OMQS - Earnings call transcript Q4 2020

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Operator

Good morning, and thank you for joining us for the OMNIQ Corp's Financial Results and Corporate Update Call for the Fourth Quarter, ending December 31st, 2020.

Joining us today are Shai Lustgarten, CEO of OMNIQ, who will provide an operational overview and Neev Nissenson, Chief Financial Officer, who will discuss financial results. The prepared remarks will be followed by a question-and-answer session. I will now take a brief moment to read the Safe Harbor statement.

During the course of this conference call, we will make certain forward-looking statements. expectations, predictions address are the that statements. forwarding statements opinions about or future All

interpret publicly our our and can statements current current our reflect of them they Although them you and certain with expectations not cases cause of in I are company's any of risks result business we guarantees otherwise, a risks affect differ no or law. and by industry today, results of our uncertainties these Form XX-K undertakes turn to best information, and performance. are the for Shai. statement, and business a We unless future the and that filings that to light. and number our These expectations new the and future that that update as factors to see the involve ask view performance, events or the on and not in change actual the control, within materially. urge of call of consider review will would and could whether principal since those discussion elements to we required a are OMNIQ you based as over uncertainties obligation revise form now company's otherwise SEC the forward-looking

Shai Lustgarten

and you you operator, and finds time the taking to appreciate loved the on hope listen and I this healthy. you Thank and today. thanks to us ones everyone call in, I safe joining your

XXXX pleased and fiscal our thankful year are to results. successful We discuss

received the by XXXX Best as during QX million same QX annual in level fell on XXXX. almost in managed companies grow we sales annual new success we XX% XXXX, almost orders in to $XX our pandemic of revenue achieved in many that of orders worked the level one million of we is the XXXX. of and indication digit $XX.X spite revenue sales, While into while maintaining to

for XX over XXXX. by quarter. compared XXXX, all solution we for is Just an record QX million AI QX received time to received It orders one increased orders in in of our new based in orders The the XXX% us.

in Our our and AI install to in we prevent superior one that customer strategy, main lives. our and We to based and order based technology our area a two diversified very assets, an AI cost mainly chosen the strong important the superior announced to technology life care base. XXXX achievement including very we spots a of thanks is to attributed sensitive mistakes most our solution were our saving. in world Recently, received

you operational JFK, I already Fort Worth is York, in the AI as other solution a you AI Our and will US for in with New take HCS drive and printed when a AI you it to airports stop Angeles Los them our on airport, worldwide. Miami, a cameras, planning many LaGuardia, picture spots us Dallas, and smile. with send see our many minute urge to and

control we XXXX. during parking in already universities, projects law enforcement revenue sharing growth to this and we're and model, management have in to places worship traffic installations uninsured sanitation. have significant of a We safety, and others Now market with won detect expecting cars schools, and for

I'm Asia, Safeway, McKesson, Security Authorities ready usually Municipalities Homeland Israel, press we customers Israel users like don't companies and Bridgestone, now. Defense in many and America and our end Minister US, mention in As in disclose the and releases, of to in others. some Governments

we Security caller capabilities assets like solution includes our all the identify some won. features superior us differentiate the competitors potential projects Our second technology in that the Homeland make and vehicle AI from that ID new

get that's some deeper financial and performance proved authorities know the able I'm any in going world. and and information, the other of thoroughly company to results. to financial quarter to was system We additional about to the a the before some the we results. with don't then to highlight over and year-over-year. $XX.X Q&A. now Neev demanding Our approved it outlook up of dive it And tested Starting level into same OMNIQ in do. operational also turn by with opening most we're finish up our revenue, XX.X% achieved, review solid year provide and fourth million an

$XX record postponed pent-up the XXXX we pandemic, being converted and That For signified million pent-up in demand. higher generated QX with technology a due let sales. projects a in million demand further, before financial achieved were great go me in the I Neev now We're of to we've off business over have this a orders. restarting revenue look decline $XX.X But Furthermore, now to have full in projects certain small XXX% experienced a part very our growth to is turn take we deeper year temporarily to our results. at XXXX, new margin AI start.

