GNSS - Earnings call transcript Q1 2022

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Operator

Good day, ladies and gentlemen, and welcome to the Genasys Inc. Fiscal First Quarter 2022 Conference Call. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Kim Rogers, Hayden IR, Investor Relations for Genasys. Ma'am, the floor is yours.

Kimberly Rogers

Thank you, Gegmma [ph]. to conference Incorporated call. welcome XXXX first and results financial afternoon the fiscal Genasys quarter Good I'm Investor Genasys. Relations Rogers firm Kim with for Hayden IR, the

On Officer. are from Officer; me Dennis the Chief and Financial Danforth, Executive Genasys Chief Klahn, call with Richard today

management uncertainties. call factor section forward-looking statements information and that call, based expectations ended statements the may forward-looking materially The expectations, company's company's year Other obligation in only regarding involve that as projections make of differences fiscal financial in management's and risks than the as explicitly be those such We update these cause of or company's from statements, this Factors the future specifically risk results of might and intent historical perform for except will statements forward-looking disclaim described otherwise certain are the today's the XX, to plans, forward-looking potential any XXXX. XX-K During on September facts today. outlook risk statements. Form can in on and differ other uncertainties stated. made found

provide company's also information respect measures discuss non-GAAP believe metrics, investors operational adjusted to bookings performance. the will and which to we and evaluating EBITDA, with backlog, We including financial helpful

of backlog planning. of a leading the in to to are regardless Bookings related executed received orders operational purchase total metrics of measure EBITDA in given months. the backlog is of today. of and next please the dollar For scheduled period, market production is metric the and recognition, metrics, purchase reconciliation an value at revenues table orders the of adjusted indicators in close measures timing revenue the ship the to XX customer internal a that consider that use press the of support by see financial GAAP company release issued future We these bookings

our page Officer, Chief the time, website. turn hours call go Finally, Genesis of Please available in four pleasure Danforth. approximately to relations be replay Richard. investor Executive it's a my Richard will on through the At to ahead, this call over this

Richard Danforth

you, Thank welcome, Kim and everyone.

start fiscal off revenue, developments. Our is another business solid a quarter strong and execution with new to of XXXX solid

supply XX% globally. disrupting are increased year-over-year, revenues that despite external quarter chain challenges First businesses

challenges are our developing our our through reengineering managing We supply alternative chain components primarily for and hardware materials. sourcing channels

new with our are times by inventory We've good million or progress and European accelerating We year bookings warning our key first for with our lead components XXXX public orders The activity, started objectives. and business. including crucial fiscal to totaling measures, X recently taking proactive meet SaaS with and Slovenia. Software-as-a-Service has wins longer managing towards customer the in Texas, our country fulfill growth Union of win award and announced SaaS in contract system contracts building California,

solutions are fiscal to with new County expansion which in Genasys covered Our software grew competitors' protect the that business GEM, another services Texas Town Elm. now contracts Little Genasys the or Said service our quarter global unified more are Management, we in Madison XX increased software We way, lives in replace in help globally over XX% of. of notification emergency Emergency capable than on by the globally. million demonstrating first lives by and

Houston of system and mass and of the synergies were synergies port. pipeline previously our within with contract system County expand and visitor had We The increasing hardware new addition Port new GEM Genasys In to GEM emergency sale its of Attorney City of software of renewing the Texas software competitive the citywide follow infrastructure These an ability which additional arrays an enable integrated Zonehaven notifications. key the key to and on With features mass is General, that added software can speaker key our Berkeley competitive to to at systems in worker facilitate of Alameda network County contract the to clarity The engagement are launched enhance unique systems suite power individually examples with warning our win services of new mass helping a or advantages XXXX, IMMS and help awards. with offer continue the differentiator software, to contract spurring and Alameda office are with installed telecommunications -- hardware city notification a orders or in growth. as notification operating safety. that and emergency network install integrated this voice its to new new notification goes perform the local down. system A configuration resources evacuation GEM will exceptional notification for public software safety enable our when of differentiating, broadcast coverage. Genasys hyper June, or outdoor

