Omniq Corp (OMQS) 2023 Q2 法說會逐字稿

Hello, and welcome to the OMNIQ Corp's second-quarter 2023 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 Neev Nissenson, Chief Financial Officer.

您好，歡迎參加 OMNIQ Corp 2023 年第二季度收益電話會議。我的名字是 [Holly]，今天我將協調您的電話。與我們一起參加電話會議的有首席執行官 Shai Lustgarten 先生；和首席財務官 Neev Nissenson。

Today's call is being recorded, and you should have access to the company's second-quarter 2023 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.

今天的電話會議正在錄音，您應該可以查看該公司在昨天收盤後發布的 2023 年第二季度收益新聞稿。此信息可在 OMNIQ 網站 www.omniq.com 的投資者關係部分獲取。

During the course of this 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 them 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.

在本次電話會議期間，我們將做出某些前瞻性陳述。所有涉及對未來的期望、意見或預測的陳述均為前瞻性陳述。儘管它們反映了我們當前的期望，並且基於我們對行業的最佳看法以及我們當前的期望和我們今天所看到的業務，但它們並不能保證未來的業績。這些陳述涉及許多風險和不確定性。由於這些因素可能會發生變化，並且在某些情況下不在我們的控制範圍內，因此我們要求您考慮這一點並據此解釋它們。

We urge you to review the company's Form 10-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. 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.

我們強烈建議您查看公司的 10-K、10-Q 表格和其他 SEC 文件，以討論影響公司業務和業績的主要風險和不確定性，以及可能導致實際結果出現重大差異的因素。 OMNIQ 不承擔公開更新或修改任何前瞻性陳述的義務，無論是由於新信息、未來事件還是其他原因，除非法律要求。在準備好發言後，該公司將在時間允許的情況下回答問題。

Now I will turn the call over to Shai Lustgarten, CEO. Mr. Lustgarten, please go ahead.

現在我將把電話轉給首席執行官 Shai Lustgarten。 Lustgarten 先生，請繼續。

Thank you, operator, and good morning, everybody. Thank you for joining us today to discuss our Q2 2023 financial results.

謝謝接線員，大家早上好。感謝您今天加入我們討論我們 2023 年第二季度的財務業績。

First, I would like to take a second to send our deepest condolences to the family of our esteemed colleague and valued board member, Andrew J. MacMillan, who sadly passed away earlier this week. Andrew joined our Board of Directors in April 2017, bringing with him the wealth of experience and expertise in the corporate communications and investment banking domains.

首先，我想花一點時間向我們尊敬的同事和尊貴的董事會成員安德魯·J·麥克米蘭 (Andrew J. MacMillan) 的家人致以最深切的哀悼，他於本週早些時候不幸去世。 Andrew 於 2017 年 4 月加入我們的董事會，帶來了企業傳播和投資銀行領域的豐富經驗和專業知識。

With over two decades of experience in the global securities industry and 18 years of investment banking, Andrew's influence and insights have been instrumental in shaping our company's strategic direction. Beyond these professional accomplishments, Andrew was known for his warmth, humility, and strong sense of integrity. His commitment to mentoring and nurturing talent was a testament to his character and his belief in the power of collaboration. We will greatly miss him.

Andrew 擁有超過 20 年的全球證券行業經驗和 18 年的投資銀行經驗，他的影響力和洞察力對於塑造我們公司的戰略方向發揮了重要作用。除了這些專業成就之外，安德魯還以其熱情、謙遜和強烈的正直感而聞名。他對指導和培養人才的承諾證明了他的性格和他對合作力量的信念。我們會非常想念他。

To start, I'd like to first thank each one of our employees across the entire company for their continued hard work and dedication to our vision and strategic plan. During today's call, I'll share with you our financials as well as give you an update on our recent achievements.

首先，我要首先感謝整個公司的每一位員工為我們的願景和戰略計劃所做的持續辛勤工作和奉獻。在今天的電話會議中，我將與您分享我們的財務狀況，並向您介紹我們最近取得的成就的最新情況。

Our core legacy business services the needs of many of the world's largest companies. While we remain confident in our continued success and the opportunities ahead, we saw a push out in orders. The temporary delay resulted in $4 million decrease in quarter two of revenue of $20.4 million versus 2022.

我們的核心傳統業務滿足了許多全球最大公司的需求。雖然我們對我們的持續成功和未來的機遇仍然充滿信心，但我們看到訂單的增加。暫時的延遲導致第二季度的收入為 2040 萬美元，與 2022 年相比減少了 400 萬美元。

Despite the challenges in the quarter, we continue to make significant advancements which provide us the ability to reach our yearly objectives and long-term growth plans. Our dedicated team worked tirelessly throughout the quarter to provide excellent customer service and actively pursue numerous substantial new contracts. We're confident that these efforts will yield positive results and more than compensate for the $4 million decrease.

