Release Date: December 09, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• International bookings rebounded significantly, up 86% year over year, indicating recovery from COVID-19 impacts.
• Domestic LRAD systems for law enforcement showed noticeable improvement, driven by acquisitions and better budget environments.
• Record software bookings increased by 46% year over year, with significant contracts like the statewide EVAC contract in Oregon.
• The $75 million project with Puerto Rico Electric Power Authority is progressing well, with designs approved for the first three groups of dams.
• Genasys Protect software is driving hardware sales, exemplified by the $73 million in hardware-related bookings in Puerto Rico.

Negative Points

• Fiscal 2024 was financially disappointing, with weak hardware revenues leading to results below targets.
• Total revenue for the fiscal year decreased by 49% compared to fiscal 2023, primarily due to a 61% drop in hardware revenues.
• Gross profit margin decreased to 40.8% in the fourth quarter, down from the previous year due to reduced overhead absorption.
• Operating expenses increased to $9.9 million in the fourth quarter, up from $7.9 million in the previous year.
• GAAP net loss for fiscal 2024 was $31.7 million, significantly higher than the previous year's loss of $18.4 million.

Q & A Highlights

• Warning! GuruFocus has detected 10 Warning Signs with GNSS.

Q: Could you provide more details on the timeline for revenue contribution from the PREPA project and when deposits for the third group might be expected? A: Richard Danforth, CEO: The March quarter is a reasonable expectation for revenue contribution. We have invoiced for the second group and will soon invoice for the third group. The fourth group is scheduled for later in the fiscal year.

Q: What are the current challenges in the installation process for the PREPA project, and how quickly can you progress once you establish a cadence? A: Richard Danforth, CEO: The installation process is complex due to multiple dam owners and their unique challenges. We will have a better understanding once we gain more experience with these owners. Everyone is eager to proceed quickly.

Q: Are there any updates on potential additional opportunities in Puerto Rico beyond the dam projects? A: Richard Danforth, CEO: We expect an RFP for additional hardware in an unrelated application later this fiscal year.

Q: Regarding the CROWS program, do you anticipate any revenue this year, and how are current government resolutions affecting you? A: Richard Danforth, CEO: The current continuing resolution has no impact at this time. We expect the federal budget to be passed around March, similar to last year, and remain optimistic about defense funding.

Q: Can you provide any metrics or insights on the Evertel (CONNECT) acquisition, particularly regarding user numbers or ARR? A: Dennis Klahn, CFO: Customer count is growing, with over 400 customers. The size of customers varies greatly, affecting average revenue per customer. We are tracking metrics, and both customer count and ARR are trending positively.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.