Senstar (SNT) Q2 2026 Earnings Call Transcript

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DATE

Tuesday, Aug. 25, 2026 at 9:00 a.m. ET

CALL PARTICIPANTS

• Investor Relations - Corbin Woodhull
• Chief Executive Officer - Fabien Haubert
• Chief Financial Officer - Alicia Kelly

TAKEAWAYS

• Revenue -- $10.4 million, representing 8% year-over-year growth driven by demand in the APAC and EMEA regions.
• Gross Margin -- 64.2%, compared to 66.1% in the prior-year quarter, reflecting changes in product and customer mix.
• Operating Expenses -- $6.4 million, an 18% increase year over year primarily due to $1.2 million in costs associated with the Blickfield acquisition.
• Operating Income -- $343,000, compared to $1 million in the second quarter of 2025, primarily affected by acquisition-related integration expenses.
• EBITDA -- $551,000, down from $1.1 million in the year-ago period but an improvement from an EBITDA loss of $403,000 in the first quarter of 2026.
• Net Income -- $351,000, or $0.02 per share, compared to $1.2 million, or $0.05 per share, in the same period last year.
• Cash and Short-term Deposits -- $8 million, or $0.34 per share, as of June 30, 2026, compared to $22.5 million as of Dec. 31, 2025.
• Debt -- Zero, with the company reporting no debt as of June 30, 2026.
• LiDAR Sales -- Nearly 100% year-over-year growth on a combined basis, now representing 20% of total global sales compared to 11% in the first quarter.
• APAC Revenue -- $2 million, a 93% increase year over year driven by utilities, data centers, corrections, and airports in Japan and South Asia.
• EMEA Revenue -- $3.9 million, up 14% year over year reflecting broad gains in the utilities, airport, and data center sectors.
• North America Revenue -- $4.5 million, a 12% decline year over year due to softness in the U.S. corrections market.
• U.S. Revenue -- $4.1 million, down 14% year over year as project delays in the corrections vertical resulted from the federal government shutdown.
• Canada Revenue -- $447,000, growing 19% year over year following a contraction in the first quarter.
• Utilities Vertical -- 17% year-over-year sales growth, supported by activity in data centers, telecommunications, and solar farms.
• Core Verticals Revenue -- Declined approximately 18% year over year, primarily due to project delays in the U.S. corrections market.
• R&D Expense -- $1.39 million, a 55% increase year over year reflecting the integration of the Blickfield team.
• Blickfield EBITDA -- Reported as positive for the second quarter, meeting an integration milestone following the February 2026 acquisition.
• Blickfield Acquisition Cost -- €10.4 million in cash, which was funded in early 2026.
• Geographic Revenue Mix -- North America 43%, EMEA 37%, and APAC 19% for the second quarter.
• Embedded FiberPatrol -- Planned for full release at the end of the third quarter, featuring an AI engine designed for short-distance applications.
• Symphony Workflow Engine -- Scheduled for release in the second half of 2026 to support software sales and recurring revenue.
• Corporate Expenses -- $588,000, compared to $865,000 in the prior-year period.

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RISKS

• Haubert stated, "The correction vertical continues to experience project delays, related to the federal government shutdown," which impacted U.S. revenue performance during the first half of the year.

SUMMARY

Management reported an 8% increase in second-quarter revenue, driven by strong growth in the APAC and EMEA regions and a near-doubling of LiDAR solution sales. The company stated that integration of the Blickfield acquisition is progressing on schedule, with that segment achieving positive EBITDA in its first full quarter of consolidated results. While U.S. revenue contracted due to government-related project delays in the corrections sector, the company reported active demand in the utilities and transport verticals and is maintaining its research and development investments to support new product launches later this year.

• CEO Haubert stated, "The combined business is beginning to generate synergies and Blickfield reported positive EBITDA in the second quarter," as the company integrates Blickfield technology into the Senstar sales network.
• Management indicated that LiDAR solutions primarily compete with thermal camera products in outdoor perimeter applications, expanding the company's addressable market without overlapping with existing sensing technologies.
• The company appointed a new Vice President of Sales for the U.S. and Latin America with specific experience in data centers and utilities to diversify the regional revenue base beyond the corrections market.
• Management expects the release of Embedded FiberPatrol by the end of the third quarter, which utilizes an embedded AI engine to improve situational awareness and reduce nuisance alarms.
• The Symphony workflow engine is designed to automate security and logistics tasks, which management stated will support long-term goals for increasing recurring software revenue.

