Genasys Inc.
For the period ended Jun 30, 2025. Filed Aug 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 14, 2025
GNSS$1.40+6.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-13.
0000950170-25-070476
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0000950170-25-109006
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 153 previous paragraphs and 162 current paragraphs.
107 unchanged; 38 reworded; 15 added; 7 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
These forward-looking statements represent our expectations, beliefs, intentions or strategies concerning future events, including, but not limited to, any statements regarding growth strategy; product and development programs; financial performance and financial condition; the continuation of historical trends; the sufficiency of our cash balances for future liquidity and capital resource needs; anticipated problems and our plans for future operations; and the economy in general or the future of the emergency communications industry.
Current report
We caution that these statements by their nature involve risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors. Such risks and uncertainties include, but are not limited to, risks relating to our reliance on a limited number of customers, the likely need for additional capital, actual or perceived failures or breaches of our information and security systems, continued funding of government spending, the timing of such funding, general economic and business conditions, including unforeseen weakness in the Company’s markets, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, market acceptance of the Company’s products, shortages in components or price increases that cannot be passed on to customers, inability to fully realize the expected benefits from acquisitions and restructurings or delays in realizing such benefits, challenges in integrating acquired businesses and achieving anticipated synergies, changes to export regulations, difficulties in retaining key employees and customers, changes in the market for microcap stocks regardless of growth and value and various other factors beyond our control. Some of these risks and uncertainties are identified in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (especially the “Liquidity and Capital Resources” section) and the section “Risk Factors” in this report and in our Annual Report on Form 10-K and you are urged to review those sections. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete list of all potential risks or uncertainties.
Current report
Received $4,500 in new and follow-on LRAD orders from U.S. Military
Current report
Entered into the First Amendment to Term Loan and Security Agreement with $4,000 First Amendment Term Loan
Current report
During the second and third quarters of fiscal year 2025, higher tariffs impacting certain sources of the Company’s materials were imposed by the U.S. government. We are monitoring these imposed tariffs and related ongoing negotiations between the U.S. government and the countries in which we source products. See"Item 1A — Risk Factors — International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects,” which is incorporated herein by reference.
Current report
It is uncertain how inflation and interest rates will be impacted during the remainder of 2025 by the imposition of tariffs and other trade-related actions or inactions. World events, including the Russia-Ukraine War and the ongoing conflict in the Middle East continue to have negative effects on the global economy.
Current report
Prolonged or recurring disruptions or instability in the United States and global economies, and how the world reacts to those disruptions or instability, could have long-term impacts on our business. These business impacts could negatively affect us in a number of ways, including, but not limited to, reduced demand for our products and services, declines in our revenue and profitability, costs associated with complying with new or amended laws and regulations and mitigating the increased cost of the new tariffs affecting our business, declines in our stock price, reduced availability and less favorable terms of future borrowings, reduced credit-worthiness of our customers, and potential impairment of the carrying value of goodwill or other intangible assets.
Current report
Gross profit decreased $1,187, or 31%, compared with the same quarter last year. The decrease in gross profit was primarily due to the impact of percentage-of-completion revenue recognition associated with the early-stage Puerto Rico project, and a less favorable hardware mix and increased tariff costs on imported components. Software’s gross margin was essentially unchanged compared to the prior year quarter.
Current report
Selling, general and administrative expenses decreased $227 or 3% over the prior year period. The decrease was primarily driven by lower professional services in the three months ending June 30, 2025.
Current report
Other Expense, Net
Current report
Other Income (Expense), Net
Current report
Operating loss increased $669 in the current fiscal year quarter due to lower gross profit this year due to the Puerto Rico project percentage of completion revenue offset by lower operating expenditures on professional services.
Current report
Operating loss increased $1,146 in the current fiscal year period compared with the prior fiscal year period due to lower gross profit resulting from the impact of percentage of completion revenue recognition for early stage hardware activity offset by lower professional services expense this fiscal year.
Current report
Our internal sources of liquidity include cash and cash equivalents, short term marketable securities, other working capital and expected future cash flows from operating activities in subsequent periods. In this context, please refer to “Item 1A – Risk Factors – Our short-term liquidity may be materially adversely affected by administrative complexities surrounding the disbursement of funds under the Puerto Rico Early Warning System project. Furthermore, our ability to receive the full benefits of such project could be materially and adversely affected by the economic, governmental, and environmental conditions in Puerto Rico.”
Current report
Our primary external source of liquidity consists of our Term Loans, although we have also relied in the past, and may rely in the future, on equity offerings. The disclosure on our Term Loans contained in “Note 12. Term Loans and Warrant Liabilities” in the notes to the consolidated financial statements is incorporated herein by reference.
