Genasys Inc.

Previous wording

The Genasys Protect platform provides a full suite of Protective Communications tools for all hazards, designed to provide targeted emergency communication, data-driven decision making, secure inter-agency collaboration, and more. Genasys Protect help to enable preparedness, responsiveness, and collaboration to keep people, assets, and operations protected against the impacts of natural disasters, terrorism, violent civil unrest, and other dangerous situations, as well as power failures, facility shutdowns, and other non-emergency operational disruptions.

Current wording

The Genasys Protect platform provides a full suite of Protective Communications tools for all hazards, designed to provide targeted emergency communication, data-driven decision making, secure inter-agency collaboration, and more. Genasys Protect helps to enable preparedness, responsiveness, and collaboration to keep people, assets, and operations protected against the impacts of natural disasters, terrorism, violent civil unrest, and other dangerous situations, as well as power failures, facility shutdowns, and other non-emergency operational disruptions.

Previous wording

ACOUSTICS unites Genasys’ next generation of mass notification speaker systems with Genasys Protect command-and-control software. Most legacy mass notification systems are sirens with limited, if any, voice broadcast capability. ACOUSTICS systems feature the industry’s highest Speech Transmission Index (“STI”), large directional and omni-directional broadcast coverage areas, and an array of options, including solar power, battery backup, and satellite connectivity that enable the systems to continue to operate when power and telecommunications infrastructure goes down.

Current wording

Genasys ACOUSTICS (“ACOUSTICS”) unites Genasys’ next generation of mass notification speaker systems with Genasys Protect command-and-control software. Most legacy mass notification systems are sirens with limited, if any, voice broadcast capability. ACOUSTICS systems feature the industry’s highest Speech Transmission Index (“STI”), large directional and omni-directional broadcast coverage areas, and an array of options, including solar power, battery backup, and satellite connectivity that enable the systems to continue to operate when power and telecommunications infrastructure goes down.

Previous wording

Announced LRAD integrated surveillance, security, and first response systems order from the U.S. Bureau of Reclamation for Hoover Dam

Current wording

U.S. Bureau of Reclamation ordered LRAD 950NXT integrated surveillance, security, and first response systems to replace first-generation LRAD systems at Hoover Dam

Previous wording

Awarded a four-year contract by the Maui Emergency Management Agency (MEMA) to provide EVAC and TRAFFIC AI by Ladris for the island of Maui

Current wording

Awarded a four-year contract by the Maui Emergency Management Agency to provide EVAC and AI-powered traffic management solutions by Ladris for the island of Maui

Previous wording

Received a four-year contract with Los Angeles County for ALERT mass notification software services

Current wording

Received a four-year contract from Los Angeles County for ALERT mass notification software services

Previous wording

Revenues for the Company’s first quarter of fiscal 2025, were $6,940, an increase from $4,361 in the first quarter of fiscal 2024 Software revenue of $2,313 increased $898 over the prior year quarter, and hardware revenue of $4,627, increased $1,681 over the prior year quarter. The timing of budget cycles, government financial issues and military conflict in certain areas of the world, often delay contract awards, resulting in uneven quarterly revenue. Gross profit increased, compared to the same quarter in the prior year, as a result of higher hardware revenue and increased higher margin software revenue in this year’s quarter. Operating expenses in the quarter ended December 31, 2024, increased 4.7% to $9,119, compared with $8,709 in the same period in the prior year. We reported a net loss of $4,078 for the first quarter of fiscal 2025, or $(0.09) per share, compared with a net loss of $6,724, or $(0.15) per share, for the same quarter in the prior year.

Current wording

Revenues for the Company’s second quarter of fiscal 2025, were $6,932, an increase from $5,739 in the second quarter of fiscal 2024. Software revenue of $2,249 increased $509 over the prior year quarter, and hardware revenue of $4,683, increased $684 over the prior year quarter. The timing of budget cycles, government financial issues, and military conflict in certain areas of the world, often delay contract awards, resulting in uneven quarterly revenue. Gross profit increased, compared to the same quarter in the prior year, primarily as a result of increased higher margin software revenue in this year’s quarter. Operating expenses in the quarter ended March 31, 2025, decreased 3.3% to $8,865, compared with $9,171 in the same period in the prior year. We reported a net loss of $6,139 for the second quarter of fiscal 2025, or $(0.14) per share, compared with a net loss of $6,938, or $(0.16) per share, for the same quarter in the prior year.

