REG - Spectra Systems Spectra Systems-SPSC - Audited results for year ended 31 December 2025
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RNS Number : 5579Y Spectra Systems Corporation 30 March 2026
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Spectra Systems Corporation
Audited results for the twelve months ended 31 December 2025
Spectra Systems Corporation (the "Company"), a leader in machine-readable high
speed banknote authentication, brand protection technologies, and gaming
security software, is pleased to announce its results for the twelve months
ended 31 December 2025.
Financial highlights
· Revenue of $64,284k (2024: $49,191k) up 30.7%
· Adjusted EBITDA(1) up 82.9% at $27,307k (2024: $14,929k)
· Adjusted PBTA(1) up 109.4% to $25,243k (2024: $12,054k)
· Adjusted earnings per share(2) up 100% to US 37.8 cents (2024: US 18.9
cents)
· Cash generated from operations of $10,107k (2024: $9,899k)
· Unrestricted cash of $14,820k (2024: $13,354k) and debt(3) of $3,256k
(2024: $4,359k) at 31 December
· Restricted cash of $3,180k (2024: $2,063k) on 31 December 2025
· The Board is declaring an annual dividend of $0.136 per share (2024:
$0.116) to be paid in July 2026
¹ Before stock compensation expense, excludes non-controlling interest, and
gain on expiration of contingent liability related to Cartor Security Printers
(CSP) acquisition
² Before amortization and stock compensation expense, excludes
non-controlling interest, and gain on expiration of contingent liability
related to Cartor Security Printers (CSP) acquisition
³ Cartor Holding Limited debt acquired on 21 December 2023 as part of the
Cartor Security Print
Operational highlights:
· First sensors delivered to our customer resulting in $5.7M payment in
2025.
· Sensor Maintenance contract executed with our customer worth
approximately $6.7M from 2026-2030.
· $4M, four-year hybrid stamp contract, with a fifth-year option, awarded
to our secure printing group in the UK.
· House note with Fusion substrate and covert machine readability produced
with Brazilian central bank printers, Casa de Moeda
· Successful print trials of our smartphone authentication technology with
Police Office of a major middle eastern country
· Gaming software security business produced record revenues and
profitability
Commenting on the results, Nabil Lawandy, Chief Executive Officer, said:
"Through the execution of our sensor contract, the Company has achieved its
highest profitability since its inception. Revenue and earnings were driven by
partial completion of the sensor order for our long-standing customer and cash
was fueled by the first deliveries in December of 2025. EPS has more than
doubled over last year with a 133% increase. Our cash position has remained
strong and will be further increased in 2026 as we deliver the remaining
sensors to our customer. In addition, the delivery of sensors lowers the
restricted component of our cash with the delivery of more sensors in 2026.
Our gaming software group has seen a major turnaround to profitability which
we expect will continue going forward. In addition, in 2025, the Security
Print Group (SPG) has undertaken successful print tests with the government
authority issuing drivers licenses, marriage certificates, and other secure
documents in a major middle eastern country further opening the door to
adoption of our smartphone technology for multiple opportunities, and
particularly tax stamps.
SPG, formed through the acquisition of Cartor Security Printers (CSP),
continues our efforts to qualify and commercialize our Fusion polymer
substrate with qualifications already achieved with two major private banknote
printers and one government printworks. All three of these qualifications have
resulted in impressive house notes which drive our marketing efforts.
Despite delays which are part of the sales cycle with government customers, we
have and will continue to navigate through the opportunities with unstoppable
determination to achieve growth through sales of our Fusion Substrate and
smartphone technology in the near future.
Spectra Systems Corporation
Dr. Nabil Lawandy, Chief Executive Officer
Tel: +1 (0)401 274 4700
Zeus (Nominated Adviser and Joint Broker)
James Joyce / James Bavister/ Andrew de Andrade (Investment Banking)
Fraser Marshall (Corporate Broking)
Tel: +44 (0)20 3829 5000
Allenby Capital Limited (Joint Broker)
Nick Naylor / James Reeve (Corporate Finance)
Amrit Nahal / Tony Quirke (Sales and Corporate Broking)
Tel: +44 (0)20 3328 5665
The person responsible for arranging the release of this announcement on
behalf of the Company is Dr. Nabil Lawandy, Chief Executive Officer of the
Company.
