[Management View]
B.O.S. Better Online Solutions Ltd. (BOSC) reported $11.5 million in revenue for Q2 2025, a 36% YoY increase, driven primarily by the supply chain division. The company raised its 2025 revenue guidance to $45-48 million and net income guidance to $2.6-3.1 million. Management highlighted ongoing strategic diversification, operational initiatives, and a focus on defense and geographic expansion opportunities in India.

[Outlook]
Management expects second-half revenue and profit to be lower than the first half of 2025 due to record-setting Q1 2025 and supply chain timing risks. Plans for a physical presence in India are being considered to capitalize on direct defense and industrial opportunities.

[Financial Performance]
- Revenue: $11.5 million, up 36% YoY
- Supply Chain Division Revenue: $8.3 million, up 57% YoY
- RFID Division Gross Profit Margin: 19.1%, down from 21.1% YoY
- Supply Chain Division Gross Profit Margin: 24%, normalized from 28% in Q2 2024
- Overall Gross Profit Margin: 23%, down from 26% YoY
- Net Income: $765,000, up 53% YoY
- EBITDA: $900,000, up from $800,000 YoY
- Contracted Backlog: $24 million, up from $22 million in March 2025
- Cash and Equivalents: $5.2 million, up from $3.6 million at 2024 year-end
- Deferred Revenue: $3.2 million, up from $2 million at year-end 2024

[Q&A Highlights]
Question 1: What percent of your revenue is now defense-based?
Answer: More than 60% of total consolidated revenues, expected to grow in 2026 due to increasing demand in the defense segment.

Question 2: Is the defense business mostly directly with the IDF or through other companies like Rafael or Elbit?
Answer: Mostly through Rafael, Elbit, and the Israeli Aircraft Industry, with recent direct bids to the IDF.

Question 3: Can a foreign company take advantage of the $60 million tax loss carryforward if they acquire BOS?
Answer: Yes, as long as the company remains registered in Israel and continues to generate profit.

Question 4: Why wouldn't a company like Elbit Systems acquire BOS to take advantage of the tax loss carryforward?
Answer: There are no antitrust laws preventing it; it depends on their strategic decisions.

Question 5: Have you made any progress on acquiring other companies?
Answer: BOS is evaluating at least two opportunities and has the tools to pursue acquisitions when deemed beneficial for shareholders.

Question 6: Can you highlight any new major customers this quarter?
Answer: Expansion is more significant with existing customers, especially in Israel and India, driving revenue growth.

Question 7: Why is the second half of the year expected to be down versus the first half?
Answer: Exceptional Q1 2025 results and cautious outlook due to supply chain timing risks.

Question 8: Can you shed more light on the robotics division and any new product roadmap?
Answer: Focused on defense clients in Israel, with a $3 million backlog. Future performance depends on client facility readiness.

Question 9: Is there potential to repurpose robotics technology into other industries, especially in the US?
Answer: Yes, through clients, with a focus on defense and logistics centers in Israel.

Question 10: What are your plans for investor relations in the US?
Answer: Plans to visit the US in October, with a schedule to be shared with interested investors.

Question 11: How much of your defense business is due to replenishing stocks after recent conflicts?
Answer: Significant budget extensions are expected due to the need for new production lines and replenishing ammunition stocks.

Question 12: Do you see significant expansion opportunities in other countries, especially India?
Answer: Yes, focusing on direct business with the assembly industry in India and considering opening a local office.

[Sentiment Analysis]
The tone of the analysts was positive, congratulating the management on a strong quarter and raised guidance. Management expressed confidence in their strategic initiatives and future growth prospects.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 |
|---------------------------------|---------------|---------------|
| Revenue | $11.5 million | $8.5 million |
| Supply Chain Division Revenue | $8.3 million | $5.3 million |
| RFID Division Gross Profit Margin | 19.1% | 21.1% |
| Supply Chain Division Gross Profit Margin | 24% | 28% |
| Overall Gross Profit Margin | 23% | 26% |
| Net Income | $765,000 | $500,000 |
| EBITDA | $900,000 | $800,000 |
| Contracted Backlog | $24 million | $27 million |
| Cash and Equivalents | $5.2 million | $3.6 million |
| Deferred Revenue | $3.2 million | $2 million |

[Risks and Concerns]
- Supply chain timing risks could impact revenue recognition.
- Dependence on defense sector and specific clients like Elbit Systems.
- Potential delays in client facility readiness affecting the robotics division.

[Final Takeaway]
B.O.S. Better Online Solutions Ltd. delivered strong Q2 2025 results, driven by the supply chain division and a focus on the defense sector. The company raised its 2025 revenue and net income guidance, reflecting confidence in its strategic initiatives and market positioning. However, supply chain timing risks and dependence on key clients remain concerns. The management's proactive approach to M&A opportunities and geographic expansion, particularly in India, positions BOS for sustained growth.