Assembly and shipment preparation of emergency warning system equipment destined for Puerto Rico dam installations.
Puerto Rico, August 15, 2025
Genasys posted a significant revenue increase driven largely by implementation work on an Emergency Warning System for multiple Puerto Rico dams. Quarterly revenue rose on strong hardware sales and early project billings, while gross margins fell due to percentage-of-completion accounting and underutilized hardware capacity. The company recorded a GAAP net loss and an adjusted EBITDA loss, announced workforce reductions expected to save about $2.5 million annually, and reported a software pipeline exceeding $60 million. Management expects Puerto Rico installations to boost future margins as systems are accepted and additional contract deposits fund production.
Key points: Genasys Inc. posted $9.857 million in revenue for the fiscal third quarter ended June 30, 2025, a 38% increase from the year‑ago quarter. The rise was driven largely by work on a major Puerto Rico dam Emergency Warning System project. The company also announced workforce reductions intended to save about $2.5 million a year and said it now claims a software pipeline of more than $60 million.
Quarterly revenue totaled $9.857M, up from $7.167M in the prior-year quarter. Software sales rose modestly year over year, while hardware revenue grew by roughly half. Quarterly recurring revenue increased 8%, and annual recurring revenue finished the quarter at $8.7M.
Gross profit margin fell to 26.3% from 52.8% a year earlier. Management attributed the decline primarily to percentage-of-completion accounting related to the Puerto Rico dam project and underutilized hardware capacity. The company reported that initial instrumentation deliveries were recorded on a low- or zero-margin basis, with profit recognized later as installation and acceptance occur.
GAAP net loss for the quarter was $6.487M (about $0.14 per share). Adjusted EBITDA was a loss of $4.781M. Operating expenses fell to $8.522M, with R&D spending down 16% year over year.
Genasys is implementing an Emergency Warning System project for the Puerto Rico Electric Power Authority covering downstream communities for 37 dams. The full contract value has been referenced at approximately $75M, divided into seven dam groups. The first three groups, approved for work, total over $36M in value.
The contract requires PREPA to pay a 60% deposit after each group’s design approval to fund procurement and production. Genasys reported receiving deposits for two groups and a partial deposit for the third during the spring update, with the remaining portion expected shortly thereafter. Initial construction on the island began in early April. Assembly of instrumentation and materials is taking place in the company’s San Diego facility, with shipments for the first three groups expected to occur in the company’s fiscal fourth quarter.
Genasys recognized $4.3M of project-related revenue in the quarter from Puerto Rico, and cumulative revenue recognized to date on the project stands at $5.6M with margins under 30% so far. Management expects Puerto Rico-related revenue between $15M and $20M in fiscal 2025 based on current schedules, and anticipates margins will improve materially in fiscal 2026 as installations are completed and earlier instrumentation revenues are accepted at higher margins.
Excluding Puerto Rico, hardware bookings improved year over year. The company reported activity tied to a U.S. Army procurement for the CROWS AHD program, where an initial production order is expected in the $8.0M–$8.5M range for LRAD equipment. That order would lift fiscal‑to‑date hardware bookings (excluding Puerto Rico) to about 10% above all of fiscal 2024. Company statements placed hardware backlog excluding Puerto Rico at over $16M.
On the software side, management said federal grant uncertainty has constrained conversions this year. Several federal funding sources cited as constrained include UASI, HSGP, BRIC and FEMA. Despite that, the company claimed an expanded software pipeline and asserted a 12‑month software backlog above $60M.
To address near-term pressure on software deals, Genasys announced cuts affecting 19 full-time equivalents, including 10 in Spain. These actions are expected to yield approximately $2.5M in annualized savings beginning in the first fiscal quarter of 2026. The company said fiscal fourth quarter operating expenses, including severance charges, should be similar to Q3 levels, with the savings realized thereafter.
Cash and marketable securities were reported at $5.5M at June 30, 2025, down from $13.1M at the end of September 2024. Management said anticipated invoice payments from the Puerto Rico project and expected cash from the U.S. Army order give confidence in adequate capital to operate through near-term needs.
Executives said business activity accelerated in the second half of fiscal 2025, driven by improved hardware bookings and project work in Puerto Rico, while software deal conversions remain dependent on the normalization of federal grant flows. The company cautioned that accounting for large, milestone-driven projects produces timing differences between cash receipts and revenue recognition.
A conference call and webcast were held to discuss results, and a replay was to be made available on the company’s investor page a few hours after the presentation. The company filed detailed unaudited financial statements and included forward‑looking disclaimers pointing readers to known risk factors in its public filings.
Revenue grew primarily because of work on the Puerto Rico dam Emergency Warning System project, which generated several million dollars of project revenue during the quarter, along with stronger hardware sales overall.
Margins were reduced mainly by the use of percentage‑of‑completion accounting on the large Puerto Rico project and by underused hardware capacity. Initial instrumentation shipments were recorded with little or no margin, while profit will be recognized later when installations are accepted.
As of June 30, 2025, the company reported $5.5 million in cash, cash equivalents and marketable securities.
The cuts affect 19 full‑time roles and are intended to provide about $2.5 million in annualized savings starting in fiscal Q1 2026. Near‑term charges will keep Q4 operating spend roughly in line with Q3.
The overall contract has been referenced at about $75 million, split into seven groups. The first three groups sum to over $36 million. The company expects $15M–$20M of Puerto Rico revenue in fiscal 2025 based on current delivery and installation plans, with higher margin recognition expected in fiscal 2026 as systems are accepted.
The company made a webcast available for the earnings call and posted financial tables and disclosure in its quarter filing. Investor relations contact details were provided in the company’s release for direct inquiries.
| Feature | Detail |
|---|---|
| Quarter | Fiscal Q3 ended June 30, 2025 |
| Revenue | $9.857M (up 38% YoY) |
| Puerto Rico project | Implementation underway; first three groups > $36M; full program referenced near $75M |
| Gross margin | 26.3% (impacted by project accounting) |
| Cash | $5.5M as of June 30, 2025 |
| ARR | $8.7M |
| Workforce action | 19 FTE reductions for ~$2.5M annualized savings |
| Software pipeline | Company claims > $60M 12-month pipeline |
| Adjusted EBITDA | Loss of $4.781M for the quarter |
This article summarizes company disclosures and filings for the fiscal third quarter. The company’s public filings include additional detail, forward‑looking disclaimers and risk factors that may affect future results.
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