Removed paragraphs (7)
Previous report
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 report
Gross profit increased $433, or 20%, compared with the same quarter last year. The increase in gross profit was primarily due to the increase in software revenue with increased gross margins slightly offset by lower gross profit in hardware from a less favorable mix of hardware revenue compared to the prior year period. Gross profit as a percentage of sales for the total company was essentially unchanged compared with the prior year period.
Previous report
Other Income, Net
Previous report
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 report
Other Income, Net
Previous report
Operating loss increased $441 in the current fiscal year period due to higher operating expenses this year including expenses related to the Puerto Rico project.
Previous report
Operating loss increased $477 in the current fiscal year period compared with the prior fiscal year due to higher operating expenses related to higher professional services and the Puerto Rico project.
Reworded paragraphs (38)
Previous wording
The discussion and analysis set forth below should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the related notes included under Item 1 of this Quarterly Report on Form 10-Q, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended September 30, 2024.
Current wording
The discussion and analysis set forth below should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the related notes included under Item 1 of this Quarterly Report on Form 10-Q, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended September 30, 2024. All dollar amounts presented in this section are in thousands.
Previous wording
This report contains certain statements of a forward-looking nature relating to future events or future performance. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements but are not the only means of identifying forward-looking statements. Prospective investors are cautioned that such statements are only predictions and actual events or results may differ materially. In evaluating such statements, prospective investors should specifically consider various factors identified in this report and any matters set forth under Part I, Item 1A (Risk Factors) of our Annual Report on Form 10-K, which could cause actual results to differ materially from those indicated by such forward-looking statements.
Current wording
This report contains certain statements of a forward-looking nature relating to future events or future performance. Any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. When used in this report and other reports, statements, and information we have filed with the Securities and Exchange Commission (“Commission” or “SEC”), in our press releases, presentations to securities analysts or investors, or in oral statements made by or with the approval of an executive officer, the words or phrases such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements but are not the only means of identifying forward-looking statements.
Previous wording
We are a global provider of Protective Communications™ solutions, including our Genasys Protect™ software platform and Long Range Acoustic Device® (“LRAD®”) products. Our unified software platform receives information from a wide variety of sensors and Internet-of-Things (“IoT”) inputs to collect real-time information on developing and active emergency situations. Genasys uses this information to create and disseminate alerts, warnings, notifications, and instructions through multiple channels before, during, and after public safety and enterprise threats, critical events, and other crisis situations.
Current wording
We are a global provider of Protective Communications™ solutions, including our Genasys Protect™ software platform and Long Range Acoustic Device® (“LRAD®”) hardware products. Our unified software platform receives information from a wide variety of sensors and Internet-of-Things (“IoT”) inputs to collect real-time information on developing and active emergency situations. Genasys uses this information to create and disseminate alerts, warnings, notifications, and instructions through multiple channels before, during, and after public safety and enterprise threats, critical events, and other crisis situations.
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 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.
Current wording
The Genasys Protect platform provides a full suite of Protective Communications tools for all hazards that is 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
Genasys ALERT (“ALERT”) is an interactive, cloud-based Software as a Service (“SaaS”) solution that is designed to enable SLED and enterprise customers to send critical information to at-risk individuals or groups when an emergency occurs. ALERT acts as both a communications input and output, receiving information from state-of-the-art sensors and emergency services, and quickly relaying notifications, alerts, and instructions to at-risk populations and first responders. ALERT communications in public spaces can be enhanced via Genasys ACOUSTICS - connected, voice broadcast speakers - while ALERT communications among first responders and emergency personnel can be augmented and accelerated with Genasys CONNECT. ALERT clients can create and send critical, verified, and secure notifications and messages that are geographically specific and targeted using location-based SMS, CBC mobile push, text, email, social media, TV, radio, digital displays and acoustic devices, panic buttons, desktop alerts, TV, social media, and more. Additionally, Genasys is a certified provider of Integrated Public Alert and Warning System (“IPAWS”) notifications. IPAWS is the federal public notification platform for the United States, which ALERT customers can use to deliver critical communications in multiple languages to specific populations.
