Genasys Inc (NASDAQ:GNSS) Q3 2025 Earnings Miss Estimates, Shares Drop 5.5%

Genasys Inc (NASDAQ:GNSS) reported fiscal third-quarter 2025 results that fell short of analyst expectations, triggering a negative market reaction. The company posted revenue of $9.86 million, missing consensus estimates of $9.95 million, while its GAAP net loss per share of ($0.14) was worse than the anticipated ($0.11). Following the earnings release, shares declined approximately 5.5% in after-hours trading, extending a downward trend that has seen the stock lose 15.6% over the past month.

Key Financial Highlights

• Revenue Growth with Margin Pressure: While revenue increased 38% year-over-year from $7.17 million in Q3 2024, gross margins contracted sharply to 26.3% from 52.8% in the prior-year period. This decline was primarily attributed to the accounting treatment of the Puerto Rico Early Warning System (EWS) project and underutilized hardware capacity.
• Persistent Losses: The company reported a GAAP net loss of ($6.5 million), slightly improved from ($6.7 million) in Q3 2024. Adjusted EBITDA came in at ($4.8 million), compared to ($4.3 million) in the prior-year quarter.
• Cash Position Deteriorates: Cash and marketable securities declined to $5.5 million as of June 30, 2025, down from $13.1 million at the end of September 2024. Management expressed confidence in upcoming cash flows from Puerto Rico and a pending U.S. Army order to support operations.

Business Developments and Outlook

CEO Richard Danforth noted accelerating business activity in the second half of fiscal 2025, particularly around the Puerto Rico EWS project, which contributed $4.3 million in Q3 revenue. The company expects $15–20 million in full-year revenue from this project, with margins improving as installations progress. Additionally, Genasys anticipates an $8–8.5 million order from the U.S. Army for its LRAD equipment under the CROWS program.

However, software bookings remained weak due to delays in federal grant funding, holding up over $9 million in potential deals. The company has implemented cost-cutting measures expected to reduce annual operating expenses by $2.5 million starting in fiscal Q1 2026.

Market Reaction and Forward Estimates

The after-hours selloff suggests investor disappointment with both the revenue miss and wider-than-expected loss. Analysts currently project full-year 2025 revenue of $46.5 million and an EPS of ($0.36), with Q4 estimates at $22.3 million in revenue and ($0.03) EPS. The company did not provide explicit guidance matching these figures, leaving uncertainty around near-term profitability.

For more detailed earnings estimates and historical performance, review Genasys Inc’s earnings data.

Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Investors should conduct their own due diligence before making any financial decisions.