Senstar Technologies Ltd. Q2 FY2026 earnings call

• Overall Financial & Acquisition Progress

  • Q2 2026 total revenue hit $10.4 million, an 8% year-over-year increase, and the company returned to profitability
  • The Blickfield (Blixell) acquisition closed in February 2026, integration is progressing on plan, synergies are beginning to materialize, and Blickfield delivered positive EBITDA in Q2
  • Overall Q2 2026 operating income was $343,000, net income attributable to shareholders was $351,000 ($0.02 per share), and EBITDA was $551,000 (improved from a $403,000 EBITDA loss in Q1 2026)
  • The company held $8 million in unrestricted cash and equivalents and no debt as of June 30, 2026

• Regional Demand Trends

  • Overall end-market demand remains healthy, with strong momentum in EMEA and APAC; EMEA's solid growth from Q1 continued into Q2, driven by demand across utilities, data centers, airports, and energy
  • APAC saw accelerated growth driven by improved activity in Japan and South Asia, with large-scale LiDAR adoption still in early stages providing long-term growth opportunity
  • U.S. revenue declined due to correction vertical project delays from the 2025 federal government shutdown, but no major projects were canceled, and early signs of recovery have emerged; growth in U.S. LiDAR and utility verticals offset most of the correction softness

• Product & Innovation

  • Two new product innovations are in final development and scheduled for full launch in H2 2026: the embedded fiber range next-generation fiber optic sensing technology for perimeter intrusion detection, and the Symfony workflow engine for the Senstar Symphony Common Operating Platform
  • The embedded fiber range will expand the addressable market for fiber sensing to include short-distance applications, and its embedded AI reduces false alarm rates
  • The Symfony workflow engine will automate security and logistics operator tasks, support software sales, and grow recurring revenue long-term; both products will be showcased at the September 2026 Global Security Exchange in Atlanta

• Organizational Updates

  • The company has expanded talent, hiring a new regional sales director for the Middle East to support LiDAR growth in EMEA, and a new vice president of sales for the U.S. and Latin America with deep experience across security, LiDAR, utilities, and data centers

By product solution: LiDAR solutions grew nearly 100% year-over-year, accounting for 20% of total global revenue (up from 11% in Q1 2026). By geographic segment: North America contributed 43% of Q2 revenue, with total revenue declining 12% year-over-year; the U.S. specifically saw a 14% year-over-year revenue decline, while Canada returned to 19% year-over-year revenue growth. EMEA contributed 37% of Q2 revenue, with 14% year-over-year revenue growth, and 26% year-to-date growth. APAC contributed 19% of Q2 revenue, and was the fastest growing region with 93% year-over-year revenue growth, and 21% year-to-date growth. By vertical market: The correction vertical saw an approximate 18% year-over-year decline due to U.S. federal government-related project delays. Utilities vertical sales grew 17% year-over-year, with broad-based regional growth driven by demand from data centers, telecommunications, and solar farms. The transport vertical delivered year-over-year growth in the quarter.

• Management maintained full-year 2026 performance expectations, and expects U.S. correction vertical project activity to resume in the second half of 2026 as early recovery signs emerge
• The higher Q2 2026 R&D expense level (which includes $300,000 in incremental costs from the Blickfield acquisition) is expected to be the normal recurring quarterly run rate going forward
• Management expects continued double-digit growth for the LiDAR segment, driven by cross-selling to existing Senstar customers, growth in Blickfield's legacy volume and traffic monitoring verticals, and expansion into new addressable market previously served only by thermal cameras
• Both new product launches are confirmed for the second half of 2026

• U.S. correction vertical project delays stemming from the 2025 federal government shutdown created near-term revenue softness, and while recovery is expected, the timing could differ from current management expectations
• Integration of the Blickfield acquisition has generated incremental upfront costs that reduced near-term operating income and net income relative to the prior year period
• Forward-looking statements around future growth, product launch timelines, and market recovery are inherently uncertain, and actual results may differ materially from projections due to unforeseen market changes

Q: A private investor asked how much of the quarter's revenue growth came from the Blickfield acquisition. / A: Management stated it is not possible to split growth between the legacy Senstar and acquired Blickfield businesses, as the company is now operated as a single integrated entity. Both the existing Blickfield team and Senstar's sales organization contributed to LiDAR's strong high-growth performance, which was the main driver of overall revenue growth. This matches management's original strategic rationale for the acquisition.

Q: An analyst asked if the elevated Q2 R&D spending was tied to the Blickfield acquisition, and what the expected future run rate is. / A: Management confirmed that roughly $300,000 of the Q2 R&D increase came from integrating the Blickfield R&D team, which accounts for nearly all of the sequential and year-over-year rise. This Q2 R&D level is expected to be the normal recurring run rate going forward, and future costs may be reduced if the company secures eligible R&D grants from Canadian or German government programs.

Q: An analyst asked if management expects U.S. sales to normalize in the second half of 2026 following correction vertical delays. / A: Management reaffirmed its expectation that U.S. correction vertical activity will resume and recover in the second half of 2026, aligned with the early recovery signs already observed. The company has also added an experienced new U.S./Latin America sales VP to strengthen existing verticals and accelerate growth in high-demand utilities and data center markets.

Q: An analyst asked if LiDAR growth has continued to materialize as expected since the prior quarter call, and asked for details on upcoming September product launches. / A: Management confirmed LiDAR sales are up 100% year-over-year and first half, with growth driven by cross-selling to Senstar's existing security customer base, expansion in Blickfield's legacy volume and traffic monitoring verticals, and new market share captured from thermal cameras, with no overlap with existing Senstar solutions. The upcoming H2 launches include an AI-enhanced fiber sensing system that expands the addressable market to short-range applications, and a new software workflow tool to boost software sales and recurring revenue, both to be demonstrated at the September GSX event.