Current wording
Genasys ALERT (“ALERT”) is an interactive, cloud-based Software as a Service (“SaaS”) solution that is designed to enable SLED and enterprise customers to send critical information to at-risk individuals or groups when an emergency occurs. ALERT acts as both a communications input and output, receiving information from state-of-the-art sensors and emergency services, and quickly relaying notifications, alerts, and instructions to at-risk populations and first responders. ALERT communications in public spaces can be enhanced via Genasys ACOUSTICS - connected, voice broadcast speakers - while ALERT communications among first responders and emergency personnel can be augmented and accelerated with Genasys CONNECT. ALERT clients can create and send critical, verified, and secure notifications and messages that are geographically specific and targeted using location-based SMS, CBC mobile push, text, email, social media, TV, radio, digital displays, acoustic devices, panic buttons, desktop alerts, TV, social media, and more. Additionally, Genasys is a certified provider of Integrated Public Alert and Warning System (“IPAWS”) notifications. IPAWS is the federal public notification platform for the United States, which ALERT customers can use to deliver critical communications in multiple languages to specific populations.
Previous wording
ACOUSTICS gives operators the ability to send critical alerts and notifications from emergency operations centers, and authorized computers or smart phones. ACOUSTICS provides highly audible, clear voice messaging thousands of meters away, staying on and connected even during broad power outages and network failures. ACOUSTICS are networked, remotely operated devices optimized with advanced driver and waveguide technology so that voice broadcasts are clearly heard and understood above loud background noise and over long distances. ACOUSTICS’ reliability enables a constant stream of information, providing redundancy when key infrastructure fails during critical events.
Current wording
ACOUSTICS gives operators the ability to send critical alerts and notifications from emergency operations centers, and authorized computers or smart phones. ACOUSTICS provides highly audible, clear voice messaging thousands of meters away, staying on and connected even during broad power outages and network failures. ACOUSTICS are networked, remotely operated devices optimized with advanced driver and waveguide technology that enable audible voice broadcasts to be clearly heard and understood above background noise and over long distances. ACOUSTICS’ reliability enables a constant stream of information, providing redundancy when key infrastructure fails during critical events.
Previous wording
Business developments during the first six months of fiscal 2025:
Current wording
Business developments during the first nine months of fiscal 2025:
Previous wording
Secured a three-year, $3.35 million follow-on maintenance agreement for LRAD systems deployed by the Indian Navy
Current wording
Secured a three-year, $3,350 follow-on maintenance agreement for LRAD systems deployed by the Indian Navy
Previous wording
Announced $1.0 million in domestic and international energy sector LRAD orders
Current wording
Announced $1,000 in domestic and international energy sector LRAD orders
Previous 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.
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 Common Remotely Operated Weapon Station (“CROWS”) 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 fiscal 2026. Historically, hardware revenue has been characterized by large and inconsistent orders that in aggregate have been a generator of cash for the Company.
Previous 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.
Current wording
Revenues increased $2,690, or 38%, compared with the third fiscal quarter of the prior year. Hardware and software revenue increased $2,548 and $142, respectively, compared with the prior year quarter. The increased hardware revenue in the third quarter of fiscal 2025 was largely due to $4,333 from the initial deliveries to our Puerto Rico customer, which was recognized using the percentage-of-completion methodology, which we expect to use for the majority of future revenues from our Puerto Rico customer. The percentage-of-completion methodology we used was based on the installation labor hours incurred as a percentage of the total installation labor hours estimated for the entire Puerto Rico project. The higher software revenue was primarily due to an 8% increase in recurring revenue and offset by a small decrease in revenue from professional services performed in the quarter ended June 30, 2025.
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 March 31, 2025, we had aggregate deferred revenue of $3,157 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 June 30, 2025, we had aggregate deferred revenue of $3,250 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 March 31, 2025 and 2024 of $338 and $439, respectively.
Current wording
We incurred non-cash share-based compensation expenses allocated to selling, general and administrative expenses in the three months ended June 30, 2025 and 2024 of $384 and $242, respectively.
Previous wording
We may expend additional resources on the marketing and selling of our products in future periods as we identify ways to optimize potential opportunities. Commission expenses will fluctuate based on the nature of our sales.
Current wording
We may expend additional resources on the marketing and selling of our products in future periods as we identify ways to optimize potential opportunities. Commission expenses will fluctuate based on the nature of our sales based on sales channels.
Previous wording
Research and development expenses decreased $314, or 12%, in the fiscal second quarter due to lower compensation expenses and outside services costs compared to the prior year period, and capitalization of Puerto Rico-related software development resources in this fiscal quarter.
Current wording
Research and development expenses decreased $396, or 16%, in the fiscal third quarter compared to the prior year quarter due to the capitalization of Puerto Rico-related software development resources in the most recent fiscal quarter. Labor capitalization was $197, with the remaining decrease of $113 in expenditures from employee costs and $79 in professional services.
Previous wording
We incurred non-cash share-based compensation expenses allocated to research and development expenses in the three months ended March 31, 2025 and 2024 of $56 and $57, respectively.
