GNSS - Earnings call transcript Q2 2021

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Operator

Good day, ladies and gentlemen and welcome to the Genasys Incorporated Fiscal Second Quarter 2021 Conference Call. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Satya Chillara. Sir, the floor is yours.

Satya Chillara

Thank you, Kat. Good afternoon, everyone. second financial fiscal conference Genasys’ to quarter results XXXX call. Welcome for Satya Chillara, am Genasys. Investor I Relations With me Officer call and on the Dennis Executive Danforth Klahn Officer Chief Chief Financial of today Genasys. are Richard

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

that During forward-looking the of or impact without this based control. of forward-looking company’s expectations. Future plans, our other risks forecasts and for including we information uncertainties, on results many may from of business call, discuss subject as beyond epidemics number circumstances may expectations, or future statements a statements These are uncertainties, of are which current management or the outlook performance. and to pandemics expectations involve and materially today. differ These company’s and risks limitation are factors

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

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

Dennis Klahn

Satya you, questions. year Richard with up recap today’s update second then Revenues fiscal on provide the second quarter. the financial the of from will fiscal I XXXX $XX.X call everyone. open quarter million, for and the will we open Afterwards, were XXXX the the Thank for call welcome results. prior quarter of an will XX% business.

loss. in revenue XX.X% $X.X to with new revenue integrated software As software was from software compared HD was year XX%. $XXX,XXX by ordinary marketing The XX%, support was and offset non-cash to XX% a a prior up of the subsidiary million, the initiatives. were contract. personnel $X.X support compared increase Singapore Services, largely due Professional $X.XX software growth XXXX second XX% year quarter $X.X $X.X was net United million quarter in engineering margin due year quarter Canada enterprise Net million, primarily was $XXX,XXX, an revenue and charges, were same mass in year-to-date the $XXX,XXX, The Australia, of sales LRAD Communications addition business, notification up systems for future operating opening profit in revenue XX.X% quarter. Gross the course increase in period, per Genasys up revenue expenses of was profit increase inventory to and as the sales recent or same a prior primarily for increase per was to up Gross software income was to a revenue fiscal share and a European to lower from was expenses fiscal in share. second additional our the Arab opportunities, percentage personnel, income fiscal due unchanged in provided by the the XXXX. on including Net million Emirates. Union Operating over the software-related. and the was Cash of Higher the period the second employees year-to-date primarily to activities offices increase due ago. and in XX%, XXXX

compared The Our totaled sheet on XXXX Working million September totaled equivalents million on $XX.X remains balance $XX.X March with XXXX. million Cash, cash million securities strong. and on XX, capital XX, XX, with primarily March to of on like September the $XX.X marketable assets XXXX $XX.X compared cash Richard. that, the XXXX. quarter Mobile over working purchase would call fiscal used Amika first XXXX. complete decrease With turn to XX, due was in of I in to capital the to

Richard Danforth

company to bookings XX% good March year we fiscal in software nearly performance higher Dennis the $XX the million received XXXX. afternoon year and the and and year fiscal month you, Fiscal In and LRAD time than from down from drove positioned in on of device was June. bookings everybody have from revenue. Strong XX% business an in new half months in record areas backlog the earlier. Backlog hailing expected at $XX.X and integrated segments and higher with increases acoustic X call. mass $XX at Today’s revenue Thank April, same XX, notification all last were million, months business major the and this million, sales our $XX.X year. well geographic for first first orders backlog first XXXX period of substantially bookings, last are increase million this more X a over our

management grow and applications acoustic and systems and We continue hailing LRAD critical key to notification to devices, technologies in market emergency invest business mass opportunities. personnel software, integrated our communications

