OMQS - Earnings call transcript Q4 2021

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Operator

Good morning, and thank you for joining us for the OMNIQ Financial Results and Corporate Update Call for the Fourth Quarter and Full Year ending December 31, 2021.

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. At this time, all participants are placed in a listen-only mode. After managements' prepared remarks, there will be a question-and-answer session. I will now take a brief moment to read the Safe Harbor statement.

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

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

Shai Lustgarten

a on and We're We it of the to Thank that defined million, some you, pleased a today. OMNIQ achievements. with us financial share thanks rate revenue the exponentially run momentum. call our hope recent joining and as XXXX with combined of annual milestone results $XXX operator, everyone to we exceed to soon. very marked you We

we've As up in to XXXX. listed projected NASDAQ September desired, and

$XX nearly revenue to QX grew by XX% million. Our

had QX, margin Equity's full revenue to product revenue XX% reach XXXX. grew In so QX in to Street XXXX, and XXXX. and over increase for gross due XX% Lake in year to analyst our We of of equal mix. XX% a projections sales annual and mainly exceeded we in sequential growth million. by QX agreements QX $XX.X the We Think achieved tag Our compared XX% service in

profit year increased gross XX%. year-over by Our

stronger cash position grew approximately Our $X.X is XX, since balance XXXX and December sheet XX% our million. by to

XX% months important acquisition both Another hospitals, automation event with activities for fruitful. Acquisition solutions and Computers, generated of leader is projects joint supermarkets, solutions. institutions, is Dangot sophisticated ago. government the in Integration Dangot of providing OMNIQ's a of Synergy AI only healthy several restaurant, and with immediate started others. of

Soon, we smart shall inclusion see automation from parking more sensors, A providing good with example the our Dangot projects the believe systems. access control many that two and combination solution We the offering. follow. product joint kiosks of AI-based is projects a will comprehensive resulting of for companies' of

staff, well experiencing and lines in eliminating smart interactions is America, South demand XX. solution cashiers parking reducing kiosks COVID U.S., in with saves by long and as of as growth automation particular, Now, in we're vision a a start divisions. with our our record safe-city, a In backlog all coming fully borders from and of and focused on XXXX, for orders of pipeline and and money Israel, the time the robust of which as service chances spreading strong our the machine we're lowering smart-city AI of demand experiencing

under and force us risks, contract Shield many that important install Q multiplier, system very recurring law with is AI-based AI our enforcement our develop are visibility in projected possible would offers to already Five the safety, to identification turnkey in sharing police many revenue locations our efficiency. like is and Q to the sign and enforcement initiative with XXxX U.S. revenue, cities approach focus you Shield Another of to the more system unbiased XXXX explain an soon. and in model. which to cities increases I

cities with I'd creating into QX that Q citation through reiterate making model collection. of the huge a Shield respond forward the are to more is for possible lives were that repayment Shield Today, community, streets needs to. share that Q deploy invested our Q of costs harder revenue XXXX responding resources dynamic the was year already full and and OMNIQ. Our back to prior Shield option empowers affecting to upfront not percentage with residents everyday a real by or safer to leap And like and

bottom-line well and momentum. we significant to positioned we’re show ahead As in top- move XXXX,

confidence AI in applications Fortune for both opportunities of existing well new our XXX as chain customer our targeting technology City our tremendous by from as backlog Our greenfield with revenue supply but solutions. part automation stems and Smart clientele

We our unleash AI financial model. our profile transform as earnings we potential stream in business expect revenue and leverage to our the grows

at Before I results. this a our go look further, to let now take Neev. Neev deeper me over financial to turn

Neev Nissenson

everyone. Hello

$XX.X fourth of revenue quarter an As XX% of at of the is quarter million reported the four Shai in of This million highlighted, end XXXX. $XX.X increase XXXX. from we

to earnings Adjusted loss ended Dangot loss was as acquisition. marketplace, depreciation, the and fourth Cash solidly of were to and doing for XXXX. expenses increase our the for For certain compared last compared Net operating the well share, for of of as at a EBITDA, of the a the consolidation the $X.X well XXX,XXX fourth for million quarter fourth reflects of the increase are a per $X.XX million as of expenses as trending meaning the fourth quarter related non-recurring continuing consolidation growth. to Dangot in quarter of loss for $X.X continued quarter XXXX loss or we with the loss to the $X.X share million amounted $X.X million was well million presence of and And per taxes, amortization, December adjusted Total in XXXX. a compared XXX,XXX $X.X XXXX. loss quarter balance interest, XX, EBITDA $X.XX quarter of period the before to year. for

