Geospace Technologies Q1 2026 Geospace Technologies Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q1 2026 Geospace Technologies Corp Earnings Call
Speaker #1: He Mr. is joined Kelly Robert Curda , company's chief the Financial officer . is being Today's call recorded and will be available Geospace Technologies Investor website .
Operator: At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. We do ask that you please pick up your handset to allow optimal sound quality. Lastly, if you should require operator assistance, please press star zero. It is now my pleasure to turn the floor over to Richard Kelley. Sir, you may begin.
Operator: At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. We do ask that you please pick up your handset to allow optimal sound quality. Lastly, if you should require operator assistance, please press star zero. It is now my pleasure to turn the floor over to Richard Kelley. Sir, you may begin.
Speaker #1: question at that please press star One on your telephone . If at any point your question has been answered , you may remove yourself from the queue by pressing We star two .
Speaker #1: do . We do please pick ask that you up your handset to optimal sound allow quality Lastly , if you time , require operator assistance , please press It is now my turn the floor over to Kelly .
Speaker #1: do . We do please pick ask that you up your handset to optimal sound allow quality Lastly , if you time , require operator assistance , please press It is now my turn the floor over to If you would begin .
Richard Kelley: Thank you, Katie. Good morning, and welcome to Geospace Technologies conference call for Q1 of fiscal year 2026. I am Rich Kelley, the company's Chief Executive Officer and President. I am joined by Robert Curda, the company's Chief Financial Officer. In our prepared remarks, I will provide an overview of the first quarter, and Robert will then follow up with more in-depth commentary on our financial performance, as well as an overview of our financials. I will then give some final comments before opening the line for questions. Today's commentary on markets, revenue, planned operations, and capital expenditures may be considered forward-looking, as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on what we know now, but actual outcomes are affected by uncertainties beyond our control or prediction.
Richard Kelley: Thank you, Katie. Good morning, and welcome to Geospace Technologies conference call for Q1 of fiscal year 2026. I am Rich Kelley, the company's Chief Executive Officer and President. I am joined by Robert Curda, the company's Chief Financial Officer. In our prepared remarks, I will provide an overview of the first quarter, and Robert will then follow up with more in-depth commentary on our financial performance, as well as an overview of our financials. I will then give some final comments before opening the line for questions. Today's commentary on markets, revenue, planned operations, and capital expenditures may be considered forward-looking, as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on what we know now, but actual outcomes are affected by uncertainties beyond our control or prediction.
Speaker #2: Katie Thank you . pleasure to . Good morning and welcome to for the
Speaker #2: Katie Thank you . pleasure to . Good morning and welcome to for the conference call Geospace Technologies fiscal quarter of
Speaker #2: I am Kelly , the Sir , executive Rich officer and president . am I company's chief company's financial Robert Curda , the chief keypad officer prepared our remarks , I And quarter .
Speaker #2: Anup will provide in-depth commentary on our financial performance for the first quarter, as well as an overview of our results. I will then give some final financial line comments before opening the call for questions.
Speaker #2: Today's commentary on markets operations , and capital revenue planned expenditures may be considered forward looking as defined in the Private Securities Litigation Reform Act of 1995 .
Richard Kelley: Both known and unknown risks can lead to results that differ from what is said or implied today. Some of these risks and uncertainties are discussed in our SEC Form 10-K and 10-Q filings. For convenience, we will link a recording of this call on the investor relations page of our geospace.com website, which I invite everyone to browse through and learn more about Geospace, our subsidiaries, and our products. Note that today's recorded information is time-sensitive and may not be accurate at the time one listens to the replay. Yesterday, after the market closed, we released our financial results for the period ended December 31, our first quarter of fiscal year 2026. For the three months ended December 31, we reported revenue of $25.6 million, with a net loss of $9.8 million.
Richard Kelley: Both known and unknown risks can lead to results that differ from what is said or implied today. Some of these risks and uncertainties are discussed in our SEC Form 10-K and 10-Q filings. For convenience, we will link a recording of this call on the investor relations page of our geospace.com website, which I invite everyone to browse through and learn more about Geospace, our subsidiaries, and our products. Note that today's recorded information is time-sensitive and may not be accurate at the time one listens to the replay. Yesterday, after the market closed, we released our financial results for the period ended December 31, our first quarter of fiscal year 2026. For the three months ended December 31, we reported revenue of $25.6 million, with a net loss of $9.8 million.
Speaker #2: statements are based These we but actual know outcomes are affected by now , uncertainties beyond our control or prediction Both known and unknown risks can lead to results that .
Speaker #2: differ from said or what is implied today . Some of these risks uncertainties are 10-K form and filings . For convenience , we will link 10-q a this call on the Investor Relations our Space.com website , invite which I to everyone browse about learn more Geospace .
Speaker #2: recording of after the closed , we released our financial Yesterday , the period ended December 31st . fiscal quarter of year 2026 Our first for the three ended December 31st , months reported sensitive we $25.6 million with a net loss revenue of of $9.8 million .
Speaker #2: Our products subsidiaries . Note that today's and recorded information our time and may not be accurate at the time one listens to the replay .
Richard Kelley: This past year was not without its challenges, many of which are reflected in our Q1 performance. We continue to operate in an environment shaped by economic uncertainty. Inflation drove up material costs faster than we could adjust pricing, tariffs impacted margins, and supply chain challenges forced us to carry higher inventory costs. With that said, we remain committed to what we can control: serving our customers, running the business efficiently, and making smart long-term decisions that benefit our clients, our shareholders, and our employees. Overall, I am encouraged by how our organization performed in this difficult operating environment. We continue to invest wisely in our future, advance our strategic initiatives, and leverage innovative technology to further diversify our business. These efforts position us well to drive sustainable growth and long-term value for our shareholders. The Smart Water segment continues to operate in a stable, yet increasingly demanding environment.
