GEOSPACE TECHNOLOGIES CORP
For the period ended Dec 31, 2025. Filed Feb 12, 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.
Dec 31, 2025 · Filed Feb 12, 2026
GEOS$3.79+5.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001437749-25-025683
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-02-12.
0001437749-26-003977
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 68 previous paragraphs and 74 current paragraphs.
31 unchanged; 25 reworded; 18 added; 12 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 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 (18)
Current report
Our Smart Water segment emphasizes our targeted approach to growing its footprint in the water management industry. This business segment contains the highly successful Hydroconn® smart water connectivity offerings along with the Aquana products.
Current report
The adoption of advanced technology in water management has been bolstered by U.S. Federal funding programs such as Water Infrastructure Finance Act funding, which provides $7.5 billion for water-related infrastructure projects.
Current report
Over the last decade, we have seen an increase of over 400% in sales volume of our Hydroconn® connector cables used in Automated Meter Reading (AMR) applications. These cables play a role in Advanced Metering Infrastructure (AMI) by enabling remote collection of usage data from utility meters, thereby eliminating the need for manual meter reading.
Current report
Our Intelligent Industrial segment consists of industrial sensors, electronic pre-press solutions and specialized contract manufacturing. The growing defense and security applications offered by Quantum and Heartbeat Detector® will also be reflected in this segment.
Current report
Imaging Products
Current report
Defense and Security
Current report
Our Quantum product line includes SADAR®, a proprietary detection system which detects, locates and tracks items of interest in real-time. Using the SADAR® technology, Quantum designs and sells products used for border and perimeter security surveillance, cross-border tunneling detection and other products targeted at movement monitoring, intrusion detection and situational awareness. Quantum’s customers include various agencies of the U.S. government including the Department of Defense, Department of Energy, Department of Homeland Security and other agencies.
Current report
In August 2025, we acquired Heartbeat Detector® by purchasing all of the outstanding common stock of Geovox Securities, Inc. ("Geovox"). Heartbeat Detector® is a heartbeat detection security technology developed by the United States Department of Energy’s Oak Ridge National Laboratory which bolsters our perimeter security and surveillance offerings. Used in more than a dozen countries to address human trafficking and prison security, the Heartbeat Detector® uses proprietary sensors to rapidly identify people hidden in vehicles, providing a modern, user-friendly interface in as little as 10 seconds. The product, which relies on geophones we manufacture, has been proven 99% effective by Oak Ridge, Sandia and Thunder Mountain national laboratories.
Current report
Consolidated operating expenses for the three months ended December 31, 2025, were $12.9 million, an increase of $0.6 million, or 5.1%, from the corresponding period of the prior fiscal year. The increase for the three months ended December 31, 2025 was primarily due to (i) an increase in sales and marketing costs and (ii) a change in the fair value of contingent consideration. The increase was partially offset by (i) a decrease in personnel costs, primarily severances and (ii) lower research and development project expenditures.
Current report
Consolidated other income decreased $0.1 million, or 13.9% for the three months ended December 31, 2025, from the corresponding period of the prior fiscal year. The decrease for the three months ended December 31, 2025 was principally due to a decrease in interest income on short-term investments, partially offset by an increase in interest income on our financing receivables.
Current report
Operating loss from our Smart Water segment for the three months ended December 31, 2025, was $(0.8) million, in comparison to operating income of $0.4 million from the corresponding period of the prior fiscal year. The decrease was primarily due the decrease in revenue and higher research and development costs.
Current report
Operating Income (Loss)
Current report
Operating loss associated with our Energy Solutions segment for the three months ended December 31, 2025, was $(3.4) million, compared to operating income of $13.3 million for the corresponding period of the prior fiscal year. The decrease was primarily due to the decrease in revenue coupled by a high gross margin on our $17 million sale of ocean bottom noted in the first quarter of fiscal year 2025.
Current report
For the three months ended December 31, 2025, we used $0.3 million from financing activities for tax payments on stock-based compensation for the exchange of common stock.
Current report
At December 31, 2025 we were in compliance with all financial and non-financial covenants under the Agreement. We had no debt outstanding at December 31, 2025 and had a borrowing availability of $25 million.
Current report
Our available cash and cash equivalents decreased $15.8 million during the first quarter of fiscal year 2026, in large part due to equipment and raw materials need for our PRM contract. However, we received our first installment payment from our PRM customer of $6.8 million in February 2026 and expect to receive another $9.5 million by the end of the month.