Chief Executive Officer's statement
We are delighted to report that we outperformed the 2024 earnings results with
revenue for the year up 30.7% at $64,284k (2024: $49,191k), This increase was
primarily driven by sensor production revenue recognition of $22,024K and
related hardware sales of $7,335K which are part of the development contract
scheduled for completion in 2026. In addition, we had a strong demand for
our materials, a very sizable increase in our gaming software security
business and the full integration of CSP into our operations
As a result of the increased revenue, adjusted EBITDA (before stock
compensation expense, non-controlling interest, and gain on expiration of
contingent liability related to Cartor Security Printers (CSP) acquisition)
for the year increased 82.9% to $27,307k compared to the prior year of
$14,929k. Our debt has been further reduced by 25% while our unrestricted cash
increases, resulting in a cash to debt ratio of 4.5.
Having generated cash from operations of $10,107k (2024: $9,899k), cash at the
end of the period was $14,820k (2024: $13,354k), excluding approximately
$3,180k of restricted cash and investments (2024: $2,063k). This also follows
the $5,612k paid to shareholders during June 2025 in the form of the Company's
dividend of $0.116 per share.
Review of Operations
Physical and Software Authentication Business
The Physical and Software Authentication Systems business generated revenue of
$42,722k (2024: $30,958k) and Adjusted EBITDA of $24,896k (2024: $13,299k).
Authentication Systems revenues and earnings were driven by sensor
manufacturing. Optical materials sales in 2025 were in line with 2024 with
several new opportunities being generated for potential sales in 2026. One of
these opportunities with the groundwork being done in 2025 led to the 2026
consummation of a significant tax stamp contract with HMRC which includes the
security printing group as well as authentication systems from the USA arm of
the company. Additional groundwork in the form of print trials in 2025 is
expected to lead to high margin authentication revenues from the use of our
smartphone technology.
On the software security side of the Company's business, the Secure
Transactions Group generated an Adjusted EBITDA of $1,892k (2024: $(8)k) on
revenue of $3,786k (2024: $1,956k). The turnaround of this segment has
resulted in a high level of profitability in 2025 which we expect to continue
to grow at the levels of $500k-$800k in 2026. Key drivers for this growth are
the new business and the expected renewal of several contracts over the next
few years, opening the door to higher pricing with a reduced contractor
staffing.
Security Printing Business (CSP)
CSP generated revenue of $17,776k (2024: 16,277k) and adjusted EBITDA of $519k
(2024: 1,638k) for the period ending 31 December 2025. During 2025, additional
development expenses of $265,000 were required to complete additional
substrate requirements, specific to a middle eastern central bank. We expect
to receive full qualification by the middle eastern central bank as well as a
small first test order in 2026. Our marketing in 2025 have resulted in a
request to provide pricing as we begin the second phase of a qualification
process with an Asian central bank for Fusion with machine-readable substrate
capabilities as well as sensors for high-speed authentication. Two other
central banks, one in Asia and one in south America have requested sample
substrates for preliminary evaluation.in 2026. In addition to continued
execution on the polymer substrate, the security printing business was
successful in winning a new contract for higher margin hybrid stamps worth $4M
over four years. The hybrid stamp business is expected to grow through an
increase in the volume of stamps from this new customer as well as increased
adoption of hybrid stamps throughout the EU over the next few years.
The restructuring plan for CSP has resulted in a staff reduction of 17
individuals at the Wolverhampton plant with three of the redundancies being
management employees. The closure of the France operation has been reevaluated
in light of French legal requirements and minor complications relating to
transferring equipment utilized for Royal Mail production to the UK facility.