Richard Kelley: This past year was not without its challenges, many of which are reflected in our Q1 performance. We continue to operate in an environment shaped by economic uncertainty. Inflation drove up material costs faster than we could adjust pricing, tariffs impacted margins, and supply chain challenges forced us to carry higher inventory costs. With that said, we remain committed to what we can control: serving our customers, running the business efficiently, and making smart long-term decisions that benefit our clients, our shareholders, and our employees. Overall, I am encouraged by how our organization performed in this difficult operating environment. We continue to invest wisely in our future, advance our strategic initiatives, and leverage innovative technology to further diversify our business. These efforts position us well to drive sustainable growth and long-term value for our shareholders. The Smart Water segment continues to operate in a stable, yet increasingly demanding environment.
Speaker #2: This past was not without its year challenges , many of which are reflected in our first quarter performance . We operate in an continue to .
Speaker #2: Inflation faster than up we could adjust costs pricing material . Tariffs impacted margins and supply chain challenges forced us to higher inventory costs carry .
Speaker #2: With that said , we remain committed to what we can control serving our drove customers , running the business smart making efficiently and long term that benefit our Our decisions shareholders clients .
Speaker #2: and our . Overall , employees encouraged by how our I am organization performed in difficult this operating environment . We continue to invest wisely in future our , advance our strategic initiatives , and leverage technology to further business innovative diversify our efforts .
Speaker #2: position us well to drive sustainable growth and long term our shareholders value for . The Smart continues segment to operate in a These stable yet increasingly demanding environment .
Richard Kelley: As is typical of Q1, revenue is reduced due to seasonal deployment schedules and the timing of municipal government budget cycles. However, long-term demand for water infrastructure, treatment, and management services remains strong, driven by population growth, urbanization, aging infrastructure, and heightened regulatory and environmental standards. We are expanding the geographic reach of our sales and marketing operations, where these pressure points are most acute, where demand criteria exists, and our technology offers significant added value. At the same time, the industry faces challenges, including rising operating costs, climate-related variability, evolving compliance requirements, and the need for sustained capital investment. These dynamics reinforce the importance of prudent planning, operational discipline, and long-term asset stewardship. The environment surrounding our energy solutions segment is defined by uncertainty and change.
Richard Kelley: As is typical of Q1, revenue is reduced due to seasonal deployment schedules and the timing of municipal government budget cycles. However, long-term demand for water infrastructure, treatment, and management services remains strong, driven by population growth, urbanization, aging infrastructure, and heightened regulatory and environmental standards. We are expanding the geographic reach of our sales and marketing operations, where these pressure points are most acute, where demand criteria exists, and our technology offers significant added value. At the same time, the industry faces challenges, including rising operating costs, climate-related variability, evolving compliance requirements, and the need for sustained capital investment. These dynamics reinforce the importance of prudent planning, operational discipline, and long-term asset stewardship. The environment surrounding our energy solutions segment is defined by uncertainty and change.
Speaker #2: As is typical of the first quarter , revenue is reduced deployment seasonal schedules and the timing of municipal government budget cycles . However , long term demand for for for water infrastructure treatment and management services remains strong .
Speaker #2: Driven by population growth , urbanization , aging infrastructure heightened regulatory and and environmental standards expanding the . We are geographic reach of our sales and marketing these operations , where are pressure points most our exists and criteria , where acute technology offers significant value added .
Speaker #2: At the the industry faces challenges , time , including rising costs , variability climate , evolving , compliance evolving requirements , and the related sustained capital need for investment .
Speaker #2: At the the industry faces challenges , time , including rising costs , variability climate , evolving , compliance evolving requirements , and the related sustained capital need for operating These dynamics reinforce the importance of planning prudent , operational discipline and long term stewardship asset .
Richard Kelley: The global energy demand remains resilient, reflecting the essential role that oil and natural gas play in supporting economic activity, industrial production, and energy security. We were encouraged by the award of the large Permanent Reservoir Monitoring contract in fiscal year 2025, which reinforces the strength of our capabilities and marketing position. In addition, our Pioneer Land Node solution continues to drive interest in the market. We have completed several sales and anticipate additional sales later this year. At the same time, the sector faces ongoing volatility driven by geopolitical events, inflationary pressures, regulatory developments, and evolving expectations from investors and policymakers. While commodity prices have fluctuated over the past year, these movements reinforce the importance of maintaining a disciplined approach rather than reacting to short-term market signals. Look, the long-term fundamentals of our industry remain intact, but success requires caution, adaptability, and operational excellence.
Richard Kelley: The global energy demand remains resilient, reflecting the essential role that oil and natural gas play in supporting economic activity, industrial production, and energy security. We were encouraged by the award of the large Permanent Reservoir Monitoring contract in fiscal year 2025, which reinforces the strength of our capabilities and marketing position. In addition, our Pioneer Land Node solution continues to drive interest in the market. We have completed several sales and anticipate additional sales later this year. At the same time, the sector faces ongoing volatility driven by geopolitical events, inflationary pressures, regulatory developments, and evolving expectations from investors and policymakers. While commodity prices have fluctuated over the past year, these movements reinforce the importance of maintaining a disciplined approach rather than reacting to short-term market signals. Look, the long-term fundamentals of our industry remain intact, but success requires caution, adaptability, and operational excellence.
Speaker #2: The environment energy surrounding our Solutions segment is defined by uncertainty and The change . global energy demand remains resilient , reflecting the role that oil and natural gas play in supporting economic activity Industrial .
Speaker #2: Production and energy security. We were encouraged by the award of the large permanent reservoir monitoring contract in fiscal year 2025, which reinforces the strength of our marketing position and.
Speaker #2: In addition , our land node solution continues to pioneered drive the interest in market . We have completed several sales and additional sales anticipate later this year same the the .
Speaker #2: time , ongoing volatility driven by sector geopolitical At , inflationary pressures , regulatory evolving developments and expectations from investors and events . While commodity fluctuated over the past year , prices these movements reinforce the of maintaining a have importance approach than reacting to rather short term disciplined signals market .