Current report
Contingent Consideration
Current report
In August 2025, we acquired Geovox. In connection with the acquisition, we recorded an initial contingent earn-out liability of $2.5 million. Contingent payments, if any, will be based on eligible revenue generated during a four-year earn-out period. The maximum amount of contingent payments is $3.3 million.
Removed paragraphs (12)
Previous report
Effective October 1, 2024, the Company changed the composition of its three operating business segments and changed its methodology for allocating manufacturing costs including overhead and other costs of revenue to the segments. The business segments are now comprised of: Smart Water, Energy Solutions and Intelligent Industrial. The change methodology for allocating manufacturing costs affected each segment's operating income (loss) but had no effect on consolidated operating income (loss).
Previous report
Our Smart Water business segment comprises our market dominant water meter connector cable series known as Hydroconn®, and our Aquana branded remote shut-off water valves and cloud-based IoT Platform. In municipal and utility applications, our smart water products support the global smart meter connectivity water utility market. These products provide our customers with highly reliable automated meter-reading and automated meter infrastructure with our robust water-proof connectors. Our highly-ruggedized outdoor valves include the AquaFlex™ and AquaFlow™ remote shut off valves.
Previous report
Our Intelligent Industrial segment is comprised of diverse software and hardware solutions leveraging decades of sensor technologies for use by the U.S. Federal government, specialized contractors and academia. This segment also includes specialized contract manufacturing in the United States along with solutions for industrial screen printers.
Previous report
Consolidated operating expenses for the three months ended June 30, 2025, were $11.8 million, an increase of $0.9 million, or 7.9%, from the corresponding period of the prior fiscal year. Consolidated operating expenses for the nine months ended June 30, 2025, were $36.1 million, an increase of $5.4 million, or 17.7%, from the corresponding period of the prior fiscal year. The increase for both the three and nine months ended June 30, 2025 was primarily due to (i) higher personnel costs, including severance costs and acceleration of stock-based compensation expense and (ii) an increase in and sales and marketing costs.
Previous report
In June 2025, we sold our property located at 4318 Northfield Lane in Houston, Texas. The 17.3-acre property served as additional parking for our main campus and contained legacy structures used to support our manufacturing and warehousing operations. The property had been classified as assets held on our consolidated balance sheets since September 30, 2024. We recognized a gain on disposal of property of $4.6 million during the third quarter of fiscal year 2025. The gain is included as a component of income (loss) from operations on our accompanying consolidated statements of operations.
Previous report
Consolidated other income was $0.5 million for the three months ended June 30, 2025, compared to $0.3 million from the corresponding period of the prior fiscal year. Consolidated other income was $1.5 million for the nine months ended June 30, 2025, compared to $0.5 million from the corresponding period of the prior fiscal year. The increase for both periods was principally due to higher interest income attributable to our financing receivables.
Previous report
Operating Income
Previous report
Operating income from our Smart Water segment for the three months ended June 30, 2025, was $2.2 million, a decrease of $0.4 million, or 14.5% from the corresponding period of the prior fiscal year. Operating income from our Smart Water segment for the nine months ended June 30, 2025, was $4.0 million, a decrease of $1.3 million, or 25.1% from the corresponding period of the prior fiscal year. The decrease for both periods was due to an increase in selling and marketing and research and development costs associated with our increase in revenue.
Previous report
Operating loss associated with our Energy Solutions segment for the three months ended June 30, 2025, was $(1.2) million, compared to $(0.1) million for the corresponding period of the prior fiscal year. The increase in operating loss was largely due to the decrease in revenue and related gross profits. Operating income associated with our Energy Solutions segment for the nine months ended June 30, 2025, was $5.4 million, a decrease of $7.6 million from the corresponding period of the prior fiscal year. The decrease in operating income for the nine months ended June 30, 2025, was primarily due to (i) lower revenue and related gross profits. The decrease in operating loss for both the three and nine months ended June 30, 2025 was primarily due to (i) the decrease in revenue and related gross profits and (ii) higher research and development expense, primarily personnel costs.
Previous report
For the nine months ended June 30, 2025, we used $0.6 million from financing activities for the purchase of treasury stock pursuant to a stock buy-back program authorized by our board of directors. The program authorized us to repurchase up to $7 million of our common stock in open market transactions. The program was completed in the second quarter of fiscal year 2025.
Previous report
At June 30, 2025 we had no outstanding borrowings under the Agreement and our borrowing base availability under the Agreement was $14.9 million after consideration of a $0.1 million outstanding letter of credit. We were in compliance with all covenants under the Agreement. We do not currently anticipate the need to borrow under the Agreement, however, we may decide to do so in the future, if needed.
