Senstar Technologies Ltd. Q3 FY2025 earnings call

Fabien Haubert noted that revenue from core verticals increased 12% year over year aggregate and 23% year-to-date, with strength in the correction and energy verticals. Third-quarter revenue was flat year over year but up 8% year-to-date. Gross margin over 67% reflected the differentiation power of Senstar Technologies. They invested in technological innovation, such as the AI-powered MultiSensor Cascade Plus. Senstar is actively targeting the security of non-critical infrastructure like hospitals and museums via business development. Disciplined operating models led to profitability and a growing cash balance with no debt.

Revenue in the third quarter was relatively flat compared to the same quarter last year, reflecting the impact of a fuel loss contract in the prior year that did not reoccur. On a year-to-date basis, revenue increased by 8%. Revenue from four core verticals increased by 12% aggregate year over year and 23% year-to-date. North America was the largest market, accounting for 51% of revenue in 2025 compared to 43% in the prior year quarter. EMEA was 36% vs 39%, and APAC was 12% vs 14%. Third-quarter gross margin was 67.3% compared to 68% in the year-ago quarter. The stability in gross margin was due to favorable product mix, diligent expense controls, and component and design optimizations.

Reiterated commitment to sustainable business and profitability. Remained dedicated to innovation and investing in next-generation security solutions. Reiterated the 60% plus growth margin profile. Emphasized momentum from the first nine months of 2025 and a growing pipeline of opportunities to capture.

Changing market trends, reduced demand, the competitive nature of the security systems industry, and other risks identified in the company's SEC filings. Non-GAAP financial measures should be considered in addition to comparable GAAP financial measures.

Q: Mike Distler asked about the significant jump in corporate expenses, specifically the consulting fees.

A: Alicia Kelly responded that the corporate expenses went from $470,000 to $890,000 this quarter due to abnormal consulting fees related to strategic growth.

Q: Ken Liddy inquired about the verticals interested in deploying the multisensor.

A: Fabien Haubert discussed that the MultiSensor Cascade Plus has been used in POCs across various verticals like prisons, utilities, and logistics.

Q: Noam Nakash asked about growth without APAC contracts and the impact of consulting fees.

A: Fabien Haubert stated it's hard to provide specific forward-looking details but the consulting fees were invested with the hope of translating into future growth.