儘管本季度面臨挑戰，但我們繼續取得重大進展，使我們有能力實現年度目標和長期增長計劃。我們的敬業團隊在整個季度孜孜不倦地工作，提供卓越的客戶服務並積極爭取大量新合同。我們相信這些努力將產生積極成果，並且足以彌補 400 萬美元的減少。

I'm excited to report that we have continued to see an increase in demand in our AI-based products, which grew by 91%, continuing its strong performance that we have been building upon over the last several quarters. This is exciting as we extend this higher-margin business, which has been met with enthusiasm from both current and potential new customers.

我很高興地向大家報告，我們看到基於人工智能的產品的需求持續增長，增長了 91%，延續了我們在過去幾個季度所建立的強勁表現。這是令人興奮的，因為我們擴展了這項利潤率更高的業務，該業務受到了當前和潛在新客戶的熱情歡迎。

As mentioned last quarter, we have begun to take steps to decrease cost and increase profitability, which I will speak about in further detail later on the call.

正如上個季度提到的，我們已經開始採取措施降低成本並提高盈利能力，我將在稍後的電話會議上更詳細地討論這一點。

During the quarter, we made several significant announcements including the following. We announced several purchase orders for our AI-based parking and security solutions, adding an additional three airports, bringing our total airport to 60 in the US. These airports include some of the largest in the country, such as JFK, LaGuardia and Newark, San Francisco, Los Angeles, and many more. Our AI machine vision systems is being deployed in South America in partnership with a multibillion-dollar, publicly traded high-tech defense and homeland security company.

在本季度，我們發布了幾項重要公告，包括以下內容。我們宣布了幾份基於人工智能的停車和安全解決方案的採購訂單，增加了三個機場，使我們在美國的機場總數達到 60 個。這些機場包括美國一些最大的機場，如肯尼迪機場、拉瓜迪亞機場、紐瓦克機場、舊金山機場、洛杉磯機場等。我們的人工智能機器視覺系統正在與一家價值數十億美元的上市高科技國防和國土安全公司合作部署在南美。

We also announced our AI-based border safety system has been enhanced with real-time anomaly detection. This new technology allows for identification of unusual acceleration of vehicles and the speeds of the vehicles in high-risk areas, enabling authorities to respond immediately to potential threats. We partnered with EAGL Technology to offer shot detection as an important add-on to our AI-based solution with additional unique features such as the vehicle color, model, and manufacturer, essential features for crime and terror prevention.

我們還宣布我們基於人工智能的邊境安全系統已通過實時異常檢測得到增強。這項新技術可以識別高風險區域的車輛異常加速度和車輛速度，使當局能夠立即對潛在威脅做出反應。我們與 EAGL Technology 合作，提供射擊檢測功能，作為我們基於人工智能的解決方案的重要附加功能，並具有額外的獨特功能，例如車輛顏色、型號和製造商，以及預防犯罪和恐怖活動的基本功能。

We added new cities to our safe city system, Q Shield, for a total of 19 under contract. We successfully navigated through regulatory requirements and are experiencing positive momentum and expect an acceleration in Q3.

我們在安全城市系統 Q Shield 中添加了新城市，合同下的城市總數達到 19 個。我們成功地滿足了監管要求，並正在經歷積極的勢頭，預計第三季度會加速。

I was featured as a guest on the Wall Street Resource Webcast. We recently entered a definitive agreement to acquire Tadiran, a significant development which I'm excited to discuss further. And finally, just this morning, we announced a significant $50 million project to modernize the supply chain for one of the largest food and drug chains in the US.

我作為嘉賓出現在華爾街資源網絡廣播中。我們最近達成了收購 Tadiran 的最終協議，這是一項重大進展，我很高興能進一步討論。最後，就在今天早上，我們宣布了一項耗資 5000 萬美元的重大項目，旨在實現美國最大的食品和藥品連鎖店之一的供應鏈現代化。

As mentioned on our previous call, as we move through 2023, we continue to have three focused company initiatives as well as three areas of growth that we believe will drive our company to continued success. First, we continue to sell deeper and wider to our existing Fortune 100 and 500 customers in all three business lines. Second, we're focused on the momentum in our deployment of our AI products to existing and newly penetrated markets and, third, an increased focus on generating cash and profitability by taking proactive measures to increase efficiency and drive profitability in our operations.

