GNSS - Earnings call transcript Q2 2024

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Operator

Good day, ladies and gentlemen, and welcome to the Genasys Inc. Fiscal Second Quarter 2024 Conference Call.

[Operator Instructions]

At this time, it is my pleasure to turn the floor over to your host, Brian Alger, SVP of Investor Relations and Corporate Development. Sir, the floor is yours.

Brian Alger

Kat. you, Thank everyone. Good afternoon, Genasys' Call. Second Financial to Fiscal Quarter Conference Results Welcome XXXX I'm Corporate Relations Investor Brian SVP, Alger, and Development Genasys. for Dennis on me our the today Klahn, and are CFO. the With company's Richard call CEO; Danforth,

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

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

market EBITDA For release table the in metrics, the issued at to a the by the today. reconciliation please of adjusted of close press financial GAAP see the the company

of metrics that to of months. value revenue in to measures planning. within received executed and leading that other of period revenues production backlog use indicators a support Backlog bookings given the is regardless purchases consider scheduled these is future a customer We dollar XX measure reduction. operational related an disorders of Bookings total ship are the next metric the internal and

hours Now finally, call website. approximately this of be the X will a Investor and company's to Relations available replay

to CEO, time, this I'd Richard? over Richard to call the Danforth. like Genasys' At turn

Richard Danforth

our X second, and the addition press our Thank with $XX closed additions the a first, the issued expansion of we financing. of After today, to debt releases the quarterly you, Brian, closing earnings and in board market fantastic million welcome, report: X everybody.

Senate we best Adding I think As to the Fuge Prior Northern opportunities coming has in of Bay Solano representing currently encompasses which the to of this serves the Senate our Assembly election and it ever the District, position State in Yolo, Napa-Sonoma everyone Francisco the up on team, should District, Assembly, Bill clear open years. State Dodd Senate, to San Bill his Bill Genasys it state in fourth region. representing to more outlook that Dodd is portions and the even is been. counties. Colusa and discuss to be includes leadership Delta all Senator our going and the in which California months served and Craig California help third Lake, Area call, the business

as administrator through January over Craig from [indiscernible] Emergency to Previously, Management from XXXX. Florida served Folgate multiple he served led Craig the years. the a XXXX. as through FEMA disasters Director record-breaking XXXX May XXXX

to as this Puerto now the the law actively being to AHCs quarter. with conditions to the grown program and project into systems written for Rico with adding we XX Moving in finalized worked to selection on, our dam budget. expected CROW federal are be before scope, of and CROW of receive the record Army, XXXX end identified U.S. The of from was new previously million now and expect terms Contract announced has PREPA. $XX up

more than in revenues as over grow continuing our will revenues QX to growing quarter. $XXX to recurring million. we program least year-over-year current is as which discuss this more prior our as much expect XXX% United yield this States Army, -- at revenue program software the with And detail, We with business past and ARR netted

secured our that loan realized. our profits contracts fortifies we balance our investments for and $XX sheet, from Finally, enabling be secured business a major to senior X-year in million financing the software

financed will into is our significant In on expected but result to a hardware for now visibility backlogs additional summary, it the Further, consistent business business makes going to basis, overall not company. that to also record with grow well in fiscal software revenues, stand-alone that better very our providing continue scale a and the and get company is XXXX. profitable profits only

second the [indiscernible] while our of backwards, business million. fiscal financially with software disappointing, bookings Looking quarter quarterly we're strong was $X.X

million. Second quarter hardware bookings continued short at $X.X only to fall

contract second of quarter the the million slip United previously ships. units of installed projects on States begin replacing surface $X.X was the LRAD a One with to out the to Navy

and expected is revenues. That third order be today finally in quarter our to received was