for critical contracts. or Slovenia million System, We work to of residents COVID compliance this our additional June these to this counties great excellent keep more and mandated other due safety Alameda during with the County and send for multiyear congratulate mandate In picked opened and million to Emergency life and visitors safe evacuation activities continue contracts to to and residents the team California deadline In real-time other in and our EU Angeles award. I'd states. real-time. in alerting, ability to in X communities revenue also Los in additional the country signed NEWS, are X.X and be available mobile selected reasons, that responders, agencies, opportunities and anticipate and European Europe. to counties recurring to agency of addition now extended we recently -- platforms for more geo-specific selected was will safety any These have phone business the Warning to NEWS near including emergency help several million events. annual like to under architecture A up. emergencies our X Genasys the and to Zonehaven advanced XXXX Europe, SaaS alerts California expansion informed in for planning, critical public of the information than County, has California to the than primarily National first access in contracts. four service anticipate door annual impact the

investments and a in investment Zonehaven safely help our and support these nationwide software when eventually their resources integrating We build-out. accelerate for by today's Genasys making enhancing see to will to Zonehaven's with and and acquired is to unique opportunity augment them the value fulfill our platform growing June, to look we early proposition. vision ongoing they management and and of world business repopulations. IMNS. SaaS Zonehaven in startup partner GEM expand manage evacuations global emergency realized larger Our an stage last needed a Zonehaven,

higher SaaS of offering. benefit As Zonehaven and platform, a unified from for SaaS revenues key company's valuation. catalyst the increase expected revenue part our contracts Zonehaven growth margin, market and recurring targets in have GEM GEM, contributions SaaS XXXX. for an important IMNS corporations our be mix opportunities, an in The and multi-channel will including major a us are in identified is towards larger shift enterprise our been

of enterprise, cities, identified inter and opportunities with in governments, counties we Additionally, United States business SaaS growth. areas the as and have

incumbent. multiyear for government renewal. businesses, successfully against enterprise come other continue all be will in GEM competitive up are We to successful and solution competing as contracts believe announced our replaced and we contract of we Almost winning awards were Importantly, providers. new

Our we to challenges. supply LRAD remains even continue as strong, manage hardware chain business

also and international up government engineering and preservation, and and done and Our keep U.S. motivated for up orders Navy solutions remains to enterprise announced robust, private X%, revenues implemented to are highly fiscal $X.X have procure we In LRAD manufacturing alternative that million. meet readily solutions to defense, Demand help, first work great informed. totaling and critical the were are with coming demand. constituencies teams safe as LRAD product their wildlife communication quarter,

the of offerings We platform unique of the potential opportunities, market compatibility capabilities with are customers. active increasing integrated of enthusiastic and about dialogue given our the strength advantages, levels number our our and an growing and

sales strategy revenue. SaaS Our to our to capabilities on and deliver team more providing is increase technical based growing,

for record We are fiscal year of another outlook reaffirming revenue. XXXX our

release, from the unchanged While revenue we chain regarding remain earnings supply disruptions. prior cautious a expectation remains ongoing

was business optimistic Our backlog turn expectations XXXX. taking With of Dennis. challenges, With measures that, are chain we XXst, on over current nearly -- of million record another I'll primarily proactive based the on supply backlog which delivering we are to was and our mitigate $XX December pipeline revenue. to are call as our year

Dennis Klahn

Thank you, up Richard. Revenues million, were from for quarter. the fiscal XXXX year $XX.X first quarter prior the XX%

X%. million, up to was period, million, was $X.X up prior LRAD IMNS $X.X the As revenue compared same year revenue XX%.

