10q10k10q10k.net

What changed in GEOSPACE TECHNOLOGIES CORP's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of GEOSPACE TECHNOLOGIES CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+197 added−238 removedSource: 10-K (2025-11-21) vs 10-K (2024-11-22)

Top changes in GEOSPACE TECHNOLOGIES CORP's 2025 10-K

197 paragraphs added · 238 removed · 148 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

61 edited+16 added−27 removed23 unchanged
Biggest changeAs a result, our wireless systems require less maintenance, which we believe allows our customers to operate more effectively and efficiently because of its reduced environmental impact, lower weight and ease of operation. The Pioneer™ is a small lightweight, cable-free, connector-less, node. Pioneer™ is the next generation node designed for extended duration land based seismic data acquisition.
Biggest changeWe have developed multiple versions of a land-based wireless (or nodal) seismic data acquisition system including our most recent launch of the Pioneer™, an ultralight wireless sensor product. We believe our wireless sensor systems allow our customers to operate more effectively and efficiently because of their reduced environmental impact, lower weight, ease of operation and less maintenance requirements.
The Mariner™ is a continuous, cable-free, four channel autonomous, shallow water ocean bottom recorder. Mariner™ is the next generation node designed for extended duration seabed ocean bottom seismic data acquisition. The slim profile nodes, which are part of our shallow water stations, are ideally deployed as deep as 750 meters.
The Mariner® is a continuous, cable-free, four channel autonomous, shallow water ocean bottom recorder designed for extended duration seabed ocean bottom seismic data acquisition. Mariner™ is the next generation node designed for extended duration seabed ocean bottom seismic data acquisition. The slim profile nodes, which are part of our shallow water stations, are ideally deployed as deep as 750 meters.
To attract and retain talented employees, we strive to make Geospace Technologies Corporation a diverse and safe workplace, with opportunities for our employees to receive educational benefits, cross-function skill-development to grow and develop their careers, all supported by competitive compensation and benefits.
To attract and retain talented employees, we strive to make Geospace Technologies Corporation a diverse and safe workplace, with opportunities for our employees to receive educational benefits and cross-function skill-development to grow and develop their careers, all supported by competitive compensation and benefits.
Unlike organizations where the two leadership roles are intertwined, this distinction helps ensure varying viewpoints designed to deliver improved returns for the shareholders we serve and the communities in which we operate. Board Charter Reviews - Every twelve-months, we conduct a Board and Board Committee assessment review to review and ensure that the highest quality standards are met.
Unlike organizations where the two leadership roles are intertwined, this distinction helps ensure varying viewpoints designed to deliver improved returns for the shareholders we serve and the communities in which we operate. Board Charter Reviews - Every twelve-months, we conduct a Board and Board Committee assessment review to evalute and ensure that the highest quality standards are met.
We provide our employees training opportunities and educational benefits to assist in career and skill development. We focus on continuous learning and provide feedback to assist in the development of talent.
We provide our employees with training opportunities and educational benefits to assist in career and skill development. We focus on continuous learning and provide feedback to assist in the development of talent.
Women in managerial roles represent 2% of our domestic workforce. We proudly employ veterans of the US Armed Forces, who make up 5% of our domestic workforce. Health, Safety and Wellness - The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are committed to the health and safety of our employees.
Women in managerial roles represent 3% of our domestic workforce. We proudly employ veterans of the US Armed Forces, who make up 5% of our domestic workforce. Health, Safety and Wellness - The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are committed to the health and safety of our employees.
Company Culture – Our Board of Directors established a Code of Business Conduct applicable to all our employees, directors and officers and a Code of Ethics for Senior Financial Officers in accordance with applicable U.S. federal securities laws and the NASDAQ Listed Company Manual.
Company Culture – Our Board of Directors established a Code of Business Conduct applicable to all our employees, directors and officers and a Supplemental Code of Ethics for our CEO and Senior Financial Officers in accordance with applicable U.S. federal securities laws and the NASDAQ Listed Company Manual.
In addition, we produce seismic borehole acquisition systems that employ a fiber optic augmented wireline capable of very high data transmission rates. These systems are used for several reservoir monitoring applications, including an application pioneered by us allowing operators and service companies to monitor and measure the results of hydraulic fracturing operations.
We also produce seismic borehole acquisition systems that employ a fiber optic augmented wireline capable of very high data transmission rates. These systems are used for several reservoir monitoring applications, including an application pioneered by us allowing operators and service companies to monitor and measure the results of hydraulic fracturing operations.
Emerging Markets Products The border and perimeter security marketplace is dominated by large integrated system providers such as Boeing, General Dynamics, Lockheed Martin, Raytheon, Elbit Systems and others. Systems provided by these competitors are generally multifaceted and may include numerous integrated surveillance technologies, including the geophysical sensor and software systems that we have developed.
The border and perimeter security marketplace is dominated by large integrated system providers such as Boeing, General Dynamics, Lockheed Martin, Raytheon, Elbit Systems and others. Systems provided by these competitors are generally multifaceted and may include numerous integrated surveillance technologies, including the geophysical sensor and software systems that we have developed.
Financial Information by Segment and Geographic Area For a discussion of financial information by segment and geographic area, see Note 20 to the consolidated financial statements contained in this Annual Report on Form 10-K.
Financial Information by Segment and Geographic Area For a discussion of financial information by segment and geographic area, see Note 21 to the consolidated financial statements contained in this Annual Report on Form 10-K.
Markets and Customers Our principal customers for our traditional and wireless seismic products are seismic contractors and, to a lesser extent, major independent and government-owned oil and gas companies that either operate their own seismic crews or specify seismic instrument and equipment preferences to contractors.
Our principal customers for our seismic products are seismic contractors and, to a lesser extent, major independent and government-owned oil and gas companies that either operate their own seismic crews or specify seismic instrument and equipment preferences to contractors.
For a discussion of the risks related to our reliance on these suppliers, see “Risk Factors – We Rely on Key Suppliers for Certain Components Used in Our Products.” Our supply chain frequently experiences disruptions, resulting in longer lead times in materials available from suppliers and extended the shipping time for these materials to reach our facilities.
For a discussion of the risks related to our reliance on these suppliers, see “Risk Factors – We Rely on Key Suppliers for Certain Components Used in Our Products.” Our supply chain frequently experiences disruption, resulting in longer lead times in materials available from suppliers and extending the shipping time for these materials to reach our facilities.
Our professional staff includes geoscientists, electrical and mechanical engineers, accountants, computer and data scientists, marketing and human resource professionals. 63% of our global workforce is employed in manufacturing, 19% in engineering and 18% in sales and administration. Our employees are not unionized. We have never experienced a work stoppage.
Our professional staff includes geoscientists, electrical and mechanical engineers, accountants, computer and data scientists, and marketing and human resource professionals. 58% of our global workforce is employed in manufacturing, 19% in engineering, 5% in field services and 18% in sales and administration. Our employees are not unionized. We have never experienced a work stoppage.
Human Rights – Last year, we introduced a Human Rights Policy Statement which demonstrates our commitment to supporting and promoting human rights that benefit all our stakeholders, including our customers, employees, shareholders, investors, and the communities in which we live and operate. Our approach is applied in our business operations, across our supply chain and through ethical business conduct.
Human Rights – We have established a Human Rights Policy Statement which demonstrates our commitment to supporting and promoting human rights that benefit all our stakeholders, including our customers, employees, shareholders, investors, and the communities in which we live and operate. Our approach is applied in our business operations, across our supply chain and through ethical business conduct.
As a global manufacturer of high-tech offerings, we believe that a diverse workforce benefits everyone, from our skilled workforce, to our valued clients, to our trusted shareholders and our society. Our domestic workforce make-up includes 33% white, 31% Asian, 25% Hispanic or Latino, 10% Black or African American, and 1% two or more races.
As a global manufacturer of high-tech offerings, we believe that a diverse workforce benefits everyone, from our skilled workforce, to our valued clients, our trusted shareholders and our society. Our domestic workforce make-up includes 29% white, 33% Asian, 25% Hispanic or Latino, 9% Black or African American, and 4% two or more races.
In our Adjacent Markets business segment, we purchase all of our thermal imaging film from a single supplier. Beyond this film supplier, we know of no other source for thermal film that performs as well in our imaging equipment.
In our Intelligent Industrial business segment, we purchase all of our thermal imaging film from a single supplier. Beyond this film supplier, we know of no other source for thermal film that performs as well in our imaging equipment.
We design and manufacture other products of a non-seismic nature, including water meter products, imaging equipment, offshore cables, remote shutoff water valves and Internet of Things ("IoT") platform. Additionally, we provide contract manufacturing services, which leverage our capabilities and manufacturing resources.
We design and manufacture other products of a non-seismic nature, including Hydroconn® connector cables, imaging equipment, remote shutoff water valves and Internet of Things ("IoT") platform. Additionally, we provide specialized contract manufacturing services, which leverage our capabilities and manufacturing resources.
We hold patents on geophones, micro-geophones, piezo-electric sensors, seismic data acquisition, in-line retrieval devices and water meter connectors, and we have pending applications on related technology. We do not consider any single patent essential to our success. Our patents are scheduled to expire at various dates through 2039. We are not able to predict the effect of any patent expiration.
We hold patents on geophones, micro-geophones, piezo-electric sensors, seismic data acquisition, our Hydroconn® water meter connectors, and we have pending applications on related technology. We do not consider any single patent essential to our success. Our patents are scheduled to expire at various dates through 2042. We are not able to predict the effect of any patent expiration.
In general, most customers prefer to standardize data acquisition systems, particularly if they are used by seismic companies that have multiple crews which are able to support each other. This standardization makes it difficult for competitive manufacturers to gain market share from other manufacturers with existing customer relationships.
In general, most customers prefer to standardize data acquisition systems, particularly if they are used by seismic companies that have multiple crews which are able to support each other. This standardization makes it difficult for competitive manufacturers to gain market share from other manufacturers with existing customer relationships. Our primary competitor for our seabed PRM systems is Alcatel-Lucent.
In the spring of 2023, we released a derivative of the OptoSeis® technology for high temperature downhole applications. The product know as Insight by OptoSeis® offers a passive, all-optical downhole sensor network – no electronics downhole - resulting in years long operational lifetime at 150 °C.
We also have a derivative of the OptoSeis® technology for high temperature downhole applications. The product, known as Insight by OptoSeis offers a passive, all-optical downhole sensor network - no electronics downhole - resulting in years long operational lifetime at 150°C.
Going forward, we intend to continue significant investments in product research and development of new oil and gas technologies as well as products for our other business segments in order to diversify and grow our revenue base. ● Selectively Pursue Acquisitions of Businesses with Technological and Engineering Overlap – The oil and gas industry periodically experiences volatile business cycles requiring us to rapidly increase and decrease our business activities to meet the industry’s demand for our products.
Going forward, we intend to continue significant investments in product research and development for all of our business segments in order to diversify and grow our revenue base. ● Selectively Pursue Acquisitions of Businesses with Technological and Engineering Overlap – Historically, the oil and gas industry periodically experiences volatile business cycles requiring us to rapidly increase and decrease our business activities to meet the industry’s demand for our products, resulting in our plan for diversification through acquisitions.
Workforce Composition - At September 30, 2024, we employed 478 people predominantly on a full-time basis, of which 461 were employed in the United States and the remainder in the United Kingdom, Canada and Colombia.
Workforce Composition - At September 30, 2025, we employed 519 people predominantly on a full-time basis, of which 502 were employed in the United States and the remainder in the United Kingdom, Canada and Colombia.
We pledge to conduct ourselves in a most responsible manner in each community. As a manufacturer, we have a responsibility to reuse or recycle waste materials from our operations. Over the last three years, we have recycled more than 423 tons of recyclable materials. Year to date 2024, we have recycled over 212 tons of manufacturing waste materials.
We pledge to conduct ourselves in a most responsible manner in each community. As a manufacturer, we have a responsibility to reuse or recycle waste materials from our operations. Over the last three years, we have recycled approximately 600 tons of recyclable materials. Year to date 2025, we have recycled over 80 tons of manufacturing waste materials.
