Genasys 2025 Q3 Earnings Slight Improvement in Losses Amid Strong Revenue Growth

Genasys (GNSS) reported its fiscal 2025 Q3 earnings on August 14th, 2025, with a mixed performance. The company exceeded revenue expectations with a 37.5% year-over-year increase and slightly improved its per-share losses. However, it did not provide a formal earnings guidance update for the quarter.

Revenue for the third quarter surged by 37.5% year-over-year to $9.86 million, driven largely by the Puerto Rico early warning system. Product sales accounted for $7 million, while contract and other services contributed $2.86 million to total revenue. The company highlighted robust international and domestic long-range acoustic device (LRAD) bookings, although federal funding freezes have temporarily slowed software sales.

Genasys narrowed its losses to $0.14 per share in Q3 2025, representing a 6.7% improvement from a loss of $0.15 per share in the same period in 2024. On a net income basis, the company reduced its loss to $-6.49 million in Q3 2025, down from $-6.68 million in Q3 2024, representing a 2.9% reduction in losses. While the company still reported a net loss, the improvement in both per-share and absolute terms signals a step in the right direction. The slight narrowing of losses indicates progress, albeit within a challenging business environment.

The stock price of Genasys edged up 1.86% during the latest trading day but posted a 0.00% change for the full trading week. Over the past month, however, the stock has fallen by 13.68%.

The performance of a post-earnings strategy—buying Genasys shares following a quarterly revenue increase and holding for 30 days—has historically underperformed. Over the past three years, the strategy has returned -33.47%, significantly lagging the 46.48% benchmark return. The strategy's excess return of -79.95% and a CAGR of -13.11% indicate a poor track record. Additionally, the strategy’s maximum drawdown was 0.00%, and it had a Sharpe ratio of -0.19, highlighting its high-risk profile and minimal downside protection.

Richard S. Danforth, CEO & Director, noted that the Puerto Rico early warning system was the primary revenue driver in Q3 2025, generating $4.3 million in revenue. He highlighted a strong software pipeline and growing LRAD bookings, while noting that federal funding freezes have temporarily slowed software sales. Danforth also emphasized that operating expenses have been reduced by $2.5 million annually, while the company maintains a strong sales effort for Genasys Protect. He expressed cautious optimism, citing a $60 million 12-month backlog and a growing sales pipeline, particularly in regions east of the Rockies. Additionally, he pointed to progress in Puerto Rico, where construction on all nine dams in the first two groups is underway, with expectations of improved gross margins as the project advances.

Cassandra Hernandez-Monteon, CFO, provided guidance for fiscal 2025, forecasting Puerto Rico-related revenue between $15 million and $20 million. She noted that gross margins are expected to improve and operating expenses will remain consistent with Q3. The company expects continued momentum from a $61 million 12-month backlog and anticipates increased cash flow from operations as the Puerto Rico project advances. Additionally, CROWS-related revenue is expected to materialize in fiscal 2026, with potential growth beyond the initial $8 million to $8.5 million tranche.

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