Previous report
Contingent Compensation Costs
Reworded paragraphs (25)
Previous wording
This Quarterly Report on Form 10-Q and the documents incorporated by reference herein contain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by terminology such as “may”, “will”, “should”, “could”, “intend”, “expect”, “plan”, “budget”, “forecast”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue”, “evaluating” or similar words. Statements that contain these words should be read carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial position or state other forward-looking information. Examples of forward-looking statements include, among others, statements that we make regarding our expected operating results, the timing, adoption, results and success of our rollout of our Aquana smart water valves and cloud-based control platform, future demand for our Quantum security solutions, the adoption and sale of our products in various geographic regions, potential tenders for permanent reservoir monitoring systems, future demand for OBX rental equipment, sales or rentals for our Mariner™ or Mariner Deep® nodes, the adoption of Quantum's SADAR® product monitoring of subsurface reservoirs, the completion of new orders for channels of our Pioneer™ system, the fulfillment of customer payment obligations, the impact of the current armed conflict between Russia and Ukraine, our ability to manage changes and the continued health or availability of management personnel, volatility and direction of oil prices, anticipated levels of capital expenditures and the sources of funding therefor, and our strategy for growth, product development, market position, financial results and the provision of accounting reserves. These forward-looking statements reflect our current judgment about future events and trends based on the information currently available to us. However, there will likely be events in the future that we are not able to predict or control. The factors listed under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024, as well as other cautionary language in such Annual Report and this Quarterly Report on Form 10-Q, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Such examples include, but are not limited to, the failure of the Quantum and OptoSeis® or Aquana technology transactions to yield positive operating results, decreases in commodity price levels, the failure of our products to achieve market acceptance (despite substantial investment by us), our sensitivity to short term backlog, delayed or cancelled customer orders, product obsolescence resulting from poor industry conditions…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This Quarterly Report on Form 10-Q and the documents incorporated by reference herein contain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by terminology such as “may”, “will”, “should”, “could”, “intend”, “expect”, “plan”, “budget”, “forecast”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue”, “evaluating”, or similar words. Statements that contain these words should be read carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial position or state other forward-looking information. Examples of forward-looking statements include, among others, statements that we make regarding our expected operating results, the timing, adoption, results and success of our rollout of our Aquana smart water valves and cloud-based control platform, future demand for our Quantum security solutions, the adoption and sale of our products in various geographic regions, potential tenders for permanent reservoir monitoring systems, sales or rentals for our ocean bottom nodes, the adoption of Quantum's SADAR® product monitoring of subsurface reservoirs, the completion of new orders for channels of our Pioneer™ system, the fulfillment of customer payment obligations, the impact of the current armed conflict between Russia and Ukraine, our ability to manage changes and the continued health or availability of management personnel, volatility and direction of oil prices, anticipated levels of capital expenditures and the sources of funding therefor, and our strategy for growth, product development, market position, financial results and the provision of accounting reserves. These forward-looking statements reflect our current judgment about future events and trends based on the information currently available to us. However, there will likely be events in the future that we are not able to predict or control. The factors listed under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, as well as other cautionary language in such Annual Report and this Quarterly Report on Form 10-Q, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Such examples include, but are not limited to, the failure of the Quantum and OptoSeis® or Aquana technology transactions to yield positive operating results, decreases in commodity price levels, the failure of our products to achieve market acceptance (despite substantial investment by us), our sensitivity to short term backlog, delayed or cancelled customer orders, product obsolescence resulting from poor industry conditions or new technologies, credit losses associated with …
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Unless otherwise specified, the discussion in this Quarterly Report on Form 10-Q refers to Geospace Technologies Corporation and its subsidiaries. We design and manufacture sophisticated technology solutions for applications in energy exploration, smart water management as well as industrial and Internet of Things. Our seismic equipment and services are marketed to the energy exploration industry and used to locate, characterize and monitor hydrocarbon producing reservoirs. We also market our seismic products to other industries for vibration monitoring, border and perimeter security and various geotechnical applications. We design and manufacture other products of a non-seismic nature, including water meter connector cables, imaging equipment, remote shutoff water valves and Internet of Things ("IoT") platform. Additionally, the company provides specialized contract manufacturing services. In recent years, the revenue contribution from our non-energy related products has grown to represent nearly half of our total revenue. Our business diversification strategy has centered largely on translating expertise in ruggedized engineering and technology manufacturing into expanded customer markets.