While we are not opposed to moderate amounts of short-term debt during favorable business cycles, we choose to minimize our exposure to long-term debt obligations which, in our view, restrict our ability to operate during periodic difficult business cycles in the oil and gas industry similar to the recent business environment.
While we are not opposed to moderate amounts of short-term debt during favorable business cycles, we choose to minimize our exposure to long-term debt obligations which, in our view, restrict our ability to operate during periodic difficult business cycles.
Two customers comprised 27.4% and 16.0% of our revenue during fiscal year 2024. Two customers comprised 26.7% and 11.7% of our revenue during fiscal year 2023.
Two customers comprised 27.4% and 16.0% of our revenue during fiscal year 2024.
Enterprise Risk Management ("ERM") – Our Board of Directors takes an enterprise-wide approach to reviewing each of our business segments, which encompass Oil & Gas, Adjacent Markets, and Emerging Markets operations which include our Security & Surveillance sector. Board members meet regularly to oversee and ensure that company objectives are met, shareholder concerns are addressed and ERM policies are maintained.
Enterprise Risk Management ("ERM") – Our Board of Directors takes an enterprise-wide approach to reviewing each of our business segments, which encompass our Smart Water, Energy Solutions and Intelligent Industrial operations, which include our Security & Surveillance sector. Board members meet regularly to oversee and ensure that company objectives are met, shareholder concerns are addressed and ERM policies are maintained.
In order to diversify our revenue base and expose us to different markets with different business cycles, we have directed these efforts toward businesses outside the oil and gas industry, as seen with our acquisition of Quantum in fiscal year 2018 and Aquana in fiscal year 2021. 4 ● Financial Management – Due to the cyclicality of the oil and gas industry, we have historically managed our financial risk by limiting or eliminating debt leverage in our balance sheet.
In order to diversify our revenue base and expose us to different markets with different business cycles, with recurring revenue streams, we have directed these efforts toward businesses outside the energy industry, as seen with our acquisitions of Quantum, Aquana and Geovox. 4 ● Financial Management – Due to the cyclicality of our core business, we have historically managed our financial risk by limiting or eliminating debt leverage in our balance sheet.
The Human Rights Policy Statement is posted to our corporate website and is adhered through our Business Code of Conduct and through responsible sourcing practices. 7 Our values and ethics serve as the guiding force through which we proactively maintain the highest standards of business conduct.
The Human Rights Policy Statement is adhered to through our Business Code of Conduct and through responsible sourcing practices. 7 Our values and ethics serve as the guiding force through which we proactively maintain the highest standards of business conduct. Our Core Values guide our corporate policies and practices and promote ethical business conduct and compliance with the law.
We protect our proprietary rights to our technology through a variety of methods, including confidentiality agreements and proprietary information agreements with suppliers, employees, consultants and others who may have access to proprietary information. 6 Research and Development We expect to incur significant future research and development expenditures aimed at the development of additional products for each of our business segments.
We protect our proprietary rights to our technology through a variety of methods, including confidentiality agreements and proprietary information agreements with suppliers, employees, consultants and others who may have access to proprietary information. 6 Research and Development We incur significant research and development expenditures.
A majority of our product research and development cost relates to our product engineers. Our engineering staff have been key to our past success, and we intend to continue our tradition of retaining and attracting quality engineering staff by providing appropriate compensation and benefits.
Our engineering staff have been key to our past success, and we intend to continue our tradition of retaining and attracting quality engineering staff by providing appropriate compensation and benefits.
These products also allow water utilities to re-claim non-revenue water at a lower energy and field service cost through remote control of water service without placing its employees in potential harm or danger.
These products also allow water utilities to re-claim non-revenue water at a lower energy and field service cost through remote control of water service without placing their employees in potential harm or danger. Energy Solutions Our Energy Solutions business segment has historically accounted for the majority of our revenue.
In this regard, we do not anticipate paying any cash dividends in the foreseeable future, however, since fiscal year 2021 we have repurchased 1,496,701 shares of our common stock in open market transactions under stock-buy-back programs authorized by our Board of Directors.
In this regard, we do not anticipate paying any cash dividends in the foreseeable future, however, since fiscal year 2021 we have repurchased 1,558,260 shares of our common stock in open market transactions under stock-buy-back programs authorized by our Board of Directors. Competition Smart Water Products Our smart water products face competition in both the real estate and utilities markets.
Governance – We pride ourselves on the highly ethical and transparent standards through the governance under our Board of Directors. Board Composition - Our Board of Directors is chaired by a highly experienced, independent Director whose position is wholly separate and divided from the role of the Chief Executive Officer.
Board Composition - Our Board of Directors is chaired by a highly experienced, independent Director whose position is wholly separate and divided from the role of the Chief Executive Officer.
For our deepwater PRM products, our customers are generally large international oil and gas companies that operate long-term offshore oil and gas producing properties. Our industrial product customers consist of specialty manufacturers, research institutions and industrial product distributors.
For our PRM products, our customers are generally large international oil and gas companies that operate long-term offshore oil and gas producing properties. We also provide oil and gas companies with real-time monitoring of seismic data with our SADAR® technology. Our industrial product customers consist of specialty manufacturers, research institutions and industrial product distributors.
This revenue growth in this segment is largely attributable to the rise in water utility modernization which includes our waterproof meter connector cable series of products.
In recent years, the revenue contribution from our Smart Water segment has grown to represent nearly half of our total revenue. This revenue growth in this segment is largely attributable to the rise in water utility modernization which includes our waterproof meter connector cable series of products.
Our primary competitors for the new energy or energy transition market are Microseismic, Inc., Namometrics, ISTI and ESG. Adjacent Markets Products Our industrial and imaging products face competition from numerous domestic and international specialty product manufacturers.
Our primary competitors for high-definition borehole seismic data acquisition systems are Avalon Sciences Ltd and Sercel. Our primary competitors for the new energy or energy transition market are Microseismic, Inc., Namometrics, ISTI and ESG. Intelligent Industrial Products Our industrial and imaging products face competition from numerous domestic and international specialty product manufacturers.
Demand for our seismic products targeted at customers in our Oil and Gas Markets segment has been, and will likely continue to be, vulnerable to downturns in the economy and the oil and gas industry in general.
Demand for our seismic products targeted at customers in our Energy Solutions segment has been, and will likely continue to be, vulnerable to downturns in the economy and the oil and gas industry in general. For more information, please refer to the risks discussed under the heading “Risk Factors”.
Our sensing technology does not rely on line-of-sight motion detection, which is required by cameras and other visual and radio frequency technologies, and thus enables motion-sensing such devices would miss.
Our sensing technology does not rely on line-of-sight motion detection, which is required by cameras and other visual and radio frequency technologies, and thus enables motion-sensing such devices would miss. Competitive geophysical technologies utilizing fiber optic sensing techniques are provided by OptaSense, Fibersensys, Future Fiber Technologies, and other specialty sensor manufacturing firms.
Our Core Values guide our corporate policies and practices and promote ethical business conduct and compliance with the law. Our employees understand the importance of applying our Core Values toward their daily best practices. Annually, we hold an internal Core Values survey to inform leadership on the values in action and opportunities to improve.
Our employees understand the importance of applying our Core Values toward their daily best practices. Annually, we hold an internal Core Values survey to inform leadership on the values in action and opportunities to improve. Governance – We pride ourselves on the highly ethical and transparent standards through the governance under our Board of Directors.
The device continuously records for up to 70 days and offers more rapid recharging times. Its slim profile creates space savings on seismic survey vessels, allowing contractors to fit up to 25% more nodes into a download/charge container. Through September 30, 2024, we have sold 7,600 Mariner™ nodes.
The device continuously records for up to 70 days and offers more rapid recharging times. Its slim profile creates space savings on seismic survey vessels, allowing contractors to fit up to 25% more nodes into a download/charge container. Mariner Deep® is a deepwater, wireless seismic acquisition node capable of operating for 200 days in water as deep as 3,450 meters.
For a discussion of financial information by segment and geographic area, see Note 20 to the consolidated financial statements contained in this Annual Report on Form 10-K. Products and Product Development Oil and Gas Markets Our Oil and Gas Markets business segment has historically accounted for the majority of our revenue.
For a discussion of financial information by segment and geographic area, see Note 21 to the consolidated financial statements contained in this Annual Report on Form 10-K. Products and Product Development Smart Water Our Smart Water segment emphasizes our targeted approach to growing its footprint in the water management industry.
Upon completion of our manufacturing and assembly operations, we test our final products to the functional and environmental extremes of product specifications and inspect the products for quality assurance. Consistent with industry practice, we normally manufacture our products based on firm customer orders, anticipated customer orders and historical product demand.
We manufacture many of our products to the specifications required by our customers and upon order. Consistent with industry practice, we normally manufacture our products based on firm customer orders, anticipated customer orders and historical product demand.
Similar to our land-based wireless systems, these marine wireless systems may be deployed in virtually unlimited channel configurations and do not require interconnecting cables between each station.
We have also developed an ocean bottom seismic data acquisition system called the OBX, and recently released Mariner® and Mariner Deep®. Similar to our land-based wireless systems, these ocean bottom systems may be deployed in virtually unlimited channel configurations and do not require interconnecting cables between each station.
Furthermore, entities in China affiliated with Sercel, as well as other Chinese manufacturers produce low-cost oil and gas seismic products, which compete with our traditional seismic products. The primary competitors for our land wireless data acquisition systems are SmartSolo, Sercel, INOVA, STRYDE, Geophysical Technologies and numerous smaller entities who have introduced similar versions of wireless data acquisition systems.
The principal competitors for many of our traditional seismic products are Sercel (a division of Viridien, formerly a division of CGG), Dynamic Technologies, and INOVA. Furthermore, entities in China affiliated with Sercel, as well as other Chinese manufacturers produce low-cost oil and gas seismic products, which compete with our traditional seismic products.
This segment’s products include wireless seismic data acquisition systems, reservoir characterization products and services, and traditional seismic exploration products such as geophones, hydrophones, leader wire, connectors, cables, marine streamer retrieval and steering devices and various other seismic products.
This segment’s products include wireless seismic data acquisition systems, reservoir characterization products and services, and traditional seismic exploration products such as geophones, hydrophones, leader wire, connectors, cables and various other seismic products. We believe our Energy Solutions products are among the most technologically advanced instruments and equipment available for seismic data acquisition.
Business Strategy We have adopted what we think is a conservative and prudent business strategy which places a focus on sound financial management practices, as outlined below.
The contingent payments, if any, will be derived from certain eligible revenue that may be generated during the four-year period. Business Strategy We have adopted what we think is a conservative and prudent business strategy which places a focus on sound financial management practices, as outlined below.
Imaging Products Our imaging products include electronic pre-press products that employ direct thermal imaging, direct-to-screen printing systems, and digital inkjet printing technologies targeted at the commercial graphics, industrial graphics, textile and flexographic printing industries. Emerging Markets Our Emerging Markets business segment consists entirely of our Quantum business.
Imaging Products Our imaging products include electronic pre-press products that employ direct thermal imaging, direct-to-screen printing systems, and digital inkjet printing technologies targeted at the commercial graphics, industrial graphics, textile and flexographic printing industries. Defense and Security Our Quantum product line includes SADAR®, a proprietary detection system which detects, locates and tracks items of interest in real-time.
These high-definition seismic data acquisition systems have a flexible architecture allowing them to be configured as a subsurface system for both land and marine reservoir-monitoring projects.
Additionally, we have developed high-definition permanent reservoir monitoring systems ("PRM") for land and ocean-bottom applications in producing oil and gas fields. Our primary offering, OptoSeis® fiber optic sensing technology, provides high-definition seismic data acquisition systems with a flexible architecture allowing them to be configured as a subsurface system for both land and marine reservoir-monitoring projects.
We believe the primary competitors for our marine nodal data acquisition systems are Magseis Fairfield ASA (a division of TGS, which recently merged with PGS), Sercel and InApril AS (which merged with SAExploration in September 2024) each of whom utilizes their own proprietary nodal technology.
We believe the primary competitors for our ocean bottom data acquisition systems are Sercel and InApril AS (which merged with SAExploration in September 2024), each of whom utilizes their own proprietary nodal technology. Most oil and gas seismic products are price sensitive, so the ability to manufacture these products at a low cost is essential to maintain market share.
