Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| And I think having an overall good reputation within the Class 1, the American, North American Class 1 network, a lot of times the calls come in, after the inquiry, some of our customers so that's really helpful |
| Our current customers and many potential new customers have told us that technically our railcar inspection portal is the best-in-class in terms of performance, reliability and standardization of the hardware software, IT infrastructure, and artificial intelligence |
| To be clear, the business is in a strong position both fundamentally and financially |
| Three of the six Class 1 railroads, plus Fair Max and Amtrak use our railcar inspection solution with strong results |
| The carriers can also benefit by seeing the railcars before they accept them and interchange with them |
| We believe that Duos is in a strong position, with the support of our current rail customers to be in the leading edge of this adoption |
| This financial position coupled with our expected success of our strategic initiatives, will position the company for growth of its recurring revenues, and positive overall outlook |
| I also believe that despite our current short-term revenue challenges, the company remains in good financial position with sufficient cash from operations and near term business opportunities that will accomplish the key milestones I discussed earlier, and provide a good return to our shareholders |
| In closing, I want to highlight that I believe our company has a leadership position in a rail sector, with machine vision and AI wayside detection, our transition over the next 12 to 18 months into a recurring revenue business model, selling into a growing demand for this technology puts us in a very strong position to give an unexpected high return on investment to our loyal shareholders |
| We remain encouraged by the long-term nature of our contracts and believe our maintenance and artificial intelligence services ensure that the railcar inspection portals are critical to three of the six Class 1 railroads and her other major transit and freight operators ongoing network operations |
| Second, it now as hundreds of car owners, lessors and shippers, many of whom have shown strong interest in using our safety data to more effectively manage the maintenance of their fleet to improve safety and overall car utilization rates |
| In this concept, a real carrier benefits by having cars arrive on its network and better mechanical condition, which is both safer and an enabler to improve overall car utilization rate |
| And I'm pleased to say that all of Duos’ customers are using our AI detections catalog of 40 plus use cases with excellent results |
| Today, I'm going to discuss my assessment that the company has in the best position it has ever been to achieve our strategy and long-term value despite some short-term financial headwinds, which Andrew will walk us through in a moment |
| There is strong consensus among industry leaders that this technology will be fully adopted in the coming years as the rail industry makes continued safety improvements |
| Number one, we're very fortunate that we haven't done a lot of international marking directly, but we've still taken an increase |
| What is critical for us in the next 12 to, coming 12 to 18 months is the transition from a volatile CapEx only business to a machine vision artificial intelligence subscription business with steady recurring revenue |
| In summary, we are financially positioned to execute our current plans |
| I want to remind everyone that we believe Duos is currently the North American rail industry leader in machine vision and artificial intelligence wayside detection technology |
| While the near term results have been lower than expected, I am confident in the long-term vision and progression towards those objectives |
| And in the discussions that we're having, which are very detailed and very technical, there's a lot of excitement for how they can use it, and how they can use that to make sure as an enabler to keep their core utilization rates higher at this point |
| So we're excited to do that |
| Duos continues to have the support of our long-term shareholders who recognize the strategic path the company is pursuing, as evidenced by its most recent capital infusion, and we appreciate their continued support as we implement our subscription platform |
| Another compelling feature is that our machine vision AI safety data is exchangeable and can be uniformly distributed amongst the stakeholders of the larger rail network in near real time |
| I expect that with support from our partners, our subscriptions will grow significantly in the near future to promote a safer rail network |
| This flexibility gives us bandwidth to take advantage of contracts that are pending and expected to be signed in the next few months, as well as convert some of the key subscriptions and CapEx projects in our pipeline |
| We have taken in some of our leads, if you will, internationally from our technology partners, both Dell Computers and Nvidia, which we're very thankful for |
| But we are partnered with one or two of the larger rail vendors in the international market that have a good international footprint, where we've partnered with them on some of these international opportunities |
| Another key technical breakthrough deployed to the track edge is a system update whereby the portals can acquire, compute and present inspection results in as little as 60 seconds after the railcar passes through the portal, which allows for instant notification to train crews, dispatchers and railroad mechanical teams |
| As you can imagine, post these Palestine, there has been renewed interest across the industry to share safety data from wayside detection systems |
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| The loss from operations was primarily the result of continued lower revenues recorded in the third quarter and year-to-date as a consequence of the project delays previously noted |
| The net effect of the aforementioned timing challenges during 2023 is that we will not be able to book sufficient revenue to meet our guidance range and thus are withdrawing full year 2023 revenue guidance |
| Another risk is the speed with which the industry will adopt this cutting edge technology |
| This was a decrease in total revenue on a year-over-year basis for both periods, driven by a combination of factors including customer driven delays on key projects, originally slated to be completed late in the third quarter, 2023 and timing of new CapEx projects |
| So what are the risks to achieving our goals? Primary risk are project delays and timing of revenue recognition and cash collection |
| This represents a decrease in revenue on a year-over-year basis, largely driven by the same period to period drivers noted in revenue |
| And project delays out of our control that those three sites have caused delays around the civil works, and some of the other preparatory works to insert those portals |
| But again, I think that customer is managing themselves through some project delays |
| However, contract timing represents Duos biggest threat to predictability |
| While full adoption of machine vision wayside technology paired with AI is going more slowly than we would like |
| We have shown we can manage through this in the past, and we will continue to see this kind of pressure as we transition to a subscription model |
| And unfortunately, we are being impacted from that |
| As we've always stated, the closing cycle for new CapEx deals is slow and episodic |
| More recently, we discussed the strategic shift at the business toward recurring revenue model given the volatility and previously noted forecast challenges of our legacy CapEx focused structure |
| Our one true government customer right now, as it stands, last time, we were threatened with the shutdown or gone through shutdowns, it did not impact us |
| Net operating loss for the third quarter total $2.97 million and $8.27 million for the nine months ended September 30 2023 |
| The primary challenge was to achieve interoperability and the ability to easily exchange data amongst carriers and other stakeholders |
| And we've also seen inquiries come in, obviously, from Canada and Mexico, but also down in Latin America |
| In our case, a government shutdown |
| If we had an extended shutdown, or one passenger rail customer, it could impact them |
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