Genasys Inc.

Previous wording

Modular Suite: Built on open standards, Genasys software and hardware systems are designed to easily integrate, whether using the full Genasys suite or complementing the notification platforms customers already have in place.

Current wording

Modular Suite: Built on open standards, Genasys software and hardware systems are designed to easily integrate, whether using the full suite of Genasys solutions or complementing the notification platforms customers already have in place.

Previous wording

Unified Viewpoint: One common safety operating picture provides real-time visibility into our customers’ people, assets, and environment by combining first-party data from asset / people-management platforms and IoT sensors with third-party data sources, including the Federal Emergency Management Agency, National Oceanic and Atmospheric Administration, Department of Homeland Security, and more.

Current wording

Unified Viewpoint: One common safety operating picture provides real-time visibility into our customers’ people, assets, and environment by combining first-party data from asset / people-management platforms and IoT sensors with third-party data sources, including the Federal Emergency Management Agency (“FEMA”), National Oceanic and Atmospheric Administration, Department of Homeland Security, and more.

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, 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

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, 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 operating when power and telecommunications infrastructure fails.

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 provides 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. To reduce alert fatigue and direct notifications to only at-risk populations, networked Acoustics installations provide authorized personnel with the capability of managing individual systems to alert neighborhoods, system groups for local emergencies, or all networked installations for city-wide or regional crises. Acoustics systems broadcast highly audible, clear voice messages hundreds or thousands of meters away, staying on and connected even during broad power outages and cellular network failures. Genasys’s advanced driver and waveguide technology enables voice broadcasts to be clearly heard and understood above loud background noise and over long distances. Acoustics’ reliability empowers a constant stream of information to facilitate mass notification redundancy when key infrastructure fails during critical events.

Previous wording

Business developments during the first three months of fiscal year 2026:

Current wording

Business developments during the first six months of fiscal year 2026:

Previous wording

In addition, the United States has recently experienced a decline in federal funding. Changes in defense and other government spending could have an adverse effect on our current and future revenues. Sales of our products to U.S. government agencies and organizations, including, for example, our recently received LRAD order for CROWS, are subject to the overall U.S. government budget and congressional appropriation decisions and processes which are driven by numerous factors, including domestic political conditions, geopolitical events and macroeconomic conditions, and are beyond our control. Even awards granted may not result in orders due to spending constraints or Congressional delays in passing the federal budget.

Current wording

In addition, the United States has recently experienced a decline in federal funding. Changes in defense and other government spending could have an adverse effect on our current and future revenues. Sales of our products to U.S. government agencies and organizations, including, for example, our LRAD order for the Common Remotely Operated Weapon Station (CROWS) II Technical Refresh program, are subject to the overall U.S. government budget and congressional appropriation decisions and processes which are driven by numerous factors, including domestic political conditions, geopolitical events, such as the conflicts in the Middle East, and macroeconomic conditions, and are beyond our control. Even awards granted may not result in orders due to spending constraints or Congressional delays in passing the federal budget.

Previous wording

The funding of U.S. government programs is subject to an annual congressional budget authorization and appropriations process. In years when the U.S. government does not complete its appropriations before the beginning of the new fiscal year on October 1, government operations are typically funded pursuant to a “continuing resolution,” which allows federal government agencies to operate at spending levels approved in the previous appropriations cycle, but does not authorize new spending initiatives. When the U.S. government operates under a continuing resolution, delays can occur in the procurement of the products, services and solutions that we provide and may result in new initiatives being canceled. We have on occasion experienced delays in contract awards which affect our future revenues as a result of this annual appropriations cycle, and we could experience similar declines in revenues from future delays in the appropriations process. When the U.S. government fails to complete its appropriations process or to provide for a continuing resolution, a full or partial federal government shutdown may result. A federal government shutdown could result in delays or cancellations of key programs or during extended government shutdown periods, the delay of contract payments, which could have a negative effect on our cash flows and adversely affect our future results.