full-year $XX same the of revenue results. million to period XXXX, of that of year $XX.X XXXX. ended in OMNIQ XX, the December million for reported XX% an increase Turning from

gross profit year same XXXX, million for of the the Our December compared end XX, same in end was in operating $X.X in that to the to $XX.X year XX, XXXX XXXX. of compared expenses period $X.X December million period $XX.X Total XXXX. in in million with million grew

for was million a $XX.X or monetary the $X for loss loss for Adjusted or [indiscernible] those for with same the limit amounted compared share this year. Bank, significant of million of financial. XX, QX had do million to last a of the of a share period same December of $X.XX $X.XX of lending to Alliance high period loss per $X.X replaced Bridge $XX.X million year. different division XXXX our loss compare EBITDA ended wish EBITDA loss per Bank million with XXXX. point However, million adjusted related ended facility acquisition in I new that we of to which year year XXXX facility loss an December basic the Net the Western the $X.X out we’re a with XX, of interest with securing $X.X basic old

been the part our cut of interest have As significantly. rates new facility,

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

Shai Lustgarten

growth QX Thank forward was and success. step position for to you, Neev. further another Company better the

centers agreement distribution equipment from a now solutions the across Midwest our to and fueled an supply customer's to with chain used rugged purchase deploy States we've new based solutions, I'll client QX, update and is automation In million computing Android-based the supply to our by by success provide offerings. be XPL received X,XXX in Our communication Dangot AI $X aggregate starting third-party employees. logistics data its collection United chain.

collecting, for a extend IoT distribution to successful food America. connecting of of for well the tracking asset trading They distributor provide designed reach to announced in $X.X as high-tech and assets, latest through deal also and technology suppliers in as system. lucrative increase most in invested We sharing million part the our identifying, and the one tracking North equipment, supply as its chain efficiency network

to food as OMNIQ's of world standards freshness, invest the food continues and efficiencies, accuracy highest requires technologies, new distribution automation in of care. with As change and the customer to continues distribution

supplies cruise healthcare customer always centers on amusing ship, including stores, the As products are they food more of forefront more, XXX,XXX convenience facilities, recreation and educational a related our than entities, and stadiums, park, hotels, restaurants, to technology.

than a provider addition, a with customer released regarding order a order for more total $XX wins approximately In in XXX,XXX tremendous Windows XXX seven our the of figure supply for generating Zebra revenue. billion long-term are that $X.X more from remove over these annual of in with Fortune base software. the chain which million and from we represent value a OMNIQ supply customers purchase These important manages. we've a information comes and of leading AI data application countries, IT to. The than and collection devices solutions the chain complete will cross-sell from offerings hardware The can Android, to migration implementation division margin install higher our XXX

to target I'd strongly of And share profitable, Dangot that, gained can of time, field believe XX% automation. reputation, in U.S. innovative to months chain like such, additional frictionless markets. significant couple healthcare, leveraged offering of ownership same the remind we our our both multiple companies. innovations worldwide will an warehouse customers we accelerate, I'd Based our as just It Turning demanding market. merging an Israeli into like by team served highlights. on systems of retail, excellent Computers Company Dangot. believe strong several the is Dangot's products to AI in everyone acquired Dangot like we to mention November, that working of increasing prominent be fit XX%. player by together, in the have the supply to equipment. offering a At restaurants operational market in we market, our and automation and verticals sales the product

is where Dangot fatal potential health cards the readers, all be intelligent diagnostic provide During the country also hospitals solutions printers, the with most innovation, and entity state-of-the-art award serves Dangot The The the cards manufacturing hospitals of interface in million leading its X,XXX and is a automatically and over identify serving the already the JCI announced, health maintenance has and hospitals with quality growth Dangot hospitals citizens. clinics. quality for from over an the organization quarter, access certified on of its spending example, high-tech is intelligent continue of because order healthcare efficiency. high and one largest Israeli the used services of XX% the to pioneers cards XX has supplier and It records, specialized of their anywhere standards chosen patient in all big barcode doctors customer for can and achieving an quality integrated providing cards proven audit are clinics to increase These rigorous provide with high Dangot over features. organization, equipment, and the Israel's in industry With safety smart in in care we a that are quality, its that it in to in deployed records requires worldwide, patients can by cards, patient customers more population of is equipped X.X these the Israel. of treatment for hospitals mistakes. Thousands preventing worldwide and was and which accreditation. compliance. pioneer files over non-profit JCI computerized cards. the known integrate to the healthcare Israel. in and will based so