We have not changed our primary focus on continued investment in product research and development, selective acquisitions and joint ventures. ● Continue Investment in Product Research and Development – Past periods of revenue growth were primarily driven through our internal development of new products for the oil and gas industry.
We have not changed our primary focus on continued investment in product research and development, selective acquisitions and joint ventures.
Our imaging customers primarily consist of direct users of our equipment as well as specialized resellers that focus on the screen-printing and flexographic printing industries. Our border and perimeter security customers are primarily government agencies. Our smart water connectivity customers include municipalities, water utilities, water meter manufacturing companies as well as asset management firms such as multifamily property owners.
Our imaging customers primarily consist of direct users of our equipment as well as specialized resellers that focus on the screen-printing and flexographic printing industries. Our border and perimeter security customers are primarily government agencies. Two customers comprised 19.1% and 16.2% of our revenue during fiscal year 2025.
We report and categorize our customers and products into three different segments: Oil and Gas Markets, Adjacent Markets and Emerging Markets. In recent years, the revenue contribution from our Adjacent Markets segment has grown to represent nearly half of our total revenue.
In recent years, the revenue contribution from our non-energy related products has grown to represent nearly half of our total revenue. Our business diversification strategy has centered largely on translating expertise in ruggedized engineering and technology manufacturing into expanded customer markets. We report and categorize our customers and products into three different segments: Smart Water, Energy Solutions and Intelligent Industrial.
Quantum’s product line includes a proprietary detection system called SADAR®, which detects, locates and tracks items of interest in real-time. Using the SADAR® technology, Quantum designs and sells products used for border and perimeter security surveillance, cross-border tunneling detection and other products targeted at movement monitoring, intrusion detection and situational awareness.
Using the SADAR® technology, Quantum designs and sells products used for border and perimeter security surveillance, cross-border tunneling detection and other products targeted at movement monitoring, intrusion detection and situational awareness. Quantum’s customers include various agencies of the U.S. government including the Department of Defense, Department of Energy, Department of Homeland Security and other agencies.
Item 1. Business Business Overview Unless otherwise specified, the discussion in this Annual Report on Form 10-K refers to Geospace Technologies Corporation and its subsidiaries. We principally design and manufacture seismic instruments and equipment. These seismic products are marketed to the oil and gas industry and used to locate, characterize and monitor hydrocarbon producing reservoirs.
Item 1. Business Business Overview Unless otherwise specified, the discussion in this Annual Report on Form 10-K refers to Geospace Technologies Corporation and its subsidiaries. We design and manufacture sophisticated technology solutions for applications in smart water management, energy exploration, as well as industrial and Internet of Things.
More recently, we’ve begun marketing our seismic products for energy transition applications such as carbon storage, geothermal and mining. We also market our seismic products to other industries for vibration monitoring, border and perimeter security and various geotechnical applications.
Our seismic equipment and services are marketed to the energy industry and used to locate, characterize and monitor hydrocarbon producing reservoirs. We also market our seismic products to other industries for vibration monitoring, border and perimeter security and various geotechnical applications.
We have incurred company-sponsored research and development expenses of $16.3 million and $15.9 million during the fiscal years ended September 30, 2024 and 2023, respectively.
Research and development expense includes personnel costs of the Company's engineers, project expenditures, on-going product maintenance and improvements to our existing products, as well as general and administrative expenses associated with the engineering department. We have incurred company-sponsored research and development expenses of $18.9 million and $16.3 million during the fiscal years ended September 30, 2025 and 2024, respectively.
Our primary competitors for the rental of our traditional and land wireless seismic equipment are STRYDE, SmartSolo, INOVA, and Geophysical Technologies. Our primary competitor for our seabed PRM systems is Alcatel-Lucent. Our primary competitors for high-definition borehole seismic data acquisition systems are Avalon Sciences Ltd and Sercel.
The primary competitors for our land wireless data acquisition systems are SmartSolo, Sercel, INOVA, STRYDE, Geophysical Technology, and numerous smaller entities who have introduced similar versions of wireless data acquisition systems.
In past years, our oil and gas product innovations included the introduction of borehole seismology tools, land and seabed PRM systems and wireless data acquisition systems for both land and marine applications. These innovative technologies are the result of our unceasing investment in research and development initiatives.
In more recent years, product innovations included the introduction of IoT values, Pioneer™, and Mariner®. These innovative technologies are the result of our unceasing investment in research and development initiatives. A majority of our product research and development cost relates to our engineers.
While our primary growth initiative is to expand our oil and gas seismic product offerings, as seen with our acquisition of the OptoSeis® fiber optic sensing technology in fiscal year 2019, we may also seek out other business opportunities in adjacent markets and emerging markets which complement our existing oil and gas seismic products, engineering and manufacturing capabilities, and company-wide culture.
Our primary growth initiative is to seek out other business opportunities in our smart water and intelligent industrial markets which complement our existing products, engineering and manufacturing capabilities, company-wide culture, and are immediately accretive to our existing revenue stream.
The following table describes our revenue by product type (in thousands): YEAR ENDED SEPTEMBER 30, 2024 2023 Traditional seismic exploration product revenue $ 9,812 $ 12,183 Wireless seismic exploration product revenue 67,059 60,848 Seismic reservoir product revenue 584 962 Industrial product revenue 43,060 36,859 Imaging product revenue 12,565 12,180 Border & perimeter security product revenue 2,222 1,234 Corporate revenue 296 243 Total revenue $ 135,598 $ 124,509 Intellectual Property We seek to protect our intellectual property by means of patents, trademarks, trade secrets and other measures.
The following table describes our revenue by product type (in thousands): YEAR ENDED SEPTEMBER 30, 2025 2024 Smart Water $ 35,816 $ 32,434 Energy Solutions 50,706 77,977 Intelligent Industrial 23,960 24,891 Corporate 321 296 Total revenue $ 110,803 $ 135,598 Intellectual Property We seek to protect our intellectual property by means of patents, trademarks, trade secrets and other measures.
This includes having employees work from home, while implementing additional safety measures for employees continuing critical on-site work. Compensation and Benefits - We provide competitive compensation and benefits programs to help meet the needs of our employees.
We provide our full-time employees and their families with access to healthcare programs. Compensation and Benefits - We provide competitive compensation and benefits programs to help meet the needs of our employees.
Removed
For more information, please refer to the risks discussed under the heading “Risk Factors.” Segment and Geographical Information We report and evaluate financial information for our three business segments: Oil and Gas Markets, Adjacent Markets and Emerging Markets. For a discussion of the products sold and markets served by each of our segments, see “Products and Product Development” below.
Added
Segment and Geographical Information Effective October 1, 2024, the Company changed the composition of its three operating business segments and changed its methodology for allocating manufacturing costs including overhead and other costs of revenue to the segments. The business segments are now comprised of the following: Smart Water, Energy Solutions and Intelligent Industrial.
Removed
We believe that our Oil and Gas Markets' products are among the most technologically advanced instruments and equipment available for seismic data acquisition. Traditional Products An energy source and a data recording system are combined to acquire seismic data.
Added
The change methodology for allocating manufacturing costs affected each segment's operating income (loss) but had no effect on consolidated operating income (loss). For a discussion of the products sold and markets served by each of our segments, see “Products and Product Development” below.
Removed
We provide many of the components of seismic data recording systems, including geophones, hydrophones, multi-component sensors, leader wire, geophone strings, connectors, seismic telemetry cables and other seismic related products.
Added
This business segment contains the highly successful Hydroconn® smart water connectivity offerings along with the Aquana products. The adoption of advanced technology in water management has been bolstered by U.S. Federal funding programs such as Water Infrastructure Finance Act funding, which provides $7.5 billion for water-related infrastructure projects.
Removed
On land, our customers use geophones, leader wire, cables and connectors to receive and measure seismic reflections resulting from an energy source into data recording units, which store the seismic information for subsequent processing and analysis. In the marine environment, large ocean-going vessels tow long seismic cables known as “streamers” containing hydrophones that are used to detect pressure changes.
Added
Over the last decade, we have seen an increase of over 400% in sales volume of our Hydroconn® connector cables used in Automated Meter Reading (AMR) applications. These cables play a role in Advanced Metering Infrastructure (AMI) by enabling remote collection of usage data from utility meters, thereby eliminating the need for manual meter reading.
Removed
Hydrophones transmit electrical impulses back to the vessel’s data recording unit where the seismic data is stored for subsequent processing and analysis. Our marine seismic products also help steer streamers while being towed and help recover streamers if they become disconnected from the vessel.
Added
Our SADAR® technology provides energy companies real-time monitoring of seismic data. Intelligent Industrial Our Intelligent Industrial segment consists of industrial sensors, electronic pre-press solutions and specialized contract manufacturing. The growing defense and security applications offered by Quantum and Heartbeat Detector® will also be reflected in this segment.
Removed
Wireless Products We have developed multiple versions of a land-based wireless (or nodal) seismic data acquisition system. Rather than utilizing interconnecting cables as required by most traditional land data acquisition systems, each of our wireless stations operate as an independent data collection system, allowing for virtually unlimited channel configurations.
Added
In August 2025, we acquired Heartbeat Detector® by purchasing all the of the outstanding common stock of Geovox Securities, Inc. ("Geovox"). Heartbeat Detector® is a heartbeat detection security technology developed by the United States Department of Energy’s Oak Ridge National Laboratory which bolsters our perimeter security and surveillance offerings.
Removed
The device continuously records for up to 50 days and offers connector less charging and data downloading. Its lightweight and connector-less design will allow contractors to operate more efficiently and at a lower cost. 2 We have also developed a marine-based wireless seismic data acquisition system called the OBX, and recently released Mariner™ and Aquanaut™.
Added
Used in more than a dozen countries to address human trafficking and prison security, the Heartbeat Detector® uses proprietary sensors to rapidly identify people hidden in vehicles, providing a modern, user-friendly interface in as little as 10 seconds. The product, which relies on geophones we manufacture, has been proven 99% effective by Oak Ridge, Sandia and Thunder Mountain national laboratories.
Removed
We have two versions of OBX nodal stations: a shallow water version that can be used in depths of up to 750 meters and a deepwater version that can be deployed in depths of up to 3,450 meters. Through September 30, 2024, we have sold 29,000 OBX stations and we currently have 19,000 OBX stations in our rental fleet.
Added
The acquisition purchase price for Geovox consisted of (i) cash of $1.7 million, which included $1.5 million paid at closing and $0.2 million to be paid June 1, 2027, and (ii) contingent earn-out payments of up to $3.3 million over a four-year period.
Removed
Our recently introduced Aquanaut™ is a deepwater, wireless seismic acquisition node capable of operating for 200 days in water as deep as 3,450 meters. Reservoir Products Seismic surveys repeated over selected time intervals show dynamic changes within a producing oil and gas reservoir, and operators can use these surveys to monitor the effects of oil and gas development and production.
Added
In the long term we are seeking to grow our recurring revenue offerings through internal development or acquisition, and expand the majority of our revenue in our business segments not associated or dependent on the cyclical nature historically seen in the energy industry. ● Continue Investment in Product Research and Development – Prior to our plan for diversification, past periods of revenue growth were primarily driven through our internal development of new products for the energy industry.
Removed
This type of reservoir monitoring requires special purpose or custom designed systems in which portability becomes less critical and functional reliability assumes greater importance. This reliability factor helps assure successful operations in inaccessible locations over a considerable period of time. Additionally, reservoirs located in deep water or harsh environments require special instrumentation and new techniques to maximize recovery.

… 24 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

36 edited+8 added−15 removed86 unchanged
Biggest changeAny material changes in oil and gas prices or other market trends, like slowing growth of the global economy, could adversely impact seismic exploration activity and would likely affect the demand for the Company's products and could materially and adversely affect its results of operations and liquidity. 9 Generally, imbalances in the supply and demand for oil and gas will affect oil and gas prices and, in such circumstances, demand for our oil and gas products may be adversely affected when world supplies exceed demand.
Biggest changeAny material changes in oil and gas prices or other market trends, like slowing growth of the global economy, could adversely impact seismic exploration activity and would likely affect the demand for the Company's products and could materially and adversely affect its results of operations and liquidity.