Speaker #2: term The long fundamentals of our remain intact , but success requires industry caution , adaptability and operational excellence . Our intelligent industrial segment continues to steady , predictable from revenue our industrial sensors , imaging contract manufacturing products and solutions .
Richard Kelley: Our Intelligent Industrial segment continues to generate steady, predictable revenue from our industrial sensors, imaging products, and contract manufacturing solutions. As previously announced, we strengthened our security portfolio with the acquisition of GeoVox Security, the exclusive licensee of a human heartbeat detection algorithm developed by Oak Ridge National Laboratory. Since the acquisition, customer interest and engagement has exceeded GeoVox's historical levels, driven largely by the reduced product form factor and the introduction of a monthly subscription model, which simplifies procurement by enabling purchase orders under operating budgets rather than capital expenditures. Combined with the consistent revenue from our long-established industrial product lines, this recurring revenue model positions the intelligent industrial segment for growth in 2026 and beyond. Over the past year, we prioritized safe and reliable operations across our company. We managed costs carefully, maintained capital discipline, and continued to strengthen our strategic position.
Richard Kelley: Our Intelligent Industrial segment continues to generate steady, predictable revenue from our industrial sensors, imaging products, and contract manufacturing solutions. As previously announced, we strengthened our security portfolio with the acquisition of GeoVox Security, the exclusive licensee of a human heartbeat detection algorithm developed by Oak Ridge National Laboratory. Since the acquisition, customer interest and engagement has exceeded GeoVox's historical levels, driven largely by the reduced product form factor and the introduction of a monthly subscription model, which simplifies procurement by enabling purchase orders under operating budgets rather than capital expenditures. Combined with the consistent revenue from our long-established industrial product lines, this recurring revenue model positions the intelligent industrial segment for growth in 2026 and beyond. Over the past year, we prioritized safe and reliable operations across our company. We managed costs carefully, maintained capital discipline, and continued to strengthen our strategic position.
Speaker #2: As previously announced , strengthened security our portfolio with the acquisition of the exclusive security , of a human detection licensee we developed by Oak National Ridge Labs .
Speaker #2: Since the generate exceeded historical levels , the reduced form product factor largely by introduction of a subscription driven simplifies procurement by enabling purchase orders under operating budgets rather than capital expenditures .
Speaker #2: the consistent from revenue industrial product lines , this recurring revenue model positions the intelligent industrial segment for growth . In 2026 and beyond the .
Speaker #2: past year , Over we prioritized safe acquisition , reliable operations across our company . We Combined with carefully managed costs discipline , and can continue to strengthen our strategic position .
Richard Kelley: Our investment decisions were guided by conservative assumptions and rigorous return criteria, ensuring that capital was deployed where it could generate durable value. Looking ahead, we expect continued uncertainty in global markets. While challenges remain, we believe the company is well-positioned due to the quality of our portfolio, the experience and professionalism of our workforce, and our conservative financial framework. We will continue to evaluate opportunities carefully, avoid speculative investments, and remain guided by returns, risk management, and long-term shareholder value. I will now turn the call over to Robert to provide more detail of our financial performance.
Richard Kelley: Our investment decisions were guided by conservative assumptions and rigorous return criteria, ensuring that capital was deployed where it could generate durable value. Looking ahead, we expect continued uncertainty in global markets. While challenges remain, we believe the company is well-positioned due to the quality of our portfolio, the experience and professionalism of our workforce, and our conservative financial framework. We will continue to evaluate opportunities carefully, avoid speculative investments, and remain guided by returns, risk management, and long-term shareholder value. I will now turn the call over to Robert to provide more detail of our financial performance.
Speaker #2: Our decisions, by conservative assumptions, investment, and rigorous return criteria, ensured that capital was deployed where it could generate durable value. Looking ahead, we expect continued uncertainty in global markets.
Speaker #2: While remain . challenges We well positioned the company is believe due to the quality of our portfolio . experience and The our and our professionalism of conservative framework workforce .
Speaker #2: While remain . challenges We well positioned the company is believe due to the quality of our portfolio . experience and The our and our professionalism of conservative framework workforce financial We continue to will opportunities evaluate carefully , avoid investments remain and guided by speculative returns , risk management and long term shareholder value will now .
Robert Curda: Thanks, Rich. Before I begin, I'd like to remind everyone that we will not provide any specific revenue or earnings guidance during our call this morning. In yesterday's press release for our Q1 ended 31 December 2025, we reported revenue of $25.6 million compared to last year's revenue of $37.2 million. Net loss for the quarter was $9.8 million, or $0.76 per diluted share, compared to the Q1 of last year's net income of $8.4 million, or $0.65 per diluted share. Q1 revenue from the company's Smart Water segment totaled $5.8 million for the three months ended 31 December 2025. This compares to $7.3 million in revenue for the same period a year ago, a decrease of 21%.
Robert Curda: Thanks, Rich. Before I begin, I'd like to remind everyone that we will not provide any specific revenue or earnings guidance during our call this morning. In yesterday's press release for our Q1 ended 31 December 2025, we reported revenue of $25.6 million compared to last year's revenue of $37.2 million. Net loss for the quarter was $9.8 million, or $0.76 per diluted share, compared to the Q1 of last year's net income of $8.4 million, or $0.65 per diluted share. Q1 revenue from the company's Smart Water segment totaled $5.8 million for the three months ended 31 December 2025. This compares to $7.3 million in revenue for the same period a year ago, a decrease of 21%.
Speaker #2: turn the I call over to Robert to provide more detail of our financial performance . Thanks , Rich .
Speaker #3: I Before begin , I'd like to remind everyone that not provide we will any specific revenue or earnings guidance during our call . This morning and yesterday's press release for our first quarter ended December 31st , 2025 .
Speaker #3: We reported revenue of $25.6 million compared to last year's revenue of net 37.2 million , loss for the quarter was 9.8 million , or $0.76 per diluted last year's share , the first quarter of income of 8.4 million , or $0.65 per share .
