Q1 2024 OMNIQ Corp Earnings Call

Holly: Hello and welcome to OmniQ Corp's first quarter 2024 earnings conference call. My name is Holly, and I will be coordinating your call today. With us on the call are Mr. Shai Lustgarten, Chief Executive Officer and Acting Chief Financial Officer. Today's call is being recorded, and you should have access to the company's first quarter 2024 earnings press release issued after the market closed yesterday. This information is available on the Investor Relations section of OmniQ's website at www.omniq.com.

Hello, and welcome to the Omni Q Corp's first quarter 2024 earnings conference call.

Holly: My name is Holly and I will be coordinating your call today.

Speaker Change: With us on the call are Mr. Shai Lustgarten, Chief Executive Officer, and acting Chief Financial Officer.

Speaker Change: Today's call is being recorded and you should have access to the company's first quarter 2024 earnings press release issued after the market closed yesterday.

Speaker Change: This information is available on the Investor Relations section of Omni Qs web site at Www Dot omni Q dot com.

Holly: During the course of this conference call, we will make certain forward-looking statements. All statements that address expectations, opinions, or predictions about the future are forward-looking statements. Although they reflect our current expectations and are based on our best view of the industry and our current expectations and our business as we see it today, they are not guarantees of future performance. These statements involve a number of risks and uncertainties, and since these elements can change, and in certain cases are not within our control, we would ask that you consider that and interpret them in that light.

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

Speaker Change: Although they reflect our current expectations and are based on our best view of the industry and our current expectations and our business as we see them today, they are not guarantees of future performance.

Speaker Change: These statements involve a number of risks and uncertainties and since these elements can change and in certain cases are not within our control. We would ask that you consider that and interpret them in that light.

Holly: We urge you to review the company's Forms 8K, 10Q, and other SEC filings for a discussion of the principal risks and uncertainties that affect the company's business and performance and the factors that could cause actual results to differ materially. OmniQ undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law. Following the prepared remarks, the company will be taking questions as time permits. Now, I will turn the call over to Shai Lustgarten, CEO. Mr. Lustgarten, please go ahead.

Speaker Change: We urge you to review the Companys forms 8-K, 10-Q, and other SEC filings for a discussion of the principal risks and uncertainties that affect the company's business and performance and the factors that could cause actual results to differ materially.

Speaker Change: NICU undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information future events or otherwise unless required by law.

Speaker Change: Following their prepared remarks, the company will be taking questions as time permits.

Speaker Change: Now I will turn the call over to Shai Lustgarten CEO. Mr. Lustgarten. Please go ahead.

Shai Shalom Lustgarten: Thank you so much operator.

Shai Shalom Lustgarten: Thank you so much, Operator. Good morning, and thank you for joining us today.

Shai Shalom Lustgarten: Good morning, and thank you for joining us today.

Shai Shalom Lustgarten: On behalf of the entire team at Omni Q.

Shai Shalom Lustgarten: On behalf of the entire team at OmniQ, I extend a warm welcome to all our investors, analysts, and guests. We appreciate the time you've taken to be with us as we discuss our recent performance, the progress of our strategic initiatives, and our vision for the future. Your continued support and interest in OmniQ are invaluable to us as we strive to enhance shareholder value and achieve new milestones together. We look forward to sharing our updates and insights with you today.

Shai Shalom Lustgarten: And a warm welcome to all our investors annually and yes, we are.

Appreciate the time, you've taken to be with us as we discuss our recent performance the progress of our strategic initiatives and our vision for the future.

Your continued support and interest in omni Q are invaluable to us as we strive to enhance shareholder value and achieve new milestones together, we look forward to sharing our updates and insights with you today.

Shai Shalom Lustgarten: First, I'll discuss some key developments in the first quarter. We're excited to announce the continued enhancement of our AI machine vision business with the upgrade of DFW Airport, which is using our technology for access control, and also a new Homeland Security project integrating our advanced AI machine vision solutions for public safety in a highly sensitive area.

Shai Shalom Lustgarten: First I'll discuss some key developments over the first quarter. We're excited to announce the continued enhancement of our AI and machine vision business with the upgrade of DFW Airport, which is using our <unk> technology for access control and also a new homeland security project integrating our advanced AI and machine vision.

Shai Shalom Lustgarten: <unk> solutions for public safety in the highly sensitive area.

