Genasys Announces $1.0M in Energy Sector Orders

Rhea-AI Summary

Genasys Inc. (NASDAQ: GNSS) has secured $1.0M in orders for its LRAD (Long Range Acoustic Device) systems to protect critical infrastructure in multiple locations. The orders include installations at oil and gas facilities in Australia and Canada, and electrical substations of a major U.S. utility.

The announcement comes amid rising security concerns, with the U.S. Department of Energy reporting 175 instances of physical attacks or threats against grid infrastructure in 2023. The company's LRAD 950NXT systems will be integrated with existing security systems at select substations, addressing the six security requirements established by the North American Energy Reliability : Detect, Assess, Communicate, Respond, Delay, and Deter.

This marks the second regional utility to implement LRAD systems for substation security. The technology provides first-response capability by broadcasting alerts and warnings, enhancing traditional observe-only security installations across 1,500 CIP-014 electrical substations in the U.S.

Positive

• Secured new orders worth $1.0M for critical infrastructure protection
• Geographic expansion with installations in Australia, Canada, and US
• Second regional utility client adoption indicates market validation
• Addressing growing security market with 1,500 potential substation installations in US

Negative

• None.

Insights

Security Solutions Analyst

The $1.0M in orders for Genasys' LRAD systems represents a strategic penetration into the critical infrastructure protection market, particularly noteworthy for addressing growing physical security threats to electrical substations. This development aligns perfectly with regulatory requirements set by the North American Energy Reliability

What distinguishes Genasys' solution is its active deterrent capability that transforms traditional passive surveillance into a remote first response system. This functional advantage addresses a critical gap in existing security implementations by enabling immediate audio response to potential threats before physical security forces can arrive.

The mention that this is the second regional utility to implement LRAD systems validates the market fit. With 1,500 CIP-014 electrical substations requiring similar protection in the U.S. alone, this initial order likely represents just the beginning of potential market capture. The integration capability with existing security systems reduces implementation barriers and increases adoption likelihood.

The increasing frequency of physical attacks on grid infrastructure (175 instances reported in 2023) creates an urgent market need that Genasys is positioned to address. The company's expansion from protecting facilities like dams and data centers into electrical infrastructure demonstrates the versatility of their technology platform and opens multiple growth channels within the broader critical infrastructure sector.

Financial Analyst

This $1.0M order is financially significant for Genasys, representing nearly 1% of the company's current market capitalization of approximately $110.9M. The announcement strategically positions Genasys in the expanding critical infrastructure protection market, particularly within the regulated utility sector where security spending is often mandated rather than discretionary.

The orders span three countries (US, Canada, Australia), demonstrating international market validation and geographic diversification of revenue streams. What's particularly compelling is the reference to this being an "opening order" for the U.S. utility, suggesting potential follow-on business if the initial implementation proves successful.

The addressable market opportunity is substantial with 1,500 CIP-014 electrical substations in the U.S. alone requiring physical security measures. Even modest penetration of this market could generate material revenue growth relative to Genasys' current size.

Beyond immediate revenue recognition, these orders carry strategic importance by establishing the company's credibility in a critical sector with regulatory-driven demand. The orders may serve as reference customers for additional utility sales, potentially creating a repeatable sales pattern that could accelerate growth in this vertical. The diversity of application across oil, gas, and electrical infrastructure demonstrates the versatility of Genasys' product line and its ability to address multiple sectors with similar security requirements.

Remotely Operated LRADs to Provide Critical Infrastructure Protection for Regional Utility’s Electrical Substations

SAN DIEGO--(BUSINESS WIRE)-- Genasys Inc. (NASDAQ: GNSS), the global leader in Protective Communications, today announced domestic and international LRAD orders for critical infrastructure protection at oil and gas facilities in Australia and Canada, and certain electrical substations of a major U.S. utility.