Speaker #3: The revenue from the First Quarter segment was $5.8 million for the three months ended December 31, 2025. This compares to $7.3 million in revenue for the same period a year ago, a decrease of 21%.
Robert Curda: The decrease in revenue is due to lower demand for the company's Hydroconn cable and connector products. The energy solutions segment revenue totaled $14.6 million for the three months ended 31 December 2025. This compares to $24.3 million in revenue for the same period a year ago, a decrease of 40%. Revenue for the three months ended 31 December 2025 included $10.6 million of Pioneer and related equipment for an order to Dawson Geophysical, announced in August 2025. However, in comparison, revenue for the first quarter of the prior year included a $17 million OBX marine wireless product sale. Additionally, the reduction in revenue for the first quarter of fiscal year 2026 was due to lower utilization of the OBX rental fleet.
Robert Curda: The decrease in revenue is due to lower demand for the company's Hydroconn cable and connector products. The energy solutions segment revenue totaled $14.6 million for the three months ended 31 December 2025. This compares to $24.3 million in revenue for the same period a year ago, a decrease of 40%. Revenue for the three months ended 31 December 2025 included $10.6 million of Pioneer and related equipment for an order to Dawson Geophysical, announced in August 2025. However, in comparison, revenue for the first quarter of the prior year included a $17 million OBX marine wireless product sale. Additionally, the reduction in revenue for the first quarter of fiscal year 2026 was due to lower utilization of the OBX rental fleet.
Speaker #3: The decrease in revenue is due to lower demand for the company's cable and hydrogen connector products energy segment Solutions revenue totaled 14.6 million for the three months ended December 31st , 2025 .
Speaker #3: This compares to 24.3 million in revenue same period a for the A ago . year decrease Revenue for the three ended December 31st , months 2025 included 10.6 million of pioneer and related equipment for an order to Joshua to , Geophysical Dawson announced in August of However , 2025 .
Speaker #3: In revenue for the prior year comparison, included a $17 million OB marine wireless product sale reduction in first quarter; the revenue for the fiscal year 2026 was due to lower utilization of the OB rental revenue for the company.
Robert Curda: Revenue for the company's intelligent industrial segment totaled $5.1 million for the three-month period ended 31 December 2025. This is compared with $5.6 million for the same year ago period, a decrease of 8%. The decrease in revenue for the three months ended 31 December 2025 was primarily due to lower demand for industrial sensor products. This decrease was partially offset by an increase in demand for our contract manufacturing services. As of 31 December 2025, the company had $10 million in cash and cash equivalents. Additionally, the company's working capital was $52.2 million, which includes $25.4 million of trade accounts and financing receivables as of 31 December. The company continues to own unencumbered property and real estate in both domestic and international locations.
Robert Curda: Revenue for the company's intelligent industrial segment totaled $5.1 million for the three-month period ended 31 December 2025. This is compared with $5.6 million for the same year ago period, a decrease of 8%. The decrease in revenue for the three months ended 31 December 2025 was primarily due to lower demand for industrial sensor products. This decrease was partially offset by an increase in demand for our contract manufacturing services. As of 31 December 2025, the company had $10 million in cash and cash equivalents. Additionally, the company's working capital was $52.2 million, which includes $25.4 million of trade accounts and financing receivables as of 31 December. The company continues to own unencumbered property and real estate in both domestic and international locations.
Speaker #3: industrial Intelligent totaled three month period ended December 31st , 2025 . This is 5.1 million for the compared with 5.6 million for the same year ago period , a decrease of 8% .
Speaker #3: The decrease in revenue for the three months ended December 31st , 2025 was primarily due to lower demand for industrial products . sensor This decrease was partially offset by an increase in demand for our contract services manufacturing .
Speaker #3: As of December 31st , 2025 , the had 10 million in cash and cash company equivalents . Additionally , the company's capital 52.2 million , working which includes accounts and was financing receivables .
Speaker #3: As of 25.4 million of trade company own continues to unencumbered property and real both estate in domestic international . In locations 2006 , management and capital expenditure budget of anticipate additions to the rental fleet given current market anticipates a conditions .
Robert Curda: In fiscal year 2006, management anticipates a capital expenditure budget of $5 million and does not anticipate additions to the rental fleet given current market conditions. This concludes my discussion, and I'll turn the call back to Rich.
Robert Curda: In fiscal year 2006, management anticipates a capital expenditure budget of $5 million and does not anticipate additions to the rental fleet given current market conditions. This concludes my discussion, and I'll turn the call back to Rich.
Richard Kelley: Thank you, Robert. This concludes our prepared commentary, and I will now turn the call back to the moderator for any questions from our listeners.
Richard Kelley: Thank you, Robert. This concludes our prepared commentary, and I will now turn the call back to the moderator for any questions from our listeners.
Speaker #3: This concludes my discussion turn the and I'll Rich to .
Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad now. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. We do ask that you please pick up your handset to allow for optimal sound quality. We will pause for just a moment to allow questions to queue. Again, that is star one if you would like to ask a question now. Again, we will pause for just a moment to allow everyone the opportunity to ask questions. Please press star one at this time. Our first question will come from Martin Lorenzen, private investor. Please go ahead.
Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad now. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. We do ask that you please pick up your handset to allow for optimal sound quality. We will pause for just a moment to allow questions to queue. Again, that is star one if you would like to ask a question now. Again, we will pause for just a moment to allow everyone the opportunity to ask questions. Please press star one at this time. Our first question will come from Martin Lorenzen, private investor. Please go ahead.
Speaker #2: you Robert . This concludes our prepared commentary , and I will now turn the call back to the moderator for any questions from our listeners .
Speaker #1: Thank you. If you would like to ask a question, please press star one on your telephone keypad. Now, if at any point your question has been answered, you may remove yourself from the queue by pressing star two.
Speaker #1: We do ask pick up that you please your allow handset to optimal for sound quality . We will pause for just a moment to allow questions to queue .
