GNSS - Earnings call transcript Q1 2020

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Operator

Good afternoon and welcome to Genasys Incorporated Fiscal First Quarter 2020 Financial Results Call. All lines have been placed in a listen-only mode and the floor will be opened for questions following the presentation. [Operator Instructions]

At this time, it is my pleasure to turn the floor over to Satya Chillara, Investor Relations for Genasys. Sir, the floor is yours.

Satya Chillara

Christie. you, Thank and financial everyone, Genasys' first fiscal Good conference welcome call. XXXX results quarter afternoon, to I'm Investor Satya Chillara, Relations for Genasys. With Richard Danforth, Klahn, call today Officer; the of Dennis Officer Chief me and Financial Chief on Executive Genasys. are

based during Before forward-looking the opportunity remind our this facts, statements on of call of you to forward-looking statements make made course to management the historical we will I this during statements. expectations. begin, are like this take are call would that that Other current statements than

During we forecast views and the could call, subject forward-looking may this results expectations, discuss from risks outlook for statements expressed company's today. or uncertainties to These actual materially plans, and the future performance. differ are

the the section XX-K any specifically For those company's statements, Form year Risk fiscal intent the update forward-looking more XXXX. as regarding refer except Factors or risks information of Genasys for potential September and ended otherwise XX, uncertainties, to disclaims obligation to stated. please

non-GAAP bookings consider and bookings with metrics leading We the production these We respect performance. operational investors support may of future company's indicators metrics planning. to to to which also and we and provide information of use discuss evaluating helpful believe revenues backlog, backlog

scheduled measures the a measure customer of is internal metric given shift revenue Backlog is dollar the the related to recognition. are operational in months. Bookings orders timing value purchase of of an received the executed regardless total that next purchase period, a in of XX that the orders

call page our four through Relations hours replay on of approximately this the Finally, be will in available a website. Investor

Genasys' Klahn. to floor pleasure my Dennis the time, Officer, Financial to At this Dennis? Chief over it's turn

Dennis Klahn

Afterwards, first will open welcome everyone. today's on questions. the recap with the we'll an update results. then Richard open you, the business. for financial of XXXX call call Thank and quarter a provide I'll Satya, fiscal

$X.X million XXXX. $X.X profitable XXXX quarter prior was the or year with gross to over the the in revenue. The was first quarter Revenues fiscal of year product for fiscal of of Gross due million improvement first the were compared XX% quarter in mix. profit million $XX.X profit XX.X% more

fiscal the the were $X.X X% in warning in This of Operating million, prior primarily expenses period compared and quarter support an increased Union of year. software the public to level same of other the reflects in the discussed increase to company's development previously initiatives. investment European XXXX first

quarter used income $X.XX million with We $XXX,XXX compared $X quarter or share in per the improvement of share net generated million. of $X.XX per activities of diluted or in balances compared last fiscal in $X.X offset XX, operating Cash the first recorded last income $X.X year. represents year. the same somewhat the of diluted September net quarter cash quarter due in the an quarter, This compared by primarily with The at in to with this first was reduced income quarter. the and liabilities, million higher use charges net This XXXX. non-cash receivable accounts was and was

$X.X balance $XX.X in million and million September XX, was mostly activities decrease the December the compared due million, sheet strong. used cash at The remains cash to in operating equivalents equivalents $XX.X were XXXX. XX, Our quarter. cash at in cash and Cash to XXXX,

the result million in million to $X of the XX, XX, of compared repurchases to the no company There was million at at increase XXXX $XX.X primarily income quarter. by The stock net increased capital December $XX.X XXXX. in were Working September quarter. generated

is of the program $X authorized year, $X.X XX, December million available. repurchase still which a through board Last million XXXX,

I call that, turn would Richard. to to With over like the

Richard Danforth

you, the and afternoon Thank on Dennis, good call. to everybody

expectations. were quarter in revenues our First line with

and in on our the revenue to pipeline, year backlog -- first than of last growth to revenues. in second million quarter half be continue we to continue the our anticipate revenues on stronger sales $XX.X expect growing bookings million discussed XXXX a respectively, fiscal half and As $X.X Based fiscal we XXXX. anticipate, call, we fiscal and year first

The information about the software the Warning NEWS. Union for is discussion acronym European public module. our warning more Emergency questions call for system Genasys' National NEWS last on System, directive our NEWS raised

many has using critical and deliver and of excessive NEWS to risks to emergency since As XXXX you alerts heat, Australia know, flooding notifications fires, at populations other been from events.