Congress, and there has been a wide-ranging policy debate, both in the United States and internationally, regarding the impact of these gases and possible means for their regulation. These efforts have included consideration of cap-and-trade programs, carbon taxes, GHG reporting and tracking programs and regulations that directly limit GHG emissions from certain sources.
Congress, and there has been a wide-ranging policy debate, both in the United States and internationally, regarding the impact of these gases and possible means for their regulation. These efforts have included consideration of cap-and-trade programs, carbon taxes, and GHG reporting and tracking programs and regulations that directly limit GHG emissions from certain sources.
Such an event could materially and adversely affect our business operations. We currently evaluating our fire suppression system in an effort further to mitigate this risk. 15 Our Credit Agreement Imposes Restrictions on Our Business. We and several of our subsidiaries domiciled in the United States are parties to a credit agreement.
Such an event could materially and adversely affect our business operations. We currently are evaluating our fire suppression system in an effort further to mitigate this risk. 15 Our Credit Agreement Imposes Restrictions on Our Business. We and several of our subsidiaries domiciled in the United States are parties to a credit agreement.
Any such violations could include prohibitions on our ability to offer our products in one or more countries and could materially damage our reputation, our brands, our international expansion efforts, our ability to attract and retain employees, our business and our operating results. 16 Because We Have No Plans to Pay Any Dividends for the Foreseeable Future, Investors Must Look Solely to Stock Appreciation for a Return on Their Investment in Us.
Any such violations could include prohibitions on our ability to offer our products in one or more countries and could materially damage our reputation, our brands, our international expansion efforts, our ability to attract and retain employees, and our business and operating results. 16 Because We Have No Plans to Pay Any Dividends for the Foreseeable Future, Investors Must Look Solely to Stock Appreciation for a Return on Their Investment in Us.
We cannot assure that we will realize our expectations regarding acceptance of and revenue generated by our new products and services in existing or new markets. 12 The Short-Term Nature of Our Order Backlog for Sales of Our Oil and Gas Products and Delayed or Canceled Customer Orders May Cause Us to Experience Fluctuations in Quarterly Results of Operations.
We cannot assure you that we will realize our expectations regarding acceptance of and revenue generated by our new products and services in existing or new markets. 12 The Short-Term Nature of Our Order Backlog for Sales of Our Oil and Gas Products and Delayed or Canceled Customer Orders May Cause Us to Experience Fluctuations in Quarterly Results of Operations.
In November 2021, the Unites States and other countries entered into the Glasgow Climate Pact, which includes a range of measures designed to address climate change, including, but not limited to the phase-out of fossil fuel subsidies, reducing methane emissions 30% by 2030, and cooperating toward the advancement of the development of clean energy.
In November 2021, the Unites States and other countries entered the Glasgow Climate Pact, which includes a range of measures designed to address climate change, including but not limited to the phase-out of fossil fuel subsidies, reducing methane emissions 30% by 2030, and cooperating toward the advancement of the development of clean energy.
Because our business depends on the level of oil exploration, existing or future laws or regulations related to GHGs and climate change, including incentives to conserve energy or use alternative energy sources, our business could be negatively impacted if such laws or regulations reduce demand for our customers’ products and, accordingly, our services.
Because our business depends on the level of oil exploration, existing or future laws or regulations related to GHGs and climate change, including incentives to conserve energy or use alternative energy sources, could negatively impacted our business if such laws or regulations reduce demand for our customers’ products and, accordingly, our services.
Trade tensions have led to a series of tariffs imposed by the U.S. on imports from China, as well as retaliatory tariffs imposed by China on imports from the U.S. If the U.S. and China are able to negotiate the issues to restore a mutually advantageous and fair trading regime, the increased tariffs could be eliminated.
Historically, trade tensions have led to a series of tariffs imposed by the U.S. on imports from China, as well as retaliatory tariffs imposed by China on imports from the U.S. If the U.S. and China are able to negotiate the issues to restore a mutually advantageous and fair trading regime, the increased tariffs could be eliminated.
However, research and development is by its nature speculative, and we cannot assure that these expenditures will result in the development of new products or services or that any new products and services we have developed recently or may develop in the future will be commercially marketable or profitable to us.
However, research and development is by its nature speculative, and we cannot assure you that these expenditures will result in the development of new products or services or that any new products and services we have developed recently or may develop in the future will be commercially marketable or profitable to us.
In addition to regulatory impacts, the occurrence of weather events caused or exacerbated by climate change could impact local, national or global commodity demand or availability in ways that could be material to our business and/or the business of our customers.
In addition to regulatory impacts, the occurrence of weather events caused or exacerbated by climate change could impact local, national or global commodity demand or availability in ways that could be material to our business and/or the businesses of our customers.
Given the high level of complexity of these laws, there is a risk that some provisions may be inadvertently breached, for example through the negligent or the unauthorized intentional behavior of individual employees, our failure to comply with certain formal documentation requirements or otherwise. Additionally, we may be held liable for actions taken by our local dealers and partners.
Given the high level of complexity of these laws, there is a risk that some provisions may be inadvertently breached, for examples through the negligent or the unauthorized intentional behavior of individual employees, or our failure to comply with certain formal documentation requirements or otherwise. Additionally, we may be held liable for actions taken by our local dealers and partners.
In April 2016, the United States signed the Paris Agreement, which requires countries to review and “represent a progression” in their nationally determined contributions, which set emissions reduction goals, every five years. Under the Paris Agreement, the Biden Administration has committed the United States to reducing its greenhouse gas emissions by 50-52% from 2005 levels by 2030.
In April 2016, the United States signed the Paris Agreement, which requires countries to review and “represent a progression” in their nationally determined contributions, which set emissions reduction goals, every five years. Under the Paris Agreement, the United States has committed to reducing its greenhouse gas emissions by 50-52% by 2030 from its 2005 levels.
Such a default would permit our lender to declare any amounts borrowed from it to be due and payable, together with accrued and unpaid interest, and our ability to borrow under the credit agreement could be terminated. If we are unable to repay any debts owed to our lender, the lender could proceed against the collateral securing such debt.
Such a default would permit our lender to declare any amount borrowed from it to be due and payable, together with accrued and unpaid interest, and our ability to borrow under the credit agreement could be terminated. If we are unable to repay any debts owed to our lender, the lender could proceed against the collateral securing such debt.
Our Storage of Lithium Batteries is a Fire Hazard. We use lithium batteries in several of our products which are stored at our Pinemont facility. These batteries are known to pose significant fire hazards. Should a fire occur, it could result in personal injuries, damage to our facility and likely interrupt our manufacturing operations.
Our Storage of Lithium Batteries is a Fire Hazard. We use lithium batteries in several of our products which are stored at our Pinemont facility. These batteries are known to pose significant fire hazards. Should a fire occur, it could result in personal injuries, damage to our facility and likely interruptions to our manufacturing operations.
Significant technology improvements by our competitors could have an adverse effect on our results of operations and earnings. Our equipment rental business has high fixed costs, which primarily consist of depreciation expenses. In periods of declining rental revenue, these fixed costs generally do not decline.
Significant technological improvements by our competitors could have an adverse effect on our results of operations and earnings. Our equipment rental business has high fixed costs, which primarily consist of depreciation expenses. In periods of declining rental revenue, these fixed costs generally do not decline.
Furthermore, we may be required to write down the value of other intangible assets related to our acquisition of the OptoSeis® fiber optic sensing technology or the goodwill and other intangible assets related to our Aquana acquisition if sufficient cash flows are not generated to recover the carrying value of such assets.
Furthermore, we may be required to write down the value of other intangible assets related to our acquisition of the OptoSeis® fiber optic sensing technology or the goodwill and other intangible assets related to our Aquana or Geovox acquisitions if sufficient cash flows are not generated to recover the carrying value of such assets.
Additionally, bankruptcies or financial difficulties among our oil and gas customers could reduce our cash flows and adversely impact our liquidity and profitability. For a discussion of the customers of our oil and gas products, see “The Limited Market for Our Oil and Gas Products Can Affect Our Revenue,” below.
Additionally, bankruptcies or financial difficulties among our oil and gas customers could reduce our cash flow and adversely impact our liquidity and profitability. For a discussion of the customers of our oil and gas products, see “The Limited Market for Our Oil and Gas Products Can Affect Our Revenue,” below.
Significant sustained future decreases in crude oil and natural gas prices may require us to write down the value of our long-lived assets in our Oil and Gas Markets business segment, including our manufacturing facilities, manufacturing equipment and rental equipment if future cash flows anticipated to be generated from these assets fall below the asset’s net book value.
Significant sustained future decreases in crude oil and natural gas prices may require us to write down the value of our long-lived assets in our Energy Solutions business segment, including our manufacturing facilities, manufacturing equipment and rental equipment if future cash flows anticipated to be generated from these assets fall below the asset’s net book value.
During periods of improved energy commodity prices, the capital spending budgets of oil and natural gas operators tend to expand, which results in increased demand for our customers services leading to increased demand in our products.
During periods of improved energy commodity prices, the capital spending budgets of oil and natural gas operators tend to expand, which results in increased demand for our customers' services leading to increased demand in our products.
We again expect revenue outside of the United States to represent a substantial portion of our revenue for fiscal year 2025 and subsequent years.
We again expect revenue outside of the United States to represent a substantial portion of our revenue for fiscal year 2026 and subsequent years.
Based on customer billing data, revenue to customers outside the United States accounted for approximately 53% of our revenue during fiscal year 2024; however, we believe the percentage of revenue outside the United States is likely higher since many of our products are first delivered to a domestic location and ultimately shipped to a foreign location.
Based on customer billing data, revenue to customers outside the United States accounted for approximately 37% of our revenue during fiscal year 2025; however, we believe the percentage of revenue outside the United States is likely higher since many of our products are first delivered to a domestic location and ultimately shipped to a foreign location.
These translations could result in significant changes to our results of operations from period to period. For the fiscal year ended September 30, 2024, approximately 6% of our consolidated revenue was related to the operations of our foreign subsidiaries and branches. Our Long-Lived Assets May be Subject to Impairment. We periodically assess our long-lived assets for impairment.
These translations could result in significant changes to our results of operations from period to period. For the fiscal year ended September 30, 2025, approximately 4% of our consolidated revenue was related to the operations of our foreign subsidiaries and branches. Our Long-Lived Assets May be Subject to Impairment. We periodically assess our long-lived assets for impairment.
This limited number of shares outstanding results in a relatively limited market for our common stock. Our daily trading volume for the year ended September 30, 2024 averaged approximately 85,000 shares. Our small float and daily trading volumes have in the past caused, and may in the future result in, significant volatility in our stock price.
This limited number of shares outstanding results in a relatively limited market for our common stock. Our daily trading volume for the year ended September 30, 2025 averaged approximately 122,000 shares. Our small float and daily trading volumes have in the past caused, and may in the future result in, significant volatility in our stock price.
These political, litigation, and financial risks may result in our customers restricting or cancelling exploration or production activities which also could reduce demand for our products and services.
These risks may result in our customers restricting or cancelling exploration or production activities which also could reduce demand for our products and services.
Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. We Have a Relatively Small Public Float, and Our Stock Price May be Volatile. At September 30, 2024, we have approximately 11.8 million shares outstanding held by non-affiliates.
Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments. We Have a Relatively Small Public Float, and Our Stock Price May be Volatile. At September 30, 2025, we have approximately 12.6 million shares outstanding held by non-affiliates.
For our imaging products, we purchase all of our thermal film from one manufacturer. Except for the film sold to us by this manufacturer, we know of no other source for thermal film that performs as well in our imaging equipment.
Except for the film sold to us by this manufacturer, we know of no other source for thermal film that performs as well in our imaging equipment.
In such case, we would be required to impair the value of such inventories on our balance sheet. 13 The Limited Market for Our Oil and Gas Markets and Emerging Markets' Products Can Affect Our Revenue. In our Oil and Gas Markets segment, we generally market many of our products to seismic service contractors.
In such case, we would be required to impair the value of such inventories on our balance sheet. 13 The Limited Market for Oil and Gas Products and Border and Perimeter Security Products Can Affect Our Revenue. We generally market many of our oil and gas products to seismic service contractors.