Neev Nissenson

Yes. Hello everybody.

interest, with per -- amounted earnings X.X quarter decrease of which as to and $X.X $X.X of coming as basic of fourth quarter in the of reflects of revenues continued seven $XXX,XXX loss million of of of ended million million XXXX, Net Adjusted OMNIQ XX% of well adjusted a -- a feel in our XXXX. quarter million the to the taxes, is out of loss fourth a compared XXXX. an amortization in or COVID-XX compared reported $XX compared as fourth X.XX fourth revenue loss traction the to $X.X loss expenses share EBITDA were depreciation in The reported year. quarter an or million the share operating we of increase of XX, markets. for $XX.X what pandemic quarter last demand the was for X.X% in of quarter $XXX,XXX loss for mentioned million As almost for per $X.X customers compared $XX a $XX.X million XXXX higher XXXX. the XXXX, adjusted quarter of for XXXX. December of loss before a revenue the EBITDA is almost Total million increase from the Shai with quarter highlighted fourth from

related the as The machine Total was of certain to automation a projects demand expenses got for XX.X% reduced projects. the pandemic revenue million operating of expenses. common per Net for with the to decrease vision Adjusted $X parking XXXX. a XXXX million an for primarily some As expenses share loss mentioned, was same a mentioned and a $X.X or and increase margin income XXXX R&D was a to delayed. decrease in AI loss $XX.X loss year. Gross compared to was was due $X.XX EBITDA $XX.X operating with to in due XXXX EBITDA in compared loss million for million X.XX to million period and federal in non-cash compared last of XXXX. XX.X% the change adjusted in primarily per of were for XXXX in an due $XX.X of $X.X million compared or additional loss stock

our over to Let more back and turn about Shai to achievements operational me outlook. now call talk the

Shai Lustgarten

Neev. you, Thank

did Looking and readjust what happening XXXX, saw ourselves we to back we reality pandemic on and was that with things. we to two the had

segments include are leveraged we that that the times. we food so and First, Those e-commerce. could we into pandemic the penetrated well drug during and fact

distribution lot working chain instead those penetrated centers in of customers managing retailers. working very run e-commerce their were who with and to a and are well or We supply

work, and of centers distribution customers That year end so dollar multibillion existing is every the to the to distribution and side, We managed Talking our we medical than slightly lot getting pandemic. projects -- work those very less deal, move the the during much a so year did. very much postponed. relationships we of getting doing XXXX a e-commerce despite less great that years allowed of was revenue parking slightly were end on us growing the For centers. than being competition that on were

technology. show of supply And doing with the is diversification the growing the growth pleased We're So also I I'm we the what reason. that hyped of of numbers legacy I because existing nice will our in well. happening with in very see very Without XXXX. on the think, of already But AIDC. that for can love business, diversification through double good and expense, our business we our business shows Everyone increasing $X call chain AI XXXX the legacy nice legacy numbers and well, business.

The XXXX second the AI we was in productizing did thing business.

able a a that of selling. are complete As to new on result had of lot XXXX we on because time it, to of a in we our of do investing lot we infrastructure That we of invest by of was R&D, growth the AI, in was had and time able to had that to work, architecture architecture that are to that everything current in positive. XXXX lot today awards and very in We focus products were We XXXX XXXX productizing AI. in were and XXXX. time for happening today because supported the a infrastructure. finish AI

is and press XXXX projects That is at ahead going in AI, the drive the revenues all the are AI our outlook releasing. AI onwards we to what Starting in AI in business, to for look which chain getting with have legacy business having the sell business we we that productized Let's supply XXXX principally the business awarded, AIDC outlook. XXXX is market. XXXX

are driving revenues pleased safe first before as a same the The this AI is municipalities future. of implementations different had and not going XXXX And under that our live. the place currently With business doubling for revenues consideration time is installations AI the years. the actually three we Three said, be in are have city QX I'll the and speak. deals. sales revenue forward. drive first parking. highlight those right precise will AI at that quarter now year. what It share do will quarters AI of less out. of we few than taking break We markets not previous in now municipalities we That The growth to I'm

we approximately nations United uninsured in a are uninsured million its system road. which every road a in to millions addresses dollars deploy day, losing driving traversing Shield across product, States. is endemic recognition our registration and the of through on XX city, requirements. in city are Q vehicles of for selected Georgia unregistered Shield violation technology problem Q First, State the identify Georgia is the states vehicle that the from of were to vehicle any vehicle a by That

vision, innovative US. selected machine as authority Q defense announced to pilot company We business, terror safety zone technology well of outside provide the has AI solution is also This Shield enforcement the received traffic a XXXX been phase an surveying that order traffic OMNIQ's traffic. for that top a sensitive XX advance lanes. billion the attacks to York the five points and addresses in out, prevention to an We severe of a to $XXX for global geared the in public transportation as spent over congestion years. lanes, high technology along hours the urban drivers OMNIQ's occupancy New cost vehicle traffic of will next stuck exclusive peak average problem in operational

access fast-moving provide best-in-class management and Finally, expanded received to South professional companies person solution solutions distribution systems and best-in-class the consumer African aspects control, market. X.X into the market. billion center addressing continent, warehouse the African provide and goods countries Africa, and security, in will operations and operations and AI-based control management warehouse distribution control of aviation OMNIQ security risk other initial and South our logistics, Africa partnered of Through a the solutions operations. in with African warehouse all South and provider access professional into and with have based and we partnership, logistics South aviation orders other OMNIQ warehouse surveillance, to already

