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GEOS Stock Dips Post-Q2 Earnings Amid Revenue Decline, Net Loss Widens
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Shares of Geospace Technologies Corporation (GEOS - Free Report) have lost 5.2% since the company reported its earnings for the quarter ended March 31, 2025. This compares unfavorably to the S&P 500 Index’s 4.6% gain over the same time frame. Over the past month, however, GEOS shares have gained 1.3%, though they continue to lag the broader market, as the S&P 500 has advanced 8.8% during the same period.
Earnings Snapshot and Segmental Overview
For the second quarter of fiscal 2025, Geospace reported revenues of $18 million, marking a 25.7% year-over-year decline from $24.3 million. The quarter concluded with a net loss of $9.8 million, or $0.77 per diluted share, a deterioration from the $4.3 million net loss, or $0.32 per share, in the same period last year.
Segment-wise, Smart Water was the standout, generating $9.5 million in revenues, up 47.7% from $6.4 million in the prior-year quarter. Conversely, Energy Solutions saw its revenue plummet by 76.5% to $2.6 million, down from $11 million. The Intelligent Industrial segment reported revenues of $5.9 million, down 12.8% from $6.7 million.
Geospace Technologies Corporation Price, Consensus and EPS Surprise
Gross profit for the quarter was $1.7 million, decreasing 70.3% from $5.9 million a year ago. Operating expenses rose 15.8% to $12 million from $10.4 million, primarily due to higher personnel, research and development, and sales and marketing costs. As a result, the company reported an operating loss of $10.3 million compared with a loss of $4.5 million in the same period last year.
Cash and short-term investments totaled $19.8 million as of March 31, 2025, compared with $22.1 million as of Dec. 31, 2024. The company had no debt and had access to $14.9 million in additional credit. Working capital stood at $71.4 million, bolstered by $36.3 million in trade accounts and financing receivables.
Management Commentary
CEO Richard Kelley acknowledged the mixed performance, noting record results in Smart Water driven by strong Hydroconn universal connector sales and growing traction for the Aquana smart valve product. Kelley attributed the underperformance in Energy Solutions to global trade tensions, lower oil prices and tariff headwinds, which delayed and canceled customer projects. He emphasized that despite the volatility, Geospace is well-positioned in its newer high-margin markets, underscored by a strong balance sheet and increasing inquiries in its Smart Water and Intelligent Industrial segments.
CFO Robert Curda provided further clarity, noting that a $2.2 million receivable from a marine rental customer was reversed from revenues due to concerns about collectability, which materially affected the results. He also highlighted the company's strategic investment of $900,000 in its rental fleet and $4.4 million in property, plant, and equipment during the quarter.
Factors Influencing Results
The substantial drop in Energy Solutions revenue reflected both a low utilization of marine ocean bottom nodes and the aforementioned receivable reversal.
The Intelligent Industrial segment also faced challenges, including reduced imaging product demand and the absence of prior-year government contract revenues. However, increasing interest in American-made sensor products and contract manufacturing provides a partial offset.
The Smart Water segment, which includes Hydroconn connectors and Aquana solutions, delivered record second-quarter and first-half results. More than 27 million Hydroconn universal AMI connectors have now been sold, reflecting growing adoption among municipalities. However, management acknowledged that Aquana still contributes a negligible share to revenue and is not expected to become material in the next nine months. That said, customer feedback has been favorable, and long-term prospects remain positive.
Guidance
No specific forward-looking revenue or earnings guidance was issued. Management did, however, express confidence in stronger performance in the second half of fiscal 2025, supported by a robust backlog and anticipated deliveries, including the recently announced $7.6 million Mariner contract, slated for fulfillment later in the year. Ongoing PRM (Permanent Reservoir Monitoring) FEED studies also suggest continued interest in Geospace’s seismic technologies, though final investment decisions are pending.
Other Developments
Geospace plans to complete the sale of 17 acres of excess land adjacent to its Houston facility in the fiscal third quarter. The sale is expected to fetch between $7 million and $10 million, potentially enhancing the company’s liquidity. Additionally, management reiterated its intention to seek accretive acquisitions that can immediately contribute to top-line growth.
