All right, let's get going. My name is Greg Burns. I'm the analyst at Sidoti. I'd like to welcome everyone here to Sidoti's May Microcap Conference, and thank you to SuperCom ticker SPCB for presenting for us here this afternoon. Today, from the company, we have Ordan Trabelsi, the company's President and CEO. He's going to run through a presentation, and then we'll get to as much Q&A at the end. If you do have a question, just enter it through Zoom. We'll get to as many of those as possible. Ordan, the presentation just closed out. If you want to just pop it open again.
Okay, got it. Yep. How's that?
Yep, just started up, so you could take it away.
Okay, great. Thanks for having me, and thanks everyone for joining today. As I said, I'm SuperCom CEO, Ordan Trabelsi, and I'm going to happily run you through our investor deck as of May 2025. Some interesting updates in progress, and then at the end, we'll have a Q&A session. Safe harbor statement, general for a moment. Now about SuperCom. For those of you who don't know, SuperCom has been around since 1988, and we're a global provider of electronic monitoring solutions for governments around the world. Our current focus in recent years has been on offender electronic monitoring, which essentially are ankle bracelets to track offenders at home while they're moving around in GPS against alcohol, domestic violence, and so forth. We'll get into that very shortly.
Our ticker is SPCB, and I myself, the global CEO, ventured this position in 2021 together with others, with new management that has come in, and we've tried to improve and change some of the things in the company, hopefully for the better. In this period, since we came, the company's grown at a 31% CAGR top line, and EBITDA has grown multiples, reached EBITDA of $6.9 million over the last trailing 12 months. We're also expanding our reach to many new projects around the world. In Europe, we have had a very nice win rate and continuously won, and we'll see that soon. We've reached the seventh national domestic violence project globally. In the U.S., which is our expansion in the recent year, we've been experiencing rapid U.S. expansion with over 20 new contracts and in nine new states since the summer of 2024.
We have a nice track record, over 70 government projects that we've won, and we've issued over 120 patents. Our mission, taking a step back, is to revolutionize public safety worldwide with innovative electronic monitoring technology and complementary services. Now, to understand what that means, we're going to look at the worldwide challenges in the criminal justice system. We're seeing high recidivism rates, prison overcrowding, excessive costs, and at the end, unsafe communities. We'll dive a little bit into each of them. Recidivism rates, the likelihood to be rearrested for crime within five years in the U.S. is 75%. That leads to very high prison population rates, and the U.S. is the highest in the world with 571 out of 100,000, which is more than half a percent of the population in the U.S. currently incarcerated.
You see the numbers are much higher than those of England and Belgium and other European countries. In the U.S., like the other countries, we still see prison overcrowding, which is a big problem. Many nations around the world, there's no room for people to sleep, and they end up sleeping in turns or fighting over the same bed. This scarcity of resources creates even more conflict within the prison environment. Of course, running these prisons is very costly. Over $80 billion annually is spent running prisons in the U.S. alone. If you moved everyone, for example, to house arrest, you would save 90% of those costs. You see the cost per person for operating a prison of $36,000 cuts down to around $3,000 for house arrest.
When someone is at home, you're not just saving costs, you're also providing them an opportunity to study, to raise kids, to help their parents, to help others, or even contribute to society rather than being in prison where they just learn bad habits and progress the problem that started in the first place that brought them to prison. The market, we see it's growing consistently in many different regions. Projects that started off 10 years ago have been growing and growing and growing, whether it's in California or in Florida or in Sweden or in other places around the world. That leads to a general market growth of roughly 7% expected in the coming years, and that's expected to reach $2.3 billion in 2028.
You see the U.S. is roughly six times the size of the European market in the slide, and that's what excites us with some of the growth we're seeing recently and some of the expansion into the actual U.S. market. The market is barriered, highly barriered. There's only 10 players around the world, high barriers to entry, and takes 5-10 years of experience deploying exactly these solutions to even bid on a project like this. You're not going to see a Google or Amazon tomorrow come and start bidding in the industry. You have to show experience. You have to show that your technology works and has been tracking offenders effectively for a long period of time. We've been building that track record, building that experience that makes us a very effective player today when we compete on these opportunities worldwide.
Here's our technology, proprietary tech that we developed in-house, Pure Security Suite. We have Pure Monitor software that runs on the cloud that essentially tracks and shows you where the offenders are at any given moment. There are exclusion zones and inclusion zones. We also see here the PureTag ankle bracelet, which is a lightweight bracelet with a battery life of up to a year and more, longest battery life in the industry. That synchronizes with the PureTrack on the PureTrack software on the phone. We have the PureTrack PureProtect, the domestic violence solution. We have the PureCom House Station and the PureOne, which is an all-in-one one-piece tracking device, which does not require the phone, which we added to our arsenal of capabilities and of tools. That has been very popular in the U.S. market and has been helping in our expansion.
