Ladies and gentlemen, good morning and welcome to Supercom's third quarter 2026 financial results and corporate update conference call. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet. Joining me from Supercom's leadership team is Ordan Trabelsi, Supercom's president and chief executive officer. I'd like to remind you that during this call, Supercom management may be making forward-looking statements. including statements that address SuperCOM's expectations for future performance or operational results. Forward-looking statements involve risks, uncertainties, and other factors that may cause SuperCOM's actual results to differ materially from those statements. For more information about these risks, uncertainties, and factors, please refer to the risk factors described in SuperCOM's most recently filed periodic reports on Form 20F and Form 6K. and Supercom's press release that accompanies this call, particularly the cautionary statements in it. Today's conference call includes EBITDA and non-GAAP financial measures that Supercom believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For a reconciliation of this non-GAAP financial measure to net income, A comparable gap financial measure, please see the reconciliation table located in Supercom's earnings press release that accompanies this call. Reconciliations for other non-gap financial measures and comparable gap financial measures are available there as well. The content of this call contains time-sensitive information that is accurate only as of today, November 12, 2026. Except as required by law, Supercom disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Supercom's President and CEO, Ordan Trabelsi.

Thank you.

And we're pleased to report continued growth in the growth quarter of 2026. Revenue increased approximately 21% and EBITDA increased approximately 17% compared with the third quarter of 2025. For the first nine months of the year, EBITDA increased approximately 37% to $9.9 million. Our results over the last several quarters demonstrate the operating leverage and scalability of our business model. We provide proprietary electronic monitoring and public safety technology to local and national governments worldwide, and our performance reflects operational efficiencies, expansion into new markets, and deeper penetration of the markets we already serve.

In the United States, we have now secured more than 50 new electronic monitoring contracts and expanded to 21 new states since mid-2024.

Our profitability and stronger balance sheet also allow us to continue investing in our technology. I'd also like to discuss SafeGenius cybersecurity products we introduced in October for the real-time monitoring and control of autonomous AI agents.

I'll now turn to our third quarter financial results.

Revenue increased approximately 21% to $7.5 million, compared with $6.2 million in the third quarter of 2025. Gross profit was $2.7 million, compared with $3.8 million in the prior year and period. And gross margin was 49.8, or 50%, compared with 60.8. Operating loss was $0.3 million, compared with operating income of $0.6 million in the third quarter of 2025, primarily due to $1.3 million foreign exchange loss. Non-GAAP operating income was $2.2 million. Foreign currency loss reflected approximately 10.11% year-over-year increase in the average value of the shekel in the U.S. dollar. And I remind you that most of our operational costs for Supercom Ltd. are in shekel. Gap net income was $0.1 million compared with $0.7 million in the prior year period. Non-gap net income was $1.9 million in line with the third quarter of 2025. EBITDA increased approximately 17% to $2.6 million compared to $2.2 million. And EBITDA margin was 34.4% compared to 34.6%. Gap earnings per share were 0.01 compared with 0.14, and non-NAP earnings per share were 0.3 dollars compared with 0.39. For the first nine months of 2026, revenue increased approximately 14%, 22.2 million, and EBITDA increased approximately 37% to 9.9 million, compared with 20.4 million dollars and 7.2 million dollars, respectively, in the first nine months of 2025. Arie Trabelsi, Barak Trabelsi, Gil Alfi, Lester Villeneuve, Ordan Trabelsi, Gil Alfi, Lester Villeneuve, to invest in our growth. Cash and cash equivalents total approximately $12.9 million as of September 30, 2020, compared with $7.4 million as of June 30, 2026, and $9.8 million at the end of 2025. In July, we raised gross proceeds of approximately $7.5 million through a registered direct offering of ordinary shares, strengthening our financial flexibility to continue executing on our pipeline. During the third quarter, we continue to deploy capital strategically to support customer onboarding, installations, and technology integration across our new contracts in the U.S. and Europe. Finally, our bulk value of equity total is $55.6 million as of September 30, 2026, compared with $47.8 million as of June 30, 2026.