Current wording
Unless otherwise specified, the discussion in this Quarterly Report on Form 10-Q refers to Geospace Technologies Corporation and its subsidiaries. We design and manufacture sophisticated technology solutions for applications in smart water management and energy exploration. Our seismic equipment and services are marketed to the energy exploration industry and used to locate, characterize and monitor hydrocarbon producing reservoirs. We also market our seismic products to other industries for vibration monitoring, border and perimeter security and various geotechnical applications. We design and manufacture other products of a non-seismic nature, including Hydroconn® connector cables, imaging equipment, remote shutoff water valves and Internet of Things ("IoT") platform. Additionally, the company provides specialized contract manufacturing services. In recent years, the revenue contribution from our non-energy related products has grown to represent nearly half of our total revenue. Our business diversification strategy has centered largely on translating expertise in ruggedized engineering and technology manufacturing into expanded customer markets.
Previous wording
In commercial applications for multi-family and real estate property management, our remote sensing water valves offer asset managers the ability to gather accurate usage information, implement occupancy-based billing and submetering as well as guard against costly leak and burst events. The AquaSense remote disconnect valve and AquaControl smart water IoT platform allow customers that manage multi-family and commercial properties to monitor their properties for leak and burst events, with real-time notifications, complimented with our remote-shut off to stop water damage. These products also allow water utilities to control and monitor water use remotely, discontinue or limit service without placing its employees in potential harm or danger.
Current wording
Our remote disconnect valves and water IoT platform allows customers that manage multi-family and commercial properties to monitor their properties for leak and burst events, with real-time notifications, complimented with our remote-shut off to stop water damage. These products also allow water utilities to re-claim non-revenue water at a lower energy and field service cost through remote control of water service without placing their employees in potential harm or danger.
Previous wording
Our Energy Solutions business segment has historically accounted for the majority of our revenue. Geoscientists use seismic data primarily in connection with the exploration, development and production of oil and gas reserves to map potential and known hydrocarbon bearing formations and the geologic structures that surround them. This segment’s products include wireless seismic data acquisition systems, reservoir characterization products and services, and traditional seismic exploration products such as geophones, hydrophones, leader wire, connectors, cables and various other seismic products.
Current wording
Our Energy Solutions business segment has historically accounted for the majority of our revenue. Geoscientists use seismic data primarily in connection with the exploration, development and production of oil and gas reserves to map potential and known hydrocarbon bearing formations and the geologic structures that surround them. This segment’s products include wireless seismic data acquisition systems, reservoir characterization products and services, and traditional seismic exploration products such as geophones, hydrophones, leader wire, connectors, cables and various other seismic products. We believe our Energy Solutions products are among the most technologically advanced instruments and equipment available for seismic data acquisition.
Previous wording
We have developed multiple versions of a land-based wireless (or nodal) seismic data acquisition system including our most recent launch of the Pioneer™, an ultralight wireless sensor product. We believe our wireless sensor systems allows our customers to operate more effectively and efficiently because of its reduced environmental impact, lower weight, ease of operation, and which require less maintenance.
Current wording
We have developed multiple versions of a land-based wireless (or nodal) seismic data acquisition system including our most recent launch of the Pioneer™, an ultralight wireless sensor product. We believe our wireless sensor systems allow our customers to operate more effectively and efficiently because of their reduced environmental impact, lower weight, ease of operation and fewer maintenance requirements.
Previous wording
We have also developed an ocean bottom seismic data acquisition system called the OBX, and recently released Mariner™ and Mariner Deep®. Similar to our land-based wireless systems, these ocean bottom systems may be deployed in virtually unlimited channel configurations and do not require interconnecting cables between each station. Through June 30, 2025, we have sold 28,000 OBX stations and we currently have 9,000 OBX stations in our rental fleet. The Mariner® is a continuous, cable-free, four channel autonomous, shallow water ocean bottom recorder designed for extended duration seabed ocean bottom seismic data acquisition. Through June 30, 2025, we have sold 7,600 Mariner® nodes and currently have 3,000 Mariner® nodes in our rental fleet.
Current wording
We have also developed an ocean bottom seismic data acquisition system called the OBX, and recently released Mariner® and Mariner Deep®. Similar to our land-based wireless systems, these ocean bottom systems may be deployed in virtually unlimited channel configurations and do not require interconnecting cables between each station. The Mariner® is a continuous, cable-free, four channel autonomous, shallow water ocean bottom recorder. Mariner™ is the next generation node designed for extended duration seabed ocean bottom seismic data acquisition. The slim profile nodes, which are part of our shallow water stations, are ideally deployed as deep as 750 meters. The device continuously records for up to 70 days and offers more rapid recharging times. Its slim profile creates space savings on seismic survey vessels, allowing contractors to fit up to 25% more nodes into a download/charge container. Mariner Deep® is a deepwater, wireless seismic acquisition node capable of operating for 200 days in water as deep as 3,450 meters.