Shai Shalom Lustgarten: The next development in this area is enhancing our capabilities to win new areas of business from existing customers and also enhance our suite of capabilities to attract new customers. We did this by developing our new SaaS product we call CQ. We developed this to remotely manage the operation, performance, and health of our systems deployed in the field. We intend to continue to develop this product so that it can be hardware agnostic.

Shai Shalom Lustgarten: The next development in this area is enhancing our capabilities to win new areas of business.

Shai Shalom Lustgarten: It from existing customers and also enhance our suite of capabilities to attract new customers. We did this by developing our new SaaS product we call <unk>.

Shai Shalom Lustgarten: We do build piece to remotely manage the operation performance and health of all our systems deployed in the field.

Shai Shalom Lustgarten: We intend to continue to develop these products. So that it can be hardware agnostic essentially consumers consumers or customers will have one place to track and manage all of their devices and received and the Lady on the device performance and.

Shai Shalom Lustgarten: Essentially, consumers or customers will have one place to track and manage other devices and receive analytics on the device performance and functionality. Now, let's move to fintech. In the first quarter, OmniQ's self-service consumer management kiosks were successfully deployed by Israel's largest energy company. Additionally, we have secured a contract with two major U.S.-based restaurant chains to implement our self-ordering platform, along with a new fintech solution deployed at Ben Gurion Airport, enhancing the traveler experience with self-ordering convenience, further expanding our footprint in the global market.

Shai Shalom Lustgarten: And functionality.

Shai Shalom Lustgarten: Now, let's move to Fintech in the first quarter sales.

Speaker Change: <unk> services consumer management kiosks were successfully deployed by Israel's largest energy company.

Speaker Change: Additionally, we have secured a contract with two major U S based restaurant chain to implement our self ordering platform along with the new Fintech solution deployed at Ben Gurion Airport.

Speaker Change: Hansen traveler experience with self ordering convenience.

Speaker Change: Further expanding our footprint in the global markets.

Speaker Change: We are also happy to announce the acquisition of codes blocks limited the leader in Fintech software development margin, marking a significant milestone in our expansion strategy into the fintech sector.

Shai Shalom Lustgarten: We're also happy to announce the acquisition of CodeBlocks Ltd., in FinTech software development, marking a significant milestone. Now we'll discuss our IoT and mobile computing business. We have won significant contracts in this area. Some recent notable business was $5 million in a purchase order from one of the largest U.S. food and drug chains, a contract to supply the new Nestle International Logistics Center, and a device upgrade in 450 sporting goods stores for a major U.S. retailer. These purchase orders help us to drive our business forward and reinforce our market leadership. Next, I have a few updates to share with you.

Speaker Change: Now, we'll discuss our Iot and mobile computing business.

Speaker Change: We have won significant contracts in this area.

Speaker Change: Some recent notable business was the $5 million.

Speaker Change: In the purchase order from one of the largest U S food and drug James the contract to supply.

Speaker Change: International Logistics center in the device upgrade in 400, <unk> sporting goods good stores for a major U S retailer.

Speaker Change: This purchase order was help us to drive our business forward.

Speaker Change: Reinforce our market leadership.

Speaker Change: <unk>.

Shai Shalom Lustgarten: First, we have submitted an application to list the trading of our common stock on the OTC, QX, and QB marketplaces. The listing of the company's common shares on OTCQX, the top tier of three markets organized by OTC Markets Group Incorporated, for trading over-the-counter securities and these designs to establish investor-focused U.S. and international companies, remains subject to approval.

Speaker Change: Next I have a few updates to share with you first we have submitted an application to lease to.

Speaker Change: So at least the trading of our common stock to the OTC <unk> and QB marketplace.

Speaker Change: The listing of the company's common shares on the OTC UX remains subject to the approval as of now <unk> top tier three markets to organize by OTC markets Group incorporated.

We're trading over the counter securities and these design.

Speaker Change: To establish investor focused U S and international companies.

Shai Shalom Lustgarten: We view the current situation as a temporary phase in our ongoing strategy focused on profitability and operational efficiency. We are actively executing our strategic plan and exploring every avenue to ensure a swift return to the national exchange list. In the interim, OmniQ will continue trading on the OTC market, and we have taken steps to be listed on the OTCQX, the premier tier of the OTC markets, reflecting our commitment to high standards and transparency.

Speaker Change: We view the current situation as a temporary phase in our ongoing strategy focused on appropriately BLT and.

Speaker Change: And the operational efficiency, we were actively executing towards our strategic plan and exploring every avenue to ensure a swift return to a national.

