Q4 2025 BOS Better OnLine Solutions Ltd Earnings Call

March 31, 2026

Speaker #1: The summary speaking, hello?

Speaker #2: Hi, I can't hear anything yet.

Speaker #1: I can't either. You look like Eyal is going through a presentation.

Speaker #2: Hello? Do you hear me? Everything? Everybody? Scott? I heard ard that. Great.

Speaker #3: Yeah, we can hear you now.

Speaker #2: Great. Thank you. So a good morning and thank you for making the time, John, our full year 2025 results call. Joining me is Mr. Moshe Zeltzer, our Chief Financial Officer.

Speaker #2: And I'm pleased to report that 2025 was an outstanding year for BOS on multiple metrics. I am grateful to our team for the hard work and commitment in achieving these results.

Speaker #2: We delivered strong revenue growth throughout the year, setting multiple record quarters and times. Ultimately, we completed the year 2025, going 27% year over year to a record $51 million in revenues, and our net income grew year over year by 57% to a record $56 million, demonstrating our ability to drive profitable growth, leveraging our model.

Speaker #2: Even with these growths, we exited the year with a substantial contract backlog of $34 million giving us good visibility into the year ahead. Looking forward, I want to share the key trends that I shaped that will shape our trajectory in 2026.

Speaker #2: Demand in the defense sectors remains robust and is expected to continue driving growth in our Supply Chain and Robotics division throughout the year. We maintain strong backlog visibility and healthy customer relationships across the segment.

Speaker #2: Alongside that, we are taking steps to extend our geographic reach in March 2026 by appointing an Indian company to represent BOS in the Indian market.

Speaker #2: India is emerging as a growing subcontracting hub for a global defense program. This is a meaningful step in our global extension strategy. On the product side, our guide BOS model is built around continuously broadening the portfolio of manufacturers, representing and embracing the new technologies they develop.

Speaker #2: Because our manufacturing partners invest heavily in next-generation solutions, we benefit from self-replenishing flow of innovative products to bring our clients. Returning to our affiliate division, the ongoing geopolitical tension in Israel since October 2023 has continued to weigh on the Israeli commercial market, which represents the primary revenue base for this division.

Speaker #2: Therefore, we recorded good internal charges of $70,000 in 2024 and an additional $1.2 million in the year year 2025. To reduce our exposure to geopolitical sensitivities, our 2026 strategic plan focuses on growing our business by entering the hospital segment.

Speaker #2: More stable and higher growth vertical within Israel. Successful penetration of this segment will require broadening our product offering, hiring personnel with relevant domain expertise, and establishing new customer relationships.

Speaker #2: We expect to make this investment through 2026, with revenue contributions expected to begin in 2027.

Speaker #4: On the current front, the USD to Israel check exchange rate opened 2026 at 3.18. Israel check per dollar. Affecting an approximately 13% devaluation of the dollar against Israel shekel compared to the start of 2025.

Speaker #4: As a result, we expect our Israel shekel–dominated rating expenses to increase by approximately $600,000 in 2026 compared to 2025. Another effect of the dollar's weakness in 2025 was $800,000 in non-recurring currency exchange income recognized that year, which arose from the devaluation of the Israel shekel–denominated balance sheet items following the sharp dollar decline.

Speaker #4: The gain is not expected to repeat in 2026. Assuming the rate remains at approximately 3.18 Israel shekel per dollar. Combined, these two currency-related items represent approximately $1.4 million in headwinds going into 2026.

Speaker #4: Separately, the $1.2 million group-in payment charge taken in 2025 is not expected to recur in 2026, which partially offset the boom, leaving a net year-over-year drop of approximately $200,000.

Speaker #4: Our financial foundation has never been stronger; cash and equivalents have grown to $11.8 billion, up from $3.6 billion a year ago in 2024.

Speaker #4: Shareholders' equity amounted to almost $29 million. Up from $21 million a year in 2024. With positive working capital of more than $22 million, and bank debt amounted to only $1.7 billion.

Speaker #2: This strong balance sheet gives us the flexibility to capitalize on opportunities as they arise. Supporting BOS organic growth and strategic acquisitions. We are actively evaluating the range of acquisition opportunities, each of which must meet our strict criteria.

Speaker #2: Including a proven rate track record of profitability and high revenue visibility. Turning to our outlook, consistent with our established policy on fishing conservative initial guidance, without its provided as the year progresses, we are projecting revenues of approximately $51 million and net income of approximately $3.6 million for 2026.

Speaker #2: We look forward to updating you as the year progresses and our momentum becomes clearer. On the investor relations point, in 2025, I conducted an open workshop comprising 44 one-on-one meetings with potential investors and presented two investor summits.

