Senstar (SNT) Grew Revenue 8% but Operating Income Fell. Is Blickfeld Paying Off?

Senstar Technologies Corporation (NASDAQ: SNT ) returned to reported year-over-year revenue growth after German LiDAR company Blickfeld was consolidated, but the combination has not yet produced stronger company-wide earnings.

Second-quarter revenue increased 8% to $10.4 million. Gross profit rose 5% to $6.7 million, although gross margin declined to 64.2% from 66.1% because of product and customer mix and the inclusion of Blickfeld. Operating income fell to $343,000 from $973,000, while net income declined to $351,000, or $0.02 per share, from $1.2 million, or $0.05 per share.

Management cited LiDAR as a material contributor to reported growth. On a combined basis, LiDAR sales nearly doubled year over year and represented approximately 20% of global sales, up from 11% in the first quarter.

Management also characterized Blickfeld as EBITDA-positive during the quarter. Senstar did not provide the subsidiary-level amount or a reconciliation, making the consolidated results the more useful measure of overall progress.

The acquisition allows Senstar Technologies Corporation (NASDAQ:SNT) to sell Blickfeld's three-dimensional LiDAR technology through its established physical-security distribution network. This expands Senstar beyond perimeter sensors, video management and access control while giving Blickfeld access to customers in utilities, data centers, airports and other critical infrastructure.

Senstar Technologies Corporation (NASDAQ:SNT)'s company-defined EBITDA recovered sequentially to $551,000 from a $403,000 loss in the first quarter, although it remained below $1.1 million a year earlier. The measure represents GAAP net income before net financial results, taxes, depreciation and amortization.

The balance sheet still offers support. Senstar Technologies Corporation (NASDAQ:SNT) had no debt at June 30. Its $8.0 million balance of cash, cash equivalents and short-term bank deposits excluded $124,000 of restricted cash. Total current assets of $30.0 million remained well above current liabilities of $8.4 million.

Reported growth was not broad-based. Management said revenue from Senstar Technologies Corporation (NASDAQ:SNT)'s core verticals declined approximately 18%, while U.S. revenue fell 14%. Weakness in the U.S. corrections market reflected project delays that management associated with the government shutdown, although the company expects activity to resume during the second half.