Previous wording
We also have a derivative of the OptoSeis® technology for high temperature downhole applications. The product known as Insight by OptoSeis offers a passive, all-optical downhole sensor network - no electronics downhole - resulting in years long operational lifetime at 150 °C.
Current wording
We also have a derivative of the OptoSeis® technology for high temperature downhole applications. The product, known as Insight by OptoSeis, offers a passive, all-optical downhole sensor network - no electronics downhole - resulting a year's long operational lifetime at 150°C.
Previous wording
We also produce a seismic borehole acquisition systems that employ a fiber optic augmented wireline capable of very high data transmission rates. These systems are used for several reservoir monitoring applications, including an application pioneered by us allowing operators and service companies to monitor and measure the results of hydraulic fracturing operations.
Current wording
We also produce seismic borehole acquisition systems that employ a fiber optic augmented wireline capable of very high data transmission rates. These systems are used for several reservoir monitoring applications, including an application pioneered by us allowing operators and service companies to monitor and measure the results of hydraulic fracturing operations.
Previous wording
Lastly, our SADAR® technology provides passive seismic real-time monitoring in emerging energy applications such as Carbon Capture and Storage (CCS) and geothermal energy. Our customers include various agencies of the U.S. government including the Department of Defense, Department of Energy, Department of Homeland Security and other agencies as well as energy companies needing real-time monitoring of seismic data.
Current wording
Our SADAR® technology provides energy companies real-time monitoring of seismic data.
Previous wording
Our robust manufacturing capabilities have allowed us to provide specialized contract manufacturing services for printed circuit board manufacturing, cabling and harnesses, machining, injection molding and electronic system assembly. We are certified to the latest revisions of ISO9001, 14001, 13485, and AS9100 standards and are committed to quality manufacturing, document and process control, qualification, non-conformance handling as well as continuous improvement. We maintain environmentally sound working conditions in all of our facilities.
Current wording
Our robust manufacturing capabilities have allowed us to provide specialized contract manufacturing services for printed circuit board manufacturing, cabling and harnesses, machining, injection molding and electronic system assembly.
Previous wording
For more than a decade our sensor products have been used for national security and homeland defense applications. More recently our SADAR® technology, has been used for border and perimeter security surveillance, cross-border tunneling detection and other products targeted at movement monitoring, intrusion detection and situational awareness.* *Our seismic sensors provide unique high definition, low frequency sensing that allows for vibration monitoring in industrial machinery, mine safety and earthquake detection.
Current wording
Our seismic sensors provide unique high definition, low frequency sensing that allows for vibration monitoring in industrial machinery, mine safety and earthquake detection.
Previous wording
Our Energy Solution segment saw a shift from rentals of our ocean bottom nodes to purchases of the equipment in fiscal year 2024, of which trend has continued in fiscal year 2025. This shift signifies our customer’s recognition of future backlog to justify ownership versus renting the nodes. We do not expect significant expansion of the ocean bottom nodal market, for we expect the market is saturable and future rental fleet use will come from our customers' need to temporarily expand their nodal fleet. We expect our Energy Solutions segment to provide a significant portion of our revenue for years to come, but in diminishing portion to our other segments. During the third quarter of fiscal year 2025, we entered into a PRM contract. The duration of the contract is expected to be approximately 18 months. Revenue will be recognized in our Energy Solutions segment over the duration of the contract.
Current wording
Our Energy Solution segment saw a shift from rentals of our ocean bottom nodes to purchases of the equipment in fiscal years 2024 and 2025. This shift signifies our customer’s recognition of future backlog to justify ownership versus renting the nodes. We do not expect significant expansion of the ocean bottom nodal market, because we expect the market is saturable and future rental fleet use will come from our customers' need to temporarily expand their nodal fleet. We expect our Energy Solutions segment to provide a significant portion of our revenue for years to come, but in diminishing portion to our other segments. During the third quarter of fiscal year 2025, we entered into a PRM contract. The majority of the contract is expected to be completed in approximately 18 months. Revenue will be recognized in our Energy Solutions segment over the duration of the contract.
Previous wording
We continue to maintain a strong balance sheet with no debt. Our current liquidity enables our ability to seek out business acquisitions, allows us to continue investments in capital assets and product research and development, which have historically driven revenue growth.
Current wording
We continue to maintain a strong balance sheet with no debt. Our current liquidity enables our ability to seek out business acquisitions and allows us to continue investments in capital assets and product research and development, which have historically driven revenue growth.