The Ongoing Armed Conflict Between Russia and Ukraine Could Adversely Affect Our Business and Results of Operations. In February 2022, the Russian Federation launched a full-scale military invasion of Ukraine, and Russia and Ukraine and continue to engage in active and armed conflict as of November 2024.
In February 2022, the Russian Federation launched a full-scale military invasion of Ukraine, and Russia and Ukraine continue to engage in active and armed conflict as of November 2024.
Climate Change and Legislation Designed to Reduce Climate Change The physical and regulatory effects of climate change could have a negative impact on our operations, our customers’ operations and the overall demand for our customers’ products and, accordingly, our services.
It remains unclear as to the tariff related impact of the future geopolitical climate will bring to our operations. Climate Change and Legislation Designed to Reduce Climate Change The physical and regulatory effects of climate change could have a negative impact on our operations, our customers’ operations and the overall demand for our customers’ products and, accordingly, our services.
In particular, we have incurred substantial expenditures to develop our oil and gas nodal seismic data acquisition systems, as well as other products for PRM applications. In addition, we try to use some of our capabilities to supply products to new adjacent and emerging markets.
In particular, we have incurred substantial expenditures to develop our ocean bottom nodal seismic data acquisition systems, as well as other products for PRM applications. In addition, we try to use some of our capabilities to supply products to smart water and intelligent industrial products.
Our ability to comply with these restrictions may be affected by events beyond our control, including, but not limited to, prevailing economic, financial and industry conditions and continuing declines in our product revenue.
The credit agreement also contains other covenants customary in agreements of this type. Our ability to comply with these restrictions may be affected by events beyond our control, including, but not limited to, prevailing economic, financial and industry conditions and continuing declines in our product revenue.
In fiscal year 2024, customers outside the United States accounted for approximately 53% of our revenues. We also purchase a portion of our raw materials from suppliers in China and other foreign countries.
Approximately 37% of our revenue for fiscal year 2025 was generated from customers outside of the U.S. We also purchase a portion of our raw materials from suppliers in China and other foreign countries.
We Cannot Be Certain of the Effectiveness of Patent Protection on Our Products. We hold and from time to time apply for certain patents relating to some of our products.
The loss of a small number of these customers, and particularly our oil and gas customers, could materially and adversely impact our future revenues. We Cannot Be Certain of the Effectiveness of Patent Protection on Our Products. We hold and from time to time apply for certain patents relating to some of our products.
Several states and geographic regions in the United States have also adopted legislation and regulations to reduce emissions of GHGs, including cap and trade regimes and commitments to contribute to meeting the goals of the Paris Agreement.
Several states and geographic regions in the United States have also adopted legislation and regulations to reduce emissions of GHGs, including cap and trade regimes and commitments to contribute to meeting the goals of the Paris Agreement. 11 It is not possible at this time to predict the timing and effects of climate change or whether additional climate-related legislation, regulations or other measures will be adopted at the local, state, regional, national and international levels.
As a result, any significant decline in rental revenue caused by reduced demand could adversely affect our results of operations. Our Expansion into the Border and Perimeter Security Market May Not Be Successful. We have not previously operated in the border and perimeter security marketplace prior to our 2018 acquisition of Quantum.
As a result, any significant decline in rental revenue caused by reduced demand could adversely affect our results of operations. Our Diversification Strategy Using both Organic Expansion and Acquisitions May Not Be Successful. We seek to grow our business through a combination of organic initiatives and strategic acquisitions.
The credit agreement limits the incurrence of additional indebtedness, contains a covenant that requires us to maintain a certain amount of consolidated tangible net worth and liquidity, and contains other covenants customary in agreements of this type.
Borrowings under the credit agreement will be secured by substantially all of our domestic assets, except for certain excluded property. The credit agreement limits the incurrence of additional indebtedness, contains covenants that require us to maintain (i) a certain amount of consolidated tangible net worth and liquidity and (ii) minimum asset and interest coverage ratios.
Removed
Crude oil prices have stabilized over the past two years, which may result in higher cash flows for exploration and production companies.
Added
Generally, imbalances in the supply and demand for oil and gas will affect oil and gas prices and, in such circumstances, demand for our oil and gas products may be adversely affected when world supplies exceed demand. The Ongoing Armed Conflict Between Russia and Ukraine Could Adversely Affect Our Business and Results of Operations.
Removed
Governmental, scientific, and public concern over the threat of climate change arising from GHG emissions has resulted in increasing political risks in the United States.
Added
In addition, the current presidential administration is utilizing tariffs to fortify domestic tax revenue which could further impact our business and operations, due to potential trade wars as a result of the implementation of tariffs or otherwise.
Removed
President Biden and Congress have identified climate change as a priority, and it is likely that additional executive orders, regulatory action, and/or legislation targeting greenhouse gas emissions, or prohibiting or restricting oil and gas development activities in certain areas, will be proposed and/or promulgated during the Biden Administration.
Added
However, the United States is currently scheduled to end its participation in the Paris Agreement in January 2026.
Removed
President Biden issued an executive order imposing a moratorium on new oil and gas leasing on federal lands and offshore waters pending completion of a comprehensive review and reconsideration of federal oil and gas permitting and leasing practices.
Added
We market our seabed PRM systems' products to large oil and gas companies. During the third quarter of fiscal year 2025, we entered into large-scale seabed PRM system contract, our first since 2014. Our border and perimeter products are sold to a small number of agencies within the U.S. government.
Removed
President Biden’s order also establishes climate change as a primary foreign policy and national security consideration, affirms that achieving net-zero greenhouse gas emissions by or before midcentury is a critical priority, affirms the Biden Administration’s desire to establish the United States as a leader in addressing climate change, generally further integrates climate change and environmental justice considerations into government agencies’ decision-making, and eliminates fossil fuel subsidies, among other measures.
Added
Our ability to achieve organic growth depends on factors such as customer retention, market demand, product innovation, and our ability to attract and retain key personnel. There can be no assurance that our efforts will result in increased revenues or profitability. In addition, we may pursue acquisitions to expand our market presence, product offerings, or geographic reach.
Removed
Other actions impacting oil and natural gas production activities that could be pursued by the Biden administration may include more restrictive requirements for the establishment of pipeline infrastructure or the permitting of liquified natural gas export facilities. 11 It is not possible at this time to predict the timing and effects of climate change or whether additional climate-related legislation, regulations or other measures will be adopted at the local, state, regional, national and international levels.
Added
Acquisitions involve numerous risks, including difficulties in identifying suitable targets, integrating operations, realizing anticipated synergies, retaining key employees, and managing increased operational complexity. We may also face unforeseen liabilities or costs associated with acquired businesses.
Removed
We market our seabed PRM systems' products to large oil and gas companies. Since this product’s introduction in 2002, we have received system orders from three offshore oil and gas operators: BP, Shell and Equinor, which have accounted for a significant portion of our revenue in fiscal year 2014 and prior fiscal years.
Added
If we are unable to successfully execute our organic growth initiatives or effectively integrate and manage acquired businesses, our business, financial condition, and results of operations could be adversely affected. We Rely on Key Suppliers for Certain Components Used in Our Products. Certain electronic components used in our land and marine wireless products are purchased from two single source suppliers.
Removed
We have not received any orders for large-scale seabed PRM systems since November 2012. Our emerging markets segment primarily sells its products to a small number of agencies within the U.S. government. The loss of a small number of these customers, and particularly our oil and gas customers, could materially and adversely impact our future revenues.
Added
In the event a change in one or both suppliers is necessary, significant engineering efforts would be required by us, which could adversely affect our financial performance. For our imaging products, we purchase all of our thermal film from one manufacturer.
Removed
Quantum is also a relatively recent entrant into this marketplace, and Quantum was not cash-flow positive when we acquired it. In fiscal year 2021, we completed our first contract with the U.S. Customs and Border Protection (“CBP”), except for on-going service and maintenance.
Removed
While we will continue to devote management time and resources, financial and otherwise, to develop our business in this marketplace, our lack of experience in this market makes it difficult to estimate our financial returns from this business.
Removed
In addition, some of the customers for this business will be governmental entities and contracting with those entities can be difficult, costly, and unpredictable. We do not have extensive experience in government contracting, and so we may not win, retain, or perform under such future contracts in a manner that is profitable.
Removed
If we are not successful in this emerging market segment, it will negatively impact our financial performance and could negatively impact our reputation and harm our other business segments. 14 We Rely on Key Suppliers for Certain Components Used in Our Products.
Removed
Certain models of our oil and gas marine wireless products require a timing device we purchase from a United States manufacturer. We currently do not possess the ability to manufacture this component and have no other reliable source for this device.
Removed
If this manufacturer were to discontinue its production of this timing device, were to become unwilling to contract with us on competitive terms or were unable to supply the component in sufficient quantities to meet our requirements, our ability to compete in the marine wireless marketplace could be impaired, which could adversely affect our financial performance.
Removed
Amounts available for borrowing under the credit agreement are determined by a borrowing base, which is determined based upon certain of our domestic assets. Borrowings under the credit agreement will be secured by substantially all of our domestic assets, except for certain excluded property.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−1 removed0 unchanged
Biggest changeThis facility supports the majority of our OptoSeis® research and development and engineering operations. (4) This property is located at 5700 N. Harbor City Blvd., Suite 100, in Melbourne, Florida. This facility contains all the operations of Quantum. (5) Oil and Gas Markets. (6) Adjacent Markets (7) Emerging Markets
Biggest change(3) This property is located at 8701 Cross Park Drive, Suite 100, in Austin, Texas. This facility supports the majority of our OptoSeis® research and development and engineering operations. (4) Smart Water. (5) Energy Solutions. (6) Intelligent Industrial.
Properties As of September 30, 2024, our operations included the following locations: Location Owned/Leased Approximate Square Footage/Acreage Use Segment (see notes below) Houston, Texas Owned 387,000 See Note 1 below 5 and 6 Houston, Texas Owned 17.3 acres See Note 2 below 5 Austin, Texas Leased 9,000 See Note 3 below 5 Melbourne, Florida Leased 7,000 See Note 4 below 7 Calgary, Alberta, Canada Owned 45,000 Manufacturing, sales and service 5 and 6 Luton, Bedfordshire, England Owned 8,000 Sales and service 6 Bogotá, Colombia Owned 19,000 Sales and service 5 (1) This property is located at 7007 Pinemont Drive in Houston, Texas (the “Pinemont Facility”).
Properties As of September 30, 2025, our operations included the following locations: Location Owned/Leased Approximate Square Footage/Acreage Use Segment (see notes below) Houston, Texas Owned 387,000 See Note 1 below 4,5 and 6 Houston, Texas Leased 30,000 See Note 2 below 4,5 and 6 Austin, Texas Leased 9,000 See Note 3 below 5 Calgary, Alberta, Canada Owned 45,000 Manufacturing, sales and service 5 and 6 Luton, Bedfordshire, England Owned 8,000 Sales and service 6 Bogotá, Colombia Owned 19,000 Sales and service 5 (1) This property is located at 7007 Pinemont Drive in Houston, Texas (the “Pinemont Facility”).
The Pinemont Facility contains substantially all manufacturing activities and all engineering, selling, marketing and administrative activities for us in the United States. The Pinemont Facility also serves as our international corporate headquarters. (2) This property is located adjacent to the Pinemont Facility.
The Pinemont Facility contains substantially all manufacturing activities and all engineering, selling, marketing and administrative activities for us in the United States. The Pinemont Facility also serves as our international corporate headquarters. (2) This property is located at 13430 Northwest Freeway, Suite 1050, in Houston, Texas. This facility supports the majority of research and development and engineering operations.
Removed
It is currently being used as additional parking for the Pinemont Facility and legacy structures are being used to support our manufacturing and warehousing operations. This facility is classified as "Property held for sale" on our accompanying consolidated balance sheet as of September 30, 2024. (3) This property is located at 8701 Cross Park Drive, Suite 100, in Austin, Texas.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−4 removed5 unchanged
Biggest changeYear Ended September 30, 2024: Low High Fourth Quarter Third Quarter $ 8.09 $ 10.81 Second Quarter 8.49 14.83 First Quarter 11.40 17.09 10.35 13.74 Year Ended September 30, 2023: Fourth Quarter $ 7.22 $ 14.59 Third Quarter 6.60 9.16 Second Quarter 3.96 7.55 First Quarter 3.76 4.88 Dividends Since our initial public offering in 1997, we have not paid dividends, and we do not intend to pay cash dividends on our common stock in the foreseeable future.
