SuperCom, Ltd.

And good morning, everyone. Thank you for joining us today. Earlier this morning, we released our financial results for the third quarter ended September 30, 2025. You can find a copy of the press release in the investor relations section of our website at supercom.com. We continue to deliver strong operational performance and strategic momentum across key markets, building on top of our record-breaking first half of the year. Since mid-2024, we have secured over 30 new electronic monitoring contracts in the US alone, including entry into 12 new states and 14 partnerships with regional service providers. These wins reflect growing demand for advanced, scalable EM solutions and validate our ability to rapidly expand our US footprint. Importantly, many of these new partnerships involve replacing incumbent vendors, a recurring theme that speaks to the strength of our pure security platform and the trust it continues to earn from agencies seeking modernization. We've seen this in states like Virginia, Utah, and Alabama, where multiple agencies have transitioned from legacy systems to super comms technology within a short time span. In Alabama, for example, we recently launched our third and fourth deployment in less than a year. In Utah, a second share of agencies selected our platform to overhaul its GPS tracking program after evaluating competing technologies. And in Virginia, another service provider fully transitioned its GPS operations to Supercom, marking our second reseller partnership in that state this year. These examples illustrate a growing trend. As agencies seek more reliable, flexible, and cost-effective solutions, they increasingly turn to Supercom for both technology and long-term partnership. Our ability to serve both direct government agency contracts and third-party service providers gives us the versatility to operate effectively in varied regions and support distinct program structures. In addition to these wins, our U.S. presence is reinforced by the continued success of Leaders in Community Alternatives, LCA, our wholly owned subsidiary in California, which recently secured a five-year reentry services contract valued at up to $2.5 million. LCA remains an important part of our integrated offering, supporting rehabilitation and compliance outcomes alongside our core EM technology, Since our acquisition of LCA, we've secured over $35 million in new contracts in California alone. While our progress in the U.S. has been substantial, we've also continued to expand our presence internationally. We strengthened our presence in Europe with an award of a $7 million National Electronic Monitoring Project in Germany, Europe's largest economy. This milestone marks a strategic foothold in a highly advanced public safety market. achieved by displacing a vendor that had served the German government for more than 20 years. We see this award as a clear validation of our competitive edge and execution capabilities on a global stage. Our leadership in domestic violence electronic monitoring continues to grow. We now support nine nations with domestic violence programs across the U.S., Europe, and other regions. Governments increasingly rely on our PureTrack and PureShield technologies to support victim protection and offender accountability. Beyond new market entry, we're also seeing our proven track record lead to deeper engagement in existing territories. A key growth pattern for Supercom has been our ability to enter new countries as a single project and expand into multiple programs as trust and performance are established. In Europe, we've seen this in countries such as Sweden and Latvia, where initial deployment has evolved into broader national coverage. We're now seeing a similar pattern play out in the U.S., where we have entered states like Utah, Kentucky, and Virginia, and more, with pilot or regional projects, and have since expanded into additional counties and service areas. This repeatable expansion model remains a key driver of our long-term growth strategy. Our ability to replicate our expansion model efficiently also ties into how we operate at scale, especially in the U.S. A core operational advantage for us in the U.S. is our cloud-based centralized platforms. as well as integrated inventory management and 24-7 support. This centralization enables us to support nationwide deployments efficiently from a unified infrastructure in one language. In contrast, European projects often require country-specific servers, local language customizations, and decentralized support models, which introduce additional complexity, local partner support, and increased costs. As a result, we can launch new programs in the U.S. more rapidly and cost-effectively, whether at the county level or statewide, enabling faster time to revenue and higher margin potential. This operational advantage supports not only organic growth, but also potential expansion through other means. In parallel, we continue to evaluate strategic acquisition opportunities in the U.S. market. Targeting established local service providers can help us accelerate our market penetration, enhance vertical integration, and unlock operational synergies. A proven example is our acquisition of LCA in 2016, which, as I said earlier, has contributed to over $35 million in project wins in California alone. As we scale, we see meaningful potential to replicate this success in additional regions in the U.S. Alongside these expansion strategies, we remain focused on addressing the core challenges facing modern justice systems. Our solutions directly address some of the most pressing challenges facing criminal justice systems worldwide, including high recidivism rates, prison overcrowding, and excessive costs and unsafe communities at the end. By providing modern, scalable alternatives to incarceration, our technology helps governments improve supervision, enhance public safety, and reduce the long-term burden on public safety and correctional systems. Tackling these systematic challenges requires continuous innovation, And that's where our technology leadership plays a central role. Our sustained investment in innovation has been key to our success. Over the years, we've invested more than $45 million in R&D for electronic monitoring solutions alone, enabling us to develop one of the most advanced and versatile electronic monitoring platforms in the world. This ongoing commitment to innovation is powered by our stellar research and development team, a group of highly skilled electrical engineers, software developers, product managers, QA personnel, and other domain experts who continue to push the boundaries of what's possible in public safety technology. Their contributions are a core reason why Supercom continues to win competitive tenders globally, often displacing longstanding legacy providers. As our capabilities advance, so does our ability to capture share in a rapidly growing market. The