Current wording
We incurred non-cash share-based compensation expenses allocated to research and development expenses in the three months ended June 30, 2025 and 2024 of $57 and $29, respectively.
Previous 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.
Current wording
Other expense, net was $554 in the third quarter this fiscal year, compared to $1,363 in the prior fiscal year quarter. The loss in the current year included $480 loss on the issuance of the First Amendment Term Loan, $580 change in the fair value of the Term Loans and $406 in interest expense from the Term Loans, $104 professional expense related to the $4,000 First Amendment Term Loan, partially offset by $1,140 non-cash income from the change in fair value of warrants and $16 of interest income.
Previous wording
Comparison of Results of Operations for the Six Months Ended March 31, 2025 and 2024 (in thousands)
Current wording
Comparison of Results of Operations for the Nine Months Ended June 30, 2025 and 2024 (in thousands)
Previous wording
Revenues increased 3,772, or 37%, for the six months ended March 31, 2025, compared with the same prior year period. Hardware and software revenue increased $2,365 and $1,407, respectively, compared with the prior year quarter. The higher revenue in the first six months 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 for the current year to date included $1,230 from backlog at the start of the fiscal year, for initial deliveries to our Puerto Rico customer. The higher software revenue in the first six months was primarily due to a 46% increase in recurring revenue.
Current wording
Revenues increased 6,462, or 37%, for the nine months ended June 30, 2025, compared with the same prior year period. Hardware and software revenue increased $4,913 and $1,549, respectively, compared with the prior year period. The higher revenue in the first nine months 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 for the current year to date included $5,563 from the initial deliveries to our Puerto Rico customer, which was in backlog at the start of the fiscal year. The higher software revenue in the first nine months was primarily due to a 31% increase in recurring revenue.
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 March 31, 2025, we had aggregate deferred revenue of $3,157 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 June 30, 2025, we had aggregate deferred revenue of $3,250 for extended warranty obligations and software support agreements.
Previous 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.
Current wording
Gross profit increased $945, or 13%, compared with the same nine-month period last year, primarily due to higher margin software revenue. Direct costs associated with recurring software revenue grow at a slower pace than such revenue, leading to higher gross margins. Gross profit as a percentage of sales for hardware was lower in the first nine months of fiscal 2025, compared with the same period in the prior year, primarily due to an unfavorable hardware sales mix driven by percentage of completion revenue recognition for early-stage hardware deliveries in Puerto Rico.
Previous wording
Selling, general and administrative expenses were essentially unchanged compared to the prior year quarter.
Current wording
Selling, general and administrative expenses were essentially unchanged compared to the prior year period. Salaries and wages increased in the period, which was offset by a reduction in tradeshow and travel costs.
Previous wording
We incurred non-cash share-based compensation expenses allocated to selling, general and administrative expenses in the six months ended March 31, 2025 and 2024 of $664 and $827, respectively.
Current wording
We incurred non-cash share-based compensation expenses allocated to selling, general and administrative expenses in the nine months ended June 30, 2025 and 2024 of $1,048 and $1,071, respectively.
Previous wording
Research and development expenses decreased $220, or 4.7%, in the first six months due to lower compensation expenses and lower outside services costs compared to the prior year period and capitalization of Puerto Rico-related software development resources in this fiscal year.
Current wording
Research and development expenses decreased $616, or 9%, in the first nine months of fiscal year 2025. $351 was for the capitalization of Puerto Rico-related software development, and $232 for lower compensation expenses and lower outside services costs.
Previous wording
We incurred non-cash share-based compensation expenses allocated to research and development expenses in the six months ended March 31, 2025 and 2024 of $104 and $101, respectively.
Current wording
We incurred non-cash share-based compensation expenses allocated to research and development expenses in the nine months ended June 30, 2025 and 2024 of $161 and $129, respectively.
Previous wording
Other income, net was $2,050 in the first six months of fiscal 2025, compared to other income, net of $128 in the prior fiscal year period. The income in the current year included $3,420 non-cash income from the change in fair value of warrants and $98 of interest income offset by expenses including $800 change in the fair value of the Term Loan and $718 in interest expense.
Current wording
Other income, net was $1,496 in the first nine months of fiscal 2025, compared to other expense, net of $1,236 in the prior fiscal year period. The income in the current year included $4,560 non-cash income from the change in fair value of warrants and $114 of interest income, partially offset by expenses including $1,380 change in the fair value of the Term Loans and $1,124 in interest expense from the Term Loans, $480 loss on the issuance of First Amendment Term Loan and $104 professional expense related to the $4,000 First Amendment Term Loan.
