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Earnings call · Jun 2026 (Q2 FY26)

Senstar Technologies Q2 FY26 earnings call SNT

Aug 25, 2026 Source

Executive summary

Senstar Technologies Q2 FY26 — LiDAR-Driven Growth and Return to Profitability

Senstar Technologies delivered a strong second quarter, driven by robust LiDAR sales and significant growth in EMEA and APAC, despite continued softness in the U.S. corrections market. The company returned to profitability, demonstrating initial synergies from the Blickfeld acquisition and effective execution of its strategy. Management expects a recovery in the U.S. market and is focused on product innovation and recurring revenue growth.

Highlights

5

  • Revenue increased 8% year-over-year to $10.4 million, in line with financial plan.

  • LiDAR sales grew nearly 100% year-over-year, now representing 20% of global sales.

  • APAC revenue surged 93% year-over-year, and EMEA revenue grew 14% year-over-year.

  • Company returned to profitability with net income of $351,000 ($0.02 per share).

  • EBITDA improved from a Q1 FY26 loss of $403,000 to a positive $551,000 in Q2 FY26.

Concerns

4

  • U.S. revenue declined 14% year-over-year and 17% year-to-date, primarily due to project delays in the corrections vertical.

  • Gross margin decreased to 64.2% from 66.1% in the prior-year quarter, reflecting product mix.

  • Operating expenses rose 18% year-over-year to $6.4 million, mainly due to $1.2 million in Blickfeld acquisition costs.

  • Cash and cash equivalents decreased from $22.5 million (Dec 31, 2025) to $8 million (June 30, 2026) due to the Blickfeld acquisition.

Guidance & targets

CategoryTargetConfidence
Embedded FiberRanger Product Release
Fully released
medium materiality
High
Symphony Workflow Engine Product Release
Released
medium materiality
High
U.S. Corrections Market Activity
Resume activity
high materiality
Medium
LiDAR Sales Growth
Keep growing
high materiality
High
R&D Expense Level
Fairly normal
medium materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
North America
Revenue declined 12% in the quarter, driven by a 14% decline in the U.S. market. This was primarily due to continued pressure on the corrections vertical and project delays related to the federal government shutdown.
Revenue mix: 43% (Q2 FY26) vs 53% (prior quarter)
—-12%——
U.S.
Performance reflected challenging market conditions, including continued pressure on the corrections vertical and project delays related to the federal government shutdown. Growth in U.S. LiDAR sales and utilities substantially offset some softness.
YTD growth: -17%
—-14%——
Canada
Returned to growth after a challenging first quarter, remaining an important market for the company.
—+19%——
EMEA
Continued strong performance from Q1 into Q2, with broad-based gains across the region. Particular strength in utilities, airports, data centers, and energy. LiDAR applications are generating inbound customer interest.
Revenue mix: 37% (Q2 FY26) vs 35% (prior quarter)YTD growth: 26%
—+14%——
APAC
Fastest-growing region in Q2, rebounding from the prior quarter. Growth driven by utilities, data centers, corrections, and airports, reflecting improved activity in South Asia and Japan. LiDAR sales are at an early stage, presenting future opportunity.
Revenue mix: 19% (Q2 FY26) vs 11% (prior quarter)YTD growth: 21%
—+93%——

Product announcements

ProductTypeDetails
Embedded FiberRangerlaunch
Symphony Workflow Enginelaunch

Deals & partnerships

Blickfeld Acquisition of LiDAR technology company to enhance position in targeted vertical markets and expand addressable markets. EUR 10.4M

The acquisition combines Blickfeld's technology and know-how with Senstar's partner network and sales force. It enhances the company's position in security, volume monitoring, and traffic applications, with limited overlap across sales channels.

Risks & headwinds

U.S. corrections market project delays Q2 FY26, expected to resume in H2 FY26

U.S. revenue declined 14% YoY and 17% YTD; overall vertical performance declined ~18% YoY.

Mitigation:No major projects have been cancelled; initial signs of recovery are emerging. New VP of Sales appointed to strengthen other verticals like utilities and data centers.

Increased operating expenses due to Blickfeld integration Q2 FY26, ongoing

Operating expenses up 18% YoY to $6.4 million, including $1.2 million of Blickfeld acquisition costs.

Mitigation:Partially offset by lower corporate costs. Blickfeld integration is progressing as planned, with the combined business beginning to generate synergies and Blickfeld reporting positive EBITDA.

