All right. Welcome everybody, and thank you for joining us today at the Sidoti May MicroCap Conference. My name is Brendan McCarthy. I'm an analyst here with Sidoti, and I'm very pleased to welcome SuperCom, the ticker is SPCB. Joining us from the firm is President and CEO, Ordan Trabelsi. Before I hand it over, a quick reminder, the Q&A tab is located at the bottom of your screen. Feel free to type in any questions throughout the presentation, we can save time for a Q&A at the end. With that said, I will pass it over to Ordan.
Thanks, Brendan. Thank you everyone for joining us today. I'm going to run through SuperCom's investor deck update as of May 2026. Start with a Safe Harbor statement, and we'll go right into it. SuperCom, for those of you who don't know us, we've been a global provider of electronic security solutions to governments worldwide since 1988. Our focus in recent years has been on offender electronic monitoring services. Essentially ankle bracelets you put on offenders historically for house arrest, and now we use it for GPS tracking, for domestic violence prevention, for alcohol monitoring and more. Our Nasdaq is SPCB. I came in as the CEO since February 2021 with other management. We had sort of a transition here. Since then, we started a very interesting transition to the company.
When you look at the last four years, we have a CAGR of 30% in revenues for the electronic monitoring business, 46% in our EBITDA, bringing us to $10.3 million EBITDA on a trailing 12-month basis. We won over 15 national projects globally in this space and over 40 new contracts in 17 new states in the last 18 months or so since mid-2024. Issued 119 patents, which support our technology over the years, and invested in this technology specifically of electronic monitoring over $45 million over the years, together with a track record of many government customers and many individuals that we've served around the world. Our mission is to revolutionize public safety worldwide and through our innovative electronic monitoring technology and the complementary services that go along with it.
We're trying to overcome worldwide challenges in criminal justice, namely high recidivism rates, prison overcrowding, excessive costs, and at the end, unsafe communities for all of us. In the U.S., we have very high recidivism rates, over 75%, roughly, of people that re-commit crime within five years of them being released from incarceration. That leads to very high prison population rates in the U.S., the highest in the world. More than 0.5% of the U.S. population is behind bars. We see that number is much higher than England, Belgium, Italy, Sweden, and Denmark, and other countries around the world. In those countries in Europe, together with the U.S., all are facing a problem with prison overcrowding. There's simply not enough space in the prisons to keep such a high population.
This leads to people sleeping in shifts or sharing beds, and that cause even more friction and more problems within the prison population. This altogether leads to excessive costs. It's very costly to keep someone in prison. Over $80 billion annually is spent just in the U.S. operating prisons, and on each person, over $36,000 in prison versus on house arrest, they would cost roughly on average $2,900. You're saving over 90% of the cost by putting someone in house arrest instead of prison. You're not just saving the cost. This person who could have been a misdemeanor crime, once he enters the prison facility for incarceration, they learn how to become better criminals, unfortunately. They can't work, they can't really study, they can't raise their children, they can't help their loved ones.
All of those things that they could do while they're on house arrest. Besides saving costs, really helping GDP and helping society in a much more impactful fashion by having people on house arrest. That's how this whole industry started. Over the years, it's been growing and growing, and it's estimated to reach $2.3 billion in 2028. The market is mostly in the U.S. You look at the U.S. market is roughly 6x that of Europe, and $1.8 billion compared to $330 million expected in 2028 in Europe. It's a very barriered market. There's only roughly 10 niche global players, and there's high barriers to entry. You can't even bid on a project in this space without showing 5-10 years of a specific industry experience to even bid on the contract.
If another technology provider comes into the space, thinks it's lucrative, they think they like it, they want to enter it, they simply can't. They can't even meet the threshold to bid. We're seeing the same players over and over again, and we've had a very good successful track record winning these projects against these same players in this industry. This is our PureSecurity Suite. This is what we developed. We put over $45 million into this. You can see on the right, all the way top right, the PureTag, and that's essentially a lightweight ankle bracelet that we develop proprietarily. It goes underneath the sock. It's waterproof. It's tamper-proof. If someone tries to cut it, you get an immediate alert to the police. The battery here runs for over a year.