Speaker Change: Change in leasing.

Speaker Change: Indian Terry.

Speaker Change: Omni Q will continue trading on the OTC market and we have taken steps to be listed on the on the OTC <unk> the premier tier.

Speaker Change: Of the OTC markets, reflecting our commitment to high standards and transparency.

Shai Shalom Lustgarten: Please be assured that Omniq remains diligent in fulfilling all SEC requirements and filings. Our commitment is unwavering, as evidenced by our consistent acquisition of new customers and the expansion of our business with existing Fortune 100 customers. We're confident in the strength of our partnerships and our proven business model, which we believe will drive our return to profitability and sustain our long-term success. We will discuss our strategic plan for operational efficiency.

Speaker Change: Please be assured that the omnicare remains diligent in fulfilling the ACC requirements and filings our commitment is unwavering as evidenced by our consistent acquisition of new customers and the expansion of our business with existing fortune 100 customers.

Speaker Change: We're confident in the strength of our partnerships and our proven business model, which we believe will drive our return to profitability and sustain our long term success.

Speaker Change: Next we will discuss our strategic plan for operational efficiency.

Shai Shalom Lustgarten: Our management team is deeply committed to enhancing operational efficiency. We have implemented strategic measures aimed at reducing costs and increasing revenues. These initiatives are designed to streamline our operations and optimize our resource allocation, setting a robust path towards sustained profitability. This includes measures such as concentrating our sales efforts toward higher-profit products, reducing operational costs without reducing operational efficiency, expanding product lines in large growing markets, utilizing existing partnerships and coming out with products that add value to those customers on a subscription basis, and more.

Speaker Change: Our management team is deeply committed to enhancing operational efficiency, we have implemented strategic measures aimed at reducing costs and increasing revenues.

Speaker Change: Initiatives are designed to streamline our operations and optimize our resource allocation sitting a robust path towards sustained profitability. This includes measures such as concentrating our sales efforts toward higher profit products reducing to operate.

Speaker Change: It'll cost without reducing operational efficiency expanding product lines in large growing markets utilizing existing partnerships and coming out with products that add value to those customers on subscription basis and more.

Speaker Change: This plan is showing results when looking at the Q1 results financial results numbers and we're expecting to see further improvements in Q2 and beyond until we regain profitability.

Shai Shalom Lustgarten: [inaudible] Now we'll talk about FinTech. The fintech market is experiencing rapid growth, driven by increasing demand for technology-driven financial solutions. This expansion presents significant opportunities for us, as our innovative solutions are well aligned with the current market needs, and we believe that we are in a good position to provide these solutions to both new and existing customers. Across the industries we operate in, trends such as digital transformation, AI integration, and automated solutions are influencing market dynamics, where we are actively leveraging these trends to enhance our product offerings and add value to our customers so that we can stay ahead in the competitive market OmniQ continues to distinguish itself from competitors through advanced technology solutions and strategic partnerships.

Speaker Change: Now we will talk about Fintech.

Speaker Change: The fintech market is experiencing rapid growth driven by increasing demand for technology driven financial solutions.

Speaker Change: This extension presents significant opportunities for omni Q, although our innovative solutions are well aligned with the current market needs and we believe that we are in a good position to provide these solutions to both new and existing customers.

Speaker Change: Across the industries, we operate in trends such as digital transformation AI integration and automated solutions are influencing market dynamics were.

Speaker Change: We are actively leveraging these trends to enhance our product offerings and adds value to our customers. So that we can stay ahead and competitive in the competitive markets.

Speaker Change: Omni Q continues to distinguish itself from competitors through advanced technology solutions and strategic partnerships, we believe that our focus on consumer on customer centric innovation and operational excellence.

Shai Shalom Lustgarten: We believe that our focus on consumer, customer-centric innovations and operational excellence positions us strongly against competitors in all of our Next, let's talk about finances. In the first quarter of 2024, we experienced strong financial improvements. Revenues rose by 14% from the previous quarter, reaching $18.3 million. Our gross margin hit a record high of 28%, up significantly from 21% in the same quarter last year and up 13% from the last quarter of 2023. Gross profit soared by 142%, reaching $5 million.

Speaker Change: Positions us strongly against competitors, you know low margins.

