Omniq (US:OMQS)2022-08-15 17:14Financial Data and Key Metrics Changes - Revenue for Q2 2022 was $24.2 million, an increase of 85% from $13.1 million in Q2 2021 [14] - Gross profit for Q2 2022 increased by 81%, maintaining a gross margin of 25% compared to Q2 2021 [6] - Six-month revenue reached $50.5 million, a 54% increase from $32.9 million in the same period of 2021 [17] - Net loss for Q2 2022 was $3.1 million, or a loss of $0.44 per share, compared to a loss of $2.5 million or $0.53 per share in Q2 2021 [16] - Adjusted EBITDA for Q2 2022 was a loss of $777,000, compared to a loss of $437,000 in Q2 2021 [16] Business Line Data and Key Metrics Changes - The company reported significant growth in its three business lines: supply chain automation, traffic management, and smart city solutions [22] - The AI-based Q Shield solution for law enforcement is gaining traction, with 12 cities contracted and more in the pipeline [8][30] Market Data and Key Metrics Changes - The company is experiencing strong demand in the retail and fast food restaurant markets, with a focus on AI-integrated solutions [11][12] - Recent orders include an $11 million order from the government of Israel and a $29 million order from a Fortune 100 customer [9] Company Strategy and Development Direction - The company aims to penetrate the retail and fast food markets with its AI technology, enhancing customer service and experience [12] - There is a focus on generating cash and profitability through better operations and revenue increases [22] - The company is expanding its reseller channel to enhance sales opportunities [40][60] Management's Comments on Operating Environment and Future Outlook - Management noted improvements in supply chain conditions, leading to better delivery rates and fulfillment of backlog orders [27] - The company anticipates continued growth in gross margins as the AI portfolio ramps up [31] - Management expressed confidence in achieving a significant number of city contracts for the Q Shield solution by the end of 2023 [30] Other Important Information - The company has a backlog of approximately $22 million to $23 million [94] - Cash balance was reported at $2.9 million as of June 30, 2022, down from $7.1 million at the end of 2021 [16] Q&A Session Summary Question: Impact of supply chain headwinds on revenue - Management quantified the revenue impact from supply chain issues as a couple to several million dollars, but noted improvements in delivery rates for the second half of the year [26][27] Question: Growth of cities under contract for Q Shield - Management confirmed that they are currently in discussions with about 20 cities and expect to have at least 50 cities under contract by the end of 2023 [30] Question: Gross margin expectations - Management affirmed that gross margins are expected to continue expanding as the AI portfolio ramps up [31] Question: Competition in the retail and restaurant sector - Management stated that while there are companies attempting to offer similar efficiencies, OMNIQ's machine vision technology is unique and not directly comparable [37] Question: Status of the $29 million order - Management confirmed that deliveries for the $29 million order have already begun [38] Question: Update on the Dangot acquisition - Management reported positive integration of Dangot's products into the US market, contributing to a stronger backlog and sales opportunities [41] Question: Staffing adequacy for growth - Management indicated that staffing is adequate to meet current demands, with a focus on enhancing indirect sales through resellers [60]