Genasys (GNSS) Q3 2026 earnings summary

Executive summary

• Fiscal Q3 2026 revenue was $7.3 million, down from $9.9 million year-over-year due to timing issues, but nine-month revenue rose 68% to $39.9 million, driven by hardware sales, especially the Puerto Rico EWS Project.

• Gross margin improved to 57.1% in Q3 2026 from 26.3% year-over-year, with nine-month gross profit up 164% to $22.2 million, driven by higher-margin software and hardware mix.

• Net loss narrowed to $4.7 million ($0.10/share) in Q3 and $4.8 million for the nine months, reflecting improved operating leverage and lower expenses.

• Adjusted EBITDA loss improved to $3.1 million in Q3 and $0.2 million for the nine months, up from $(4.8) million and $(14.7) million, respectively.

• Backlog exceeded $69 million entering Q4, with strong demand across hardware and software segments.

Financial highlights

• Hardware revenue increased 92% year-over-year to $32.5 million for the nine months, while software revenue grew 21% year-over-year in Q3 and 8% for the nine months.

• Gross margin improved to 57.1% in Q3 and 55.6% for the nine months, up from 26.3% and 35.3% year-over-year.

• Operating expenses decreased 3.8% to $8.2 million in Q3; SG&A down 4.6% and R&D down 1.2% year-over-year.

• Cash, cash equivalents, and marketable securities totaled $3.1 million as of June 30, 2026, down from $8.0 million at September 30, 2025.

• Net loss per share for the nine months was $(0.11), compared to $(0.37) in the prior year period.

Outlook and guidance

• Management expects record revenue and profitability for fiscal 2026, with both hardware and software pipelines growing.

• Puerto Rico project expected to contribute meaningfully to Q4 revenue as activities ramp up, with $21.4 million in remaining obligations, 94% to be recognized in the next 12 months.

• Liquidity remains a concern due to payment delays, but recent loan extensions and new financing are expected to support operations for the next year.

• Confident in delivering a record year, supported by a $69 million backlog and improved operating leverage.

• CROWS program constraints resolved and Puerto Rico payment backlog reduced, supporting improved delivery.