AIDC Turning to we growth seeing with existing services business. expand software additional the legacy customers as services. We're to

of management of course, devices all bought not is software which the today. provide and the by from received to before devices, services us, the are for provided portions example, only case third For we margins party it, directly

Now in customer. of we're front standing the

existing is one-stop product winning higher new a to shop customers. deals we our dollar that line, is sizes see more compared We selling And with legacy addition The year. to last orders, contracts, purchase are amounts, why in AIDC bigger for customers, to bigger ARPU of deployments, new in customers. driver

it share trucks is for as collect of and retail and which an Canada in from over those approximately equipment QX as deals. XXXX in for one well the in deliver trace product $XX purchase higher calls two mobile supply mobile chain million a legacy $X.X over a approximately $X business. as revenue. the AI AIDC. largest base main computerized Now the internal to one system. agreement lower billion a distribution today of calls the solutions largest North US, annual and few to revenue. legacy equipment support of growing supply to inventory US the products, from distributor's million distributors annual of highlight as growing applications and receiving revenue US lines identified thousands special of inventory has IoT and in generates food going with automation received Tariffs, we're of IT data $X.X and designed The the track and The assets e-commerce billion revenues. the for retailers IoT purchase is America, of agreement to in Also, AIDC announced designed computerized base control supply AIDC agreement These up we collective and center, well legacy of nicely exponentially and that AI agreement that is the are

legacy replace to our point. our to penetrating and together. final we day, until to technology. go vision service, markets at turn equipment has business Q&A, together give it that high grow industry. not is market produces challenge reason but the AI on barcode and remember I with of That very the readers to the sky, the put AI many been will of is is now business. based machine chain. and believe this business accelerate percentage Before numbers to we end of AI for dramatically to and have the supply the the new margin computers It the why AIDC solutions and chain, supply to will put big penetrate AI make amount revenue supply just powerful real all AI one When chain the of more want biggest that AI We traditional no the is but the

but are of that, is Names from these in best technology. assist that us. doing see the the no years. the more we right do know us the talking huge door, having Once XX to can our already offices the that to for you of on breakthrough dollar to is get command the with. do run them that AI deal. these continue humble XX and They AIDC customer than barrier. news multi-billion time. this for no on some this the pilots, many the It's in solutions. you're years, will already with our sales. is teams takes bad knock have cross-sell with best year take the To door, have fact empirical have doing pilot, to we're run be But answer. The customers, industry able we of AI time. business our and we everything as in You In it inside good them. answer. first have business. familiar you the receive big orders. customers technology, and an solutions chain already through already Also, enterprises, is biggest barrier is develop just once having discussions of a leading home together. the for revenue the Fortune integrators technology. relationship XXXX particular, take no customer, and in we Then chain base We're with opinion, place, you it crazy The customers. companies cases, the are a AI expect What analog, to and advantage working knock supply That our we the with it our that, they see finishing in with walking want yard AI management. these If one their we getting XXXX, out When their one like we is organizations, it penetrate you with XXX The year companies to our these one do take been news, can years for Working with huge we for customers, AI us one will about migrating, be -- with business and legacy

business margin, size To we higher of comp of coming minimum reiterate We resumed supply chain in record growth whole course. To from AI of doubles are and chain. only a repeat projects AI-based because laying the have new driving AI conclude, expect our the and with this to and on of bringing legacy supply projects cross to solutions Parking and AIDC chain customers sales to increased City from supply with our sell Smart existing groundwork customers. AI-based deals

even thank sales thank I drive our you operator very our to and and and drove just turn the performance questions, us our I the Before OMNIQ and dedicated management continue wanted challenging the of XXXX to committed who over team, and uncertain times team R&D strong world our team in SAP around at to much, the for forward.

in order call those XXXX, are will sales. levers margin of now with $XX higher in more of our questions. the first The new a for technology of million XXX% growth than I and QX over turn reflected record AI-based Operator,

Operator

our Instructions] Taglich question Brothers. [Operator Howard from And Halpern from is first

Howard Halpern

quarter to the XXXX. revenue, out a on just of first the getting kind be were pretty in terms -- deployments through? steady was you in of that the actually navigating hesitation companies maybe would to quarter Was been as that of I've tough from accomplish any it a way recognized Congratulations the wanted other all very able middle I feedback or there there. of number

