Genasys (GNSS) 9 Dec 242024 Q4 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Genasys Inc. Fiscal Year 2024 Conference Call. [Operator Instructions]. At this time, it is my pleasure to turn the floor over to your host, Brian Alger, SVP, Investor Relations and Corporate Development. Welcome, Brian. yours. is floor The

to Results XXXX Brian Conference and Genasys. Investor Welcome Full Alger, Quarter Year Relations for Development Financial Call. Corporate Genasys's afternoon. Fourth Fiscal and SVP, Good I am

call me the Klahn, today With CFO. the are Danforth, and company's our Richard Dennis CEO; on

expectations, certain differ such call, cause today's these risks uncertainties XX, described The might results may plans, and from make future the and the other financial in that Risk and Factors statements. ended of in regarding XXXX. for differences the potential forward-looking risks Form can the uncertainties. During September forward-looking and statements performance fiscal materially year projections will company's XX-K found management outlook that be involve the company's Factors section company's

statements explicitly statements of Other or any are and of this call the forward-looking stated. We solely as obligation management's as update expectations forward-looking historical XXXX. on disclaim facts, based X, statements made on except information those otherwise intent specifically to December than today, the

performance. non-GAAP also with loss, net adjusted including bookings, EBITDA, provide will operational the metrics, financiers adjusted We we evaluating company's to information to an believe respect helpful investors which and discuss

support recognition. a ship next please value For at of of customer a period timing issued future EBITDA that GAAP months. a given and see within an received related of planning. the indicators leading internal market and bookings that press in production to backlog Backlog close executed to Bookings XX scheduled reconciliation today. measure the is revenues purchase the regardless orders these total is metric the orders the revenue of by of financial operational purchase are of in measures of the dollar metrics, the table company to metrics adjusted release the We use consider

the hours Finally, page approximately a Investor website. be this through call available company's of X replay the Relations will in on

CEO, Richard to Danforth. turn my this the Richard? pleasure it's call to time, Genasys over At

Thank welcome, everyone. and you, Brian,

will detail from financial shortly, results XXXX a standpoint, Dennis fiscal disappointing. As was extremely

largely in and line losses our from bookings and fiscal tracked our target. revenues the in perspective. with be fourth transformational weak quarter results to below well year proved a hardware said, expectations, a While That were software XXXX throughout the resulting year the

So contract I more of the factor by largest the bookings Puerto encouraged am Rico recovery. the was far. our breadth by

of well and Naval with portion recovery hardware traditional growth. bookings Eastern International international or bookings. year-over-year. on of all Africa example way regions, As the fiscal business Whether our it to international recent international business. in had fiscal the quite militaries during This our customers, Genasys And eroded rebound that XX% with And our completely the whether are until announcement in European region Indian International the that is to the is Navy most wasn't many customers, -- XXXX, they COVID. you levels, of up while that to were although nearly came know, XXXX it were we would APAC it hoped the the the each morning's from not is we it rebounded. bookings contributing rebound restoring Middle is pre-COVID and back

diverse LRAD enforcement LRAD to small back. Evertel departments budget campuses, police Domestically, systems improvements come of and law metropolitan noticeable drove enforcement large the for acquisition a continue From for The environment systems improving year-over-year. to law [ Critical college made our the LRAD Port like Tribe, [ deliver Alabama protection ], infrastructure and communication acoustics applications the the Houston, testament Huvadam of the projects Casutto a solution. equipment. our for mobile to best-in-class the ] the and

and expand private both of opportunities public new marquee with to we customer add pipeline As customers. sites, sector our continues

the software and both basis. and of provided our fiscal X the software demonstrated contract up alert year illustrative year-over-year, because ARR These an coming Genasys are and that single deal largest the cases, XX% EVAC. front, were it with of customers management. we with Office statewide addition In late The across of X the customer, to of utilizes functionality had notable Angeles Resilience Notably, that wins were platform, replicating sales total Los a our our bookings making the on by complete EVAC emergency now the value are both value County's Protect we was motions of country. EVAC in contract On selected largest the record different Oregon a we year. existing uniqueness

EVAC Angeles, whole took of sales urban to In couple Angeles county. [ counties. additional deployed then [ the was and and state Patos coverage areas, Los Like Los the in [indiscernible] was managers a made ways managers were respond in Rapidly States, to -- year more us in interface responders initially United expanded the that a Oregon Angeles to constructed. to notice the emergency county ] bringing are Lahaina enable was Genasys and we solution [indiscernible discussing alert all a after Los the county for XX-plus In a and intent with fire-prone ago ] emergency move Then EVAC efficiently is ] the Oregon, tragedy, implementation, initial of to protect County, single the shortly in in actively first implement constituents. communication the County the communities platform. following include onto moving the

with small county Genasys sales engagement, improving or starting Genasys cities down is EVAC working expanding is Protect. a and and the it counties a statewide cycle for to handful driving Whether a towards with large of

