Odysight.ai Inc(ODYS) - 2025 Q1 - Quarterly Results

Executive Summary & Business Update Odysight.ai reported strong Q1 2025 financial performance, strategic advancements, and successful Nasdaq uplisting, positioning for future growth Key Highlights Odysight.ai reported a strong net cash position and significant revenue growth in Q1 2025, driven by a major contract fulfillment, achieving a Nasdaq uplisting and securing new commercial partnerships - Net cash position of approximately $37.2 million as of March 31, 2025[2] Q1 2025 Revenues | Metric | Q1 2025 (USD) | Q1 2024 (USD) | | :----- | :------------ | :------------ | | Revenues | $2.1 million | $0.2 million | - Backlog was approximately $14.8 million as of March 31, 2025[4] CFO Commentary The CFO emphasized building technological and operational foundations for long-term growth, strengthening infrastructure, expanding capabilities, and establishing global partnerships, with the Nasdaq uplisting and recent capital raise enhancing the balance sheet, visibility, and access to customers and investors - Focus on strengthening infrastructure, expanding technological capabilities, establishing relationships with global leaders, and positioning for future success in Aerospace and new verticals[3] - Successful uplisting to Nasdaq and recent capital raise mark major milestones, strengthening the balance sheet and enhancing visibility, credibility, and access to global customers and investors[3] Commercial Achievements Odysight.ai secured key partnerships and initial purchase orders, expanding its reach in railway safety and industrial monitoring solutions - Partnered with Israel Railways to develop an advanced AI-powered visualization system to prevent derailments and enhance railway safety[6] - Received an initial purchase order from a European partner for a combined industrial solution using Odysight.ai's sensors and machine learning algorithms to monitor belts and cables across various industrial sectors[6] Nasdaq Uplisting and Capital Raise The company successfully uplisted to the Nasdaq Capital Market in February 2025, raising significant gross proceeds to strengthen its financial position - Uplisted to the Nasdaq Capital Market in February 2025[6][10] - Raised gross proceeds of $23.7 million through a U.S. underwritten public offering[6][10] Financial Performance - Q1 2025 Overview This section details Odysight.ai's Q1 2025 financial results, including significant revenue growth, increased operating expenses, and an improved cash position Revenues Revenues significantly increased in Q1 2025, primarily due to the full recognition of a contract with a Fortune 500 medical company Q1 2025 Revenues Comparison | Metric | Q1 2025 (USD) | Q1 2024 (USD) | Change | | :----- | :------------ | :------------ | :----- | | Revenues | $2.1 million | $0.2 million | +$1.9 million | - The increase was primarily attributed to the full recognition of approximately $1.7 million in revenues from the fulfillment of a contract with a Fortune 500 medical company[4] Cost of Revenues and Gross Profit Cost of revenues increased due to contract fulfillment and inventory impairment, but gross profit improved significantly, turning from a loss to a positive margin, driven by Industry 4.0 revenues and the medical contract Q1 2025 Cost of Revenues and Gross Profit | Metric | Q1 2025 (USD) | Q1 2024 (USD) | Change | | :---------------- | :------------ | :------------ | :----- | | Cost of Revenues | $1.5 million | $0.4 million | +$1.1 million | | Gross Profit (Loss) | $0.6 million | ($0.2 million) | +$0.8 million | | Gross Margin | 26% | N/A | Improvement | - Increase in Cost of Revenues primarily attributed to approximately $1 million related to the Fortune 500 medical company contract fulfillment and $0.2 million inventory impairment[7] - Gross profit improvement attributable to Industry 4.0 revenues and the contract fulfillment related to a Fortune 500 medical company[8] Operating Expenses Operating expenses increased significantly due to the expansion of operations, development of new products, and one-time costs associated with the Nasdaq uplisting Q1 2025 Operating Expenses | Metric | Q1 2025 (USD) | Q1 2024 (USD) | Change | | :--------------- | :------------ | :------------ | :----- | | Operating Expenses | $5.1 million | $3.1 million | +$2.0 million | - Increase primarily driven by the expansion of the Company's operations, including the development of new Industry 4.0 products and one-time expenses related to the Nasdaq uplisting[9] Net Loss The company reported an increased net loss in Q1 2025 compared to the prior year, despite revenue growth, primarily due to higher operating expenses Q1 2025 Net Loss | Metric | Q1 2025 (USD) | Q1 2024 (USD) | Change | | :------- | :------------ | :------------ | :----- | | Net Loss | ($4.3 million) | ($3.2 million) | -($1.1 million) | Cash Position Odysight.ai significantly improved its cash balance as of March 31, 2025, largely due to the proceeds from its Nasdaq public offering Cash Balance Comparison | Metric | March 31, 2025 (USD) | March 31, 2024 (USD) | Change | | :---------- | :------------------- | :------------------- | :----- | | Cash Balance | $37.2 million | $17.0 million | +$20.2 million | - The increase in cash balance is primarily due to the approximately $23.7 million gross proceeds from the Nasdaq public offering