Biggest changeYear Ended September 30, 2025: Low High Fourth Quarter $ 10.22 $ 21.90 Third Quarter 5.51 18.99 Second Quarter 7.02 10.46 First Quarter 9.68 13.79 Year Ended September 30, 2024: Fourth Quarter $ 8.09 $ 10.81 Third Quarter 8.49 14.83 Second Quarter 11.40 17.09 First Quarter 10.35 13.74 Dividends Since our initial public offering in 1997, we have not paid dividends, and we do not intend to pay cash dividends on our common stock in the foreseeable future.
Securities Authorized for Issuance under Equity Compensation Plans The following equity plan information is provided as of September 30, 2024: Equity Compensation Plan Information Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a) Weighted-average Exercise Price of Outstanding Options, Warrants and Rights (b) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) (In shares) (In dollars per share) (In shares) Equity Compensation Plans Approved by Security Holders (1) 408,895 N/A 827,088 Equity Compensation Plans Not Approved by Security Holders — — — Total 408,895 N/A 827,088 (1) The number of securities shown in column (c) represents number of securities remaining available for issuance under the Company’s 2014 Long Term Incentive Plan, as amended (the “2014 Plan”).
Securities Authorized for Issuance under Equity Compensation Plans The following equity plan information is provided as of September 30, 2025: Equity Compensation Plan Information Plan Category Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights (a) Weighted-average Exercise Price of Outstanding Options, Warrants and Rights (b) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) (In shares) (In dollars per share) (In shares) Equity Compensation Plans Approved by Security Holders (1) 332,693 N/A 682,071 Equity Compensation Plans Not Approved by Security Holders — — — Total 332,693 N/A 682,071 (1) The number of securities shown in column (c) represents number of securities remaining available for issuance under the Company’s 2014 Long Term Incentive Plan, as amended (the “2014 Plan”).
On October 31, 2024, there were approximately 136 holders of record of our common stock, and the closing price per share on such date was $11.20 as quoted by The NASDAQ Global Select Market.
On October 31, 2025, there were approximately 143 holders of record of our common stock, and the closing price per share on such date was $25.34 as quoted by The NASDAQ Global Select Market.
Column (b) excludes restricted stock unit awards. 19 Recent Sales of Unregistered Securities and Use of Proceeds None.
Column (b) excludes restricted stock unit awards. 19 Recent Sales of Unregistered Securities and Use of Proceeds None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
Removed
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information with respect to purchases of common stock of the Company made during the three months ended September 30, 2024: Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1) July 1, 2024 through July 31, 2024 $ 164,048 $ 9.09 $ 164,048 $ 501,000 August 1, 2024 through August 31, 2024 141,695 9.23 141,695 1,186,000 September 1, 2024 through September 30, 2024 57,491 9.88 57,491 615,000 (1) On May 9, 2024, the Company's Board of Directors (the "Board") authorized a stock repurchase program ("the program") under which the Company may repurchase up to $5 million of its outstanding stock.
Removed
On August 8, 2024, the Board approved an extension to the Program increasing the dollar amount of shares allowed to be purchased to $7 million, Under the Program, the Company may purchase shares of common stock on a discretionary basis from time to time through open market transactions through block trades, in privately negotiated transactions and pursuant to any trading plan that may be adopted by the Company’s management in accordance with Rule 10b5-1 of the Exchange Act, or otherwise.
Removed
The timing and number of shares repurchased will depend on a variety of factors, including stock price, trading volume, and general business and market conditions. The Program has no time limit, does not obligate the Company to acquire a specified number of shares and may be modified, suspended or discontinued at any time at the Company’s discretion.
Removed
The repurchase plan will be funded using existing cash or future cash flow.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

44 edited+25 added−43 removed18 unchanged
Biggest changeOther uses of cash included a (i) $11.0 million increase in inventories for the strategic purchase of long lead components needed for use in wireless products, valves and contract manufacturing and (ii) $3.0 million decrease in other liabilities due to the return of customer deposits on rental contracts, partially offset by an increase in our product warranty accrual and (iii) $0.3 million increase in other assets.
Biggest changeUses of cash included (i) our net loss of $9.7 million, offset by non-cash charges of $14.6 million resulting from deferred income taxes, depreciation, amortization, accretion, inventory obsolescence, stock-based compensation and provision for credit losses, (ii) a $7.6 million increase in inventories for the strategic purchase of long lead-time components needed for use in wireless products, valves and contract manufacturing, ( iii) $4.2 million increase in trade accounts and notes receivable due to timing of collections from customers and (iv) $1.3 million increase in other assets, primarily due to prepaid product purchases.
Additionally, we anticipate this segment to see substantial revenue contributions from our Aquana smart water valve and IoT technology products as market traction and increased sales backlog continues to gather.
Additionally, we anticipate this segment to see revenue contributions from our Aquana smart water valve and IoT technology products as market traction and increased sales backlog continues to gather.
In the absence of future profitable results of operations, we may need to rely on other sources of liquidity to fund our future operations, including executed rental contracts, available borrowings under the Agreement through its expiration in July 2025, sales or leveraging real estate assets, sales of rental assets and other liquidity sources which may be available to us.
In the absence of future profitable results of operations, we may need to rely on other sources of liquidity to fund our future operations, including executed rental contracts, available borrowings under the Agreement through its expiration in July 2028, sales or leveraging real estate assets, sales of rental assets and other liquidity sources which may be available to us.
Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out method, except that our subsidiary in the United Kingdom uses an average cost method to value their inventories.
Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out method, except that our subsidiary in the United Kingdom uses an average cost method to value its inventories.
Such examples include, but are not limited to, the failure of the Quantum or OptoSeis® or Aquana technology transactions to yield positive operating results and decreases in commodity price levels which could reduce demand for our products, the failure of our products to achieve market acceptance (despite substantial investment by us) our sensitivity to short term backlog, delayed or cancelled customer orders, product obsolescence resulting from poor industry conditions or new technologies, bad debt write-offs associated with customer accounts, inability to collect on promissory notes, lack of further orders for our OBX rental equipment, failure of our Quantum products to be adopted by the border and perimeter security market, or a decrease in such market due to governmental changes, and infringement or failure to protect intellectual property.
Such examples include, but are not limited to, the failure of our acquisitions to yield positive operating results and decreases in commodity price levels which could reduce demand for our products, the failure of our products to achieve market acceptance (despite substantial investment by us), our sensitivity to short term backlog, delayed or cancelled customer orders, product obsolescence resulting from poor industry conditions or new technologies, bad debt write-offs associated with customer accounts, inability to collect on promissory notes, lack of further orders for our ocean bottom rental equipment, failure of our Quantum products to be adopted by the border and perimeter security market, or a decrease in such market due to governmental changes, and infringement or failure to protect intellectual property.
Examples of forward-looking statements include, among others, statements that we make regarding our expected operating results, the adoption, results and success of our rollout of our Aquana smart water valves and cloud-based control platform, future demand for our Quantum security solutions, the adoption and sale of our products in various geographic regions, potential tenders for PRM systems, future demand for OBX rental equipment, the adoption of Quantum's SADAR® product monitoring of subsurface reservoirs, the completion of new orders for our channels of our GCL system, the fulfillment of customer payment obligations, the impact of the current armed conflict between Russia and Ukraine, our ability to manage changes and the continued health or availability of management personnel, volatility and direction of oil prices, anticipated levels of capital expenditures and the sources of funding therefor, and our strategy for growth, product development, market position, financial results and the provision of accounting reserves.
Examples of forward-looking statements include, among others, statements that we make regarding our expected operating results, the adoption, results and success of our rollout of our Aquana smart water valves and cloud-based control platform, future demand for our Quantum security solutions, the adoption and sale of our products in various geographic regions, potential tenders for PRM systems, sales or rentals for ocean bottom nodes, the adoption of Quantum's SADAR® product monitoring of subsurface reservoirs, the completion of new orders for channels of our Pioneer™ system, the fulfillment of customer payment obligations, the impact of the current armed conflict between Russia and Ukraine, our ability to manage changes and the continued health or availability of management personnel, volatility and direction of oil prices, anticipated levels of capital expenditures and the sources of funding therefor, and our strategy for growth, product development, market position, financial results and the provision of accounting reserves.
We currently believe that our cash and short-term investments will be sufficient to finance any future operating losses and planned capital expenditures through the next twelve months.
We currently believe that our cash will be sufficient to finance any future operating losses and planned capital expenditures through the next twelve months.
Our capital expenditures are expected to be funded from our cash on hand, internal cash flows, cash flows from our rental contracts or, if necessary, borrowings under our new credit agreement.
Our capital expenditures are expected to be funded from our cash on hand and internal cash flows or, if necessary, borrowings under our new credit agreement.
Consolidated Results of Operations As we have reported in the past, our revenue and operating profits have varied significantly from quarter-to-quarter, and even year-to-year, and are expected to continue that trend in the future, especially when our quarterly or annual financial results are impacted by the presence or absence of relatively large, but somewhat unpredictable, sales of our oil and gas PRM systems and/or wireless seismic data acquisition systems for land and marine applications. 21 We report and evaluate financial information for three segments: Oil and Gas Markets, Adjacent Markets and Emerging Markets.
Consolidated Results of Operations As we have reported in the past, our revenue and operating profits have varied significantly from quarter-to-quarter, and even year-to-year, and are expected to continue that trend in the future, especially when our quarterly or annual financial results are impacted by the presence or absence of relatively large, but somewhat unpredictable, sales of our oil and gas PRM systems and/or wireless seismic data acquisition systems for land and marine applications. 21 We report and evaluate financial information for three segments: Smart Water, Energy Solutions and Intelligent Industrial.
We do not expect significant expansion of the ocean bottom nodal market, for we expect the market is saturable and future rental fleet use will come from our customer’s need to temporarily expand their nodal fleet.
We do not expect significant expansion of the ocean bottom nodal market, because we expect the market is saturable and future rental fleet use will come from our customers' need to temporarily expand their nodal fleet.
We believe our wireless product sales and rentals will increase in fiscal year 2025, over 2024 levels, primarily driven by our recent introduction of our Mariner™ marine wireless system and our Pioneer™ land based wireless system, but we can make no assurance in this regard.
We believe our wireless product sales will moderately increase in fiscal year 2026 over 2025 levels, primarily driven by our recent introduction of our Pioneer™ land-based wireless system and our Mariner® wireless system, but we can make no assurance in this regard.
We design and manufacture other products of a non-seismic nature, including water meter products, imaging equipment and provide contract manufacturing services. For further information on the nature of our operations, see the information under the heading “Business” in this Annual Report on Form 10-K.
We design and manufacture Hydroconn® water meter connector products, IoT water values, imaging equipment and provide contract manufacturing services. For further information on the nature of our operations, see the information under the heading “Business” in this Annual Report on Form 10-K.
We consider many factors in selecting appropriate operational and financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of these financial statements. We continually evaluate our estimates, including those related to revenue recognition, bad debt reserves, inventory obsolescence reserves, goodwill and long-lived asset impairment.
We consider many factors in selecting appropriate operational and financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of these financial statements. We continually evaluate our estimates, including those related to rental revenue recognition, bad debt reserves, inventory obsolescence reserves, business acquisitions and contingent earn-out liabilities.
Our current liquidity enables our ability to seek out business acquisitions, allows us to continue investments in capital assets and product research and development, which have historically driven revenue growth. 22 Fiscal Year 2024 Compared to Fiscal Year 2023 Consolidated revenue for fiscal year 2024 was $135.6 million, an increase of $11.1 million, or 8.9%, from fiscal year 2023.
Our current liquidity enables our ability to seek out business acquisitions and allows us to continue investments in capital assets and product research and development, which have historically driven revenue growth. 22 Fiscal Year 2025 Compared to Fiscal Year 2024 Consolidated revenue for fiscal year 2025 was $110.8 million, a decrease of $24.8 million, or 18.3%, from fiscal year 2024.
