B.O.S. Better Online Solutions Ltd. (BOSC) Earnings Call Transcript & Summary

Good day, and welcome to the iAccess Alpha Virtual Best Ideas Spring Investment Conference 2026. Our next presenting company is BOS. [Operator Instructions] I'd now like to turn the floor over to today's host, first, Eyal Cohen, CEO of BOS, who has led the company's strategic direction for 7 years. And joining him is Moshe Zeltzer, BOS' Chief Financial Officer, who oversees the company's financial strategy. Please go ahead.

We are excited to participate in iAccess Alpha Investment Conference for the second time. Before we start the presentation, I would like to give a brief on BOS. BOS integrates supply chain technologies for different manufacturers and retailers. BOS has delivered 21 consecutive profitable quarters with $51 million in revenue, $666 million in net income and $4.6 million in EBITDA in year 2025. With a solid balance sheet with [ $20 million ] in equity, $10 million in cash and less than $1 million loans. In a moment, we will play a 10-minute video presentation that we have carefully prepared for this event. It covers who we are, what we do, our financial performance and where we see BOS heading. Once the video concludes, we will be right here to answer any questions you may have, whether on strategy, financials, operations or anything else on your mind. So let's begin. [Presentation]

Good afternoon, everyone. My name is Toni McLaughlin. I am the Director of Communications at Allele Communications. And I am going to run through these questions that came in through the chat to the BOS team here. So let's go ahead and get started with some questions that I see here.

Eyal, let's start with you. Could you please tell us a little bit about yourself, when you joined the company, in what role and what is your professional background?

Yes. Thank you. In my background, I am an Israeli and a U.S. CPA. I worked for several years at PwC. And since '97, have played varied roles, financial roles in NASDAQ companies. I joined BOS in 2003 and since 2019, have been serving BOS as BOS' CEO, member of the Board of Directors.

Amazing. All right, let's go to the next one. So can you give us a sense of how the 3 divisions: Robotics, RFID and Supply Chain complement each other.

Right. So most integrated technologies that improve the efficiency of inventory, production and logistics. So the initial point usually is when our Supply Chain division [indiscernible] our franchise components into the clients product during the development. It continue when our Robotic division offers robotic sales for manufacturing the client products. And then, thereafter, our RFID division marks and tracks the product to the production and logistic phases using RFID. And at the end of the line, it provides automatic packing and sorting machines. So this is the exact cycle that you saw in the presentation.

Another one here. Where is the company physically located?

So first, we are located in Israel in one site. And we use like a 3,000 square meter to operate our business. In addition, we have 2 satellite offices, one in India and one in the U.S.A. to serve the global operation of our Supply Chain division.

Wonderful. Which portion of your business is defense-related?

Yes. So approximately 65% of our business serves the defense segment. Most of our supply chain and robotic divisions revenues are associated with the defense segment. While our RFID division engage mainly with retailers. So because of that, recently, we have engaged a specialized consulting firm led by [ IDF veterans ] to expand RFID division into Israeli defense sector. .

Great. So another one here. What is the profile of your revenues? And what portion of it is highly predictable?

Great question. I think more than 80%, more or less, of our revenues are predictable. A major portion of our products is defined as consumables for our clients versus CapEx, capital expenditure. For example, let's take an example, the electronic components that our Supply Chain division sells to our defense clients are embedded in [ ammunition, ] which are consumers. Hence, the orders are highly repeated and highly predictable. On the other hand, the robotic sales of our Robotics division are defined as capital expenditure, CapEx. Thus, we have very low visibility into the time frame of new orders.

Here's a good one. So you've doubled your engineering team and tripled the number of manufacturers you represent over the past 2 years. What drove that decision? And what does that mean for future revenue?

Yes. So while our clients develop new products, our sales engineers offer the client our relevant franchise companies. Once our component is approved by the client and the clients' product goes live, we get orders according to our clients' production rate. So because of that, we tripled our engineering team over the past 2 years, and it played an instrumental role in our growth.

Okay. This one definitely knows what's going on here. So it says, you serve global defense leaders like Elbit, IAI and Rafael and their subcontractors in the U.S., India and Europe. How does that network actually work as a launch pad for global expansion?

Yes. So typically, our client in Israel, the defense manufacturer, uses some contractors for the assembly of the product. Those subcontractors have to buy our franchise components from us and they are part of the product bill of materials. And as a result, we received like $7 million in orders from subcontractors in India and the U.S. in the first 5 months of 2026. So this is a business model. .

All right. This one, a good question here. It says, it seems like defense automation is a key focus for the Robotics division. Why defense specifically, a sector that is traditionally conservative about adopting new technology?

Sorry, can you repeat on the question?

Yes, absolutely. It says, it seems here like defense automation is a key focus for the Robotics division. Why defense specifically, a sector that is traditionally conservative about adopting new technology?

Yes. So the defense segment is defined by us as in the strategic plan that we prepared as a heavy consumer of automation. And actually, they don't -- they have no choice. They are facing resilient demand, short lead time and the shortage of employees. And this is exactly the segment where we will focus or should focus our resources. .

So another question here. Elbit Systems is your flagship robotics client. How dependent is the division on Elbit? And what is your strategy for broadening the customer base?

Yes. So Elbit is a major client of our Robotic division, and it's great. And recently, we received an initial order for Rafael, another leading defense manufacturer. And we are in initial sales processes with IAI within the Robotic division. And by the way, the IAI and Rafael also are the main client of the Supply Chain division. So we think by the end of this year, we will have a [ footprint ] for Robotic division, we'll have a footprint with the key players in the Israeli Defense segment.

All right. Another one here. It says, revenue grew from $33.6 million in 2021 to $51 million in 2025. Can you walk us through what drove that growth?

Yes, sure. There are 3 pillars behind our growth. First, increasing the number of manufacturers we represent. So it increased our product offering, solution offering. Second, tripling the number of ourselves, engineering in order to support all the manufacturers we represent. And third, the resilient demand in the defense segment. So those are the 3 pillars.

It seems like a follow-up to that question. It says, are those demands sustainable?

Great question. I believe that the strong demand will continue for several years for 3 reasons. First, after 3 years of intensive conflict, the Israeli defense forces have to replenish their empty warehouses. And second, the new perception in Europe driven by the conflict with Russia and the lack of confidence in NATO is pushing countries in Europe, especially Germany, to significantly increase their defense budget. And I believe the Israeli defense industry will gain a significant portion of those budgets.