“Since 2022, electrical substations have been vandalized and attacked in North Carolina, Washington, California, Oregon, and Idaho,” said Richard Danforth, Chief Executive Officer of Genasys Inc. “The U.S. Department of Energy reported at least 175 instances of physical attacks or threats against critical grid infrastructure, including incidences of theft and vandalism in 2023.*

“The North American Energy Reliability Corporation has established physical security requirements for electric power providers and utilities that include six specific security actions: Detect, Assess, Communicate, Respond, Delay, and Deter,**” continued Mr. Danforth. “Our next generation LRAD 950NXT systems fully address all these security actions to help safeguard vital electrical transmission and distribution assets. The remotely monitored and activated LRAD 950XTs will be integrated with existing physical security systems at certain substations of the U.S. utility under this opening order.”

David Schnell, Genasys Vice President of Global Hardware Sales, said, “This is the second regional utility to install remotely operated LRAD systems for electrical substation security. With LRAD systems protecting dams, nuclear facilities, data centers, and other critical infrastructure sites around the world, our LRAD 950NXTs are ideally suited to meet the physical security requirements at the 1,500 CIP-014 electrical substations in the U.S.”

Unlike traditional physical security networks, LRAD systems provide a vital first response capability missing from observe-only integrated security installations. LRAD turns passive monitoring systems into remote first responders by broadcasting attention-commanding alerts, warnings, and critical notifications with industry-leading audibility and clarity.

*https://klrd.gov/2024/12/18/grid-security/

**https://www.nerc.com/pa/Stand/Reliability%20Standards/CIP-014-1.pdf (B. Requirements and Measures - 5.1)

About Genasys Inc.

Genasys Inc. (NASDAQ: GNSS) is the global leader in Protective Communications. Incorporating the most comprehensive portfolio of preparedness, response, and analytics software and systems, as well as the Company’s Long Range Acoustic Devices® (LRAD®) the Genasys Protect platform is designed around one premise: ensuring organizations and public safety agencies are “Ready when it matters™.” Protecting people and saving lives for over 40 years, Genasys covers more than 155 million people in all 50 states and in over 100 countries worldwide. For more information, visit genasys.com.

Forward-Looking Statements

Except for historical information contained herein, the matters discussed are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. You should not place undue reliance on these statements. We base these statements on particular assumptions that we have made in light of our industry experience, the stage of product and market development as well as our perception of historical trends, current market conditions, current economic data, expected future developments and other factors that we believe are appropriate under the circumstances. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those suggested in any forward-looking statement. The risks and uncertainties in these forward-looking statements include without limitation the business impact of geopolitical conflicts and other causes that may affect our supply chain, and other risks and uncertainties, many of which involve factors or circumstances that are beyond the Company’s control. Risks and uncertainties are identified and discussed in our filings with the Securities and Exchange Commission. These forward-looking statements are based on information and management’s expectations as of the date hereof. Future results may differ materially from our current expectations. For more information regarding other potential risks and uncertainties, see the “Risk Factors” section of the Company’s Form 10-K for the fiscal year ended September 30, 2024. Genasys Inc. disclaims any intent or obligation to publicly update or revise forward-looking statements, except as otherwise specifically stated.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250327378628/en/

Investor Relations Contact

Brian Alger, CFA

SVP, IR and Corporate Development

ir@genasys.com

(858) 676-0582

Source: Genasys Inc.

FAQ

What is the value of Genasys (GNSS) new energy sector orders?

Genasys secured $1.0M in orders for LRAD systems to protect oil and gas facilities in Australia and Canada, and U.S. electrical substations.

How many electrical grid attacks were reported in 2023 according to the Department of Energy?

The U.S. Department of Energy reported at least 175 instances of physical attacks or threats against critical grid infrastructure in 2023.

What security features does GNSS's LRAD 950NXT system provide for electrical substations?

The LRAD 950NXT system addresses six security actions: Detect, Assess, Communicate, Respond, Delay, and Deter, while providing remote monitoring and activation capabilities.

How many CIP-014 electrical substations could potentially use GNSS's LRAD technology in the US?

There are 1,500 CIP-014 electrical substations in the U.S. that could potentially implement LRAD security systems.