Shares of Geospace Technologies Corporation (GEOS Quick QuoteGEOS - Free Report) have lost 38.7% since the company reported its earnings for the quarter ended Sept. 30, 2025. This compares to the S&P 500 Index’s 1.4% gain over the same time frame. Over the past month, the stock lost 57.5% compared with the S&P 500’s 1.6% decline.

GEOS’ Earnings Snapshot

Geospace reported fourth-quarter fiscal 2025 revenues of $30.7 million, down 13.3% from $35.4 million a year ago. The company posted a net loss of $9.1 million, or $(0.71) per share, compared with a $12.9 million loss, or $(1.00) per share, in the prior-year quarter, reflecting a narrower loss year over year. Gross profit fell 78.3% to $3.5 million from $15.9 million, as product costs rose and segment mix shifted.

By segment, Smart Water revenue was $8.5 million compared with $11.9 million, down 28.1% year over year. Energy Solutions revenue declined 10.9% to $15.7 million from $17.6 million, and Intelligent Industrial revenue rose 8.9% to $6.4 million from $5.8 million.

For fiscal 2025, total revenue was $110.8 million compared with $135.6 million in fiscal 2024, down 18.3%, while the net loss widened to $9.7 million, or $(0.76) per share, from a $6.6 million loss, or $(0.50) per share, a year earlier. For the full fiscal year, gross profit also declined 37.4% to $32.9 million from $52.6 million.

Geospace’s Other Key Business Metrics

Segment profitability weakened as Energy Solutions swung to an operating loss. In the quarter, Smart Water’s operating income was $1.6 million, down 57.3% from $3.8 million a year ago, tracking the revenue decline. Energy Solutions posted an operating loss of $4.9 million against operating income of $5.6 million in the prior-year quarter, indicating significant margin compression. Intelligent Industrial’s operating loss narrowed to $1.1 million from $4.5 million, despite still being negative. Companywide operating loss was $9.2 million against operating income of $1.2 million year over year.

Cash and equivalents at the end of fiscal 2025 were $26.3 million, up from $6.9 million a year earlier, helped by investing inflows including sales of short-term investments and rental equipment. Net cash used in operating activities was $22.2 million for fiscal 2025 compared with $9.1 million in fiscal 2024, reflecting the net loss and working-capital use, while investing activities provided $42.7 million. Geospace also reported $64.1 million of working capital and $8 million of undrawn credit availability at year-end.

GEOS’ Management Commentary

Management emphasized ongoing strategic diversification efforts, highlighting the continued strength of the Smart Water segment. CEO Rich Kelley noted that the Hydroconn connector line has delivered four consecutive years of double-digit revenue growth, and Aquana products are gaining traction domestically and in Caribbean markets. In contrast, Energy Solutions continues to face headwinds from reduced offshore exploration, consolidation in the sector and low oil prices, which have curtailed ocean-bottom node rental demand. Nevertheless, the segment achieved notable wins, including a major Permanent Reservoir Monitoring (PRM) contract with Petrobras and a strong reception for the Pioneer ultralight land node sales.

The Intelligent Industrial segment remains a steady performer, supported by demand for industrial sensors and contract manufacturing. The recent acquisition of Geovox Security’s Heartbeat Detector product line expands Geospace’s security-focused offerings and aligns with management’s goal of adding more recurring revenue solutions.

Factors Influencing Geospace’s Headline Numbers

Cost pressures weighed heavily on GEOS’ quarterly performance. Management attributed higher product costs partly to U.S. trade tariffs affecting certain overseas-sourced components. Energy Solutions margins were affected by commoditization in the land-node market and initial manufacturing inefficiencies for Pioneer, although management expects margin improvement as production stabilizes. Government shutdown-related delays also disrupted project timelines for U.S. Navy and Customs and Border Protection initiatives, affecting near-term revenue potential.

In addition, lower utilization of Geospace’s rental fleet significantly reduced rental revenue, which fell 61.6% to $1.1 million in the quarter from $2.8 million a year ago. Inventory obsolescence expenses and muted offshore exploration activity further contributed to the challenging operating environment.

GEOS’ Guidance

Management did not provide revenue or earnings guidance for fiscal 2026. However, they expressed confidence in backlog strength heading into the new fiscal year and reiterated expectations for improved margins on future PRM and Pioneer shipments. Revenue recognition for the Petrobras PRM contract is anticipated to begin in the second quarter of fiscal 2026 and extend into fiscal 2027, offering potential future uplift.

Geospace’s Other Developments

During fiscal 2025, Geospace acquired Geovox Security, Inc., giving it exclusive rights to a heartbeat detection algorithm and adding the Heartbeat Detector product line to its security portfolio. The company also restructured its Exile product portfolio to improve revenue and margins.

GEOS also completed the sale of excess land and facilities adjacent to its Houston location, and it invested $1.8 million in the Heartbeat Detector acquisition. No additional acquisitions, divestitures or restructuring initiatives were disclosed for the quarter.