related the to first support was cost new revenue slightly prior to growing year software software was due of services lower offset from gross Gross hires hardware in decrease of profit was year the XXXX. and revenue percentage personnel $XX,XXX line fiscal quarter XX.X%, acquisition added first higher margin in to profit increased fiscal current by prior year in the in $XXX,XXX, And the by revenue. via offset higher margin quarter. the from in from XXXX the business professional a lower XX.X% higher roughly with higher recurring performed the Gross SaaS quarter the due

additional XX% million in expect The opportunities, the future prior opening expenses XX% personnel including and to to from is fiscal to over increase plus million, new year ago. gross increase of $X.X offices, Zonehaven for of or revenue in Operating a a the minus year. the personnel, the primarily related largely acquisition. period to engineers continue were be for growth sales intangibles and marketing development profit due product $X.X We margin up amortization support year same sales the to

gross included of an our largely cash first the the per three with EBITDA share to prior expenses compared due The our quarter XXXX strategic to of visibility conference year earnings million equivalents of an of XXXX December materially of XXth, a XXXX. first the just XXXX of of initiatives compared XXst, loss comparisons in in XXst, figures I has was increase compares year-over-year million for XXXX As mix our fiscal per or from with million loss been call, year prior and initiatives $X.X used This $XXX,XXX $X.XX increase a release. XXXX in last $X.X to was the SaaS months shifting of increase to $X.X overall $XXX,XXX $XX.X million The This fiscal as million. higher the year-end. margins. fiscal growth for compared our that as at To as targeted operating recall in fluctuation for enhances first revenue September or of a December million results by securities operating an primarily the operating EBITDA revenue this fiscal as Working discussed. operating expense. marketable loss of chain quarter. and capital in business last of cash of totaled non-GAAP $X.X towards our a was $XX.X first quarter. $XX We year. Cash Cash, for share, $XX.X in supply adjusted expanding of the period GAAP is of information increase $XXX,XXX totaled support our fiscal the million performance. Net was and Adjusted our understanding provided the business effect increase activities a XXXX hedge in approximately reconciliation quarter you challenges. against loss proportion may to net in with activities million plan from includes -- the growth EBITDA inventory same $X.XX reflects believe increase adjusted

this to convert buyback fiscal authorized December to increase through up million cash inventory shipments to year. through The $X for the an share company XXXX. customer XXst, expect program has We

months three market the time ended may, open from We time, During shares XXXX, transactions. for repurchased XXX,XXX were to December repurchase XXst, shares in $XXX,XXX.

business future Operator? to However, We of our growth the like now for our open call investing for to objective in would the allocation primary remains capital. Q&A.

Operator

[Operator comes Thank Instructions] your open from Brian state Please question The floor is Colley. you. questions. for question. first now Our

Brian Colley

to wide begin? contribution just Hey, when guys was kind from guys revenue the good for win. contract. taking expect you country provide of expected I recognizing to annual color you Thanks begin that Just guys. Slovenia hoping expect from the revenue And do some my evening question. that could around

Richard Danforth

likely recognition will revenue our haven't we QX, the in of the public The domain, put begin in and Brian, out economics it.

Brian Colley

how of, portion a in it's I services it structured, and terms revenue, it. -- remainder it Got on good as then as maybe think in But the revenue, in any the like licensed it's is I how of was Australia, past, guess, recognized Okay. structured? color

Richard Danforth

over months Yeah. handful not There of only Australia year, services as professional would required nearly model. Australia took -- a a take so. complex however, as it was upfront. expected to turn and to then a Where this It's revenue full is recurring

Brian Colley

business And governments to additional the on within Got win with and helpful. Okay. lead expect to the follow That's country? it. do companies you local Slovenia

Richard Danforth

it's think opportunity that I And do. I exist. Europe throughout

Brian Colley

EU Got And out confident it. feel also you And additional there that countries do this are have RFPs curious, additional the pretty you EU? can the in I customers in was that win now. right year

Richard Danforth

And in do. directive. several at in RFPs of getting activity active right there's EU I uptick least countries Yes, have terms two compliance them. Brian, right now with good behind a the to seen we in and

there's So, and lot going activity an lot an be awful RFI awful RFP to of beginning on. of

Brian Colley

Got it.