Current wording

The funding of U.S. government programs is subject to an annual congressional budget authorization and appropriations process. In years when the U.S. government does not complete its appropriations before the beginning of the new fiscal year on October 1, government operations are typically funded pursuant to a continuing resolution (“CR”), which allows federal government agencies to operate at spending levels approved in the previous appropriations cycle, but does not authorize new spending initiatives. When the U.S. government operates under a CR, delays can occur in the procurement of the products, services and solutions that we provide and may result in new initiatives being canceled. We have on occasion experienced delays in contract awards which affect our future revenues as a result of this annual appropriations cycle, and we could experience similar declines in revenues from future delays in the appropriations process. When the U.S. government fails to complete its appropriations process or to provide for a CR, a full or partial federal government shutdown may result. A federal government shutdown could result in delays or cancellations of key programs or during extended government shutdown periods, the delay of contract payments, which could have a negative effect on our cash flows and adversely affect our future results.

Previous wording

From October 1, 2025 to November 12, 2025, the federal government of the United States was in a shutdown as Congress failed to pass appropriations legislation for the 2026 fiscal year. On November 10, 2025, Congress passed a continuing resolution (“CR”), which funded the government at existing spending levels through January 30, 2026. On February 3, 2026, a funding appropriation bill was passed by Congress and signed by the President which covers the majority of U.S. Government spending for the 2026 fiscal year. However, the funding bill excluded the Department of Homeland Security, which includes FEMA. Funding for the Department of Homeland Security remains subject to further negotiations.

Current wording

From October 1, 2025 to November 12, 2025, the federal government of the United States was in a shutdown as Congress failed to pass appropriations legislation for the 2026 fiscal year. On November 10, 2025, Congress passed a CR, which funded the government at existing spending levels through January 30, 2026. On February 3, 2026, a funding appropriation bill was passed by Congress and signed by the President which covers the majority of U.S. Government spending for the 2026 fiscal year. However, the funding bill excluded the Department of Homeland Security, which includes FEMA. Funding for the Department of Homeland Security remains subject to further negotiations.

Previous wording

Revenues increased $10,125, or 146%, compared with the first fiscal quarter of the prior year. Hardware revenue increased $10,167, or 220%, and software revenue decreased $42 or 2%, respectively, compared with the prior year period. The higher hardware revenue in the first quarter of fiscal year 2026 was largely due to the strong backlog at the start of the fiscal year compared with the prior year period, and included $9.8 million of revenue from our Puerto Rico EWS Project. As of December 31, 2025, we had aggregate deferred revenue of $3,823 for extended warranty obligations and software support agreements.

Current wording

Revenues increased $8,573, or 124%, compared with the second fiscal quarter of the prior year. Hardware revenue increased $8,437, or 180%, and software revenue increased $136 or 6%, respectively, compared with the prior year period. The higher hardware revenue in the second quarter of fiscal year 2026 was largely due to the strong backlog at the start of the fiscal year compared with the start of the prior year period, and included $10,307 of revenue from our Puerto Rico EWS Project. Backlog represents customer purchase orders received that are expected to ship within the next twelve months. As of March 31, 2026, we had aggregate deferred revenue of $3,710 for extended warranty obligations and software support agreements.

Previous wording

Gross profit increased $5,005, or 157%, compared with the same quarter last year. The increase was due to higher revenue from hardware. Gross profit as a percentage of sales was higher compared with the prior year period primarily due to a favorable mix of higher hardware revenue and increased higher margin hardware revenue in the first quarter of fiscal year 2026.

Current wording

Gross profit increased $7,209, or 276%, compared with the same quarter last year. The increase was primarily due to higher hardware revenue and improved gross margin on the Puerto Rico EWS Project. Gross profit as a percentage of sales increased compared with the prior year period, primarily due to the timing of revenue and cost recognition under the Puerto Rico EWS Project.

Previous wording

We incurred non-cash share-based compensation expenses allocated to selling, general and administrative expenses in the three months ended December 31, 2025 and 2024 of $353 and $326, 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, 2026 and 2025 of $489 and $338, respectively.

Previous wording

We incurred non-cash share-based compensation expenses allocated to research and development expenses in the three months ended December 31, 2025 and 2024 of $45 and $48, respectively.

Current wording

We incurred non-cash share-based compensation expenses allocated to research and development expenses in the three months ended March 31, 2026 and 2025 of $42 and $56, respectively.

