Senstar Technologies Corporation

Greetings and welcome to the FinStar third quarter 2024 financial results call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please signal by pressing star and then zero. As a reminder, this conference is being recorded. It is now my pleasure to hand over to Kim Rogers of Investor Relations. Thank you, and you may proceed, Kim.

Thank you, Claudia. Welcome, and thank you for joining us today. I want to thank the management of Sunstar Technologies for hosting today's call. With us on the call from the company are Mr. Fabian Hobert, CEO, and Ms. Alicia Kelly, CFO. 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 Senstar cannot guarantee that they will in fact occur. Senstar 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, as well as other risks identified in the document filed by the company with the Securities 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 our non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. You can also refer to our website at www.sunstartechnologies.com for the most directly comparable financial measures and related reconciliations. With that, I'll now hand the call over to Sunstar Technologies CEO, Fabian Haubert. Fabian, please go ahead.

Thank you, Kim. Thank you for joining us today to review our third quarter 2024 financial results. Starting with an overview of this quarter performance, our revenue increased by 8% compared to Q3 2023 and is up 7% year-to-date compared to the same period last year. Gross margin was exceptionally strong at 68%, representing an 11.4% point increase over Q3 2023. The improvement in the quarter was primarily driven by our ongoing streamlining activities, recent price adjustments, normalization in the component markets, and a favorable product mix. Year-to-date, our growth margin of 63.9% aligns with our expectation to deliver a growth margin of 60% or better. Due to diligent expense controls, operating expenses decreased by 3.6% from Q3 2023, and 9.2% year-to-date. Our revenue growth and growth margin expansions combined with decrease in operating expenses led to a significant increase in our profitability. We experienced encouraging growth trends in the U.S. and EMEA, along with a 2% increase in revenue in our core verticals in Q3 2024 and a 9.8% increase year-to-date Our growth this quarter reflects both our strategic focus and high potential sectors and the success of our tailored solutions. Correctional facilities. Demand in this sector is growing for enhanced security, driven by the increasing emphasis on advanced security technology for public safety. Our integrated solution continues to resonate well in this sector, especially in the U.S., where correctional facilities are investing in modernization. Our offerings have helped strengthen our position as a trusted partner leading to an increase in contract wins. Utilities. This vertical continues to be one of our strongest, with broad-based demand across data centers, solar farms, energy generation, as well as telecom infrastructure. The security sector is increasingly focused on integrating security and monitoring for critical infrastructure, and our solution addresses these needs with precision. In particular, data centers and solar farms have increasingly integrated our offerings, underscoring the reliability and scalability of our technology in protecting vital assets. This growth also reflects our expanded reach in the MEA, U.S. and APAC regions where utilities and large infrastructure projects prioritize improved security solutions. Transports. Our growth in the transport sector has been driven by a mix of established customers and new market engines, particularly in EMEA, where transport infrastructure development is advancing rapidly. We've seen strong adoption of our solution in the airport sector, which recognizes the need for secure monitoring systems. The market remains a priority as our technology aligns well with the demands of modern transplantation security, particularly in Yemen and Asia. Logistics and oil and gas. While revenue in logistics and oil and gas declined slightly, we continue to see opportunities in these sectors as companies explore ways to enhance operational efficiency and protect critical assets. We're seeing positive trends in the oil and gas industry, particularly North America and EMEA, and we're hoping this will contribute positively in future orders. Focusing on core verticals in these critical sectors and fine-tuning our solution to meet their unique needs with new products like the multi-sensor, we're enhancing customer value and positioning ourselves for sustained growth. I'm happy to share that initial sales from Meldo Center are promising, highlighting the product's innovative impact in the market. The future enhances our positions and builds on this initial momentum. We appointed a new VP of product management and marketing with a solid background and proven track record in video technology to help expand our market presence beyond our traditional perimeter-focused solutions. Our strategy remains focused on business development to expand global market share across key verticals. We aim to bring on new end users and existing markets while also gaining customers in new regions. The investments we made in established markets are already yielding results, driving growth in the second half of 2024. Likewise, our investments in new territories are beginning to pay off with identified projects now being rolled out. We're seeing strong sustainable demand growth and are scaling our effort to meet it. In conclusion, we are encouraged by our financial progress this quarter and the strides we've made in Key Verticals. The SAMSR team remains dedicated to executing our growth strategy and driving operational efficiency. We're excited to build on these successes as we continue delivering value to our shareholders and advancing our long-term goals. Now, I will pass the call to our CFO, Alicia Kelly. Alicia, please go ahead and review the financial results.