Many of the solutions in the industry, the battery runs for only a day or two , so significantly better battery life in terms of the architecture. We have the house station. We have the smartphone. All this is integrated together and everything unites on the cloud. You see here the system on the cloud that shows you where the offenders are and allows the officers to see in real time if there's any violations, so they can react. We also developed our own proprietary PureProtect solution, which is domestic violence. Because our technology and architecture allows for such a long battery life and such a small bracelet, many countries around the world are putting this bracelet on people that haven't been convicted. There's a threat. There's a complaint for domestic violence.
They put the bracelet on the potential offender immediately until there's proper trial, and that essentially effectuates a restraining order. In Romania, the police come home, after a complaint, they see marks of violence. They put the bracelet on the leg. The person can't come close to the victim, and if he does, it alerts the victim's phone and alerts the police. That is our domestic violence solution. It's in 10 countries around the world already. PureOne is a solution that we developed for the U.S. market. It's all-in-one tracking device. With all these services together, we are supporting a wide array of programs, including house arrest, including GPS monitoring, domestic violence prevention, inmate monitoring in the prisons themselves, alcohol monitoring, and rehabilitation services. In the U.S. alone, since mid-2024, we have over 40 new project wins across 17 new states.
Very rapid expansion, and we hope that this is just the beginning. We expect much more of where this has come from. As I said, we put a lot of money in the technology, over $45 million. We continue investing in R&D every year, and with every new project we win, we add additional features and capabilities that makes the platform even stronger and more robust and make future projects even easier to win than the original ones. That technology, together with the references, together with our experience, makes a nice runway for our project wins. We had in Europe over 65% win rate on national government tenders. Note, we're talking about 10 players internationally. We alone had over 65%, and we think it's a very nice win rate that we're very proud of. It's usually attributed to our superiority in technology.
We get a very high score in our quality and technology. That's because of the significantly longer battery life, the ultra lightweight of the bracelets, next-gen location technology, multiple methods of biometric authentication, video calls, two-way communication, and protection of domestic violence victims with our unique architecture. These are just some of the features. You put them all together, compare it to others, we score very highly. That's what helps us win consistently. In Europe, we started years ago with small projects like Lithuania and Latvia, which are $100,000 projects. We grew to Denmark, which is larger. The Finland national project of $3.6 million. The first Sweden project of $7 million. The Germany project of $7 million. We just won another Sweden project for another $17 million.
You can see here the latter, we also won Romania of $33 million. As we progress in time, our experience in the market and our references and our technology allow us to win larger and larger projects. These countries, once we enter, are usually a customer for a very long time. They're very sticky customers, and we'll look at that in a second. Right now, as we speak in Europe, we're actively bidding on a variety of interesting opportunities, some that are very large in size, some that are smaller, but we have a very good track record in Europe, and we expect to win more in that region, in parallel to what we're doing in other places of the world, which we'll see momentarily. Here are some of the countries that we won, and a little bit more info on these geographies.
Typically, when you enter a geography, you enter with one project, and then you have a good opportunity to win other ones. You're already deployed in the country, your technology is working well, you have a good relationship, and you usually have good scores and follow-up tenders when you've already deployed and built the technology in a way per the needs of the customer. We can see here that in Israel, for example, we displaced a 20-year incumbent, and we have a contract that covers all the programs in Israel, including home detentions, GPS tracking. In Romania, we started with their first ever EM project. This was awarded in 2022. Up to 15,000 enrollees simultaneously, which is very large for our industry. The launch was within three weeks. It was a very fast launch and showing some of our execution abilities to deploy things effectively in a rapid fashion.
In Finland, after winning the first one, we won another contract. In Croatia, it was the first one. In Germany, we announced a $7 million project which will cover multiple EM programs, and we displaced a 20-year incumbent there. In Sweden, this is very interesting. Several years back, we displaced a 24-year incumbent with a $7 million project, and then we won other two smaller projects, and now we just won a $17 million project, and they have expressed significant aspirations to grow their programs in Sweden. As their partner throughout that, we are happy to be awarded again to help them grow electronic monitoring. Sweden was one of the pioneers for electronic monitoring in Europe and the world, and they're a very discerning customer. They're very experienced.
They know exactly what they want from the technology, and we're happy to be selected by them time after time for a fourth win in that nation. Moving over to the U.S. The U.S. market is a little different from Europe. It's much more fragmented. There's thousands of counties that are running different programs for pre-trial, for early intervention, for probation, for sheriff. In the U.S., the same technology with additional features and capabilities like the PureOne that we deployed in Europe, we now enter the U.S. mid-2024, and our results have been stellar. We were able to enter 17 new states, win over 40 new contracts, sign on 17 regional service providers. In some of these states, we sign the service provider. Sometimes we go directly.