Speaker #2: Our stock appreciated 42% during that year, year 2025. Yet, a significant valuation gap remains relative to our benchmark index, the Russell 2000. Over the past four years, BOS delivered compounded annual earnings per share growth of 6%.

Speaker #2: Compared to 12% of the Russell 2000. Five times the rate of the index. Despite this performance, we trade near book value, while Russell 2000 rate of roughly 2.4 times book value.

Speaker #2: And our price-to-earnings ratio stands at approximately 9 times, compared to 20 times for the index. We attribute much of this discount to limited market awareness.

Speaker #2: To address this, we will shift our strategy toward digital marketing starting this cycle, engaging telecommunication and investor relations firms specializing in digital investor outreach.

Speaker #2: We believe this approach will meaningfully expand our investor reach and visibility in a significantly shorter timeframe, rather than the traditional hire method. With that, we are happy to take your questions, and if you have any questions, please unmute yourself.

Speaker #5: Thank you, guys. Congratulations on a really good year. This is a top LC. I was wondering if you could talk about the current conditions over there and how you expect your business to be impacted if the war, let's say, lasts another 30 days, compared to what happens if it drags on for another six months with your various divisions.

Speaker #3: Yeah. So thank you, Tom. First, most of our business is related to the defense segment, as you know, the supply chain, which is the primary growth driver of BOS, most of its business is related to the defense segment.

Speaker #3: And the robotic division as well. So in that aspect, the war will continue. It will positively affect the growth of those two divisions. In regard to the RFID division, currently, it is very sensitive to the geopolitical tension, and if the war will continue, it will negatively impact its business.

Speaker #3: But as I mentioned before, we are working to shift our sales resources and business development resources toward a new segment, which are less sensitive—or even the opposite—are growing in such areas like the hospitals in Israel, and defense as well.

Speaker #3: But we will focus on the hospital segment in Israel. In addition, as you know, if the war will continue, we will learn how to work with that.

Speaker #3: The economy will gradually return to its normal course of business despite several attacks a day. It's not new for us. We are in this situation for three years.

Speaker #3: And still, we are doing good. But hopefully, it will be ended.

Speaker #2: Okay. And there was a gentleman who asked a question in the chat, which I thought was a good question. He spoke about the growth rate you've achieved and why there is no growth anticipated in the guidance.

Speaker #2: I think your guidance is for $51 million in that space, basically what you did last year. So, can you give us some insight on that?

Speaker #3: Yes. First, we reached a record level of revenues—$51 million in revenues compared to $40 million in the previous year. It's a phenomenon. Our revenue growth depends on the consumption of our components by the defense segment, mainly Rafael and Israel Industry and their hundreds of contractors around the world.

Speaker #3: I believe that there is high potential for continuing growth because there were also empties. But we currently have at the end of year 2025, we have like 24 million of backlog, which covers 50% of our outlook for a year.

Speaker #3: 2026, so we have to be as we did all the time big conservative. And we will update I believe we will upgrade the outlook quarter by quarter according to the progress.

Scott Weiss: Is somebody speaking? Hello? I can't hear anything yet. I can't either. It looks like Eyal is going through a presentation.

Speaker #3: And after that, we are in a very sensitive period in geopolitical tension. Every day, there is news, and we have to be a little bit conservative.

Speaker #3: And I think that still, with $50 million in revenues and $3.6 million net income, and all the ratios that I illustrated before—that were illustrated before—compared to the index, to the Russell 2000 index, there is no need for any growth to justify this current valuation.

Speaker #3: I think we are undervalued with the $51 million in revenues and $3.6 million net income. And there is a great upside.

Eyal Cohen: Hello. Do you hear me, everything, everybody? Scott, I heard that.

Scott Weiss: Yes, now we can hear you.

Eyal Cohen: Great.

Scott Weiss: Yeah, we can hear you now.

Speaker #2: Okay, thank you. My last question is just on the M&A front. I see your cash position is up to $11.8 million. Can you just kind of go over your M&A strategy?

Eyal Cohen: Great. Thank you. Good morning, and thank you for making the time to join our Full Year 2025 Results Call. Joining me is Mr. Moshe Zeltzer-

Speaker #2: I believe in the past, you plan to be no dilution on any M&A that you did and any acquisitions you did would be immediately accretive to revenue and earnings.

Moshe Zeltzer: Hello.

Eyal Cohen: Our chief financial officer. I am pleased to report that 2025 was an outstanding year for BOS on multiple metrics, and I am grateful to our team for the hard work and commitment in achieving these results. We delivered strong revenue growth throughout the year, setting multiple record quarters and increasing our outlook three times. Ultimately, we completed the year 2025, growing 27% year over year to a record $51 million in revenues. Our net income grew year over year by 57% to a record $3.6 million, demonstrating our ability to drive a profitable growth leverage in our model. Even with this growth, we exited the year with a substantial contracted backlog of $24 million, giving us good visibility into the year ahead.

