GNSS - Earnings call transcript Q4 2020

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Operator

Good day ladies and gentlemen, and welcome to the Genasys Inc.'s Fiscal Year 2020 Conference Call. All lines have been placed on listen-only mode and the floor will be open for your questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to your host Mr. Satya Chillara. Sir, the floor is yours.

Satya Chillara

Jess. you, Thank and Results everyone, Genasys Year Fiscal Good Call. welcome Financial Conference XXXX afternoon to I'm Relations Chillara, Satya Investor for Genasys. of Klahn, With are me Financial Dennis Richard today Officer Chief Danforth, Chief on Executive Officer; the Genasys. call and

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

or During we outlook discuss statements company's or pandemics number including the forecast control. and to results other the circumstances other that risk current forward-looking uncertainties, outbreak, uncertainties, of today. as from and are and our These subject this These the on information may call, statements expectations. COVID-XX plans, consequences risks and factors company’s are for management's based expectations differ materially Future expectations, future are of of a performance. many of may involve forward-looking beyond which

metrics We more value Bookings Backlog revenue the we update orders of are purchase customer may these and and bookings that to to received to a except performance. Factors company's information potential an orders months. respect metric the We intent executed fiscal in of Genasys to obligation timing refer in any consider internal of bookings specifically ended measure period and a planning. of evaluating dollar provide of is Form company's September XX purchase the and ship please as leading backlog the scheduled is the total measures metrics risks revenues indicators non-GAAP for that year to operational XX-K those support production helpful related future forward-looking next which use operational otherwise given such recognition. believe regardless disclaims uncertainties, also statements, stated. as regarding discuss backlog, investors with of the Risk XX, section or the XXXX. to For information the

the page over of my Finally, our Investor Klahn. At Relations a Financial website. to call in replay floor available will turn it’s Chief Genasys be through Dennis on Officer, the time, hours Dennis? this pleasure to X approximately this

Dennis Klahn

welcome, or fiscal million administrative period fiscal same or the the fiscal $XX.X of share to XXXX. selling, net in against fiscal assets. million deferred fiscal recap the We in of $X.XX $XX today's and were from resulted fiscal of had XXXX, $X.X cost the revenue growth diluted fourth allowance benefit an the diluted $XX XX, was the in quarter will compared Thank share This fiscal increase to call fiscal open income we million, expenses fourth growth and net everyone. to the of of loss XXXX million, gained with then valuation profit update revenue. largely primarily $X.XX of quarter of higher $XXX,XXX business. the million. year The XXXX of XXXX I Revenues results. fiscal share of XXXX leverage increase in $X.X fourth a $X.X Richard $X.X with in higher the which a million, with of portion company's against of XX, portion revenues. expenses Operating was per a was increase the is revenue higher $X.X due and overhead and revenue on higher will release quarter the quarter revenue. This and Gross deferred backlog profit revenues were the leverage in The generated quarter benefit million last our higher year XXXX support was primarily fiscal tax in tax was year Revenues ended $X.XX to million, a primarily on revenues million million fourth quarter. QX quarter ended the XXXX. of last compares expenses for and for fourth non-cash due The million, In operating Gross Afterward, period higher quarter prior same in was call This increase gained entering the history. XX% opportunities. million per record $XX.X in $X.X was was of higher to non-cash backlog or prior September million. benefit generated expenses for the compared valuation diluted a income were from higher we or general, future tax the the in in profit compares an Satya, open in tax in profit a you, to provide non-cash or year a increase assets. due an to year revenue $X.XX revenue of $X.X selling, record primarily share XX% future during revenue per the million with for same release the year ago. The XX.X% million from diluted gross additional XXXX. had questions. income the on million year year. higher XXXX fiscal last entering $X.X due Cash, $X.X of compares of compared $X.X non-cash will fiscal highest opportunities. income in compares the per $XX period. to generated from income allowance XX% to net general with This a increase resulted The fiscal any due largely The additional fourth quarter of revenues due activities financial increase a revenue revenues revenues. to the of X% to fiscal benefit our higher The were fixed margin ago. costs or $X.X year. XXXX. increase to and in of support the September overhead gross which and million net the compared fixed $XX.X The Operating from a margin administrative XXXX, of

the Our on $XX.X fiscal up $X.X increased The $XX.X balance like from year and the was options September at XX, received equivalents Working operations million that, September XXXX sheet to million net year of total at by cash year. call prior end strong. by prior activities. was year. million The increase operating increase income $X $XX.X XXXX, cash from cash end the due in remains XX, cash the last the capital due XX.X Cash to in fiscal million provided from to cash exercise million turn equivalents the working and of I at capital to from the and over fiscal with Richard. of With would primarily to compared in XXXX. million stock