INDUSTRY GLOSSARY

• LiDAR: Light Detection and Ranging; a sensing technology that uses laser pulses to create high-resolution 3D maps for security and monitoring.
• PIDS: Perimeter Intrusion Detection Systems; sensors and software used to detect unauthorized entry at the boundaries of a secured area.
• FiberPatrol: A Senstar-branded fiber optic sensing technology used to detect disturbances along fences or buried perimeters.
• Symphony: Senstar's common operating platform that integrates video management, video analytics, and access control.
• EMEA: A geographic region encompassing Europe, the Middle East, and Africa.
• APAC: A geographic region encompassing Asia and the Pacific.

Full Conference Call Transcript

Operator: Welcome to Senstar Technologies Conference Call to discuss its Second Quarter 26 Results. All participants are currently in a listen-only mode. Instructions for the question and answer session will follow the management's prepared remarks. As a reminder, this conference call is being recorded. I would now like to turn the call over to Corbin Woodhull of Hayden IR. Corbin, please begin.

Corbin Woodhull: Thank you, Sherry. Welcome everyone joining us today, and thank you to Sensor Technologies management for hosting the call. Joining us today are Mr. Fabien Haubert, CEO of Senstar Technologies, Ms. Alicia Kelly, the CFO of Sensor Technologies. Fabien will summarize key business and financial highlights, followed by Alicia who will review Senstar's second quarter 26 financial results. We will then open the call for questions. Unless otherwise indicated, all financial figures discussed today are in U. S. Dollars all comparisons year over year. Before we begin, please note that this conference call may contain forward looking statements. Including projections regarding future events and Senstar's future performance.

These statements are based on current expectations and assumptions and are subject to risks and uncertainties. Actual results may differ materially from those expressed or implied by such statements. For a discussion of these and other risks, please refer to the risk factors and other information in Senstar's filings with the U. S. Securities and Exchange Commission. Senstar undertakes no obligation to update any forward looking statements except as required by law. During the call, we will also discuss certain non GAAP financial measures. These measures should be considered in addition to and not as a substitute for the most directly comparable GAAP measures. Reconciliations are included in our earnings release in accordance with Regulation G.

You can also refer to Senstar's website at www.senstar.com for the most directly comparable financial measures and related reconciliations. With that, I will turn the call over to CEO, Fabien Haubert. Fabien, please go ahead.

Fabien Haubert: Thank you, Corbin, and thank you to everyone joining us today to review Senstar Technologies' second quarter 26 result. Our second quarter results reflect continued execution of our strategy including revenue of 10.4 million up 8% year over year, and a return to profitability. LiDAR, again, performed strongly and continues to be an important contributor to our growth. We believe this momentum reflect the contribution of Senstar's sales infrastructure to Blickfield growth. The combined business is beginning to generate synergies and Blickfield reported positive EBITDA in the second quarter. We believe integration is progressing as planned, and we are working to realize efficiency gain and expand our addressable markets.

Let me provide some context on the demand environment, which remains healthy. We saw particularly strong momentum in EMEA and APAC supported by demand from utilities, data centers, and airports. EMEA's performance in the first quarter continued into the second quarter with revenue increasing 14% year over year and 6 26% year to date. Growth was primarily driven by utilities data centers, airports, and energy. LiDAR sales momentum is building. Supported by increasing business development, investment, including the recent hiring of a regional sales director in the Middle East. Our EMEA pipeline continues to strengthen and we expect the region to remain an important contributor to the business. Asia Pacific was the fastest growing region in the second quarter.