Speaker #2: Is that still the case? And do you plan on investing some of that cash maybe in short-term notes for securities if there's no M&A on the horizon?

Speaker #3: Yeah. So first, as we have the 12 million cash in hand, I think the opportunities of M&A are increasing. Because we can acquire a larger company that can move the needle.

Speaker #3: So it's great. It's a great tool to have on hand. And we have several acquisitions that we are evaluating. Hopefully, we'll close an acquisition during the year 2026.

Speaker #3: Until then, we invest the cash in hand in the security funds, and that bears like 4%, 4.5% interest per year, something around that. So the money is working and waiting for utilization.

Eyal Cohen: Looking forward, I want to share the key trends that will shape our trajectory in 2026. Demand in the defense sector remains robust and is expected to continue driving growth in our Supply Chain and Robotics Division throughout the year. We maintain strong backlog visibility and healthy customer relationships across this segment. Alongside that, we are taking steps to extend our geographic reach. In March 2026, we appointed an Indian company to represent BOS in the Indian market. As India is emerging as a growing subcontracting hub for global defense programs. This is a meaningful step in our global expansion strategy. On the product side, our organic growth model is built around continuously broadening the portfolio of manufacturers we represent and embracing the new technologies they develop.

Speaker #2: And it's not included in the plan. There is no plan for dilution. With 11 million to do an acquisition, it's a nice acquisition. And if we want to increase it, we can leverage it with the profitable company.

Speaker #2: We can leverage it with the bankers, Northern bankers, and together to reach a significant amount of acquisition. It could be one, it could be two.

Speaker #2: So I don't expect for any dilution in that aspect. In M&A, by the way, in any other aspect as well.

Speaker #5: Thank you. That's all from me.

Speaker #6: I have two questions to discuss for you.

Speaker #3: Fine.

Speaker #6: Okay, thank you. Regarding India, can you comment on if you've seen revenue in India to date? And what kind of numbers are you expecting for 2026?

Speaker #3: Yeah. We see lower revenues from India than we saw—lower revenues in the year 2023, in the year 2024, in the year 2025. And we opened the year—we established the office there, the agency there, in order to urge it.

Eyal Cohen: Because our manufacturing partners invest heavily in next-generation solutions, we benefit from self-replenishing flow of innovative products to bring our clients. Turning to our RFID Division. The ongoing geopolitical tension in Israel since October 2023 has continued to weigh on the Israeli commercial market, which represents the primary revenue base for this division. Therefore, we recorded goodwill impairment charges of $700,000 in 2024 and an additional $1.2 million in 2025. To reduce our exposure to geopolitically sensitive Israeli civil market, our 2026 strategic plan focuses on growing our business, the RFID business, by entering the hospital segment, more stable and higher growth vertical within Israel.

Speaker #3: And to have more foot on the ground in India, in order to increase this number. We didn't provide any outlook for how many revenues, but hopefully, it will increase significantly during the year.

Speaker #3: It's not an investment for one year. It's for long-term investment. And we will expand our investment in India according to the progress.

Speaker #3: So this is our addressable market overseas.

Speaker #6: Can you share one or two of the larger customers from the Indian markets?

Speaker #3: Yes. We are working our client I believe the biggest one of the biggest on the top five subcontractors of assembly subcontractors of electronic systems.

Eyal Cohen: Successful penetration of this segment will require broadening our product, offering hiring personnel with relevant domain expertise, and establishing new customer relationships. We expect to make this investment throughout 2026, with revenue contribution expected to begin in 2027.

Speaker #3: They are working with the Rafael. They are working with the Eyal. They are working with the Boeing. They are working with global organization. Among the names are SASMOS, Vineas, DCX, and I believe there are there is a long list of subcontractors that we have not reached yet.

Moshe Zeltzer: On the currency front, the USD to Israeli shekel exchange rate opened 2026 at 3.18 Israeli shekel per dollar, reflecting an approximately 13% devaluation of the dollar against the Israeli shekel compared to start of 2025. As a result, we expect our Israeli shekel-denominated operating expenses to increase by approximately $600,000 in 2026 compared to 2025. Another effect of the dollar's weakness in 2025 was $800,000 in non-recurring currency exchange income we recognized that year, which arose from the revaluation of the Israeli shekel-denominated balance sheet items following the sharp dollar decline. The gain is not expected to repeat in 2026, assuming the rate remains at approximately 3.18 Israeli shekel per dollar. Combined, these two currency-related items represent approximately $1.4 million in headwinds going into 2026.

Speaker #3: And this is the primary reason for having foot on the ground in India. In order to go to visit more manufacturers, more assembly companies, and to start to do business with them.