Speaker #1: Again , that is star like to ask a question . . Now one . Again , If we will pause for just a moment to everyone allow the opportunity to ask questions .
Speaker #1: Please press time . Our first question from will come Martin Lorenzen , private investor . ahead .
Martin Lorenzen: Good morning.
Martin Lorenzen: Good morning.
Richard Kelley: Good morning, Martin.
Richard Kelley: Good morning, Martin.
Martin Lorenzen: Can you talk about the strategic importance of the Heartbeat installed base? Specifically, when should we expect a meaningful portion of those contracts to come up for renewal? And if that installed base were fully subscription-based today, which I realize it's not, but just hypothetically posing, what would be the implied annual recurring revenue for us?
Martin Lorenzen: Can you talk about the strategic importance of the Heartbeat installed base? Specifically, when should we expect a meaningful portion of those contracts to come up for renewal? And if that installed base were fully subscription-based today, which I realize it's not, but just hypothetically posing, what would be the implied annual recurring revenue for us?
Speaker #4: Good morning .
Speaker #2: Good morning , Martin .
Speaker #4: portion of those meaningful contracts to come up for renewal ? And if that install were fully base
Speaker #4: but just hypothetically posing , what would be the implied annual recurring revenue for us .
Richard Kelley: Thanks for the question, Martin. So, I'll break it into two pieces. The first one is that we have reached out to the historical installed base. You know, the prior system was designed to last for many, many years. However, that equipment is aging out, and there is obviously interest in replacing their legacy equipment with the new subscription model. However, that base is pretty diverse, and it's international in nature. We've not really run the numbers as if we did a 100% replacement, knowing that really wasn't possible, so I don't have a good answer for you. But that clearly would be, you know, there's several hundred installed bases, so you can sort of imply what that might be. That's a good question.
Richard Kelley: Thanks for the question, Martin. So, I'll break it into two pieces. The first one is that we have reached out to the historical installed base. You know, the prior system was designed to last for many, many years. However, that equipment is aging out, and there is obviously interest in replacing their legacy equipment with the new subscription model. However, that base is pretty diverse, and it's international in nature. We've not really run the numbers as if we did a 100% replacement, knowing that really wasn't possible, so I don't have a good answer for you. But that clearly would be, you know, there's several hundred installed bases, so you can sort of imply what that might be. That's a good question.
Speaker #2: for the Thanks question , Martin . So pieces . I'll break it into two The first one is , is that we have reached out .
Speaker #2: to The historical install base . You know , the the to system was prior many , many . However , that is aging out .
Speaker #2: there is last for obviously And interest in replacing their legacy equipment with the new years subscription model . However , that that base is , that base is pretty diverse its in international in We've nature .
Speaker #2: not really Please go run the numbers . If we did 100% replacement , knowing that , that really wasn't possible . So I don't have a good answer for you , but that clearly would be , you know , there's several hundred bases , so you can sort installed of imply what that might be .
Operator: Thank you. Once again, if you would like to ask a question, please press star one. Our next question will come from Bill Dezellem with Titan Capital. Your line is open.
Operator: Thank you. Once again, if you would like to ask a question, please press star one. Our next question will come from Bill Dezellem with Titan Capital. Your line is open.
Speaker #2: That's a good question .
Speaker #1: Thank you . Once again , if you ask a would like to please press star one . question will come from Bill Zelin with Tieton Capital .
William Dezellem: Thank you. I have a group of questions. First of all, on the government's, the US government's website, there is a reference to, Homeland Security doing a, an RFP for persistent surveillance detection system for 15mi. Did you all bid on that?
William Dezellem: Thank you. I have a group of questions. First of all, on the government's, the US government's website, there is a reference to, Homeland Security doing a, an RFP for persistent surveillance detection system for 15mi. Did you all bid on that?
Speaker #1: Your line is open. Our next.
Speaker #5: Thank of a group have questions . the First of all , government's US on government's , there is a reference to homeland Security doing a an RFP for surveillance detection persistent system for 15 miles .
Richard Kelley: Good morning, Bill. Thanks for the question. So even though that's out there, if you also look, they actually did a direct award. We followed up with that, and this administration, in order to expedite, contracts, has taken the mindset to do direct awards where applicable. And so in the areas of interest, they did direct awards. We were not direct awarded, in relationship to that. So there is no expectation of a further RFP.
Richard Kelley: Good morning, Bill. Thanks for the question. So even though that's out there, if you also look, they actually did a direct award. We followed up with that, and this administration, in order to expedite, contracts, has taken the mindset to do direct awards where applicable. And so in the areas of interest, they did direct awards. We were not direct awarded, in relationship to that. So there is no expectation of a further RFP.
Speaker #5: Did you all bid that
Speaker #5: on
Speaker #2: . So even though that's out there , if you also look , they actually did a direct award . We followed up with that .
Speaker #2: And this administration in order to expedite contracts , has mindset taken the to do direct awards . Were applicable . And so in the areas of interest , they did direct awards .
Speaker #2: We were not direct awarded in relationship to that . So there is no expectation of a RFP further .
William Dezellem: Okay, thank you. And then shifting to Petrobras and that contract win. Would you discuss the timeline for the deployment of that and how you anticipate revenues will be reflected over time?
William Dezellem: Okay, thank you. And then shifting to Petrobras and that contract win. Would you discuss the timeline for the deployment of that and how you anticipate revenues will be reflected over time?
Speaker #5: Thank Okay . you . then And to shifting Petrobras and that win contract discuss the you timeline for the deployment of that and and how you anticipate revenues will be reflected over time ?
Richard Kelley: You want to speak to the revenue recognition?
Richard Kelley: You want to speak to the revenue recognition?
Robert Curda: Yeah. The revenue recognition will be an over time model, which will be very similar in nature to percentage completion. So as we accumulate a cost against what our total anticipated cost, we'll recognize revenue proportionately.
Robert Curda: Yeah. The revenue recognition will be an over time model, which will be very similar in nature to percentage completion. So as we accumulate a cost against what our total anticipated cost, we'll recognize revenue proportionately.
