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Geospace (GEOS) Q3 Profit Jumps on Gain
Key Points
Geospace Technologies (NASDAQ:GEOS) returned to profitability in Q3 FY2025 (GAAP), primarily due to a $4.6 million gain from a property sale.
Smart Water segment revenue rose 6.1% year-over-year to $10.5 million.
Revenue contraction persists in core Energy Solutions and Intelligent Industrial businesses, as reflected by a 13.6% year-over-year decrease in Energy Solutions segment revenue and a 5.4% decrease in Intelligent Industrial segment revenue for Q3 FY2025 (GAAP).
Geospace Technologies (NASDAQ:GEOS), a developer of specialized seismic, water utility, and security technologies, released its fiscal third quarter results on August 8, 2025. The report marked a return to profitability, with net income of $0.8 million ($0.06 per diluted share, GAAP) after a net loss a year ago, despite a 3.9% decline in revenue to $24.8 million (GAAP) for Q3 FY2025. No analyst estimates were available for comparison. Profitability in Q3 FY2025 was driven largely by a $4.6 million gain from the sale of property. Overall, segment results were mixed: the Smart Water business set new records, while traditional Energy Solutions and Intelligent Industrial units saw declines.
| Metric | Q3 2025 | Q3 2024 | Y/Y Change |
|---|---|---|---|
| EPS – Diluted (GAAP) | $0.06 | $(0.16) | NM |
| Revenue (GAAP) | $24.8 million | N/A | N/A |
| Revenue – Smart Water segment | $10.5 million | $9.9 million | 6.1% |
| Revenue – Energy Solutions segment | $8.1 million | $9.4 million | -13.8% |
| Revenue – Intelligent Industrial segment | $6.1 million | $6.5 million | (5.4%) |
| Operating Income (GAAP) | $0.4 million | $(2.4 million) | NM |
About Geospace Technologies
Geospace Technologies builds electronic equipment and sensor systems for seismic data acquisition, utility smart water metering, and advanced security screening. Its main business lines have traditionally served the oil and gas sector with seismic node systems, but it has diversified into water utility technologies and security-focused sensing products.
Lately, the company has emphasized innovation in wireless and marine seismic systems, as well as the expansion of its Smart Water products and forays into security and industrial analytics. Cutting-edge product development, robust research and development spending, and less reliance on oil and gas cycles are key points of its recent strategy.
Quarter Review: Key Developments and Segment Performance
During Q3 FY2025, Geospace Technologies experienced a positive earnings turnaround, primarily due to a one-time gain on a property sale. Net profit (GAAP) for Q3 FY2025 was supported by a one-time $4.6 million gain on a property sale, offsetting softer operating trends. Gross profit (GAAP) was below last year’s result, partly due to lower total sales and tighter margins.
The Smart Water segment, which produces automated meter infrastructure (AMI) products like Hydroconn universal connectors for smart water networks, reported revenue up 6.1% over last year (GAAP). The segment has emerged as the company’s largest by revenue, reflecting Geospace’s focus on revenue diversification. Management noted strong customer response to its Smart Water technologies at the American Water Works Association annual conference.
In contrast, the Energy Solutions segment, home to seismic data acquisition nodes for marine and land surveying, as well as permanent reservoir monitoring (PRM) systems like OptoSeis for oil and gas customers, saw revenue fall 13.6%. The main drag was “lower utilization and sales for our marine ocean bottom node rental fleet,” reflecting weaker demand. However, Geospace did secure a major contract to provide nearly 500 kilometers of OptoSeis PRM systems for Brazil’s Mero field and completed the first commercial sale of Pioneer, its new ultralight land node, which is intended to open up new customer opportunities.
The Intelligent Industrial segment—which sells imaging and scanning systems for security, industrial, and government applications—saw revenue decline by 5.4% compared to the same period a year ago. The drop followed strong prior-year results from a large government contract, and ongoing lower demand for imaging products. To boost the division, Geospace acquired the Heartbeat Detector, a vehicle screening system capable of sensing concealed human presence, expanding its security offerings. The company plans to sell this technology on a recurring subscription basis, hoping to provide more predictable future revenues. Geospace also brought industry advocate Carla Provost, a former U.S. Border Patrol Chief, aboard to increase adoption rates for these new offerings.
Rising research and development spending, up to $4.2 million (GAAP), highlights the ongoing push towards product innovation. The period also saw higher inventory costs and slightly compressed gross margins, as cost of goods sold rose in relation to revenue. Cash on hand was bolstered by the property sale and short-term investment liquidations, with $23.6 million in cash and $2.0 million in remaining short-term investments at period end (GAAP). The company continues to operate with zero long-term debt.
Looking Ahead: Guidance and Investor Considerations
Management did not issue any forward financial guidance for the upcoming quarter or full year. However, the company highlighted its contract win for the Mero PRM project and expects cutover for the Pioneer node sale before the end of FY2025. Ongoing investments in recurring-revenue security offerings were mentioned, but their full commercial impact is yet to be seen.
No dividend was declared and Geospace Technologies does not currently pay a dividend. Looking ahead, investors may want to monitor the rollout of new seismic and security products.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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