Speaker #3: Because if we have a good offering for one, for the competitors, I believe we can increase ourselves when we can increase our client base in India with the same offering.

Speaker #6: Okay, thank you. My second question is regarding the RFID investment. What kind of investment spend are you expecting to enter the hospital market?

Speaker #3: In the amount of, or what kind of investment?

Speaker #6: Both.

Speaker #3: Okay. Trying to according to the initial plan, I believe it won't be a significant amount in the size of the cost, but it will be significant amount for the RFID.

Speaker #3: It could be around 800, or it could be, generally, it could be like 300,000 in the year 2026. And then, in the year 2027, this new segment will be very given.

Moshe Zeltzer: Separately, the $1.2 million goodwill impairment charge taken in 2025 is not expected to recur in 2026, which partially offsets the impact, leaving a net year-over-year drag of approximately $200,000. Our financial foundation has never been stronger. Cash and equivalents have grown to $11.8 million, up from $3.6 million at year-end 2024. Shareholder equity amount to almost $29 million, up from $21 million at year-end 2024. We have positive working capital of more than $22 million, and bank debt amounted to only $1.7 million.

Speaker #3: And in the year 2028, it starts to be profitable. But it is for the long term because in the RFID division, every time there is a geopolitical tension, it gets impacted directly and immediately.

Speaker #3: So we have to and because we don't believe that in the year going forward, there will be long-term peace period, so we have to be ready for that.

Speaker #3: And we have to do this move.

Speaker #6: Do you have existing relationships in the hospital segment?

Speaker #3: Currently, no. But we have several candidates that we can hire with the related connections. By the way, it could also be through M&A of companies that are already in that field.

Eyal Cohen: This strong balance sheet gives us the flexibility to capitalize on opportunities as they arise, supporting both organic growth and strategic acquisitions. We are actively evaluating a range of acquisition opportunities, each of which must meet our strict criteria, including a proven track record of profitability and high revenue visibility. Turning to our outlook. Consistent with our established policy of issuing conservative initial guidance with updates provided as the year progresses, we are projecting revenues of approximately $51 million and net income of approximately $3.6 million for 2026. We look forward to updating you as the year progresses and our momentum becomes clearer. On the investor relations front. In 2025, I conducted an on-the-road show comprising 44 one-on-one meetings with potential investors and presented at 2 investor summits. Our stock appreciated 42% during that year 2025.

Speaker #3: And to use our system to support the sales and the sourcing of the products to these segments.

Speaker #6: Okay. My last question is regarding guidance. I realize how conservative you’ve historically been, but the guidance suggests that you’ve seen a slowdown, and I just wanted to flesh that out a little bit.

Speaker #6: Have you seen any changes from Q4 to Q1 to where we are today?

Speaker #3: No, the opposite. I see that the backlog increased. The backlog of the group increased in the first quarter.

Speaker #6: Okay. Thank you very much.

Speaker #3: You're welcome. And hope to see you soon in Israel.

Speaker #5: Hello. This is Jordan Garotov. Good afternoon and good morning for me. I have a question, and I think somebody else had the same question about your guidance.

Speaker #5: Do you project the same revenue and the same net income as you had this year? So I understand the revenue part. The net income was affected by those things this year.

Speaker #5: One is the impairment charge, which I assume will not be going forward, or maybe it will be. The second part, you're paying all taxes.

Speaker #5: Are you going to pay the taxes next year? So maybe just walk me through, and say on the $51 million, how do you get to that same net income when you had those discount items affecting this year?

Eyal Cohen: Yet, a significant valuation gap remains relative to our benchmark index, Russell 2000 Index. Over the past four years, both delivered compounded annual earnings per share growth of 60% compared to 12% over the Russell 2000 Index, five times the rate of the index. Despite this performance, we trade near book value, while Russell 2000 Index trade at roughly 2.4 times book value. Our price to earnings ratio stands at approximately 9 times compared to 20 times for the index. We attribute much of this discount to limited market awareness. To address this, we will shift our IR strategy toward digital marketing starting this April, engaging Aly Communications, an investor relations firm specializing in digital investor outreach. We believe this approach will meaningfully expand our investor reach and visibility in a significantly shorter timeframe rather than the traditional IR method.

Speaker #3: Yes. Thank you for your question. I think that Moshe described that we had two points that was impacted the year 2026 report. And maybe Moshe can return on what you just said regarding the currency exchange, the weakness of the dollar, and what was the impact in the year 2026.

Speaker #3: It's five, and what do we expect in the year 2026?

Speaker #5: Yeah. In the financial income in 2025, because of the—we said that our Israeli check is dominating—operating expenses increase by approximately $600,000 in 2026 compared to 2025.

Speaker #5: So another effect of the dollar weakness in 2025 was 800,000 dollars in annual recurring currency exchange income we recognized last year. Which are also the valuation of the Israeli check dominated balance sheet items following the sharp dollar decline.