electronic monitoring market is projected to reach $2.3 billion by 2028, with approximately 95% of that opportunity concentrated in the U.S. and Europe. Notably, the U.S. market is estimated to be more than six times the size of the European market, making it a particularly attractive driver for long-term growth. As more jurisdictions adopt electronic monitoring as a core public safety strategy, Supercom is well-positioned to capture this growing demand through our proven solutions and expanding footprint. I'll now turn to the financials, reviewing our performance for the third year, third quarter, and first nine months of 2025, compared to the same period last year in 2024. In the third quarter of 2025, we achieved continued profitability and margin expansion, driven by operational efficiencies and improved cost structures. While revenue for the quarter came in at $6.2 million compared to $6.9 million in Q3 of last year, we delivered significantly improved profitability across all key metrics. Gross profit actually increased this quarter to $3.8 million, with gross margins expanding to 60.8%, up from 45.6% a year ago. This marks one of the highest quarterly gross margins in our history, driven by disciplined cost management, operational automation, and reduced reliance on third-party service providers. It also reflects a favorable revenue mix, with a growing share of higher-margin international project phases and U.S. programs also contributing to the results. As we continue to bring more work in-house and streamline deployment and adaption processes, we're seeing operating leverage as well as margin expansion. Operating income surged to $640,000 this quarter, up from around $30,000 in Q3 of last year, with operating margins increasing to 10.3%. EBITDA doubled to $2.2 million. from 1.1 million in Q3 of 2024, reflecting EBITDA margins of 34.6%. Net income reached $700,000, a turnaround from a net loss of $400,000 in the prior year. And non-GAAP net income surged to $1.9 million, up from $350,000 last year. Non-GAAP EPS came at $0.39, compared to $0.17 in the third quarter of 2024. And now let's have a look at the nine-month performance of 2025 compared to the same period of 2024. Revenue was $20.4 million compared to 21.3 in the first nine months of 2024, reflecting a modest decrease due to revenue mix and timing of contract launches. However, despite the lower top line, we delivered strong improvements in margin and profitability. Gross profit actually increased. to $12.5 million, up from $10.7 million, with gross margins expanding to 61% compared to 50.1% last year. Operating income nearly tripled to $3 million, with operating margin improving to 14.7%, up from 5.3% last year. EBITDA reached $7.2 million, a 56% increase from $4.6 million in the prior year, reflecting an EBITDA margin of 35.4%. And net income more than doubled to $6 million, from 2.5 million in the first nine months of 2024, supported by our improved cost structure, discipline execution, and the positive impact of certain non-operational financial gains recorded during the period. Non-GAAP net income increased to $9.3 million, with net margin more than doubling to 45.7%. And non-GAAP EPS for the period was $2.17. We also made progress in strengthening our balance sheet. In the past two years alone, we reduced our net debt by nearly $25 million. This was achieved also through a combination of strategic debt to equity exchanges, executed at premiums of up to 100% or more above market price, and amendments to our senior debt agreement, which extended maturity to December 2028 and lowered the interest rate significantly. In parallel, we raised over $16 million in gross proceeds, including $6 million for a registered direct offering completed at the beginning of 2025, and an additional $10.2 million for warrant exercises. These steps in unison contributed to a stronger cash position and enhanced our financial flexibility to support future growth opportunities, including new project deployments, continued investment in technology, and potential M&A activity. As of September 30th, 2025, working capital stood at $41.8 million, up from $26.1 million just a year ago. Book value of equity tripled to $40.8 million, up from $13.3 million a year ago, and cash and cash equivalents surged by 111% to $13.1 million, up from $6.2 million a year ago. While current margins reflect a favorable mix of projects and contracts, They're not yet at a steady state level. That said, we believe our progress in streamlining operations, automating processes, and improving launch execution is sustainable and positions us for long-term margin resilience and expansion as we scale. Before closing, I'd like to highlight the broader transformation that continues to define Supercom's trajectory. Since implementing our new strategic roadmap in 2021, We've consistently strengthened the business across revenue growth, profitability, and balance sheet health. We find the results even more compelling when viewed over a multi-year horizon. Revenue more than doubled from a five-year consistent decline, reaching $11.8 million in 2020, to four years of continued growth, reaching $27.6 million in 2024. As of the first nine months of 2025, we reached $20.4 million in revenue, reflecting continued scale relative to previous previous years. Gross profit grew by 140% from $5.6 million in 2020 to $13.4 million in 2024, and gross profit for the first nine months of 2025 reached $12.5 million, closely aligned with the 2024 full-year figure. Gap net income turned from a loss of $7.9 million in 2020 to to $660,000 profit in 2024 and has since surged to $6 million in the first nine months of 2025. Non-GAAP net income improved by over $10 million, turning from a loss of $1.7 million to a $6.3 million profit and stands at $9.3 million year-to-date in 2025. EBITDA has improved from $2.8 million in 2020 to $6.3 million in all of 2024 and has already reached $7.2 million in the first nine months of 2025. These improvements were achieved while navigating macroeconomic headwinds, a global pandemic, supply chain disruptions, rising interest rates, a regional war, and they underscore the strength of our operating model, technology differentiation, and long-term execution strategy. Furthermore, they underscore the essential role of our solutions, which is resilient through market cycles. And as we continue to scale, we believe this foundation positions us well for long-term value creation.

In closing, we are proud of our execution this quarter and trust our customers to continue to place in us.

I'd also like to thank our global team for the dedication and performance. Their expertise, commitment, and hard work continue to drive our success. And as we look ahead, we remain focused on leveraging our momentum to expand strategically, deepen customer relationships, and continue delivering innovative solutions that improve public safety outcomes around the world.