Genasys Reports Revenue Growth Driven by Puerto Rico Dam Work

Puerto Rico, August 15, 2025

News Summary

Genasys posted a significant revenue increase driven largely by implementation work on an Emergency Warning System for multiple Puerto Rico dams. Quarterly revenue rose on strong hardware sales and early project billings, while gross margins fell due to percentage-of-completion accounting and underutilized hardware capacity. The company recorded a GAAP net loss and an adjusted EBITDA loss, announced workforce reductions expected to save about $2.5 million annually, and reported a software pipeline exceeding $60 million. Management expects Puerto Rico installations to boost future margins as systems are accepted and additional contract deposits fund production.

Genasys Reports Q3 FY2025 Revenue Rise Driven by Puerto Rico EWS Work; Backlog and Software Pipeline Grow

Genasys Inc. released its fiscal third quarter results for the period ended June 30, 2025, showing $9.857 million in revenue, often rounded to $9.9M. The company posted a 38% year-over-year increase from the prior-year quarter, with software revenue up 7% and hardware revenue up 50%. Recurring revenue also grew by 8%, while ARR reached $8.7 million.

The quarter carried a gross profit margin of 26.3%, down from 52.8% a year earlier, a decline attributed primarily to percentage‑of‑completion accounting on the Puerto Rico project and underutilization of hardware revenue. Operating expenses totaled $8.522 million, a reduction from $9.145 million in the prior year, while SG&A remained broadly flat and R&D declined 16% year over year.

Net results reflected the margin pressures and cost structure, with GAAP net loss of $(6.487) million ($(0.14) per share). The company also reported Adjusted EBITDA of $(4.781) million, versus $(4.329) million in the prior-year period. Liquidity stood at $5.5 million in cash, cash equivalents and marketable securities as of June 30, 2025, down from $13.1 million on September 30, 2024.

Puerto Rico Emergency Warning System (EWS) project highlights

The August 2024 definitive agreement with PREPA aims to deploy an Emergency Warning System to safeguard residents and visitors downstream of Puerto Rico’s 37 dams. The overall project is divided into seven groups of dams, each with its own Emergency Operating Center. The first three groups carry a combined value exceeding $36 million, with PREPA paying a 60% deposit on each group upon design approval to facilitate procurement, manufacturing and delivery.

In the latest quarter, Genasys recorded $4.3 million in project-related revenue from the Puerto Rico EWS initiative, reported with very little profit margin. To date, the company has recognized $5.6 million in Puerto Rico-related revenue with margins below 30%. Revenue recognition follows a percentage‑of‑completion approach, with initial instrumentation deliveries recognized at cost and subsequent installation work recognized hourly as it unfolds.

Management has guided that total Puerto Rico-related revenue for fiscal 2025 will fall in the range of $15 million to $20 million, subject to execution timelines. As each dam’s system is completed and accepted, the remaining 40% of the group value is paid. The company expects revenue and profit recognition to accelerate in fiscal 2026 as installations advance and earlier instrumentation revenue is realized, with the majority of the early group revenues expected to be recognized in the September quarter.

Headlines tied to Puerto Rico included in the company’s coverage emphasize the acceptance status of at least one dam and updates indicating that installations are underway across all dams in the first two groups. The company also noted that the remaining deposit for the third group was confirmed as transferred, signaling ongoing progress in the project timeline.

Other programs, backlog and software pipeline

Excluding Puerto Rico, hardware bookings have shown year-over-year improvement. The U.S. Army has issued an RFQ for an initial production order in support of the CROWS AHD program, with management indicating the initial LRAD equipment order could be in the $8.0 million to $8.5 million range. This order, if realized, would push hardware bookings for fiscal 2025 above the prior-year period and keep hardware bookings growing. Current CROWS AHD backlog is expected to exceed $16 million when excluding Puerto Rico.

Software demand remains robust but was constrained by the uncertainty of federal funding sources, including UASI, HSGP, BRIC and FEMA. The company reported its software pipeline has expanded to unprecedented levels, buoyed by nationwide awareness from recent events and ongoing procurement efforts. Management cited a software backlog greater than $60 million on a 12-month horizon.

The Puerto Rico project interacts with the software and hardware backlogs in a way that the company says raw cash receipts may outrun revenue recognition for a period, as the project uses percentage‑of‑completion accounting. Separately, other analysts’ notes referenced a wide backlog range for Puerto Rico and total software/backlog expectations; however, the company’s own figures focus on the tangible $60 million-plus software backlog alongside a multiyear hardware and services pipeline.

Margins, accounting, and cost-reduction actions

The Q3 margin dip is tied to the Puerto Rico project’s accounting treatment and underutilization of hardware revenue. Initial instrument deliveries are recognized at cost, with subsequent installation work recognized on an hourly basis. Management expects margins on the Puerto Rico project to improve as installations progress and profits on earlier instrumentation revenues are realized, including recognition at 100% gross margin upon final acceptance of instrumentation.

To address operational costs, Genasys announced plans to reduce operating expenses tied to its software business, targeting $2.5 million in annualized savings beginning in fiscal Q1 2026. The actions involve cutting 19 full-time positions, including 10 FTE reductions in Spain. In the near term, fiscal Q4 2025 operating expenses are expected to be similar to Q3 levels, with the savings taking effect in fiscal 2026.

Liquidity, outlook and management commentary

As of June 30, 2025, the company held $5.5 million in cash and equivalents, down from the prior year; management sees upcoming Puerto Rico invoice receipts and U.S. Army cash flows as supportive of capital sufficiency. Management described the second half of fiscal 2025 as having accelerated dramatically, noting continuous improvement in hardware bookings and ongoing constraints in software due to federal funding uncertainty. While the company expects software deal conversions to recover as federal funds normalize, ongoing cost discipline is being pursued.

Two press releases accompanied the results: one focusing on the quarterly financials with status on the Puerto Rico dam acceptance, and another providing an update on the Puerto Rico EWS project and its implementation phase. Both releases framed progress within the broader context of the company’s protective communications platform and its global footprint.

Timeline, deposits, and shipments in Puerto Rico

Since the August 2024 definitive agreement, PREPA and Genasys have pursued full implementation. The first-quarter earnings release noted that two deposits had been received, with a third expected soon; a subsequent update in May indicated receipt of a partial third deposit, with the remainder anticipated in the following weeks. Initial construction began in early April, with instrumentation and materials being assembled in San Diego and shipments for the first three groups expected to begin in the company’s fiscal fourth quarter. Cash receipts are expected to precede revenue and profit recognition, with the majority of revenues from the first three groups recognized in the September quarter.

Forward-looking statements and risk considerations

The company’s releases include standard cautionary language regarding forward-looking statements and risks, including supply-chain dynamics, funding delays and other factors. The company also notes the availability of risk factors in its latest Form 10-K. Investors are reminded that recommendations and forward-looking statements are subject to change and that the company does not undertake a duty to update them unless required.

Key features and takeaways

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Additional Resources

• Genasys Inc. Reports Fiscal Third Quarter 2025 Financial Results — Business Wire
• Wikipedia: Genasys
• Genasys Q3 2025: Unpacking contradictions — AInvest
• Google Search: Genasys Q3 2025 analysis
• Genasys backlog hits $61 million — AOL Finance
• Encyclopedia Britannica: Genasys
• Genasys Inc. Provides Update on Puerto Rico Dam EWS Project — Business Wire
• Google News: Genasys Puerto Rico dam Emergency Warning System
• Genasys Inc. Reports Fiscal Second Quarter 2025 Financial Results — Business Wire
• Google Scholar: Genasys Emergency Warning System

Author: RISadlog