Speaker #5: This gain is not expected to repeat in 2026. So about the impairment of the goodwill, it will be offset by the impact of the Israeli shekel against the dollar, which is not supposed to impact in 2026 like it was in 2025.

Eyal Cohen: With that, we are happy to take your question, and if you have any question, please unmute yourself.

Todd Felte: Hey, guys. Congratulations on a really good year. This is Todd Felte. Was wondering if you could talk about the current conditions over there and how you expect your business impacted if the war, let's say, lasts another 30 days compared to, you know, what happens if it drags on for another 6 months with your various divisions.

Speaker #5: So I agree. In summary, there was a sharp 4.2 million dollars of goodwill in 2025 that we don't expect to rewrite. We don't expect it to recur in 2026.

Speaker #5: Okay. But on the other hand, there were some benefits in the year 2025 if that in the year because of the weakness of the dollar, the operational expenses in the year 2025, in 2026, will be higher by 600,000 dollars than it was in the year 2025.

Eyal Cohen: Yeah. Thank you, Todd. First, most of our business linked to the defense segment, as you know, the supply chain, which is a primary growth driver of both, most of its business related to the defense segment and the robotics division as well. In that aspect, if the war will continue, it will positively affect the growth of those two divisions. In regard with the RFID division, currently it is very sensitive to the geopolitical tension. If the war will continue, it will negatively impact its business.

Speaker #5: Because we opened the year 2026 with a very low currency rate of 3.18 nits per dollar, as compared to something like 3.5 nits per dollar at the beginning of the year 2025.

Speaker #5: So, we expect higher operational costs by $600,000. And another thing that we recall: in the year 2025, financial income because of the weakness of the dollar of $800,000.

Speaker #5: As long as the currency exchange rate in 2026 remains at 3.18, we don't expect to record the same income. So, the benefit in the currency exchanges in the year 2025 is offset by the goodwill impairment in the year 2025.

Eyal Cohen: As I mentioned before, we are working to shift our sales resources and business development resources toward a new segment, which are less sensitive or even or the opposite, are growing in such period, like the hospitals in Israel, defense as well, but we're focused on the hospital segment in Israel. In addition, as you know, if the war will continue, we learn how to work with that. The economy will gradually return to its normal course of business despite several attacks a day. It's not new for us. We are in this situation for three years and still we are doing good. But hopefully it will be ended.

Speaker #5: So now you can easily compare the years of 2025 and 2026. Okay. Okay. My other question is a little bit difficult to break down if you're paying any taxes.

Speaker #5: And I know you referred to, that you have a taxpayer award on unrealized losses. So could you tell me what you expect your taxes are going to be like this year and next year?

Speaker #3: Yeah. We have a plan, too. The taxes are a little bit tricky because the taxes are—we're going to use to utilize all the territorial taxes in BOS, the parent company.

Speaker #3: By the end of year 2026, all of it is recorded as an asset in the balance sheet. But we still have a lot of tax assets in taxpayer forward losses in the subsidiaries.

Speaker #3: We did a vision that we want to utilize, and we are considering different kinds of solutions, tax solutions, so that in order to utilize it, because in order to show that all the profits of all the group will be offset by the territorial taxes losses of the affected division.

Todd Felte: Okay. There was a gentleman who asked a question in the chat, which is, I thought a good question. He spoke about the, you know, the growth rate you've achieved and why there is no growth anticipated in the guidance. I think your guidance is for NIS 51 million, and that's basically what you did last year. Can you kind of give us some insight on that?

Speaker #3: So, we don't expect to have any significant tax expenses in the year 2026.

Speaker #5: Okay. And for your 2027, is it a little bit early, or are you also saying that the taxes keep on carrying over into the next years?

Eyal Cohen: Yes. First we reached to a record level of revenues. $51 million revenues compared to $40 million revenues in the previous year. It's phenomenal. Our revenue growth depends on the consumption of our components by the different segment, mainly Rafael, and Israel Aerospace Industries and their 100 subcontractors around the world. I believe that there is high potential for continuing growth because the warehouses are empty. We currently have, and at the end of 2025, we have like $24 million backlog, which cover 50% of our outlook for 2026. We have to be as we did all the time, to be conservative. We will update. I believe we will upgrade the outlook quarter by quarter according to the progresses.

Speaker #3: Can you repeat this again?

Speaker #5: For year 2027, going forward, do you see that you're going to still have tax rollovers in your division, or it's probably going to expire?

Speaker #3: No. There is no expiry date. So for those losses,

Speaker #5: Sorry. You stopped. I heard you expire.

Speaker #3: Okay. We will utilize the if you will execute the tax planning as we wish, I believe we won't have tax expenses coming in the several coming years.

