B.O.S. Better Online Solutions Ltd. (NASDAQ: BOSC) Q2 2025 Earnings call | 08/21/2025

BOS reported an exceptionally strong second quarter, building on the momentum from a record Q1. The company achieved significant growth in revenue and profitability, leading to a raised financial outlook for the full year 2025.

Financial Highlights

• Revenue: Total revenue surged 36% year-over-year (YoY) to $11.5 million, driven primarily by the Supply Chain division.

• Profitability: Net income grew 53% YoY to $765,000 ($0.13 per share). EBITDA increased to $900,000 from $800,000 in Q2 2024.

• Backlog & Guidance: The contracted backlog stood at a strong $24 million as of June 30th. Due to this visibility and business momentum, management raised its full-year 2025 guidance. New revenue guidance is $45-$48 million (up from $44 million), and net income guidance is $2.6-$3.1 million (up from $2.5 million).

• Financial Position: Cash and equivalents grew to $5.2 million (up from $3.6 million at year-end 2024), reflecting strong operational cash generation.

Division Performance

• Supply Chain Division: This was the star performer, with revenue jumping 57% to $8.3 million. Its gross margin of 24% was stated to be at a sustainable level.

• RFID Division: Faced temporary challenges, with gross margin decreasing to 19.1%. Management has implemented restructuring initiatives and expects a return to normalized performance by Q4 2025. A non-cash goodwill impairment charge of $700,000 was recorded for this division.

Strategic Focus & Market Outlook

• Defense Sector Dominance: Over 60% of total revenue now comes from the defense sector, primarily through subcontracting for major Israeli defense companies like Rafael, Elbit Systems, and Israeli Aircraft Industries. The company is also beginning to bid directly with the IDF. Management expects this segment to grow further in 2026 due to elevated defense budgets and the need to replenish munitions and establish new production lines.

• International Expansion: India was highlighted as a key growth market and a global hub for defense assembly. The company is considering opening a local office there to pursue direct business opportunities, particularly in cabling and wiring.

• Robotics Division: This division is strategically focused on defense clients, mainly Elbit Systems, for automating new factories. It has a $3 million backlog expected to be delivered in H2 2025.

• M&A Activity: The company confirmed it is continuously evaluating 2-3 acquisition opportunities and has the financial flexibility to pursue strategic deals that benefit shareholders.