The proposed timeline has been reset to the end of the third quarter of 2026,
after which we would expect to begin benefiting from the reduced costs and
sharper management focus related to that operation. We would maintain a sales
staff of four individuals in France in order to service customers requiring EU
based contract management. The restructuring plan has already had an impact
through the reduction of staff and in the UK as well as a shift of focus to
contracted revenues.
The analysis for the security printing group to generate profits in 2026 and
going forward as well as increasing of the effective margin on Fusion polymer
substrate depends on a significant part of the gravure machine labour costs
being allocated to other contracts. One of the most critical contracts for
this plan is renewal of the Royal Mail contract. The tender for this renewal
was issued in early 2025 and it was stated in the documents that contract
award would take place in June 2025. During the tender process, EP
Group agreed to buy International Distribution Services (IDS), the owner of
Royal Mail. The takeover was approved by the British government in December
2024 and was set to be finalized by April 30, 2025, after securing all final
regulatory conditions. Due to the new ownership, previous delivery practices
were suspended affecting our H1 results, and to date, there has not been a
fully approved and signed contract. Despite not yet having an executed
contract with Royal Mail, Spectra is highly confident that we will be awarded
the contract once the new management has adjusted to the changes. Business has
continued as normal during the interim between contract termination and the
new contract execution. Royal Mail has continued to place individual orders in
line with what would have been part of the new contract.
Prospects
The Company continues to have number of new short-term and long-term
prospects. Short-term opportunities are expected in the 2026-2028 period, and
the long-term opportunities are expected in the 2028-2031-time frame.
The short-term opportunities include:
· Delivery of all sensors to our customer and increasing cash significantly
· Qualification of our polymer substrate with a second central bank in
addition to the middle eastern central bank we are currently engaged with.
· Expansion of the higher margin hybrid stamp sales to two additional
postal authorities
· Adoption of our smartphone technology and sale of our materials for
several billion tax stamps per annum
· Increasing profits in security printing through innovative technology
that lowers paper costs
Long-term opportunities include:
· Increase of covert authentication material sales
· Covert materials sales for passports in conjunction with partners
· Spirits tracking with two-level continuous ink jet materials developed
for major well positioned company in tax and revenue stamps.
· Further expansion of hybrid stamps for vapes in the EU
The combination of these prospects will allow the Company to accelerate its
revenue and earnings growth over the coming years. We continue to develop
technologies with our expanded security printing capabilities and expertise to
remain a technology leader in the authentication industry and to offer our
shareholders growth through innovation and dedication, serving both new and
existing customers.
Dividend
With the Company having the eleventh year of sustainable profits and reaching
their highest levels since our inception, we are pleased to pay a dividend of
$0.136/share to our shareholders Our dividend policy takes account of the
Group's profitability, underlying growth, and maintenance of sufficient cash
reserves and will continue to be in proportion to our profits going forward.
The Board therefore intends to pay an annual dividend of $0.136 per share on
July 17, 2026 to shareholders of record as of July 3, 2026 (ex-dividend date
is July 2, 2026).
Nabil M. Lawandy Chief Executive Officer March 30, 2026
Consolidated statements of income
for the years ended 31 December:
2025 2024
Audited Audited
USD '000 USD '000
Revenue
Product $ 56,655 $ 43,052
Service 7,629 6,139
Total revenues 64,284 49,191
Cost of sales 27,212 25,702
Gross profit 37,072 23,489
Operating expenses
Research and development 2,697 2,161
General and administrative 8,984 8,392
Sales and marketing 1,089 1,457
Total operating expenses 12,770 12,010
Operating profit 24,302 11,479
Interest income 168 150
Interest expense (155) (198)
Foreign currency reversal 132 (127)
Extinguishment of contingent consideration 2,367 -
Profit before taxes 26,814 11,304
Income tax expense 6,769 2,802
Net income 20,045 8,502
Net loss attributable to noncontrolling interest (11) (18)
Net income attributable to Spectra Systems Corporation $ 20,056 $ 8,520
Earnings per share
Basic $ 0.42 $ 0.18
Diluted $ 0.41 $ 0.17
All of the Group's operations are continuing.