Let's talk a little about safety and agentic AI. Before discussing our

and Business More. I want to address SafeGenie, which we introduced in October. SafeGenie is a cybersecurity product suite for the real-time monitoring and control of autonomous AI agents. SafeGenie builds on the technology and customer base of SafeNet, our wholly-owned cybersecurity subsidiary. Electronic monitoring remains the primary growth driver, while SafeGenie allows us to build on technology and customer relationships already within SuperCom. SafeNet's current-level endpoint security technology has been deployed across millions of endpoints and thousands of customers, including government agencies, defense organizations, and enterprises. AI agents are spreading rapidly across enterprises. They can research, move data, and complete multi-step tasks across business systems without constant human direction. The independents can also make an agent a potential insider threat, operating within employee's access and machine speed and around the clock. Traditional security is built around people, devices, and approved applications, not autonomous software capable of choosing its next action in a statistical fashion. Current forecast spending on securing AI will grow from approximately $2.8 billion in 2026 to almost $7.7 billion by 2028. Average growth of approximately 65% a year. Aging evaluates each action an AI agent attempts and either allows, flags, or blocks in real time. This can help prevent unauthorized actions and sensitive data leakage before they occur. Those departments' enforcement occurs at the current level, on the device, safety and you can protect supported endpoints online or offline, including when AI agents run locally. Each decision follows the organization's own policy, rather than AI model judgment. The suite also secures conventional generative AI use, including power protection. Our cybersecurity engineers develop patent-paying methods to address security challenges specific to agency AI, savings, current level technology, and long-standing relationships with government, defense, and enterprise customers, provide an established foundation for SafeGenie. The initial rollout will focus on integrating SafeGenie with the SafeMed infrastructure and offering it to SafeMed's existing customers directly and through SafeMed distribution channels across the United States, Europe, and Asia. We then plan to offer SafeGenie to our government customers and additional enterprises. SafeGenie will be offered as a separate subscription alongside existing SafeMed licenses and maintenance agreements. This structure provides a potential new recurring revenue stream from SAFE as established customer base. Since introducing SAFE Genie, we have received requests for demos from channel partners and customers. We're preparing initial versions for deployment with several existing customers. Margin performance. Next, I want to discuss operating leverage in our model and the factors that affect our margins. Many of our recent wins have displaced providers that have had these programs for decades. In Sweden, Germany, Israel, and Norway, the private providers have supported the programs for approximately 20 to 25 years. Winning against such establishments demonstrates the strength of our technology and our ability to meet the requirements of national charge monitoring programs. At the outset of a new program, we incur upfront costs associated with onboarding, training, development, and deployment. As the program matures and additional monitoring units are deployed, those initial costs are spread across a larger recurring revenue base, increasing the contribution from each internal unit and creating operating leverage. For larger European programs, device revenue may be recognized upfront and recorded as receivable, which is collected over the life of the program. As those receivables are collected, cash flow improves, even though the related revenue was recognized earlier.

Over the life of the program, the recurring revenue base expands while initial deployment costs subside, improving the program's margin profile. To support further margin expansion, we have taken several operational steps.

First, we have consolidated and centralized operations in Europe, including logistics, equipment handling, and shipments out of one hub in Romania. We're also taking on more IT and support responsibilities directly, reducing our reliance on local partners and improving our margins. And we have established our own 24-7 support capabilities across multiple projects.

We're also using AI. Everybody hear me? I have a comment here. Moderator?

Yes, we can hear you. Yeah, okay, great. I heard a comment here internally that they couldn't hear. We're also using AI in development, deployment to projects and customer support. It's already automated certain tasks, accelerated development, reduced costs and deployments and customer operations on all departments of our business. Technology is a key factor in European national tenders, which often uses rigorous technology-based evaluations. Our wins across all five Nordic countries, offering us long-serving incumbents, demonstrate how our platform performs and competitive valuations and provide relevant references for future tenders. I'll now turn to our market expansion strategy, which focuses on entering new markets and expanding within the market we already serve. Our electronic management business grew at a compound annual rate of approximately 30% over the four-year period ended in 2025, while our EV grew at a compound annual rate of approximately 47% over the same period. The higher EV growth rate reflects the operational efficiencies we have built in the business and the leverage in our model as we scale. As a reminder, our European revenue includes some larger multi-year national contracts. Revenue recognition can fluctuate meaningfully based upon specific ordering cycles. In these programs, when a customer places a significant device or order, the device value is typically recognized as receivable over the life of the program. As a result, orders with large orders can show up and step up in revenue, while the related cash comes in steadily over time. Romania represented a significant portion of our European revenue in prior periods. Arie Trabelsi, Barak Trabelsi, Yoad Hayash In Europe, we have won more than 20 national projects and maintain a presence across all five Nordic countries. We believe there is room to expand further within these markets. Several European opportunities are expected to come up for bid over the next 24 months, including Italy. In-gooder managed financing opportunity valued at more than 150 million British pounds. When we previously competed for the contract, we were in a different position as a company. At that time, we had a smaller market capitalization, a heavier debt load, and a less developed reference base than we have today. Many of the markets are competing, particularly in Nordic countries. Our contracts are objective, technology-based evaluation process rather than incumbent relationships. Our ability to win in these environments, often as an outside bidder, with no prior local presence, reflects the strength of our technology.

I believe we are now better positioned to compete with this UK contract and others like it.