phone implement Union having June emergencies. in. public by major directive by of opt member also tourists public notify must can must mandates EU to residents reach system that communications. country system geo-targeted include a The system The without emergencies of must warning and mobile every XXXX users that warning emergency The European affected

critical Each with range a which two sends country complying are; cell the mobile The its second, receive and warnings sends of ensuring to and in location-based towers the cell information system. phones And for best other alerts, during one-to-many SMS, and communication. fulfill situations. broadcast, to that directive EU ALERT the directive text enables options is crisis to two-way area and first, messages citizens visitors to cell within specific selected AMBER and similar system devices a responsible

mobile even required. geo-location ensure receive SMS configuration, even officials and management if visitors. to emergency progress. are tourists tourists cell affected on devices of mobile alerts, opt-in channels. and send download, specific capabilities areas and registration, monitor their cell on directly and -- no in the evacuation carrier Based of in on broadcast phones phones no networks areas of all to networks NEWS deployed warnings No across carrier NEWS is different instructions crisis cell no NEWS mobile The people powerful

population. for do not carrier NEWS people many reliably. This NEWS' geo-location as quickly rates direct and and alerts, to access ignore attention notification mobile to officials the and to deliver government emergency regional and alerts to to warnings and notifications alerts and ensures that imperative tend geo-fencing immediately warnings With affect them. only local, national empowers managers maximizing are delivered is at-risk

sending sent traffic alerts egress and of updated alert, notification. everybody real-time area all of If crisis-affected is monitors wide is phones NEWS evacuations are emergency density prioritize cell or population in provides by ensuring notify This and movement local before also evacuees an routes. awareness area. and particular ordered, NEWS critical the a congested to information less situational locating in area

Our has million member last telecom deliver EU SMS XXX industry to population are and large over directive the presentations Genasys ongoing notifications years proven address solution. seven in working well positioned as emergency providers complete to experience Australia provide EU Government-requested more with Genasys discussions nations. follow-on in and than with to a

year. expect We fiscal proposal for request formal this

mass the Outside that delivers directive, only and a of public hardware the platform provider is alerts and unified Genasys EU notification. safety software emergency

Rico unified is orders. the -- of uniform and previously basis platform the Our Puerto announced California system

alerts and emergency agencies across multiple integrates FEMA to safety channels, options. data provide and sources mobile all public communication supports platform geo-targeted and industry-leading Genasys emergency activation control notification, easily remote alerts and The advanced

Messages the cloud-based earthquakes, and flooding, and are landslide, capabilities are integrated detection for system. Genasys fires Dynamic through managed delivered software. traffic maps, the command census control and command control other information, and into forecast and weather

In social systems. addition to radio, the our alerts -- apps media, TV, SMS emergency other and mass and channels Genasys cell including delivers LRAD mobile through communication speaker notification safety broadcast, public

systems area vocal audible industry's best with the Our emergency notification alerts coverage. clarity and broadcast and

infrastructures backup battery stay go operate used information urgent to connectivity, the critical solar notifications, Featuring telecommunication existing and more continue & to channels power when everybody power, they more turned-off. need safe. the will the distribute to The likely down systems or are receive satellite

officials on management that safety practices state notification emergency California with implement fund advanced and will measures system is members mass and work of and progressing. legislator the public Our

from in this for to interest year. Laguna other NEWS and United our year. In A requests fiscal in and Safety Union municipal proposal European Newport Asia module and States addition this expected in the is Beach, significant expected culminate Valley Mass Public Pacific, increase other integrated countries fiscal Mill nations, solution to Beach orders Notification are several the software

and XXXX. segments fiscal revenue orders from Latin security U.S. international Hailing America Pacific growth anticipated defense Strong backlog in have robust in for our and XXXX. in a pipeline and are domestic Safety Significant Genasys business Asia on-track Notification further and Military, and the both Device fiscal growth and business Europe, Acoustic region also Public Mass the homeland

the for to turn back I'll Q&A. that operator With it over

Operator

first from with And Riley Instructions] B. Aman comes [Operator question our Gulani FBR.

Aman Gulani

for guys, thanks Hey my taking question.

Acoustic in your XXXX? Army wanted Hailing get Device for sense orders there revenue? What's a Just of for to expectation terms from the

Richard Danforth

Aman it. office. But in before 'XX maybe for will or slightly that when order likely pent-up order see than some probable for smaller the budgets said demand the the had we'll be actually program that's XXXX. to I've the XXXX's order get

Aman Gulani

timing it. Got these what's Laguna And how looking long Like orders to at that? Beach Thanks. for Newport revenue? then from does convert and the that like just Beach, like

Richard Danforth

to time I'd permitting to can takes quarter depends quarters access get. say two one sometimes some that require It and installation from

Aman Gulani

the in above you the see gross Thanks. gross Okay. think do is then XX%. What margin normalize driving improvement And to to margin? nice starting

Richard Danforth

shown Dennis it's As last points. mix. help think at year-over-year We the XX%? in quarter it me recall some Dennis gross but you really mentioned margin last we're improvement, Mix -- X.X I is -- if has

Dennis Klahn

XX%.