With our technology, we're able to support a wide array of programs from house arrest to GPS monitoring, domestic violence, inmate monitoring, alcohol monitoring, and rehabilitation services. Domestic violence is an interesting one. As I said earlier, we've won our seventh national domestic violence program in the world. We're a leader in this space. Our technology with the smartphone together with the ankle bracelet allows us to create an architecture, whereas if we put a bracelet on an offender, they can't come close to the victim because their phone will alert. That creates a new paradigm, new architecture, which is very effective utilizing our technology to do domestic violence more effectively in various places in the world. Our solutions create positive social impact, and they improve public safety. It's not just a theory. We see it in practice.
We're able to help eradicate domestic violence, increase public safety. They offer rehabilitation and proper re-entry to society with our services, where you can reduce incarcerated population sizes in the regions where we work. We've seen the electronic monitoring has improved to reduce recidivism from the number I talked about, 75%, all the way down to 35%. With all this, we're also cutting significantly government expenditures. How do we win? We get asked a lot, and we have a nice slide here that describes with our technology, we put over $45 million into R&D over the past years, and that helped us develop this Pure Security Suite, proprietary technology. We're able to offer significant advances compared to the competition, such as significantly long battery life and sensitive programs. Our battery runs for up to a year and more.
Since the programs run for less than a year, you never have to charge it during the program. Ultra-lightweight, next-gen location tech. We can track subways within buildings, within cities. We can synchronize with multiple methods of biometric authentication and multiple methods of tracking, including Wi-Fi tracking, including Bluetooth and RF, and together with GPS and GNSS. We have video calls, two-way communication, and domestic violence protection. Altogether, in Europe, that has led to a competitive edge and a win rate of over 65% in national government tenders in Europe.
In Europe, as we're newer to the industry, we started with small projects like Lithuania and Latvia, which were $100,000 or so, and slowly grew to Denmark and Finland of $3.6 million, or Sweden, a Ministry of Justice of $7 million, and Romania project of over $33 million, which is mainly a domestic violence project, which we announced several years back. There are still opportunities in Europe that are large, of the size that we want, and much larger also. After we have this track record that's growing in Europe with over 15 national project wins, we're able to much better compete. We also today have a strong balance sheet of $17 million in cash. We lowered our debt balance, and we've been able to show more stability, which is important to some of these government customers.
Our performance over recent years not only reflects a strong track record and great technology, but also a more stable and more predictable base, which gives comfort to a potential government customer. We are expanding in existing geographies and in new ones. It is interesting to note that in many of these geographies, once we put our foot in the door, like in Sweden, we displaced an incumbent vendor of 24 years. Twenty-four years they were serving the government. We came in with our technology, showed our capabilities, and we displaced them and won. After we won the first project, the Ministry of Justice, we shortly after that won another project for the Swedish police for domestic violence. Then we won Juvenile. Now there is another RFP out in Sweden for another project, which is a substantial size that we are looking to compete for.
The idea is once you put your foot in the door, you can add more and more projects. Romania, we launched the first project, which is 15,000 enrollees simultaneously, which is massive. We expect and hope that they'll do more projects. Just like in Finland, we saw that they've done another project. In Croatia, the first project was ours and also Romania. We are either the first in the country or we are displacing incumbents, and then we add more and more projects. In Israel, they had a 20-year incumbent here, nearly 20 years. We were just awarded the project of 5-10 years. Now we will encompass all electronic monitoring programs in the country. The original estimate was 1,500 enrollees simultaneously.
The rapid deployment was completed at record speed, and there is potential for growth, especially when you have something that is all of the EM programs in the country. As the country evolves and wants to put more and more EM solutions, we will be the natural vendor to do that. In the U.S. market, which we saw is estimated to be six times the size of the European market, we have been experiencing accelerated expansion speed faster than we had in Europe. Since last summer alone, we saw 20 new contracts and entry into nine new states. That is very exciting for us. Some of these contracts are smaller because they are initial. You have to start small and then grow. They are helping us plant seeds into many different locations throughout the U.S. With our technology, it performs well as it has in the past.
We get more references and more word-of-mouth marketing and more expansion within every one of these regions and adjacent regions. We have also signed six regional service provider partnerships. These service providers are important because they have been in the market for years. They have tried all the technology. If they chose us, that means that they like our technology after seeing everything else. It is sometimes even more of a signal to your success than having a new government customer, which might not know all the technology that is out there. We have signed on direct contracts. We have signed partnerships. Just yesterday, we announced another one in Virginia, which is nine states in the last year. We continuously displace the incumbents. Together with that, we have been maintaining our presence in California through an acquisition back in 2016. We acquired LCA.