Previous wording

For several years through fiscal 2023, the Company has recognized revenue under a $110,000 U.S. Army program of record for Long Range Acoustic Devices. Final deliveries under this program occurred in the fourth quarter of fiscal year 2023. A new, larger multiyear program was approved by Congress in late March 2024, as part of this year’s Department of Defense budget. Due to the timing of the budget passage, and common hurdles in the initial procurement and purchase order process, revenues are not anticipated to begin until after the current fiscal year. Historically, hardware revenue has been characterized by large and inconsistent orders that in aggregate have been a generator of cash for the Company. We continue to be optimistic about our future with the fully funded award of a contract of up to $75,000 to engineer, procure and build an Early Warning System (“EWS”) for Puerto Rico. We anticipate a majority of revenue from this contract will be realized in our fiscal years 2025 and 2026. In addition, we continue to invest in our Genasys Protect software platform with a significant win in fiscal 2024 in Los Angeles County, in addition to wins in other counties in California, Colorado, Utah, and Oregon. The early-stage Software segment continues to generate operating losses; however, revenue continues to grow year over year and segment operating loss has improved incrementally from prior years. With the delay in hardware orders and continued investment in software, the Company used $19,454 of cash in fiscal 2024. To address the ongoing cash needs, the Company completed a follow-on equity offering for $11,500 in October of 2023, and signed a $15,000, two-year senior secured Term Loan agreement in May 2024. This capital activity is expected to enable the Company to continue operations and return to expected growth in annual revenue and generation of cash from operations through the EWS for Puerto Rico and the new Common Remotely Operated Weapon Station (“CROWS”) program for the U.S. Department of Defense. For the three months ended December 31, 2024, the Company operating activities provided cash of $947.

Current wording

For several years through fiscal 2023, the Company had recognized revenue under a $110,000 U.S. Army program of record for Long Range Acoustic Devices. Final deliveries under this program occurred in the fourth quarter of fiscal year 2023. A new, larger multiyear program was approved by Congress in March 2024, as part of fiscal year 2024’s Department of Defense budget. Due to the timing of the budget passage, and common hurdles in the initial procurement and purchase order process, revenues are not anticipated to begin until after the current quarter. Historically, hardware revenue has been characterized by large and inconsistent orders that in aggregate have been a generator of cash for the Company. We continue to be optimistic about our future with the fully funded award of a contract of up to $75,000 to engineer, procure and build an Early Warning System (“EWS”) for Puerto Rico. We anticipate a majority of revenue from this contract will be realized in our fiscal years 2025 and 2026. In addition, we continue to invest in our Genasys Protect software platform with a significant win in fiscal 2024 in Los Angeles County, in addition to wins in other counties in California, Colorado, Utah, and Oregon. The early-stage Software segment continues to generate operating losses; however, revenue continues to grow year over year and segment operating loss has improved incrementally from prior years. With the delay in hardware orders and continued investment in software, the Company used $19,454 of cash in fiscal 2024. To address the ongoing cash needs, the Company completed a follow-on equity offering for $11,500 in October of 2023, a $15,000, two-year senior secured Term Loan agreement in May 2024 and a $4,000 increase on the Term Loan. This capital activity is expected to enable the Company to continue operations and return to expected growth in annual revenue and generation of cash from operations as a result of the anticipated revenues under the EWS for Puerto Rico contract and the new Common Remotely Operated Weapon Station (“CROWS”) program for the U.S. Department of Defense. For the six months ended March 31, 2025, the Company’s operating activities used cash of $5,375.

Previous wording

The proliferation of natural and man-made disasters, crisis situations, and civil unrest require technologically advanced, multichannel solutions to deliver clear and timely protective communications to help keep people safe during critical events. Businesses are also incorporating protective communication and emergency management systems that locate and help safeguard employees and infrastructure when crises occur.

Current wording

The proliferation of natural and man-made disasters, crisis situations, and civil unrest requires technologically advanced, multichannel solutions to deliver clear and timely protective communications to help keep people safe during critical events. Businesses are also incorporating protective communication and emergency management systems that locate and help safeguard employees and infrastructure when crises occur.