We were able to do this in a very short period of time, considering this is still the government contracting, which takes time, and we're very happy with the results so far. We just announced four wins in New York, for example, where we converted 100% of opportunities. We had four opportunities recently in New York for different counties, and every opportunity we had, we converted to a win. One was displacing one vendor that was incumbent, a second incumbent, a third incumbent, and we won a fourth brand new county that didn't have any program whatsoever. I think this reflects a little bit of what we're seeing around the world, that our technology is scoring very highly and people are very satisfied with our performance.
It's important to state that in New York, we had a first county over a year ago, and after they give the reference to the other four counties, all of them converted. It's important to get your foot into the door into a certain region, do a good job, execute effectively, show them the capabilities of our technology, and then use that as a strong reference as we win additional contracts. You can see here 17 new state entries, including Alabama, Texas, Utah, Nebraska, and Nevada, which we just announced a few days ago, West Virginia, Wisconsin, and more. We also have a strong California presence. This is off of the acquisition that we did of LCA, of a service provider. These acquisitions, there's many more opportunities like that around the U.S. These are service providers which aggregate many different counties into one.
Sometimes it's hard to serve so many different counties, and they aggregate it together. When we acquire a company like that, we have a very nice cost synergy because they use the equipment from other vendors and they move it over to us. We also have very nice synergy on the top line because now they're able to offer our technology, which is, we believe, best in class to many of their existing counties to grow the programs. In California, since we completed that acquisition, we won over $35 million of additional wins of projects in California. The projects are long-term. There's a high recurring revenue base.
After you win the project, whether it's a national project, which is longer, or even a county project, you win the bid or you win the opportunity, you have a deployment, which takes a while, and then you have a very long tail of ongoing recurring revenues, and that can be between 5-15 years and sometimes even longer. Many of our customers are with us for a very long time, and we expect to grow and adapt with them as needed. Our growth strategy today is to win larger scale national contracts in Europe, as we've been doing, to continue. There's opportunities out there in Europe. For example, England is expected to surpass GBP 150 million in the next iteration, which is expected in 2027, the England national project. There's very many nice opportunities in Europe.
We hope to continue to win as we've done in the past, expand our U.S. footprint by entering more states through direct bids and partnership service providers, potentially acquire service providers to help with some inorganic growth to complement what we're doing organically, enhance our sales efforts. Right now, we have what we described, a new VP of Sales to help us with the international growth. In the U.S., we hired salespeople, all veterans, internationally and in the U.S., veterans of the industry to help us expand our presence and to provide our technology to more and more government agencies around the world. We continue to innovate continuously to unlock new growth opportunities, such as the domestic violence protection solutions that we talked about.
Looking at revenue trends, this company, SuperCom, we're a government contractor for a long time, but in 2015, most of our revenues were from a different technology, different business, identification. That's passports, ID cards, driver's license. We made a decision to leave that space, which was mainly in Africa and South America for us, and shift over from developing countries to developed countries, where we have much more predictability of revenues, of collectibility, and of recurring revenue nature. We shifted from identification to public safety. You can see throughout that shift, there's actually been a CAGR over these years of over 48% in the public safety business. In the last four years, we had a continuous CAGR of over 30% in public safety while growing our EBITDA by roughly CAGR of 46% as well.
We've been growing continuously at a pace higher than the market, roughly 4 x higher than the industry. If the industry in the last few years grew at 7.8%, we grew at roughly 30%. At the same time, we had an upward EBITDA trend with a 46% CAGR from $2.1 million to over $10 million now on a trailing 12-month basis after Q1. Some highlights of what we talked about. We're looking at a niche market for electronic monitoring. Has a nice size of $2.3 billion expected in 2028 with very high barriers to entry. There's only 10 players that we see consistently, and we've had very nice win rates. As I said, in Europe, over 65%.
In the U.S., in many areas, we're seeing higher than that, just like we saw in New York, a conversion rate of 100% in the last four counties that we worked on. We have rapid expansion. In the U.S. right now, over 40 new U.S. contracts in 17 new states. High revenue growth over the last four years, 30% CAGR of electronic monitoring. At a similar time, our trailing 12-month EBITDA, which reached $10.3 million and 36% margin. We had record non-GAAP net income of $11.24 in 2025, together with non-GAAP EPS of $2.47. High recurring revenues from a lot of our government customers and over $45 million in R&D to put us at a very competitive standing versus the industry players. We continue to invest, and we're backed by 119 patents issued at the time. Quick look at the financials.
