Executive Summary

Q2 FY25 delivered margin and profitability gains despite softer top-line: revenue $8.35M (-7% YoY), gross profit $4.11M (+4% YoY), operating income $0.04M vs ($0.96M) YoY; net loss narrowed to ($0.5M) vs ($1.9M) YoY .
Sequential mix supported EBITDA: Adjusted EBITDA $1.32M (15.8% margin) vs $1.25M in Q1 and $0.79M in Q2 FY24; improvements driven by lower monitoring center costs and OpEx reduction after sale of Chile subsidiary .
FY25 guidance adjusted: revenue range lowered to $34.5–$35.5M (from $35–$36M), while Adjusted EBITDA margin range widened to 13.5–16.5% (from 14–15%), reflecting caution on volumes with continued cost discipline .
Operational drivers: volume weakness at Virginia (and earlier Michigan) offset by growth in Illinois, Puerto Rico, Bahamas; FX volatility remained a headwind; strategic reinvestment and program launches cited as catalysts for sustained FY25 growth .

What Went Well and What Went Wrong

Gross profit and operating income improved: Gross profit rose 4% YoY to $4.11M; operating income turned positive to $0.04M from ($0.96M) YoY, underscoring cost management benefits .
Adjusted EBITDA growth and margin expansion: $1.32M (+63% YoY) and 15.8% margin in Q2; CEO: “Adjusted EBITDA also climbed to $1.3M…reflecting our focus on cost management and strategic execution” .
Revenue resilience in selective geographies: increases in Illinois, Puerto Rico, Bahamas mitigated declines elsewhere, supporting mix and margin quality .

Top-line pressure: total revenue fell 7% YoY to $8.35M as Virginia volumes declined and the Chilean subsidiary sale reduced revenue base .
FX headwinds: management cited negative currency movements impacting results (including 6M comparisons), contributing to higher other expense and net loss .
Guidance trimmed on revenue: FY25 revenue outlook lowered vs Q1 guide, signaling continued caution on monitoring volume recovery trajectory .

Metric	Q2 FY24	Q1 FY25	Q2 FY25
Revenue ($USD)	$8.991M	$8.668M	$8.352M
Gross Profit ($USD)	$3.967M	$4.424M	$4.114M
Operating Income ($USD)	($0.955M)	$0.129M	$0.044M
Net Income ($USD)	($1.903M)	($2.011M)	($0.517M)
Diluted EPS ($)	($0.16)	($0.17)	($0.04)
Adjusted EBITDA ($USD)	$0.788M	$1.250M	$1.319M
Adjusted EBITDA Margin (%)	8.8%	14.4%	15.8%

Segment revenue breakdown

Revenue Component	Q2 FY24	Q1 FY25	Q2 FY25
Monitoring & other related services ($USD)	$8,758,650	$8,441,307	$7,867,975
Product sales & other ($USD)	$232,570	$227,021	$484,345
Total revenue ($USD)	$8,991,220	$8,668,328	$8,352,320

Balance sheet KPIs

KPI	Sep 30, 2024	Dec 31, 2024	Mar 31, 2025
Cash ($USD)	$3,574,215	$3,740,043	$3,416,045
Accounts Receivable ($USD)	$4,428,535	$5,319,041	$5,085,595
Inventory ($USD)	$582,481	$811,992	$915,816
Long-term Debt (net) ($USD)	$42,639,197	$42,659,634	$42,680,070
Stockholders’ Equity (Deficit) ($USD)	($11,609,411)	($11,457,578)	($12,060,403)

Actuals vs consensus (S&P Global)

Metric	Period	Actual	Consensus	Surprise
Revenue ($USD)	Q2 FY25	$8,352,320	N/A*	N/A*
EPS ($)	Q2 FY25	($0.04)	N/A*	N/A*

Values retrieved from S&P Global.*

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD)	FY2025	$35M–$36M	$34.5M–$35.5M	Lowered
Adjusted EBITDA Margin (%)	FY2025	14%–15%	13.5%–16.5%	Widened (lower bound down, upper bound up)

No earnings call transcript found for Q2 FY25; management commentary sourced from press releases and 8-Ks .

Topic	Previous Mentions (Q4 FY24, Q1 FY25)	Current Period (Q2 FY25)	Trend
Technology initiatives	Reinvestment in monitoring technology; program implementations in late FY23/FY24	Reinforced reinvestment in tech; new programs initiated late FY24 supporting FY25 growth	Continuing execution
Supply chain & 3G phase-out	FY24 noted operational challenges, settlement costs; 3G device transition backdrop	Prior supply chain delays and U.S. 3G phase-out cited; asserting resilience	Normalizing; cost controls evident
Regional volume trends	Growth in Illinois/Bahamas offset by declines (Chile) in FY24	Declines in Virginia; increases in Illinois, Puerto Rico, Bahamas	Mixed; diversified offsets
FX/macro	FX gain in FY24 overall; Q1 FY25 showed FX loss impacting other expense	FX headwinds persisted; noted impact on results and year-to-date comparisons	Volatile; risk to net income
R&D execution	Ongoing R&D investment; modest quarterly spend	R&D $0.75M in Q2; continued product/platform support	Stable spend profile
Legal/one-time items	FY24 impairment (~$0.8M) and ~$1.0M settlement expense	Prior-year settlement expense benefited YoY OpEx comparison; Chile sale completed	One-time effects rolling off

“Gross profit rose by 4% year-over-year ($4.1M vs $4.0M in Q2 FY24)…Adjusted EBITDA also climbed to $1.3M in Q2 FY25, a 63% increase from $0.8M in Q2 FY24, reflecting our focus on cost management and strategic execution over the last six months.” — Derek Cassell, CEO .
Business outlook highlights resilience despite prior supply-chain delays, COVID impacts, and 3G device phase-out; strategy emphasizes reinvestment in technology and new programs to drive sustained FY25 growth .

No earnings call/Q&A transcript identified for Q2 FY25; no additional clarifications beyond the press release and 8-K disclosures .

Consensus estimates from S&P Global were not available for EPS or revenue for Q2 FY25; therefore, a Street beat/miss cannot be determined*.
Values retrieved from S&P Global.*

Mix and cost control are driving margin expansion: Adjusted EBITDA margin improved to 15.8% with operating income turning positive; watch for continued OpEx discipline and monitoring center efficiencies .
Top-line recovery remains uneven: Virginia weakness and Chile sale weigh on YoY revenue; offsets in Illinois, Puerto Rico, Bahamas help sustain profit quality .
Guidance prudent on revenue, more confident on margins: FY25 revenue range trimmed while EBITDA margin range broadened upward at the high end; signals management’s cost-control conviction amid volume uncertainty .
FX remains a swing factor for net income; continued volatility could blur progress at the bottom line despite operational improvements .
Balance sheet constraints: negative equity and ~$42.7M long-term debt warrant attention; liquidity adequate but modest (cash $3.4M at Q2) .
Near-term trading lens: narrative likely anchored on sustained EBITDA trajectory and sequential profitability improvements versus unresolved volume headwinds and FX noise .
Medium-term thesis: execution on technology reinvestment and new programs, plus stabilization in key jurisdictions (e.g., Virginia), are critical to reaccelerate revenue while defending margin structure .