Okay.

expectation $XX the bookings guidance, to in million increase this million for addition of expenses? terms the SaaS your over year In XX% it to is still operating $X in

Richard Danforth

that substantially for exceed expected end what to it before. from up up Yeah. It was substantially The we XX%, in still last ARR year. as bookings some will but for revenue, our ramp takes on what the talked with about time SaaS bookings XX%. at go are to The OpEx of was track

Dennis Klahn

be The business. software growth Yeah. in XX% would year-over-year the

Brian Colley

Great.

Okay. I'll Thanks Well, Got the guys. questions leave it. it for taking there.

Richard Danforth

Thank you.

Operator

Okay.

Mike next your question question. comes Latimore. Our state Please from

Mike Latimore

Good. Congratulations Thanks. on results here. Yeah. the

and pipeline, the sort enterprise? Zonehaven, software stands in there EU stuff? category really the from year the the what's out leaders software software bookings? it this Is one be is it the potential of should Just of Is terms it biggest drivers here? Just is that

Richard Danforth

time They from GEM and It's The the have Zonehaven the do. shorter much a different SaaS cycles, bookings Mike. Zonehaven offerings ones GEM. have lead than

whereas full both We in areas. every quite But is a I And moment National competition. Zonehaven bookings ago, and a GEM, revenue of see competition EU, Warning no I two So, Systems there. the being day more a from year. our as kind still this with enjoy we'll and there getting those with full think activity is scenario in out the perspective, will increase see think I of substantial improvements driven mentioned substantial Emergency pipeline

those revenue more than anticipated XXXX from revenue recurring in -- likely that the I -- XXXX. our our think be wins will in

Mike Latimore

I in all, to terms were Okay. number those to March guess, first well, first all quarter? even in then, recently, And of all those show wins were business, or in of of quarter going some a the -- up going Zonehaven the though are those it's booked of bookings

Richard Danforth

my remarks? don't ones I What are know. you The referencing Mike? in

Mike Latimore

and you've just announced all Slovenia wins and No, that. Zonehaven

quarter or are just bookings? bookings of those kind quarter I'm So, curious, March are those December

Richard Danforth

For the Zonehaven to approvals award. ago in the QX. out we notification but Angeles out to a put award QX couple went domain, We receive, was Los example, released weeks a award. That the in which we get needed public did and requisite authority the it

Mike Latimore

Yeah. booking that And booking? then million total X a gave Was number. you

Richard Danforth

Yes.

Mike Latimore

of comment kind any And percent that what in on software the was Okay. of CAGR?

Richard Danforth

it's it a be, piece put than haven't that's sure. We out that But much for there. used bigger to

Mike Latimore

about XXXX. the it then in guiding margin Okay. year was being it as Great. fiscal And sounds like same gross the you're this

XX%. I think said about you

despite that supply about feel constraint? you good so the And

Richard Danforth

XX% chain Well, parts. so the to with that's price continue up or gross mentioned, to going XX% what where keep to And with we minus It's it's margin, still able correct. it. Dennis end plus the seen and up team But growth across we're they spectrum and managing has we're expectation that historically believe will We've constraints. kept do. of we're is through availability that up. the is issues my far it and supply

Mike Latimore

win kind there? location So just they the sort the cell government the full Great. of Slovenia, did and feature front everything end, all one needed, And operators then you whatever mobile based of suite government did business, meaning last stuff? on the broadcast, get you there, that

Richard Danforth

RFP the Defense. The Ministry of issued by was No.

all front based end location and the contract the of is under obligation data. for the Our

display able the in they're we be will where their real-time So, and all how are phones to moving.

Mike Latimore

Thank Great. Okay. you.

Richard Danforth

You're welcome.

Operator

Okay.

