Genasys Inc.
For the period ended Jun 30, 2026. Filed Aug 13, 2026.
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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, 2026 · Filed Aug 13, 2026
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 2026-03-31; filed 2026-05-14.
0001193125-26-224042
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-13.
0001193125-26-349219
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 142 previous paragraphs and 151 current paragraphs.
97 unchanged; 31 reworded; 22 added; 12 removed; 2 previous and 1 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 (22)
Current report
Entered into a Second Amendment to Term Loan and Security Agreement, dated May 12, 2026, and a Third Amendment to the Term Loan and Security Agreement, dated July 13, 2026 (the “Third Amendment”), pursuant to which, among other things, the maturity date of the Close Date Term Loan was extended to July 13, 2027.
Current report
Entered into a loan agreement with Maran Partners Fund, LP on June 9, 2026 for an unsecured term loan in the principal amount of $4,300.
Current report
Announced new Protective Communications and emergency management service orders with California and Idaho counties and cities.
Current report
Integrated Evertel with law enforcement platform used by Vacaville, CA police department.
Current report
Announced $2,000 remotely operated LRAD system orders from a large U.S. utility company.
Current report
As a result of administrative complexities surrounding the approval process within the authority responsible for electricity generation, distribution and transmission in Puerto Rico, which is responsible for requesting disbursement of funds from FEMA, we have recently experienced, and continue to experience, delays in receiving payments under our contract to provide the Puerto Rico Electric Power Authority with an Emergency Warning System (the “Puerto Rico EWS Project”). These delays have materially and adversely affected our liquidity position despite the continued significant contribution of the Puerto Rico EWS Project to the Company’s revenues. A further continuation of these delays and/or future delays would exacerbate our liquidity challenges.
Current report
Revenues decreased $2,562, or 26%, compared with the third fiscal quarter of the prior year. Hardware revenue decreased $3,029, or 40%, primarily due to an approximately $3,012 decrease in revenue from the Puerto Rico EWS Project resulting from a temporary suspension of work related to customer payment delays. Hardware revenue was also adversely affected by the timing of certain military and defense shipments due to component availability constraints, which were subsequently resolved. The decrease in hardware revenue was partially offset by a $467, or 21%, increase in software revenue reflecting an increase in the volume of existing products sold and support-related services. As of June 30, 2026, we had aggregate deferred revenue of $3,716 for extended warranty obligations and software support agreements.
Current report
Please see “—Trends and Uncertainties” for details on how payment delays under the Puerto Rico EWS Project affect our liquidity.
Current report
Gross profit increased $1,568, or 60%, compared with the third fiscal quarter of the prior year. Gross profit and gross margin increased significantly, despite of lower total revenue, primarily attributable to the timing of revenue and cost recognition under the Puerto Rico EWS Project and a favorable shift in revenue mix toward higher-margin software revenue. In the third fiscal quarter of
Current report
2025, we recognized $4,333 of revenue associated with the initial delivery of hardware for the Puerto Rico EWS Project. The hardware revenue was recognized at zero margin because revenue was recorded in an amount equal to the cost of the hardware upon delivery. At that time, no installation or other project activities had been performed and, therefore, no progress toward completion of the project had been recognized. During the third fiscal quarter of 2026, we recognized $1,159 of revenue associated with the Puerto Rico EWS Project at improved margin levels. Gross profit and gross margin also benefited from a $467, or 21%, increase in software revenue compared with the prior-year period, as software revenue generally carries higher gross margins than hardware revenue.
Current report
Selling, general and administrative expenses decreased $295, or 5% compared to the prior year period. The decrease was primarily attributable to an approximately $150 decrease in information technology expenses following the implementation of a service management platform in fiscal 2025, and an approximately $144 reduction in travel and trade show expenses. As a percentage of revenue, selling, general and administrative expenses increased to 84.0% from 65.2% in the prior-year period, primarily due to lower revenue during the quarter.
Current report
Research and development expenses decreased $26, or 1%, in the third quarter of fiscal year 2026 compared to the prior year period. The Company maintained consistent investment in research and development activities supporting its software and hardware product offerings.
Current report
Other Expense, Net
Current report
Please see “—Trends and Uncertainties” for details on how payment delays under the Puerto Rico EWS Project affect our liquidity.
Current report
Selling, general and administrative expenses decreased $931, or 5% in the nine months ended June 30, 2026 over the prior year period. The decrease was primarily attributable to lower legal expenses of $400, reduced computer and information technology expenses of $326, lower travel expenses of $234, and reduced sales and marketing expenses of $230. As a percentage of revenue, selling, general and administrative expenses decreased compared with the prior-year period as revenue growth outpaced operating expenses, reflecting improved operating leverage.