As we diversify globally, the U.S. remains a high-growth market for us. Our strategy is to add additional states and build a deeper presence within each one. To date, we have won more than 15 new electronic monitoring contracts in the U.S. since mid-2024 and expanded into 21 new states, with access to additional states through 18 regional service providers' partnerships. We're also seeing contract sizes increase over time, from smaller initial deployments to more recent wins of 100 to 250 simultaneous units and more. Many of our U.S. wins have involved Agencies and service providers transitioning from incumbent vendor and legacy systems to super common security platform. Every one of our five contracts to date has involved placing an incumbent provider. Our third Utah contract displaced a provider that has served the country for more than a decade. And our latest wins in New York and Indiana were also full incumbent displacements. These incumbent displacements affect the performance of our platform and our ability to support government agencies directly as well as regional service providers across different program structures. Our third Utah contract came through a recommendation from an existing Supercom customer in another country, Meadow County, followed by the new agency-owned trial. The referral shows that satisfied customers are helping create new opportunities for us. Our technology also served the agency, launching electronic modeling for the first time. In Illinois, our 20th new state, a county sheriff's office starts at Pier 1 as a platform for its newly established work release program. are the 22 states where we currently operate. We're deployed into multiple counties, 11 of them we serve. Our U.S. presence is also supported by leaders of community alternatives, our wholly-owned subsidiary in California. LCA provides re-entry and rehabilitation services that complement our core electronic modeling technology. In June 2025, LCA secured a five-year re-entry service contract value of $2.5 million. And since acquiring LCA, Supercoma secured more than $35 million in new contracts in California. These services allow us to address the local compliance and rehabilitation needs alongside our monitoring technology. Pipeline. To announce our pipeline, in Sweden in June we announced that we had signed and launched a new national electronic monitoring project with Sweden's Prime Prison and Prison Services. The total project value is estimated to range from $17 million affecting the previously announced basic case scenario to the $75 million budget published by the customer. The published budget reflects the potential for expansion through a higher number of active offenders in the Journal of Capability, such as alcohol monitoring, our Pure One GPS solution, and the Pure Officer mobile device. The contract allows the program to expand to as many as 6,000 active offenders, roughly six times the scale of the program we launched with the customer in 2019. Since our call, we have announced new U.S. contract winners in Texas, Utah, Illinois, Indiana, and New York. In Texas, we won a contract with the Juvenile Prevention Agency in August. I'm sorry, I lost my voice in recent days. And in October, we won two more contracts covering adult and juvenile probation programs in a single county.

That brings us to five Texas contracts since entering the state in December 2025.

All five displaced incumbent providers and the three most recent awards following multi-week live unit evaluations against competing solutions. In Utah, we secured a third contract in the state with a sheriff's agency, displacing an incumbent of more than 10 years. Illinois became our 20th new U.S. state since mid-2024, where our first contract supports a county sheriff's newly established work release program. Training and deployment began in October. In Indiana, our 21st new state secured a direct contract with the Community Corrections Agency covering both adult and juvenile programs. The agency selected 301 after a field evaluation, fully displacing its incumbent provider. In New York, we secured our seventh contract in the state since mid-2024 with an adult probation and parole per agency. Also fully displaced incumbent brought a schedule to begin in this month. This is an inherent lag between contract timing and revenue recognition. For some contracts, full deployment could take six months or more as customers replace the existing units. And in both Europe and the U.S., the customer ordering patterns can affect time and revenue recognition. Our U.S. electronic monitoring technology analyzed recurring revenue run rate increased significantly as per in the PR. And many markets in the U.S. and Europe remain open to us. Our greater scale and financial stability allow us to pursue larger and more complex operations and opportunities. We are also valuing select opportunities in Latin America, Asia Pacific, and other national markets. Electronic monitoring has been developed in many of these regions. But Supercom has deployed solutions in more than 40 countries, giving us experience we can now draw on as these markets develop. I'm very pleased with the growth and profitability we have delivered over recent quarters. We continue to expand our electronic models and footprint across the US and Europe. With SafeGenium, we have also expanded our technology into one of the fastest growing areas of cybersecurity and some of the biggest threats we're facing today with AI. And with a stronger balance sheet, a larger culture base, and an expanding pipeline, we believe Supercom is in its strongest position to date. I'd like to thank our employees around the world for the continued dedication and execution, as well as our customers and shareholders for their ongoing trust and support. This includes our prepared remarks and optional call. That's the operator for questions.

Ladies and gentlemen, if you wish to ask a question on today's call, you will need to press star, then the number one on your telephone. If you are using a speakerphone, please pick up your handset before entering your request and speaking on the call. If your question has been answered and you wish to withdraw your request, you may do so by pressing the pound key. Again, press star 1 on your telephone keypad to ask a question. One moment, please, for our first question.