Our next Yang. from Martin question. state question your Please comes

Martin Yang

afternoon. Good the Hi. question. Thanks for taking

pricing you can more little situation the is, placed how Slovenia what us was much question versus First context was on win, weight technology? a give competitive maybe and on

Richard Danforth

pricing the were suspects award was. criteria technical usual the The all including was Martin, Everbridge. there principle not

Martin Yang

a And strength at ongoing fiscal stronger products? Got Zonehaven to expect and little And activities, the expect it. would out respective -- you GEM moment. into looking maybe how and software those customer interests year a this say pipeline that you customer is also, do on which Thanks. you do engagement and shake

Richard Danforth

like get interest a both Well, significant of because we've appears and of in has now we as California. -- cycle season, systems to the they're to I a GEM that out When it amps that them longer seen counties more a nature into there's a uptick mentioned fire up get we year urgency And for be the to them. which Zonehaven in GEM. the enter because recognized longer what XX in have place you urgency sold moment the of in. competitive Zonehaven, months ago,

people albeit Colorado or hour You and of -- fire took Zonehaven. an a circumstances life significant have a weren't fortunately of shines in the light down little at it New the all much when there. period. there more a about limited less Eve just could home, the that really be different, in a on for homes Year's But thousands event given night of of saw that kind utility loss XX that life than there need and loss been was And

we've a uptick -- in So, we that like big time got that, every happen. see events

Martin Yang

you question. of final that Got think it. for given you still your investment may the investments for pace OpEx expect extend the maybe that Do pace. Thank do COVID year? Omicron the OpEx you. A same the year, reopening and -- this

Richard Danforth

Yes.

Martin Yang

you. Thank it. Got

Richard Danforth

welcome. You're

Operator

Okay.

Please from state question. your Our next question comes [indiscernible].

Unidentified Analyst

your ask on to question like the my going just for answered. engineers, Most or that sales to be questions largely my taking in question. gentlemen. side? But for it more have headcount offerings. is Is of Thanks about been to one expanding your I wanted And SaaS going here, investment I have

Richard Danforth

a and -- something XX% well. saw We engineering in XX% as sales our Both. -- engineering in was XXXX marketing. -- What in XX% the increase increase the was fiscal

Dennis Klahn

that. don't I have

Richard Danforth

So we growth had both increase that sales continue and XXXX year. XXXX. significant fiscal in in will like a and marketing XX% to to And engineering XX% this

Unidentified Analyst

have. all I That's you. Thank Okay.

Richard Danforth

Thank you. Okay.

Operator

next Our Ed Woo. question state comes Please from your question.

Ed Woo

the Congratulations on My quarter. opportunities. question Yeah. is M&A on

acquisitions you a opportunistic year. there? the guys past did still guys Are number You of out in

Richard Danforth

Yes.

Ed Woo

And M&A the environment? how's

Richard Danforth

more but our know, affordable, which opportunistic have will part it's Ed, looking. you we to additional and bit, -- up growth important them is But good. as and and Valuations it's down which they're we're yeah, of active levers is makes M&A. continue an always actually come with down, a be

Ed Woo

there particular customer Is will any looking at that or Great. come by? whatever just international focus, reach technology or either or opportunistic is you're it

Richard Danforth

area It's and communication focused. software revenue generally focused, SaaS the critical recurring in

Ed Woo

Great. Well, thank luck. you and good

Richard Danforth

you. Thank

Operator

Our Anderson. question. question next your state Please comes Tucker from

Unidentified Analyst

Yes.

disruptions, me there my relate a add First been seeing do to answered, And regard most a of semiconductors win. you're problems the do With have of let in supply lot Slovenia chain supply I chain other supply that questions but that, the my besides are with? congratulations materials where short have couple. on to areas them or

Richard Danforth

circuits. just beyond to for hard plywood while a even steel, resins, come It's by. Raw was micro materials,

