Omniq (US:OMQS)2021-08-14 02:24Financial Data and Key Metrics Changes - OMNIQ reported Q2 2021 revenue of $13.1 million, a 3.5% increase from $12.7 million in Q2 2020, reflecting higher demand post-COVID-19 [15][16] - The first half of 2021 revenue reached approximately $32.9 million, marking a significant 24% year-over-year growth [12][31] - The net loss for Q2 2021 was $2.5 million, or a loss of $0.53 per share, compared to a loss of $1.9 million, or a loss of $0.49 per share in Q2 2020 [16] - Adjusted EBITDA for Q2 2021 was a loss of $437,000, an improvement from a loss of $551,000 in Q2 2020 [17] - Cash balances were reported at $5.4 million as of June 30, 2021, which increased to over $10 million post-acquisition of Dangot [18] Business Line Data and Key Metrics Changes - AI-based revenue in Q2 2021 increased approximately 100% from Q1 2021 [13] - Dangot Computers Ltd. contributed $19.5 million in revenue for the six months ended June 30, 2021, with a gross margin of 24% [6] - Combined pro forma revenue for OMNIQ and Dangot for the six months ending June 30, 2021, was $52.5 million, with a gross margin of 20% [7] Market Data and Key Metrics Changes - The self-service kiosk market is projected to reach $30.8 billion by 2024, indicating significant growth potential for OMNIQ's offerings [8] - OMNIQ plans to install approximately 120 self-ordering kiosks in Aroma Espresso Bar branches by the end of 2021, with a total of 250 kiosks expected by the end of 2022 [9] Company Strategy and Development Direction - OMNIQ aims to leverage the acquisition of Dangot to expand its market presence and enhance its AI-based offerings [5][11] - The company is focused on creating long-term shareholder equity by strengthening its balance sheet and continuing growth in both AI products and supply chain automation [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth in AI demand and backlog, indicating that sales are expected to increase [44] - The company anticipates gradual revenue growth from cross-sales between OMNIQ and Dangot, with significant contributions expected in 2022 [35] Other Important Information - OMNIQ's combined consolidated revenue for the first half of 2021 exceeds $52 million, representing an annual run rate of over $100 million [31] - The company is in a strong position to uplist to a major stock exchange, having met the necessary criteria [55] Q&A Session Summary Question: Contribution from the U.S. market regarding Dangot - Management indicated that immediate cross-sales will occur, with significant growth expected to start gradually this year and continue into 2022 [34][35] Question: Timeline for expected synergies and normalized EBITDA - Management expects to see significant synergies beginning in early 2022, with a focus on enhancing EBITDA through the merger [36][37] Question: Update on legacy business - The legacy business is experiencing year-over-year growth due to improved offerings and additional in-house solutions [38] Question: Backlog comparison and pipeline for second half momentum - Management confirmed that the backlog continues to grow, supporting positive momentum for the second half of the year [40][41] Question: Plans to increase ownership in Dangot - Management confirmed plans to increase ownership in Dangot sooner than the due date outlined in the acquisition agreement [43] Question: Status of AI technology breakthroughs - Management noted strong demand for AI solutions and an increasing backlog, indicating continued growth in this area [44] Question: Update on previous AI deployments - Management provided updates on projects in Georgia and New York, highlighting successful pilot programs and the company's unique end-to-end solution capabilities [46][48] Question: Expected gross margin with $100 million in annual revenue - Management aims for gross margins in the mid-30s, with aspirations to reach higher margins as integration progresses [52] Question: Confidence in uplisting to a major exchange - Management expressed confidence in meeting the criteria for uplisting but noted that the timing is out of their control [55]