Duos Technologies (DUOT) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q2 2022 increased 458% to $3.62 million compared to$649,000 in Q2 2021, driven by production and installation of new railcar inspection portals [11][12] - Gross margin for Q2 2022 increased 575% to $1.28 million compared to a negative$270,000 in Q2 2021, attributed to operational improvements [19][20] - Net operating loss for Q2 2022 totaled $1.39 million, an improvement from a net operating loss of$2.95 million in Q2 2021 [23] Business Line Data and Key Metrics Changes - Technology Systems revenue for Q2 2022 was approximately $2.78 million, while recurring services and consulting revenue was approximately$837,000, marking the highest quarterly recurring revenue in the company's history [11] - Total revenue for the first half of 2022 increased 80% to $5.06 million from$2.8 million in the same period last year, driven by new installations and increased services [13] Market Data and Key Metrics Changes - The company has a pipeline of potential new business worth over $120 million, indicating strong market demand [55] - The total addressable market for the North American Class 1 railroad network could accommodate as much as 150 railcar inspection portals [76] Company Strategy and Development Direction - The company’s 2022 operating strategies focus on improving technical and operational delivery, adding recurring revenue, and expanding into the trucking and aviation industries [33][34] - The company aims to enhance its AI capabilities and has deployed 20 AI use cases with a reliability rate of 95$16.5 million and $18 million, representing a 99$6.27 million in cash and cash equivalents, indicating sufficient liquidity to support operations through 2022 and into 2023 [26] - The company is considering increasing working capital due to anticipated business growth and ongoing supply chain disruptions [26][27] Q&A Session Summary Question: Clarification on expected revenue growth in Q3 and Q4 - Management confirmed that they expect third and fourth quarter revenues to be up sequentially in absolute dollars [62][63] Question: Pipeline growth drivers - Management indicated that pipeline growth was driven by new opportunities with Class 1 railroads and car owners, with a focus on subscription models for data [66][67] Question: Recurring revenue from AI use cases - Management confirmed that as more AI use cases are added, recurring revenue will increase due to added value [79]