Speaker #5: Okay. And my last sort of comment—you don't have to take it as a question. You referred to your thought being cheap, and I think everybody on this call agrees with this.

Speaker #5: I think there's no better way to demonstrate yourself as cheap as one ounce of small buyback or to have the executive buy some of your own stock because I think it would benefit everybody.

Speaker #5: So, this is just a comment. I don't know if you agree with this, but that would be, I think, many people's minds.

Speaker #3: Yeah. I think because we have just 11 million dollars and we have a very small company, we have to invest this money by acquiring companies in order to support the growth of the company and not to do an artificial financial act to support the stock.

Eyal Cohen: We have to remember that we are in a very sensitive period in geopolitical tension. Every day there are news, and we have to be a little bit conservative. I think that still, with $51 million revenues and a $3.6 million net income and all the ratios that I illustrated before, compared to the Russell 2000 Index, there is no need for any growth to justify this current valuation. I think we are undervalued with the $51 million revenues and $3.6 million net income, and there is a great upside here.

Speaker #3: Personally, I don't believe in buying stock, buyback stock. It didn't improve itself according to what I read. I have been reading during all the years.

Speaker #3: And we are very small to activate such a plan. Companies with a big size, that have hundreds of millions in cash on hand, they can do it.

Speaker #3: They can allocate part of it just for public relations. We don't have space for it. We have to work very hard to gain this money.

Speaker #3: And we have a lot of opportunities for acquisitions, and I believe this is the best thing to do for the company, for the long term.

Speaker #3: Regarding buying stocks by the officers of the company, I think I can tell you I know what the compensation packages of those officers are.

Speaker #3: I think they cannot afford to do buyback. They are not they don't have a compensation huge compensation that they can allocate it. The part of their compensation, it's options instead of cash bonus.

Todd Felte: Okay. Thank you. My last question is just on the M&A front. I see your cash position is up to NIS 11.8 million. Can you just kind of go over your M&A strategy? I believe in the past you planned there would be no dilution on any M&A that you did and that any acquisitions you did would be immediately accretive to revenue and earnings. Is that still the case? Do you plan on investing some of that cash maybe in short-term notes or securities if there's no M&A on the immediate horizon?

Speaker #3: And I think it's a sign of support from the officer that they lead in the company.

Speaker #5: Okay. Thank you very much. And I don't have any more questions.

Speaker #3: Thank you. I have a question. It's James Kahn in New York. You were talking about India. And I was a little unclear. You said that if I understood, your revenues in 2023, 2024, and 2025, and you're expecting India to grow, but can you quantify how much of your revenue came from India in 2023, 2024, and 2025?

Eyal Cohen: First, as we have the $12 million cash on hand, I think the opportunities of M&A are increasing because we can acquire a larger company that can move the needle. It's great. It's a great tool to have on hand. We have several acquisitions that we are evaluating. Hopefully, we will close an acquisition during 2026. Until then, we invest the cash on hand on securities funds that bear like a 4% to 4 or 5% interest per year, something like that. The money is working and waiting for utilization. Regarding the dilution-

Speaker #3: Okay. Several million dollars, around $3 million on average during that year, in those years. And we expect, following the trends in the market and following our investment in India, to grow significantly, gradually, during the years.

Speaker #6: Thanks.

Speaker #3: You're welcome, James. Any follow-up questions? Okay. So, thank you all for your thoughtful questions today. They reflect exactly the kind of engaging dialogue we value with our investors.

Todd Felte: Thank you. That's all for me.

Speaker #3: Let me close with a final note. Year 2025 was a massive for BOS, record revenues, record net income, and record cash on the balance sheet.

Eyal Cohen: Regarding the dilution, it's not included in the plan. There is no plan for dilution. With $11 million to do an acquisition, it's a nice acquisition. If we want to increase it, we can leverage it with the bank loans, long-term bank loans, if it's a profitable company, and together to reach to a significant amount of acquisition. It could be one, it could be two. I don't expect for any dilution in that aspect in M&A. By the way, in any other aspect as well.

Speaker #3: We entered 2026 with a strong foundation, a clear strategic roadmap, and a team that has demonstrated its ability to execute. We are committed to delivering long-term value for our shareholders.

Speaker #3: And I look forward to continuing that dialogue with you throughout the year. Thank you again for your participation, and please feel free to reach out at any time.

Scott Weiss: Thank you. That's all for me. Hi, Eyal. I have two questions. This is Scott Weiss. How are you?

Eyal Cohen: Fine. Thank you, Scott. How are you?

Scott Weiss: Good, thank you. Regarding India, can you comment on if you've seen revenue in India to date and what kind of numbers are you expecting for 2026?

