Senstar Technologies Corporation

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

and thanks Senstar Technologies Management for hosting today's call. With us on the call today are Mr. Fabian Hobert, Chief Executive Officer of Senstar Technologies, and Ms. Alicia Kelly, the Chief Financial Officer. Fabian will summarize key financial and business highlights, followed by Alicia, who will review Senstar's financial results for the third quarter of 2025. We will then open the call for a question and answer session. I would like to remind participants that all financial figures discussed today are in U.S. dollars, and all comparisons are on a year-over-year basis unless otherwise indicated. Before we start, I'd like to point out 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 results or events may differ materially from those projected, including as a result of changing market trends, reduced demand, the competitive nature of the security systems industry, as well as other risks identified in the documents 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 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, Gordon. And thank you to those joining us today to review Senstar Technologies' quarter 2025 financial results. We continue to deliver on our strategic objectives throughout the first nine months of 2025, while balancing targeted investments to drive long-term market share gains across our key verticals and geographies. Revenue from our four core verticals increased by 12% in aggregate year over year, and 23% on a year-to-date basis, with notable strength from the correction and energy verticals. In parallel, our discipline operating models generated gross margin above our targets, as well as continued profitability, and a growing cash balance with no debt. Those results reflect our differentiated technology and strong execution in addressing the needs of our customers. Our performance is driven by an unwavering focus on generating sustainable growth across our core and emerging verticals. Now, moving on to a review of quarterly highlights. Revenue in the third quarter was relatively flat compared to the same quarter last year, reflating the impact of Ipsula's contract in the prior year that did not reoccur. On a year-to-date basis, revenue increased by 8%. We are prioritizing repeatable deployments and scalable account growth and experiencing increasing market demands for advanced, differentiated solutions as well as tailwinds from growing legislation around the security of critical infrastructure. Our growth margin of over 67% reflects the differentiation power of sensor technology in a competitive market and underscores the team's success in meeting the growing global demand for security modernization. We continue to invest in technological innovation to boost our competitive strength and gain market share in scalable verticals. Consistent with prior quarters, we maintain rigorous our margin objectives aimed at generating sustained profitability going forward. Operational leverage combined with stable revenue generation drove third quarter net income to $1 million and $3.2 million year-to-date, a significant improvement versus the comparable nine-month period in 2024. In terms of core geographic markets, Sunstar's diversified footprint continues to strengthen, with North America delivering broad-based double-digit gains across our key verticals. North America remains our largest as a percentage of our sales, with revenue increasing by 17% in the third quarter, mainly due to continued momentum in the correction and utilities verticals, as was the case in the prior quarter. Revenue from the USA was particularly strong, increasing by 22% in the third quarter, driven by the successful efforts of our business development team to gain market share across multiple high-growth verticals. Sales from Canada increased by 7% on a year-to-date basis, sustained by utilities and correction. Our methodical investments in the EMEA region over the last several years are positioning Senstar to capture new opportunities with key accounts in targeted verticals, transports, utilities, solar farms, logistics and data centers are continuing to show momentum and robust customer adoption leading to 15 percent revenue growth year to date the asia pacific region is stabilizing following a decline in the second quarter of 2025 our business development and qcan strategy is starting to deliver new wins across data centers utilities correction and logistic verticals APAC remains a key market presence and the achievements of our business development team are positioning the company for long-term gains in the region. Moving on to product updates. Technological innovation is the cornerstone of our playbook to advance our competitive positioning and capture market share. Our advanced proprietary technology translated to impactful wins for our AI-powered intrusion detection systems, multi-sensor Cascade Plus. Leveraging the first-generation sensor, Cascade Plus adds support for daisy-chaining up to 16 devices, as well as power over Ethernet, support for third-party devices, covering 100 meters distance for a single PoE connection. Our industry-leading technology virtually eliminates you nuisance alarm rate optimizes total cost of ownership and reduces installation and maintenance expenses, opening the door to significantly larger market opportunities. The momentum generated from multi-center is in full alignment with our focus on delivering disruptive security solution and the targeting of highly scalable projects and customers alike. Turning to other strategic initiatives, As discussed on the prior earning conference call, Sensor is actively working to broaden its addressable market by targeting the security of critical points within non-critical infrastructure, such as hospitals, museums, and educational institutions and logistic facilities. Our business development team is successfully expanding into new key accounts while deepening existing customer relationships through cross-selling. The team is fully ramped and increasingly converting pipeline opportunities into incremental sales across our target verticals and geographies. The sales strategy of our business development team is centered on high growth verticals, an appetite for complexity, opportunities for scalability worldwide, and leveraging our existing footprint. These efforts will be sustained as we build upon the development of large key accounts aimed at accelerating market shares gains across high potential sectors. In summary, our third quarter results demonstrate the resilience of our business model. Execution of our discipline strategy is expanding our market presence, strengthening competitiveness in core verticals, and accelerating growth in high-value solutions while upholding our 60% plus growth margin profile. With the momentum generated throughout the first nine months of this year and a growing pipeline of opportunities to capture, we reiterate our commitment to sustainable business and profitability. We remain dedicated to innovation, investing in next-generation security solutions that enhance our competitive position and support customers worldwide. Before turning the call to Alicia, I want to express my gratitude to our employees for their strong execution of our strategy to grow market share across key global verticals, to our valued customers for their continuous partnerships, and to our shareholders for their ongoing support. Thank you for your attention. I will now turn the call over to Alicia for a review of the financial results.