Current report
Research and development expenses decreased $302, or 5% in the nine months ended June 30, 2026 compared to the prior year period. The decrease was primarily attributable to a $565 reduction in professional services expense resulting from the Company's cost reduction initiatives implemented during fiscal year 2025.
Current report
Hardware segment revenue decreased $3,029, or 40%, compared to the prior year period. The decrease was primarily attributable to lower revenue recognized on the Puerto Rico EWS Project during the quarter and delays in certain military and defense shipments due to component availability constraints.
Current report
Software segment revenue increased $467, or 21%, compared to the prior year period. The increase was primarily attributable to higher software support and subscription revenue, including approximately $161 of software revenue recognized on the Puerto Rico EWS Project during the quarter, compared to no software revenue recognized on the project in the prior year period.
Current report
Operating loss decreased $1,147 in the third quarter of the current fiscal year compared to the prior year period. The improvement was primarily attributable to higher revenue and lower operating expenses resulting from cost reduction initiatives implemented during the fourth quarter of fiscal year 2025, including reduced professional services expense and a lower reliance on temporary personnel and contractors.
Current report
Software segment revenue increased $561, or 8%, compared to the prior year period. The increase was primarily attributable to higher software support and subscription revenue, including $485 recognized on the Puerto Rico EWS Project during fiscal year 2026.
Current report
Operating loss decreased $2,497 in the first nine months of the current fiscal year compared to the prior year period. The improvement was primarily driven by lower operating expenses that reflected cost reduction initiatives implemented during the fourth quarter of fiscal year 2025. These initiatives included reduced professional services expense, lower spending on temporary personnel and contractors, and reduced payroll and benefit costs. The decreases were partially offset by continued investments in software development and strategic platform enhancements.
Current report
delays in shipments due to component availability constraints;
Removed paragraphs (12)
Previous report
In addition, on January 13, 2026, the Company announced that the first two groups under its Puerto Rico Early Warning System project (the “Puerto Rico EWS Project”) had been completed in line with the project plan and scheduled milestones. Genasys does not expect to receive additional compensation with respect to these two groups.
Previous report
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 report
Selling, general and administrative expenses decreased $442, or 7% compared to the prior year period. The decrease was primarily driven by a reduction of $266 in sales representative commissions, reflecting changes in sales mix and timing of customer activity, as well as a $111 reduction in sales and marketing expenses and a $72 decrease in travel and entertainment expenses.
Previous report
Research and development expenses increased $114, or 5%, in the second quarter of fiscal year 2026 compared to the prior year period. The increase was primarily due to higher engineering labor costs associated with enhancements to the Genasys Protect platform.
Previous report
Selling, general and administrative expenses decreased $636, or 5% in the six months ended March 31, 2026 over the prior year period. The decrease was primarily driven by $285 in professional services, $177 in sales and marketing expense and $176 in computer expenses, consistent with our cost reduction trends.
Previous report
Research and development expenses decreased $276, or 6% in the six months ended March 31, 2026 compared to the prior year period, due to lower professional service expenses of $387, partially offset by an increase in compensation of $161 for engineering labor costs associated with enhancements to the Genasys Protect platform.
Previous report
Other (Expense) Income, Net
Previous report
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 report
Software segment revenue increased $136, or 6%, compared to the prior year period, primarily driven by customer renewals completed at higher pricing during the quarter.
Previous report
Operating loss decreased $809 in the second 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.
Previous report
Software segment revenue increased $94, or 2%, compared to the prior year period, primarily driven by customer renewals completed at higher pricing.
Previous report
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.
Reworded paragraphs (31)
Previous wording
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 wording
These forward-looking statements represent our expectations, beliefs, intentions or strategies concerning future events, including, but not limited to, any statements regarding expected payments under, and resumption of execution of, our Puerto Rico project; 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.
Previous wording
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 receiving timely payment under, regulatory uncertainties surrounding, or disruptions in governmental support or funding of, the Puerto Rico project, 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 wording
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 continuous delays in receiving payment under, regulatory uncertainties surrounding, or disruptions in governmental support or funding of, the Puerto Rico project, 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, the effects of continued geopolitical unrest and regional conflicts, including the conflict in Iran and its effect on global oil supply and prices, continued funding of government spending, the timing of such funding, general economic and business conditions, including unforeseen weakness in the Company’s markets, 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.