Richard Danforth

XX% something like that.

has mix most it of So Aman.

Aman Gulani

it. Got

Okay. for me. for And relative think the about for XXXX? we should How to R&D last cadence XXXX question

Richard Danforth

Growth.

line putting line. SG&A both in We the are R&D the and

realized than We spoke about. of expect of we in XXXX more in support some the 'XX I in initiatives

Aman Gulani

more software Would the Right. business focused piece on it's of hardware? the largely or say you

Richard Danforth

Software.

Aman Gulani

Okay. Thank you. on. I’ll it pass

Satya Chillara

Thank you, caller Aman please. Next

Operator

from question Woo Capital. comes with go Please And our Ed ahead. next Ascendiant

Ed Woo

the for actually request Yes. question their mentioned be the What to selected that from there's taking you potentially product? is a for for getting think going My you proposals for timing delivering would Thank request to be some for my question. EU to do mandate. you proposals actually

Richard Danforth

to proposals mean this countries fiscal don't this I it? out doing proposals expect question. will that handful I don't a these have this. come Ed How long to be to know the I EU to just I they evaluated be that multiple do of the the in time is know. are year. and take of first there evaluate answer

to it's more going longer expect. anybody So likely take would than

Ed Woo

amount what sales? about then my I sounds included is margin question And of because you of mix. it do other think potential? All of Is you right. gross greater longer-term product the improvement that's being That about good. with the because And gross talked your software know margin

Richard Danforth

dominated us revenues United we still are if in you the continued States in the we team opened in recently to FY years. second think since We at I has acquired Spain the have in as count our EU team Spain. development In two just regions last look grow our That doubled the pursuits world. XXXX a hardware. and about of Genasys to other by and software we support Australia, today office

software see FY start the I think side XXXX. growth substantive in our you'll more likely in and revenue to XXXX

Ed Woo

And -- what is long Great. the term

Richard Danforth

out broke Ed. You

Satya Chillara

Ed?

Operator

line as dropped. We like. you'd our have on if may believe can question I to And next move

Richard Danforth

Sure.

Satya Chillara

Yes, please.

Operator

Rivershore from question Rick next go Investments. comes Neaton with Please Our ahead.

Rick Neaton

talked you for guys. expectations out assumed that any proportion Thank your year? from about and proration later RFPs the or Do bookings getting EU you. Good this your include XXXX revenue in afternoon, revenue business

Richard Danforth

No. for in substantive is No fiscal a as ago don't -- said the moment EU think we're Rick going this our see year I XXXX revenue timing timing I that such initiative. any to

Rick Neaton

Okay.

So that's or bookings that you're assuming -- of quarter? you so each put any that your out numbers backlog in not your in

Richard Danforth

No.

Rick Neaton

your And just system and Okay. identify NEWS phones I'm location turning their how without Thanks. mobile them that services? does works? the on curious detect

Richard Danforth

necessary. are services not location The

Rick Neaton

tower Okay, is just the phone receive if is and should message not that some identify a and then where it so they determine then or detect should it right? off of

Richard Danforth

Yes.

Rick Neaton

as year. a you your your we your as recognition XX-XX backlog this should in into numbers -- second And Okay. the we press XXXX? numbers in according see half some split get shifts revenue about said fiscal in release of in bookings And

Richard Danforth

Yes.

Rick Neaton

Thanks, I’ll it. guys. Thanks. that’s I it. -- appreciate

Richard Danforth

Rick. Thanks,

Satya Chillara

please. caller Next

Operator

Billeadeau next ahead. our from comes with question And go Please Walrus Partners. Scott

Scott Billeadeau

to to question another Thanks it's out EU there. Do relating just already compared for size be say related questions. implementations past? of I Great. are -- what have to those you probably couple in to have what going maybe those. just taking the of any was based you idea timing. foresee the Do contracts A of them those asked my potentially, you what on the will

Richard Danforth

Yes.

close those, comment We have gets our to too internal on estimates going to not but it on pricing. I'm that Scott,

leave it at we'll that. So

Scott Billeadeau

that this out these guess, are I idea take the good then how political RFPs long stuff. will and you And of going them in I and Yes. all you be crap know is again respond year, to you how don't much and mean kind yes, get

of and you've on How it's things large out conversion in not there So the some domestic good talked of seen More forth What's -- the about this -- expect you give? about probably of -- from or terms year rates anything what County any you there. -- business? a pipeline. color so and Orange to can or what the

Richard Danforth

Yes.

growth all bookings the of -- regions revenue expect We geographic in world.