Richard Danforth

and achieve provider in throughout team do and notwithstanding, San and a unprecedented open Thank conference the quarter pre-pandemic fiscal critical fiscal XXXX. second job the essential societal conditions you, Genasys fiscal XXXX good record December afternoon in solutions, and profits. powered and half spite Dennis company the we half of fiscal year California second fourth stringent Genasys and XXXX, and tremendous communication members as did to the so Spain's to revenues revenues and great our world and on everybody Diego XXXX. of the around call. the we XXXX year fiscal In FY at provided call. business the an systems Genasys the a outlook to Record had on in working lockdowns our company stayed of year, fiscal helping plan meet

Our rapidly is growing software systems build to customer resources for a chain industry intact necessary leading base. the supply hardware solutions and providing and our

most As partial and communities world, spread responded followed with COVID-XX governments shutdowns quickly throughout measures. the re-openings workaround and by

headwinds the impacted million. is were pipeline bookings, fiscal business our which during our $XX grown XXXX Although these pandemic,

As orders government governments – government with many orders anticipated, and to new were pushed adapting out normal. the communities anticipated

ahead growth, return initiatives. to expect planned emergency as to they warning move with We bookings

half for expect revenues. us As record XXXX follow finished contract a for evidence, We unique in XXXX location communication will based put the received We of information fiscal revenues as XXXX to awards anywhere, authorities SMS fiscal across anticipate geolocation that officials SMS record weighed will Systems. powerful of phone emergency fiscal trend the bookings we no critical the confirmation mobile our each technology saving XXXX send quarter capability use and second to fiscal same to alerts with Cell NEWS in Deployed the revenues carriers National a also Australia notifications more XXXX multi-year year. with Emergency on of network mobile carriers fiscal first and Warning our anytime The to track potential life opt-in required. fiscal whether and provides user information. with Emergency mobile National or directly enables NEWS network channels Warning Systems Broadcast heavily on

emergency geo-targeted over NEWS to important alerting phones cell compete a awards deadline both other in competitive emergency June residents and EU experience and Having Member seeking European with the alerts all be countries public states to mid-calendar awards to delivered for visitors previous would EU, a between emergency announcing in mobile in and system begin aggressively to per will software which emergencies guidance State, Genasys There that the significant without platform required June be emergency XXXX Genasys State mobile similar warning the EU and SMS critical of Australia emergency we carriers Directive from every Union XXXX, implement Public warning can the actively and XXX the mobile Member Article events. notify the phones systems. combination The provides are and System or advantages features XXXX each alerts the in deploy Based Warning two able broadcast, SMS, to system Our XXX we must of to Directive. National XXXX. that since five residents that having strategically send and million Australians comply the awards are of because EU, or mandates anticipate implement to to communication, The of other opt-in. member parallel visitors as a of case include of disasters EU in mandate. of to on

significantly. closing by a Genasys XXXX country we providers. of EU include based with many throughout software of The The SMS, go Genasys acquisition is broadcast, business and including and While going We the speaker EU a base, opportunities pace. now large continues across the officials of and activities in acquisition live program January. the and addresses in and large push pilot from towards dialogue software a Information to received professional to Member a for location part fiscal Despite has Canada's we companies. integration known being calendar for ongoing government mobile agencies EU teams, expected EU and other demonstration resulted and continue States EU enterprise integration, carriers Canadian pipeline Communications Mobile the of a mobile enterprise and The will RFIs, a businesses at and end our important We The conducted plan. well customer increased Requests program is the have enterprise and U.S. software sports American recently as growth platform. XXXX, Amika pilot all the telecom stadiums, NEWS Government will our of countries. demonstration areas country's diverse expect the Canada. rapid enterprise awards started cell utilized solutions pandemic, revenue provider, of North business

in now XXXX. in base or customer in a one, the with over software to sold Canada three, year five software grown Because win significantly new is Genasys license renewals solution. licenses and The has this expect installed relatively enterprise the strong United contracts to first expand and compete a the is years. year time enterprise and five throughout position fiscal States last replace typically are our We market base for term, and