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
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 EBITDA alongside our other U.S. GAAP-based financial performance measures, net income and our other U.S. GAAP financial results.
Previous 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.
Current wording
Hardware segment revenue increased $2,548, or 50%, over the prior fiscal quarter. 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 $4,333 of Puerto Rico project revenue.
Previous 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.
Current wording
Software segment revenue increased $142, or 7%, over the prior fiscal quarter. This primarily reflects an 8% increase in recurring revenue compared with the prior fiscal quarter.
Previous 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.
Current wording
Operating loss decreased $105 in the third 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
Comparison of Segment Adjusted EBITDA for the Six Months Ended March 31, 2025 and 2024 (in thousands)
Current wording
Comparison of Segment Adjusted EBITDA for the Nine Months Ended June 30, 2025 and 2024 (in thousands)
Previous wording
Hardware segment revenue increased $2,365, or 34%, over the prior fiscal year. The increase was largely due to the higher backlog at the start of this fiscal year compared with the prior year amount. Hardware revenue in the first six months of the current fiscal year included $1,230 from deliveries on the Puerto Rico project.
Current wording
Hardware segment revenue increased $4,913, or 41%, over the prior fiscal year period. The increase was largely due to the higher backlog at the start of this fiscal year compared with the prior year amount. Hardware revenue in the first nine months of the current fiscal year included $5,563 from deliveries on the Puerto Rico project.
Previous wording
Software segment revenue increased $1,407, or 45%, over the prior fiscal year. This primarily reflects a 46% increase in recurring revenue compared with the first six months of the prior fiscal year.
Current wording
Software segment revenue increased $1,549, or 30%, over the prior fiscal year period. This primarily reflects a 31% increase in recurring revenue compared with the first nine months of the prior fiscal year period.
Previous wording
Operating loss decreased $2,505 in the six-month period of this fiscal year due to increased revenue and gross margin and lower operating expenses in sales and marketing expenses and compensation related costs compared to the prior year period.
Current wording
Operating loss decreased $2,609 in the nine-month period of this fiscal year due to increased revenue and gross margin and lower operating expenses in sales and marketing expenses and compensation-related costs compared to the prior year period.
Previous 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.
Current wording
Cash and cash equivalents as of June 30, 2025 were $5,339, compared with $4,945 as of September 30, 2024. We had short-term marketable securities of $120 as of June 30, 2025, compared with $7,945 as of September 30, 2024.
Previous 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.
Current wording
During the nine months ended June 30, 2025, net cash used in operating activities was $11,271, resulting from a net loss of $16,704, offset by non-cash expenses of $1,451 and a net cash increase from changes in our operating assets and liabilities of $3,982. Net cash increase from changes in our operating assets and liabilities, consisted primarily of a $13,604 increase in accrued liabilities resulting from receipt of $17,278 deposit from the Puerto Rico project, $3,737 increase in accounts payable related to procurement of inventory for increased fiscal 2025 sales projections, partially offset by a $4,793 increase in prepaid expenses and other, mostly driven by the prepayment made for hardware for the Puerto Rico project, and a $4,367 increase in inventory, $2,846 increase in contract assets, and $1,353 increase in accounts receivable. Non-cash expense adjustments of $1,451, consisted primarily of $4,560 gain on fair value of warrants driven mostly by our stock price, offset by $2,114 depreciation and amortization, $1,380 loss on fair value of Term Loans, $480 loss on issuance of First Amendment Term Loan, $570 amortization of operating lease ROU assets, and $254 inventory obsolescence.
Previous 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.
Current wording
During the nine months ended June 30, 2025, net cash provided by investing activities was $7,893, primarily due to the net proceeds received from the maturities of investments in our holdings in marketable securities of $8,106, offset by the purchase of property and equipment of $213. We anticipate additional expenditures for tooling and equipment during the balance of fiscal year 2025.
Previous wording
In the six months ended March 31, 2025, we received net proceeds of $25 through financing activities, due to stock option exercises.
Current wording
In the nine months ended June 30, 2025, we received net proceeds of $4,025 through financing activities, primarily due to $4,000 from the First Amendment Term Loan borrowings.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
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 most of the 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.
Current report — wording carried from elsewhere
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 entered into a $15,000, two-year senior secured Term Loan agreement in May 2024 and a $4,000 increase on the Term Loan in May 2025. 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 CROWS program for the U.S. Department of Defense. For the nine months ended June 30, 2025, the Company’s operating activities used cash of $11,271.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
EBITDA alongside our other U.S. GAAP-based financial performance measures, net income and our other U.S. GAAP financial results.