Previous wording
Acoustic Hailing Device (“AHD”) market with the introduction of our LRAD in 2002, and creating the first multi-directional, voice-based public safety mass notification systems in 2012, and the first AHDs with a digital interface for remote operations in 2023. Building on our proven, best in class, and reliable solutions, we offer the first and only unified, end-to-end Protective Communications platform.
Current wording
LRAD by Genasys products broadcast audible voice messages with exceptional clarity from close range out to 5,000 meters. We have a history of successfully delivering innovative products, systems, and solutions for mission critical situations, pioneering the Acoustic Hailing Device (“AHD”) market with the introduction of our LRAD in 2002, and creating the first multi-directional, voice-based public safety mass notification systems in 2012, and the first AHDs with a digital interface for remote operations in 2023. Building on our proven, best in class, and reliable solutions, we offer the first and only unified, end-to-end Protective Communications platform.
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 operating when power and telecommunications infrastructure fails.
Current wording
Acoustics unites Genasys’ next generation 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
Business developments during the first six months of fiscal year 2026:
Current wording
Business developments during the first nine months of fiscal year 2026 and through the date of this report:
Previous wording
Appointed Bill Dodd as Chairman of Board of Directors and Larry Hagenbuch to Board of Directors
Current wording
Appointed Bill Dodd as Chairman of Board of Directors and Lawrence Hagenbuch to Board of Directors.
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 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, and on April 30, 2026, an appropriations bill for the Department of Homeland Security, which includes FEMA, was enacted for fiscal year 2026.
Previous wording
In the second fiscal quarter of the prior year, the first set of hardware for the Puerto Rico EWS Project was delivered and recognized at zero margin, as revenue was recorded in an amount equal to the cost of the hardware upon delivery. At that time, no installation or other project activities had been performed, and therefore zero progress had been recognized toward completion of the project. In the current quarter, as installation and other project activities progressed, including completing work on Groups 5 and 6 and further progress on the ten‑dam scope within Group 3, we recognized additional revenue associated with the project. As a result of the progress, a portion of the previously unrecognized hardware margin was recognized in the current period, contributing to the increase in gross profit and gross margin. For additional information, please see “Note.4. Revenue Recognition - Long-term contracts - over-time revenue recognition using input cost measures” in the notes to our financial statements, which disclosure is incorporated herein by reference.
Current wording
For additional information, please see“Note.4. Revenue Recognition - Long-term contracts - over-time revenue recognition using input cost measures” in the notes to our financial statements, which disclosure is incorporated herein by reference.
Previous 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.
Current wording
We incurred non-cash share-based compensation expenses allocated to selling, general and administrative expenses in the three months ended June 30, 2026 and 2025 of $212 and $384, respectively.
Previous 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.
Current wording
We incurred non-cash share-based compensation expenses allocated to research and development expenses in the three months ended June 30, 2026 and 2025 of $41 and $57, respectively.
Previous wording
Research and development costs vary period to period due to the timing of projects, and the timing and extent of using outside consulting, design, and development firms. We seek to continually improve our product offerings, and we expect to continue to expand our product line with new products, customizations, and enhancements. Based on current plans, we may expend additional resources on research and development in the current fiscal year compared to the prior fiscal year.
Current wording
Research and development costs vary period to period due to the timing of projects, and the timing and extent of using outside consulting, design, and development firms. We seek to continually improve our product offerings, and we expect to continue to expand our product line with new products, customizations, and enhancements.
Previous wording
Other expense, net was $414 in the second quarter of this fiscal year, compared to other income, net of $187 in the prior year period. The change was primarily due to the loss from the change in the fair value of our $15,000 term loan (the “Close Date Term Loan”), our $4,000 Term Loan (the “First Amendment Term Loan” and with the Close Date Term Loan, the “Term Loans”) and the warrants issued in accordance with the Term Loans (the “Warrants”).
Current wording
Other expense, net was $582 in the third quarter of this fiscal year, compared to other expense, net of $554 in the prior year period. The change was primarily attributable to normal fluctuations in non-operating expenses and changes in the fair value of our $15,000 term loan (the “Close Date Term Loan”) and the warrants issued in connection with the Close Date Term Loan (the “Warrants”).