As COVID-XX including has are more planning, ago, fiscal XXXX, how from into Even demand just and workers ensure approved to months software distributed agencies Enterprise post-pandemic RFPs. we be engaged better a working vaccines Solutions business look and in acquisition and government multiple expected employees with home, safety Genasys spurred interest and in for enterprise a our closed dramatic increase productivity. to though and soon, few

part operating generating of expand as pursuing business company's are cash. while continuing acquisitions additional to grow all to the while strategy positive revenues, our We

systems. our substantially utilized and maximize million not XXX In demand the and the enhance value. expanding we're believe LRAD shareholder greatest flexibility SX for unified platform. GEM enterprise sales and critical international domestic registration to fiscal could growing attracting acquisitions we and offers it have business closing we the in our staff company communication today, XXXX, that shelf software While our serve our

awards NEWS be bookings defense, the political solutions continuing growing to help other and to Augmented significantly are enforcement, Canada ongoing recent throughout back and the COVID-XX, and our by operator world, acquisition year people With systems Australia, With and disasters to safe. for manmade our with it proving increase in is unrest, Communication to the Genasys and of we contract software future revenues. law Genasys pandemics the and to natural essential keep Combined for that, grow LRAD business, in Genasys expect public XXXX. fiscal turn higher Q&A. well-positioned of I'll safety, another integration

Operator

Our comes Northland at Latimore question Thank Mike first you. Capital. from Instructions] [Operator

Mike Latimore

Great, great thanks. the on year Congratulations quarter. and

sort expect take become then, fully you long more you enterprise do people, mentioned how of how for do the the – you sales hiring know, you're expect them what's for that? You know, to you And productive? timeframe long

Richard Danforth

almost We completed process, began Mike, after on of the October hiring X. acquisition we Mobile immediately a Amika

hired two sales people. full have we time So,

offers I second have more all probably on that and looking they'll outstanding by quarter. end additional, six are between – be We two put to to of our our expect second on,

Mike Latimore

for there? assuming you then productivity, them what to up And the are ramp full

Richard Danforth

the know, on ramp and geography. depends by certainly fairly be immediate, I but individual going it's to But steeply. not will expect as third that It up and the you quarter fourth the

Mike Latimore

[pilot] Great. this sort you specific of only are the pilot Okay. one then doing Europe, you in country? And mentioned a in the

Richard Danforth

for can we're pilot. doing I only Genasys and speak the

Mike Latimore

order in in the then kind you terms XXXX, LRAD into that Okay. fiscal kind the of sizable And visibility visibility know what's on of business, just and timeline? another, the of there what's

Richard Danforth

XXXX systems, in our for XXXX. to board enterprise is FY are and which bookings substantially than software that our expected LRADs Our – experienced we across be higher solutions. in our in the integrated That's

it's acquisitions and of The programmed quite terms cycle LRAD good. sales quite for In long. visibility, is systems

good is visibility into forecast the our we well. in which that So, got pipeline as

Mike Latimore

great. Okay, much. Thanks very

Richard Danforth

welcome. You're

Satya Chillara

Thank you, Mike.

call Next please.

Operator

Ascendiant go Capital. We'll next to Woo Ed at

Ed Woo

record year. on you there’s Did that quarter the and you record going the for year? in correct fiscal revenue and congratulations revenue Also, said Yeah. I to be that QX hear

Richard Danforth

record And Ed, do Not what FY our XXXX. the From fiscal exactly. all can expect revenues in in yet again, I QX for now I fiscal cards. I expect record said, XXXX. that's of bookings I see

continued I again, as pandemic but I’ve this year-over-year. now I in revenue Now, past growth a cautioned shadow, see casts what the very see long

Ed Woo

pretty very guys And good you All growing revenue then rate. right, obviously, great. you healthy know, job of have done a at a

guys the you able what You into high offices at move margin much new a know, pace? know, revenue you know, to guys, your, more as year, last are opportunity for, are grow you you such improvement,

Richard Danforth

did Dennis. we’ve in Dennis let quarter, record margins but I’ll I think comment ahead – fourth on gross we While hit but go that,

Dennis Klahn

the In fourth had Yeah. gross we XX% quarter margin.

over couple quarters. XX.X%. over XX% been an improvement a the achieved For each year is We've we've is total last XX% the – over last quite where two the both years. of of –

company margin you been a over revenue software the increased So, know, – as to business, road, big added obviously years, we've significant the would the it's of not X% company that increase total but a percentage the yet margins grows of It's revenue. in And, part or that you as somewhat. revenue, less total of would growth. last down that's you driver software it's couple the but look – business, a the with probably expect The that the in that as revenue. total

Ed Woo

you that M&A then question the And mentioned you last were I still is, have know, guys opportunity. pursuing Right. you

M&A are going Amika think size acquisition? potentially, Amika looking on much you terms deals, also, know, a smaller to are much integrated deals Amika? for deal. fully look You for in continue Are know, you congratulations closing the bigger you pretty or type – you Genasys for guys And to the of

Richard Danforth

mobile ongoing next The integration the Amika Solution quarters, couple Enterprise the of Ed. of Genasys is we’ll with and continue over

on large, constrained can In the two in terms variety. the although particular a value bought help we been of a it's acquisition perspective. what small candidates, improve and particularly from no, focus of acquisition have we’re versus not not shareholder capabilities, the smaller But its size, have

Ed Woo

you. for thank I And good answering luck. my wish Well, you guys Thank Great. you questions.