Colorado, course, Our not software just Arizona, of Coast. on the success Significant being is been has Hawaii. progress Utah, in West made Texas,

North we is Florida, Genasys date, Rico. course, to addition east, Protect win to New of are Puerto in This, wins Massachusetts. the in Hampshire with and largest further Carolina, making Looking inroads

Power PREPA report to moved And Puerto contract bodies PREPA, pleased August, the I'm both with project the $XX have quickly. signing that progressing is the well. with million in Rico Authority, Electric

inventory instrumentation number dam This its and for also will XX% us remaining components by within a own groups, EOC. the allow progress island XX each acceptance will installation. of and the with dam projects provide the invoicing the completion for on of through basis. contracts size. after to is As revenue as group Each the dam of you each that this a This, the into of how Genasys many in will both but procure deliver percentage of but projects dam unique, of approval, required. know, enable divided all receives will Each and X in an group terrain of go dams, recognized The XX% been a is deposit group the design cash terms of to on the typical necessary that have work sale value process will course, is the with basis scope flow be payment group. different

been have we the dams. groups today approved Where on is stand of our first X designs

approved materials, PREPA begun take. damps predict it We over is systems checks, the exactly for as placing to our deposit $XX how that first orders total on It of resources will we million. preparing of we belt, first up invoiced have The is the and the deposits first possible. our value a for the ground. are to have just X groups. groups local intention receiving X after couple however, impossible quickly staffing get the Till under to And is install as break long emergency warning

Genasys and and that is case, power unique the Rico systems power not networks management its abroad. as Regardless a tremendous including when in communications, as serving our example operate fail. acoustic with planning timing, and we combines Protect of Rico that is traditional opportunities of both communication of complete the exact pursuing a similar system unified event and domestically Puerto are Puerto

call the to program the turn provide over to on an I record. Before AHD CROs update I want discuss to financials, Dennis the of

for years. to in requirement existing finally In fiscal has the initial AHD program system funded existed appropriations have with we CROs several LRAD XXXX, the As $XX discussed totaling an was CROs past, adding million.

office program the detailed with on scheduling. working actively are planning and We

apprised all as it occurs. progress you keep will We of

Now the outlook Dennis? to call to Dennis greater financials detail. in I through will go and turn the over

Richard. recurring and the quarter each In X% XXX% grew successfully quarter. revenue fiscal increased year-over-year XXXX, software recurring we Thank XXXX, sequentially. software our In fourth of you,

recurring grew the full year the full XXX% revenue On software year, versus XXXX.

revenue $X.X prior Evertel fourth revenues year the to to the of $X.X fiscal over Compared XX% from fiscal grew CONNECT, Revenues increased total software Excluding million. were decrease year quarter. known 'XX period, the same recurring a XX%. year's current now million, XX% prior quarter for as revenue

value which million. GAAP million stock in including This tax was $X.X million negative million last year expenses included was a from our to compared $X.X net up warrants related term change other operating last due quarter XX% million, in decreased a to compensation a were a loss noncash XXXX. fiscal the ago $X.X $X.X revenue million $X.X negative $X.X fiscal which fair year's expense onetime fiscal of expense. in the reduced year's X primarily million noncash loss a the of $X.X to compared absorption. quarter. fourth a points excludes $X.X This million. $XX.X this operating Hardware overhead XX.X% the fourth million noncash compares was $XX.X loss million of EBITDA, loss quarter roughly to quarter of the prior includes basis, expense Adjusted was million, net of the the loss $X.X quarter. in GAAP deferred fourth fiscal year's in quarter $X On in on loan. profit year to quarter, last margin below the Quarterly year's fourth Gross of to million,

Moving to the full year. fiscal

to XXXX, fiscal a of For that XX% revenues last decrease ] benefited $XX.X fiscal XXXX completed record XX% million. of from which $XX.X a was decreased $XX from the program fiscal million, total year. was compared $XX from million to Hardware million full of revenue year, revenue [ revenues

Brian, Thank everyone. welcome, you, and

was financial that's As -- fiscal results from extremely standpoint, shortly, will detail XXXX Dennis disappointing wrong. a

in While largely Weak quarter year the in with expectations. versus hardware our our and are fourth the line resulting. tracked software throughout results

Richard. read to Ready

full were fiscal the gross margins year, For XX.