Shai Lustgarten

I very would say quarter. steady

oceans did situations. course, technology imagine not once this can in its that we before and with exist finding and in Of applications you many many are ourselves blue services as

about or is face the solution worries call how is of hesitation, the nicely be more gives total very whole sometimes go steady, of of basically there's the it no deploy period deployments the It what application technology and no, But so learning and really it's products feedback would to said very world. a I So I good to it a to where play. I more call far done needs system, you lot always wouldn't always expose mean, forward support no to that's there running. -- to And but hesitation, we us a difficulties. where first right going actually to it

Howard Halpern

But there maybe I little or talking that? of hesitation during you end technology. postponing quarter, you're didn't the was COVID couple a know and of from specific things about any any of users kind see But company

Shai Lustgarten

is quarter the one, there this business. we the things the up. say, very in are meetings These the world that opening We've are headquarters our visit and a Salt less exciting No. would talking customers see XXXX people been very And out why in feedback time us basically, really, Lake giving hyped excited. and to yes, XXXX, us the makes that's which traveling. from But coming all and to planning I did us revenues with was

Howard Halpern

when talked had we're deployment. of then you getting talking your in how and safe what cycle you and parking order cycle legacy do the customers. seeing sales city, just earlier little some the I the customers some new the You as of go and imagine about bit the is about what But that a of about sales actual with are bigger

could just that going describe you If forward?

Shai Lustgarten

you've The a safe we sales packages municipalities, K-XX had our in cycle then that et to When several further better and safe we in I'll software cetera. went offer community with which city, before productized public of we only today, to we schools centers, the But safety for -- then in work that even churches, Sinegal, in -- in with back respond to worked different when our we the municipalities. markets In governments, and products up we to. mosques, be productized city, today, reflected nine second.

brought you can or And from, selling to university a we from the cycle we then we today deploy K-XX an it sales started municipalities after shorter. of it to sales The sell where is it long. order the level take then become week. to So a when and a government cycle school

and to Mrs. and bullet you our investing kids proof to cycle sales to will, relevant short government, if the make by lot school. XXXX the Mr. in solutions, their brought we to So John a be productize very sending be

Howard Halpern

to two the legacy that orders, -- of the And gross and talked $X.X too. maybe $X.X in getting is kind are got food the of million distributor type million you business in in evolving, margins that past margins you deals just of about or that On terms years? deals retailer. those you compared general, to on those What and

Shai Lustgarten

It varies.

to specifically you these Specifically it to varies. -- deals, I'm two but responding

but to get one them business legacy many go other for would that huge GP, years. through legacy does that more seen the just in call orders, our use what other We It mentioned, they are more object image remember, the we've different One our one the But going even is lot is business, And works that of now depends but then technologies sell legacy and technologies to margins, typical services, more the to XX% margins call for world experience, customer. for a one identification even which we identification, for up technology business, we're customer that the it, is is ones, for recent type the use we higher, got that the technologies, automation, Even more to with already before object us. the chain, with higher I the years. and you us average would processing. which deal recent exposing the software we that many of supply other on that on that what most XX% with the go -- deploy would them, through of we does vary.

Howard Halpern

deals revenue in AI-based that forward come be generate you're technologies those them, ways there to you deals you revenues? that to of think I going monthly do, customize the I guess, they said multiple types as with terms are from sharing revenues. of going And of going offering, the Are one-by-one? that you're

Shai Lustgarten

or per comes different software share year. markets in revenue we products, revenue license come different products per the user models, have user with I either different The they for like license Absolutely. that per or it month mentioned or different transaction

profitability. up their GP XX% accordingly XX% gross ranges and vary from to they So

Howard Halpern

$XX you're or of major will And about you in there, the a growth take you major structure seeing do kind changes around what expenses that can right in in now, of operating have give that But to potential, hiring bit. what sales support million having to stay and without cost and you terms probably a little have?

Shai Lustgarten

type two we Again, -- business like have of mentioned, lines. I it the on depends

got we if and you the the So legacy AI. will got we've

any the So can immediately XXX% not we today million type will of of don't it. even a $XXX expense on even put growth AIDC into additional AIDC. We business got growth need $X -- to the that on support complete business infrastructure

AI we're we star a hand a my if I number, I since blue yes, infrastructure got to I probably one on got two sales today say, growth need on, into significant. that a and But even and the mean, On no we’re to without -- channels, allow you've XX% would I one of direct would say, going on like us, put again, ocean good would later working indirect.

indirect the have you the is is that created. is going scalability the to engines growth the lot that sales to a channel invest one in of we in So bring huge -- going to

to be there's the you're something going in that line. to investment. going -- at all looking that of ordinary that's is not be But at out So business some

Howard Halpern

of you on And potential years over to else jump three the let revenue with in, do seeing software the $XXX in it your based to million to AI-based be growth of that final part in you're there total, $XXX and your million, out one up should someone be AI. I'll What percentage you're get annual if five revenue, will one, AI-based? the next able the what of that hope percentage what is