Consolidated statements of comprehensive income
for the years ended 31 December:
2025 2024
Audited Audited
USD '000 USD '000
Net income $ 20,045 $ 8,502
Other comprehensive income (loss)
Unrealized gain / (loss) on currency exchange 667 (294)
Reclassification for realized loss in net income (132) 127
Total other comprehensive gain / (loss) 535 (167)
Comprehensive income 20,580 8,335
Net loss attributable to non-controlling interest (11) (18)
Comprehensive income attributable to Spectra Systems Corporation $ 20,591 $ 8,353
Consolidated balance sheets as of 31 December:
2025 2024
Audited Audited
USD '000 USD '000
Current assets
Cash and cash equivalents $ 14,820 $ 13,354
Trade receivables, net of allowance 2,906 3,000
Unbilled and other receivables 14,806 4,597
Inventory 8,027 6,206
Prepaid expenses 872 1,152
Total current assets 41,431 28,309
Non-current assets
Property, plant and equipment, net 8,232 9,048
Operating lease right of use assets, net 4,946 5,684
Intangible assets, net 13,040 13,511
Investments 100 95
Restricted cash 3,180 2,063
Deferred tax assets, net 1,381 2,093
Other assets 58 171
Total non-current assets 30,937 32,665
Total assets $ 72,368 $ 60,974
Current liabilities
Accounts payable $ 4,248 $ 3,631
Accrued expenses and other liabilities 1,482 1,034
Line of credit 391 453
Operating lease liabilities, short term 647 798
Taxes payable 3,223 1,423
Third party loans 2,023 1,711
Deferred revenue 2,719 4,967
Total current liabilities 14,733 14,017
Non-current liabilities
Operating lease liabilities, long term 4,484 4,969
Third party loans 1,233 2,648
Contingent consideration - 2,513
Deferred revenue 560 499
Total non-current liabilities 6,277 10,629
Total liabilities 21,010 24,646
Stockholders' equity
Common stock 483 482
Additional paid-in capital - common stock 57,702 57,605
Accumulated other comprehensive income/(loss) 156 (378)
Treasury Stock (36) -
Accumulated deficit (7,491) (21,936)
Total Spectra Systems stockholders' equity 50,814 35,773
Non-controlling interest 544 555
Total stockholders' equity 51,358 36,328
Total liabilities and stockholders' equity $ 72,368 $ 60,974
Statements of cash flows
for the year ended 31 December:
2025 2024
Audited Audited
USD '000 USD '000
Cash flows from operating activities
Net income $ 20,045 $ 8,502
Adjustments to reconcile net income to net cash provided by operating
activities:
Extinguishment of contingent consideration (2,531) -
Depreciation and amortization 2,903 3,194
Stock-based compensation expense 98 192
Lease expense 102 11
Deferred taxes 468 (228)
Changes in operating assets and liabilities
Accounts receivable 238 752
Unbilled and other receivables (10,195) (3,200)
Inventory (1,595) 258
Prepaid expenses and other assets 406 445
Accounts payable 311 912
Accrued expenses and taxes payable 2,056 1,140
Deferred revenue (2,199) (2,079)
Net cash provided by operating activities 10,107 9,899
Cash flows from investing activities
Restricted cash and investments (1,117) (1,550)
Payment of patent and trademark costs (308) (689)
Purchases of property, plant and equipment (186) (745)
Net cash used in investing activities (1,611) (2,984)
Cash flows from financing activities
Repurchase of stock (36) -
Dividends paid (5,612) (5,595)
Third party loan principal payment (1,365) (1,129)
Line of credit (48) (139)
Net cash used in financing activities (7,061) (6,863)
Effect of exchange rate on cash and cash equivalents 31 49
Net increase (decrease) in cash and cash equivalents 1,466 101
Cash and cash equivalents, beginning of year 13,354 13,253
Cash and cash equivalents, end of year $ 14,820 $ 13,354
Noncash investing activities
Contingent consideration - -
Equity used for investment in CSP - 1,278
Acquisition of patents included in accounts payable - 68
Notes to financial information
1. Basis of preparation
This report was approved by the Directors on the 25th day of March 2026.