With revenue increasing 93% year over year. A rebound from the prior quarter. Revenue in the region grew 21% year to date. Growth in the second quarter was driven by utilities, data centers, corrections, and airports, reflecting improved activity in South Asia and Japan. LiDAR sales in the region remain at an early stage. Which we believe provides an opportunity as adoption develops. In The US, second quarter revenue declined 14% year over year, and 17% year to date. The correction vertical continues to experience project delays, related to the federal government shutdown. No major project have been canceled, and we are seeing initial signs of recovery. We expect activity to resume in the second half of the year.

Growth in U.S. LiDAR sales and continued strength in utilities substantially offset the softness in U.S. corrections. We also continue to add talent including the appointments of a new Vice President of Sales, USA and Latin America with experience across security, LiDAR, utilities, and data center. Turning to our 4 core vertical markets. Performance was mixed in the quarter, declining approximately 18% year over year, primarily because of the slower activity in the corrections market during the first half of the year. Utilities was a highlight with sales increasing 17% year over year. Driven by data centers, telecommunication, and solar farms. Growth with broad based across regions.

Transport also grew in the quarter, and we remain focused on adding new logos and expanding relationship. With existing customers through cross selling. More broadly, the performance of 4 verticals continues to be affected by weakness in The U.S. corrections market. However, underlying demand remains active We have not experienced customer project losses, and we recorded several wins in APAC during the quarter. LiDAR remains a key proof point of our strategy. On a combined basis, LiDAR solutions grew nearly 100% year over year, and now represents 20% of our global sales. Compared with 11% in the first quarter. Sensor sales force generating a meaningful portion of that growth.

We believe the results support the strategic rationale of the Blickfield acquisition, which combined Blickfield technology and know how with Senstar partner network and Salesforce. This combination enhances our position in targeted vertical markets. We are seeing a growing pipeline in security and volume monitoring application with opportunities across North America, Latin America, EMEA, and APAC. Blickfield is also complementary to our existing portfolio. With limited overlap across sales channels. Its LiDAR solution primarily competes with thermal camera solution and perimeter outdoor application. Growth reported by our closest peers in LIDAR across security volume monitoring, and traffic monitoring reinforces our confidence the long term market opportunity. Product innovation remains important to Senstar.

And we continue to advance product and solution we add in response to customer needs. Specifically in the final development stage of 2 planned launches, Embedded FiberPatrol, our next generation fiber optic sensing technology designed for perimeter intrusion detection systems and critical infrastructure protection. is expected to be fully released at the end of the third quarter. The Embedded FiberPatrol is intended to broaden the FiberPatrol markets to include short distance application, traditionally using alternative technologies. Its embedded AI engine is designed to improve situational awareness when evaluation intrusion attempts and reduce nuisance alarm rate. Symphony workflow engine. The customizable tool is integrated into the Senstar Symphony common operating to automate tasks for security and logistics operators.

We expect the workflow engine to support software sales and recurring revenue over time. We currently expect both innovations to be released in the second half 26, and we intend to showcase the security solution at the upcoming global security exchange in Atlanta. Overall, our confidence is supported by customer engagement order activity, geographic diversification, and expanding LiDAR opportunity. We believe the benefits of the Blickfield acquisition are beginning to emerge alongside continued growth in utilities, growth in EMEA and APAC, and an expected recovery of The U.S. corrections market. Our diversified pipeline is converting to revenue and improving revenue conversion remains a key priority.

With our team, products, solutions, and experience in place, we believe we are positioned to execute on our goals for the year and pursue sustainable profitable growth. Before turning the call over to Alicia, I would like to thank our employees for their continued dedication. Our customers for their trust, and our shareholders for their support. I will now turn the call over to Alicia for more detailed review of the financial results.

Alicia Kelly: Thank you, Fabien. Revenue in the second quarter of 26 was $10.4 million. Compared to 9.7 million in the year ago quarter. And was in line with our financial plan. This 8% year increase over year reflected strength in APAC, and EMEA. LiDAR sales nearly doubled, partially offsetting continued weakness in The US corrections vertical related to project delays following the federal government shutdown in late 25. APAC was the strongest performing geographic market in the quarter. With revenue increasing 93% year over year. Growth was driven by steady demand in utilities, data centers, corrections, and airports. Japan and South Asia reported accelerated growth during the quarter while LiDAR is showing encouraging early indicators.