正如我們在之前的電話會議中提到的，隨著 2023 年的到來，我們將繼續實施三項重點公司計劃以及三個增長領域，我們相信這些舉措將推動我們公司持續取得成功。首先，我們繼續向所有三個業務線的現有財富 100 強和 500 強客戶進行更深入、更廣泛的銷售。其次，我們關注將人工智能產品部署到現有和新滲透市場的勢頭，第三，通過採取積極措施提高效率和提高運營盈利能力，更加註重創造現金和盈利能力。

We have taken and continue to take additional cost-cutting measures. As mentioned in our quarterly press release, we continued this process and improved efficiencies initiated this year, resulting in an approximate $1.7 million reduction in SG&A, maintaining our efforts to reach positive EBITDA. And we continue our focus on sales growth of our higher-margin business lines driven by Machine Vision, our patented technology.

我們已經採取並將繼續採取額外的成本削減措施。正如我們在季度新聞稿中提到的，我們今年繼續了這一流程並提高了效率，導致 SG&A 減少了約 170 萬美元，繼續努力實現正 EBITDA。我們繼續專注於由我們的專利技術機器視覺驅動的高利潤業務線的銷售增長。

Before I go further, let me turn the call over to Neev Nissenson, our Chief Financial Officer, who will go over our financial results in more detail. Neev?

在進一步討論之前，請允許我將電話轉給我們的首席財務官 Neev Nissenson，他將更詳細地介紹我們的財務業績。尼夫？

Thank you, Shai. OMNIQ reported revenue of $20.4 million for the quarter that ended June 30, 2023, which is a decrease of 16% from $24.2 million in the second quarter of 2022. Our gross margin in the second quarter was 19% compared to a gross margin of 25% in the same period of 2022. The decrease in gross margin is due to the fixed cost of goods sold combined with a decrease in revenue. Margin on the direct cost of material was actually higher by 2% in second quarter of this year compared to the second quarter of last year.

謝謝你，謝。 OMNIQ 報告截至 2023 年 6 月 30 日的季度收入為 2040 萬美元，比 2022 年第二季度的 2420 萬美元下降了 16%。我們第二季度的毛利率為 19%，而毛利率為 25%。 2022 年同期的%。毛利率下降是由於銷售商品的固定成本加上收入下降所致。今年第二季度的直接材料成本利潤率實際上比去年第二季度高了 2%。

Total operating expenses for the quarter were $6.4 million, a decrease from $8 million in the second quarter of 2022. Net loss for the quarter was $3.9 million, or a loss of $0.49 per basic share, compared with a loss of $3.2 million, or a loss of $0.44 million per basic share, for the second quarter of last year. Adjusted EBITDA, meaning adjusted earnings before interest, taxes, depreciation, and amortization, for the second quarter of 2023 amounted to a loss of $1.5 million compared with an adjusted EBITDA loss of $777,000 in the second quarter of 2022. Cash balance at June 30, 2022, was $2 million compared with $1.3 million at December 31, 2022.

該季度的總運營費用為640 萬美元，低於2022 年第二季度的800 萬美元。該季度的淨虧損為390 萬美元，即每股基本股虧損0.49 美元，而同期虧損為320 萬美元，即每股基本股虧損320 萬美元。去年第二季度每股基本股虧損 44 萬美元。 2023 年第二季度調整後 EBITDA（即調整後息稅折舊及攤銷前利潤）虧損 150 萬美元，而 2022 年第二季度調整後 EBITDA 虧損 777,000 美元。截至 6 月 30 日的現金餘額2022 年，這一數字為200 萬美元，而2022 年12 月31 日為130 萬美元。

For the six months ending June 30, 2023, financial results, OMNIQ reported revenue of $48 million, a decrease of 4% from $50 million in the first six months of 2022. Our gross margin for the first half of 2023 was 20% compared to a gross margin of 24% for the same period last year.

在截至2023 年6 月30 日的六個月財務業績中，OMNIQ 報告收入為4800 萬美元，比2022 年前六個月的5000 萬美元下降4%。我們2023 年上半年的毛利率為20% ，去年同期毛利率為24%。

Total operating expenses for the six months ended June 30, 2023, were $14.1 million compared with $15.5 million for the same period of 2022, a decrease of 9%. Net loss for the six months ended June 30, 2023was $7.4 million, or a loss of $0.95 per basic share, compared with the loss of $5.8 million, or a loss of $0.79 per basic share, for the first six months of last year. Adjusted EBITDA, again, adjusted earnings before interest, taxes, depreciation, and amortization, for the six months ended June 30, 2023, amounted to a loss of $2.4 million compared with an adjusted EBITDA loss of $1 million in the same period 2022.

截至 2023 年 6 月 30 日的六個月總運營費用為 1,410 萬美元，較 2022 年同期的 1,550 萬美元下降 9%。截至 2023 年 6 月 30 日的六個月淨虧損為 740 萬美元，即每股基本股虧損 0.95 美元，而去年前六個月的淨虧損為 580 萬美元，即每股基本股虧損 0.79 美元。截至 2023 年 6 月 30 日的六個月，調整後的 EBITDA 調整後的息稅折舊及攤銷前利潤為 240 萬美元的虧損，而 2022 年同期調整後的 EBITDA 虧損為 100 萬美元。

Back to you, Shai.