Previous wording
Comparison of Results of Operations for the Six Months Ended March 31, 2026 and 2025 (in thousands)
Current wording
Comparison of Results of Operations for the Nine Months Ended June 30, 2026 and 2025 (in thousands)
Previous wording
Revenues increased $18,698, or 135%, for the six months ended March 31, 2026, compared with the same prior year period. Hardware and software revenue increased $18,604 and $94, respectively, compared with the prior year period. The increase in hardware revenue for the first six months of fiscal year 2026 was largely attributable to the conversion of higher backlog at the beginning of the fiscal year resulting from increased orders received in fiscal year 2024. Fiscal year 2024 orders included the Puerto Rico EWS Project, which has a longer duration than our typical projects and is expected to extend beyond a 12-month period. Backlog represents customer purchase orders received that are expected to ship within the next twelve months. Hardware revenue for the current year-to-date period included $20,148 related to the Puerto Rico EWS Project.
Current wording
Revenues increased $16,136, or 68%, for the nine months ended June 30, 2026, compared with the prior year period. Hardware and software revenue increased $15,575 and $561, respectively, compared with the prior year period. The increase in hardware revenue was primarily attributable to the conversion of higher backlog at the beginning of fiscal year 2026 resulting from increased orders received during fiscal year 2025. Included in those orders was the Puerto Rico EWS Project, which has a longer duration than our typical projects and is expected to extend beyond a twelve-month period. Revenue recognized on the Puerto Rico EWS Project totaled $21,469 during the first nine months of fiscal year 2026, compared with $5,563 during the prior year period, representing an increase of $15,906. Excluding the Puerto Rico EWS Project, revenue remained relatively consistent with the prior year period and reflected changes in customer mix and the timing of product shipments.
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, 2026, we had aggregate deferred revenue of $3,710 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, 2026, we had aggregate deferred revenue of $3,716 for extended warranty obligations and software support agreements.
Previous wording
Gross profit increased $12,214, or 211%, compared with the same six-month period last year, primarily driven by higher hardware revenue and improved gross margin on the Puerto Rico EWS project. Gross margin increased compared with the prior year period, primarily due to the timing of revenue and cost recognition under the Puerto Rico EWS Project.
Current wording
Gross profit increased $13,782, or 164%, compared with the same nine-month period last year, primarily driven by higher hardware revenue and improved gross margin on the Puerto Rico EWS Project. Gross margin 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
During the prior year period, certain hardware components of the Puerto Rico EWS Project were delivered and recognized at zero margin, as revenue was recorded in an amount equal to the cost of the hardware upon delivery. At that time, limited installation and other project activities had been performed, and therefore minimal progress had been recognized toward completion of the project. During the current year-to-date period, as installation and other project activities progressed, we recognized additional revenue associated with the project. As a result of this progress, a portion of the previously unrecognized hardware margin was recognized in the current period. Because a significant portion of the related hardware and material costs had been incurred in prior periods, revenue recognized during the first six months of fiscal year 2026 was not accompanied by a proportional level of material cost, contributing to higher gross profit and gross margin. For additional information, please see “Note.4. Revenue Recognition - Long-term contracts - over-time revenue recognition using input cost measures” in the notes to our financial statements, which disclosure is incorporated herein by reference.
Current wording
During the nine months ended June 30, 2025, we recognized $5,563 of revenue associated with the Puerto Rico EWS Project. Certain hardware components were delivered and recognized at zero margin, as revenue was recorded in an amount equal to the cost of the hardware upon delivery. At that time, limited installation and other project activities had been performed, and therefore minimal progress had been recognized toward completion of the project. During the current year-to-date period, as installation and other project activities progressed, we recognized $21,469 of revenue associated with the Puerto Rico EWS Project, an increase of $15,906 compared with the prior-year period. As a result of this progress, a portion of the previously unrecognized hardware margin was recognized in the current period. Because a significant portion of the related hardware and material costs had been incurred in prior periods, revenue recognized during the first nine months of fiscal year 2026 was not accompanied by a proportional level of material cost, contributing to higher gross profit and gross margin.
Previous wording
We incurred non-cash share-based compensation expenses allocated to selling, general and administrative expenses in the six months ended March 31, 2026 and 2025 of $842 and $664, 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, 2026 and 2025 of $1,054 and $1,048, respectively.
Previous wording
We incurred non-cash share-based compensation expenses allocated to research and development expenses in the six months ended March 31, 2026 and 2025 of $87 and $104, respectively.
Current wording
We incurred non-cash share-based compensation expenses allocated to research and development expenses in the nine months ended June 30, 2026 and 2025 of $128 and $161, respectively.