is are our place the groceries rollout market the in of the Smart offer Additionally, We for stores. March announced largest customers the States According industry United on by we solutions of Buy Journal supermarket of Dangot. North a massive. of chains as The and with roles sales in solution X,XXX taking one Street these Go, to XX% America, Wall $X plan XXXX, to SBG grocery trillion his units SBG in to XX,

into reported responding. As at Go of October, customers grocery around time TechCrunch the Caper the Buy the industry by announcement growing and solutions acquired Instacart XXXX, we In world Smart is all in AI, demand the are shared deeper Washington and card, Post, smart startup solutions million, According in $X,XXX moved the $XX,XXX may checkout $XXX smart card. for tech. a physical per and published as to retail the card an cost article between instant an it

lines, at The store of the and solution affordable cost the the terminal and car. to minimize experience. into customer receive and is enables the the to cradle solution and finished reporting. customer automatically parking card exit another payment improving shopping, customers SBG their solution regular of the of others, the smart they lines can lots, for with SBG Buy which with they Smart life our a put compared and fraction while eliminates our terminal AI-based one the that straight Once new better example processed minimizing shopping The to is usage store to enables In line Go friction. shopping parking automation of generating the Our an them of specific a which solutions solution allowing go and places in the back solution and exiting carts. the is product quality as provide a to and on scan

North proud this largest We and are of some it soon wraps XXX just to That's prepared supermarket to Israel our about our America. in U.S. market including chains to Fortune solution in offer the up customers, remarks.

here and off in today, very productive heard OMNIQ great start it XXXX. was a XXXX a you've As is to

will of our from business of profile AI transform we remains our high on potential leverage for earnings focus the AI Thus, percentage revenue the delivering financial stream, solutions supply and margin this as penetration Our chain increase increased benefit in OMNIQ’s new offerings. automation model. and leading

questions, opening help people heartfelt to Before make extend who I to for gratitude my possible. want the this

our First an a welcome and heartfelt employees and and foremost, as become the team of to family. has supporters. member our Dangot act well customers, indispensable worked our day, who strong to while to continuing OMNIQ day determination. with after suppliers, and professionalism the Thanks hard Also, professional that devoted loyal

importantly, with I'm for for us. the shareholders over call an as for turn the I'll success now just believing, questions. but you, Operator, Lastly the grateful ensuring

Operator

Your Street. for post coming Jason questions. your floor Instructions] first Please the from Lake question. is Certainly, now of is Schmidt question open [Operator

line is Your live.

Jason Schmidt

curious seeing of you're supply some if source chain components, able you're from and out being to just these getting Just seeing a just being and with what relatedly, installations? to standpoint, issues install able

Shai Lustgarten

percent, challenges not to still course, the backlog. of are we in quarter-after-quarter, else, we everyone these able perform supply maybe revenue quarter not and a or us to face chain in resolve show but the in quarter-after-quarter affecting, perform Like growth, way such but hundred we do that in but that challenges a also see allows only

we So, we the definitely, well both show have we we growth with better very global are fact revenue parameters didn't if and supply perform that could these of continue in backlogs. but challenges, to chain satisfied

Jason Schmidt

how No, that's was good to XXXX? or revenue QX AI hear. share all And can for in you of much either

Shai Lustgarten

we're to from the $X to $X at year. services in Yes, at involved QX growth we're going the $X about towards about -- of in this, looking but million totaling of we're still year, probably continues And all this million XXXX. to last looking stronger $X that grow even

Jason Schmidt

me queue. and And then for into last I'll jump one back

continued You've cities What could number contract. city highlighted some year under in by end? be that the safe traction market, five

Shai Lustgarten

mean revenue? of You dollars number

Jason Schmidt

I'm sorry, of cities. number

Shai Lustgarten

Okay.