So, it covers the it gambit. Nothing is now. immune right to

Unidentified Analyst

Which to it's applies likely while. for a that continue

to The regard other labor with is question …

Richard Danforth

Absolutely is correct. correct. That

Unidentified Analyst

question … other The

Richard Danforth

tailing no off. Yeah. sign There's yet

Unidentified Analyst

could question cost what you availability with seeing The and regard labor of other sort pressures, there? you're talk is to compensation

Richard Danforth

there. been increased the in Particularly availability, U.S., substantially over Labor Spain. we've fortunate, we've and the very Spain headcount in both Canada

necessary marketing, we it's folks do. we've to U.S., Here we job Salesforce to been and we're growth United needed continue here States. mainly in the to add the the do trying attract and to the able sales And in to the been

and of board. that sure. is compensation, to folks, manufacturing, salaries, pressure software, and for sort to hardware the building the there engineers, the across the upward on hourly So, hardware the And extends

Unidentified Analyst

again, thank much. congratulations once very Well, you and

Richard Danforth

Thank you.

Operator

Okay.

question state question. [ph]. comes Our from Please next Paul your Oki

Unidentified Analyst

do thank Richard, you call. taking have my of Most Hey, questions you that guys for feel my you been enough cash? answered. have

Richard Danforth

Yeah.

cash, of We have plenty Paul.

Unidentified Analyst

Okay.

Richard Danforth

like Yeah. order Our to you I conference call. cash consumption I look product. would mentioned we operating consumption We to QX, we basis material that available. we -- soon think, that of was X.X, total likely for a inventory. an in our And at ship things But doing was thing. announced And And from working revenue, it tactic. be when QX. temporary on remarks, you the capital even all last -- in in I cash that, the the cash to for hit think know, if and in that as it's our Dennis it's the It'll, turns is us need secure a in as as his made was

Unidentified Analyst

been like seems up as more as owned, I just long cash. but was I quarter, But getting always has I've curious, there. Hey, to one this be QX weaker

quarter. Okay. the Thank you. on Congrats

Richard Danforth

You're welcome.

Unidentified Analyst

I hope year. great are you going have to a

Richard Danforth

Thank you.

Operator

your is Brian Okay. And question. Please Colley. our from state final question

Brian Colley

curious just Hey, down thanks what revenue? drove kind in here. follow-up renewing software not on services year-over-year in higher ending was the I was for a decline or step taking Was contract there one-time--? the of the and revenue, it

Richard Danforth

that. was it Yeah,

had completed ago, a year, So it's non-recurring development a year that model. substantial went live Australia. we revenue a so Australia last of recurring September into and on activity for now

Dennis Klahn

year's a And worth about of development had work. we

may been October started months think of that X I development XXXX. of it XX have approximately work

our went month the on X. So, or said, September And live it so fiscal as Richard XXXX. first of

work there was two carriers bit. cell doing that to quite were So, We different for. we had a

in revenue. software the the decrease that's for So, reason

Brian Colley

be Okay. rest for this Got to software increase it sequentially the that would for expectation moving your revenue I it. mean, year? -- of forward for

Richard Danforth

Yeah. It follow Brian. will bookings, up

and press substantial uptick a you RFPs at try announce We've uptick looking We'll releases. So, a substantial keep in bookings. in to our seen all SaaS wins.

Brian Colley

it. Got

Okay. the for Thanks follow-ups.

Richard Danforth

You're welcome.

Operator

over you Okay. remarks. turn her I'll to Richard, back closing for

Richard Danforth

handle this. will Dennis

Dennis Klahn

our be Best regularly This the in participating week We conferences at business Ideas throughout discuss the Conference. we'll investor Virtual Investor year.

call. today's to with next look plan Additional you participating report we fiscal you speaking conference quarter investor forward results. when quarter, second year. again are fiscal XXXX this for Thank We in presentations throughout

Operator

call. thank participation. conference your concludes you This you. We for Thank today's

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

Genasys (GNSS) 8 Feb 222022 Q1 Earnings call transcript