Shai Shalom Lustgarten: We also successfully reduced our expenses, with SG&A expenses decreasing by 18% leading to an overall 18% reduction in total operating expenses compared to the first quarter of last year. Our operating loss decreased by 37% from $2 million in the first quarter of 2023 to $1.3 million in 2024. Similarly, our net loss saw a drastic reduction of 40%. Additionally, the basic loss per share from continuing operations improved to $0.20 from $0.45 per share in the same period last year. The total comprehensive loss for the quarter was $1.9 million, a reduction of 39%; the remaining loss was partly due to the effects of foreign currency exchange.

Speaker Change: Next let's talk about financials.

Speaker Change: In the first quarter of 2024, we experienced strong financially improvements revenues rose by 14% from the previous quarter, reaching $18 3 million.

Speaker Change: Our gross margin.

Speaker Change: A record high of 28% up significantly from 21% in the same quarter last year and up 13% from the last quarter of 2023 gross gross profit soared by 142% reaching $5 million.

Speaker Change: We also successfully reduced our expenses with SG&A expenses decreasing by 18% leading to an overall, 18% reduction in total operating expenses compared to the first quarter of last year, our operating loss decreased by 37% from two from $2 million.

Speaker Change: In the first quarter of 2023 to $1 3 million in 2024, similarly, or a net loss so a drastic reduction of 40% to 40%.

Speaker Change: Additionally, the basic loss per share from continuing operations improved to 20 cents from 45 cents loss per share in the same period last year.

Speaker Change: The total comprehensive loss for the quarter was $1 9 million a reduction of 39%.

Speaker Change: The remaining lots was partly due to the to the effects from foreign currency exchange.

Shai Shalom Lustgarten: These financial achievements reflect our effective cost management strategy. These efforts not only demonstrate our commitment to operational excellence but also reflect our focus on enhancing shareholder value, which has shown a 37% reduction in operational losses year over year. This quarter, OmniQ has made significant strides towards financial stability, with successfully streamlined operations and managed costs effectively, leading to a noticeably noticeable decrease in losses. Our focused efforts are not only improving our bottom line but also driving sales. This progress is a clear indicator of our commitment to operational excellence and value creation for our shareholders, operators.

Speaker Change: These financial achievements reflects our effective cost management strategy.

Speaker Change: These efforts not only demonstrate our commitment to operational excellence, but also reflect our focus on enhancing shareholder value, which is shown 37% reduction in operational losses year over year.

Speaker Change: This quarter Omni Q has made significant strides towards financial stability with.

Speaker Change: We have successfully streamlined operations and manage cost.

And managed costs effectively leading to unnoticed noticeable degree.

Crease in losses.

Speaker Change: Our focused efforts are not only improving our bottom line, but also driving sales.

Speaker Change: This progress is a clear indicator of our commitment to operational excellence and value creation for our shareholders.

Shai Shalom Lustgarten: Now I'll turn the time back over to Q&A. Thank you. Thank you. At this time, please leave your name, address, or phone number.

Speaker Change: Operator, now I will turn the time back over to the.

Speaker Change: For Q&A. Thank you.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Your first question for today is from Moran Pober with acquisition.com.

Speaker Change: Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in the question queue.

Speaker Change: You May press Star two if you would like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: One moment, please while we poll for questions.

Speaker Change: Okay.

Speaker Change: Your first question for today is from Moron Pilbara with acquisition Dotcom.

Speaker Change: Thanks.

Unknown Attendee: Hey, can you hear me? Yes, we can hear you. Hey, thank you, Shai. Yeah, thank you, Shai.

Hey, Hello.

Speaker Change: Yes, we can hear you.

Unknown Attendee: Good job on the improved results. I have three questions, please. First one is, what is the plan for the next quarters? Like, will you continue with the cost cuts so OmniQ achieves profitability? My second question is, can you please explain the higher gross margin? Is it the product mix?

Hey, Thank you Shai.

Speaker Change: Thank you Shannon and good job on the improved results.

Speaker Change: Three questions. Please.

Unknown Attendee: And my third question: can you please tell us more about the fintech business segment? Like, do you see it as an important growth engine, or how do you see it?

Speaker Change: First one is what is the plan for the next quarter or will it continue.

Speaker Change: Cost Scott So I'll meet you achieve profitability.

Speaker Change: My second question.

Speaker Change: Can you please explain the higher gross margin.

Speaker Change: Is it the product mix is it expected to continue at this level what do you think.

Speaker Change: And my third question. Please.

Speaker Change: Can you please tell us more about the Fintech business segment.

Speaker Change: Do you see that.

Speaker Change: An important growth engine or how do you see.

Speaker Change: Thank you.