While we experienced stronger marine nodal product sales in fiscal year 2024, the need for new seismic equipment, particularly land-based equipment, remains restrained due to our customers’ (i) limited capital resources, (ii) lack of visibility into future demand for their seismic services and (iii) in some cases, under-utilized legacy equipment.
While we experienced stronger wireless land product sales in fiscal year 2025, the need for new seismic equipment, particularly traditional land-based equipment, remains restrained due to our customers’ (i) limited capital resources, (ii) lack of visibility into future demand for their seismic services and (iii) in some cases, under-utilized legacy equipment. 28 The vast majority of our Energy Solutions business segment revenue in fiscal year 2025 was derived from wireless product sales.
We are aggressively marketing our SADAR technologies to security and oil and gas industry customers. While marked acceptance of SADAR as an effective analytical tool for categorizing seismic data, we continue to believe acceptance will occur. Fiscal year 2025 revenue from our Emerging Markets products is expected to be flat or modesty increase compared to fiscal year 2024 .
We are aggressively marketing our SADAR® technologies to both our security and oil and gas industry customers. While marked acceptance of SADAR® as an effective analytical tool for categorizing seismic data, we continue to believe acceptance will occur.
We do not have any obligations which meet the definition of an off-balance sheet arrangement, and which have or are reasonably likely to have a current or future effect on our financial statements or the items contained therein that are material to investors. 26 Contractual Obligations Contingent Compensation Costs In connection with the acquisition of Aquana in 2021, we are subject to additional contingent cash payments to the former members of Aquana over a six-year earn-out period.
We do not have any obligations which meet the definition of an off-balance sheet arrangement, and which have or are reasonably likely to have a current or future effect on our financial statements or the items contained therein that are material to investors. 26 Contractual Obligations Contingent Consideration In August 2025, we acquired Geovox.
The merger agreement with Aquana requires the continued employment of a certain key employee and former member of Aquana for the first four years of the six year earn-out period for any of Aquana’s former members to be eligible to receive any earn-out payments.
There is no maximum limit to the contingent cash payments that could be made. The Merger Agreement requires the continued employment of a certain key employee and former member of Aquana for the first five years of the seven-year earn-out period in order for any of Aquana’s former members to be eligible for any earn-out payments.
Our Oil and Gas Markets segment saw a shift from rentals of our OBX marine wireless nodes to purchases of the equipment. This shift signifies our customer’s recognition of future backlog to justify ownership versus renting the nodes.
Our Energy Solution segment saw a shift from rentals of our ocean bottom nodes to purchases of the equipment in fiscal years 2024 and 2025. This shift signifies our customer’s recognition of future backlog to justify ownership versus renting the nodes.
Given the well-known and often extreme volatility experienced in our Oil and Gas segment, careful expansion of products and market diversity in our Adjacent Markets segment has been a longstanding part of our strategic vision and reflects our on-going diversification efforts. We continue to maintain a strong balance sheet with no debt.
Given the well-known and often extreme volatility experienced in our Energy Solutions segment, careful expansion of products and market diversity in our Smart Water and Intelligent Industrial segments has been a longstanding part of our strategic vision and reflects our on-going diversification efforts.
We expect fiscal year 2025 revenue from our Adjacent Markets products to increase over fiscal year 2024 levels due to our acquisition of Aquana and integration of Aquana's products into our business and optimism that demand for our industrial, imaging products and contract manufacturing services will continue to increase in fiscal year 2025.
We expect fiscal year 2026 revenue from our Intelligent Industrial business segment products to increase over fiscal year 2025 levels due to our recent acquisition of Geovox's Heartbeat Detector® as well as optimism that demand for our surveillance and defense products and our contract manufacturing services will increase.
In accordance with ASC 805, Business Combination s, due to the continued employment requirement, no liability has been recorded for the estimated fair value of contingent earn-out payments for this transaction. Earn-outs achieved are recorded as compensation expense when incurred.
Due to the continued employment requirement, no liability has been recorded for the estimated fair value of earn-out payments for this transaction. Earn-outs achieved are recorded as compensation expense when incurred. See Note 19 to our consolidated financial statements in this Annual Report on Form 10-K for more information on our contractual contingencies.
The evaluation primarily consists of reviewing past due account balances and other factors such as the credit quality of the customer, historical trends of the customer and current economic conditions. We suspend the recognition of rental revenue when the collectability of amounts due are no longer probable and record a direct write-off of the lease receivable to rental revenue.
We regularly evaluate the collectability of our lease receivables on a lease-by-lease basis. The evaluation primarily consists of reviewing past due account balances and other factors such as the credit quality of the customer, historical trends of the customer and current economic conditions.
The contingent payments, if any, will be derived from certain eligible revenue generated during the earn-out period from products and services sold by Aquana. There is no maximum limit to the contingent cash payments that could be made.
Pursuant to the merger agreement with Aquana, as amended ("the Merger Agreement"), the Company is subject to additional contingent cash payments to the former members of Aquana over a seven-year earn-out period. The contingent payments, if any, will be derived from certain eligible revenue generated during the earn-out period from products and services sold by Aquana.
The Agreement also requires us to maintain a springing minimum interest coverage ratio of 1.50 to 1.00, tested quarterly whenever there is an outstanding balance. The Agreement expires in July 2025.
The Agreement also requires us to maintain a springing minimum interest coverage ratio of at least 1.50 to 1.00, tested quarterly whenever (a) there is an outstanding balance on the revolving credit facility or (b) have letter of credit exposure greater than $1 million. At September 30, 2025, we were in compliance with all covenants under the Agreement.
For the fiscal year ended September 30, 2024, we used cash of $6.4 million from financing activities for the purchase of treasury stock pursuant to a stock buy-back program authorized by our Board of Directors. The program authorizes us to repurchase up to $7.0 million of our common stock in open market transactions.
For fiscal year 2025, we used $1.0 million from financing activities which consisted of (i) $0.4 million in debt issuance costs related the renewal of our credit agreement and (ii) $0.6 million for the purchase of treasury stock pursuant to a stock buy-back program authorized by our board of directors.
Interest shall accrue on outstanding borrowings at a rate equal to Term SOFR (Secured Overnight Financing Rate) plus a margin equal to 3.25% per annum. We are required to make monthly interest payments on borrowed funds. The Agreement is secured by substantially all of our assets, except for certain excluded property.
The Agreement is for a three-year term and provides a revolving credit facility with a maximum availability of $25 million. Interest shall accrue on outstanding borrowings at 30 Day Term SOFR plus a margin equal to 2.75% per annum. We are required to make monthly interest payments on borrowed funds.
These uses of cash were partially offset by a (i) $6.6 million decrease in trade accounts and notes receivable primarily due to the timing of collections from customers and (ii) $2.7 million increase in accounts payable due to timing of payments to our suppliers.
These uses of cash were partially offset b y a i) $4.8 increase in other liabilities primarily related to customer deposits and (ii) $2.4 million increase in trade accounts payable due to timing of payments to our suppliers. For fiscal year 2025, we generated cash of $42.7 million in investing activities.
If, based on the quantitative assessment, we determine that the fair value of a reporting unit is less that its carrying amount, a goodwill impairment is recognized equal to the difference between the carrying amount of the reporting unit and its fair value, not to exceed the carrying amount of the goodwill. 27 We record a write-down of our inventories when the cost basis of any manufactured product, including any estimated future costs to complete the manufacturing process, exceeds its net realizable value.
We perform ongoing credit evaluations of our accounts and financing receivables, and allowances are recognized for potential credit losses. 27 We record a write-down of our inventories when the cost basis of any manufactured product, including any estimated future costs to complete the manufacturing process, exceeds its net realizable value.
Segment Results of Operations Fiscal Year 2024 Compared to Fiscal Year 2023 Oil and Gas Markets Revenue Revenue from our Oil and Gas Markets products for fiscal year 2024 increased $3.5 million, or 4.7%, from fiscal year 2023.
Segment Results of Operations Fiscal Year 2025 Compared to Fiscal Year 2024 Smart Water Revenue Revenue from our Smart Water products for fiscal year 2025 increased $3.4 million, or 10.4%, from the prior fiscal year. The increase was primarily due to an increase in demand for our Hydroconn® cable and connector products.
The Agreement requires us to maintain a minimum (i) consolidated tangible net worth of $100 million, (ii) liquidity of $5 million, and (iii) current ratio no less than 2.00 to 1.00, in each case tested quarterly.
The Agreement is secured by substantially all of our assets, except for certain excluded property. The Agreement requires us to maintain (i) a minimum consolidated tangible net worth of $85 million, (ii) minimum liquidity of $10 million, and (iii) a minimum asset coverage ratio of 2.00 to 1.00.
We expect fiscal year 2025 cash investments into our rental fleet will be approximately $3 million. We expect fiscal year 2025 cash investments in our property, plant and equipment will be approximately $8 million.
These sources of cash were partially offset by (i) $8.0 million for additions to our property, plant and equipment, (ii) $1.1 million for additions to our equipment rental fleet and (iii) $1.8 million paid for our Geovox acquisition. We expect fiscal year 2026 cash investments in property, plant and equipment will be approximately $7 million.
Recent Accounting Pronouncements Please refer to Note 1 to our consolidated financial statements contained in this Annual Report on Form 10-K for a discussion of recent accounting pronouncements. Management ’ s Current Outlook and Assumptions Regarding our Oil and Gas Markets business segment, demand for our products are subject to volatile fluctuations in crude oil prices.
Management ’ s Current Outlook and Assumptions Regarding our Energy Solutions business segment, demand for our products is subject to volatile fluctuations in crude oil prices.
Operating Income Operating income from our Adjacent Markets products for fiscal year 2024 was $14.2 million, an increase of $2.7 million, or 23.2%, from the prior fiscal year. The increase in operating income was primarily due to the increase in revenue and gross margin improvements.
Operating Income Operating income from our Smart Water products for fiscal year 2025 decreased $3.6 million, or 38.5%, from the prior fiscal year. The decrease was primarily due to an increase in sales and marketing and research and development costs associated with our increase in revenue.
The components of this increase were as follows: ● Traditional Exploration Product Revenue – Revenue from our traditional products decreased $2.4 million, or 19.5% from the prior fiscal year.
The components of this decrease were as follows: ● Product Revenue – Product revenue decreased $14.3 million, or 24.3%, from the prior fiscal year. The decrease was primarily due to lower demand for our ocean bottom nodes.
In the event collectability of lease payments is not probable at the lease commencement date, we recognize revenue when payments are received. We regularly evaluate the collectability of our lease receivables on a lease-by-lease basis.
Adjustments, if any, will be included as a component of earnings in the consolidated statements of operations. We recognize rental revenue in accordance with ASC Topic 842, Leases . In the event collectability of lease payments is not probable at the lease commencement date, we recognize revenue when payments are received.
The increase in revenue was primarily due to revenue recognized on $1.5 million government contract completed in third quarter of fiscal year 2024. Operating Loss Operating loss from our Emerging Markets products for fiscal year 2024 was $6.2 million, compared to $4.0 million from the prior fiscal year.
The decrease was primarily due to (i) revenue recognized for fiscal year 2024 on a government contract completed in the fourth quarter of fiscal year 2024 and (ii) lower demand for our imaging products. The decrease was partially offset by an increase in demand for our sensor products and contract manufacturing services.
We do not currently anticipate the need to borrow under the Agreement; however, we may decide to do so in the future, if needed. Our available cash, cash equivalents and short-term investments was $37.1 million at September 30, 2024, which included $1.1 million of cash and cash equivalents held by our foreign subsidiaries and branch offices.
At September 30, 2025, we could borrow approximately $8 million without violating any debt covenants. At September 30, 2025, we had no outstanding borrowings under the Agreement. We do not currently anticipate the need to borrow under the Agreement; however, we may decide to do so in the future, if needed.
The increase was primarily due to higher demand for our water meter products. ● Imaging Product Revenue – Revenue from our imaging products increased $0.4 million, or 3.2%, from the prior fiscal year. The increase was primarily due to higher demand for our film products, partially offset by a decrease in demand for our imaging equipment.