回到你身邊，謝伊。

Thank you, Neev. Now let me shift gears and share more on our plan and what our shareholders can expect as we move throughout the year. While we continue our efforts on all sectors, we remain specifically enthusiastic and focused on three verticals, including safe cities, supply chain, and traffic management. As we look at our entire business and with these three verticals in mind, we expect to see accelerated growth and continued strong results, as our new orders and backlog remain strong.

謝謝你，內夫。現在讓我換個方向，更多地分享我們的計劃以及我們的股東對我們全年行動的期望。在我們繼續在各個領域努力的同時，我們仍然特別熱情並專注於三個垂直領域，包括安全城市、供應鍊和交通管理。當我們審視我們的整個業務並考慮到這三個垂直領域時，我們預計將看到加速增長和持續強勁的業績，因為我們的新訂單和積壓訂單仍然強勁。

I will now take a few minutes to expand on each of these three key verticals to allow you to a better understanding of the opportunity ahead. First, safe cities. This vertical continues to show impressive progress during this quarter. We announced several awards in the safe city deployments in South America. We also introduced the new speed functionality, which allows for identification of unusual acceleration of vehicle speeds in high-risk areas, enabling authorities to respond immediately to potential threats.

現在，我將花幾分鐘時間分別詳細介紹這三個關鍵垂直領域，以便您更好地了解未來的機會。一是平安城市。這一垂直領域在本季度繼續顯示出令人印象深刻的進展。我們宣布了南美洲安全城市部署的多項獎項。我們還推出了新的速度功能，該功能可以識別高風險區域中異常的車速加速，使當局能夠立即對潛在威脅做出反應。

With that, Q Shield further differentiated itself as a one-of-a-kind public safety AI solution. Q Shield is proving to be a major force multiplier, operating 24/7, while providing an unbiased approach, eliminating the potential of conflicts that has traditionally occurred. In addition, this solution removes the need for a physical officer by utilizing our proprietary vehicle recognition system and our cloud-based citation management technology. Our solution is unique in both the patented technology as well as the revenue share model that we created and has resulted in both safety, benefit, as well as revenue generator for the cities we serve.

由此，Q Shield 作為一種獨一無二的公共安全人工智能解決方案進一步脫穎而出。事實證明，Q Shield 是一個主要的力量倍增器，24/7 運行，同時提供公正的方法，消除傳統上發生衝突的可能性。此外，該解決方案利用我們專有的車輛識別系統和基於雲的罰單管理技術，消除了對現場官員的需求。我們的解決方案在專利技術和我們創建的收入分享模式方面都是獨一無二的，為我們所服務的城市帶來了安全、效益和收入。

Q Shield identifies any vehicle driving through a city, which is on the National Crime Information Center database or on the city's local bureau investigation database. Within milliseconds, Q Shield alerts authorities of potential criminals and if any vehicles are driven unregistered or uninsured. Our initial four deployments have already shown significant benefits to the public, the cities, and to OMNIQ.

Q Shield 可識別穿過城市的任何車輛，這些車輛位於國家犯罪信息中心數據庫或該市地方局調查數據庫中。在幾毫秒內，Q Shield 就會向當局發出潛在犯罪分子的警報，以及是否有任何車輛在未註冊或未投保的情況下行駛。我們最初的四次部署已經為公眾、城市和 OMNIQ 帶來了顯著的好處。

Being an innovative product, OMNIQ is literally inventing the manual for both the deployment and use of our products. As we've entered into a new industry with groundbreaking technology, we encountered several learning curves and navigated unexpected regulatory demand, which caused a delay in our deployment. I'm pleased to tell you that these challenges are being successfully addressed, and we anticipate a swifter pace of deployment for the additional 15 cities waiting for their systems.

作為一款創新產品，OMNIQ 實際上是在發明我們產品的部署和使用手冊。當我們進入一個擁有突破性技術的新行業時，我們遇到了一些學習曲線並應對了意想不到的監管需求，這導致了我們的部署延遲。我很高興地告訴您，這些挑戰正在得到成功解決，我們預計另外 15 個等待系統的城市的部署速度將會加快。

In addition, we see a continued positive pace of new contracts moving forward, as many success stories are shared between different chief of police in several states. With over 22,000 cities across the country, our potential is vast. We have witnessed amazing performance Q Shield in assisting police departments with several of their challenges.