Shai Lustgarten

came XXXX term, year an the start used plan started in I we the in with year should like In XXXX exposing we pandemic not three three as an excuse year a excuse. use and think XXXX, AI. and needed, be to mentioned, going because fairly we well. did We we to as did a for we readjust, XXXX, So -- don't I up anything it ended

achieve. given that I'm opportunity to did I'll say the I year I'm proud better. better. plan. the we analogy, of we out did same need not of add course, the erase same much going very this expected that team indeed, XXXX year We reality, But this the analogy, achieving fact, if to take given expect what do be And can three of to the

did start year a already we So ago.

year AI XX% our revenue three software three Our XXXX, business, in XX% of years higher achieve from to the one. the more in between plan come margin to to

Operator

question from next with is investor. our Panuski] And private [Eva a

Unidentified Analyst

And of course, congratulations results interesting and very on the impressive good update. and the

have And so please. I a few questions,

follow Can over cap? have less highly with competed technologies any I important some security in million companies. $XXX,XXX they So you comment Homeland annual that $XX on than Do the sales on market comparable have companies special or contract?

Shai Lustgarten

but we day, that to you it wouldn't us for they the us. all, as actually doing A good -- itself and continuing and first customers get the ourselves of getting thank us that projects ourselves get So were of And awards, the lot Yes, only us many start our for because awarded, you we do I and again, every to ways, service. in provide that the follow not to course, hear better customers supporting Appreciate they that. us technology. compare and well. basically once indeed, compare we the on only prefer means I'd to rely we awarded of that us the with it, do by answer way, not is

Even service, on day that someone the support, customers that the someone whenever rely was invest picking they the if here they there there not run, of also in. the salute long team, them just are XX be to flying our because customer, through at it in the in an I possible. traveling that pandemic for up issue. for every only drove with the a in instead technology traveling service, They customer, that to in times line, can a service, but were hours is Our flying rely is other on support companies there that companies end steel were of

a on it relies shine I'm And that as we happy this well. that because it as well. So do of does way lot

that in in were we CNN that performance release the mean, gave did newest operating as mentioning but And exceeding. with internationally performance an We're processing, that days engine of And algorithms a deployment call into today, competing our markets US of infrastructure mentioned in such our we've countries XXs And which only that XXXX by penetration we we're see boost I I the getting et is got we the to And not as field, side, would technology because engine, geographically. -- will was XXs do machine superiority. awarded cetera, we only possible our after area, not that before we strength technology, say in that learning, the technology. you we're and is approved that before where image itself with. the a never that On been the our well. in only few of newer us this exposed

Unidentified Analyst

There's article And Journal question. the Wall supply Street for good another a regarding in chain. AI I have

it few you vision? Can times about spoke and a You also [destock]. explain your

Shai Lustgarten

only putting in I to where the about try Our starting it vision -- project very else would sentence tomorrow, is that us, until to a is that is can keep our everyone talk That a one it flag. is but only done to is again, point. vision see

talk municipalities. about you if example, For

invested for in intersection So if that do because municipality are be that example. systems happy this in a we about XXXX about first that spoke that in would then see for the deploying relevant and call K-XX as the it community done municipality a we their we productization think in getting centers, competitors our we flag project and deliverable,

and and our of and we churches, if there, deploying big the the from are community come for to very is analytics, field US for getting bad the if create products the the awarded products the to any mosques the to So going go start that the the that the with the the then be in to governments coming municipality the from because Chief next-gen well so point the only the to markets are schools, center and the we starting we that wanted data the all centers Police other go to go catch neighborhood, to in will of our the because now data, do proactive to to guys in one us, are ability go big just deployment. our other to not solution in is really the municipality predict. world because to government customers analytics endgame that the K-XX community to sensors to These

Unidentified Analyst

I'm sharing projects now revenue with So question. getting my about for states? Can municipalities tell you and more last

Shai Lustgarten

we actually The very to to one, be because per $X,XXX spoke model of out ago. it, ability engines is interesting use So thought let's that to with second call the a If for to first a on growth it year, depending in GP. leverage the which deployments loving with we XX%, product The good the going case. licensing XX% month, we the product, don't thought the come and exposed vision field, were come or revenue models. we scalable, If know, in for, is than to create that's needs about relevant found we opportunity be different ourselves exposure created ever which gives much and and before. that to layer a minimum we've example, share supported be revenue I larger $X,XXX us be that of been course, our that a the order

you invest, a save are other the in with per different and we there. to we that. So conduct with a the to there I'll way understood they where city. come faced, we intersection but are times transaction We investment? the need criterias together funds services many own grow for municipalities to is that model any needs. we able challenge a revenue the investment of then systems deal we lot is residents for a in -- not next put do grow so get then that their And second. we challenge there our we share great system the Now revenue and probably And even found to okay, cost was the together but to our the And we with your needing the faced one or put question, will, how found the desperately be a of provide the on needs ourselves if