Richard Danforth

Thank you.

Operator

Ryan next MacWilliams We’ll Stephens. at to go

Ryan MacWilliams

questions cases asking think any solve? you corporates Are solutions? municipalities do And add used demand notification about to on Thanks for about Genasys for taking to there's seeing that solutions work. you're these to Really the corporates there are particular move difference that can to planning emergency they're the nice hear incremental and back if between, go will municipalities the results. or you and as a congrats or first yourself

Richard Danforth

fence both a management municipality, if harm the possible the they Ryan, it's as that all think actions as and I whether taken that could a it's quickly a quickly giving and there's are them occurring or confidence that possible. notified a government, employees as as necessary about get business,

the way where if – knowing are be those So, used they cases critical and It's taking. about people and action getting people communications are that. might and be should just harm’s in what

Ryan MacWilliams

the on then cell examples maybe just broadcast of an software Genasys you opportunity. solutions broadcast as opportunity for for a public public your country acquire or sell think its capabilities sense to the do to cell make broadcasts capabilities? provider this Would on warning And countries country additional there's some separately, cell existing Perfect. top a some add of European maybe opportunity? it warning And or examples to part to hardware

Richard Danforth

is answer the yes. and first, question second The

As I and SMS, broadcasts, integration. includes pilot mentioned, device the doing both acoustic we're based cell location

cell question we what think what first it? to or want do your company – If buying a was, about was

Ryan MacWilliams

cell additional provider broadcast broadcasts capabilities. add for to country examples Yeah, cell or any

Richard Danforth

to say I that. time this At no

broadcast integrated location has SMS. that cell platform own our based have We and

to necessary Ryan. And are would As available the run provider pretty provide with, those you hardware horsepower you the all know, likely would a work know, that software?

Ryan MacWilliams

Yeah.

the of already. capabilities platform You have your

of you [hybrid COVID point? going do is case result point, country forward towards at as it in this Europe really solutions] trend a that case more the will think still on to or a by basis is Just

Richard Danforth

hybrid think versus where of to they was might SMS. and broadcast. of are phones, the phones cell the is and location emergency. many an broadcast that more the what based solution. cell mix functionality based need be by not the a at how location I more in It The based It's location SMS provided area attributes a knowing be in and the looking pending of notified That SMS.

valuable be proven and quite phones I the people. where knowing how think So, management how and moving, many versatile for they're to a emergency are, has tool

Ryan MacWilliams

my but congrats that many the Yeah, quarter the taking There's both, on providers Thanks can Perfect. understanding. not do questions. too that's again. for

Richard Danforth

Thank you, Ryan.

Operator

go We'll next Instructions] [Operator Neaton to Rivershore Investments. Rick at

Rick Neaton

Good you. and record congratulations guys afternoon, a year. on Thank

First XX% question this half we about allocated occur comments was, about by in XXXX, fiscal last is would year it? year you in that half, how that at look should XX% revenue suggested revenues the growth second in first the will be your how

Richard Danforth

Yes.

Rick Neaton

to Okay. And of going X.X a OpEx looking kind fourth be and at your the quarter million, of you is going expand your sales higher Amika? that baseline forward as force in integrated

Dennis Klahn

probably higher a Amika base. little own It’ll its than be bit has that.

accretive. So, to be that's going

as to initiative. In and worldwide support we're noted, We're the increase to the support our our looking plus acquisition, we're EU sales at substantially just sales The force hiring worldwide. to looking XX, to continue to addition, we've expand force Amika looking enterprise software.

it will XXXX. I see So, would to that increase expect in

Rick Neaton

How's looking year the forward some contracts – One government visibility of military the the XXXX? on into and on fiscal right now the federal last level contracts question.

Richard Danforth

a still It's murky. bit

Genasys, they’ve continuing obviously Rick, with Congress, resolution Senate still see Appropriations shortly. a well CR a a COVID fiscal the expected the aware bipartisan one-week bill the support happen. XX on [Omnibus] scenario to Friday, that package December. that. lot President general budgets midst extension passed. pass Appropriations defense in of side. passed from We will we're have hasn't, to That they'll no it bill. there's to the likely voted interested though. is As year – Defense I there’s the From house an of It's very still The of Bill. a of perspective the country for a current to but has as week. XXXX submitted things a expires There's you're next XXth be that But together is shall all it Bill, in is as the and relief well put mean, in

know, the of it you we've always calendar the issues So chance way, that a there in certainly this got get are, make end before year. that political will the but

Rick Neaton

Okay.

issue. So it's more of a timing

actual of your as issue it view visibility, issue You this at timing point? a of then more performance

Richard Danforth

Yes.