Eyal Cohen: Yeah. We see flow of revenues from India. We saw flow of revenues in year 2023, in year 2024, in year 2025. We established the office there, the agency there, in order to urge it and to have more foot on the ground in India in order to increase this number. We didn't provide any outlook for how many revenues, but hopefully it will increase significantly during the year. It's not investment for one year, it's for long-term investment. We will expand our investment in India as its progress, according to the progress. This is our addressable market overseas.

Scott Weiss: Can you share one or two of the larger customers from the Indian markets?

Eyal Cohen: Yes. We are working. Our client, I believe, the biggest, one of the biggest or the top five, subcontractors of assembly subcontractors of electronic systems. They are working with the Rafael, they are working with the IAI, they are working with the Boeing, they are working with a global organization. Among the names are Sasmos, Vinyas, DCX, and I believe there is a long list of subcontractors that we have not reached yet. This is a primary reason for having foot on the ground in India in order to go to visit more manufacturers, more assembly company, and to start to do business with them.

Eyal Cohen: Because if we have a good offering for one, for their competitors, I believe we can increase our sales. We can increase our client base in India with the same offerings.

Scott Weiss: Okay, thank you. My second question is regarding the RFID investment. What kind of investment spend are you expecting to enter the hospital market?

Eyal Cohen: In what amount or what kind of investment?

Scott Weiss: Both.

Eyal Cohen: Okay. According to the initial plan, I believe it won't be a significant amount in the size of both, but it will be significant amount for the RFID. It could be around 800 to. It could be in shekel, it could be like $200,000 in 2026. Then in 2027, this new segment will be in break-even, and in 2028, it start to be profitable. It is for the long term, because in the RFID Division, every time there is a geopolitical tension, it got impacted directly and immediately. We have to

Eyal Cohen: Because we don't believe that, going forward, there will be a long-term peace period, so we have to be ready for that, and we have to do this move.

Scott Weiss: Do you have existing relationships in the hospital segment?

Eyal Cohen: Currently, no. We have several people, several candidates that we can hire with the related connections. By the way, it could be also through an M&A of a company that is already in that field, and to use our system to support the sales and the sourcing of the product to this segment.

Scott Weiss: Okay. My last question is regarding the guidance. I realize how conservative you've historically been, but the guidance suggests that you've seen a slowdown, and I just want you to flesh that out a little bit. Have you seen any changes from Q4 to Q1 to where we are today?

Eyal Cohen: No. The opposite. I see that the backlog of the group increased in the Q1.

Scott Weiss: Okay. Thank you very much.

Eyal Cohen: You're welcome, and hope to see you soon in Israel, Scott.

Igor Novgorodtsov: Hello. This is Igor Novgorodtsov. Good afternoon and good morning from me. I have a question, and I think somebody else had the same question about your guidance. You're projecting the same revenue and the same net income as you had this year. I understand the revenue part. The net income was affected by two things this year. One was the impairment charge, which I assume will not be going forward, or maybe it will be. The second part, you paid no taxes. Are you going to pay the taxes next year? Maybe you can just walk me through and say on the NIS 51 million, how do you get to exactly the same net income when you had two significant items affecting it this year?

Eyal Cohen: Yes. Thank you for your question. I think that Moshe described that we had 2 point that was impacted 2026 report. Maybe Moshe can comment on what you just said regarding the currency exchange, the weakness of the dollar, and what was the impact in 2026 is 5, and what do we expect in 2026.

Moshe Zeltzer: Yeah. In the financial income in 2025, because of the we expect that our Israeli shekel denominated operating expenses to increase by approximately $600,000 in 2026 compared to 2025. Another effect of the dollar weakness in 2025 was $800,000 in non-recurring currency exchange income we recognized last year, which arose from the revaluation of the Israeli shekel denominated balance sheet items following the sharp dollar decline. This gain is not expected to repeat in 2026. About the impairment of the goodwill, it will offset by the impact of the Israeli shekel against the dollar, which is not supposed to impact in 2026 like it was in 2025.

Eyal Cohen: I agree. In summary, there was a charge of $1.2 million of goodwill impairment in 2025.

Moshe Zeltzer: Yeah.

Eyal Cohen: That we don't expect. You're right, we don't expect it to recur in 2026. Okay. But on the other hand, there were some benefits in year 2025, that because of the weakness of the dollar, the operational expenses in year 2025, in 2026 will be higher by $600,000 than it was in year 2025. Because we opened the year 2026 with a very low currency rate of 3.18 NIS per dollar, as compared to something like 3.5 NIS per dollar at the beginning of year 2025. We expect higher operational costs by $600,000. Another thing that we recorded in 2025, financial income because of the weakness of the dollar of $800,000.

Eyal Cohen: As long as the currency exchange rate of 2026 will remain at 3.18, we don't expect to record the same income. The benefit in the currency exchanges in year 2025 and offset by the goodwill impairment in year 2025. Now you can easily compare the years of 2025 and 2026. Okay?