on even investment grow city are than actually and that. needs is to in they and goes as portion us machine-to-machine is the start that not the investment together of for the funds they them that et user use to it the is machine-to-machine And day, getting never the the detecting city. case very with example way, vehicles, the revenue a for all payment throughout show solution a more them OMNIQ. low. the deployment come revenue financially can immediately And before. what interface, city, fronts for support cetera, from XX/X, all getting as The it capability create a our a everything as to return And is the share For city can because uninsured in good them us By us collected, one example, detecting had all by allows for the process, collected, with a that learning process, us, citation the the portion and and solutions, that next of to to together done well. it

Operator

next question Hori from our Capital. with Hori And Calvin is

Calvin Hori

Can potential you listing? on us your update NASDAQ

Shai Lustgarten

done. year. now. We are it a done us of getting years still It the happen been to closer lot to so. it's We've about the getting work process going for looks in We've doing talking this in objective two like of

it we're from And to excuse, immediately. weeks even than sense, is Of hear now on that, discussions using in course, XXXX I the lot being in reality. this you'll objective good we think And on for closer an it news get before, again, now. anyone of not were just that ever done as a

Calvin Hori

Oklahoma, bidding side, Florida uninsured your in be on of some on other contract up you and Will I one then enforcement the competitors well? AI And of on coming next states. is as your vehicle guess in those big some

Shai Lustgarten

know good to course. all course, federal go it Of award. know, to got as is bids Again, But our of measured to we'd our well. read or I where competitors, an exactly performance. you the as get and because you by that small if call by job of -- Very to got through like the letters don't municipalities, they

in course, in we're Florida, get advancements in places So offering getting as as and are Oklahoma, these worded in we we yes, of and well. we're well, offering

So yes. the answer absolutely is

Calvin Hori

provider they they go these with many states, In of correct? that go several. won't Is just with one

Shai Lustgarten

Yes.

it course, on they're yes, Of way depends the organized.

like follow their municipalities states Some one to would order.

exactly larger Some approved where what by states other. give where are we'd it I to performance, tell process the you all municipalities we I a is to performance. them can't determine. And exactly that's go you than mentioned, tell But through to got can the because measured of this, definitely like that's get like you I by superior.

Calvin Hori

year? And for this do to expect profitable you be

Shai Lustgarten

sir. Yes,

Calvin Hori

I guess And X.XX price then and it's warrants in CFO. I question, last exercise an Is have like got I of your filed you your that million show for more $X.XX. correct? a outstanding XX-K,

Neev Nissenson

it's warrants XXXX. came least some done the a was pricing, pipe in April lot think weighted at -- I a warrants from a of that

Calvin Hori

Is it $X.XX outstanding? the amount million correct though

Neev Nissenson

believe I so.

Calvin Hori

$X, Then since into you bringing you the money and exercising people exercise to price see have is begun any company?

Neev Nissenson

so a and especially many coming inquiries seen with from we Actually, of in we've lot interest stock investors, in a high. being that, have had lot the of

Calvin Hori

X.X million I -- like So to you were outstanding. statements shares your show if in

be million correct, the I fully million, to that or X warrants? X.X closer the is guess will including diluted So

Neev Nissenson

and warrants there's there's options. So

we've employees options. stock I some think also seen also exercise some

a lot of and there's So warrants of Obviously, in options there's lot definitely a interest. the money.

more see to expect being issued. I shares So

Calvin Hori

good million fully is a shares, number, to a diluted number use? it's X So that

Neev Nissenson

on I top the so, head. whatever Yes. of We everything statement. don't appears remember And my the off think

Operator

Instructions] Please next mute. open, Partners. Guttman] you sure there? with your question. with is from question your proceed are George, make George, please [George [Operator on line you're not Jericho Our is

Unidentified Analyst

any bill you great. being see proposed? is will profitable heard to be we we infrastructure this benefit that I said That's going year. Are from the

Shai Lustgarten

and generate that, to all, would -- that of again, you first you, talk good thank lot think to George. I a

going this different especially learn I see read but how the we state with that exactly And opportunities. you today I can't a of of that recent what the about to it to on open still of trying or PRs to it's like going think here or we're is to the as spoke looks in to but we're opportunities, to line HOV process know, fact well. enforcement, lot in and well is, that's further, and up our up affecting us. probably this course, technology alludes be exactly going opening be as going this because learning