Speaker Change: Thank you moron appreciate the questions.

Unknown Attendee: Thank you.

Speaker Change: Regarding the first question.

Speaker Change: Our plan for the next quarter not only for the next quarter, but the additional quarters this year and of course going forward.

Shai Shalom Lustgarten: Thank you, Moran. I appreciate the questions.

Speaker Change: Is very simple we are focused on profitability, we've reached nice revenues.

Shai Shalom Lustgarten: Regarding the first question, our plan for the next quarter, not only for the next quarter, but the additional quarters this year, and, of course, going forward, is very simple. We are focused on profitability. We've reached nice revenues. We have very clear visibility towards our revenue growth this year, and thus, that gives us the ability to continue our focus on profitability and continue our cost cuts. We've already, very quickly, as we demonstrated, shown the fruits of these efforts.

Speaker Change: We are we have very clear visibility.

Speaker Change: Towards our revenue.

Speaker Change: Growth D C. This.

Speaker Change: This year and does that gives us the ability to continue our focus on profitability and continue our cost cuts we've already very quickly as we demonstrated shown the fruits of these efforts and.

Shai Shalom Lustgarten: And that's very simple, and not simple to execute, of course, but as a $100 million company becoming profitable in a year, that's something that is, I think, going to be noticed by our shareholders. And, of course, that's the best thing for the company, and that's our simple strategy, continue growth and continue to achieve profitability. Regarding the second question on higher margins, it is mainly due to two factors.

Speaker Change: That's that's very simple.

Speaker Change: Not simple to execute of course, but.

Speaker Change: There's $100 million company, becoming profitable in the year, that's something that is.

Speaker Change: <unk> going to be noticed by our shareholders and of course, that's the best thing for the company and that's our simple strategy continued growth and continued appropriate and continuing getting profitability regarding the second question on the higher margins. It is.

Speaker Change: Mainly due to two factors one yes, we have.

Shai Shalom Lustgarten: One, yes, we have introduced to the market our AI machine vision products and continue to develop these products and continue to increase our footprint in the different markets that we serve. And this allows us to grow that revenue pie of the machine vision product, the AI product, and increase that revenue portion of the total pie. And that, of course, comes with higher margins. The other factor is cost cuts, right? We're working according to our plan on cutting the cost of goods sold, and thus, this allows us to continue increasing our margins. All of this is part of our plan that we discussed on many calls before, and we said that 2024 was going to be that year, and that is exactly what we're experiencing now.

Speaker Change: Introduce to the market or in AI and machine vision product and continue to develop these products and continued to increase our footprint in the different markets that we serve and this allows us to do.

Speaker Change: <unk> grow that.

Speaker Change: Revenue pie of the machine vision products AI product grow that revenue pie.

Speaker Change: Revenue portion in the total pie.

Speaker Change: And of course comes with higher margins. The other factor is the cost cuts right. We're working.

Speaker Change: There are plan on cutting the cost of goods sold and thus this allows us to continue to increase and our margins again all of this is part of our plan that we've discussed in many calls before and we said that 2024 is going to be that year and that is exactly what we are.

Speaker Change: Experiencing now.

Shai Shalom Lustgarten: Regarding the fintech... [inaudible] 500, Fortune 100 customers, and we decided to invest in the Phintech software and hardware as a complete system because it is part of the many products we already serve our existing Fortune 500 and Fortune 100 customers. Today, we already manage approximately 30,000 businesses, and they're Financial Transactions. That is a very nice footprint and one that we see as a growth engine, of course, aimed at our existing customers we already serve, which buy our total solutions.

Speaker Change: Regarding the Fintech.

Speaker Change: You can take it.

Speaker Change: Is the market that is significantly growing year over year, it's a market that we already provide.

Speaker Change: Solutions that we call point of sale solutions that go to retailers that go to.

Speaker Change: Different other customers in the different markets, we serve we already today.

We're providing our solutions totaled solutions total systems to Fortune 500, Fortune 100 customers.

Speaker Change: And we.

Speaker Change: We decided to invest in.

Speaker Change: Fintech.

Speaker Change: Software.

Speaker Change: And in hardware as a complete system because it is part of the many products we have already several fortune existing fortune 500 Fortune 100 customers today, we already manage 30000, approximately 30000 businesses.

They are.

Speaker Change: Financial transactions that is a very nice footprint and one that we see as the growth engine of course.

Speaker Change: Aimed on our existing customers, we already serve which by our total solutions and that is.

