Senstar Technologies Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the CENSTAR Technologies first quarter 2025 results conference call. All participants are at present in a listen-only mode. Following management's formal presentation, instructions will be given for the question and answer session. As a reminder, this conference is being recorded. I would now like to hand over the call to Corbin Woodhull of Hayden IR. Corbin, would you like to begin?

Thank you, Shamali. I would like to welcome everyone to the conference call and thanks CENSTAR Technologies Management for hosting today's call. With us on the call today are Mr. Fabian Haubert, CEO of CENSTAR Technologies, and Ms. Alicia Kelly, the CFO. Fabian will summarize key financial and business highlights, followed by Alicia, who will review CENSTAR's financial results for the first quarter of 2025. We will then open the call up for a question and answer session. Before we start, I'd like to point out that the 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. the unanticipated and unknown effect of the coronavirus, including on our operations and our clients, as well as other risks identified in documents filed by the company with the Securities and Exchange Commission. In addition, during the course of this 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 the company's website at www.senstar.com for the most directly comparable financial measures and related reconciliations. And with that, I will now hand the call over to Fabian. Fabian, please go ahead.

Thank you, Corbin. Thank you for joining us today to review Senstar Technology First Quarter 2025 Financial Results. We deliver strong first quarter results marked by solid execution and a well-managed balance between growth and profitability. Our four core verticals increased by 33% in aggregate year over year, which led to 12.5% revenue growth and a robust expansion in both growth and EBITDA margin. Now moving to a review of quarterly highlights. Revenue in the first quarter was driven by the well-balanced mix of products with notable vertical market strength from energy logistics and corrections. This performance reflects the sustained customer demand, and combined with our focus on design cost optimizations, drove the material growth margin expansion to 67.2% in the first quarter, comfortably above our targets. We're continuing to invest for the long-term growth of the company, while also focusing on cost control measures and monitoring headcount efficiency, which are contributing in a meaningful way to sustainable profitability. In the first quarter, operating expenses increased by 2% year-over-year and declined to 55% of revenue compared to the 61% in the prior year quarter. Based on double-digit revenue growth, margin expansion, and strict cost monitoring, EBITDA rose to 1.2 million and EBITDA margin reached 14.3%. Telstra global diversification continues to strengthen, with North America, EMEA, and APAC delivering broad-based gains across our key verticals. In North America, our largest markets are the percentage of sales. Revenue increased by 6% in the first quarter, mainly due to the solid performance in corrections and utility. Of particular note is the performance of Canada during the quarter, which increased revenue by 58% on strong demand for our utilities and corrections offering. In EMEA, also one of our largest markets, revenue increased by 19% in the first quarter. Market demand in the region remains strong, especially in the logistics and energy verticals. Exiting last year, we made several strategic hires focus on business developments in our three main regions, Americas, EMEA, and APAC. The team is now fully integrated with incentives aligned towards profitable growth in our core verticals. As a result of CENSA's sustained investment in Europe in previous years, the EMEA region now represents 30% of total revenue, up from 28% in the year-ago period. In Asia Pacific, our revenue grew by 40% compared to the previous year's first quarter, the strongest regional growth rate among our covert markets. The powerful performance in the quarter was primarily driven by increasing perimeter security requirements in energy and logistics. Asia-Pacific also increased revenue contribution in the quarter to 17% compared to 14% in the year-ago period. In LATAM, the region declined as a percentage of revenue in the quarter, but we continue to identify new opportunities in this important market. Our international strategy remains focused on regions where our solutions can deliver the greatest value, specifically in markets prior to rising security modernization. Looking at revenue contribution per verticals, our four key verticals grew 33% in aggregate in the first quarter, driven primarily by strong performance in correction, energy, and logistics. Interest and activity in data centers and alternative energy facilities continue to accelerate, reflecting their growth and growing momentum. I would like to reiterate the high priority we placed on technological innovation, a key differentiator for SenStar. Multi-sensor continues to gain traction and generate growing interest. Increased market awareness of its innovative capability has led to high levels of customer engagement and expanded testing and validation activity. We recently launched a new version of the product under the name Cascade Plus, which supports daisy-chaining, enabling scalable deployments across complex environments. Our pipeline of new opportunities with new and existing customers is expanding. And we expect to secure new design wins for multi-sensor in the coming months, particularly among our customers who operate critical infrastructure. In summary, our first quarter results demonstrate meaningful progress in both top-line growth and margin expansion, underscoring the successful execution of our strategy to grow market share in key verticals, and demonstrating the scalability of sensors operating models. Thank you for your attention. I will now turn the call over to Alicia for a review of the financial results in more detail.