Operating Loss Operating loss from our Intelligent Industrial products for fiscal year 2025 decreased $2.4 million, or 35.3%, from the prior fiscal year. The decrease in operating loss was primarily due to a $2.8 million non-cash impairment of intangible assets recorded in the prior fiscal year.
This source of cash was partially offset by (i) $3.9 million for additions to our property, plant and equipment, (ii) $8.3 million for additions to our equipment rental fleet, (iii) net disbursements of $14.7 million for purchases of short-term investments and (iv) $1.2 million for cash disposed on sale of our subsidiary.
Sources of cash consisted of (i) $30.4 million from the sale of short-term investments, (ii) $8.7 million of proceeds from the sale of property, plant and equipment and (iii) $14.2 million in proceeds from the sale of rental equipment.
Revenue from our Oil and Gas Markets segment increased $3.5 million, which was largely driven by a $30.0 million sale of our Mariner™ shallow water ocean bottom nodes and a $10.5 million sale of our shallow water OBX 750E nodes, both of which replaced rental contracts with the customers.
However, in comparison, revenue for fiscal year 2024 included a $30 million sale of our Mariner® shallow water ocean bottom nodes and an $11 million sale of our shallow water OBX 750E nodes. ● Rental Revenue – Rental revenue decreased $13.0 million, or 68.0%, from the prior fiscal year.
The increase was partially offset by (i) an increase in operating expenses resulting from the increased revenue and (ii) higher research and development expense. Emerging Markets Revenue Revenue from our Emerging Markets products for fiscal year 2024 was $2.2 million, compared to $1.2 million from the prior fiscal year.
The decrease was primarily due to (i) the decrease in revenues and related gross profits and (ii) higher research and development expenses, primarily personnel costs. Intelligent Industrial Revenue Revenue from our Intelligent Industrial products for fiscal year 2025 decreased $0.9 million, or 3.7%, from the prior fiscal year.
Revenue from our Emerging Markets segment increased $1.0 million primarily due to the completion of a government contract. Consolidated gross profit for fiscal year 2024 was $52.6 million, an increase of $0.9 million, or 1.7%, from fiscal year 2023.
Consolidated gross profit for fiscal year 2025 was $32.9 million, a decrease of $19.7 million, or 37.4%, from fiscal year 2024.
This increase was largely offset by a decrease in utilization of our OBX rental fleet and decreased demand for our traditional seismic exploration products. Revenue from our Adjacent Markets segment increased $6.6 million primarily due to an increase in demand from our industrial products.
The decrease was also attributable to a decrease in our wireless marine rental revenue. The decrease in consolidated revenue for fiscal year 2025 was partially offset by an increase in demand for our Hydroconn® cable and connector products from our Smart Water segment.
Removed
Summary financial data by business segment follows (in thousands): YEAR ENDED SEPTEMBER 30, 2024 2023 Oil and Gas Markets Traditional exploration product revenue $ 9,812 $ 12,183 Wireless exploration product revenue 67,059 60,848 Reservoir product revenue 584 962 Total revenue 77,455 73,993 Operating income 13,134 15,759 Adjacent Markets Industrial product revenue 43,060 36,859 Imaging product revenue 12,565 12,180 Total revenue 55,625 49,039 Operating income 14,152 11,490 Emerging Markets Revenue 2,222 1,234 Operating loss (6,193 ) (4,003 ) Corporate Revenue 296 243 Operating loss (13,976 ) (11,918 ) Consolidated Totals Revenue 135,598 124,509 Operating income 7,117 11,328 Overview As further discussed below, revenue increased for all of our business segments for fiscal year 2024, confirming increased momentum in our diversification strategy.
Added
Summary financial data by business segment follows (in thousands): YEAR ENDED SEPTEMBER 30, 2025 2024 Smart Water Product revenue $ 35,816 $ 32,434 Income from operations 5,663 9,215 Energy Solutions Product revenue 44,600 58,878 Rental revenue 6,106 19,099 Total revenue 50,706 77,977 Income from operations 388 18,570 Intelligent Industrial Product revenue 23,788 24,724 Rental revenue 172 167 Total revenue 23,960 24,891 Loss from operations (4,329 ) (6,691 ) Corporate Revenue 321 296 Loss from operations (13,006 ) (13,977 ) Consolidated Totals Revenue 110,803 135,598 Income (loss) from operations (11,284 ) 7,117 Overview Growing industry acceptance of our water meter cables and connectors provides a strong enabler for additional revenue from our Smart Water segment.
Removed
We have embarked on a diversification strategy to grow our non-Oil and Gas businesses through organic means or through acquisition. As a result of these efforts, we have experienced steady year over year revenue growth in our Adjacent Markets segment.
Added
We expect our Energy Solutions segment to provide a significant portion of our revenue for years to come, but in diminishing portion to our other segments. During the third quarter of fiscal year 2025, we entered into a PRM contract. The duration of the contract is expected to be approximately 18 months.
Removed
Additionally, we experienced year over year growth in oil and gas revenue, mostly due to growing demand for wireless marine nodes for ocean bottom seismic surveys.
Added
Revenue will be recognized in our Energy Solutions segment over the duration of the contract. We continue to maintain a strong balance sheet with no debt.
Removed
We expect our Oil and Gas Markets segment to provide the majority of our revenue for years to come, but in diminishing portion to our other segments. Growing industry acceptance of our water meter cables and connectors provides a strong enabler for additional revenue from our Adjacent Markets segment.
Added
The decrease in revenue was primarily due to lower product revenue from our Energy Solutions segment. Revenue for fiscal year 2025 included a $17 million sale of ocean bottom nodes structured as a sales-type lease. However, in comparison, revenue for fiscal year 2024 included a $30 million sale of our Mariner® shallow water ocean bottom nodes.
Removed
The increase in revenue was driven by increases in demand across all three of our business segments.
Added
The decrease in gross profit was primarily due to a decrease in ocean bottom nodes product revenue and a lower utilization of our rental fleet, and the operating costs of our rental fleet are primarily depreciation expense, which is not variable with revenue.
Removed
Gross profit from our Adjacent Markets segment increased $4.4 million, attributable to (i) the increase in revenue and (ii) margins improvements from fully absorbing our fixed overhead.
Added
The decrease in gross profit was also attributable to low gross margins on sales of our land-based wireless products due to very strong price competition on these products and due to an increase in tariffs on the raw materials we purchase.
Removed
This increase was offset by a $3.3 million decrease in gross profit from our Oil and Gas Markets segment as a result of the lower utilization of our OBX rental fleet, of which cost is primarily fixed depreciation. Consolidated operating expenses for fiscal year 2024 were $45.5 million, an increase of $3.8 million, or 9.1%, from fiscal year 2023.
Added
Consolidated operating expenses for fiscal year 2025 were $48.8 million, an increase of $3.3 million, or 7.3%, from fiscal year 2024. The increase was primarily due to (i) higher personnel costs, including severance costs and acceleration of stock-based compensation expense and (ii) an increase in sales and marketing costs.
Removed
The increase was largely due to a $2.8 million non-cash impairment of intangible assets from our Emerging Markets segment. The increase was also attributable to (i) higher selling and marketing expenses resulting from increased revenue and (ii) increased research and development expense caused by an increase in project expenditures and personnel costs.
Added
The increase was partially offset by a $2.8 million impairment charge on intangible assets in the prior year. In June 2025, we sold our real property located at 4318 Northfield Lane Houston, Texas.
Removed
In February 2023, we sold our real property located at 7310 Langfield Road in Houston, Texas for a cash sales price of $3.7 million, net of closing costs of $0.3 million.
Added
The 17.3-acre property served as additional property for our main campus and contained legacy structures used to support our manufacturing and warehousing operations We recognized a gain on disposal of property of $4.6 million during the third quarter of fiscal year 2025. The gain is included as a component of income (loss) from operations in the accompanying statements of operations.
Removed
We recognized a gain of $1.3 million from the sale of this property which is included as a component of our income from operations in the accompanying statement of operations. In August 2024, we sold our oil and gas product manufacturing operations based in the Russian Federation to a group of former employees ("Buyer").
Added
The decrease was also attributable to lower gross margins due to changes in the mix of products sold proportionally affecting the allocation of manufacturing overhead and other costs of revenue to our business segments. Energy Solutions Revenue Revenue from our Energy Solutions products for fiscal year 2025 decreased $27.3 million, or 35.0%, from fiscal year 2024.
Removed
We recorded a loss of $14.5 million in connection with the transaction, of which $13.1 million was related to the impact of cumulative foreign currency translation losses previously included in accumulated comprehensive loss. The loss on sale of this subsidiary is included as a component of other income (loss) in the accompanying statement of operations.
Added
Revenue for fiscal year 2025 included a $17 million sale of ocean bottom nodes and $11 million in sales of our wireless land-based Pioneer™.
Removed
We have determined that the Buyer's legal entity is a variable interest entity ("VIE") due to the nature of the financing for the transaction. While the debt represents a direct obligation to absorb significant losses of the VIE, the debt does not establish the right and power to direct activities that most significantly impact the economic performance of the entity.
Added
The decrease was due to lower utilization of our ocean bottom nodes rental fleet. The decrease for fiscal year 2025 was also attributable to the reversal of a $2.2 million receivable from a rental customer against rental revenue during the second quarter of fiscal year 2025. We determined the collectability of this receivable was less than probable.
Removed
We retained no equity or voting interest, have no employees that are directors or advisors of the new ownership group, and have no direct influence on the day-to-day decisions in operations or affect their ability to generate profits or losses. As such, we have determined we are not the primary beneficiary of the entity.
Added
Any future cash received from this customer will be recognized as rental revenue. 23 Operating Income Operating income associated with our Energy Solutions products for fiscal year 2025 decreased $18.2 million, or 97.9%, from the prior fiscal year.
Removed
The sale had no material reduction to our consolidated net assets and is not expected to have a material effect on future revenue, profits or losses.
Added
The decrease in operating loss for fiscal year 2025 was partially offset by (i) the decrease in revenue and (ii) lower gross margins due to changes in the mix of products sold proportionally affecting the allocation of manufacturing overhead and other costs of revenue to our business segments. 24 Liquidity and Capital Resources At September 30, 2025, we had $26.3 in cash and cash equivalents.
Removed
The decrease primarily reflects lower demand for our sensor and marine products. ● Wireless Exploration Product Revenue – Revenue from our wireless exploration products increased $6.2 million, or 10.2%, from the prior fiscal year.
Added
For fiscal year 2025, we used $22.2 million of cash from operating activities.
Removed
This increase was largely due a $30.0 million sale of our Mariner™ shallow water ocean bottom nodes and a $10.5 million sale of our shallow water OBX 750E nodes, both of which replaced rental contracts with the customers.
Added
The program authorized us to repurchase up to $7 million of our common stock in open market transactions. The program was completed in the second quarter of fiscal year 2025. On August 29, 2025, we amended our credit agreement (“the Agreement”) with Woodforest National Bank. The Agreement extended our revolving loan agreement, dated as of July 26, 2023, with Woodforest.
Removed
This increase was largely offset by a decrease in utilization of our OBX rental fleet. 23 Operating Income Operating income associated with our Oil and Gas Markets products for fiscal year 2024 was $13.1 million, a decrease of $2.6 million, or 16.7%, from the prior fiscal year.
Added
Our available cash and cash equivalents was $26.3 million at September 30, 2025, which included $0.8 million of cash and cash equivalents held by our foreign subsidiaries and branch offices.
Removed
The decrease in operating income was primarily due to lower utilization of our OBX rental fleet, of which its cost is primarily fixed depreciation. This decrease was partially offset by lower research and development costs. Adjacent Markets Revenue Revenue from our Adjacent Markets products for fiscal year 2024 increased $6.6 million, or 13.4%, from the prior fiscal year.
Added
In connection with the acquisition, we recorded an initial contingent earn-out liability of $2.5 million. Contingent payments, if any, will be based on eligible revenue generated during a four-year earn-out period. The maximum amount of contingent payments is $3.3 million. In July 2021, we acquired Aquana.

… 32 more changes not shown on this page.

Other GEOS 10-K year-over-year comparisons