Genasys Q1 Earnings Call Highlights

Genasys (NASDAQ:GNSS) executives highlighted record quarterly revenue, improving profitability metrics, and continued momentum in both hardware and software during the company’s fiscal first-quarter 2026 earnings call covering results for the period ended December 31, 2025.

Record revenue and improved profitability trends

CEO Richard Danforth said the company “built on the strong foundation laid in the back half of fiscal year 2025” and delivered record quarterly revenue of $17.1 million. CFO Cassandra Monteon reported revenue was up 146% year-over-year, driven primarily by hardware performance.

Hardware revenue grew roughly 220% from the year-ago period, including $9.6 million tied to the Puerto Rico project. Total software revenue was $2.3 million, flat versus the year-ago quarter, though Monteon and Danforth noted software revenue increased about 5% sequentially.

Monteon said gross profit margins improved by 220 basis points year-over-year due to product mix, and the company expects annualized gross margins to be “roughly 50%.” Operating expenses totaled $8.1 million, down 6% from the prior-year period, which management attributed primarily to cost reduction initiatives completed at the end of 2025.

On profitability metrics, Monteon reported:

• GAAP operating loss of $0.4 million, compared with a $5.9 million operating loss in the year-ago quarter.
• Adjusted EBITDA of positive $0.7 million, compared with an adjusted EBITDA loss of $4.8 million a year earlier.
• GAAP net loss of $0.8 million, versus a net loss of $4.1 million in fiscal Q1 2025.

Balance sheet update: term loan repaid, cash balance maintained

Danforth highlighted the full repayment of the company’s $4 million term loan during the quarter. Monteon said the company ended the period with $10.3 million in cash, cash equivalents, and marketable securities, and described the remaining cash position as reflecting the strength of operating performance.

Monteon added that, based on the company’s cash forecast and anticipated cash flows, management believes Genasys has sufficient capital to serve its debt obligations.

Project updates: Puerto Rico revenue recognized; CROWS timing reiterated

Danforth said the company recognized $9.8 million in revenue from Puerto Rico in the quarter and described progress across multiple dam groups. He said the first two dam groups are completed, and the third group—described as the largest, with 10 dams, 50 speaker arrays, and over 100 sensors—is under construction with equipment on site. Danforth also said that after receipt of a multi-million dollar deposit, site surveys and engineering designs have begun for a fourth group of eight dams in Puerto Rico’s west-central interior, with the overall project on track for 2027 completion.

On the CROWS initiative, Danforth reiterated that in late September the company announced a $9 million production order, which he characterized as the first contract for the tech refresh effort under the CROWS AHD program after the LRAD 450XL model’s qualification for integration in 2024. He described the broader opportunity as roughly 5,000 units needing a refit, with solutions priced around $35,000, implying a total addressable market exceeding $175 million. Danforth said the company continues to expect initial revenue contribution from the CROWS-AHD program in the second half of the fiscal year.

Demand commentary: LRAD traction and software contracting activity

Danforth said LRAD systems continue to gain traction domestically and internationally, with increased interest and expanded demand building across Middle Eastern and Asian markets. He also pointed to real-world deployments and related news coverage, including an example in Minnesota where LRADs were used to disperse crowds while providing clear communication.

On software, Danforth said interest is expanding across municipalities, states, and government entities. He noted that in fiscal Q2 the company is “in contracting” with five cities/counties and two federal agencies. Management acknowledged that government budget cycles and funding timelines have created near-term conversion challenges but said they remain confident in the trajectory as constraints resolve.

Backlog, pipeline, and Q&A themes

Danforth said the company’s 12-month backlog was $58 million at the end of fiscal Q1 and described the pipeline as the strongest it has ever been. During the question-and-answer session, Danforth told analysts that the backlog “insulates” the business from budget uncertainties.

Discussing federal budget timing, Danforth said the defense budget for FY 2026 was “finally passed,” but he said it is unlikely the company will see the FY 2026 CROWS award within Genasys’ fiscal year 2026 due to timing, though he noted it could still happen.

He also discussed international and naval opportunities, saying the company has sold units to the German Navy, Spanish Navy, Canadian Navy, and French Navy, and that it is pursuing three other European naval programs that he believes will come to fruition in the next couple of quarters. He added that the company expects to close a couple of significant orders in the Middle East, a region he said has historically not been a strong market for Genasys.

On sales cycles, Danforth said grant freezes in the federal government had lengthened the sales cycle, but he said conditions are “starting to thaw.” He also said deal sizes being pursued for software this year are “significantly higher” than what the company historically focused on, describing many of the opportunities as potential “needle movers” for the SaaS business.

On gross margins, Danforth emphasized that mix can create quarter-to-quarter variability but maintained the company expects to be at 50% for the year, adding that fiscal Q1 was “down a little” versus that target and the next quarter would “probably make up for that.”

Looking ahead, Monteon and Danforth both stated the company continues to expect operating income and GAAP net income profitability for fiscal 2026, alongside margin expansion toward an annualized gross margin rate of 50%.

About Genasys (NASDAQ:GNSS)

Genasys, Inc (NASDAQ: GNSS) specializes in mission-critical communications and emergency mass notification solutions designed to keep organizations and communities connected during high-stress events. The company’s core offerings include a multi-channel alerting platform that integrates SMS, email, voice, sirens, public address systems and social media outlets. By combining hardware and cloud-based software, Genasys delivers robust, scalable systems that can push targeted warnings and status updates to millions of recipients in seconds.

In addition to its flagship Smart Mass Notification System, Genasys provides hardened private LTE networks, satellite communications terminals and interoperable radio systems tailored for government agencies, defense customers, utilities, energy producers and remote industrial operations.