Rick Neaton

your Okay. time Thanks, answer guys. Appreciate taking my to you questions.

Richard Danforth

Alright. Thank you.

Operator

go next Investments. Korten to We’ll at Unique Lloyd

Lloyd Korten

hi. Hello,

Richard Danforth

Hi there, Lloyd.

Lloyd Korten

a Hello. there know, third you and I quarter we team, again. Yeah. Hi. exciting. want on Is there had Thank you this was know, A any and there, your contract like Waited a couple just one long that? really contract. whole but on you Australia, a Thank for this. time we two, time word

Richard Danforth

the There's carrier. been on no announcement third Australian

Lloyd Korten

Oh, good.

Okay.

get that. hat-trick they're We might constrictions there. now? any So the feeling all financial the we Are in because headwinds under haven't lost a that of States you right

Richard Danforth

have how certainly XXXX and year world. remotely. out in down XXXX. our fiscal figuring communities in across not working We be was most will country revenues then the people working, partially from then the Tax to and with filled work

to So, we're that that Lloyd doubt. my whether it's That no could will pressure environment, the say, safety think not say, some in for systems disasters, happen. it, our however, that or community it's course. our it's government more likely what's going is than the down But today's continue a they a to will cancel whether in natural terrorism, going our business it's will, or that opinion unlikely, employees. pandemic, on I whether a citizens I put

Lloyd Korten

I’m new. just more interested in

they whether not to that yet, that know, to cities, money now. that going my right have for You That spend be have them burden question. was a it's don't states implemented it

Richard Danforth

It'll be a challenge.

Lloyd Korten

And been has listen, – again. thank Anyway, answered. was else Yeah. you that everything

Richard Danforth

Thank Lloyd. welcome. you, You're

Satya Chillara

Next please. question,

Operator

to next Wittenstein]. go [Myles We’ll

open. please go is ahead. line Sir, Your

Unidentified Analyst

guys. Three you doing? Thank you. Hi, How questions.

this Number comment can First backlogs one. of two… at Number on time? you all,

Richard Danforth

going revenue. the and the of at in the is down bookings XXXX Backlog difference

XX. was So, the the bookings as and mentioned I revenue million were XX

So, $X million.

Unidentified Analyst

your And got the Okay, it. buyback stock program? of status

Dennis Klahn

we purchased stock see the of about This we'll that at the be will that the end and at second holds. That in $XXX,XXX what of year future this board looking the year. quarter worth expires

Unidentified Analyst

Okay.

sensitive emerging don't Finally, sale any you? going to running weaker up do but overseas that import to how know a you're competitor, see competitor of single is dollar your be price you any with against? is, I that

Richard Danforth

FX Well, world. we deal all with around the the

product, de standard. In frequently amount North have the of We the facto in run States terms become provider LRAD small companies, the America, competitors an some the as don't into Software competition of as we for very Enterprise outside very the a here fair there's large a States. in or United From Solution here – United competition companies. with some well

terms solution. in we're Rico, the software only In systems, of Laguna have like believe ones and integrated integrated integrated we’re our sold that Puerto an I Beach, solution, that hardware

its So, competition, against compete has a Systems to the based both SMS in I requirements terms the Union would of there to would there consortium Warning based cell look they like the it Genasys will will of heritage solution. single abilities in the have enough, location that Genasys broadcast, European but companies services. pioneer be National and Emergency for think be a location but far SMS back Australia, that they And you like the – and the a were of competition in be if actually

area. the our decade's move of we have that chances I EU. We And in worth into experience as like

Unidentified Analyst

too. chances Nice lot Thanks your I like job. guys. Nice quarter. a

Richard Danforth

Thank you.

Operator

or additional with holding, conference like I'd turn to any closing questions And for comments. other management back no the to

Dennis Klahn

Thank investor look months for events. you to discuss quarter call. we you these participating at you for speaking results. again with invite business We join year. us We events a report We the fiscal regularly in to during first when XXXX forward few in our today's

Operator

for thank participation. that your We will today's call. gentlemen and Ladies conclude you

have a You may time day. disconnect at and this great

Genasys (GNSS) 9 Dec 202020 Q4 Earnings call transcript