from off, only year that five question, this on thank it are when only basically able we we are not to Q sales you double because drew in minimal We probably but XX for under at kicking the but to within, and pipeline solution, efforts. that than still development cities the really projections few number cautious contract, started should about trying the months, least So, be within fast working here, it Shield, XXXX. last we with that be that more actually of saw deployment double year. the And in

Operator

question Penisque]. next coming your Please question. Your is [Hella post from

Your is live. line

Unidentified Analyst

for Hi. few Thank have you, Shai. a themselves. questions please. speak I Results

for prediction forward? XXXX of the your First, and what revenue and XXXX percentage recurring for is going

Shai Lustgarten

our least reach XX% years. first we get that recurring in XX%, to we year XXXX in basically revenue, show half we looking year from to actually were closer previous So and able it or are XX%, towards for to previous doubling growth so discussed XX% XXXX, the to from the the at in the to

Unidentified Analyst

Excellent.

you current can and explain the with and joint Regarding the Dangot, potential synergy products? Dangot projects, please

Shai Lustgarten

definitely. Yes,

when a course, So vertical, Dangot we look AI part vertical these that solution the of that's the verticals. when start They where penetrated we of the technology fitted solution. from. offering, the products And providing at markets, different of of are there, into the infrastructure, and they vertical we the we is that solution to provide actually are we provide, market the that baseline the start vertical that's from we

for the can additional with provide in billing, can either now if Machine we kiosk that kiosks identification the provide the in So addition smart that we look automation Dangot, allows solutions lots. then of parking software parking and But we solutions, the provide or as different example, Vision that well the solution of the to at form other ticket-less of does we parking payment applications. and applications, the

the that one good exposed parking solution as recently to ability basically an together for $X.X we million in the only that is with us parking or U.S. So, order gives very to operator parking we base that our offer Dangot a only to turnkey one where of And the key issued products, biggest immediately kiosks good, the provide basically example today, operators. of technology. they turnkey smart solution approximately owners

Unidentified Analyst

one question, not tell Israel in course. That's you. what last safety? from off Thank please. improving and if investors evolvement confidential is great. me, Please Dangot And

Shai Lustgarten

Israel we all Yes, these that time the are happening. as difficult looking are acts know, in at terror all

in terrorist, can alert very agencies today, additional spot that different AI well Israel, solution identify our well or anomalies risk. forces is could and that and objects be OMNIQ that Israeli integrated -- position a Our serving they defense identify to to as the

and of say technology OMNIQ, are what our news and that different you probably So let we and one Israeli does and solution these are daily risks in they news all and these the that and before risk of the to technologies see able of major total Israel, the become in were that doing our proactive friction at you that proud be agencies only to a that was significant is solution is about events treat all And the every and I'm the that in forces detect that don't hear them to notify especially today. is the threats more other our solution, day. times, alert that defense what our prevent

So very are today proud to that but especially we are it say in the come unfortunately, assisting doing question, we're that to fatal XX before to every hear news. of OMNIQ to technology. the times to we say day, And doing And your as ones we incidents more but due well. casualties that our the are there that we're they resolve news, about probably is course,

Unidentified Analyst

Of course, you hear to I'm very much. happy important that it. and very Thank is very,

Operator

Howard question. question coming Please from Brothers. Halpern with next is Your Taglich post your

Your line is live.

Howard Halpern

Congratulations and quarter on year. the the

Shai Lustgarten

Thank you, sir.

Howard Halpern

of backlog, us terms you your Or you how it much In entered XXXX, over entered increase -- do where you tell as you XXXX? can when of stands? an

Shai Lustgarten

Yes. about we're revenue in said, record growth like and then. still XXXX We we're And today back $XX in quarter-over-quarter, about million which backlog was showing million. our backlog ended with backlog, breaking I $XX is

revenue increase well. the about is with as million in So, increase together $X

Howard Halpern

be you're Okay. maybe growing say that because And you generally you seem that the but even day? how handling are to every seeing and addition more pipeline this that pipeline it's from Dangot, would the descriptive, of

Shai Lustgarten

great. Yes, requires because manage is focus chain which carefully. much every growing, with affecting order thing, step laser the team that and much a to the schedule. but more detail, really customers, up single pipeline We and by our really and point work together focusing demands our our every us supply from is to pipeline in it -- challenge -- together to and the we on on is to the meet is handle that might And vendors really which also way everything members our it with partners, good growing, is managing focus laser be able be customers on

customers. demand demand can -- time we our everything the to respond schedule in the of So, growing to to