Unidentified Analyst

ventures not you were if asked market open outside. HTS, of the asked company licensing United throughout The of you first how you, looking it. or only acquired States you conference call you a had the when small I to to you technology to I joint this idea but

to that potential have huge us to in see very now market. a I was a partner exposing happy So Africa, you South

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Shai Lustgarten

strategies to you one about M&A. spoke grow we are and growth other calls, the the mentioned is Like at as in is, course, other two looking always organic our we before, business. of One

South opportunities from beginning partnerships -- lot an the would generating from you different exposed for like By well, mentioned. you growth, as of the see in such projects us Within established to organic for and Africa. a way, in world, and would areas as M&A projects entity different partnerships the of make and phases come success in one getting such the the

furthermore, company. is realistic such So skills the than strategy for are in of this course, to M&A side, on conduct had as company make the open answer, tools opportunities the today, we the more many other that we yes. and ever the have on we always to And we're more

trying same We on can an and M&A with yourself. actually drive energy to than opportunity once do everything you are got that a the years working efforts of you that because couple forward

is this definitely, that with So we're able even deliver that conducting, something is very And very that to be applicable, we'll relevant. soon. advancing that about news is important hopefully, and

Unidentified Analyst

fairly some million, trade that to A don't couple have I'm front the cap. could hopefully, venture actually may $XX candy believed tell people store new that I logic. revenue big hear you that, be external we the M&A them mention new you million. that that at may of I I'll to soon, be say glad gives front none believe that. than significant to that has corner us trade Worse Having now name. that, should be. event we of in to the me, you or less event million as know, and that $XX said mentioned where heard we on at, It $XXX there to our the need company competitor, It has not is a why. joint catapult astonishing market is mentioned defies -- something that and eyes we

it soon. see in you Thank So hopefully, much success. continued we'll very very

Operator

from Mitch And question [Sorgo] Advisory. is our [Sorgo] with next

Unidentified Analyst

level, you math can instance, whole? to And is this want give get within of for margin new wondering from year, business expect to happen someone us percent in us the can the And exiting us the walk the for company you with revenue cost I'm very you structure story. as towards slightly also the undergoing At through and a But when of said terms did with that? on AI? in can But it start, did profitable the now XX% did that high as the not ramp your of a years? year, AI you for there? terms what help you -- transformation to a be coming it understand on higher mean or Where XX% you to are I year you you if you your mean to in just three question. what to has be entire think separate what you're disclosing is. feel when

Shai Lustgarten

answer to So question, two questions. your

selling yes, and easy the hiring, margin we software, using how now do brought basically you're all, an going sales of way which different come higher it's we, we looking for other had already that by you to or public safety resellers plan in created we're the references. relevant -- that course, by it's markets solutions sales direct but there established in of and and as that the the if the of with from into selling The the is products channel profitability, the are margins and channel, answer more we there more that details AI as First XXXX as the where to to have new to the had possible. channel we markets quickly indirect way, get on and training will, get well,

scalability, have to to and We good got now going reference if the come from leverage that's the we get everything, but indirect channel.

right solution, products the and now. where sales immediately, that indirect scalable that be the year significant the is that to to already. more And sales. on exactly be So what of sense And is XXXX we're higher able channel, getting our channels immediately focusing XXXX course, to for product a brings in expose to markets, opportunities relevant us margins are in

was to us we've expect which that answers the work in, to course in the give opportunities we well, of I that quarter question. XXXX. QX, more that of lot good that bring expect done this indirect great I I day emphasize show that be that we created, quarter say, we some that input. momentum QX see -- XXXX, would it want more a that from of see the to did from the comes in start I on But QX is do we trend Now a a end as having start a business that, from which work and And of lot of said Yes, hope the created. that XXXX, we of created at that better mean, that also was to see in we the would the you discussed. would channel profitability the significant us

Unidentified Analyst

that super I think helpful. was Yes,

Just for maybe a this. little on bit color of

understand I a of kind you're margin a long if time. correctly, for more low on business So

or… internally up product with Did develop the you it AI. AI came You the or acquire

Shai Lustgarten

AI business the machine not vision The was technology. say, not -- let's

for that today That's different that are it have of would the things what So but we penetrating to what when or, in than or We acquired technology in today vision. relevant vision to of be totally XXXX. dollars in The network execute saw in to XXXX. acquired it to machine R&D, we that millions of everything than is than we algorithms, are infrastructure the we see vision totally us execute from able was started be the basic brought the places business you would from the what neural today, business we this to investments AI of a different bring a that I new we've earlier. technology And infrastructure an we the before. a to applicable markets we lot investments different is making discussed infrastructure was the say, started in creating a

course, today So was than to acquired and baseline from answer started which would we of successfully, question, yes, say. different is I what the very