In 2025, we actually had our revenues year-over-year only showed slight growth. When you neutralize the decline from our largest customer in 2024, you have 40% underlying growth. What we actually saw in 2025 was 40% underlying growth. When you neutralize that decline from one customer, that means all the other customers, the new and existing, grew very effectively in that year, actually higher than our four-year average of 30%. We had nice margins of net profits of 40% and EBITDA of close to 34%. We strengthened our balance sheet significantly, reaching the cash and bank deposits of $12 million. We lowered our long-term debt from over $35 million and now long-term liability is around $20 million at the end of 2025, bringing the shareholders' equity to $43 million. There's some information on our stock price and the outstanding shares.
We just announced our Q1 financials, again, with record numbers and profitability. We had record quarterly EBITDA, record quarterly gross profit, and we're very pleased with these numbers. Our cash balance still remains high at $11 million, roughly. Shareholder's equity continues to improve to $46 million, and margins stay strong with EBITDA margin reaching 44% close, and the net profit margin of 37% and gross profit of 63%. This reflects some of the operating leverage that is inherent in our business. As we continue to scale and expand into the U.S., where the margins are even higher on average, the contribution margins are higher, everything is on the cloud and in English and centralized, we hope to see these margins improve over the years. That's it for our presentation. I can now open up for any questions that we have.
Great. Thank you, Ordan, for the overview there. We can now open the floor for Q&A, and we have a couple questions from our attendees. How should investors think about the expected revenue from signed contracts compared to the amounts included in RPO? Is RPO intended to represent a minimum contracted revenue amount, or is it management's expectations for total revenue from those contracts?
Can you read the first part, versus the contracts announced versus RPO?
Sure, yeah.
The main performance obligations, just to clarify, yeah.
Yeah. It's essentially asking how can investors think about the expected revenue from signed contracts compared to the amount that you include in RPO.
When we have awards or contracts, we announce them through press releases, especially the substantial ones, and their main performance obligations look at all the contracts, together, the outstanding stages of them, which are to be recognized in the future.
Got it. The next question here, given the U.S. model appears to be more recurring in nature compared to the upfront device sales, maybe you can just differentiate the different contracts a little bit, and how investors can think about the economics of those contracts.
It's a great question. I'll try to take a step back and just help people understand between the U.S. and Europe. In Europe, which we had until now, these are national projects. It's more competitive sale cycle, and it's longer, and you have a project, and it's more well-defined in terms of the minimum size, the amount of years, and then usually it's on-premise in Europe. That means you have to deploy the servers on a specific premise. It's not on the cloud. There's a lot of installation and training and adjustment and adaption. Together with that, they either purchase units or they lease units, but it's not necessarily a simple daily recurring revenue model.
There's some element of recurring revenues and some element of deployment revenues, and that changes from nation to nation, and that's why it's a little bit hard for people to just have a template for all the European contracts. Everyone's a little bit different. The cash flows are usually easier to deal with because you get paid in stages as you go along the stages. In the U.S., almost everything that we've seen until now is just per unit per day. You just tell them $3, $4, $5 per unit per day, and the deployment is already done. It's on the cloud. You just get paid over time. Monthly, you bill, and you get paid over time based on the daily active units and the shelf units, and that is entirely billed in a recurring fashion and much simpler to understand.
The margins are usually higher, when you compare 1 : 1 in the U.S. versus Europe. There's difference in cash flows and difference in margins, but over time, the U.S. provides a more diversified base with higher margins, that spread out throughout many different counties and states in the U.S. market at larger size.
That makes sense. That's helpful. How can investors think about the timeframe from contract award to ultimate deployment in the field? What's that timeframe typically look like?
We'll start with Europe. It change from country to country. Sometimes deployments, the initial deployments could be as quick as three weeks, but usually the full deployment could be six months or a year or more. It depends what you're developing and what kind of adjustments they want. In the U.S., it's a little quicker, at least on the county level that we're seeing, because it's already running on software on the cloud. We just have to deploy the units. Because these are active projects, sometimes they don't want to call everyone in to replace a bracelet. Whoever's on the program, they let them finish their term, which is another two to three months. When they leave, they put on the new person with our bracelet, and that's how they do the replacement.
