Omniq (US:OMQS)2022-04-01 18:10Financial Data and Key Metrics Changes - Q4 2021 revenue increased by 93% to nearly $25 million compared to $12.9 million in Q4 2020 [6][15] - Annual revenue grew by 42% to $78.3 million from $55 million in 2020 [7][18] - Gross margin improved to 24% in Q4 2021 from 19% in Q4 2020, driven by growth in service agreements [7] - Cash position increased by 39% to approximately $7.1 million since December 31, 2020 [8][17] - Net loss for Q4 2021 was $2.2 million, a reduction from a loss of $2.9 million in Q4 2020 [16] - Adjusted EBITDA loss narrowed to $548,000 in Q4 2021 from a loss of $771,000 in Q4 2020 [17][20] Business Line Data and Key Metrics Changes - The acquisition of 77% of Dangot Computers is expected to generate immediate joint projects with OMNIQ's AI solutions [8][9] - Significant contracts include a $7 million agreement with a logistics client and a $7.8 million deal with a food distributor for IoT equipment [24][25] - A purchase order valued at approximately $1.8 million was received from a Fortune 500 IT supply chain provider [27][28] Market Data and Key Metrics Changes - Demand for AI machine vision solutions is growing in the U.S., Israel, and South America [10] - Five cities in the U.S. are under contract for the Q Shield initiative, with more than 30 cities in the pipeline [11][47] Company Strategy and Development Direction - The company aims to increase its annual revenue run rate to over $100 million [6] - Focus on expanding AI-based solutions and supply chain automation [40] - Plans to develop and install the Q Shield system in multiple U.S. cities, enhancing law enforcement capabilities [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth despite global supply chain challenges [44] - The company expects to achieve positive cash flow in 2022 and maintain a revenue run rate of at least $100 million [70] - Recurring revenue increased from 10% in 2020 to 15% in 2021, with a target of reaching 20% in 2022 [49] Other Important Information - The company secured a new $8.5 million lending facility with Bridge Bank, replacing a higher interest facility [21] - The integration of Dangot's offerings is progressing well, with expectations for accelerated growth in joint projects [30] Q&A Session Summary Question: What are the supply chain challenges being faced? - Management acknowledged supply chain challenges but noted continued growth in revenue and backlog despite these issues [44] Question: What was the AI revenue for Q4 or 2021? - AI revenue is projected to be around $6 to $7 million for 2021, with continued growth expected in Q1 2022 [45] Question: How many cities are expected to be under contract for the Q Shield initiative by year-end? - Management indicated that they expect to double the number of cities under contract within 2022 [47] Question: What is the percentage of recurring revenue for 2021 and predictions for 2022? - Recurring revenue grew to 15% in 2021, with a target of reaching 20% in 2022 [49] Question: What are the synergies with Dangot and current joint projects? - Management explained that Dangot's products complement OMNIQ's AI technology, allowing for comprehensive solutions in various verticals [50] Question: What is the current backlog status? - The backlog increased to approximately $18 million at the start of 2022, up from $14 million at the end of 2021 [60] Question: What is the expected gross margin profile with increased recurring and AI revenue? - Management expects gross margins to continue to improve, aiming for the 30% range as AI products are sold [65] Question: Is there interest from U.S. and European hospitals for Dangot's products? - Management confirmed ongoing discussions with U.S. distributors and noted significant interest in Dangot's healthcare products [66] Question: Is the company expecting positive cash flow in 2022? - Management confirmed expectations for positive cash flow in 2022, alongside continued revenue growth [68]