And our first questioner is Matthew Galenko with Maxim.

Hey, thank you for taking my question. Can we go to the Safe Genie product for a moment? And I know you've covered it in some detail, but I'm Hoping you could give us a little bit more on, you know, what's the realistic outcome or what would be a successful outcome in your view, you know, following launch? We see material revenue in 2027. And, you know, how does that look geographically? Is it expected to be a pretty global product or where do you anticipate demand initially coming from? Thanks.

We have between 500,000 and a million endpoints at Safeland. And the revenue is roughly a million dollars. These products of security, they charge between $50 to $250 a year. So it's roughly 50 times or more, up to 50 times what we're currently getting from Safeland, just for the existing customer base, the potential. That's just the potential, of course. doesn't mean we're going to convert everyone to this product, but there's a huge potential there with our existing customer base. And we have initial versions that are close to be ready to deploy to our customers and our service providers. And that's the current status of that. The next versions will come afterwards. And here we're deploying our unique capabilities or patent pending methods to help secure autonomous agents on endpoints. And we're starting with endpoint

customer base of SafeVent, which has been developed together with the technology for over 20 years.

Great. Thank you. And then I was hoping maybe you could maybe give us an update on, you know, maybe compare the pipeline you're seeing in Europe versus the U.S. at this point now that, you know, you've been in really in the market for a few quarters now in the U.S. You're seeing traction, and you also have these pretty big opportunities in Europe on the horizon. So how are you thinking about the respective pipelines and kind of where your mix goes depending on where you went?

It's a great question, and we grew our sales team one or two years ago where it was basically management and a few bid managers. We've developed a team of five people in the U.S. sales team. And in Europe, we have, I think, three or four people. We have an actual sales team now together with management and other personnel. And we have a very big pipeline. Just in Europe, the upcoming opportunity in England is over 150 million pounds. And there's other opportunities that are very exciting in Europe. In the U.S., as we're aware, it's much larger than in Europe. And our sales team, all veterans in the States pretty much are deploying are unique solutions, and we're getting great traction, and we're displacing incumbents left and right. We have over 50 contract wins since mid-2024, and we expect the number of wins to continue and also the size of wins in the U.S. In Europe, we're at a larger scale. We started with projects that were $100,000, $200,000. We went up to $1 million, $3 million, $5 million, $7 million, $33 million, and now up to $75 million. So on both markets, we're effectively growing up the ladder and growing our customer base. There's other markets that we started looking into, like Asia-Pacific, Latin America, Middle East, other regions where our technology could provide great service. And there's some of our new electronic monitoring. We have experience working with new markets as well. Romania, for example, was a customer that never had electronic monitoring before. It was first with us. I think Croatia was as well, and a few other ones. And so we're excited also to educate customers for the first time on electronic monitoring and also go to existing customers like what we saw in Sweden or Norway or Israel that have been doing electronic monitoring for over 20, 25 years, but show them that we can do it in a better way with better technology that's still proven across many, many different projects around the world.

So we plan to do both.

Great. Thank you. Maybe just one last one. Looking into 2027, kind of as you're growing that current revenue in the U.S., do you expect there to be value in adding to the sales team there? Or to your point, I think you said you're getting kind of word-of-mouth type marketing on the ground there. So do you need more capacity on the ground, or do you think that the channel is working as it should?

Again on that, sorry, I didn't hear you for a second and broke out. My last question.

Yeah, so looking at the 27, particularly in the U.S. market, do you see an opportunity to grow the sales team to help further accelerate that business or sustain the momentum, or does the existing headcount, is that sufficient for continuing the growth in the U.S.?

Right now it's sufficient. We saw an increase in expenses accordingly. and we think this team can do much more than what we're seeing today. We developed new platforms with AI agents that are searching and crawling non-stop around the world for opportunities. There's many opportunities. They're scraping them. They're finding all the information and comparing and doing great work. And there's a lot of work for the sales team to do currently. There's not low-hanging fruit because most opportunities that we pursue, we win. In Europe, it was over 65% win rate. And in the U.S., in many locations like New York. All the recent projects were wins. And in Texas, we just had a fifth one. So it's actually doing very, very well. It's spreading. The expansion in the U.S. is going great. I'm excited to actually improve as salespeople get more familiar with the products and more products into customers' hands.

And networking, in fact, starts to take place. Got it. Thank you. With no further questions in the queue, at this time I will pass the call back to Ordan for closing remarks. Thank you, operator.

I want to thank all of you for participating in today's call and for your interest in Supercom. We look forward to updating you for our filings, better releases, press releases, and next conference call.

Thank you very much, and have a great day.

I want to thank all of you for participating in today's call and for your interest in Supercom. We look forward to sharing our progress on our next conference calls, filings, and press releases. Thanks, and have a good day.