此外，我們看到新合同的持續積極進展，因為多個州的不同警察局長分享了許多成功故事。我們的業務遍及全國22,000多個城市，潛力巨大。我們見證了 Q Shield 在協助警察部門應對多項挑戰方面的驚人表現。

For example, Q Shield recently was utilized to thwart a robbery by identifying a vehicle that was registered to an elderly woman while the car was identified by our sensors being driven by a young man with several others in the vehicle, immediately identifying an anomaly. With the speed and accuracy our system provides, the police were already en route when the potential aspects entered the parking lot of a local gun store and the men were apprehended without incident.

例如，Q Shield 最近被用來阻止搶劫，方法是識別一輛登記為一位老年婦女的車輛，而我們的傳感器則識別出該車由一名年輕男子駕駛，車內還有其他幾人，從而立即識別出異常情況。憑藉我們系統提供的速度和準確性，當潛在人員進入當地一家槍支商店的停車場時，警方已經在路上，並順利逮捕了這些人。

In another story, one of our cities utilizing our system was able to identify the location of an FBI most wanted fugitive, a significant action. While the police on duty were unable to take the fugitive into custody, Q Shield was successful in the identification process and worked precisely as designed. This success has further emphasized the significance of our technology's capabilities and has resulted in further interest in our product offering. In addition to growing revenue, we're seeing more of these type of success stories, which are a clear sign that Q Shield's real-time platform solution would benefit every city within every intersection.

在另一個故事中，我們的一個城市利用我們的系統能夠確定聯邦調查局頭號通緝逃犯的位置，這是一項重大行動。雖然執勤警察無法將逃犯抓獲，但 Q Shield 成功完成了身份識別，並且工作完全按照設計進行。這一成功進一步強調了我們技術能力的重要性，並引起了人們對我們產品的進一步興趣。除了收入增長之外，我們還看到了更多此類成功案例，這清楚地表明 Q Shield 的實時平台解決方案將使每個十字路口的每個城市受益。

Next, supply chain. This is our core legacy business services that services the needs of many of the world's largest companies, and that business vertical remains very strong. We remain confident in our continued success and the opportunities ahead, despite the push-out of orders this quarter.

其次，供應鏈。這是我們的核心傳統業務服務，可以滿足許多世界上最大的公司的需求，並且垂直業務仍然非常強大。儘管本季度訂單被推遲，但我們對我們的持續成功和未來的機遇仍然充滿信心。

We continue to make significant advancements which provide us the ability to reach our yearly objectives and long-term growth plans. sorry about that. Our dedicated team worked tirelessly throughout the quarter to provide excellent customer service and actively pursue numerous substantial new contracts. We're confident that our efforts will yield positive results, more than compensating for the current revenue decrease.

我們繼續取得重大進步，使我們有能力實現年度目標和長期增長計劃。對於那個很抱歉。我們的敬業團隊在整個季度孜孜不倦地工作，提供卓越的客戶服務並積極爭取大量新合同。我們相信，我們的努力將產生積極的成果，不僅僅是彌補當前收入的下降。

In fact, as you saw earlier this morning in the significant announcement that we released, we have been selected for a $50-million project to modernize the supply chain for one of the largest food and drug companies in the United States. This project aims to modernize and enlarge the logistics system of this multibillion longstanding customer.

事實上，正如您今天早上早些時候在我們發布的重要公告中看到的那樣，我們已被選中參與一個價值 5000 萬美元的項目，為美國最大的食品和製藥公司之一實現供應鏈現代化。該項目旨在現代化並擴大這個數十億長期客戶的物流系統。

The project is for Android-based handheld IoT devices, using -- managing the customers' total supply chain level of operations within its warehouses, distribution centers, and up to point of delivery to their end customer. This application ensures proper timing, routing, and proof of delivery, ensuring customer success. The order includes specialized services and support under OMNIQ's responsibility.

該項目適用於基於 Android 的手持物聯網設備，使用管理客戶的倉庫、配送中心以及直至交付給最終客戶的整個供應鏈運營水平。該應用程序可確保正確的時間安排、路線和交付證明，確保客戶成功。該訂單包括 OMNIQ 負責的專業服務和支持。

Our team has diligently worked over the last six months on many fronts, including these projects, where we focused on design and seamless integration within our customers' logistics systems. Our efforts have culminated in success, and we take pride in once again receiving a strong vote of confidence from one of the largest and most prestigious corporations worldwide. The unwavering dedication of our entire company-wide team to meet the ever-evolving demand of our longstanding customers has played a pivotal role in nurturing and enduring partnerships.

