Genasys Inc. (NASDAQ:GNSS) Q1 2024 Earnings Call Transcript

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Richard Danforth: Well, the Genasys Protect platform approach is introducing larger deals to us. In the case of Puerto Rico, if you look at the traditional competitors we face in hardware and software, they weren’t in the picture. So, Genasys as a company was the most qualified to respond to that RFP and was reflective in the scores that the customer gave us. So, I think, yes, we will continue to pursue larger opportunities to exploit the Genasys Protect platform capabilities around the world.

Ed Woo: Great. Well, thank you and congratulations again.

Richard Danforth: Thank you.

Operator: [Operator Instructions] And then, we’ll take our next question from Martin Yang from Oppenheimer. Please go ahead, Martin.

Martin Yang: I think given the question; I think you answer part of my — the first question I have regarding OpEx associated with Puerto Rico. I know there’s not a lot of increase, but if anything changed for OpEx for Puerto Rico project, what would it be? And should we assume a major operating leverage coming from the Puerto Rico project?

Dennis Klahn: So, the second question first, yes, of course. That’s what I think I just said, talked about that. The contribution margin that it will avail will be significant. And as I said, the base business will also benefit from that increased absorption. From an OpEx perspective, travel will go up, we will hire more people on the island, but it’s a single digit kind of number. I don’t see us adding anybody in the factory. I don’t see us adding anybody in purchasing or sales or marketing. So, I think it’s nominal from a headcount perspective.

Martin Yang: Got it. Thank you. The second question is about your enterprise customers. Can you maybe give us an update on how are you seeing customer engagement and pipeline regarding your sales into the enterprise market?

Richard Danforth: Yes, for us, it’s SLED first and enterprise to be opportunistic. Aramco fell into that and there’s been several others. I don’t think we’ve released anything on a win with those yet, but you’ll see some coming shortly.

Martin Yang: Thank you. That’s it for me.

Richard Danforth: Okay.

Operator: [Operator Instructions] Okay. And there appear to be no further questions. At this time, I’d like to turn the floor back over to Brian Alger for closing remarks.

Brian Alger: Great. Thank you, everyone, for participating in today’s call. You should see the press release. It did cross the wire in the middle of our commentary. So, you can find it on our website. A replay of the call will be available on our website here shortly. For additional information and up-to-date news and activity regarding Genasys, our products, customers we serve, again, I’ll strongly recommend that you follow us on our various social platforms, whether that’s LinkedIn or X. We actively post and comment and a number of our customers do the same. So, to stay on top of things, I strongly encourage you all to follow us on those social networks. Otherwise, have a great night. We look forward to speaking with you again next quarter when we report fiscal second quarter 2024 results. Thank you.

Operator: Thank you. Ladies and gentlemen, this does conclude today’s teleconference. We thank you for your participation. You may disconnect your lines at this time, and have a great day.

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