Previous wording

military opportunities. We also plan to pursue domestic and international emergency warning, enterprise and critical event management, government, law enforcement, fire rescue, homeland and international security, private and commercial security, border security, maritime security, critical infrastructure protection, and wildlife preservation business opportunities. In addition to the matters above, we are authorized for the performance of services and provision of goods pursuant to Delaware General Corporation Law.

Current wording

We intend to continue pursuing domestic and international business opportunities with the support of key representatives and resellers. We plan to grow our revenues through increased direct sales to governments and agencies that desire to integrate our communication technologies into their homeland security and public safety systems. This includes continuing to pursue further U.S. military opportunities. We also plan to pursue domestic and international emergency warning, critical event management, enterprise, government, law enforcement, fire rescue, homeland security, private and commercial security, border security, maritime security, critical infrastructure protection, and wildlife preservation business opportunities. In addition to the matters above, we are authorized for the performance of services and provision of goods pursuant to Delaware General Corporation Law.

Previous wording

Revenues increased $2,579, or 59%, compared with the first fiscal quarter of the prior year. Hardware and software revenue increased $1,681 and $898, respectively, compared with the prior year quarter. The higher revenue in the first quarter of fiscal 2025 was largely due to the higher backlog at the start of the fiscal year from increased orders received in fiscal year 2024. Backlog is a measure of purchase orders received that are scheduled to ship in the next 12 months. The higher software revenue in the first quarter was primarily due to a 69% increase in recurring revenue resulting from new customer contracts that were signed and then went live during fiscal year 2024, which generated recurring revenue in addition to the 2024 revenue.

Current wording

Revenues increased $1,193, or 21%, compared with the second fiscal quarter of the prior year. Hardware and software revenue increased $684 and $509, respectively, compared with the prior year quarter. The increased hardware revenue in the second quarter of fiscal 2025 was largely due to the higher backlog at the start of the fiscal year from increased orders received in fiscal year 2024. Backlog is a measure of purchase orders received that are scheduled to ship in the next 12 months. Hardware revenue this quarter included $1,230 from backlog at the start of the fiscal year for initial deliveries to our Puerto Rico customer. The higher software revenue was primarily due to a 28% increase in recurring revenue and a small increase in professional services performed in the current quarter.

Previous wording

The receipt of orders and signing of contracts is often uneven due to the timing of budget cycles, government financial issues, and military conflict. As of December 31, 2024, we had aggregate deferred revenue of $3,192 for extended warranty obligations and software support agreements.

Current wording

The receipt of orders and signing of contracts is often uneven due to the timing of budget cycles, government financial issues, and military conflict. As of March 31, 2025, we had aggregate deferred revenue of $3,157 for extended warranty obligations and software support agreements.

Previous wording

We incurred non-cash share-based compensation expenses allocated to selling, general and administrative expenses in the three months ended December 31, 2024 and 2023 of $326 and $380, respectively.

Current wording

We incurred non-cash share-based compensation expenses allocated to selling, general and administrative expenses in the three months ended March 31, 2025 and 2024 of $338 and $439, respectively.

Previous wording

Other income, net was $1,863 in the first quarter this fiscal year, compared to other income, net of $77 in the prior fiscal year quarter. The income in the current year included $2,470 non-cash income from the change in fair value of warrants and $62 of interest income offset by expenses including $370 change in the fair value of the Term Loan and $368 in interest expense.

Current wording

Other income, net was $187 in the second quarter this fiscal year, compared to other income, net of $51 in the prior fiscal year quarter. The income in the current year included $950 non-cash income from the change in fair value of warrants and $36 of interest income offset by expenses including $430 change in the fair value of the Term Loan and $350 in interest expense.

Previous wording

Gross profit increased $1,699, or 115%, compared with the same quarter last year, due to increased hardware and software revenue. In addition, a current fiscal year hardware order was sold through a more profitable sales channel. Prior year quarterly revenue included a hardware shipment, representing 12% of total revenue, which realized a lower than normal gross profit. As recurring software revenue grows, the growth rate of direct costs slows, leading to higher gross margins. Consequently, gross profit as a percentage of sales was higher in the first quarter of fiscal 2025, compared with the same period in the prior year, primarily due to a favorable mix of higher hardware revenue and increased higher margin software revenue.

