B.O.S. Better Online Solutions Ltd. Q4 FY2025 earnings call

• 2025 was outstanding with 27% YoY revenue growth to $51M and 57% YoY net income growth to $3.6M, ending with $24M contracted backlog. - 2026: Defense and Robotics division growth expected from robust demand; global expansion via Indian market appointment; RFID division strategic plan to enter hospital segment in Israel. - Financials: Cash and equivalents $11.8M, shareholders' equity almost $29M, positive working capital >$22M, bank debt $1.7M. - IR strategy shift to digital marketing starting April 2026.

Defense segment: Revenue growth driven by supply chain and Robotics division, with robust demand in defense sector and global expansion strategy including appointing an Indian company to represent in Indian market. RFID division: Geopolitical tension in Israel since Oct '23 weighed on Israeli commercial market (primary revenue base), resulting in goodwill impairment charges of $700,000 in 2024 and $1.2 million in 2025; 2026 strategic plan focuses on growing RFID business by entering hospital segment in Israel, with investment expected in 2026 and revenue contribution expected in 2027.

• Projecting revenues of approximately $51 million and net income of approximately $3.6 million for 2026. - Conservative initial guidance with updates as year progresses. - Currency-related items create approximately $1.4 million headwinds in 2026, but $1.2 million goodwill impairment charge not expected to recur. - M&A: Actively evaluating acquisition opportunities, cash invested in securities until acquisition, no plan for dilution.

• RFID division sensitive to geopolitical tension in Israel; ongoing tension weighs on Israeli commercial market, causing goodwill impairment charges. - Currency fluctuations: USD to Israeli shekel exchange rate devaluation affects Israeli shekel denominated operating expenses and currency exchange income.

Q: Congratulations on a really good year. This is Todd Felty. I was wondering if you could talk about the current conditions over there and how you expect your business impacted if the war, let's say, last another 30 days compared to what happens if it drags on for another 6 months with your various divisions.

A: Most business linked to Defense segment, positively affects growth of Supply Chain and Robotics divisions; RFID division negatively impacted, but shifting resources to less sensitive segments.

Q: My last question is just on the M&A front. I see your cash position is up to $11.8 million, can you just kind of go over your M&A strategy?

A: Actively evaluating acquisitions, cash invested in securities, no plan for dilution.

Q: Regarding India, can you comment on if you've seen revenue in India to date? And what kind of numbers are you expecting for 2026?

A: Revenues from India around $3M on average in '23 - '25, expecting significant growth.

Q: Regarding the RFID investment, what kind of investment spend are you expecting to add to the hospital market?

A: Investment around $300,000 in 2026, new segment expected to break even in 2027.

Q: Do you have existing relationships in the hospital segment?

A: Currently no, but have candidates and potential M&A.

Q: Regarding the guidance. I realize we've been, but the guidance suggests that you've seen a slowdown. And I just want you to flesh that out a little bit. Have you seen any changes from Q4 to Q1 to where we are today?

A: Backlog increased in first quarter.

Q: You were talking about India, and I was a little unclear. You said that if I understood it, there were revenues in '23, '24 to '25 in and you're expecting India to grow. But can you quantify how much of your revenue came from India in '23, '24 and '25.

A: Around $3 million on average.

Q: You referred to in this call agrees with this. I think there is no better way to more buyback or to have the executive buy some of your own stock because I think it would benefit everybody. So this is just a comment.

A: Don't believe in buyback, focus on acquisitions for long-term growth.

Q: It's James - can in New York. You were talking about India, and I was a little unclear. You said that if I understood it, there were revenues in '23, '24 to '25 in and you're expecting India to grow. But can you quantify how much of your revenue came from India in '23, '24 and '25.

A: Around $3 million on average.