Genasys Inc.

Ladies and gentlemen, thank you for standing by. My name is Krista and I will be your conference operator today. At this time, I would like to welcome everyone to Genesis third quarter 2026 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star then the number one on your telephone keypad. and if you'd like to withdraw your question, again, press star one. Thank you. I would now like to turn the conference over to Clay Lielos, Investor Relations. Please go ahead.

Clay Lielos Good afternoon, everyone. Thank you for participating in today's conference call to discuss Genesis Inc.'s fiscal third quarter 2026 results on June 30th, 2026. Joining us on today's call are the company's Chief Executive Officer, Richard Danforth, and Chief Financial Officer, Cassandra Monteon. Before we begin, let me remind everyone of the company's Safe Harbor disclaimer. Certain portions of our comments today will concern future expectations, plans, and prospects of the company that constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements containing verbs such as aims, anticipates, estimates, expects, believes, intends, plans, predicts, will, may, continue, projects, or targets, and negatives of these words and similar words or expressions. Forward-looking statements are subject to certain risk and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. The factors that could affect our actual results include, among others, those that are discussed under the heading risk factors in our most recently filed reports with the SEC, including our annual report on Form 10-K, our quarterly reports on Form 10-Q, and our current reports on Form 8-K. In addition, this call includes discussions of certain non-GAAP financial measures, including adjusted EBITDA, the most directly comparable GAAP measure and reconciliations for non-GAAP measures are available in the earnings release and other documents posted on the company's website under investor relations. A replay of the webcast will be made available approximately four hours after the presentation through the conference call link on the events and presentations page of the company's website. With that, I would like to turn the call over to Genesys CEO, Richard Danforth.

Thank you, Clay. and welcome everyone. Revenue for the fiscal third quarter was $7.3 million compared to $9.9 million in the prior year period. The decrease was driven by two timing related factors. The first was a supply chain constraint associated with the CROWS program. The constraint has now been resolved. Production on this initial $9 million order is underway and we expect to complete delivery within the fiscal year. Importantly, this was a timing issue rather than a demand issue. The second factor was a deliberate pause in our work in Puerto Rico. We elected to suspend work until customer payments resumed. Following quarter end, collections began flowing again, and we have since remobilized project activities on the island. Even with the temporary pause, we expect the work scheduled for the fiscal year to remain unchanged. With both of these timing factors now moving in the right direction and with gross margins remaining above 50%, we continue to expect fiscal 2026 to be a record year for both revenue and profitability. Staying on the top line, we are seeing meaningful progress and growing demand for our software offerings. Recent wins include a large multi-year Genesys Protect contract with Ada County, Idaho. home to more than 550,000 residents and over 3 million annual visitors. Ada County is the second Idaho county to replace its incumbent emergency alert provider with our platform. That displacement trend is encouraging. Agencies are moving away from legacy providers because Genesys delivers better outcomes when it really matters. We also continue to expand our platform. In June, we announced a partnership with Interra and Cal Fire to connect the Cal Fire Aware platform and Genesis Protect. This connection gives the public another trusted source for real-time emergency updates. Now, any alert issued through Genesis Protect instantly spreads across the state. Separately, we integrated Genesis Evertel with the public safety data and analytics platform called Peregrine. They are a leading crime data and intelligence software used by real-time crime centers and fusion centers today. This was tested and verified by the Vacaville, California Police Department, pushing real-time crime center intelligence directly to officers in the field rather than through manual distribution. It is worth noting that there are approximately 80 fusion centers and 800 real-time crime centers across the USA. Integrations like these accomplish two important objectives. They extend the reach of our software into the platform agencies already rely on every day, and they make Genesys Protect increasingly difficult to displace once it becomes embedded in mission-critical workflows. We are seeing steadily increasing interest from strategic partners looking to build similar connections, and we expect that to be a durable contributor to our software growth. Earlier this week, we announced a software milestone we are especially proud of. Genesis Protect now covers approximately 15% of the U.S. population and 20% of the country's land area, making it the nation's leading platform for zone-based emergency alerting, evacuation management, and secure real-time communication. That level of adoption is a testament to our technology and its ability to help keep people safe and save lives. While we are proud of this milestone, we believe there remains substantial opportunity to expand our footprint across the rest of the country. On the hardware side, momentum continues to build, particularly in critical infrastructure. Over the past several months, we have seen a steady expanding pipeline for our LRAD 950 NXT systems as a security layer for unmanned sites such as electrical substations, dams, ports, and data centers. Last week, we announced a $2.4 million critical infrastructure protection order from one of the largest utilities in the United States. The order expands a deployment that began with a single substation installation and was followed by a $2 million order. This is a customer that continues to expand its deployment as it sees the system perform. The 950 NXTs are integrated with the substation's physical security infrastructure and Multisensor Perimeter Intrusion Detection Systems. They address a full range of physical security requirements to detect, assess, communicate, respond, delay and deter threats. In short, they transform passive monitoring into immediate intervention. Critical infrastructure remains one of our strongest growth opportunities. The pipeline continues to build and we expect the market to be a meaningful driver of our hardware growth going forward. At the same time, our long-standing defense and security customers remain active. The U.S. Army continues to be an important partner, and demand from international navies and defense agencies continue to strengthen as government increased spending on force protection, maritime security, and critical infrastructure resilience. Overall, our pipeline continues to go across both hardware and software, and our focus remains on converting those opportunities into signed contracts and Recognize Revenue. Turning to the balance sheet, in July we extend the maturity of our term loan, providing additional working capital flexibility and reducing our dependence on the timing of payments from any single customer. We view our lender's willingness to extend the facility as further validation of the strength of our backlog, the opportunities within our pipeline and our long-term outlook. Overall, the fiscal third quarter was affected by timing, not by any change in underlying demand. Our backlog remains strong, our pipeline continues to grow, and the factors that delayed revenue recognition during the quarter are now being resolved. We enter the fourth quarter with improved operating leverage, greater financial flexibility, and a strong visibility into the work ahead. As a result, we remain confident in delivering a record year of revenue and profitability. With that, I'll turn the call over to Cassandra.