Previous wording
Three and nine months ended June 30, 2025, compared to the three and nine months ended June 30, 2024
Current wording
Three months ended December 31, 2025, compared to the three months ended December 31, 2024
Previous wording
Consolidated revenue for the three months ended June 30, 2025, was $24.8 million, a decrease of $1.0 million, or 3.9%, from the corresponding period of the prior fiscal year. The decrease was primarily due to lower utilization of our ocean bottom nodes rental fleet from our Energy Solutions segment. The decrease was largely offset by an increase in demand for our traditional seismic products, partly from the sale of our marine retrieval and steering device product line completed in the third quarter of fiscal year 2025. Consolidated revenue for the nine months ended June 30, 2025, was $80.1 million, a decrease of $20.1 million, or 20.0%, from the corresponding period of the prior fiscal year. The decrease was primarily due to lower product revenue from our Energy Solutions segment. Revenue for the nine months ended June 30, 2025, included a $17 million sale of ocean bottom nodes structured as a sales-type lease. However, in comparison, revenue for the nine months ended June 30, 2024 included a $30 million sale of our Mariner™ shallow water ocean bottom nodes. The decrease was also attributable to lower wireless marine rental revenue. The decrease in consolidated revenue for both the three and nine months ended June 30, 2025 was partially offset by an increase in demand for our Hydroconn® cable and connector products from our Smart Water segment.
Current wording
Consolidated revenue for the three months ended December 31, 2025, was $25.6 million, a decrease of $11.6 million, or 31.3%, from the corresponding period of the prior fiscal year. The decrease for the three months ended December 31, 2025 was primarily due to a decrease in revenue from our Energy Solutions segment attributable to (i) a $17 million sale of ocean bottom nodes in the first quarter of fiscal year 2025 and (ii) lower utilization of our ocean bottom nodes rental fleet. The decrease was largely offset by an increase in demand for our wireless land-based Pioneer™. The decrease in consolidated revenue was also attributable to lower demand for our Hydroconn® cable and connector products from our Smart Water segment.
Previous wording
Consolidated gross profit for the three months ended June 30, 2025, was $7.5 million, a decrease of $1.0 million, or 11.6%, from the corresponding period of the prior fiscal year. The decrease in gross profit was primarily due to a decrease in ocean bottom nodes rental revenue from our Energy Solutions segment. The decrease was partially offset by an increase in traditional seismic revenue, partly due to the sale of our marine retrieval and steering product line and related gross profits. Consolidated gross profit for the nine months ended June 30, 2025, was $29.4 million, a decrease of $7.2 million, or 19.7%, from the corresponding period of the prior fiscal year. The decrease in gross profit was primarily due to a decrease in ocean bottom nodes product revenue and rental revenue. This decrease was partially offset by a high gross profit margin on a $17 million sale of ocean bottom nodes in the first quarter of fiscal year 2025. The decrease in gross profit for both three and nine months ended June 30, 2025 was also due to an increase in tariffs on the raw materials we purchase.
Current wording
Consolidated gross profit for the three months ended December 31, 2025, was $2.7 million, a decrease of $17.5 million, or 86.6%, from the corresponding period of the prior fiscal year. The decrease in gross profit for the three months ended December 31, 2025 was primarily due to the decrease in revenue from our Energy Solutions segment coupled by a high gross margin on our $17 million sale of ocean bottom nodes in the first quarter of fiscal year 2025. The decrease in gross profit was also attributable to a lower utilization of our ocean bottom rental fleet, in addition to an increase in tariffs on the raw materials we purchase.
Previous wording
Revenue from our Smart Water segment for the three months ended June 30, 2025, increased $0.6 million, or 6.1%, from the corresponding period of the prior fiscal year. Revenue from our Smart Water segment for the nine months ended June 30, 2025, increased $6.7 million, or 32.7%, from the corresponding period of the prior fiscal year. The increase for both periods was primarily due to an increase in demand for our Hydroconn® cable and connector products.
Current wording
Revenue from our Smart Water segment for the three months ended December 31, 2025, decreased $1.5 million, or 21.0%, from the corresponding period of the prior fiscal year. The decrease was primarily due to a decrease in demand for our Hydroconn® cable and connector products.
