SuperCom Ltd. Q4 FY2025 earnings call

• U.S. expansion: Since mid-2024, the company has signed more than 35 new electronic monitoring contracts, entered 16 new states, and built 17 new service provider partnerships. Themes include new state entry, deepening presence in existing states, incumbent displacement, moving up the customer ladder. LCA was awarded a reentry services contract in Northern California. - International expansion: Secured a national EM contract in a Western European country, awarded the Swedish Prison and Probation Service National Contract valued at $17 million, and deployment with Israel Prison Service is advancing. - Capital structure: The company reduced its long-term debt by approximately 45% since the start of 2024, amended debt terms improved annual interest rates, and completed a $6 million common-only registered offering in January 2025.

For the full year ended December 31, 2025, revenue was $27.9 million compared to $27.6 million in fiscal 2024, demonstrating stability and modest growth. Excluding the impact of the largest customer, underlying revenue growth was approximately 40% year over year. Growth margin expanded to 55% from 48.4% in 2024. In the fourth quarter ended December 31, 2025, revenue was $7.5 million compared to $6.3 million in Q4 2024, representing 18% year-over-year growth. Gross profit was $2.9 million with a gross margin of 39%. EBITDA in 2025 reached $9.4 million compared to $6.3 million in 2024, a 49% year-over-year improvement. Gap net income for the year was $3.7 million, compared to $661,000 in the prior year. Non-gap net income was $11.2 million, and non-gap EPS was $2.47.

In 2026, the company is encouraged by the momentum carried into the new year. Already secured over six new North American contracts in the first four months of 2026. The $17 million national contract in Sweden is expected to contribute to revenue as deployments progress. Growth drivers include winning large-scale national contracts in Europe, expanding U.S. footprint through direct bids and partnerships, considering acquisitions, enhancing sales efforts, and continuing innovation.

Provision for doubtful accounts related to long overdue receivables from African government customers from the legacy e-government business amounted to roughly $1.8 million in 2025 versus $1.2 million in 2024.

Q: Trend towards Euro-skeptic politicians in Europe and its influence on EM opportunities.

A: Activity in Europe, Sweden expects program growth due to crime factors, general trend shouldn't impact negatively except as described.

Q: State-level programs in U.S. in 2026.

A: Bidding on state level including Arizona DOC, large county opportunities like L.A. County, scattered but strategic.

Q: Debt management in 2026.

A: Good relationship with debt holders, hope to opportunistically pay down debt, latest amendment until end 2028.

Q: Price negotiation in U.S. wins.

A: Typically come in with similar prices, offer newer technology with better capabilities, feature richness clinches deals.

Q: Pipeline attractiveness in Europe vs U.S. in 2026.

A: Pipeline larger in Europe now but U.S. opportunity six times size, margins higher in U.S.

Q: Competitive bidding process in markets.

A: Market highly barriered with ~10 players, successful in winning RFPs in both Europe and U.S., through direct contracts or formal RFP processes.