After that acquisition, not only did we replace their technology with ours, we also were able to win over $35 million in bids in California since the acquisition. You can see here, we're entering into many new states, expanding within existing states, and starting our expansion into the U.S. market, which we're excited about. Now, it's important to note that the U.S., not just larger in size, but also the margins are larger because everything is on the same platform, on the cloud. It's all centralized. It's all in the same language. It's easier than when in Europe. We have to customize the language, customize the programs, launch the software on different server farms with different governments. Here, everything is much more streamlined. It offers for higher contribution margins per bracelet.
We expect over time to see, as revenues in the U.S. grow, to see expansion of margin as well for the U.S. market. Our growth strategy has multiple layers. We're, on one hand, looking to win more large-scale national projects in Europe. We have a good reference, good track record. We know how to work in Europe well. We're looking to expand our footprint in the U.S. through entering more states, through direct bids, and through partnerships with service providers. We are open to acquiring service providers as we did in California. There are others throughout the U.S. That would strengthen our market presence because we would have not only immediate synergies by replacing the technology of other vendors with ours, but also a presence in those locations where we could win more contracts in a more effective manner. We're enhancing our sales.
We used to be just passive and bidding on. Now we're more active. We're enhancing these proactive sales efforts to streamline our sales cycles. We're innovating continuously to unlock new growth opportunities, such as domestic violence solution, which was a sub-market, but we really capitalized on it and showed how our technology, our architecture could work extremely effectively in tracking and preventing domestic violence because our bracelet that we put on the offender, it's lightweight, non-intrusive. You don't have to charge it. It could track and make sure that that offender is not close to the victim when there are domestic violence situations. It's interesting to note a lot of our revenues are recurring because a lot of these projects are recurring in nature. In the U.S., almost everything you get paid per unit per day. In Europe, there's a mix.
Sometimes they have these ongoing recurring revenues. Sometimes it's reoccurring revenues of countries that keep on buying in a consistent manner. Either way, you're looking at long-term projects. Like I said, in Sweden, we displaced an incumbent that was there for 24 years. In Israel, that was there for almost 20 years. Many of our customers also in the U.S., California, have been with us for 10, 15, and more years. As we enter these markets and put our foot into more locations, we expect there to be long-term revenues. Even if the initial contract is five years or nine years, there's usually rebids, and you have a higher likelihood to win if you're already there and you're doing a good job. Long-term government projects help create a nice base for us as we go into the future.
The revenue trends are interesting. For those who have looked at the business, we've been around since 1988, and most of the history was a legacy business of identification. Around 2015, 2016, we decided to shift away from legacy business, which was mainly in developing countries, mainly in Africa and South America. We moved to this tracking of offenders business. We call it electronic monitoring, IoT tracking, or public safety. That has been growing since 2015 at a CAGR of 55% nearly and has shown a very nice shift away from the legacy to the existing business today, where we're seeing not only growth, but also a very high presence in the developed markets where collections and predictability is higher. The industry has grown in the last few years at 14% on average, and we grew almost three times that speed.
Within the industry, we're growing faster than others. We're displacing others, and the industry is growing altogether. We were able to optimize and show operating leverage and grew our EBITDA from $200,000 in 2022 to $6.3 million in 2024, showing multiples of growth of EBITDA over these years together with, as I said before, top-line growth, a CAGR of 31% for the company in total in the last three years. Some investment highlights. To remind you, we're looking at a nice market of $2.3 billion, which is highly barriered in size. There's large growth potential there. The U.S. market, which we're entering into now effectively, is six times that of Europe. There's a nice opportunity there also with better margins in Europe because of the structure of the U.S. market, which is all in one language, centralized on the cloud, and very similar in nature.
We're seeing rapid expansion into the U.S. market, as I said, over 20 new contracts and 9 new states since last summer alone. High revenue growth. The electronic monitoring business, which is tracking offenders, which is roughly 90% of our business today, experienced 41.7% CAGR in recent years. And our trailing 12-month EBITDA is roughly $6.9 million with a 25% EBITDA margin. Q1 that we just announced a week or two ago showed a net income of $4.2 million and an EPS of $1.2 million. We have high recurring revenues, long-term government contracts, and we have a very strong R&D base, a strong moat, competitive edge through our technology that we invested over $45 million developed. And we have a nice patent portfolio as well. Looking into financials just for a moment, we'll start with the balance sheet.