completed in February 2025[10] Backlog The company reported a substantial backlog as of March 31, 2025, representing booked orders not yet recognized as revenue Backlog as of March 31, 2025 | Metric | As of March 31, 2025 (USD) | | :------- | :------------------------- | | Backlog | $14.8 million | - Backlog refers to booked orders based on purchase orders or hard commitments not yet recognized as revenue, and is not a comprehensive indicator of future revenue or profitability[5] About Odysight.ai Odysight.ai is a pioneer in Predictive Maintenance and Condition Based Monitoring, offering AI-powered video sensor solutions for critical industrial systems Company Profile Odysight.ai is a pioneer in Predictive Maintenance (PdM) and Condition Based Monitoring (CBM) markets, offering visualization and AI platforms with video sensor-based solutions for critical systems across aviation, transportation, and energy industries - Odysight.ai pioneers the Predictive Maintenance (PdM) and Condition Based Monitoring (CBM) markets with its visualization and AI platform[11] - Provides video sensor-based solutions for critical systems in the aviation, transportation, and energy industries, leveraging proven visual technologies from the medical industry[11] - Utilizes unique video-based sensors, embedded software, and AI algorithms deployed in hard-to-reach locations and harsh environments for various PdM and CBM use cases[11] Financial Statements This section presents Odysight.ai's interim condensed consolidated statements of operations and balance sheets for Q1 2025 Interim Condensed Consolidated Statements of Operations and Comprehensive Loss The interim condensed consolidated statements of operations provide a detailed breakdown of the company's revenues, costs, and expenses, resulting in the net loss for the three months ended March 31, 2025, compared to the same period in 2024 Interim Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric (USD in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :------------------------ | :-------------------------------- | :-------------------------------- | | REVENUES | 2,065 | 187 | | COST OF REVENUES | 1,527 | 410 | | GROSS PROFIT (LOSS) | 538 | (223) | | RESEARCH AND DEVELOPMENT EXPENSES | 2,487 | 1,567 | | SALES AND MARKETING EXPENSES | 396 | 234 | | GENERAL AND ADMINISTRATIVE EXPENSES | 2,215 | 1,340 | | OPERATING LOSS | (4,560) | (3,364) | | FINANCING INCOME, NET | 295 | 202 | | NET LOSS | (4,265) | (3,162) | Interim Condensed Consolidated Balance Sheets The interim condensed consolidated balance sheets present the company's financial position as of March 31, 2025, and December 31, 2024, detailing assets, liabilities, and shareholders' equity Interim Condensed Consolidated Balance Sheets | Metric (USD in thousands) | March 31, 2025 | December 31, 2024 | | :------------------------ | :------------- | :---------------- | | Assets | | | | Cash and cash equivalents | 36,881 | 18,164 | | Total current assets | 38,091 | 20,787 | | Total non-current assets | 1,752 | 2,892 | | TOTAL ASSETS | 39,843 | 23,679 | | Liabilities | | | | Total current liabilities | 3,418 | 3,295 | | Total non-current liabilities | 660 | 2,140 | | TOTAL LIABILITIES | 4,078 | 5,435 | | Shareholders' Equity | | | | Additional paid-in capital | 85,987 | 64,205 | | Accumulated deficit | (50,239) | (45,974) | | TOTAL SHAREHOLDERS' EQUITY | 35,765 | 18,244 | | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 39,843 | 23,679 | Additional Information This section provides important disclaimers regarding backlog, forward-looking statements, and company contact information Backlog Definition and Disclaimer This section clarifies the company's definition of "backlog" as booked orders not yet recognized as revenue, emphasizing that it is a supplemental informational measure and not a comprehensive indicator of future financial performance or profitability - Backlog is defined as booked orders based on purchase orders or hard commitments but not yet recognized as revenue[5][13] - It is presented for supplemental informational purposes only and is not a comprehensive indicator of future revenue or profitability, nor a substitute for GAAP financial measures[5][13] - Orders included in backlog may be cancelled, reduced, or delayed by customers due to various conditions[5] Forward-Looking Statements The report contains forward-looking statements regarding future events and performance, which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations - Statements in the news release regarding future events or performance are forward-looking, subject to risks and uncertainties that could cause actual performance or results to differ materially[14] - Key risk factors include market acceptance, product delays, regulatory approvals, intense competition, product liability, manufacturing limitations, inability to establish sales/marketing, attracting personnel, intellectual property, reliance on single customers/suppliers, need for additional capital, cyberattacks, foreign jurisdiction risks, and political/economic instability in Israel[14] Company and Investor Contacts Contact information for the company's CFO and investor relations is provided for inquiries - Company Contact: Einav Brenner, CFO, info@odysight.ai[15] - Investor Relations Contact: Miri Segal, MS-IR LLC, msegal@ms-ir.com, Tel: +1-917-607-8654[15]