Scott. solid pretty looks it but others, than more Some

Scott Billeadeau

All Okay. right.

Richard Danforth

Scott. you Thank

Operator

And go Please next [ph] with on we'll move to David Summit Luke Financial. ahead.

Unidentified Analyst

big think all one, plus, of Hello. delivered? that writing $XX order remember quarter that million my the split order order pretty the saying case up that I Was Thanks be taking to four in or close that much I would the you quarters between for was one-fourth that After Army revenues call. of XXXX.

Richard Danforth

Yes.

Unidentified Analyst

Okay. Thank you.

Satya Chillara

Thanks, David.

caller Next please.

Operator

[Operator Jonathan -- from Instructions] private Korten [ph], -- comes And our I'm next from question sorry Lloyd investor. a

Unidentified Analyst

Hey, you? gentlemen. Hey are Richard, how

Richard Danforth

are How Lloyd. you? Good

Unidentified Analyst

good. before some in was while doing. have after different talking America in few initiative typing Maybe here I’m aware questions. going here I were talk that states the Thank I -- you. Europe? but a people of about certainly you about have we you're California it, I'm But do we notes this

Richard Danforth

a perspective, a hardware and both software Lloyd. Yes. From

Unidentified Analyst

various go the business? I'm many cities. includes that the after Genasys we both that people How for which do of have talking kind about program, them

Richard Danforth

U.S. outside put is prosecute will to San the the U.S. the back then in the opportunity. the go network team together usually identifying Diego, we'll entire and opportunities and come The to opportunities a

Unidentified Analyst

states what with have In guess do all go other we I words, in XX different… after individually we And XX foothold asking, got you've California. a I'm here. states

Richard Danforth

Yes states all not buy. eventually are to you going to, but XX have

be disasters of Tsunamis will thing. have areas, floods, the kind that states it tornadoes, historically with burdened fires, in the it So been that be

Unidentified Analyst

a share. Rico base we've has California I be and their would Florida Puerto target perfect and think would got Florida

there? we'll think You in get

Richard Danforth

We're as speak. working we opportunities in Florida

Unidentified Analyst

Okay.

extremely Next us, be European for can the obviously. thing, initiative lucrative

many going office the are have assume, each submitting do right? initiative be different country is I So in after we there there? be we have their to as how going to going mean, own, an Spain, I people

Richard Danforth

Yes. Yes.

Unidentified Analyst

We amount have few a -- a of sales team that -- X people there?

Richard Danforth

think, added, people last call do the on we're quarter next and this We more putting and I two that. We've certainly. growing throughout we're since people and

Unidentified Analyst

whether ever be any alliance telecom any of European Great. it domesticated we Is about -- telecom, telecoms, consideration since with or an there thought a --

Richard Danforth

Yes.

Unidentified Analyst

Good. Okay. you. Thank

and of Thank today for it luck good you. rest for the That’s Okay. the year.

Richard Danforth

Thank you.

Satya Chillara

Thank you, Lloyd.

caller, Next please?

Operator

next caller Jonathan Manela ahead. with is Our Please Edge. go

Jonathan Manela

you? Hey, earlier. are How Richard. I dropped I apologize,

Is expectation apologize. year? I for this, fiscal still this answered it you bookings If your growth for

Richard Danforth

I do. Yes.

Jonathan Manela

be obviously, it be your similar, sort fourth Okay. very Do expectation the lumpy -- expect you will towards -- of is quarter? it'll

Richard Danforth

a over the move to years, always bookings of further of you close always Bookings right nature that's the I've Jonathan, the our can years. have and be grown before, They lumpy. to expect it. just four at than three CAGR said XX% last

but think out flatten bit slope a that the I remain XX%. positive, from will

Jonathan Manela

you. I got Yes. you. I got

The noticed a in BlackBerry might strategic other hires topic, explored strategic for business some are any with that there thing that AtHoc company? is, business. been that BlackBerry's I news the on Are there separate there being has from was initiatives opportunistic lately. -- just recent be were the

Richard Danforth

not on I'm Jon. comment going to that,

Jonathan Manela

Okay.

Okay. That’s all.

Richard Danforth

you. Thank Okay.