It could take up to six months or longer until the switch is done, but it's still not as long as what sometimes we see in Europe, which is a larger project, and it's spread out over a larger geography, and there's some more complications to it. That's what makes it sticky, though, also as well. The more complicated the deployment is, the harder it is for them to do another deployment to replace what you've done.
Understood. We have a question on the legacy cybersecurity business. Is that a business that you consider core to the overall company, and would you ever consider divesting that business?
The cybersecurity business is still valuable for us. We use the technology and capabilities and know-how in all our projects because cybersecurity is an inherent part of what we're doing, especially when it's on-premise deployment of very sensitive data. We also have our software, which is endpoint protection, which is, for a long time, very important to organizations, and also today. It's something that is a small part of our business and a smaller focus. You see the revenues are around a million dollars, but it is cash flow positive, and it doesn't burden us in a way. We haven't decided yet what the long-term strategy with that is, but so far it's assisting us and providing cash flows.
Got it. You alluded to this earlier, but can you talk about the margin profile difference between the different geographies?
Okay, another good question. In Europe, especially originally, five years, six years ago, we would have a local partner who would do a lot of the training, the inventory management, the deployment, the language, the obstacles, and that takes a percentage from the top line. If we had a project that's, let's say, worth $15 million, we have 20% or 25% going to this local partner. Over time, we started optimizing that. We have our own inventory management hub right now in Europe, and we're doing a lot of the things ourselves. All the shared services that we see across different countries in Europe, we're doing it ourselves, and that optimizes our margins for the European market.
Still, we have local partners, we have on-premise deployments, and if there's a purchase element to it, margins are going to be lower than in the U.S. where we don't have a local partner that we need to pay things to. If we're with the service provider, they're essentially the one who have the contract with the customer, and then they give the revenues to us. They're, let's say, after already that's been removed. We have it at a higher margin from the start. Also in the U.S., we don't have hardware deployments and we don't have as much complications with different languages and widespread deployment. It's so far at a higher margin and it's a much more simplistic recurring revenue nature.
Got it. Turning to the balance sheet. You've done a nice job reducing debt in the past couple quarters. How can investors think about capital allocation at this point? Where do you see yourself? What are the top priorities for the company?
On the debt, at some point, several years ago, we had over $35 million debt at double-digit interest rate, and we did a lot of work through premium conversions and through other amendments to bring that debt down. Now, as of the latest announcement, it's a little more than $18 million, and interest rate blended of under 6%. We plan to continue paying that down with conversions over time based on the opportunities the company sees ahead. The capital allocation will take that into account together with the need we have for manufacture of equipment, from deploying new projects, and from any potential other working capital needs, along with inorganic growth, if we see opportunities that meet our threshold of requirements.
Understood. You talked about the county contract awards that you've won in New York. What have incumbents mentioned being the primary pain points, and how does SuperCom ultimately overcome those challenges and win those contracts?
I won't say specifically to the ones in New York. In general, in the industry there's 10 players, but there's still a lot of technological challenges. If someone goes into a city with a lot of noise, it's hard to track them. Underground, it's hard to track them. Within buildings, sometimes there's issues on the online system, people have a lot of technical issues from one vendor or another through the hardware or the software. We come, and we overcome those issues. We help them with battery life issues, with wrong proximity alerts, if you just get false alarms. We help them have a much more seamless integration into their case management systems. We help them overcome the variety of different problems with our more innovative technology and our newer and more modernized approach to a lot of these problems.
Got it. One last question here. What do you see as the key challenges to scaling the business going forward?
Right now, we're scaling at a pace that since we're a public company and we're still trying to maintain healthy profitability margins, we're scaling at a consistent pace. We don't have as big of a sales team as some of our competitors. We're relying more on our technology capabilities. That's why we're scaling it step by step from smaller counties to larger. There's many large opportunities in the U.S., such as ICE, of hundreds of millions of dollar opportunities. We're not jumping ahead straight to the largest ones. We're going to the smaller ones, going up the ladder as we've done. That allows us to utilize our own cash in a more effective fashion rather than take higher risks on external capital. We are scaling accordingly to what we believe is the most appropriate allocation of capital.
Understood. Well, Ordan, we'll conclude there. We really appreciate the time and the overview. I know there may have been a few questions that we didn't reach. Feel free to reach out to Sidoti or you can contact SuperCom.
Thank you, Brendan. Thanks everyone for joining us today.
Thanks, everybody.