Geospace Technologies (GEOS) investor relations material

Executive summary

• Revenue for Q3 2026 was $15.8 million, down 36.4% year-over-year, mainly due to lower demand in Smart Water and Energy Solutions segments.

• Net loss for Q3 2026 was $9.7 million ($0.75 per diluted share), compared to net income of $0.8 million ($0.06 per diluted share) in the prior year.

• Margins and gross profit were pressured by inflation, raw material costs, tariffs, and component availability, partially offset by cost reduction and productivity improvements; gross profit for the quarter was $0.5 million, down from $7.5 million.

• A 20% workforce reduction plan was implemented, targeting $10 million in annualized savings.

• Awarded a $10.8 million U.S. Navy contract for a Seismic Acoustic Detection and Ranging system, to be completed by December 2027.

Financial highlights

• Nine-month revenue was $61.1 million, down from $80.1 million in the prior year; nine-month net loss was $30.5 million ($2.37 per diluted share) compared to a $0.7 million loss ($0.05 per diluted share) last year.

• Gross profit for the nine months was $3.9 million, down from $29.4 million year-over-year.

• Operating expenses decreased by $1.2 million for the quarter and $400,000 for the nine-month period, mainly due to lower personnel, commissions, and legal fees; operating expenses for the quarter were $10.6 million, down 9.8% year-over-year.

• Cash and cash equivalents at quarter-end were $2.8 million, with total liquidity including restricted cash at $4.8 million; working capital at quarter-end was $41 million, including $17 million in receivables.

• No long-term debt outstanding; $25 million revolving credit facility available.

Outlook and guidance

• No specific revenue or earnings guidance was provided.

• Majority of $98 million in unsatisfied performance obligations expected to be fulfilled by Q3 FY2027, mainly from the PRM contract; next PRM contract installment of ~$35 million anticipated between Q2 and Q3 FY2027.

• The company expects revenue recognition from the Navy contract to span fiscal years 2027 and 2028, with PRM contract revenue concluding between Q3 and Q4 of fiscal 2027.

• Cost containment and workforce reduction expected to yield $10 million in annualized savings.

• Management expects continued revenue contributions from Smart Water and Intelligent Industrial segments as market traction grows.