Senstar Technologies Ltd. Q1 FY2026 earnings call

Key Financial Highlights - 2025: Revenue $36.4M, gross margin 65.5%, net income $3.2M, strong balance sheet with $22.5M cash and no debt. - Q4 2025: Revenue $8.8M, down 14% YoY, impacted by nonrecurring and timing-related factors like U.S. government project delays and European telecom utility project. - Core verticals: Grew 5% in 2025, supported by corrections and energy in NA and EMEA. - LiDAR: Adoption grew in 2025, with strong sales growth in Q4, expanding target market and creating new use cases. - Geographic performance: U.S. and LATAM strong in 2025, Canada had strong Q4 and full year growth, EMEA had low single-digit growth with pipeline creation, APAC improved in Q4. - Strategy: Focused on repeatable deployment, scalable account expansion, leveraging installed base and cross-selling. - Blickfield acquisition: Positions to expand solution range, address more applications, and support volume and traffic monitoring verticals.

In 2025, revenue was $36.4 million. Gross margin expanded to 65.5%, and net income was $3.2 million with a strong balance sheet ($22.5 million in cash, no debt). Fourth quarter revenue declined 14% year over year to $8.8 million. Core verticals grew 5% in 2025, supported by corrections and energy. U.S. and LATAM were strongest markets in 2025, with U.S. and LATAM revenue increasing 5% for the year but declining 20% in Q4 due to government funding delays. Canada had over 110% revenue increase in Q4 and 22% for full year. EMEA had low single-digit revenue growth for 2025, with Q4 impacted by prior-year nonrecurring utility telecom project. APAC had 21% growth in Q4 but declined 9% annually. LiDAR adoption grew in 2025, with strong sales growth, especially in Q4, expanding target market and creating new use cases. Revenue contribution by region in Q4 2025: North America 44% vs 42% prior year, EMEA 41% vs 46%, APAC 15% vs 11%, others immaterial.

Forward-looking Statements - 2026: Enthusiastic about opportunities in data centers, utilities, energy, and LiDAR, with growing pipeline. - Business development strategy: Centered on high-growth verticals, complexity appetite, worldwide scalability, leveraging preexisting footprint. - Pipeline: Growing, supporting improved market penetration and revenue diversification. - Blickfield integration: Will assist in expanding solutions, addressing more applications, and broadening addressable market. - Focus: Convert pipeline to revenue, expand in key verticals, drive sustained growth while being disciplined with cost.

Risk Discussion - Market trends: Changing market trends could materially affect actual events or results. - Reduced demand: Reduced demand in the security systems industry could impact performance. - Competitive nature: Competitive nature of the security systems industry poses risks. - Government project delays: Delays of government projects, like U.S. corrections vertical following federal government shutdown, can impact revenue. - Nonrecurring project timing: Timing of nonrecurring projects, such as European telecom utility project, can affect revenue recognition.

Q: With regards to the Blickfield acquisition, is there a specific vertical or opportunity you see for their technology?

A: Yes, three main paths to growth. First, LiDAR within current verticals increases addressable market by competing with alternative technologies like thermal cameras, radar, etc. Second, addresses parts of current verticals not previously addressed, like storage yards, roofs, etc. Third, in volume monitoring applications (petrochemicals, fertilizers, etc.) and traffic applications (road, crosswalk monitoring, tunnels) where Blickfield is active. ### Q: As far as Brookfield is concerned, the charges we saw in the fourth quarter—are you expecting more in the first quarter, or is that mostly behind you? What can we expect?

A: Cannot comment on first quarter. LiDAR sales in Q4 are only Senstar Technologies Ltd. sales as there was a technology partnership with Blickfield. Expect some costs still in future periods but not substantial. ### Q: With regards to the projects that were delayed in the United States: have any of those projects broken ground, or are you moving forward, or is that still pending?

A: All of them are moving forward, still alive and working, with good hopes to convert some in coming quarters. ### Q: And I think it was a telecom project in the EMEA area—you are expecting that to hit again in 2026?

A: Absolutely, expect some portion of it in 2026 as it was a multiphase project with further phases delayed outside control. ### Q: And I saw there were some charges with regards to closing of a foreign office. Where was that located?

A: Related to relocation of company in early 2025 in Canada, closing previous legacy Magal office. ### Q: And what is your employee count? How much has that gone up with the Brookfield acquisition?

A: Headcount went up by 28 people with the acquisition, around 160 people with Blickfield.