Howard Halpern

that of quarter we related of much SG&A And the fourth in how expenses, back terms can number? acquisition out

Shai Lustgarten

I off it's don't that say a dollars. but number of probably head, my million would have I about

Howard Halpern

the achieve of recurring total in achieve XX% what And end not that revenue you of revenue? with but related if XXXX, margin by recurring area of AI of looking that are gross at terms we to profile some well revenue, with when of revenue, hope to the questions if, in AI type you the prior that and

Shai Lustgarten

we mentioned like legacy with we AI doing way, products, our even today. we're also as mentioned more So and penetrate before, by better as you sell and the

grow. increase gross Our see profits legacy efforts well. number and calls, QX, in trend it And why of a in also We the way, that and profit investments, can that's XXXX, before expect I what to that we I the to projected we that's put and gross also And the raised have exactly In mentioned expect mentioned. we like and reach, mentioned XXs. came to in and been you still as XX%. expected by continue lot previous the

Howard Halpern

you that about and from the hospitals product? And Dangot healthcare, the seeing are parts just hospitals both one and one last interest for U.S. European

Shai Lustgarten

do in already the Absolutely, have that with on And competition. over take are matching yes, that different discussions they with today value the we we in been checks customers product, interest, we in what prices sell field. provide U.S., we sanity the the see the to tremendous in matching distributors added

So, for should I interesting that's like only product we're to mentioned but the sell. be for cross one us before, that starting very line But already us, simple. penetration

Operator

George post question Guttman from next is Your with your question. Jericho Partners. coming Please

is Your line live.

George Guttman

there that it know really for struck time. before. a me. annual I've there reports now was And the as long line been haven't a seen reading you I

XXXX. You it's very, flow said very, expect sign. a To positive you cash positive me, that, very positive

give able all at year, So, to that expect guidance you you beyond line say positive to if the are you million? vague this able cash are top $XXX to be

Shai Lustgarten

was grew because are and see pandemic, last seeing Yes, during grow. are current we of This seen out also backlog the trend parameters at QX, flow have well we time things and in with the the we million. world especially I a the first that's unique XXXX that cash still And together The better but very And have. the did very that as us. as going revenue that basically, for we of all positive together continue just weird also you the rate definitely mean, we the we getting why the XXXX, yes, way, solutions to year revenue started tracking can -- comes good with looking of are pandemic will of and is are that a of growing a if at $XXX parameter parameter minimum $XXX are as a positive QX, well hint I towards in we to looking the well. million. continue run run rate as way profitability of all, well,

we're So, for expecting that's XXXX. what

George Guttman

timeline pay-off Do Blue-Star? you have a to

Shai Lustgarten

You mean ScanSource?

George Guttman

Well ScanSource, the way significantly I read it is mean, $X.X million, which BlueStar, so it's negligible. is I more.

Shai Lustgarten

it's BlueStar But It's you we paid is receivables. something an work up backed the with to AP, accounts to way, and know, by with off that dealing accountable. zero. the them we just ScanSource let

anymore. X.X even not it's So,

George Guttman

the That's you for a years of great. at Congratulations, past I've cusp I five next day in we years. what what? a time. long than should five, That's completely great. experienced are better The I've significantly OMNIQ. new in believe that and be here Well, been know the seven

Shai Lustgarten

breakthrough year for better, a are And, off we a paid to another also for OMNIQ. we that a tremendous because, I'm support breakthrough much yes, me and loyalty. we your very is example. excited, not here, and to about George, Thank have be also last and for much thank your for doing milestone much been you very XXXX team for for, zero myself you And very four it great it's the week. yes, asking year but that's paid liability ScanSource, zero, for you for us years for and only going to

Operator

There further are in this no questions at time. queue

Shai Lustgarten

Okay.

adjourn. can we So,

Operator

Ladies conclude this and conference you. call. Thank does today's gentlemen,

I disconnect You may phone participation. Thank your this time wonderful have a you at and lines for day. your

Neev Nissenson

you. Thank

Shai Lustgarten

Thank you.

OMNIQ (OMQS) 1 Apr 222021 Q4 Earnings call transcript