在過去的六個月裡，我們的團隊在許多方面勤奮工作，包括這些項目，我們在這些項目中專注於客戶物流系統的設計和無縫集成。我們的努力最終取得了成功，我們為再次獲得全球最大、最負盛名的公司之一投下的強烈信任票而感到自豪。我們整個公司團隊堅定不移地致力於滿足長期客戶不斷變化的需求，這在培育和持久的合作夥伴關係方面發揮了關鍵作用。

These projects, coupled with our robust pipeline and backlog, will undoubtedly have positive impact on the company's performance throughout 2023 and beyond. It is important to emphasize that this segment not only provides stable revenue generation but also presents a significant opportunity for us to introduce our AI-related products to these advantageous customer base. As we further gradually penetrate this market, we anticipate a substantial increase in both our revenue and margins over time.

這些項目，加上我們強大的管道和積壓訂單，無疑將對公司 2023 年及以後的業績產生積極影響。需要強調的是，該細分市場不僅提供了穩定的收入來源，而且為我們提供了向這些優勢客戶群推出人工智能相關產品的重要機會。隨著我們進一步逐步滲透這個市場，我們預計隨著時間的推移，我們的收入和利潤率將大幅增加。

And finally, traffic management. The traffic management vertical encompasses our AI solution tailored for airport, commercial, and public parking. As previously mentioned, we have successfully deployed our solution in additional airports, bringing our total to an impressive 60 airports nationwide. This achievement solidifies our invaluable position in market. This vertical relies on our many channel partners whom we focus on and continue to grow.

最後是交通管理。交通管理垂直領域包括我們為機場、商業和公共停車場量身定制的人工智能解決方案。如前所述，我們已在更多機場成功部署了我們的解決方案，使全國機場總數達到 60 個，令人印象深刻。這一成就鞏固了我們在市場上的寶貴地位。這個垂直領域依賴於我們關注並持續增長的眾多渠道合作夥伴。

In Q2, we saw the growth expand. Our product provides a precise user-friendly and scalable solution, which automates previously manual or non-automated actions. This is significant, as it creates efficiencies, a better customer experience, and reduces expenses of our customers' operations. As evidenced by our 91% growth this quarter, our AI products show continued interest by both existing and new customers, and we look forward to further success in our AI products going forward.

在第二季度，我們看到增長擴大。我們的產品提供了精確的用戶友好型且可擴展的解決方案，可以自動執行以前的手動或非自動操作。這非常重要，因為它可以提高效率、提供更好的客戶體驗並降低客戶的運營費用。本季度 91% 的增長就證明了我們的人工智能產品受到了現有客戶和新客戶的持續關注，我們期待著我們的人工智能產品在未來取得進一步的成功。

Before I conclude and turn this call over to questions, I'd like to discuss our recently announced definitive agreement for Tadiran. As reported in our July 10 press release, we have entered into a definitive agreement with Tadiran Telecomm.

在我結束本次電話會議並提出問題之前，我想討論一下我們最近宣布的塔迪蘭最終協議。正如我們 7 月 10 日新聞稿中所報導的，我們已與 Tadiran Telecomm 簽訂了最終協議。

Based on reported segment results from Afcon 2022 annual financial statements, Tadiran had revenues of $26 million in 2022 and $1.7 million in operating profit. Tadiran's revenue also includes a significant portion of recurring revenue. For 100% of Tadiran's shares, OMNIQ will pay a total consideration of $15.25 million, of which $12.5 million will be paid in cash which is expected to be financed with traditional debt. In addition, $2.75 million of the consideration will be paid in the form of restricted, non-discounted common stock.

根據 Afcon 2022 年度財務報表報告的分部業績，Tadiran 2022 年的收入為 2600 萬美元，營業利潤為 170 萬美元。 Tadiran 的收入還包括很大一部分經常性收入。對於 Tadiran 100% 的股份，OMNIQ 將支付 1525 萬美元的總對價，其中 1250 萬美元將以現金支付，預計將通過傳統債務融資。此外，275萬美元的對價將以限制性、非折價普通股的形式支付。

With the addition of Tadiran, we will possess a comprehensive proprietary communication solution that enables us to better serve our customers and complete our solution. Our platform technology utilizes three steps: we sense, identify and act.

隨著Tadiran的加入，我們將擁有全面的專有通信解決方案，使我們能夠更好地服務客戶並完善我們的解決方案。我們的平台技術採用三個步驟：感知、識別和行動。

With the addition of Tadiran, we can now add audio, cellular, and Wi-Fi signals to our current sensors which today include cameras, scanners, RFID, and Bluetooth technologies allowing us to analyze the digital data in greater detail and at a faster speed. This significantly enhances our ability to manage events and mitigate risks at all levels. The new smart automation is a unique solution into our supply chain, traffic management, retail, and hospitality customers, allowing us to provide a superior service with more accurate and faster sensing, identification, and action.