Igor Novgorodtsov: Okay. My other question is, it's a little bit difficult to break down if you're paying any taxes. I know you referred to that you have a tax carryforward ability and unrealized losses. Could you tell me what you expect your taxes are gonna be like this year and next year?

Eyal Cohen: Yeah. We have a plan. The taxes are a little bit tricky because the taxes are we are going to utilize all the tax loss carryforward in BOS, the parent company, by the end of 2026, and all of it recorded as an asset in the balance sheet. We still have a lot of tax assets in tax loss carryforwards in the subsidiaries, RFID Division, that we want to utilize, and we are considering different kind of tax solution for that in order to utilize it, because, you know, all the profit of all the group will be offset by the tax loss carryforwards of the RFID Division.

Eyal Cohen: We don't expect to have any significant tax expenses in year 2026.

Moshe Zeltzer: We don't expect to have any significant tax expenses in year 2026.

Igor Novgorodtsov: Okay. For 2027, is it a little bit too early or you're also saying that the taxes keep on carrying over into the next years?

Eyal Cohen: Can you repeat please again?

Igor Novgorodtsov: For year 2027 going forward, do you see that you're gonna still have tax carryovers in your divisions or it's probably gonna expire?

Eyal Cohen: No, there is no expiry date for those losses.

Igor Novgorodtsov: Use that. I mean, it expires.

Eyal Cohen: Okay. If you will execute the tax planning as we wish, I believe we won't have a tax expenses in the several coming years.

Igor Novgorodtsov: Okay. My last sort of comment, which you can take as a question. You referred to your stock being cheap, and I think everybody on this call agrees with this. I think there is no better way to demonstrate that your stock is cheap is to announce a small buyback or to have the executive buy some of your own stock, because I think it would benefit everybody. This is just a comment. You know, I don't know if you agree with this, but that would be, I think, on many people's minds.

Eyal Cohen: Yeah, I think because we have just $11 million, and we are a very small company, we have to invest this money by acquiring a company in order to support the goals of the company and not to do an artificial financial act to support the stock. Personally, I don't believe in stock buybacks. It doesn't, it didn't improve itself according to what I've read during all the years. We are too small to activate such a plan. You know, companies with big size that have hundreds of millions in cash on hand, they can do it. They can allocate part of it just for public relations. We don't have the space for it. We have to...

Eyal Cohen: We worked very hard to gain this money, and we have a lot of opportunities for acquisitions, and I believe this is the best thing to do for the company for the long term. Regarding buying stocks by the officers of the company, I think I can tell you I know what the compensation package of those officers is. I think they cannot afford to do buyback. They don't have huge compensation that they can allocate it. Part of their compensation is options instead of cash bonus. I think it's a sign of support from the officer that they believe in the company.

Igor Novgorodtsov: Okay. Thank you very much. I don't have any more questions.

Eyal Cohen: Thank you.

Igor Novgorodtsov: Thank you.

James Khan: I have a question. It's James Khan in New York. You were talking about India, and I was a little unclear. You said that, if I understood it, there were revenues in 2023, 2024, and 2025, and you were expecting India to grow. Can you quantify how much of your revenue came from India in 2023, 2024, and 2025?

Eyal Cohen: It's several million dollars. It's around $3 million on average during that year, those years. We expect to follow the trends in the market, and following our investment in India to grow significantly, gradually during the years.

James Khan: Thanks.

Eyal Cohen: You're welcome, James. Any further questions? Okay. Thank you all for your thoughtful questions today. They reflect exactly the kind of engaged dialogue we value with our investors. Let me close with a final thought. 2025 was a milestone for BOS. Record revenues, record net income, and record cash on the balance sheet. We enter 2026 with a strong foundation, a clear strategic roadmap, and a team that has demonstrated its ability to execute. We are committed to delivering long-term value for our shareholders, and I look forward to continuing that dialogue with you throughout the year. Thank you again for your participation, and please feel free to reach out at any time. Have a great day. Thank you. Any further questions? Okay. Thank you all for your thoughtful questions today.

Eyal Cohen: They reflect exactly the kind of engaged dialogue we value with our investors. Let me close with a final thought. 2025 was a milestone for BOS, record revenues, record net income, and record cash on the balance sheet. We enter 2026 with a strong foundation, a clear strategic roadmap, and a team that has demonstrated its ability to execute. We are committed to delivering long-term value for our shareholders, and I look forward to continuing that dialogue with you throughout the year. Thank you again for your participation, and please feel free to reach out at any time. Have a great day. Thank you.

Q4 2025 BOS Better OnLine Solutions Ltd Earnings Call

Request a DemoDemo

BOSC

BOS Better Online Solutions

Earnings