Genasys Q3 2025: Unpacking Contradictions in PREPA Revenue, Supply Chains, and Future Projections

PREPA contract revenue recognition and gross margins, impact of supply chain on Puerto Rico project timelines, revenue contribution from Puerto Rico project, CROWS revenue and expectations are the key contradictions discussed in Genasys Inc.'s latest 2025Q3 earnings call.



Revenue Growth and Puerto Rico Project:
- Genasys reported $9.9 million in total revenues for Q3 fiscal 2025, up 42% sequentially and 38% year-on-year.
- Growth was driven by the first significant impact of the Puerto Rico early warning system project, which contributed $4.3 million in revenues.

Software Pipeline and Backlog Expansion:
- Genasys' software pipeline reached an all-time high, contributing to a growing 12-month backlog of business surpassing $60 million.
- Increased awareness of Genasys' offerings due to recent disasters like the L.A. Fires and Texas floods, along with targeted sales efforts, have led to this expansion.

Operating Expense Reduction and Headcount Adjustments:
- Genasys implemented targeted cost reductions, resulting in an expected annualized reduction of $2.5 million in operating expenses, effective from Q1 fiscal 2026.
- This action included a reduction of 19 full-time employees, with 10 in Spain, to manage expenses in light of software business slowdowns due to federal funding delays.

Puerto Rico Project Milestones:
- Genasys completed hardware and software development and integration for the initial dams in Puerto Rico, with the first dam sign-off received.
- The project is proceeding as planned, with construction underway on all dams and equipment on-site, despite payment delays that have since been resolved.