EMEA's strength in the first quarter continued into the second quarter, with revenue increasing 14% year over year. Performance related broad based gains across the region with particular strength in utilities, airport, data centers, and energy. LiDAR applications continue to generate inbound customer interest. And our business development efforts remain focused on capturing the long term growth opportunities in the region. Revenue from North America declined 12% in the quarter, driven by a 14% decline in The US. As Fabien noted, U.S. performance reflected challenging market condition including continued pressure on the corrections vertical and project delays related to the federal government shutdown. We have not lost any customer projects.

And we expect activity to resume in the second half of the year as early signs of recovery have emerged. Canada returned to growth after a challenging first quarter. With revenue increasing 19%. Canada remains an important market, and we will continue to focus on serving customers in the region. The geographical breakdown of the second quarter revenue compared to the prior quarter was as follows. North America, 43% versus 53%. EMEA, 37% versus 35%. APAC, 19% versus 11%. And all other regions immaterial in both periods. Second quarter gross margin was 64.2% compared with 66.1% in the year-ago quarter. The change primarily reflected product mix. The second quarter margin was in line with our plan.

Sequentially, our gross margin increased from 60% in the first quarter of 26 driven by healthier product mix in the second quarter. Operating expenses were $6.4 million up 18% from $5.4 million in the year ago quarter. And represented 60.9% of revenue. Compared to 56% in the year-ago period. The increased primarily reflected $1.2 million of cost associated with the Blickfield acquisition partially offset by lower corporate costs, including due diligence costs for Blickfield incurred in the second quarter of 25. Operating income for the second quarter of 26 was $343 thousand compared to $1 million in the second quarter of 25 Operating income and revenue were in line with internal forecast for the quarter.

With operating income primarily affected by Blickfield integration expenses. EBITDA for the second quarter was $551 thousand compared to $1.1 million in the second quarter of 25. The decline from the prior year quarter primarily reflected slightly lower gross margin and higher costs associated with the Blickfield acquisition. Compared with the first quarter of 26. EBITDA improved from a loss of $403 thousand Financial income was $61 thousand in the second quarter of 26. Compared with financial loss of $330 thousand in the second quarter of 25.

The primary difference reflects a noncash accounting effect from adjustments to the valuation of monetary assets and liabilities denominated in currencies other than the functional currency of the group's operating entities in accordance with GAAP. Net income attributable to Senstar's shareholders was $351 thousand or $02 per share, in the second quarter of 26 compared with net income of $1.2 million or $0.05 per share in the second quarter of 25. Net income also reflects company platform expenses and amortization of intangible assets from historical acquisitions. Corporate expenses in the second quarter were approximately $588 thousand compared to $865 thousand in the year-ago period. Turning next to the balance sheet.

Cash and cash equivalents and short term bank deposits excluding $100 thousand of restricted cash related to deal closing balances. Were $8 million as of June 30, 2026, or $0.34 per share. This compares to $22.5 million or $0.96 per share as of December 31, 2025. The company had no debt as of 06/30/2026. The decrease in cash during the period ended 06/30/2026 primarily reflected the €10.4 million cash funded acquisition of Blickfield, which closed in February 2026. That concludes my remarks. Operator, we would like to open the call now for questions.

Operator: Thank you. You may press '2' if you would like to remove your question from the queue. Before pressing the star keys. Please limit to just 1. Our first question is from Fred Eisenman with Private Investor. Please proceed.

Fred Erman: Hi, Fabien and Alicia. The increase in revenue, how much was that attributed to your Blickfield acquisition?

Fabien Haubert: So thanks very much, Fred, for this question. it is hard to answer in this sense. First of all, we are only closing. We are running our company as a single company. And on top of it, the sales were driven both by the existing Blickfield team, but as well at the sensor sales team, which have been selling Blickfield first on the OEM before. So indeed, LiDAR has been a high contribution in the growth, absolutely, but generated by both simultaneously. We cannot disclose basically which 1 generated which. I hope I have answered your question, Fred. Thank you.

Operator: Our next question is from Ken Liddy with Oppenheimer and Company. Please proceed.