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GEOS Stock Dips Post-Q2 Earnings Amid Revenue Decline, Net Loss Widens
Shares of Geospace Technologies Corporation (GEOS - Free Report) have lost 5.2% since the company reported its earnings for the quarter ended March 31, 2025. This compares unfavorably to the S&P 500 Index’s 4.6% gain over the same time frame. Over the past month, however, GEOS shares have gained 1.3%, though they continue to lag the broader market, as the S&P 500 has advanced 8.8% during the same period.
Earnings Snapshot and Segmental Overview
For the second quarter of fiscal 2025, Geospace reported revenues of $18 million, marking a 25.7% year-over-year decline from $24.3 million. The quarter concluded with a net loss of $9.8 million, or $0.77 per diluted share, a deterioration from the $4.3 million net loss, or $0.32 per share, in the same period last year.
Segment-wise, Smart Water was the standout, generating $9.5 million in revenues, up 47.7% from $6.4 million in the prior-year quarter. Conversely, Energy Solutions saw its revenue plummet by 76.5% to $2.6 million, down from $11 million. The Intelligent Industrial segment reported revenues of $5.9 million, down 12.8% from $6.7 million.
Geospace Technologies Corporation Price, Consensus and EPS Surprise
Geospace Technologies Corporation price-consensus-eps-surprise-chart | Geospace Technologies Corporation Quote
Other Key Business Metrics
Gross profit for the quarter was $1.7 million, decreasing 70.3% from $5.9 million a year ago. Operating expenses rose 15.8% to $12 million from $10.4 million, primarily due to higher personnel, research and development, and sales and marketing costs. As a result, the company reported an operating loss of $10.3 million compared with a loss of $4.5 million in the same period last year.
Cash and short-term investments totaled $19.8 million as of March 31, 2025, compared with $22.1 million as of Dec. 31, 2024. The company had no debt and had access to $14.9 million in additional credit. Working capital stood at $71.4 million, bolstered by $36.3 million in trade accounts and financing receivables.
Management Commentary
CEO Richard Kelley acknowledged the mixed performance, noting record results in Smart Water driven by strong Hydroconn universal connector sales and growing traction for the Aquana smart valve product. Kelley attributed the underperformance in Energy Solutions to global trade tensions, lower oil prices and tariff headwinds, which delayed and canceled customer projects. He emphasized that despite the volatility, Geospace is well-positioned in its newer high-margin markets, underscored by a strong balance sheet and increasing inquiries in its Smart Water and Intelligent Industrial segments.
CFO Robert Curda provided further clarity, noting that a $2.2 million receivable from a marine rental customer was reversed from revenues due to concerns about collectability, which materially affected the results. He also highlighted the company's strategic investment of $900,000 in its rental fleet and $4.4 million in property, plant, and equipment during the quarter.
Factors Influencing Results
The substantial drop in Energy Solutions revenue reflected both a low utilization of marine ocean bottom nodes and the aforementioned receivable reversal.
The Intelligent Industrial segment also faced challenges, including reduced imaging product demand and the absence of prior-year government contract revenues. However, increasing interest in American-made sensor products and contract manufacturing provides a partial offset.
The Smart Water segment, which includes Hydroconn connectors and Aquana solutions, delivered record second-quarter and first-half results. More than 27 million Hydroconn universal AMI connectors have now been sold, reflecting growing adoption among municipalities. However, management acknowledged that Aquana still contributes a negligible share to revenue and is not expected to become material in the next nine months. That said, customer feedback has been favorable, and long-term prospects remain positive.
Guidance
No specific forward-looking revenue or earnings guidance was issued. Management did, however, express confidence in stronger performance in the second half of fiscal 2025, supported by a robust backlog and anticipated deliveries, including the recently announced $7.6 million Mariner contract, slated for fulfillment later in the year. Ongoing PRM (Permanent Reservoir Monitoring) FEED studies also suggest continued interest in Geospace’s seismic technologies, though final investment decisions are pending.
Other Developments
Geospace plans to complete the sale of 17 acres of excess land adjacent to its Houston facility in the fiscal third quarter. The sale is expected to fetch between $7 million and $10 million, potentially enhancing the company’s liquidity. Additionally, management reiterated its intention to seek accretive acquisitions that can immediately contribute to top-line growth.