Speaker #2: You want to speak to the revenue recognition .
Speaker #3: The revenue recognition will be an overtime, which will be very similar in nature to percentage of completion. We accumulate cost against what our total cost—recognize, anticipated proportionately.
Richard Kelley: We anticipate recognizing revenue for the first time in Q3?
Richard Kelley: We anticipate recognizing revenue for the first time in Q3?
Robert Curda: Yeah, beginning in Q3.
Robert Curda: Yeah, beginning in Q3.
Richard Kelley: And that project is slated to, as you know, as you remember, Bill, the prior discussions, the goods contract, which is our portion of that, expects to be completed in Q1 of 2027. So we'll have revenue recognition through that. And then on the actual installation, that's the consortium that we're partnered with in Brazil, and there'll be a small other portion of revenue recognition later in Q4 in 2027.
Richard Kelley: And that project is slated to, as you know, as you remember, Bill, the prior discussions, the goods contract, which is our portion of that, expects to be completed in Q1 of 2027. So we'll have revenue recognition through that. And then on the actual installation, that's the consortium that we're partnered with in Brazil, and there'll be a small other portion of revenue recognition later in Q4 in 2027.
Speaker #2: And we anticipate recognizing revenue for the
Speaker #2: in Q3 .
Speaker #3: Yeah . Beginning in will Q3 .
Speaker #3: . And that
Speaker #2: is slated project to , you know , as you Bill prior discussions , the goods contract , which is our portion of that expects to be completed in Q1 of 2027 .
Speaker #2: So we'll have revenue recognition through And then on the actual installation , that's the consortium that we're partnered with Brazil . in And there'll be small a other of revenue portion recognition later in in 2027 .
William Dezellem: And so as we shift into Q3, what is your anticipated revenue level that you would experience that quarter and then in Q4?
William Dezellem: And so as we shift into Q3, what is your anticipated revenue level that you would experience that quarter and then in Q4?
Speaker #5: so as we And shift into Q3 , what is your revenue level that you would that experience that quarter and then and then in Q4 ?
Richard Kelley: We're not really speaking in actuals at this time, Bill, but if you could imagine, I mean, the portion of the contract, if you divided it over the next three quarters, roughly, it'll be a slightly lower in the first quarter as we build up production capacity, full capacity in Q4, going into Q1, and then downgrading at the end of Q1. So you can think about the revenue curve being, you know, kind of a curve versus a fixed number.
Richard Kelley: We're not really speaking in actuals at this time, Bill, but if you could imagine, I mean, the portion of the contract, if you divided it over the next three quarters, roughly, it'll be a slightly lower in the first quarter as we build up production capacity, full capacity in Q4, going into Q1, and then downgrading at the end of Q1. So you can think about the revenue curve being, you know, kind of a curve versus a fixed number.
Speaker #2: We're not speaking in in actuals at this time . Bill , but really if you can imagine , I mean , the portion of the you it over the next three quarters , roughly divided , it'll be a slightly lower in the first quarter as we build production capacity full capacity Q4 in Q1 and then and then downgrading at the end of So you Q1 .
Speaker #2: can think about the revenue curve you being , know , kind of a a fixed versus a number curve
William Dezellem: Got it. And literally, you do think it will be over three quarters that this will be recognized?
William Dezellem: Got it. And literally, you do think it will be over three quarters that this will be recognized?
Richard Kelley: The expectation is that we ship this equipment out in Q1. So yeah, I mean, the goods portion should be completed Q1, possibly, depending on the customer's final schedule in Q2 of 2027.
Richard Kelley: The expectation is that we ship this equipment out in Q1. So yeah, I mean, the goods portion should be completed Q1, possibly, depending on the customer's final schedule in Q2 of 2027.
Speaker #2: .
Speaker #5: Got it . will think it literally , you over be do three quarters that this will be .
Speaker #2: , the goods portion should be completed . Q1 possibly depending on customer's the of 2027 .
William Dezellem: Okay.
William Dezellem: Okay.
Robert Curda: We'll continue to recognize revenue on the services contract as services are performed.
Robert Curda: We'll continue to recognize revenue on the services contract as services are performed.
Richard Kelley: Afterwa- after-
Richard Kelley: Afterwa- after-
Robert Curda: Afterwards.
Robert Curda: Afterwards.
Richard Kelley: Yeah. Yep.
Richard Kelley: Yeah. Yep.
Speaker #3: We'll continue Okay , recognize revenue on services the to contract as services are performed .
William Dezellem: Robert, roughly how large will that be?
William Dezellem: Robert, roughly how large will that be?
Speaker #2: After , after
Speaker #3: Afterwards . Yeah .
Speaker #2: Yeah .
Richard Kelley: The total value of the contract, which we've announced in the past, is in the $90-ish million range.
Richard Kelley: The total value of the contract, which we've announced in the past, is in the $90-ish million range.
Speaker #5: And
Speaker #5: Large, Robert, will be that?
William Dezellem: With the vast majority-
William Dezellem: With the vast majority-
Speaker #2: value of The total the contract , which we've in the past , is in range .
Robert Curda: With the majority.
Robert Curda: With the majority.
Richard Kelley: We've never announced what the difference is between the goods and the services, Bill.
Richard Kelley: We've never announced what the difference is between the goods and the services, Bill.
Robert Curda: Yeah. The services is a much more insignificant portion in comparison to the goods.
Robert Curda: Yeah. The services is a much more insignificant portion in comparison to the goods.
Speaker #3: vast 90 ish million With the majority majority .
Speaker #2: We we've never announced what the difference is between the goods and the . Yeah .
William Dezellem: Okay, that is helpful. And then let's shift, if we could, to GeoVox. Would you provide a detailed update on the deployments that you have experienced to date, and on the pipeline, essentially, the pipeline?
William Dezellem: Okay, that is helpful. And then let's shift, if we could, to GeoVox. Would you provide a detailed update on the deployments that you have experienced to date, and on the pipeline, essentially, the pipeline?