Previous wording
Revenue from our Energy Solutions segment for the three months ended June 30, 2025, decreased $1.3 million, or 13.6%, from the corresponding period of the prior fiscal year. Revenue from our Energy Solutions segment for the nine months ended June 30, 2025, decreased $25.4 million, or 42.0%, from the corresponding period of the prior fiscal year. The components of this decrease were as follows:
Current wording
Revenue from our Energy Solutions segment for the three months ended December 31, 2025, decreased $9.6 million, or 39.7%, from the corresponding period of the prior fiscal year. The components of this decrease were as follows:
Previous wording
Revenue from our Intelligent Industrial segment for three months ended June 30, 2025, decreased $0.4 million, or 5.4%, from the corresponding period of the prior fiscal year. Revenue from our Intelligent Industrial segment for nine months ended June 30, 2025, decreased $1.5 million, or 7.6%, from the corresponding period of the prior fiscal year. The decrease in revenue for both the three and nine months ended June 30, 2025, was primarily due to (i) revenue recognized for the three and nine months ended June 30, 2024 on a government contract completed in the fourth quarter of fiscal year 2024 and (ii) lower demand for our imaging products. The decrease for both periods was partially offset by an increase in demand for our contract manufacturing services.
Current wording
Revenue from our Intelligent Industrial segment for the three months ended December 31, 2025, decreased $0.5 million, or 8.4%, from the corresponding period of the prior fiscal year. The decrease in revenue for the three months ended December 31, 2025, was primarily due to a decrease in demand for our industrial sensor products. The decrease was partially offset by higher demand for our contract manufacturing services.
Previous wording
Operating loss from our Intelligent Industrial segment for the three months ended June 30, 2025, was $(1.0) million, a decrease of $0.2 million, or 18.8%, million from the corresponding period of the prior fiscal year. The decrease was primarily due to lower operating expenses incurred during the three months ended June 30, 2025. The decrease in operating loss was partially offset by (i) decrease in revenue and related gross profits. Operating loss from our Intelligent Industrial segment for the nine months ended June 30, 2025, was $(3.3) million, an increase of $1.1 million, or 49.8%, from the corresponding period of the prior fiscal year. The increase in operating loss for nine months ended June 30, 2025 was primarily due (i) the decrease in revenue and related gross profits and (ii) higher research and development costs.
Current wording
Operating loss from our Intelligent Industrial segment for the three months ended December 31, 2025 decreased $0.1 million, or 13.5%, from the corresponding period of the prior fiscal year. The decrease for the three months ended December 31, 2025 was primarily due to a decrease in operating expenses. The decrease was largely offset by a decrease in revenue and related gross profits incurred during the period.
Previous wording
At June 30, 2025, we had $25.6 million in cash and cash equivalents and short-term investments. For the nine months ended June 30, 2025, we used $18.1 million of cash from operating activities. Uses of cash included (i) our net loss of $0.7 million, offset by non-cash charges of $9.8 million resulting from deferred income taxes, depreciation, amortization, accretion, inventory obsolescence, stock-based compensation and provision for credit losses, a (ii) $5.6 million increase in inventories for the strategic purchase of long lead-time components needed for use in wireless products, valves and contract manufacturing, (iii) $4.2 million decrease in trade accounts payable due to timing of payments to our suppliers and (iv) $0.6 million increase in other assets, primarily for the prepayment of insurance premiums. These uses of cash were partially offset by a (i) $2.2 million decrease in trade accounts receivables due to timing of collections from customers and (ii) $2.0 increase in other liabilities primarily related to accrued compensation costs.
Current wording
At December 31, 2025, we had $10.6 million in cash and cash equivalents. For the three months ended December 31, 2025, we used $15.1 million of cash from operating activities. Uses of cash included (i) our net loss of $9.8 million, offset by non-cash charges of $3.6 million resulting from deferred income taxes, depreciation, amortization, accretion, inventory obsolescence, stock-based compensation and provision for credit losses, a (ii) $4.0 million increase in inventories largely due to raw material purchases for use in our PRM contract, (iii) $4.1 million decrease in other liabilities due to a decrease in deposits held from customers on product sales and lower accrued compensation costs, a (iv) $3.2 million increase in notes receivable on product sales and (v) $3.0 million increase in other assets, primarily due to prepaid product purchases related to our PRM contract. These uses of cash were partially offset by a $5.1 million increase in trade accounts payable in large part due to raw material purchases for our PRM contract.
Previous wording
For the nine months ended June 30, 2025, we generated cash of $35.4 million in investing activities. Sources of cash consisted of (i) $28.4 million from the sale of short-term investments, (ii) $8.7 million of proceeds from the sale of property, plant and equipment and (iii) $5.1 million of proceeds from the sale of rental equipment. These sources of cash were partially offset by (i) $5.8 million for additions to our property, plant and equipment and (ii) $1.1 million for additions to our equipment rental fleet. We expect fiscal year 2025 cash investments in property, plant and equipment will be approximately $7 million. We expect fiscal year 2025 cash investments into our rental fleet will be limited unless we experience an expansion of customer demand of our rental fleet. Our capital expenditures are expected to be funded from our cash on hand, short-term investments, internal cash flows, cash flows from our rental contracts or, if necessary, borrowings under our new credit agreement.