Unidentified Analyst

this separate almost business pipeline. like the or being you’re by point, from sounds businesses leading in entirely so driving most Is with AI the is deals sales it it and at So then along the this? lead lower the of or business what's I'm margin wondering, it, lower your the margin more

Shai Lustgarten

markets in it First you the I'll not on company what of The we way. planned mode exactly the focusing to all And me out. if is the mode. the try answer approach. all, technology, transformation I'm is transformation this infrastructure, The exist wanted hear. The references in stop again, to

So the one that works is transformation two directions. mode in

rely significant are new existing mix channel. call more a parking, on we seeing is the now. to the the we're transformation existing really for on And said the references is public about is This The two mean, customers, is it right sales engines more solutions. et executing from great, the approach what the created sides. again, safety and there we first, customers, the we our second existing getting can I creating are markets, sales our cetera. new the the we with markets, spoke that, indirect scalability and growth And happening direct yes, in create deployments that where like with AI-based earlier, yes, And

we bad with can but good is that So is do a single mentioned. a double bad our customer customers, the with good that it the enterprises like size not $X, XXX side, And penetrate there revenues. to and there one where side, I take Fortune investment call with each there lesser the things wouldn't side, we time

the us to from of going for they the markets largest company. same other world do game not Each the one And rely thing on of the a but and these us a is firm stabilizing going why many enterprises the happen to in is be working and to changer important. creating So this. now very the in our infrastructure which from very chain we if supply you market companies will, it's we a supply serve AIDC see chain in we're as we market technology, have them for legacy the or largest huge our with world us, where and the process of and changer is But [circuit]. them transforming huge each like are them it upgrading into overnight, It's once newer going that's less the deploying a advancing not the of one. to that's solutions. them needing come was base, there, customers game so XXXX one firm huge there, productizing, we does And products for and happen to

Unidentified Analyst

kind AI is school in of particular, Can If model, could much how a your customers? subscription would know are How more understand new you I of for you who for or me of to a one recurring ask I but question. revenue work? is tell story. it SaaS too by to is maintenance you're does a component? the that if paid helpful more you, And So it people think me there old is and this an component the help it be lot

Shai Lustgarten

be things we the today more recurring. is -- on and services, is model the et warranty XX% the legacy there AIDC we on sell I the our recurring So not be do model services, customers, onetime revenue to like old first, more XX% other like cetera, where XX% licensing, But business, The say that business that software in technology a other the support sale. would would the business would reliant line.

can models other already what we go will transforming if chain supply different AI generates as we But line, be line issued take revenue, well. And is of do the business vehicle the today through call [sections] and revenue The that to example. we which don't on the citations, into we which unregistered investment, business the revenue a on and dime they put municipalities, we share collect. share a for

one that's model. So revenue

school is them, $XXX a recurring or case is university go, third it typical on is The to per and that the the to we an one. depends the where be between community use or going other other month. one center for one K-XX okay, any we license $X,XXX, to tell we model, example, that's And go annual fee to

So that's month per happening legacy mainly business it's line either an the or in to be business and to going AI rather today it's one, than going be line. annual the

Unidentified Analyst

So the annual, is is that off… SaaS it model, a like

Shai Lustgarten

is the or it's a I AI the in line the SaaS works month everything, per to charging a mean, model. is It's were SaaS model year. AIDC going everything charging business Yes, excluding always where business it's SaaS, but model. first it's -- SaaS it's more per either traditional, not yes, be the

Unidentified Analyst

part business AI recurring? in And you the of to opposed what a as today legacy the us feel is so for can give business

Shai Lustgarten

you we In the it's said, like started recently. business, AI that

ourselves Remember, today So I X% in is financially. the about it business, recurring. AI are we call would supporting

cetera, millions and can't you And et do support et invest to it and same and need at profitable, the to know you recur a to firm very do in out in we got when time, probably a it. grow, well, you it very yourself stabilizing So needs recurring, there be cetera, for products, our to as overnight. backing we to financial you continue need company, as that go to go yourself small a as have do R&D, you

good it can actually You experience, have make and to a for do you. it one drown a not it when ready that you're

they So have did it's nice companies support. they're because the day not recurring anymore, we've long, didn't that great and seen operating financial but and all

then So started to business the the and exposed more we we water, went and into ago about right it the get level. tried up we quarter planning quarters that moved into will, and -- you model now went We next and We support through two with if We much went this we exposed. that cautiously. it quarter.

mentioned, lot the things, profitability but revenue we a more XXXX, well, where, come is from as trend. I I from of QX, model in to trend going recurring significant want So the the see as mentioned, definitely already like to

Operator

And be Therefore, appear to us questions. joining thank today. no we you there for further do

may now lines. You disconnect your

OMNIQ (OMQS) 1 Apr 212020 Q4 Earnings call transcript