the yours. Mr. is Alger floor now

everyone. Hi,

go We splicing recording. with up pick off. Sorry that. Dennis, the of we obviously to Dennis leaving you mistakes going where are had the can is some ahead? about

of fiscal a revenue revenues to customers $XX.X a and including went the benefited record was was 'XX decreased compared this was start $XX by software fiscal $XX Hampshire. offset from increase new Barbara I'll Thanks, completed decrease XX% full million. of County with that from Los to County, million Diego 'XX. program This that year, Hardware as live Brian. of the known XX% year addition total million Oregon Evertel San of CONNECT of Angeles fiscal significant from which states We XX% New the year. million, in the revenue revenues in included Santa partially last County, and revenue, $XX.X

On margins gross the full were XX.X%. year, fiscal

hardware [ gross were contribution. overall negatively by margins So the Crest impacted ]

improved gross Software margins throughout fiscal XXXX.

addition of year-over-year $X.X year, grew to to services million. the $XX.X due tell. expenses professional million the ever On incremental largely fiscal operating on full is The and spending increase

our fiscal million For the $XX.X compared year, fiscal negative was Fiscal expense $XX.X and of interest XXXX 'XX's million expenses loan to was EBITDA other a compared warrants securing related GAAP loss the including $XX the noncash valuation $X.X expense with ] in [ last operating related full expense loss. and to $XX.X fiscal loss interest. the loan, 'XX to million year's the million. was negative of adjusted operating GAAP net 'XX includes for million, changes associated expense. term term $X.X Other million for

GAAP fiscal the including allowance. deferred $XX.X 'XX net million tax $X.X loss The was valuation million

activities cash sheet. million the Net senior million as operating the totaled XXXX, million. financing XXXX, including by million. year-end. fiscal XXXX May year prior in balance with equity was the of and of the $XX.X debt of marketable $XX.X to October used September Cash, financing $XX.X compared $XX.X secured and of in provided in offering Cash was activities, the securities cash in Moving XX, equivalents as

first months company Richard As in the of the of first the deposit a Rico. X Puerto year in received group mentioned, XXXX, on dams fiscal

dams. XXXX, for ago. backlog, invoiced second year and of deposit current a including ARR better software positioned hardware just in bookings than our fiscal we of the In addition, the starting were we we the are on strong the $X.X our million, group customer With substantially

installation year. expect confident continued said, Our growth and timing will guidance. likely purchase the that recurring Rico of we XXXX, substantial throughout in we to levels the we fiscal Having we year. will are on the that improvement do, the growth Puerto orders, prevent the do from hardware deliver backlog grants software specific moderate triple-digit revenue full and That pertaining process uncertainty financial

remarks before make the for closing Now Richard call some we Richard? will Q&A. open

Dennis. you, Thank

still the year way We the As for was business on XXXX Dennis We just was million in this fiscal disappointing than results detailed, with started and XXXX very of basis. less a bottom line short in book expectation year, but was $X were year. in to and it million financial total the of a able $XX bill reflected fiscal backlog. our

better. XXXX, year, we to in our is time million booked In dramatically business looking $XXX business. Compared this last new fiscal

million, bookings and expect Our throughout XX-month $XX-plus revenue additional we year. backlog is and the resulting

software but $XX Rico. not an ARR Our is is fiscal million XXXX million yet in awarded revenues. Puerto already starting plus of again been software It contracts in worth Genasys noting that that the business the large with bookings enabled X.X have hardware-related Protect contributing

software sales. to We expect hardware that will continue drive

Genasys's summary, tremendous In moving advantage fiscal of take starting position. momentum, to XXXX our with aggressively

with afforded a that more We steadfast to revenues commitment Genasys thank excited us. predictable results rewards have are business I also to to its the increasingly support want global profitability. deliver entire delivering and team the shareholders balanced for larger,

for call Q&A. like I Now the up would Operator? to open

questions. We'll first Capital. the and Ladies for Searle [Operator from you. Thank question Instructions] from Scott open ROTH is our now take floor gentlemen,

the the Nice into some I third time could March when would of around is terms Richard, along more we I first in of that the progress what in the expect color? had to right when moving of front income, group. you And revenue to to on grouping? those see start you're quarter, third but line you you the on some Maybe expect seeing PREPA see comments PREPA, lines, should know the guess, now? give given the the contribution, some deposits

quarter is for group. the mentioned, expectation, Yes. we've reasonable March invoiced second Dennis Scott. a

And that be the out the this then fourth the fiscal year scheduled invoicing third is fifth, scheduled of think The group I in shortly. and well. as out will for fourth

[indiscernible]. the Towards

end the towards year. of the Yes,

you Got are get cadence, elements be presenting we progress, And the installing should if the headwinds. you lead us wondering of a of terms how talk And dams? some now into you. some the in Helpful. be about just could can times. quickly once I'm thinking of the you that how through

once I our obligations Yes. come to That's still Puerto get The at the you going that the right way, a this There's Almost bit is on a unknown. support island. all of through look Scott. lot of all to it variabilities -- would in of here. equipment Rico.

company, Rico Department really the of Environmental and have process also private the electric there's company, this. installation And most municipalities, the that's is. certain part of easy of the and it's complicated, where money a the them owners all is of owners XX different So Resources lot include The Natural water the of challenges. dams Puerto of

I going experience anxious we I'm as question possible. soon done and to directly to So this X as defer your going answer owners. to these with until had say, is a Everybody, more get different will get little

the to let infrastructure any with some of have though, island. dams using potentially just been initial Or me so front? PREPA opportunities, sort [indiscernible], front, occupied larger throughout were just infrastructure that advance to other an that you on on trying you for that the because entry but point been there guys not ask Has the progress contract?