Another or was the million of federal passage so the late delayed budget. $X by

hardware Army sequentially, these up our combined low in the bookings below revenues the the $X just are third expected While prior prior $X that AHD now entering revenues be with realized hardware from total program. included but to million year quarter resulted in million, the of quarter, fiscal backlog the period well a low roughly

the shipments at are record. orders that bookings expect U.S. were Army key a Puerto and and program project improvements including both in budget As hardware new to to International sequential pipeline we revenue DoD should expected in as Rico QX not delayed the by process. and the play look our current of we the or orders role QX, activities, under

opportunities infrastructure hardware both our safety we protection are number will that for a and of diversify public base. acoustic critical revenue Additionally, pursuing

what forecasted Though we previously identified, canceled, year. revenues. As the outlook improvements fiscal beginning of secure to the is had projects half don't the for we will we precisely able their the of couple and to expected expect opportunities know current pursuing still the were a strong as is are second be recognize but at when not bookings the in we

approximately bookings $XX expectations by of the dropped million. to our XX fiscal what Excluding Puerto year be CROW we able Rico and has from program, this close will

revenue forward. could So hardware projects pull bookings and from

it Our positive is well. recent reasonable more movement forward. history not to material expect very a a to continues business our On software shows unreasonable that side, -- is do

in Los County. million. We're announced Angeles the Software bookings over contract quarter EVAC in bookings total the included were with $X the

As mentioned for up strong revenues 'XX. March bookings. strong recurring ARR quarter-to-date, expect as software ARR with will we fiscal activity have continue least and was exiting quarter previously, we of such, versus year-over-year, were believe another recurring And XXX% million, $X.X double to revenues software to 'XX at fiscal quarter

pursuing last vision for for adapted quarter, strategy has a As is the than military business we realized. more that We application communicated being on Genasys years X focused been and successfully sold but ultimately a software of Japan, through enhanced market to Genasys. serve larger with improved the with mass and hailing devices acoustic much hardware acquisition development of notification XXXX originally to

internally and our the software afforded Zonehaven and XXXX, transforming business get-go, hardware mass hardware software market the a market-defining communications. through software, combined zone-based us our acquisitions. notification and acquisition is to develop with the protected market-leading Through of From redefining in capabilities, has our both the opportunity

and Genasys Today, with is serving a category-defining market hardware. software multibillion-dollar differentiated

developments in Our Europe selection announced strategy. this and Rico validate in Puerto our

be critical experience anchor we a attain Positioned no Genasys the are wish, as years Genasys secure going denying there may to profitable and term as potential. over and protection, new some the aggressively opportunities with members, strong and improved, who bring public remarkable of forward, additional precise infrastructure is phase each next and prospects support is Board balance Looking of pursue resources sheet, our infrastructure expertise entering growth. in near new safety protection. that fortified safety and the Through dramatically we and is to may in not a will wins public few granular visibility critical our

through go will and financials turn Dennis outlook second I Now the over to greater Dennis? the detail. to in call quarter

Dennis Klahn

Thank recurring prior with million, quarter XX% fiscal revenues a same growth of decrease approximately you, second which strength this in prior a growing from from in benefited see XXX% the $X.X $X.X period. completed for year and second second million the program year quarter, to Richard. continued XXX% record of XXXX. that quarter, over In software prior of of year was Revenues were our business the year-over-year we the from

than in quarter hardware that to million. recurring Software revenue. was More XX% revenue the reflecting decreased XXX% $X $X.X growth, million, growth offsetting this revenue

As with we started quarter, exceptionally low discussed XXXX Genasys fiscal last hardware backlog.

We from a entering the of XX% coming points resulted The and in do Gross of lower in percentages the X the out year's the absorption. year to again quarter. was gross the expect drop reduction revenues with to primarily quarters. a million fiscal period. second U.S. percentage prior of low or in slipping the DoD profit quarter, increased attributable margin this revenue recover backlog gross in margin budget addition profit to XXXX decline hardware overhead the in related in was quarter approval delayed revenue $X.X In quarter,

million the negative of acquisition quarter loss which Evertel adjusted Quarterly in incremental basis, in Adjusted compared up our comp, year's to period. was to XX% compared revenues the $X.X EBITDA last EBITDA, $X.X XX% in ago operating of $X increased The XX% was increased was second a operating the expenses in fiscal overhead quarter lower due the while subsequent SG&A to that negative the change. year year year. more On and million million of increased second million, R&D XX% expenses from over loss fiscal attributable hardware decline largely The absorption the million a year-over-year 'XX. GAAP reduced $X.X services of a million. $X.X account to excludes for than the professional prior difference $X.X quarter. and stock was noncash current were

September $X.X figure and as with Rico cash discussed marketable of bond the for $XX.X Richard Puerto million the from as bid XXXX, business fiscal million a $X.X million Cash, ago. XX, March moment just totaled year-end. Excluded being as cash held compared the securities a is equivalents of

