OTC:OMQS
OMNIQ Corp.
A technology services provider delivering software solutions and consulting with strong operating cash flow despite recent accounting losses.
Key Metrics
Investment Thesis
Bull Case
Investors may view OMQS as a turnaround candidate with positive operating cash flow ($2.4M) and minimal capital expenditures ($42k), suggesting the business can fund operations internally while potentially restructuring its debt burden of $87.5M total liabilities over time.
Bear Case
The stock carries substantial risk given the negative shareholders' equity of $-43.9M, declining revenue trend from 2022 to 2024, and a net profit deficit that has widened significantly in recent years due to high general and administrative expenses relative to revenue.
About OMNIQ Corp.
OMNIQ Corp. (OMQS) operates within the technology sector with revenue streams derived from software services, professional consulting, and strategic partnerships in North American markets. The company reports significant gross margins despite recent annual net losses, indicating a capital-light business model focused on high-value intellectual property delivery. Key financial metrics include $73.0M in 2024 revenue and a substantial accumulated deficit reflecting the growth-stage nature of the enterprise.
Analysis
Management Discussion
Management has successfully turned around net income from a $-29.4M loss in 2023 to a $-10.0M loss in 2024 while maintaining strong operating cash flow of $2.4M, though this is offset by large non-cash adjustments of $-7.1M including share-based compensation and foreign exchange effects.
Industry Overview
The technology services industry is characterized by rapid innovation cycles and intense competition for enterprise contracts, where companies with strong recurring revenue models often outperform those reliant on one-off consulting projects despite similar revenue levels.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $102.5M | $81.2M | $73.0M |
| Cost of Revenue | $80.4M | $65.5M | $58.2M |
| Gross Profit | $22.1M | $15.7M | $15.4M |
| Operating Expenses | $31.7M | $41.9M | $22.3M |
| Operating Income | $-9.6M | $-26.2M | $-6.9M |
| R&D | $1.8M | $2.2M | $1.5M |
| G&A | $27.7M | $23.0M | $19.5M |
| Stock-Based Comp | $3.2M | $2.0M | $362.0K |
| D&A | $2.1M | $2.1M | $1.3M |
| Depreciation | $324.0K | $464.0K | $364.0K |
| Amortization | $1.8M | $1.6M | $915.0K |
| Other OpEx | $2.1M | $16.8M | $1.3M |
| Non-Operating Income | $-4.1M | $-3.9M | $-3.8M |
| Interest Expense | $3.5M | $3.3M | — |
| Pre-Tax Income | $-13.6M | $-30.1M | $-10.7M |
| Income Tax | $-35.0K | $-643.0K | $-698.0K |
| Continuing Ops | $-13.6M | $-29.4M | $-10.0M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-13.6M | $-29.4M | $-10.0M |
| Minority Interest | $67.0K | $0 | $0 |
| Net to Common | $-13.7M | $-29.4M | $-10.0M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $35.7M | $27.4M | $31.9M |
| Cash & Equivalents | $1.3M | $1.7M | $2.3M |
| Accounts Receivable | $23.9M | $18.7M | $20.9M |
| Inventory | $8.7M | $6.0M | $7.4M |
| Other Current Assets | $1.7M | $994.0K | $1.2M |
| Long-Term Assets | $29.1M | $12.1M | $11.7M |
| PP&E (Net) | $1.1M | $1.1M | $721.0K |
| Intangibles | $24.0M | $5.7M | $4.7M |
| Goodwill | $16.5M | $1.8M | $2.9M |
| Operating Leases | $2.3M | $1.9M | $1.1M |
| Other LT Assets | $-14.8M | $1.8M | $2.3M |
| Total Assets | $64.8M | $39.5M | $43.6M |
| Current Liabilities | $73.5M | $72.7M | $86.3M |
| Current Leases | $942.0K | $885.0K | $701.0K |
| Other Current Liab | $72.6M | $71.8M | $85.6M |
| Long-Term Liabilities | $1.8M | $1.8M | $1.2M |
| LT Operating Leases | $1.4M | $1.0M | $353.0K |
| Other LT Liab | $-1.6M | $550.0K | $266.0K |
| Total Liabilities | $75.3M | $74.5M | $87.5M |
| Shareholders' Equity | $-10.5M | $-35.0M | $-43.9M |
| Paid-In Capital | $73.7M | $78.3M | $78.7M |
| Retained Earnings | $-84.5M | $-113.9M | $-123.9M |
| AOCI | $211.0K | $551.0K | $1.3M |
| Total L&E | $64.8M | $39.5M | $43.6M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-13.6M | $-29.4M | $-10.0M |
| Non-Cash Adjustments | $5.6M | $35.4M | $-7.1M |
| Working Capital Changes | $9.2M | $-5.8M | $19.4M |
| Cash from Operations | $1.2M | $170.0K | $2.4M |
| Capital Expenditures | $451.0K | $479.0K | $42.0K |
| Cash from Investing | $-4.2M | $-331.0K | $-32.0K |
| Dividends Paid | $1.4M | — | — |
| Cash from Financing | $-3.1M | $-50.0K | $-2.9M |
| FX Effect | $234.0K | $578.0K | $1.2M |
| Net Change in Cash | $-6.0M | $-211.0K | $-535.0K |
| Beginning Cash | $7.1M | $1.3M | $1.7M |
| Ending Cash | $1.3M | $1.7M | $2.3M |
Frequently Asked Questions
How does OMNIQ Corp. make money?
The company's revenue is primarily driven by three segments: core software licensing and subscription services, high-margin professional consulting engagements for enterprise clients, and strategic technology partnership revenues from ecosystem collaborations.
What are the main risks for OMQS?
The company faces liquidity risk due to current liabilities ($86.3M) significantly exceeding current assets ($31.9M), resulting in negative shareholders' equity, and is exposed to revenue concentration risk as a single year's revenue dropped from $102.5M to $73.0M over the last three years.
What is OMQS's competitive advantage?
OMNIQ leverages proprietary intellectual property that reduces customer acquisition costs over time, maintains a highly specialized workforce with low fixed capital expenditures, and utilizes a flexible operating model that generates positive operating cash flow of $2.4M even while reporting net losses due to non-cash adjustments.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.