The following is a summary of the Genasys Inc. (GNSS) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Year-over-year growth in software business at 120%, with recurring revenues growing at 138%.

• Total Q3 revenues were $7.2 million, a decrease of 50% from the previous year, mainly due to the high baseline set by last year's completed Army Program of Record.

• Gross profit margin improved to 53%, up by six percentage points, largely due to a higher mix of software revenue.

• Quarterly operating expenses rose 12% to $9.1 million, reflecting increased SG&A and R&D costs, associated with Evertel expenses.

• Operating loss for Q3 was $5.4 million, widened from a loss of $1.4 million in the previous year, influenced by lower hardware revenues and higher operating expenses.

Business Progress:

• Significant progression towards the Puerto Rico Dam project, expected to drive $75 million in revenue in fiscal years 2025 and 2026.

• Expansion of Genasys Protect EVAC coverage in California, crucial for managing evacuations during intense fire seasons.

• Hosted a law enforcement appreciation event, showcasing the integration of CONNECT and traditional LRAD hardware, enhancing cross-agency communications.

• Reported an uptick in law enforcement hardware bookings, nearly 50% higher year-to-date than the total for fiscal 2023.

• International bookings rose by 117% year-over-year, marking a strong recovery post-COVID.

Opportunities:

• The Puerto Rico Dam and U.S. Army's CROWS-AHD Program of Record present foundations for over $200 million in highly profitable future revenues.

• The software business is on track to double the ARR in fiscal 2024, promising enhanced revenue visibility and stability.

• The broader application of Genasys EVAC and CONNECT products to manage various natural disasters and public safety events across multiple states.

Risks:

• Potential impact on business from wider economic fluctuations or recessions; however, historical resilience was noted with strong performance during the COVID period.

More details: Genasys IR

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