$X.X the second million. quarter operating activities fiscal in used Cash was in

and is continue investments monetize the As return $X.X Richard and have Strong upfront of cash growing Rico financing We payment bookings quarter. and to after an to of both our provide resources receive ample the the fortified bid his made we initial believe announced balance our remarks, sheet business. finalized the our have and are in in the later conditions bond considerably. we this expect terms million diversifying mentioned contract we software award Puerto to

As and our number we earnings that large in are discussed we a about. excited there release call, in opportunities of have this are

CROW Rico revenue nearly Puerto alone, coming we're million years. the $XXX and the highly business in profitable Between in expecting XX

post grow year. it rapidly, to track and this in business Our to is growth continues on triple-digit software ARR

revenues from confident the prioritized now at to 'XX not more we're second this open like hardware considerably We are than to be position a to grow And Operator? but half in Q&A. half, we'd and fiscal that time. software first will the call that

Operator

Instructions] [Operator

question Northland Latimore first from from comes Capital. Our Mike

Mike Latimore

update here. Thanks for the

revenue, you'll year-end clarity have by funding CROW you believe what do the whether the But the calendar on budget. it I growth On for that in get order?

Richard Danforth

forecast, Mike. kickoff the to flow clarity. internal our office. meeting of scheduled program in is the The money The currently initial have that, more week is June. not After It's beginning to for we'll first

Mike Latimore

Got it.

some for how much you right sounds Okay. this expecting Puerto payment it the And guess you get Puerto clarity from Rico, of closing but fiscal on gave 'XX year? maybe excluding then any the I like a from deal, Rico guidance you're revenue might after

Richard Danforth

I expecting to think I'm for XX any the designs phase point. at need this of dams. each about they of not call. spoke the we this initial on last accept our an -- There's

subsequent be our we and signed. the then approvals an close our the and we're expectation, August end the into deposit the fiscal is get of which will and I think July to it initial us contract gives contract September required being 'XX. June, if to There by

Mike Latimore

Got it.

Rico days. on what And revenue Okay. Puerto on deal, the the recognition then XXX

Richard Danforth

worth, to last lot know, we told believe $XX and moving had of soon last it's about worth million call we $XX contract don't parts, you the be since I million been the would $XX I million. a tell. Too time, now There's to Mike,

customer scope So and added each every the dam. has to

proposal, in has our our we're now. that doing and that included So all be to and designs

think I now. to next conference be we -- to I So right would our Mike, provide than can at able can I way expect call, clarity more

Mike Latimore

over is years that like or XX get years? deployed something that I mean can X

Richard Danforth

days XXX No, no, at initial the done so The all. all I approval RFP dams. of after don't think had

Dennis Klahn

is [indiscernible] and of Year-over-year recurring revenue growing. growth XXX%

Richard Danforth

'XX be likely more 'XX be for not good it XXX, probably will still know and be more next It conference well. than that. But will as call. I'll should very

Operator

our comes And question from Ed next Capital. Ascendiant Woo from

Edward Woo

that whatnot. any a that Have they're opportunity your Obviously, devices. LRAD or of opportunities with people great we've market not used college have all on claiming these a the different getting for upticks to, and civil processors question you you is notified forces? country, civil disobedience be in about on type seen that Across My been disobedience. been hearing the police campuses slightly will

Richard Danforth

Yes, need [indiscernible] more selling been -- coming typically the in of LRADs. the of you've all be police the typical time here a is major police some on light as is weeks, States there's them, of of do a for United in have good not around queries, most Ed, watched during over follow. a would forces countries. news shine forces the crisis it's lot several LRAD this acquisition and to but But use of would What the the those a last

Edward Woo

Well, to to say that's play wish good everything. very be maybe I guys these you music wouldn't be you so great Thank with then I'll some loud some much. hear. of really capping happy and overnight. protestors luck

Operator

Instructions] [Operator

remarks. to turn this I'd time, back And like any at for it closing management to

Brian Alger

over the to good next you several the you. everyone I on conference quarterly getting there's With going our on that, we appreciate I look forward call wish call. lot Thank a night. Obviously, on all everyone and months, updating past tonight. Well, been

Operator

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

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

Genasys (GNSS) 14 May 242024 Q2 Earnings call transcript