Satya Chillara

please? caller, Next

Operator

[ph] take [ph]. Jack Shaw we'll Please Personal question Next, a ahead. from with go Share

Unidentified Analyst

have about or it what always say, you to doing? Hi. we've I'm to you've How strategic small while prospective the huge you to talked you're and things doing. a add-ons ever any past of spoke you in are fish that fish, that looking calling listen do because the is, the for your me market My call you're question relatively occurs up? is and big

Richard Danforth

Would ever us the fish call big up?

Unidentified Analyst

should what, I'm be that? Do maybe You say, bigger words, know players, know, to this us. look saying? spot, you you part that a In does Genasys so some ever in they great is what the of Genasys get of market other big

Richard Danforth

than far. this, market the are And you that's There shaped out we of aren't. the tell they other of one way people player I'll the lot and course, has so there's There's, major are. in market. just news-like a not bigger

Unidentified Analyst

you. Thank Okay.

Richard Danforth

You're welcome.

Operator

another be ahead. Carter CBDG. question with And from appear -- I'm to questions at sorry, go Christopher Please no there's other there

Carter Christopher

I Hi, there's Southern on was how the developments curious if -- guys. border, any just border?

Richard Danforth

maybe DHS. It very, near really. frankly slow. that election. after significant term, on. the and I Not And very affects continues discord a budgeting, that's in everything that to it the see There's be going changing between affects Congress And don't

Carter Christopher

part CROWS Or of Is in dead Army the kind the contracts? of ago end of initiative LRAD? has well? years you out CROWS kind a serve about was that been there What as that

Richard Danforth

alive concept begin, No. and CROWS It is development. to budgeted does some money say, I'll have initial well.

think, that of activity small year. to to begin expect bulk But, contract the We earnest expect XXXX. in effort the I a to you fiscal this see would in sometime begin FY

Carter Christopher

you Is the talk size scaled that -- the just is deal? it that size? big? about you Or it can Is Or time can CROWS on one was at that comment of supposedly any it back? sensitive? CROWS too -- make Is

Richard Danforth

I the sizable to now, follow know don't More to follow. More that we say past. a I was know though. what it's what can order. said in

Carter Christopher

Yes.

be I the But -- program a think multiyear if over differentiate last you the other a and/or to in question use to it deal of with you over kind Rico there that use I metrics about. estimated say right. yourselves the this way U.S. is the remember States with or Is Australia you $XXX market as Genasys. can NEWS million as approach was got you go European the effective to experience talked system Lloyd on how in is Puerto more recently

effective Is KPI of in way Performance Indicator there it's a - the is and Is at numerically of system? from is there what more a way quantitate do standpoint than competitors? Key to a any designed to differentiating that our effectiveness our can hey say, product doing you system like kind

Dennis Klahn

X going very there on experience a Yes we to do customer. of granular, this and I'm call, Australia years but not it is. satisfied the in have

Carter Christopher

guys thanks for Well Okay. your it. Appreciate time.

Dennis Klahn

welcome. You’re

please. caller Next

Operator

go Ramsley to with Partners. Please ahead. Walrus next And move we'll Walter

Walter Ramsley

is any effect a Has Thank higher-level of on Congratulations the of good your coronavirus. quarter. threatening to? had looking I questions couple Or business? kind it you. that Got guess,

Richard Danforth

source the amount small a supply material of part with Currently, see. world. source our States. We not of contract do any our and vendors is here in of that vendors of in We're impact. Most chain the is me Within supplier parts in those situation. base, contact it we're the in with composite -- parts likely from may that China. United Let aware evaluating

and back go of I'll material impact. So any aware currently not we're say

Walter Ramsley

Okay. And your the if the at proposition will networks value over change that XG proliferate of years products all? few the next

Richard Danforth

network that more NEWS that highly to have to will When to the upgrade we broadly. software module it's a XG it. answer probable within integrate I'll upgrades provider

So it opportunities. provides

Walter Ramsley

again. Well, Appreciate thanks it.

Richard Danforth

You’re welcome.

Operator

any Would call? see the out further I queue. any remarks And closing do give I with not questions like close before the in to that you

Dennis Klahn

We our events some of look forward at few Thank months look for Thank fiscal discuss at year. call. regularly today's investor you. future you the to second again in a business we with to quarter forward participating seeing results. events. when during these We you you speaking in We report

Operator

And you. thank Fiscal Call. Genasys conclude First Conference XXXX This Quarter Financial Results the does

disconnect may at You lines time. this your

Genasys (GNSS) 10 Feb 202020 Q1 Earnings call transcript