Gross margin compression due to product mix Q2 FY26

Gross margin declined to 64.2% from 66.1% in the prior-year quarter.

Mitigation:Gross margin improved sequentially from 60% in Q1 FY26, driven by a healthier product mix.

What to watch in Q3 FY26

U.S. Corrections Market Recovery

H2 FY26
Current Declined 14% YoY in Q2 FY26, 17% YTD
Target Activity resumes, growth

Why it matters

U.S. corrections market weakness significantly impacted overall U.S. revenue; recovery is key for overall growth and meeting full-year expectations.

It's our expectation that the business in the corrections indeed will resume in the second half. It's our expectation as mentioned. We're seeing first signs of this recovery, but it remains our expectation.

Q&A highlights

How much of the revenue increase was attributable to the Blickfeld acquisition?

Fabien explained that it's difficult to quantify precisely as the company operates as a single entity post-acquisition, and sales were driven by both the existing Blickfeld team and Senstar's sales team. He confirmed LiDAR was a high contributor to growth.

“It's hard to answer in this sense. First of all, since the closing, we're running our company as a single company. And on top of it, the sales were driven both by the existing Blickfeld team, but as well at the same time by the Senstar sales team, which had been selling Blickfeld first on an OEM basis before.”

asked by Fred Ehrman · answered by Fabien Haubert

2 min read 6 chapters

Detailed narrative

Blickfeld Acquisition Synergies and LiDAR Growth

The integration of Blickfeld is progressing as planned, with the combined business beginning to generate synergies and Blickfeld reporting positive EBITDA in Q2 FY26. LiDAR sales, driven by both Blickfeld and Senstar's sales teams, grew nearly 100% year-over-year and now represent 20% of global sales, up from 11% in Q1. This performance validates the strategic rationale of the acquisition, enhancing Senstar's market position and expanding its addressable markets, particularly in security, volume monitoring, and traffic applications.

Geographic Performance Highlights

EMEA continued its strong momentum from Q1 into Q2, with revenue increasing 14% year-over-year and 26% year-to-date, primarily driven by demand from utilities, data centers, airports, and energy. APAC was the fastest-growing region in Q2, rebounding with a 93% year-over-year revenue increase and 21% year-to-date growth. This acceleration was supported by improved activity in South Asia and Japan across utilities, data centers, corrections, and airports.

U.S. Market Headwinds and Expected Recovery

U.S. revenue declined 14% year-over-year and 17% year-to-date, largely due to continued project delays in the corrections vertical following a federal government shutdown in late 2025. Management emphasized that no major projects have been cancelled and initial signs of recovery are emerging, with activity expected to resume in the second half of the year. Growth in U.S. LiDAR sales and continued strength in utilities partially offset the softness in the corrections market.

Vertical Market Performance and Strategic Focus

Performance across the four core vertical markets was mixed, with an overall decline of approximately 18% year-over-year, primarily attributed to the U.S. corrections market. However, utilities was a strong performer, with sales increasing 17% year-over-year, driven by data centers, telecommunications, and solar farms. Transport also showed growth. Senstar is focused on adding new customers and expanding existing relationships through cross-selling, leveraging its diversified pipeline.

Product Innovation and Recurring Revenue Initiatives

Senstar is advancing product innovation with two key launches planned for the second half of 2026. The Embedded FiberRanger, a next-generation fiber optic sensing technology with an embedded AI engine, is expected to be fully released by the end of Q3, aiming to broaden the fiber PIDS market to short-distance applications. Additionally, the Symphony Workflow Engine, a customizable tool for the Senstar Symphony Common Operating Platform, is designed to automate tasks and support software sales and recurring revenue growth over time.

Financial Performance and Balance Sheet Overview

The company reported Q2 FY26 revenue of $10.4 million, an 8% increase year-over-year. Gross margin was 64.2%, improving sequentially from 60% in Q1 FY26. Operating expenses were $6.4 million, up 18% year-over-year, primarily due to Blickfeld integration costs. Operating income was $343,000, and EBITDA was $551,000. Cash and cash equivalents stood at $8 million as of June 30, 2026, a decrease primarily reflecting the EUR 10.4 million cash-funded acquisition of Blickfeld in February 2026.

AI-generated summary of the company's earnings call. Not investment advice.