emergency management, maritime and port security.
In December, Genasys announced a more than $2 million contract with an unnamed Middle Eastern defense force to deploy its LRADs on multiple ships and shore installations.
The company also announced improved international sales with recent orders from Europe, Asia and the Middle East. Danforth said international bookings are up 117% year-over-year for the first three quarters of fiscal 2024.
Genasys also has seen an increase in law enforcement customers.
“Year-to-date, our law enforcement hardware bookings are already nearly 50% higher than the fiscal 2023 total,” Danforth said. “While some of this is likely due to the civil unrest we have witnessed this year, the combined sales engagements with both connect and LRAD is also contributing in a meaningful way.”
Other business highlights include expanded Genasys Protect coverage in California with the activation of Genasys EVAC in San Diego County and a recent multi-year contract with Santa Barbara County.
EVAC, part of the Genasys Protect platform, enables responding agencies to make collaborative decisions and communicate in real-time to other agencies, businesses, and the public.
“Tragically, 2024 is shaping up to have another intense fire season with many of our customers throughout the western U.S. actively using our system as I speak today,” Danford said.
“Importantly, Genasys Protect EVAC is helping emergency managers and first responders across the country plan for and manage evacuations much more efficiently and safely.”
Genasys
FOUNDED: 1992 as American Technology Corp.
CEO: Richard Danforth
HEADQUARTERS: Rancho Bernardo
BUSINESS: Maker of critical communications systems
REVENUE: $46.7 million in fiscal 2023
STOCK: GNSS (Nasdaq)
EMPLOYEES: 187 full-time employees, 105 in the US
WEBSITE: www.genasys.com
CONTACT: 858-676-1112
NOTABLE: Acoustic hailing devices from Genasys, used by military and industrial customers, can project sound for 2 miles or more, with the sound remaining intelligible.
SOCIAL IMPACT: Genasys’ technology is used in San Diego County and other areas to help coordinate emergency responses to wildfires and other natural disasters.