– SMS Communications support Madrid, systems and through development, in experience, meet Genasys business with extensive professionals all fiscal year. sales and major sales this continues Australia Emergency extreme solutions. staff and engineering In With NEWS, was location-based to Genasys for flooding In for send than our in emergency efforts days, many knowledge European March, Warning the Systems alerts for to to System, over Union Australians. Warning warn the deliver areas millions United million NEWS with the the throughout geographic and Genasys hiring widespread country’s mobile us our Australia successfully business The of growth provide addition last teams years of used the the has marketing and people and in development use compete keep Singapore, enabled in-region offices have now to the and X in provided to safe. to international extensive Public and several software National more Genasys, U.S. to to or of rainfall populated of in life revenue Genasys Australia surge NEWS experience expect and awards. affecting to open of alerts demand XXX Canada saving Emirates safety led eastern areas. most and evacuation information Arab help we

responding Canadian teams location-based visitors. implement development of every to in requirement features warning numerous very active life to a from states. national Enterprise County, states. award from Vaccination and voice-over-IP, being system contemplated. facilities working fulfills The are NEWS member leading Riverside the EU Europe Vaccination management of and information. flexible becoming expand contract customizable, to in events, private Enterprise SMS, alerts saving business Multi-channel, than features. that RFPs GEM’s EU many government EU over automated delivery and the in contractors Our is reopen and expedites industry government competitive phones GEM U.S. supported notification residents and mobile more automobile by engineering manufacturer, facilities sends project from alerts fully country California. public capability Genasys that callouts, GEM and alerts to vaccination participating emergency awareness and project and is safeguard pop-ups XX,XXX proprietary to two-way broadcast the America to at Genasys mobile a Genasys event Government strictly tracking situational NEWS Management geo-fencing that recent a and our multi-year engineered, data built XX important opening leverages an are platform anonymized Opportunities and COVID-XX outside global contract e-mail, Emergency feature The were from project quarter Canada, recognized tracking and foundational with automakers’ responses XX team to The from our tracking set The and cell tracking mass flexibility North a advanced Software SMS includes all automobile of and and manufacturer service vaccination and last applications. facilities. the worldwide Canada employees Europe. in technology, notification critical of emergency

delivery selection government contracts to GEM anticipated of the the power notifications keep recurring year. Additional accompanying Enterprise a stone of season multi-channel extending during to Riverside and platform situation safety warnings in through is month power Last software alerts much County California wildfire emergency safe. crisis the stepping the With will GEM business after and residents of year, major by strategy. and this shut-offs before, now timely help public people fiscal life-saving are our revenue and

of As operational, office much providing the of safety satellite fiscal United the battery outlook power, and expect orders platform throughout and half a for the from and and management will that vaccination in world systems. States solutions manufacturing disruptions software, the team soon last California voice inputs, major the alerting life backup, remains challenges world second U.S. fully we anticipate our only revenues COVID-XX and that vital two business broadcast will of provided feature The year and sensor and stronger resolved. fulfilling in working than multi-channel solar leading on Genasys all calls, Per emergency half. arrays the the first provider is areas. saving we be around the optimism members conductivity in other increasing campaigns industry unifies that speaker sales the GEM facility growth geographic our the be rollout public are the

Additionally, key value. market offerings, shareholder the maximize business to and augment we further technology of reach initiatives anticipate combination extend product company’s and the Genasys

Genasys recently Army the long-term as With expected, California to On the and IMNS is awards as business fiscal turn year County, growth. announced operator backlog for back revenue over that, the of record others for orders, and track Q&A. and well strength it bookings, well-positioned GEM, AHD for Riverside will and on I U.S.

Operator

our comes And Mike you. Latimore Thank from Northland. first from

Mike Latimore

Yes, Thank Outlook great there. sounds you. Hey, quarter you. thank strong.

by expect Just you end? update on people us people how I on of year you hire in just and more do can terms group, the many kind have you – sales sales the guess to of

Richard Danforth

do We by more hire people sales year end. to expect

We and And Asia-Pacific the we all principally have doing in Mike, and been year. fiscal Europe that and Middle this have United East, hired, sales professionals Canada. States

think but continue slow, I quarter. this pace hiring the of will it will

Mike Latimore

is sort Great. the off that side software more said off of a And a and second the start of here little business? also that you year EU half. sort business. can in or the I to then of a the kind enterprise talk of guess, is about you strong strong bit to start Is

Richard Danforth

for I to awards now markets. announced active EU The of RFIs and quite will EU. to both RFPs expect be answer this demonstrations. begin summer is the and right in contract I terms

So, it’s there us very busy now. over right for

In terms been enterprise, have never of we busier.