Speaker #3: services is The more portion in comparison to the goods .
Speaker #3: a much
Speaker #3: insignificant
Speaker #5: Okay . That helpful is
Speaker #5: . And If we to could and then geovax provide a , would you detailed update on the deployments that experienced you have to and on the pipeline of the on the date essentially the pipeline
Richard Kelley: So we've just started shipping the units this quarter. So we'll have revenue recognition in this quarter, which we'll announce at the next call, the next release. We anticipate a couple of hundred units in this year, and then that building over the subsequent periods. There is a tremendous amount of interest, both domestically and internationally, in that.
Richard Kelley: So we've just started shipping the units this quarter. So we'll have revenue recognition in this quarter, which we'll announce at the next call, the next release. We anticipate a couple of hundred units in this year, and then that building over the subsequent periods. There is a tremendous amount of interest, both domestically and internationally, in that.
Speaker #2: So we've just started shipping the units this , this quarter . So we'll have revenue in this recognition quarter , which will at the next call and next release .
Speaker #2: We anticipate a couple of hundred in this announced year. And units that build over the subsequent periods, there's a tremendous amount of interest, domestically and internationally, in that.
William Dezellem: So if you think about the pipeline, what's the magnitude or what's the size of it? You mentioned you have a couple hundred units that will be deployed.
William Dezellem: So if you think about the pipeline, what's the magnitude or what's the size of it? You mentioned you have a couple hundred units that will be deployed.
Speaker #2: and
Speaker #5: So if you think, and about the pipeline, what's the, what's the size of it, magnitude, or—you mentioned you have a couple hundred units that will be next, like starting sounds deployed.
Richard Kelley: Yeah.
Richard Kelley: Yeah.
William Dezellem: It sounds like starting next quarter?
William Dezellem: It sounds like starting next quarter?
Richard Kelley: The first deliveries are this quarter, ramping up into next quarter. As far as the pipe, I mean, we anticipate... and we've talked about this in the past. I mean, the overall market size is in the thousands. It's not, you know, tens of thousands. And so, we anticipate over the next couple of years, you know, reaching a saturable, close to saturable level.
Richard Kelley: The first deliveries are this quarter, ramping up into next quarter. As far as the pipe, I mean, we anticipate... and we've talked about this in the past. I mean, the overall market size is in the thousands. It's not, you know, tens of thousands. And so, we anticipate over the next couple of years, you know, reaching a saturable, close to saturable level.
Speaker #5: It quarter
Speaker #5: .
Speaker #2: These are first deliveries this quarter, ramping up into next quarter. As far as the pipe, I mean, we anticipate it.
Speaker #2: We've talked in the about this mean , past . I the the overall market size is in the thousands . It's not , tens you know , of thousands .
Speaker #2: And so we anticipate over the next couple of years . You know , reaching a saturable or saturable level close to .
William Dezellem: And is the market continuing to be prisons and jails, essentially incarceration facilities?
William Dezellem: And is the market continuing to be prisons and jails, essentially incarceration facilities?
Speaker #5: And is the market continuing to be prisons and jails—incarceration facilities, essentially?
Speaker #5: the And is market continuing to be prisons and jails incarceration facilities essentially
Richard Kelley: Short term, yes. And then, of course, border crossings. And then we are trying to expand into secured sites like nuclear power facilities, power transfer stations, where you want to protect the egress and ingress on the site.
Richard Kelley: Short term, yes. And then, of course, border crossings. And then we are trying to expand into secured sites like nuclear power facilities, power transfer stations, where you want to protect the egress and ingress on the site.
Speaker #2: term ? course , . And then , of border . Short crossings and then are trying to expand into sites like secured nuclear power facilities , power transfer stations , want to where you protect the egress ingress on site
Speaker #2: Yes
Robert Curda: Yeah, that's really the new market we'll be moving towards as we develop that, that product line.
Robert Curda: Yeah, that's really the new market we'll be moving towards as we develop that, that product line.
Speaker #3: that's really the new
William Dezellem: Relative to the border, where does the border patrol's interest lie in this product, and how large could that be?
William Dezellem: Relative to the border, where does the border patrol's interest lie in this product, and how large could that be?
Speaker #3: will be moving towards as we develop , that that . product line Yeah , .
Speaker #5: relative And to the border does the Patrol's interest lie Border product ? And how large could that be ?
Richard Kelley: There's, they're definitely interested in the technology. I mean, they utilize a couple different technologies today. They're obviously looking at ways to make it more efficient and effective. As you know, as we've said in the past, the number of trucks that are checked coming across the border are, you know, in the single percentiles. They would obviously like to increase that, and they do like the efficiency as far as the timeliness of the system. There are 300-ish border crossing points in the US alone. So if you talk about multiple units on each site to build check multiple trucks, you know, it could be, you know, 1,000-plus units for CBP.
Richard Kelley: There's, they're definitely interested in the technology. I mean, they utilize a couple different technologies today. They're obviously looking at ways to make it more efficient and effective. As you know, as we've said in the past, the number of trucks that are checked coming across the border are, you know, in the single percentiles. They would obviously like to increase that, and they do like the efficiency as far as the timeliness of the system. There are 300-ish border crossing points in the US alone. So if you talk about multiple units on each site to build check multiple trucks, you know, it could be, you know, 1,000-plus units for CBP.
Speaker #2: they're There's definitely interested in the technology . I mean , they utilize a couple of different technologies today . They're obviously looking at ways to make it more efficient and effective .
Speaker #2: And as we've said in the past , the number of trucks that are coming the border are , you know , in the single percentiles , they would obviously like to increase that .
Speaker #2: And they do like the the efficiency as far as the of of timeliness the , there are border crossing points in the US alone .
Speaker #2: 300 ish So if you talk about multiple units site on each to build a check , trucks , multiple you could be , know , it you know , a thousand plus units for CBP
William Dezellem: That's helpful. And then two additional questions. You did increase the contingent consideration on one business here this quarter by, I think, $196,000. Which business was that?