Shai Shalom Lustgarten: And that is how we see fintech going to grow, to continue exposing it and selling it to our existing customers and, of course, bringing in new customers as well. One last thing about fintech; it allows us, as our vision supports, of course, the data-driven markets we are providing today, IoT systems, and AI products to our consumers, which these products are, if you will, you can imagine them as sensors that pick up data.

Speaker Change: That is how we see the fintech going to grow to continue to exposing it and selling it to our existing customers and of course.

Speaker Change: Bringing in new customers as well.

Speaker Change: One one last thing about between ticket allows us.

Speaker Change: As our vision supports of course the data in three markets. We are providing today Iot systems AI products to our consumers, which these products are if you will you can imagine it is sensors that pickup data same thing with Fintech. This is another.

Shai Shalom Lustgarten: Same thing with fintech. This is another very solid path to letting us get even better data, much more precise, I would say, that allows us to identify trends and thus bring us to the next-gen products of our market. I hope that answers the question.

Speaker Change: Very solid path in the in letting us get even better data much.

Speaker Change: Much more precise I would say that allows us to identify trends and does bring us to the next gen products of omni Q.

Speaker Change: I hope that answers the questions.

Speaker Change: Yes. Thank you.

Operator: Your next question for today is from Pavlina Silikiotou. Your line is live.

Speaker Change: Your next question for today is from Pennsylvania silica owe to your line is live.

Speaker Change: Hello side.

Speaker Change: A few months ago, the company announced.

Pavlina Silikiotou: A few months ago, the company announced that I'm fine, thank you. How are you?

Speaker Change: I'm fine. Thank you how are you.

Pavlina Silikiotou: So I have two questions for you. The first one is, a few months ago, the company announced that it had been selected for a project of approximately 50 million. Can you update us on the project? And does the revenue already announced include the execution of part of the project?

Speaker Change: Thank you.

Speaker Change: So I have two questions for you. The first one is a few months ago. The company announced that it has been selected for the project of approximately 50 million.

Speaker Change: Can you update us on the project and does that I mean, you already announced include the execution of the task of the project.

Shai Shalom Lustgarten: I would like to answer this one first. This is the first question, actually, in two parts.

Speaker Change: Can you repeat that I was trying to at least answer isn't it.

Speaker Change: This is the first question actually.

Shai Shalom Lustgarten: Does the revenue already announced include the execution of part of the project? Okay, so yeah, we've been awarded a project. We can call it a project, but these are already items, products, IoT products we have been providing to discuss with a leading food and chain customer, fortune 100 company. We've been providing them with this equipment in the past, and now they have selected us. Last year they selected us to really expand across the board.

Speaker Change: But yeah. It does anything you already announced including the execution of cost of the project.

Speaker Change: Mhm.

Speaker Change: Okay. So yes, we are.

Speaker Change: Being awarded with the project.

Speaker Change: We can call the project, but these are already items products. The Iot product, we have been providing.

Speaker Change: Providing to the customer a leading food and Jane.

Speaker Change: The customer.

Speaker Change: Fortune 100 company.

Speaker Change: We've been providing them this equipment already in the past and now they have selected us.

Last year, they have selected us to.

Shai Shalom Lustgarten: Our footprint over there involved a lot of pilots, not because, like I mentioned, these are products we already provided, but to expand such a cross-border to older operations, older warehouses, distribution centers. [inaudible] That same customer had already provided us purchase orders, not from this specific project budget, but actually from other budgets and smaller ones which use the same product. And that was an amazing sign for us because that shows us that they are trusting our product, that we passed all the pilots, and we even further increased our potential business with them because the purchase orders we currently receive for the same product from the same customer are ones that are not even from the budget of the $50 million one. So we are seeing very positive feedback. We are already providing the customer with this technology, and we are expecting the first orders from this specific $50 million budget to come every day now.

Speaker Change: Really expanded across the board our footprint over there it involved a lot of pilots.

Speaker Change: Not because like dimension, because our products were already provided but expand such across core two older operations older warehouses distribution centers stores et cetera.

Speaker Change: That is a larger scale project.

That came with pilots that we conducted and ended successfully and we are currently at the space of pending the first orders to come in.

Speaker Change: That same customer.

Speaker Change: <unk> already provided those purchase orders not from this specific project budget, but actually.

Speaker Change: From other budgets and smaller ones, which use the same product and that was an amazing sign for us because that shows us that they are trusting our product that we passed all pilots and even further increased our potential business with them because the purchase orders we currently receive.

