Senstar Technologies Corp. Q2 FY2024 earnings call

• Revenue of $8.3 million, down 1.6% YOY. - Gross margin reached 63.2%, best in 8 quarters, due to product mix shift, supply chain improvements, and cost realignments. - Operating expenses decreased 9% to 55.2% of revenue, lifting operating margin to 8% from 1% YOY. - Net income climbed to $493,000, EBITDA margin 10.2%. - Balance sheet strengthened with higher cash reserve and $1 million inventory reduction. - US revenue up 2% with strong correctional and utilities; APAC up 135% from major wins; Europe down 33% due to project delays but expects catch-up. - Four verticals grew 5% YOY and 14% YTD, driven by utilities and airport environments. - Successful launch of Sensor MultiSensor, addressing nuisance alarms with advanced capabilities.

In the second quarter, Senstar's revenue was $8.3 million, down 1.6% YOY. In the US, revenue increased 2% with a strong correctional market and growing utilities sector. APAC saw revenue surge 135% YOY due to major wins in utilities and transport. Europe had a 33% revenue drop in Q2 due to project delays but expects catch-up in Q3/Q4. The four key verticals grew 5% YOY and 14% YTD, driven by utilities (solar farms, power stations, etc.) and airport environments. Revenue contributions by region: North America 47%, EU 27%, APAC 23%, Latin America 1%, others <1%.

• The MultiSensor was just released for sales with first deliveries in coming weeks, but it's early to determine material impact on revenue. - Fabien stated they are working hard to drive growth but didn't provide specific forward-looking revenue targets beyond general efforts.

• Risks include changes in market trends, reduced demand, competitive nature of the security systems industry, unanticipated effects of COVID-19, and other risks identified in SEC filings.

Q: When would the MultiSensor have a material impact on revenue or revenue growth?

A: The product just got released for sales, first deliveries in coming weeks. It's early to say, first orders not significant yet.

Q: Does the company currently have a backlog of orders expected in the next 12 months?

A: They had a good booking trend in the first part of the year but are not commenting on backlog or further expectations.

Q: Do you expect to increase revenue in the second half of the year compared to last year's $18 million for the second half of 2023?

A: They are not providing forward-looking statements but are working hard on it.