Senstar Technologies Corporation

Greetings and welcome to the Sunstar Technologies first quarter 2024 financial results. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kim Rogers with Hayden IR. Thank you, Kim. You may begin.

Thank you, Camilla. I'd like to welcome everyone to the conference call and thank SemStar Technologies Management for hosting today's call. With us on the call today are Mr. Fabian Haubert, CEO of SemStar Technologies, and Ms. Alicia Kelly, CFO. Fabian will summarize key financial and business highlights, followed by Alicia, who will review SemStar's financial results for the first quarter of 2024. We will then open the call for question and answer sessions. Before we start, I'd like to point out that this conference call may contain projections or other forward-looking statements regarding future events or the company's future performance. These statements are only predictions, and Sunstar cannot guarantee that they will, in fact, occur. Sunstar does not assume any obligation to update that information. Actual events or results may differ materially from those projected, including as a result of changing market trends, reduced demand, and the competitive nature of the security systems industry, the unanticipated and unknown effects of the coronavirus, including on our operations and our clients, as well as other risks identified in the documents filed by the company with the Security and Exchange Commission. In addition, During the course of the conference call, we will describe certain non-GAAP financial measures, which should be considered in addition to and not in lieu of comparable GAAP financial measures. Please note that in our press release, we have reconciled non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. You can also refer to the company's website at www.sunstartechnologies.com for the most directly comparable financial measures and related reconciliations. And with that, I'd now like to hand the call over to Fabian. Fabian, please go ahead.

Thank you, Kim. Thank you for joining us today to review Senstop Technology first quarter 2024 financial results. We're off to a strong start in 2024 with first quarter results that improve year over year across major financial metrics. we delivered revenue growth of 17% compared to the first quarter of last year. And importantly, our profitability from operation improved significantly. Before diving into our financial and business highlights, I'd like to highlight a major accomplishment for the first quarter. In March, we issued a press release announcing Senstar's successful rhythm of filing to Canada, which streamlined the organization and reduced operating costs. Additionally, I had the honor of being confirmed that the CEO and Alicia was promoted to CFO. These steps positioned Alicia and me to effectively achieve our strategic objectives. Revenue in the first quarter was derived from higher margin products and price adjustments compared to last year, driving our growth margin to nearly 60% of revenue in line with our target growth margin goal. Operating expenses decreased 15% and represented 60.6% of revenue compared to 80.6% in the year-ago quarter. In terms of profitability, our operating loss improved significantly from a loss of 1.7 million in the year-ago quarter to a loss of 73,000 approaching break-even from operation. Cost control measures and price adjustments that we implemented over the course of 2023 have taken hold and are more apparent in our financial results. Notably, for the first quarter, we delivered growth in most of our geographic regions with notable strength in Asia-Pacific and Latin America. In the U.S., largest market as a percent of revenue revenue increased by 6% in the first quarter mainly due to great achievement in the correction and utility markets under our recently appointed new leadership the US team is making fantastic progress in developing our position with strong business development activity especially in the data centers and utility segments in Europe one of our largest markets, revenue increased by 8% in the first quarter. Market demand in Europe remained strong, especially in the utilities, energy, and transport sectors. Sensar has invested in Europe in previous years, developing promising opportunities in markets where we were underrepresented. In addition, Sensar has improved its market share in established territories, which also contributed to a growth on Q1. To sustain focus on key accounts in targeted verticals has been the key to our success. In Asia Pacific, our revenue grew by 150% compared to the previous year's first quarter under the drive of new leadership. Growth was mainly generated from the utilities and transport verticals with a concentrated effort on existing territories from north to south APAC. In the LATAM region, We sustained the higher growth rate we experienced in late 2023 again this quarter. Primarily due to wins in the correction verticals, we delivered 39% growth in Q1. Looking at the revenue contribution from our key four verticals, utilities, correction, energy, and logistics, revenue increased by 30% in this key market segment. We remain committed to our business development strategy with key accounts in these verticals to drive our growth. Looking ahead, we're most excited about the official launch of MultiSensor this quarter. MultiSensor is our new AI-based intrusion detection system that uses an embedded sensor fusion engine to intelligently synthesize data from multiple sensing technologies, providing full intrusion situational awareness and reducing false alarm rate close to 0%. The system includes short-range radar, PIR, accelerometer, high-frequency vibration, and image sensor. The multi-sensor is being extremely well received by major players in our industry and recognized as an advanced and versatile solution unlike anything else on the market. We are building a vetted pipeline of new sales opportunities, and we expect to begin recording sales in the second half of the year. In summary, the first quarter delivered solid results across key metrics, with growth in important geographies and gains in target verticals, resulting in year-over-year revenue growth and improved profitability. We remain focused on achieving continued growth and improvements on these metrics as we progress through 2024. I will now turn the call over to Alicia for a review of the financial results in more detail.