Speaker Change: For the same product from the same customer.

Speaker Change: Once that are not even from the budget of the $50 million. One so we are.

Speaker Change: Seeing very positive feedback we are already providing the customer with this technology.

Speaker Change: We are expecting the first orders from this specific $60 million budget to come every day now.

Shai Shalom Lustgarten: And the second question is there were a few announcements regarding new AI unique features like in-car face recognition, crowd management, and here I'm referring to the Israeli train company project announced on September 23, HOV, and others. Can you please update us on these issues?

Speaker Change: Thank you and.

Speaker Change: The second question is.

Speaker Change: If you are announcements regarding new unique features like <unk> face recognition.

Speaker Change: Management CRM resetting today's the Daily train Company project announced in September Atlantic TUI, HOV and kind.

Can you please update us on these issues.

Shai Shalom Lustgarten: Certainly. Yeah, we have done a lot of work, R&D work. One of our biggest expenses is R&D for research and development. And one of the infrastructures that we invested in is to manage our solutions over the cloud to complete cloud management for our clients, for our customers. This allows us to more rapidly expand and deploy systems. We have more than 10,000 deployments now, only in the U.S., 10,000 lanes, and 10,000 AI systems working.

Speaker Change: Certainly.

Speaker Change: We have.

Speaker Change: We have done a lot of work R&D work one of our biggest expense.

Speaker Change: Expenses are the R&D.

Speaker Change: But to the RMB to research and development and one of the <unk>.

Speaker Change: Infrastructures that we invested in is to manage our solutions over the cloud.

Shai Shalom Lustgarten: So, being on the cloud to do that, having that infrastructure, And that is done. We've also been able through that to increase our computing power with the AI product. This allows us to really use virtual servers much stronger and allows us to do things like the machine vision identification of objects quicker, much faster, of course, but also with much higher accuracy because of the computing power that we use over the cloud with virtual servers.

Speaker Change: Complete cloud management for our clients for our customers.

Speaker Change: This allows us to more.

Speaker Change: More rapidly expand and deploy systems, we have more than 10000 deployment now only in the U S.

Speaker Change: 10000 lanes 10000.

Speaker Change: Systems, working so being on the cloud.

Speaker Change: Do that having that infrastructure and that is done.

Speaker Change: Being also able through that to increase our computing power with the AI product. This allows us to really use a virtual servers.

Speaker Change: A much stronger and allow us to do things the machine vision identification of objects weaker.

Speaker Change: Much faster of course, but also with much higher accuracy because of the computing power that we used over the cloud with virtual servers.

Speaker Change: And one of these.

Speaker Change: Outcomes from these infrastructure is the ability to work in different projects expand our reach to additional industries such as the train.

Shai Shalom Lustgarten: And one of the outcomes from this infrastructure is the ability to work on different projects, expand or reach additional industries, such as the train market, where we provided, signed an already concluded pilot where we are providing the system, the product, an AI product that allows to identify crowds and the number of people that can be affected by the computer. What we do is we provide, we look at the platform where the trains come in and or go out from, and there we can identify risks. One of the biggest risks these customers specifically wanted us to identify is crowds, people that increase and create kind of a risky crowd situation where it could end up in an accident where we are. When that happens, before that happens, before this, we can identify the risks this way on every platform that we are deployed at.

Speaker Change: Market, where we provided signed and already concluded a pilot where we are providing the system the product AI product that allows us to identify crowd and b.

And the number of people that can.

Speaker Change: But the computer what we do is we provide we look at the platform.

Speaker Change: Where the trains come in and go out from there we can identify.

Speaker Change: Risks.

Speaker Change: One of the biggest risk this customer specifically wanted us to identify is crowd.

Speaker Change: The people that increase and create kind of a risky crowd situation where.

Speaker Change: It could.

Speaker Change: <unk>.

Speaker Change: And up in the.

Speaker Change: In in an accident, where we are.

Speaker Change: When that happens before that happened before this we can identify the risks this way.

Speaker Change: On every.

Speaker Change: On every platform that we are deployed at we can identify the crowds increasing numbers of people there and we can then alert.

Shai Shalom Lustgarten: We can identify the crowds, the increasing numbers of people there, and we can then alert the authorities or the customer, anyone that he wants us to alert, we can alert them before this risk becomes an event. That's a life-threatening situation where we're doing lifesaving. We're creating a life-saving situation out of it due to the notifications and alerts that we provide. So that's regarding that specific project.