As I said, this is important for us as we compete around the world with larger projects. There are various large projects out there. There's the ICE project of over 100,000 units for the federal project in the U.S. There are projects such as in England that they're expecting large projects to come out. When you're looking at these large projects, having a nice cash base and improved balance sheet is helpful. We have a cash balance of $17 million. Our debt has been paid down. A third of it has been paid down over the last year or so. Right now, our book value of equity is roughly $35 million with total assets of $64 million. Stock price has been moving recently, but we're looking at roughly 4.4 million shares and some pretty nice volume of 225,000 shares.
Our financials, our P&L in 2024, $27 million, which is the fourth year of growth consistently after 3 years of decline before new management came in in 2021. We had a gross profit of $13 million and EBITDA of 6.3. Q1 on 7.1 million, which is a slight revenue increase from the previous year. In our Q1, we had a gross profit of 4.5. That's a gross profit of 63%, which has been a record level for us. Net income of 4.2 million and EBITDA of $2.5 million. With that, through with the presentation, I'll open up the call for you to take questions.
Yeah. Thanks, Ron. We've got some time here for some Q&A. Maybe we could start off with, you mentioned maybe some immigration opportunities with ICE domestically, and maybe there's some in Europe.
Maybe you could talk about the opportunity there for you. There was a question in the chat which maybe aligns with this. Do you have any disadvantage competing for U.S. business being an Israeli-based company?
Okay. The opportunity in ICE with the detaining people across the border physically in detention centers, they're trying to move a lot of them through to tracking with the ankle bracelet. It's been going on for some time. There's been huge growth in that specific project over the years. We've had incoming requests for potential offers from representatives of the government or from the vendor who has it today, which is BI. The government has shown interest in expanding that to multiple vendors. That opportunity is up for bid again soon. In Europe, I said in England, they have a big opportunity coming up. It's not just them.
There's always these projects coming for bid, and there's sub-projects in various aspects of it. We, as an Israeli company, have not had problems winning projects in Europe and also projects in the U.S. As you've seen, we announced 20 new contracts directly with various counties in the U.S. and also partnerships that we're deploying units through. We've been performing well. I think the technology speaks for itself. Before the customers take the technology, they try it out and they see how it performs. I think based on what we see, it performs very well. They talk to other colleagues in the industry and more and more growth. We like to underpromise and overdeliver. We're not going to promise anything specific except for the fact that we're going to continue executing and try to expand our presence.
There are massive opportunities out there, like the ICE project, like if you look at England or France or Italy or Germany, there are big projects out there that we have not yet won. We think with our capabilities, we have the ability to do so in the future. We will continue competing. In the U.S., we just started with the smaller projects, and we are growing in size. Just like we have seen in Europe, we will be able to hopefully expand the size of the project wins, and all the small ones that we win today, see them grow and grow to larger projects.
All right. Great. Maybe you could talk a little bit about the stock's performance relative to the improvements you have seen in terms of revenue and EBITDA growth and the improvement you have made on your balance sheet.
What do you think is driving maybe the disconnect in the market versus how the company's been performing?
We have gone through a transition that I talked about. We were a legacy business of identification tracking, and we shifted from that business almost completely to the electronic monitoring business. There were some periods of blurriness. It was hard to understand what exactly was going on. When I came into this role, 2021, it was after the cash burn was roughly $9 million or $10 million a year at the time from operations. In this last year, 2024, our cash burn from operations was roughly $1 million. We have improved significantly, and it took people a little while to see that. I still think there is a lot of unawareness in the market.
Just in the last period of time, less than a year, with announcements in the U.S. and with meetings with investors, people are starting to get more accustomed to the story. We're still trading at multiples, which are significantly lower than our peers. If you look at companies like GEO Group or Big Technologies, you see that their multiples on revenues, multiples on earnings are significantly higher than ours. Even though in the industry, we're growing at a higher, I would say, roughly three times, almost three times the industry general growth. We're performing well, and we had a win rate of over 65% win in Europe. We're performing well. We're doing well. Over time, people understand the story. I think things will start to balance out, but it's a process.
Some of the transition over the recent years, I think, has made it a little tricky for people to understand. Also, the outstanding debt, we had a pretty high debt balance, and that's been we paid a third of it down. Our latest amendment in the debt that we announced in January pushes the debt out to December 2028 for our senior debt. The payments are due at that time, so we have a nice runway. The interest rate on our debt currently is low. It's between 5% to so far plus 2.5%. I think we're in a very good position in terms of that. We have a good position on our cash on our balance sheet, and we have a good track record that we're leveraging. Our situation is pretty good for continued expansion.
All right. Great. Thanks for that.
We're at the end of our allotted time. If you had a question we didn't get to, hopefully, you have a one-on-one scheduled with the company. You could have it answered in person. With that, we'll wrap it up. Thanks, Ordan, for presenting. Thanks, everyone else, for listening in.
Thank you, Gregory, and thanks, everyone. Have a good conference.
Thanks. Bye.
Bye-bye.