Previous wording
Research and development costs vary period to period due to the timing of projects, and the timing and extent of using outside consulting, design, and development firms. We seek to continually improve our product offerings, and we expect to continue to expand our product line with new products, customizations, and enhancements. Based on current plans, we may expend additional resources on research and development in the current fiscal year compared to the prior fiscal year.
Current wording
Research and development costs vary period to period due to the timing of projects, and the timing and extent of using outside consulting, design, and development firms. We seek to continually improve our product offerings, and we expect to continue to expand our product line with new products, customizations, and enhancements.
Previous 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.
Current wording
Other expense, net was $1,336 in the first nine months of fiscal 2026, compared to other income, net of $1,496 in the prior fiscal year period. The change was primarily attributable to the changes in the fair value of our $15,000 Close Date Term Loan and the Warrants and normal fluctuations in non-operating expenses.
Previous 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.
Current wording
Operating loss was $1,847 in the third quarter of fiscal year 2026 compared to an operating loss of $2,589 in the prior year period. The improvement was primarily attributable to higher gross margin resulting from improved profitability on the Puerto Rico EWS Project and lower operating expenses.
Previous wording
Comparison of Segment Adjusted EBITDA for the Six Months Ended March 31, 2026 and 2025 (in thousands)
Current wording
Comparison of Segment Adjusted EBITDA for the Nine Months Ended June 30, 2026 and 2025 (in thousands)
Previous wording
Hardware segment revenue increased $18,604, or 200%, compared to the prior year period. The increase was primarily driven by progress toward completion of the Puerto Rico EWS Project.
Current wording
Hardware segment revenue increased $15,575, or 92%, compared to the prior year period. The increase was primarily driven by progress toward completion of the Puerto Rico EWS Project. Revenue recognized on the Puerto Rico EWS project totaled $21,469 during the first nine months of fiscal year 2026, compared with $5,563 during the prior year period
Previous wording
Operating income was $5,413 in the first six months of fiscal year 2026 compared to an operating loss of $6,363 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 $3,566 in the first nine months of fiscal year 2026 compared to an operating loss of $8,952 in the prior year period. The improvement was primarily attributable to higher revenue and gross profit associated with the Puerto Rico EWS Project, including the recognition of previously deferred project margin, as well as lower operating expenses.
Previous 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.
Current wording
Cash and cash equivalents as of June 30, 2026 were $3,068, compared with $7,969 as of September 30, 2025. We had no short-term marketable securities as of June 30, 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 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.
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 and the June Term Loan, 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 and the June Term Loan 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,” including the defined terms contained therein, is incorporated herein by reference.
Previous 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.
Current wording
Based on (a) our current cash position, (b) the extension of maturity under the Close Date Term Loan to July 13, 2027 , (c) new financing under the June Term Loan, (d) currently planned expenditures and (e) 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 “—Trends and Uncertainties” and 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 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.
Current wording
During the nine months ended June 30, 2026, net cash used in operating activities was $5,047, resulting from a net loss of $4,771, adjusted for a net cash decrease from changes in our operating assets and liabilities of $4,647, and offset by an increase in non-cash expenses of $4,371. The net cash decrease from changes in our operating assets and liabilities consisted primarily of a $3,302 decrease in customer deposits primarily driven by the fulfillment of obligations from our Puerto Rico EWS Project, a $2,835 increase in inventory, a $1,288 increase in accounts receivable, and a $543 increase in prepaid expenses and other, offset by a $2,242 decrease in contract assets, $574 increase in accrued liabilities and a $505 increase in accounts payable related to procurement of inventory. Non-cash expense adjustments of $4,371, consisted primarily of a $2,041 loss on fair value of Term Loans driven by the closer maturity term, $2,035 depreciation and amortization, $1,239 share-based compensation and $624 amortization of operating lease ROU assets, offset by a $1,810 gain on fair value of Warrants driven mostly by our stock price.
Previous 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.
Current wording
During the nine months ended June 30, 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 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.
Current wording
In the nine months ended June 30, 2026, net cash used in financing activities was $138, primarily due to the repayment of $4,000 of principal on the First Amendment Term Loan, offset by $3,999 cash proceeds received from the June Term Loan and the exercise of stock options.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For additional information, please see “Note.4. Revenue Recognition - Long-term contracts - over-time revenue recognition using input cost measures” in the notes to our financial statements, which disclosure is incorporated herein by reference.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
LRAD by Genasys products broadcast audible voice messages with exceptional clarity from close range out to 5,000 meters. We have a history of successfully delivering innovative products, systems, and solutions for mission critical situations, pioneering the
Previous report — wording carried elsewhere
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.