Previous wording

Other expense, net was $340 in the first quarter of this fiscal year, compared to other income, net of $1,863 in the prior year period. The change of $2,203 included a $2,001 loss from the change in the fair value of the Term Loans and warrants.

Current wording

Other expense, net was $754 in the first six months of fiscal 2026, compared to other income, net of $2,050 in the prior fiscal year period. The change was primarily driven by a $1 loss in the current year, compared to a $2,620 gain in the prior year, related to the changes in the fair value of the Term Loans and Warrants.

Previous wording

Adjusted EBITDA is a non-GAAP financial measure. We define EBITDA as net income (loss) before interest income, interest expense, income tax expense (benefit), and depreciation and amortization expense. We define adjusted EBITDA as EBITDA further adjusted for share-based compensation, fair value measurements of our Term Loans and warrants, and other items that we do not consider indicative of our core operating performance.

Current wording

Adjusted EBITDA is a non-GAAP financial measure. We define adjusted EBITDA as net income (loss) before interest income, interest expense, income tax expense (benefit), and depreciation and amortization expense adjusted for share-based compensation, fair value measurements of our Term Loans and Warrants, other non-recurring expense (income) and other items that we do not consider indicative of our core operating performance.

Previous wording

EBITDA and Adjusted EBITDA are measures 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 that are 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. 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.

Current wording

Adjusted EBITDA are measures 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 that are 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. 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.

Previous wording

Hardware segment revenue increased $10,167, or 220%, compared to the prior year period. The increase was largely due to the higher backlog at the start of this fiscal year compared to the prior year period.

Current wording

Hardware segment revenue increased $8,437, or 180%, compared to the prior year period. The increase was largely due to the higher backlog at the start of this fiscal year compared to the prior year period driven primarily by Puerto Rico EWS Project.

Previous wording

Operating income was $1,897 in the first quarter of fiscal year 2026 compared to an operating loss of $3,151 in the prior year period, with the improvement primarily due to higher revenue and resultant gross profit, as well as a reduction in operating expenses.

Current wording

Operating income was $3,516 in the second quarter of fiscal year 2026 compared to an operating loss of $3,212 in the prior year period, with the improvement primarily due to higher revenue and resultant gross profit, as well as a reduction in operating expenses.

Previous wording

Operating loss decreased $541 in the first quarter of the current fiscal year compared to the prior year period due to lower operating expenses in payroll and benefits and a reduction in professional service and software development.

Current wording

Operating loss decreased $1,350 in the first six months of the current fiscal year compared to the prior year period due to lower operating expenses in payroll and benefits and a reduction in professional service and software development.

Previous wording

Cash and cash equivalents as of December 31, 2025 were $10,286, compared with $7,969 as of September 30, 2025. We had short-term marketable securities of $30 as of December 31, 2025, compared with $70 as of September 30, 2025.

Current wording

Cash and cash equivalents as of March 31, 2026 were $931, compared with $7,969 as of September 30, 2025. We had short-term marketable securities of $30 as of March 31, 2026, compared with $70 as of September 30, 2025.

Previous wording

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. 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 11. Term Loans and Warrant Liabilities” in the “Notes to Condensed Consolidated Financial Statements” is incorporated herein by reference.

Current wording

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. 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 or debt offerings. The disclosure on our Term Loans contained in “Note 11. Term Loans and Warrant Liabilities” and “Note 20. Subsequent Events”, including on the recent extension of maturity under the Close Date Term Loan, in the “Notes to Condensed Consolidated Financial Statements” is incorporated herein by reference.

Previous wording

Based on our current cash position, and assuming currently planned expenditures and level of operations, we believe we have sufficient capital to fund operations for the next twelve months. However, we operate in a rapidly evolving and unpredictable business environment that may change the timing or amount of expected future cash receipts and expenditures. Accordingly, there can be no assurance that we may not be required to raise additional funds through the sale of equity or debt securities or from credit facilities. Additional capital, if needed, may not be available on satisfactory terms, or at all.

