Duos Technologies (DUOT) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q1 2022 decreased 33% to $1.44 million compared to$2.15 million in Q1 2021, attributed to delays in contract notices and supply chain issues [9][19] - Gross margin for Q1 2022 decreased 56% to $222,000 compared to$503,000 in Q1 2021, driven by lower revenues and elevated operational costs [16] - Net operating loss for Q1 2022 totaled $2.64 million, compared to a net operating loss of$1.82 million in Q1 2021, primarily due to lower revenue and higher operating costs [18] Business Line Data and Key Metrics Changes - Revenue from technology systems for Q1 2022 was approximately $783,000, while recurring services and consulting revenue was approximately$656,000 [9] - The average revenue per installation continues to increase due to customer demand for enhanced functionality and capabilities [8] Market Data and Key Metrics Changes - The company has the largest set of contract commitments in its history, currently standing at approximately $17 million, with expectations to book much of this revenue in 2022 [11] - A pipeline of potential new business worth over$100 million has been established, with significant inquiries from both current and new customers [41][55] Company Strategy and Development Direction - The 2022 operating strategy focuses on improving technical and operational delivery, increasing recurring revenue, expanding into logistics and intermodal industries, and recruiting top talent [27][28] - The company aims to position itself as a leader in deploying cutting-edge technologies for precision railroading and logistics [50] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing supply chain disruptions and inflationary pressures impacting costs and timelines for procurement and installation [22][35] - The company expects to meet its revenue goal of $16.5 million to$18 million for 2022, with anticipated improvements in the second half of the year [50] Other Important Information - The company ended the quarter with approximately $5.33 million in cash, significantly up from$894,000 at the end of 2021, providing sufficient resources to support operations [20] - Management is focused on eliminating non-essential costs while investing in long-term growth opportunities [24] Q&A Session Summary Question: Are the sizable cash payments expected to be recognized as revenue? - Management indicated that these payments are milestone payments from contracts won previously, which will help manage cash flow, but revenue recognition will lag behind cash received [52][54] Question: What is the current pipeline number compared to the last update? - The pipeline has increased to over $100 million, with a mix of opportunities from current customers, new Class I customers, and inquiries related to logistics systems [55][56] Question: Is the services line expected to be a new baseline for growth? - Management confirmed that the services line has shown consistent growth and is expected to continue improving due to successful deployments and increased recurring revenue from AI applications [57]