This financial information has been prepared using the recognition and
measurement principles of US Generally Accepted Accounting Principles.
The principal accounting policies used in preparing the annual results are
those the Company expects to apply in its financial statements for the year
ending 31 December 2025 and are unchanged from those disclosed in the
Company's Annual Report for the year ended 31 December 2024.
2. Earnings per share
The calculation of basic earnings per share is based on the net income divided
by the weighted average number of common shares outstanding. Diluted earnings
per share is calculated by considering the dilutive impact of common stock
equivalents under the treasury stock method as if they were converted into
common stock as of the beginning of the period or as of the date of grant, if
later. Excluded from the calculation of diluted earnings per common share for
the years ended 31 December 2025 and 2024 were 132,000 and nil shares,
respectively. The following table shows the calculation of basic and diluted
earnings per common share.
Full Year to 31 Dec 2025 Full Year to 31 Dec 2024
Numerator:
Net income $ 20,055,896 $ 8,520,046
Denominator:
Weighted average common shares 48,289,071 48,023,360
Effect of dilutive securities:
Stock Options 621,332 935,229
Diluted weighted average common shares 48,910,403 48,958,589
Earnings per common share:
Basic: $ 0.42 $ 0.18
Diluted: $ 0.41 $ 0.17
3. Copies of this statement are available to the public on the Company's
website at http://www.spsy.com.
4. Reclassification: Certain reclassifications have been made to prior
period amounts in order to confirm to current period presentation.
5. Nature of financial information
The Preliminary Announcement set out above is an extract from the forthcoming
Annual Report and Accounts and does not represent statutory accounts for
Spectra Systems Corporation. The statutory accounts of Spectra Systems
Corporation in respect of the period ended 31 December 2025 will be delivered
to the Registrars of Companies before the Company's Annual General Meeting.
It is anticipated that the Annual Report and Accounts will be circulated to
shareholders of Spectra Systems Corporation by March 2026. The Annual Report
and Accounts will also be made available on the Company's website at: Investor
Relations | World Lead In Security Technology | Spectra Systems
(https://www.spsy.com/investor-relations/) .
Appendix - Reconciliation of Non-GAAP measures
The Company publishes certain additional information in a non-statutory format
in order to provide readers with an increased insight into the underlying
performance of the business. Reconciliations to the GAAP measures are shown in
the following tables:
2025 2024
USD '000 USD '000
Adjusted earnings before interest, taxes, depreciation and amortization
(EBITDA):
Operating profit $ 24,302 $ 11,479
Depreciation 2,045 2,690
Amortization 851 560
Stock compensation 98 182
Operating loss noncontrolling interest 11 18
Stock compensation noncontrolling interest - (10)
Adjusted EBITDA $ 27,307 $ 14,919
Adjusted profit before taxes and amortization (PBTA):
Profit before taxes $ 26,814 $ 11,304
Gain on extinguishment of contingent consideration (2,531)
Amortization 851 560
Stock compensation 98 182
Operating loss noncontrolling interest 11 18
Stock compensation noncontrolling interest - (10)
Adjusted PBTA $ 25,243 $ 12,054
Adjusted earnings per share:
Adjusted PBTA $ 25,243 $ 12,054
Income tax expense (6,769) (2,802)
Adjusted earnings $ 18,474 $ 9,252
Diluted weighted average common shares 48,910,403 48,958,589
Adjusted earnings per share $ 0.378 $ 0.189
1 Before stock compensation expense, excludes non-controlling interest, and
gain on expiration of contingent liability related to Cartor Security Printers
2 Before amortization and stock compensation expense, excludes non-controlling
interest, and gain on expiration of contingent liability related to Cartor
Security Printers (CSP) acquisition
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