B.O.S. Better Online Solutions (NASDAQ:BOSC) executives highlighted record revenue, profit and cash generation during the company’s full-year 2025 results call, while outlining a cautious initial outlook for 2026 amid currency headwinds and ongoing geopolitical uncertainty.
Record 2025 results and backlog visibility
Management said 2025 marked “an outstanding year” across multiple metrics, driven by strong demand in defense-related end markets. The company reported revenue growth of 27% year-over-year to a record $51 million and net income growth of 57% to a record $3.6 million. The company also said it “set multiple record quarters” during the year and increased its outlook three times.
Defense demand, India expansion, and product strategy
Looking ahead, management said demand in the defense sector “remains robust” and is expected to continue driving growth in its supply chain business and Robotics Division through 2026. In response to a question about the potential impact of a prolonged war, management said the continuation of conflict would be “positively” correlated with growth in those two defense-linked divisions, while the RFID Division would likely see negative effects due to its sensitivity to the Israeli commercial market.
Management also emphasized geographic expansion. The company said that in March 2026 it appointed an Indian company to represent B.O.S. in India, calling the move meaningful as India becomes a growing subcontracting hub for global defense programs. In response to investor questions, the company said it has already seen revenue flow from India in 2023, 2024, and 2025, and characterized the effort as a long-term investment intended to increase sales over time. When asked to quantify India’s contribution, management said it was “several million dollars,” averaging about $3 million per year across those years.
Management named several Indian subcontractors as part of its customer landscape, including Sasmos, Vinyas, and DCX, and said it believes there is a longer list of subcontractors it has not yet reached. The company said having “foot on the ground” in India will support visits to more manufacturers and assembly companies and help expand its client base with the same offering.
Separately, management described B.O.S.’ organic growth model as centered on expanding the portfolio of manufacturers it represents and adopting new technologies developed by those partners, which it said creates a “self-replenishing flow” of new products for customers.
RFID challenges, impairments, and hospital-market investment plan
Executives said ongoing geopolitical tensions in Israel since October 2023 have continued to pressure the Israeli commercial market, which management described as the primary revenue base for the RFID Division. As a result, B.O.S. recorded goodwill impairment charges of $700,000 in 2024 and an additional $1.2 million in 2025.
To reduce exposure to the “geopolitically sensitive” Israeli civilian market, management said its 2026 plan for the RFID business is to enter Israel’s hospital segment, which it described as a more stable and higher-growth vertical. Management said successful penetration will require expanding product offerings, hiring personnel with relevant domain expertise, and establishing new customer relationships. The company expects to invest through 2026, with revenue contribution anticipated to begin in 2027.
In the Q&A, management estimated the planned 2026 investment for the hospital push at about $200,000 (described as “in shekel like $200,000”), adding that while not significant at the consolidated level, it would be meaningful for the RFID Division. Management said it expects the new segment to be around break-even in 2027 and profitable in 2028. Executives also said the company does not currently have hospital relationships, but is evaluating candidates to hire with relevant connections, and suggested an acquisition could also serve as a path into the market.
Currency impacts and tax outlook
Management flagged several currency-related items affecting year-over-year comparability. The company said the U.S. dollar-to-Israeli shekel exchange rate opened 2026 at 3.18, representing an approximately 13% devaluation of the dollar against the shekel versus the start of 2025. As a result, management expects Israeli shekel-denominated operating expenses to rise by about $600,000 in 2026 compared to 2025.
Executives also said dollar weakness in 2025 produced $800,000 of non-recurring currency exchange income tied to revaluation of shekel-denominated balance sheet items after the sharp dollar decline. Management said that gain is not expected to repeat in 2026 if the exchange rate remains around 3.18. Combined, management described these two items as roughly $1.4 million of headwinds entering 2026, partially offset by the expectation that the $1.2 million 2025 goodwill impairment will not recur, leaving an estimated net year-over-year drag of about $200,000.
On taxes, management said it expects to utilize tax loss carryforwards at the parent company level by the end of 2026, while still having tax assets and tax loss carryforwards in subsidiaries, including the RFID Division. Management said it is considering tax planning approaches so profits across the group could be offset by RFID’s carryforwards, and it does not expect significant tax expense in 2026. Management also said there is “no expiry date” for those losses and, if tax planning is executed as intended, it believes it may avoid tax expenses for “several coming years.”
Balance sheet strength, M&A focus, and conservative 2026 guidance
Management said B.O.S. ended 2025 with a significantly stronger balance sheet, including:
- $11.8 million in cash and equivalents, up from $3.6 million at year-end 2024
- Shareholders’ equity of nearly $29 million, up from $21 million at year-end 2024
- Positive working capital of more than $22 million
- Bank debt of only $1.7 million
Executives said this financial position provides flexibility for both organic growth and acquisitions, and that the company is evaluating opportunities that meet its criteria, including profitability and high revenue visibility. In response to a question about M&A, management said the larger cash position increases the company’s ability to acquire a business that “can move the needle,” and added it hopes to close an acquisition during 2026. Until then, management said the company invests its cash in securities funds yielding roughly 4% to 5%. Management also said there is “no plan for dilution,” noting acquisitions could be funded with cash and, if needed, supplemented with long-term bank loans for profitable targets.
For 2026, management reiterated its practice of issuing conservative initial guidance and updating as the year progresses. The company projected revenue of approximately $51 million and net income of approximately $3.6 million. Addressing investor questions about the flat year-over-year guidance despite 2025’s growth, management said the company had reached a record revenue level and that growth depends on component consumption across customers, including major defense-related programs and subcontractors worldwide. Management also cited the need for caution given geopolitical sensitivity, while stating it expects to update guidance as progress becomes clearer and noting that backlog increased in the first quarter.
On valuation and investor outreach, management said the stock rose 42% in 2025, but argued a valuation gap remains versus the Russell 2000, pointing to compounded annual EPS growth of 60% over the past four years compared with 12% for the index. Management said B.O.S. trades near book value versus the Russell 2000 at roughly 2.4 times book, and cited a price-to-earnings ratio of about 9 times compared with 20 times for the index. Management attributed much of the discount to limited awareness and said it will shift its investor relations strategy toward digital marketing starting in April by engaging Aly Communications.
When asked about a potential buyback, management said it prefers to allocate cash toward acquisitions and does not view repurchases as the best use of funds for a small company, adding it would rather pursue long-term growth opportunities.
About B.O.S. Better Online Solutions (NASDAQ:BOSC)
B.O.S. Better Online Solutions Ltd. provides intelligent robotics, radio frequency identification (RFID), and supply chain solutions for enterprises worldwide. The Intelligent Robotics Division provides custom-made machines for industrial automation and assembly of products and packing that offer technological solutions. The RFID Division provides hardware products, such as thermal and barcode printers; RFID and barcode scanners and readers; wireless, mobile, and forklift terminals; wireless infrastructure; active and passive RFID tags; ribbons, labels, and tags; and RFID systems for libraries.