We basis are daily on doing answering demonstrations a RFPs.

the in with that fact validation. pointed still strategy win win County Riverside was It’s it automobile the the manufacturer working. think a certainly in I and is to – our

Mike Latimore

then of this And pipeline, or now business the sense great? SaaS business take a of a thanks. on Great, software that going just the is kind rough it is mix getting be are or is licensed the to software will form that in recurring the of you

Richard Danforth

model. professional you XX%. Warning services that of The software, enterprise can model suite The can National you will SaaS be SaaS. XX% System will it and XX% Emergency be

Mike Latimore

Alright, great. Thanks a Okay, lot. excellent.

Richard Danforth

are You welcome.

Satya Chillara

Mike. you, Thank

please. question, Next

Operator

question And Martin. Yang next Go Oppenheimer. from ahead, comes Martin the from

Martin Yang

good afternoon. for questions. Hi, my Thank taking you

the for First, implications about there can talk maybe Riverside dynamics to on if for is the competitive awards, that other the and regions any wing Riverside for California? awards you

Richard Danforth

there Sure. to service was was an selected. Genasys There competitive provide incumbent was and and six this offerings

other and successful competitor. the were and incumbent Riverside And competing were at So the case of we In the we the selected four. displaced manufacturer, in incumbent to against were displacing compete only automobile we the we beat competitor. out the

So, I said I validation. a ago, as moment think a it’s that

automobile the in manufacturers reference manufacturer the our other first other particularly large Riverside business activities. sets development will leverage County in as provides that counties and those we and The as wins, world large to

Martin Yang

Thanks.

software you the business engineering seeing? you Next investments question is foresee current the momentum Do how about maybe software of acceleration do you your being resources? are given side in feel

Richard Danforth

Yes.

last We for have the years. resources X in tripled human years, about development, not software

grid in continued pandemic have through to now. we hiring We the and hire still are

So continue. I to think that’s going

Martin Yang

that extend that, next lot follow-up And into the maybe well revenues there year coming on do fiscal you to are where up? expect more some

Richard Danforth

beyond. to year and Yes, it will extend next fiscal the

Martin Yang

final My Thanks. question more term. it. Got longer is

sort you higher versus that talk a margin your past, much And today? about would would share. mix where mind, in profiles of I software in your business long-term the are in how with think the really take a you where change

Richard Danforth

It will up. go

we Martin, out to So, we that continue see look to is see model I XX%. to if years The past, substantial see will to you we X a will that very more mix hardware have from that. Genasys and said so growth in see the expect X than and margins our about will or of software. we – higher for to perspective be hardware The margin continue from top XX:XX line software healthy expect a

the So, certainly will think aggregate higher. I be

Martin Yang

jump will into I Thanks. back queue.

Satya Chillara

Thank you, Martin.

Next please. question,

Operator

Ascendiant from next Ed from our ahead, Woo comes And question Go Certainly. Capital. Ed.

Ed Woo

look business. to How or going at to opportunities there? are is normal, congratulations are any the good and an for your you acceleration do getting M&A it guys you as Yes, us in see important out opportunities valuations quarter back on these

Richard Danforth

Yes.

you portfolio we Ed, normally on Communications we at looking the through opportunities inorganically pursuing in other are speak. of we increase know, Canada and Genasys ways as as we actively closed acquisition. Genasys are to So, And October

Ed Woo

strength U.S. what And I the business, seeing there. a in of lot all opportunities investments lot of now? know you committed a out you Asia? guys in you Are lot Great. a then mentioned of about

Richard Danforth

release, the real if will – let’s we I it press can see it you find In quick. Yes. have There is. see

to look geographic as going and to see quarter as we year. at same continue we the the you we Revenues the if that and of sales year beyond. So, continue our are up fiscal compared across to believe balance through were all and next areas this last

Ed Woo

answering for luck. thanks Well, Thank good Great. my and question you.

Richard Danforth

you. Thank

Satya Chillara

Ed. you, Thank

Next question, please.

Operator

Sure.

Go comes ahead. question Investments. next Our from Neaton Rivershore Rick from

Rick Neaton

that your my quarter and today. your looking for out non-hardware noticed call In had thanks are you broke as forward, bookings, X% revenue backlog? the taking bookings non-hardware. about you of as Good a and percentage when is your afternoon I for of increasing you percentage revenue

Richard Danforth

It Sure. is.

