Ladies and gentlemen, thank you for standing by. Welcome to the Senstar Technologies First Quarter 2025 Results Conference Call. All participants are currently 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, Shemali. I would like to welcome everyone to the conference call and thank Senstar Technologies management for hosting today's call. With us on the call today are Mr. Fabien Haubert, CEO of Senstar Technologies, and Ms. Alicia Kelly, the CFO. Fabien will summarize key financial and business highlights, followed by Alicia, who will review Senstar'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, due to changing market trends, reduced demand, and the competitive nature of the security systems industry, the unanticipated and unknown effects 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 following 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 Fabien. Fabien, please go ahead.

Thank you, Corbin. Thank you for joining us today to review Senstar Technologies' first quarter 2025 financial results. We delivered 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 a well-balanced mix of products with notable vertical market strength from energy, logistics, and corrections. This performance reflects sustained customer demand, and combined with our focus on design cost optimizations, drove a 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 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%. Senstar's global diversification continues to strengthen, with North America, EMEA, and APAC delivering broad-based gains across our key verticals. In North America, our largest market by sales percentage, revenue increased by 6% in the first quarter, mainly due to solid performance in corrections and utilities. Of particular note is the performance of Canada during the quarter, which increased revenue by 58% on strong demand for our utilities and corrections offerings. 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 focused on business development 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 Senstar’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 rates among our core vertical markets. The powerful performance in the quarter was driven by increasing perimeter security requirements in energy and logistics. Asia Pacific also increased its 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 poised for 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 corrections, energy, and logistics. Interest and activity in data centers and alternative energy facilities continues to accelerate, reflecting their momentum into growth. I would like to reiterate the high priority we place on technological innovation, a key differentiator for Senstar. MultiSensor continues to gain traction and generate growing interest. Increased market awareness of its innovative capabilities 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 with MultiSensor 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 Senstar’s operating model. Thank you for your attention. I will now turn the call over to Alicia for a review of the financial results in more detail.

Thank you, Fabien. Our revenue for the first quarter of 2025 was $8.4 million, representing a 12.5% increase compared to $7.5 million in the first quarter of 2024. This growth was driven by widespread strong performance across our key geographic and vertical markets. Canada led the geographic regions with a 58% year-over-year revenue growth. Strategic wins and expanded relationships with both new and existing clients contributed to the significant uptick, particularly in corrections and utility verticals. The APAC region followed with a 40% increase in revenue, fueled by the increasing perimeter security requirements in energy, logistics, and correctional projects. EMEA delivered a solid 19% revenue growth, supported by expanded adoption in the energy and logistics sectors. In contrast, sales in the US were down slightly by 2% year-over-year, primarily due to the timing of contract awards, which can fluctuate quarter to quarter. As Fabien commented, LATAM faced pressures in the quarter, but we continue to believe this market represents a significant opportunity due to its growing demand for security modernization. The geographical breakdown of the percentage of revenue for the first quarter of 2025 compared to the prior year's quarter is as follows: North America, 49% versus 52%; EMEA, 30% versus 28%; APAC, 17% versus 14%; Latin America, 3% versus 5%. All other regions were immaterial for both periods. The first quarter gross margin was 67.2% compared to 59.6% in the year-ago quarter. The 752 basis point margin improvement was primarily due to a more favorable product mix, component and design cost optimization, and efficiency gained from headcount streamlining. Our operating expenses were $4.6 million, up 2% compared to $4.5 million in the prior year's first quarter. The increases were driven by targeted marketing and selling spending in core growth verticals, with a positive offset from research and development investment optimization. Strong revenue and a sizable increase in gross margin drove our operating income for the first quarter to $1 million, a significant improvement compared to the operating loss of $73,000 in the year-ago period. The company's EBITDA for the first quarter was $1.2 million compared to $114,000 in the first quarter of last year, with margins expanding to 14.3% from 1.5% in the year-ago quarter. These gains highlight the scalability of Senstar’s operating model. Financial income was $269,000 in the first quarter of this year compared to $54,000 in the first quarter of last year. This is mainly a non-cash accounting effect we regularly report due to adjustments to the valuation of our monetary assets and liabilities denominated in currencies other than the functional currency of the operational entities in the group in accordance with GAAP. Net income attributable to Senstar Technologies shareholders in the first quarter was $1 million or $0.04 per share compared to a net loss of $746,000 or negative $0.03 per share in the first quarter of last year. Added to Senstar’s operational contribution are the public platform expenses and amortization of intangible assets from historical acquisitions. The corporate costs for the first quarter were approximately $494,000. Turning back to our balance sheet, cash and cash equivalents and short-term bank deposits as of March 31, 2025, were $22 million or $0.94 per share. This compares to $20.6 million or $0.88 per share as of December 31, 2024. The company had zero debt as of March 31, 2025. This concludes my remarks. Operator, can you please open the call for questions now?

Our first question comes from Mike Distler with AMX. Please proceed with your question.

Good afternoon everyone. Thank you for taking my call. I was wondering if you could briefly discuss the tariff issue and its potential impact on your operations. I don't think it will significantly affect you now compared to two or three years ago under the previous structure, but any insights you could provide would be appreciated. Thank you.

Okay, thank you very much for your question. So regarding tariffs, today we're not impacted in the sense that we produce most of our goods in Canada, and the only tariff would be, of course, in the US, and we're not facing today any tariff from Canada to the US. That being said, we've been working on the plan to basically have assembly produced in the US to mitigate those tariffs to next to zero. So we're managing that situation well. As per the current circumstances, no impact from tariffs. If a 25% tariff were to come, we have already developed a plan to minimize those impacts to nearly zero. What I cannot predict is if the tariff were to change, in which case we would need to reassess our strategies.

Right. I'm hopeful that you won't. Thank you for clarifying that, and continued success, Fabien. I appreciate it. Take care.

Thank you so much for your support and trust.

Thank you, and we have reached the end of the question-and-answer session. I would like to turn the floor back over to CEO Fabien Haubert for closing remarks.

On behalf of Senstar’s management, I would like to thank our investors for their interest and long-term support of our business. Have a great day.

Thank you. And this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.