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Dec 31, 2021
Geospace Q1 2022 Earnings Report
Geospace Technologies reported a net loss on decreased revenue due to challenges in the Oil and Gas Markets segment and the near completion of a contract in the Emerging Markets segment, while Adjacent Markets segment experienced growth.
Key Takeaways
Geospace Technologies reported a net loss of $6.8 million on revenue of $18.0 million for the first quarter ended December 31, 2021. The decrease in revenue is primarily attributed to challenges in the Oil and Gas Markets segment and the near completion of a contract in the Emerging Markets segment. The Adjacent Markets segment experienced an 18% increase in revenue.
Revenue decreased by $10 million compared to the prior year's first quarter.
Oil and Gas Markets segment revenue decreased by 24% due to minimal capital investments in new exploration and production.
Adjacent Markets products revenue increased by 18%, marking a historic level of first-quarter revenue for this segment.
Emerging Markets segment revenue significantly decreased due to the near completion of a contract with the U.S. Border Patrol.
Geospace
Geospace
Forward Guidance
Geospace Technologies anticipates continued commercial challenges in the Oil and Gas Markets segment, while remaining optimistic about Adjacent Markets and Emerging Markets segments.
Positive Outlook
- PRM systems opportunities for the Oil and Gas Markets segment are in active discussion and remain very promising.
- Adjacent Markets segment shows consistent growth, validating strategic diversification efforts.
- Emerging Markets segment offers unique solutions to the U.S. Border Patrol and other government entities.
- Migration of Quantum’s SADAR system technology opens new revenue opportunities within the Oil and Gas Markets segment for monitoring carbon capture and storage operations.
- Advanced capability of carbon capture monitoring systems positions Geospace as a potential technological leader in this developing market.
Challenges Ahead
- Oil and Gas Markets segment will continue to face near-term commercial challenges that are difficult to forecast.
- Uncertainties exist in the Oil and Gas Markets segment.
- Terms and conditions for PRM projects in the Oil and Gas Markets segment must be of appropriate risk.
- Emerging Markets segment revenue decreased due to the near completion of a contract with the U.S. Border Patrol.
- Federal budgets for follow-on Border Patrol work and contracts with other government customers need to be established.