No.

additional and later an unrelated for RFP an this fiscal expect application year. We hardware

over And maybe know point to And call. or this some not I'm existing you? the you. government continuing just current [indiscernible], had at the comments you functionality resolution or revenue you I then and of you expect if impacting resolution some how are on issues shifting wondering impacting Got the year?

impact, Scott, the Now no has at this CER time. current

until passed frame opinion, the The my last year. the headed to current towards more budget and we're seems of that's, year, in incoming friendly fiscal March As year federal administration be wasn't recall, this 'XX you time defense. where

optimistic. leaves us that So

the Evertel you lastly, had front. that share And if any comments other now. if willing you. metrics guys to are wondering about or there on are CONNECT could, you I'm some Got I

ARR, business. front about acquired of of speaking the business [ or recurring But have on guys there the You're our on would about it? you users or talking are guys subscribers the size help ] with number safety you public side first a in broadly that talk that since AvTel us responders

Scott. Thanks, Yes.

continues count customer the So grow. to

have we those largest a XXX. of Sorin that the of over the with entire in was I a the really or have Oregon down a goes and There's last different. customers. of therefore, month, obviously, think agencies law huge number license variance customer, X your software small the your terms that the So we And state gave the might then $X [ to that vary per enforcement ] At quite right? X have a size, little customers officers revenue average is size only a size as you right? of customer

Also, and need your are And customer account and CAC matter. to certainly, are we numbers that a ARR tracking from traditional place. they're scale direction. more before we in the giving the to standpoint, for But from all start timing right metrics can you trending the get an those. over We

And could Helpful. at the AR Okay. then $X.X million. you're front, on I if one maybe more,

You started a I'm other you of number yet. hasn't comfortable exiting look number like? what feel fiscal wondering that won terms will with that some in business ARR 'XX to contribute if there's

Yes.

on Scott bookings will in the and expectations plans end have We up based go-lives where and XXXX. ARR

We haven't side to world. are closure continue to of The deal The SaaS good. see significant shared good. the but of There's optimism our in the anybody at SaaS in very is growth a pipeline with great we this rates very that time, expect business.

the I'll get queue. Thanks. back in Great.

Ascendiant Capital. And our you. question Ed next Thank take we'll from Woo,

Congratulations your on Yes. all progress.

lot right As does Is guys your which acquisitions? you right contract, and the time start will balance money to you are strong collect sheet landscape guys like a be what now. from the acquisition potential now? very considering Rico of Puerto is the And

offering, if price is have acquisitions significantly been product Ed it it but any software I right, something like to that opportunistic. of plans our you It's think and the we'll acquisition. have buy with deal offering, can current And that for we then to -- add something our at we looks all don't this, our know time.

are you your completing integrations of you opportunistic prior a in that on feel acquisitions? are good the if there based Do guys shape

The integrations are complete.

So development operate always going there's Genasys company. as no ongoing software as one but you we as There's integration. on, know,

good for you guys answering I Great. Thanks questions luck. my wish and

Instructions]. Northland [Operator our next And Capital. from from we'll question take Mike Latimore

[ for couple Devar is Mike Latimore. of questions. quarter. Vijay Good This quick ] A

just overall On is now? in of much as backlog how PREPA could tell the your you PREPA, me

in portion We're sizable there in to It now. in give backlog on obviously is that you X.X going biggest software. not We're not the the Also down of today. a breaking million that ARR portion a of $XX as of the terms included right backlog. breakdown is

yes, think for And plans I fiscal software year for 'XX. Understood. for increasing have sales you giving you're next software year? exit ARR your not force the for the any But the do

We do.

We increasing we team have I endeavoring additional software or our throughout and to been are XXXX recs sales open have -- X we fiscal that X software think fill.

back And no to remarks. for I'd time. Brian are to at there floor turn this Alger questions further the closing like

Great. we after Thank attendance, early you, and February. Good to call look quarterly your evening. speaking everyone. forward in the with I appreciate again next you conference

and Ladies you. gentlemen, your teleconference. conclude We participation. today's thank for this Thank you does

time, disconnect have You great a your lines and at may this day.