Current wording

Gross profit increased $2,132, or 58%, compared with the same six-month period last year, primarily due to increased hardware and software revenue. As recurring software revenue grows, the growth rate of direct costs slows, leading to higher gross margins. Consequently, gross profit as a percentage of sales was higher in the first six months of fiscal 2025, compared with the same period in the prior year, primarily due to a favorable mix of hardware and higher margin software revenue.

Previous wording

Selling, general and administrative expenses increased $316, or 5%, over the prior year quarter. The increase was largely due to a $413 increase in professional services plus $72 increase in insurance expenses, offset by a $206 decrease in compensation-related expenses and $120 decrease in sales marketing and travel expenses.

Current wording

Selling, general and administrative expenses increased $324, or 2% in the six months ended March 31, 2025, over the prior year period. The increase was largely due to a $423 increase in professional services, offset by a $161 decrease in sales marketing and travel expenses.

Previous wording

Adjusted EBITDA represents our net income before other income, net income tax expense (benefit), depreciation and amortization expense, and stock-based compensation. We do not consider these items to be indicative of our core operating performance. The items that are non-cash include depreciation and amortization expense and stock-based compensation. Adjusted EBITDA is a measure used by management to understand and evaluate our core operating performance and trends, and to generate future operating plans, make strategic decisions regarding allocation of capital, and invest in initiatives focused on cultivating new markets for our solutions. In particular, the exclusion of certain expenses in calculating adjusted EBITDA facilitates comparisons of our operating performance on a period-to-period basis. Adjusted EBITDA is not a measure calculated in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). We believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. Nevertheless, use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (1) although depreciation and amortization are non-cash charges, the intangible assets that are amortized and property and equipment that is depreciated, will need to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacement or for new capital expenditure requirements; (2) adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (3) adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (4) adjusted EBITDA does not reflect tax payments or receipts that may represent a reduction or increase in cash available to us; and (5) other companies, including companies in our industry, may calculate adjusted EBITDA or similarly titled measures differently, which reduces the usefulness of the metric as a comparative measure. Because of these and other limitations, you should consider adjusted EBITDA alongside our other U.S. GAAP-based financial performance measures, net income and our other U.S. GAAP financial results.

Current wording

Adjusted EBITDA represents our net income before other income, net income tax expense (benefit), depreciation and amortization expense, and stock-based compensation. We do not consider these items to be indicative of our core operating performance. The items that are non-cash include depreciation and amortization expense and stock-based compensation. Adjusted EBITDA is a measure used by management to understand and evaluate our core operating performance and trends, and to generate future operating plans, make strategic decisions regarding allocation of capital, and invest in initiatives focused on cultivating new markets for our solutions. In particular, the exclusion of certain expenses in calculating adjusted EBITDA facilitates comparisons of our operating performance on a period-to-period basis. Adjusted EBITDA is not a measure calculated in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). We believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. Nevertheless, use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Some of these limitations are: (1) although depreciation and amortization are non-cash charges, the intangible assets that are amortized and property and equipment that is depreciated, will need to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacement or for new capital expenditure requirements; (2) adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (3) adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (4) adjusted EBITDA does not reflect tax payments or receipts that may represent a reduction or increase in cash available to us; and (5) other companies, including companies in our industry, may calculate adjusted EBITDA or similarly titled measures differently, which reduces the usefulness of the metric as a comparative measure. Because of these and other limitations, you should consider adjusted

Previous wording

Software segment revenue increased $898, or 63%, over the prior fiscal year. This primarily reflects a 69% increase in recurring revenue compared with the prior fiscal year.

Current wording

Software segment revenue increased $509, or 29%, over the prior fiscal year. This primarily reflects a 28% increase in recurring revenue compared with the prior fiscal year.

Previous wording

Operating loss decreased $1,325 in the fiscal first quarter of the current year due to increased revenue and lower operating expenses in selling, general and administrative due to higher personnel and marketing related expense in the prior year.

Current wording

Operating loss decreased $1,180 in the fiscal second quarter of the current fiscal year due to increased revenue and lower compensation and sales and marketing expenses compared to the prior year quarter.