通過添加Tadiran，我們現在可以將音頻、蜂窩和Wi-Fi 信號添加到我們當前的傳感器中，這些傳感器現在包括攝像頭、掃描儀、RFID 和藍牙技術，使我們能夠以更快的速度更詳細地分析數字數據。這顯著增強了我們在各個層面管理事件和降低風險的能力。新的智能自動化是我們供應鏈、交通管理、零售和酒店客戶的獨特解決方案，使我們能夠通過更準確、更快速的傳感、識別和行動提供優質服務。

As OMNIQ continues to drive automation for our customers, this acquisition not only allows us to meet the existing organizational communication needs of our current customers but also enables us to create automation through real-time AI communication sensing. This is important, as it provides us the capability to identify and respond faster and with greater accuracy. By leveraging the sensing and digitization of communication data and identifying trends at the communication AI level, we can take prompt and precise actions. This capability is crucial in our commitment to delivering predictive and proactive actions.

隨著 OMNIQ 繼續為我們的客戶推動自動化，此次收購不僅使我們能夠滿足當前客戶現有的組織通信需求，而且使我們能夠通過實時 AI 通信傳感創建自動化。這很重要，因為它使我們能夠更快、更準確地識別和響應。通過利用通信數據的傳感和數字化，並在通信人工智能層面識別趨勢，我們可以採取迅速、準確的行動。這種能力對於我們致力於提供預測性和主動性行動至關重要。

Our acquisition of Tadiran is a pivotal moment for OMNIQ, as it aligns perfectly with our strategic goals of increasing recurring revenue and enhancing profitability. By expanding our portfolio with Tadiran's robust business model, customer base, UC&C solutions, and enhanced safe city offering, we strengthen our market position and unlock new revenue streams. These synergies create opportunities for growth, market expansion, and increased shareholder value.

我們對 Tadiran 的收購對於 OMNIQ 來說是一個關鍵時刻，因為它完全符合我們增加經常性收入和提高盈利能力的戰略目標。通過利用 Tadiran 強大的業務模式、客戶群、UC&C 解決方案和增強的安全城市產品來擴展我們的產品組合，我們鞏固了我們的市場地位並釋放了新的收入來源。這些協同效應為增長、市場擴張和增加股東價值創造了機會。

As I have explained, during the quarter, our company continued to see many success despite the near-term challenges that we faced. We believe we are in a solid position to continue with our plans and expectations for the year. As we continue to ramp sales while continuing to further reduce costs, we are confident in the future of our company and look forward to further success.

正如我所解釋的，儘管我們近期面臨挑戰，但在本季度，我們公司繼續取得了許多成功。我們相信，我們有能力繼續實現今年的計劃和期望。隨著我們繼續提高銷量，同時繼續進一步降低成本，我們對公司的未來充滿信心，並期待取得進一步的成功。

Our focus remains crystal clear and our approach remains disciplined. We remain dedicated to the initiatives and segments that have been outlined, ensuring that we allocate our resources effectively and capitalize on the opportunities before us. By adhering to our strategic road map, we are confident in our ability to drive continued success and maximize shareholder value.

我們的重點仍然非常明確，我們的方法仍然嚴格。我們仍然致力於已概述的舉措和細分市場，確保我們有效地分配資源並利用擺在我們面前的機會。通過堅持我們的戰略路線圖，我們對推動持續成功和股東價值最大化的能力充滿信心。

As we turn the call over to the questions, I would also like to extend my sincere thanks to our loyal customers and suppliers, our professional team, and other strong supporters. Finally, we would like to thank our shareholders for their trust in us, as well as wish you all continued success.

在我們進行提問的同時，我還要向我們忠實的客戶和供應商、我們的專業團隊以及其他強有力的支持者表示誠摯的感謝。最後，我們要感謝股東對我們的信任，並祝愿大家繼續取得成功。

Operator, I'll now turn this call over for questions.

接線員，我現在將轉接此電話以詢問問題。

Certainly. At this time, we will be conducting a question-and-answer session. (Operator Instructions) Jaeson Schmidt, Lake Street Capital.

當然。此時，我們將進行問答環節。 （操作員說明）Jaeson Schmidt，Lake Street Capital。

Hey guys. Thanks for taking my questions. So I just want to start with today's announcement on that $50 million contract. It sounds like this is an existing customer. But can you help us kind of understand how many locations this covers and if there's an opportunity to expand further from this level?

大家好。感謝您回答我的問題。我只想從今天宣布的 5000 萬美元合同開始。聽起來這是一個現有客戶。但您能否幫助我們了解這涵蓋了多少個地點，以及是否有機會在此基礎上進一步擴展？

This is actually an expansion. You are absolutely correct, Jaeson, that this is an existing customer that we have very good relationship with for probably, I would say, 20 years now. And we actually expanded with this contract to -- into additional divisions that we have not yet automated with our IoT devices. It does have a more global expansion opportunity that we will continue discussing with them and understand further.