Current wording
For the three months ended December 31, 2025, we used cash of $0.4 million in investing activities. Uses of cash included (i) $2.5 million for additions to our property, largely offset by $2.1 million of proceeds from the sale of rental equipment. We expect fiscal year 2026 cash investments in property, plant and equipment will be approximately $5 million and do not anticipate a significant increase to its rental fleet.
Previous wording
On July 26, 2023, we entered into a credit agreement (the “Agreement”) with Woodforest National Bank ("Woodforest"), as sole lender. The Agreement refinanced our credit agreement dated May 6, 2022, with Amerisource Funding, Inc., as administrative agent and as a lender, and Woodforest, as a lender. The Agreement provides a revolving credit facility with a maximum availability of $15 million. Availability under the Agreement is determined based upon a borrowing base comprised of certain of our domestic assets which include (i) 80% of eligible accounts receivable, plus (ii) 90% of eligible foreign insured accounts, plus (iii) 25% of eligible inventory plus (iv) 50% of the orderly liquidation value of eligible equipment, in each case subject to certain limitations and adjustments. Interest shall accrue on outstanding borrowings at a rate equal to Term SOFR (Secured Overnight Financing Rate) plus a margin equal to 3.25% per annum (7.65% at June 30, 2025). We are required to make monthly interest payments on borrowed funds. The Agreement is secured by substantially all of our assets, except for certain excluded property. The Agreement requires us to maintain a minimum (i) consolidated tangible net worth of $100 million, (ii) liquidity of $5 million, and (iii) current ratio no less than 2.00 to 1.00, in each case tested quarterly. The Agreement also requires us to maintain a springing minimum interest coverage ratio of 1.50 to 1.00, tested quarterly whenever there is an outstanding balance on the revolving credit facility. Effective July 26, 2025, the Agreement was amended to extend the maturity date from July 26, 2025 to August 26, 2025. The Company is currently negotiating a long-term maturity extension on the Agreement.
Current wording
On August 29, 2025, we amended our credit agreement (“the Agreement”) with Woodforest National Bank. The Agreement extended our revolving loan agreement, dated as of July 26, 2023, with Woodforest. The Agreement is for a three-year term and provides a revolving credit facility with a maximum availability of $25 million. Interest shall accrue on outstanding borrowings at 30 Day Term SOFR plus a margin equal to 2.75% per annum. We are required to make monthly interest payments on borrowed funds. The Agreement is secured by substantially all of our assets, except for certain excluded property. The Agreement requires us to maintain (i) a minimum consolidated tangible net worth of $85 million, (ii) minimum liquidity of $10 million, which includes cash and amounts available to borrow and (iii) a minimum asset coverage ratio of 2.00 to 1.00. The Agreement also requires us to maintain a springing minimum interest coverage ratio of at least 1.50 to 1.00, tested quarterly whenever (a) there is an outstanding balance on the revolving credit facility or (b) have letter of credit exposure greater than $1 million. Effective December 31, 2025, we entered into a limited waiver agreement with Woodforest which waived our springing minimum interest coverage ratio through February 16, 2027.
Previous wording
Our available cash, cash equivalents and short-term investments was $25.6 million at June 30, 2025, which included $1.0 million of cash and cash equivalents held by our foreign subsidiaries and branch offices. In the absence of future profitable results of operations, we may need to rely on other sources of liquidity to fund our future operations, including executed rental contracts, available borrowings under the Agreement assuming a long-term maturity extension in reached, sales or leveraging real estate assets, sales of rental assets and other liquidity sources which may be available to us. We currently believe that our cash and short-term investments will be sufficient to finance any future operating losses and planned capital expenditures through the next twelve months.
Current wording
In the absence of future profitable results of operations, we may need to rely on other sources of liquidity to fund our future operations, including our backlog, executed rental contracts, available borrowings under the Agreement through its expiration in July 2028, sales or leveraging real estate assets, sales of rental assets and other liquidity sources which may be available to us. We currently believe that our cash, and amounts available under the Agreement if needed, will be sufficient to finance any future operating losses and planned capital expenditures through the next twelve months.
Previous wording
During the nine months ended June 30, 2025, there has been no material change to our critical accounting estimates discussed in Item 7 of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.
Current wording
During the three months ended December 31, 2025, there has been no material change to our critical accounting estimates discussed in Item 7 of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025.