Previous wording

Hardware segment revenue increased $1,681, or 57%, over the prior fiscal year. The increase was largely due to the higher backlog at the start of this fiscal year compared to the prior year.

Current wording

Hardware segment revenue increased $684, or 17%, over the prior fiscal year. The increase was largely due to the higher backlog at the start of this fiscal year compared to the prior year. Hardware revenue in this quarter included $1,230 from deliveries on the Puerto Rico project.

Previous wording

Cash and cash equivalents as of December 31, 2024 were $8,469, compared with $4,945 as of September 30, 2024. We had short-term marketable securities of 5,146 as of December 31, 2024, compared with $7,945 as of September 30, 2024. Other than cash and cash equivalents, short term marketable securities, other working capital and expected future cash flows from operating activities in subsequent periods, we have no unused sources of liquidity at this time.

Current wording

Cash and cash equivalents as of March 31, 2025 were $5,667, compared with $4,945 as of September 30, 2024. We had short-term marketable securities of 1,409 as of March 31, 2025, compared with $7,945 as of September 30, 2024. Other than cash and cash equivalents, short term marketable securities, other working capital and expected future cash flows from operating activities in subsequent periods, we have no unused sources of liquidity at this time.

Previous wording

product mix and effect on margins;

Current wording

product mix and effect on margins, including the impact of tariffs on margin;

Previous wording

ability to reduce and manage current inventory levels; and

Current wording

ability to manage current inventory levels and supply chain; and

Previous wording

During the three months ended December 31, 2024, net cash provided by operating activities was $947, resulting from a net cash increase from changes in our operating assets and liabilities of $5,705, offset by net loss of $4,078 and non-cash expenses of $680. Net cash increase from changes in our operating assets and liabilities, consisted primarily of a $6,290 increase in accrued liabilities resulting from receipt of $8,313 deposit from the Puerto Rico project, $500 increase in accounts payable related to procurement for increased fiscal 2025 sales projection, $259 decrease in accounts receivable, partially offset by a $1,084 increase in prepaid expenses and other, mostly driven by the prepayment made for hardware for the Puerto Rico project, and a $260 increase in inventory. Non-cash expense adjustments of $680, consisted primarily of $2,470 gain on fair value of warrants driven mostly by our stock price, offset by loss on fair value of Term Loan, expenses of share-based compensation, warranty provision, depreciation and amortization, amortization of operating lease ROU assets, accretion of acquisition related liabilities and inventory obsolescence.

Current wording

During the six months ended March 31, 2025, net cash used in operating activities was $5,375, resulting from a net loss of $10,217 and non-cash expenses of $111, offset by a net cash increase from changes in our operating assets and liabilities of $4,731. Net cash increase from changes in our operating assets and liabilities, consisted primarily of a $7,816 increase in accrued liabilities resulting from receipt of $10,611 deposit from the Puerto Rico project, $151 increase in accounts payable related to procurement for increased fiscal 2025 sales projection, partially offset by a $1,369 increase in prepaid expenses and other, mostly driven by the prepayment made for hardware for the Puerto Rico project, and a $1,527 increase in inventory, $340 in accounts receivable. Non-cash expense adjustments of $111, consisted primarily of $3,420 gain on fair value of warrants driven mostly by our stock price, offset by loss on fair value of Term Loan, expenses of share-based compensation, warranty provision, depreciation and amortization, amortization of operating lease ROU assets, accretion of acquisition related liabilities and inventory obsolescence.

Previous wording

During the three months ended December 31, 2024, net cash provided by investing activities was $2,633, primarily due to the maturities of investments in our holdings in marketable securities by $2,702, offset by the purchase of property and equipment of $69. We anticipate additional expenditures for tooling and equipment during the balance of fiscal year 2025.

Current wording

During the six months ended March 31, 2025, net cash provided by investing activities was $6,461, primarily due to the net proceeds received from the maturities of investments in our holdings in marketable securities by $6,685, offset by the purchase of property and equipment of $224. We anticipate additional expenditures for tooling and equipment during the balance of fiscal year 2025.

Previous wording

In the three months ended December 31, 2024, we received $1 through financing activities, due to minimal stock option exercises.

Current wording

In the six months ended March 31, 2025, we received net proceeds of $25 through financing activities, due to stock option exercises.