這實際上是一種擴展。 Jaeson，您說得完全正確，這是我們與我們保持良好關係的現有客戶，我想說，可能已經有 20 年了。實際上，我們通過這份合同擴展到了我們尚未使用物聯網設備實現自動化的其他部門。它確實有更多的全球擴張機會，我們將繼續與他們討論並進一步了解。

Currently, it is nationwide. And, of course, as this been a global customer with a global footprint, then the opportunities that we -- once we get more details, we'll understand better the opportunity.

目前，已在全國范圍內推廣。當然，由於這是一家業務遍及全球的全球客戶，一旦我們獲得更多細節，我們就會更好地了解這個機會。

Okay. That's helpful. And you mentioned that there's going to be some services and support along with this. But how should we think about any sort of gross margin profile for this contract?

好的。這很有幫助。您提到，隨之而來的是一些服務和支持。但我們應該如何考慮該合同的毛利率狀況呢？

That's part of our statement that we discussed, where we say that as we grow further into this supply chain market and penetrate further with more services, thus, we will grow also our gross margins. And that is a good example of that because we're adding different services and we're adding different devices, again, being experts in the solution that allows us to do so. And we are increasing our margin this way.

這是我們討論過的聲明的一部分，我們說，隨著我們進一步發展到這個供應鏈市場並通過更多服務進一步滲透，我們的毛利率也將增長。這是一個很好的例子，因為我們正在添加不同的服務，我們正在添加不同的設備，再次成為解決方案的專家，使我們能夠做到這一點。我們正在通過這種方式增加我們的利潤。

Now, the most important thing is that once we are successful, like this success this morning, this -- with high-volume or high-scale contracts, enlarging even with one point -- we did with more. But even with one point on the gross margin, this really is affecting the bottom line significantly because these are high dollar values.

現在，最重要的是，一旦我們成功，就像今天早上的成功一樣，通過大批量或高規模的合同，即使擴大一個點，我們也會做得更多。但即使毛利率只有一點，這確實會顯著影響利潤，因為這些產品的美元價值很高。

Okay. Got it. And then just the last one from me, and I'll jump back into queue. Just curious if you could provide an update for us on the restaurant or retail opportunities you had. I know you're rolling out at that fast food chain. Just curious where you are in that trajectory.

好的。知道了。然後我就會跳回隊列。只是好奇您是否能為我們提供有關您擁有的餐廳或零售機會的最新信息。我知道你正在那家快餐連鎖店推出。只是好奇你在這條軌跡上的位置。

Right. So we were -- last time we spoke, we said that we are rolling out slowly with one of the customers. And we also discussed the fact that we have successfully approached additional two customers, at least, in that area of drive-throughs.

正確的。所以我們 - 上次談話時，我們說我們正在與一位客戶一起慢慢推出。我們還討論了這樣一個事實：我們至少在免下車服務領域成功接觸了另外兩個客戶。

We are currently advancing with one of the customers that we've discussed on our last call and waiting for deployments. We've concluded the pilot. We were notified that they're interested to start the deployment, and we are waiting.

目前，我們正在與上次通話中討論過的一位客戶進行合作，並等待部署。我們已經完成了試點。我們被告知他們有興趣開始部署，我們正在等待。

We came into kind of what they call a quiet period until they can issue the orders, which is part of their internal policy as a company. We're waiting now, impatiently actually, to start -- to receive the information of how many locations they would like us to deploy. That's the most, I would say, exciting news or advancement in that area.

我們進入了他們所說的安靜期，直到他們可以發布命令，這是他們作為公司內部政策的一部分。我們現在正在等待，實際上是不耐煩地等待開始——接收他們希望我們部署多少個地點的信息。我想說，這是該領域最令人興奮的消息或進步。

Okay. Perfect. Thanks a lot, guys.

好的。完美的。非常感謝，伙計們。

Thank you.

謝謝。

(Operator Instructions) There are no further questions in queue. I will now turn the call over to Shai for any closing remarks.

（操作員說明）隊列中沒有其他問題。現在我將把電話轉給 Shai，讓他發表結束語。

Thank you, operator, and thank you all again for your participation in today's quarterly update. We appreciate you taking the time out of your schedule to better understand OMNIQ's current and future opportunities. I look forward to speaking to you all on our next call and hope you have a great day. Thank you very much.

謝謝運營商，再次感謝大家參與今天的季度更新。我們感謝您抽出時間來更好地了解 OMNIQ 當前和未來的機會。我期待著在下次電話會議上與大家交談，並希望你們度過愉快的一天。非常感謝。

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

今天的會議到此結束，此時您可以掛斷電話了。感謝您的參與。