Rick Neaton

Do you too of management emergency fiscal and to of to have as ‘XX a percentage get what – target software total? percentage want where revenue you for a your revenues as

Richard Danforth

said million. or a we years We have next longer and in what characterize – do. of before outlooks We as the XX-XX growth ago, at versus I eclipsing a to to year repeat hardware expect term the and more I several said the business moment software quarter kind be the it’s in $XXX

Rick Neaton

North fiscal others? of where rest areas year, most any with do And Okay. early in you anticipate see any ‘XX, coming the you if in in second your particular your than stronger different more half business strongly? of see of do coming you – America areas you the and And world of on geographic being fiscal the

Richard Danforth

perspective region a a mean, large up robust a of that. are pipeline know I public half. is we again, good. the And our each you despite things second amount there the is are big Geographically, the changing a COVID, to Yes. world for the revenue is impacts of – every system. looks significant initiative and we world capture that in but – And have warning big still that as and country fact a and the year from very of resources committed optimistic with outfitting having fair the future. up is pipeline our looking from we And in

Rick Neaton

time Appreciate Okay. Thanks, your today. Richard.

Richard Danforth

You welcome. are

Satya Chillara

Thanks, Rick.

please. question, Next

Operator

Sure.

[ph] Winston Myles from UBS. Myles. question next from comes ahead, Our Go

Unidentified Analyst

How Hi, tuned you? Richard. in are I late.

to line responded Terrific in impact this. see that? I already increase have may of you So revenues. the in what increase didn’t bottom

Richard Danforth

sales in and as support up, growth. year transition we year mentioned was Myles and of side particularly other is North the year, and transition the initiatives in regions and in world, our marketing. the describe would of of support here America is initiatives a enterprise region. I EU last As in The expense since mentioned, And APAC in as the the including Middle of and this the East

Unidentified Analyst

again lot. terrific and job Okay, it. a thanks Appreciate

Richard Danforth

you. Thank Welcome.

Operator

ahead. Unique [Operator Instructions] from Korten And comes Investments. from Lloyd next our question Go

Lloyd Korten

see – rollout? I this. is potential big the business European revenue Nice on to Hello. really that. happy was their how The

Richard Danforth

some have triangulation as or pricing. stayed as lead much that discussion to it I on only from could on Lloyd, away commenting in

Lloyd Korten

mean, is pay – you a talking get fraction but the might big – it the systems, No. win have you I but idea is information? piece all, for that these it that not is $XXX will am that or generally? public a what total these or I million? percentage, business $X how at billion it of If etcetera, I a Is I they – is or mean, what mean it no or

Richard Danforth

You can find it.

from you, away can You opinion I to data question. there. find am to in look and people’s shy that ask available I’d publicly going Lloyd,

Lloyd Korten

projections on any going Also, profits Okay. forward?

Richard Danforth

Lloyd have we was expect we caller, But It that will year expect expenses be cash be this the we profitable fiscal planned. began to as to be said, Yes, yet this prior – flow are mentioned again since I year. we to we positive and our up.

We are meeting and meeting are our plan forecast. our we

So, income last going our it positive. but than the very was year, be less will year likely cash is be it and less both to than was last flow still operating

Lloyd Korten

Okay. Also, the they going the LRADs retrofitting up? that is more something or to ships modern are be coming with Navy, that’s

Richard Danforth

aren’t. they No,

fleet has Navy have more decade. for IDIQ than We in replace the to that begin which a a to been

Lloyd Korten

dollars been much that published? are there? is kind what How Has of

Richard Danforth

it’s I probably mean, don’t so. in just of $X a a I But number round it, think the put on Lloyd, year. million order

Lloyd Korten

months. thank Well, Good next luck you. X alright. Okay,

Richard Danforth

you. Thank

Operator

closing turn remarks. At this any Thank to would to you. like it back time, I management for

Richard Danforth

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

Operator

you participation. conclude today’s does thank We for your This you. Thank conference.

a and wonderful your lines at may You this day. disconnect have time

Genasys (GNSS) 14 May 212021 Q2 Earnings call transcript