Ken Liddy: Hi. In the quarter, your research and development costs were up higher Than I Can Remember. Is that due to Blickfield? that is all.

Fabien Haubert: So I understand you want to understand the rise of R&D in the second quarter. Do I get your question right?

Ken Liddy: Yes. Is it attributed to the synergies of developing new products with the Blickfield acquisition or is it something else?

Alicia Kelly: Yeah. So we did integrate the Blickfield team into the group. And Blickfield makes up about 300 thousand of the of the total R&D expense. And that would be most of the change that occurred period over period.

Ken Liddy: And is there a dollar amount that you can expect quarter to quarter or annually that you are targeting? Research and development, or a percentage of sales? Number?

Alicia Kelly: I think the number that we have incurred for Q2 is fairly normal for the group now. So, like $1.3 million or so? Yep. The thing that changed with that is if we continue to look for opportunities around IRAP, which is the research and development program from Canada where we would get a grant or if there was a grant that was eligible from Germany. We would also be looking for those opportunities that could potentially reduce the future cost.

Ken Liddy: Great. And I have another question. Regarding The U. S. Sales, I understand they have got pushed off from late last year. Are you expecting US sales to normalize the second half of the year? Or in this quarter, the next quarter?

Fabien Haubert: it is our expectation that the business and the corrections indeed will resume in the second half. it is our expectation. As mentioned, we are seeing first signs of this recovery. But it remains our expectation. On top of it, we are just having onboarded a new vice president of sales with a very strong experience and utilities and data centers. To help us on top of strengthening the position in our historical verticals among with the correction to further accelerate our development in data centers and utilities, end user markets. So we are taking the problem of the issue of the challenge very seriously.

Indeed, we expect a recovery and then growth, of course, over time in the other verticals.

Ken Liddy: Great. And do you expect to see any more opportunities with LiDAR? You talked extensively last call. Is there anything that is materializing since the last call?

Fabien Haubert: 100%. Oh, so we are we are online so far. So there are 3 elements I would like to add to this question, and thank you for raising it, Ken. The first thing is that our LiDAR sales, if you take in combines, quarter-over-quarter, and over the first half, is around 100%. So we absolutely feel the growth of the LiDAR segments, basically of the LiDAR product. In our in our target. And we are working hard to cross sell our existing markets, number 1, in security. And as mentioned, we are not willing to give detailed figures, but to this extent, Sensor has highly contributed to the growth of LiDAR.

On top of it, the historical verticals of Blickfield are increasing tremendously in volume monitoring and traffic. And finally, we believe that there is no we do not see any overlap with our existing solution. But we perceive LiDAR 3D as the main competitor of thermal camera which is a product we did not have in our portfolio. Per se historically. And which is extending the TAM tremendously and is not competing to our current solution range. So on the 3 elements, we expect LiDAR sales to indeed keep growing. And I would like to mention that we are monitoring closely our peers, and we see that they are sustaining very high growth rate, 2 digits.

Ken Liddy: And in relationship to that, could you speak about the new products that innovations that you have coming out in September, I think you said, and how that relates to your verticals?

Fabien Haubert: Yeah. 100%. We are releasing a new fiber detection systems and embedded platform with an AI algorithm, which provides better detection, sharper detection, which we will focus on lower distances where there is today a mix of different technologies and we would like to basically gain leverage on the fiber by providing this fiber solution that can cover from very short distances to very long ranges. Expanding again our addressable market. Number 2, we are providing we are going to release the Senstar Flow, which is next generation of software algorithm on top of first the Senstar Symphony platform and the purpose is to basically boost the sales of software application next to our traditional bids, develop the recurring revenue.

Which is 1 of our main challenges for the future. And we will happily demonstrate both solution during the GSX in Atlanta in September. Great. that is good to hear. Okay. that is all I have for now. I appreciate your answers. Thanks.

Ken Liddy: Thank you, Ken.

Fabien Haubert: Thank you for your trust.

Operator: There are no further questions at this time. Mr. Haubert, would you like to make your concluding statement?

Fabien Haubert: On behalf of Senstar management, I would like to thank our investors for their interest and long term support of our business. Have a good day.

Operator: Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.

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