Current wording

Based on (a) our current cash position, coupled with the extension of maturity under the Close Date Term Loan to July 13, 2026 and the currently expected availability of short-term financing if we continue to experience delays in the receipt of accounts receivable from our Puerto Rico EWS Project, (b) currently planned expenditures and (c) current level of operations, we believe we have sufficient capital to fund operations for the next twelve months. We continue to encounter delays in the receipt of funds from our Puerto Rico EWS Project, as also described in our annual report on Form 10-K for the year ended September 30, 2025 under“Item 1A. Risk Factors – Risks Related to our Business and Industry - Our short-term liquidity may be materially adversely affected by administrative complexities surrounding the disbursement of funds under our 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 and by natural disasters impacting our operations or delivery of products in a timely manner.” Furthermore, we generally operate in a rapidly evolving and unpredictable business environment that may change the timing or amount of expected future cash receipts and expenditures. There can be no assurance that we may not be required to raise additional funds through the sale of equity or debt securities or from credit facilities or otherwise. Additional capital, if needed, may not be available on satisfactory terms, or at all.

Previous wording

During the three months ended December 31, 2025, net cash provided by operating activities was $7,200, resulting from a net loss of $817, and adjusted for a net cash increase from changes in our operating assets and liabilities of $6,764 and an increase in non-cash expenses of $1,253. The net cash increase from changes in our operating assets and liabilities consisted primarily of a $10,636 increase in customer deposits primarily driven by the deposit received from our Puerto Rico EWS Project and a $206 decrease in inventory, offset by a $1,287 increase in accounts receivable, $1,033 increase in contract assets, $711 decrease in accounts payable related to procurement of inventory, $534 decrease in accrued liabilities, and $513 increase in prepaid expenses and other expenses, mostly driven by the prepayment made for hardware for our Puerto Rico EWS Project. Non-cash expense adjustments of $1,253, consisted primarily of a $771 loss on fair value of Term Loans driven by the closer maturity term, $682 depreciation and amortization, $419 share-based compensation and $205 amortization of operating lease ROU assets, offset by a $870 gain on fair value of warrants driven mostly by our stock price.

Current wording

During the six months ended March 31, 2026, net cash used in operating activities was $2,113, resulting from a net loss of $94, adjusted for a net cash decrease from changes in our operating assets and liabilities of $4,947, and offset by an increase in non-cash expenses of $2,928. The net cash decrease from changes in our operating assets and liabilities consisted primarily of a $5,483 increase in accounts receivable, a $3,296 increase in prepaid expenses and other, mostly driven by the prepayment made for hardware for our Puerto Rico EWS Project, a $967 decrease in inventory and a $477 decrease in customer deposits primarily driven by the fulfillment of obligations from our Puerto Rico EWS Project, offset by a $2,791 decrease in contract assets, a $1,476 increase in accounts payable related to procurement of inventory and $1,009 increase in accrued liabilities. Non-cash expense adjustments of $2,928, consisted primarily of a $1,560 loss on fair value of Term Loans driven by the closer maturity term, $1,371 depreciation and amortization, $970 share-based compensation and $413 amortization of operating lease ROU assets, offset by a $1,560 gain on fair value of Warrants driven mostly by our stock price.

Previous wording

During the three months ended December 31, 2025, net cash provided by investing activities was $41, primarily due to the net proceeds received from the maturities of investments in our holdings in marketable securities. We anticipate additional expenditures for tooling and equipment during the balance of fiscal year 2026.

Current wording

During the six months ended March 31, 2026, net cash provided by investing activities was zero, primarily due to the net proceeds received from the maturities of investments in our holdings in marketable securities, offset by the capital expenditures. We anticipate additional expenditures for tooling and equipment during the balance of fiscal year 2026.

Previous wording

In the three months ended December 31, 2025, net cash used in financing activities was $4,929, primarily due to the repayment of $4,000 of principal on the First Amendment Term Loan and the payment of $961 related to the minimum return amount on the First Amendment Term Loan.

Current wording

In the six months ended March 31, 2026, net cash used in financing activities was $4,924, primarily due to the repayment of $4,000 of principal on the First Amendment Term Loan and the payment of $961 related to the Minimum Return Amount on the First Amendment Term Loan, offset by cash proceeds received from the exercise of stock options.