William Dezellem: That's helpful. And then two additional questions. You did increase the contingent consideration on one business here this quarter by, I think, $196,000. Which business was that?
Speaker #5: that's
Speaker #5: helpful . . And And then two additional did the You contingent questions . consideration increase one business on here . quarter by , I think , This 196,000 , which business was that
Robert Curda: It's related to H, Heartbeat Detector.
Robert Curda: It's related to H, Heartbeat Detector.
William Dezellem: Okay, thank you. And then lastly, what's the prospects for the rental fleet seeing activity levels pick up and a little more on the deployment front?
William Dezellem: Okay, thank you. And then lastly, what's the prospects for the rental fleet seeing activity levels pick up and a little more on the deployment front?
Speaker #3: Related to
Speaker #3: each ? The heartbeat detector .
Speaker #5: Thank Okay . you . and And what's the prospects then . fleet seeing activity rental lastly , up in a little more on the deployment front .
Richard Kelley: So, you know, overall, the Ocean-bottom node business, as of last year, expected this year is still to be flattish. We have seen a number of requests for quotations going into the summer season, but none of those have developed into orders yet. So the volume has increased as far as requesting information, but we've not seen any actual impact on orders yet.
Richard Kelley: So, you know, overall, the Ocean-bottom node business, as of last year, expected this year is still to be flattish. We have seen a number of requests for quotations going into the summer season, but none of those have developed into orders yet. So the volume has increased as far as requesting information, but we've not seen any actual impact on orders yet.
Speaker #2: know , overall the , you node bottom business as ocean it last year expected this year still flattish have seen a number we of .
Speaker #2: requests for quotations going into the season . We But none of summer into orders yet . So the volume has increased as far as requesting information we've not .
William Dezellem: Great. Thank you.
William Dezellem: Great. Thank you.
Richard Kelley: Mm-hmm. Thanks for the question, Bill.
Richard Kelley: Mm-hmm. Thanks for the question, Bill.
Speaker #2: Impact on actual developed yet seen any of those have.
Robert Curda: Yeah, thank you.
Robert Curda: Yeah, thank you.
Operator: Thank you. Once again, if you would like to ask a question, please press star one on your telephone keypad now. We will pause for once, once more. Again, that is star one to ask a question. Thank you. We do have a follow-up from Martin Lorenzen. Your line is open.
Operator: Thank you. Once again, if you would like to ask a question, please press star one on your telephone keypad now. We will pause for once, once more. Again, that is star one to ask a question. Thank you. We do have a follow-up from Martin Lorenzen. Your line is open.
Speaker #5: Great . Thank .
Speaker #5: Great . Thank .
Speaker #5: you question ,
Speaker #2: Thanks for the
Speaker #3: Thank you Bill . .
Speaker #1: you once Thank would like But to ask a
Speaker #1: One on your keypad, telephone. Now we will pause for once more. Again, it is star, star, question, one to ask a question.
Martin Lorenzen: Thank you. Just, just on PRM, could you disclose the number of parties you have ongoing discussions with, excluding Petrobras?
Martin Lorenzen: Thank you. Just, just on PRM, could you disclose the number of parties you have ongoing discussions with, excluding Petrobras?
Speaker #1: Thank We do have a follow up you . Martin line is Lorenzen . Your open .
Speaker #4: Thank you . Just just on . Prem , could you disclose the number of you parties have ongoing discussions with excluding Petrobras .
Richard Kelley: No, due to confidentiality, we're not able to discuss which parties. There's a couple other companies we're talking to, but we're not allowed to disclose those discussions at this time.
Richard Kelley: No, due to confidentiality, we're not able to discuss which parties. There's a couple other companies we're talking to, but we're not allowed to disclose those discussions at this time.
Speaker #2: No , due to confidentiality , we're not able to discuss which parties a couple . There's other talking to , we're not allowed to disclose those but we're discussions at this time .
Martin Lorenzen: Just the number of those? Is it one additional party, or is it two, three, without going-
Richard Kelley: Just the number of those? Is it one additional party, or is it two, three, without going-
Richard Kelley: I would say it's multiple. I would say it's multiple, Martin.
Richard Kelley: I would say it's multiple. I would say it's multiple, Martin.
Speaker #4: the number of those Just . Is it is it one additional party or is it 2 or 3 going ?
Martin Lorenzen: That's helpful. Thank you, and good luck.
Richard Kelley: That's helpful. Thank you, and good luck.
Richard Kelley: Thank you.
Richard Kelley: Thank you.
Speaker #2: multiple . I would say it's I would say it's multiple .
Operator: Thank you. At this time, this concludes our question and answer session. I'd now like to turn the meeting back over to management for any final or closing remarks.
Operator: Thank you. At this time, this concludes our question and answer session. I'd now like to turn the meeting back over to management for any final or closing remarks.
Speaker #2: Martin
Speaker #4: helpful .
Speaker #4: And good luck . That's .
Speaker #2: Thank you without
Speaker #1: At this concludes our , this question and time session . I'd now like to answer turn the meeting back over to management for any final or closing
Richard Kelley: Thank you, Katie, and thanks to all of you who joined our call today. We look forward to speaking with you again on our conference call for the second quarter of fiscal year 2026. Thank you, and have a good day.
Richard Kelley: Thank you, Katie, and thanks to all of you who joined our call today. We look forward to speaking with you again on our conference call for the second quarter of fiscal year 2026. Thank you, and have a good day.
Speaker #1: remarks .
Speaker #2: Thank you Katie , and thanks to all who joined our call . of you
Speaker #2: . We look forward to speaking Thank you . on our call for second quarter of the fiscal year 2026 . Thank you good day and have a
Speaker #2: . We look forward to speaking Thank you . on our call for second quarter of the fiscal year 2026 . Thank you good day conference .
Operator: Thank you. That brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.
Operator: Thank you. That brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.