Speaker Change: Or are these.

Speaker Change: Or the customer or any one that he wants us to alert we can alert them before these risks.

Speaker Change: An event that's a life.

Threatening situations where were doing lifesaving, we're creating lifesaving situation out of it.

Speaker Change: Due to the notifications and alerts that we provide so that's regarding that specific project and of course. This is.

Shai Shalom Lustgarten: And, of course, this is a product that is relevant to many other customers. And the fact we did it with this specific customer, which is a national train company, allows us to really have a great reference going out to the whole market. The other, what you mentioned, the HOV, what we do is train our engine, we call the algorithms, the patented algorithms that we have, we call it the engine. We train our engine to identify the number of passengers in the vehicle.

Speaker Change: A product that is relevant for many other customers.

Speaker Change: The fact, we did it would be this specific customer which is the national train.

Speaker Change: Company that allows us to really have a great reference going now to the whole market.

Speaker Change: The other the other what you mentioned the HOV, what we do we trained or engine we call the algorithms.

Speaker Change: Attentive the algorithms that we have we call. It the engine we trained our engine to identify the number of passengers in the vehicle that that immediately.

Shai Shalom Lustgarten: That immediately drove interest from two specific industries. The first is the military one, the defense one, and the second is, of course, the commercial one. In the defense one, we already are deploying this product, this AI product, in the prime minister's residence, and that was a very, that was a significant milestone we achieved with other ministers in different governments to identify not only the vehicles but also the people that are in the vehicle.

Speaker Change: <unk> interest for us.

Speaker Change: Pacific Industries. The first is the military one that defense one and the second is of course the commercial one.

Speaker Change: In the defense one.

Speaker Change: We already are deploying this.

Speaker Change: Product this AD product in prime ministers.

Speaker Change: <unk>.

Speaker Change: Yes.

Speaker Change: That was a very.

Speaker Change: That was a significant milestone we achieved in other ministers in different governments.

Speaker Change: Two identify also not only the vehicles, but also identify the people that are in the vehicle and on the commercial side. We are currently conducting pilots with.

Shai Shalom Lustgarten: And on the commercial side, we're currently conducting pilots with one of the largest, I would say, integrators in the U.S. to actually then go after the commercial market, the HOV lanes, and be able to enforce HOV regulations, which are not today enforceable, but with our product R. Again, it's a huge growth engine and something that we're focusing on as well.

Speaker Change: One of the largest integrator in the U S. Factually then go after the commercial market, the HOV lanes and be able to enforce HOV.

Speaker Change: Regulations, which are not today enforceable, but with our product are again, it's a huge growth engine and something that we're focusing on as well.

Operator: Thank you. Thank you, Pavlina. Once again, if you would like,

Speaker Change: Yes.

Speaker Change: Thank you.

Speaker Change:

Lena: Thank you Lena.

Operator: Once again, if you would like to ask a question, please press star 1. We have reached the end of the question and answer session, and I will now turn the call over to Shai for closing remarks.

Speaker Change: Once again, if you would like to ask a question. Please press star one.

Speaker Change: Yeah.

Charles: We have reached the end of the question and answer session and I will now turn the call over to Charles for closing remarks.

Speaker Change: Thank you operator.

Shai Shalom Lustgarten: Thank you all for your participation today. As we close this call, I want to express my deep gratitude for your ongoing interest and belief in Omnicube. Your support fuels our commitment to innovation and excellence. We are excited about the road ahead and look forward to continuing this journey with you. Together, we are driving OmniQ towards a brighter, more profitable future. Thank you once again for joining us today. We thank also our team, the employees of OmniQ, and the amazing achievements that we are achieving daily. We appreciate your trust and partnership as we move forward into an exciting era of achievement. Have a wonderful day. Thank you so much.

Charles: Thank you all for your participation today.

Charles: We close this call I want to express.

Charles: My deep gratitude for your ongoing interest and belief in omni Q your support fuels, our commitment to innovation and excellence.

Charles: We're excited about the road ahead and look forward to continuing this journey with you together, we are driving the omni Q towards a brighter more profitable future. Thank.

Charles: Thank you once again for joining US today, we think also our team the employees of omni Q.

Charles: And the amazing achievements that we are achieving daily we appreciate your trust and partnerships.

Charles: We move forward into an exciting era of achievement have a wonderful day. Thank you so much.

Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Speaker Change: This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.