Executive Summary

Q4 2023 was an inflection quarter: revenue stepped up to ~$1.95M (derived as FY 2023 $3.033M less 9M 2023 $1.087M), driving FY revenue to $3.033M (+356% YoY) and the company’s first positive gross profit ($0.509M); the Q4 gross margin was ~55% on our filing-derived calculation .
Management highlighted commercialization momentum: formalized unit price increases with the Fortune 500 healthcare customer, first aerospace PdM purchase orders, and FY 2024 PO commitments of $3.3M with the healthcare partner, which should anchor near-term revenue visibility .
OpEx intensity persisted amid R&D scaling (FY R&D $5.602M) and rebranding/marketing (FY S&M $1.109M), resulting in an FY operating loss of $10.633M and net loss of $9.445M despite Q4’s margin improvement .
Year-end liquidity was strong: cash and short-term deposits totaled ~$17.0M, funding continued productization and aerospace/industrial expansion .

What Went Well and What Went Wrong

What Went Well

First-ever annual gross profit and a sharp Q4 margin step-up driven by formalized higher unit pricing and increased product volumes to the Fortune 500 customer: “the unit price experienced a substantial increase… [and] an increase in the number of products sold” .
Commercial traction beyond medical: recent aerospace PdM orders and Israel Air Force prototype integrations, plus partnership initiatives (e.g., SIPAL S.P.A.) “poised to deliver a transformative solution” for PHM in aerospace/industrial markets .
Healthcare demand consolidation: FY 2024 PO commitments of $3.3M with the Fortune 500 customer signal sustained uptake following FDA-cleared device launch; CEO: “tremendous endorsement of Odysight.ai’s capabilities” .

What Went Wrong

Losses remain significant despite gross profit improvement: FY operating loss ($10.633M) and net loss ($9.445M) driven by R&D ramp ($5.602M), G&A ($4.431M) and S&M ($1.109M) .
Customer concentration risk increased: one major customer accounted for ~98% of FY 2023 revenue; losing this customer would materially harm the business .
Limited near-term disclosure: no formal quantitative revenue/OpEx/margin guidance and no Q4 earnings call transcript available; reliance on press releases and filings for narrative/updates (no call transcript found).

Financial Results

Quarterly performance (oldest → newest)

Metric	Q2 2023	Q3 2023	Q4 2023
Revenue ($USD Millions)	$0.674	$0.110	$1.946 (derived from FY $3.033 minus 9M $1.087)
Gross Profit ($USD Millions)	-$0.103 (gross loss)	-$0.211 (gross loss)	$1.070 (derived: FY $0.509 minus 9M -$0.561)
Gross Profit Margin %	-15.3% (derived from -$0.103/$0.674)	-191.8% (derived from -$0.211/$0.110)	55.0% (derived from $1.070/$1.946)
Operating Loss ($USD Millions)	-$3.119	-$2.872	-$1.863 (derived: FY -$10.633 minus 9M -$8.770)
Net Loss ($USD Millions)	-$2.876	-$2.542	-$1.341 (derived: FY -$9.445 minus 9M -$8.104)
Net Loss per Share ($)	-$0.39	-$0.24	N/A (not disclosed)

Note: Q4 values for revenue, gross profit, gross margin, operating loss, and net loss are computed directly from filed FY and 9M figures.

Annual comparison

Metric	FY 2022	FY 2023
Revenue ($USD Millions)	$0.665	$3.033
Gross Profit ($USD Millions)	-$0.966	$0.509
Gross Profit Margin %	-145.2% (derived from -$0.966/$0.665)	16.8% (derived from $0.509/$3.033)
Operating Loss ($USD Millions)	-$9.439	-$10.633
Net Loss ($USD Millions)	-$9.468	-$9.445
Cash And Equivalents ($USD Millions)	$10.099	$8.945
Short-term Deposits ($USD Millions)	$3.047	$8.096

Revenue disaggregation (mix evolution)

Revenue Type ($USD Thousands)	Q2 2023	Q3 2023
Products	766	29
Development Services	211	105
Total	977	110

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2024	No formal guidance	Purchase order commitments of $3.3M from Fortune 500 medical customer	Raised (visibility via PO)
Commercialization trajectory	FY 2024	N/A	“Positive trajectory to commercializing its products” (aerospace PdM POs; healthcare scale-up)	Maintained bullish tone

Management did not issue formal quantitative guidance for margins, OpEx, OI&E, tax rate, or dividends in Q4 materials .

Earnings Call Themes & Trends

(No Q4 2023 transcript available; themes drawn from Q2/Q3 filings and Q4 press releases.)

Topic	Previous Mentions (Q2 & Q3 2023)	Current Period (Q4 2023)	Trend
AI/technology initiatives	Focus on I4.0 PdM/CBM R&D; scaling productization; rebranding to Odysight.ai	Strategic partnership with SIPAL for HMS/PHM applications; CTO appointment strengthens tech leadership	Expanding ecosystem and execution capacity
Healthcare product performance	Transition to production; higher volumes; price formalization driving FY revenue	FY 2024 PO commitments of $3.3M indicate ongoing adoption post FDA-cleared device launch	Strengthening demand signal
Aerospace/Defense	Collaboration with IAI; UAV monitoring; prototype integrations	New PdM purchase orders and continued prototypes (e.g., Apache, Seahawk programs)	Broadening pipeline
Supply chain/macro	Inventory build; contract liabilities dynamics; Israel macro risks disclosed	Operations resilient amid Israel conflict; minor disruptions mitigated	Stable with monitored risks
Regulatory/legal	ISO/AS9100D compliance, IIA grant obligations; patent proceedings noted	EU patent revocations (no material impact), trademark oppositions; USPTO reexamination ongoing	Managed, not operationally material
R&D execution	R&D up to support I4.0 expansion	Continued investment; CTO onboarding to accelerate roadmap	Sustained investment intensity

Management Commentary

“The unit price experienced a substantial increase compared to its previous rate… [and] an increase in the number of products sold and supplied to the customer during 2023” (10-K MD&A on FY mix/price dynamics) .
“Our collaboration with SIPAL S.P.A. marks a significant milestone… poised to deliver a transformative solution that seeks to redefine PHM” (SIPAL partnership) .
“This is a tremendous endorsement… to be trusted by a Fortune 500 company… sets the stage for promising developments in the future” (FY 2024 PO commitments) .
“Positive trajectory to commercializing its products” (Q4 results press release) .

Q&A Highlights

No Q4 2023 earnings call transcript was published or found; therefore, no Q&A is available for analysis (search returned none) [earnings-call-transcript: none].

Estimates Context

S&P Global/Capital IQ consensus estimates were unavailable due to missing CIQ mapping for SCTC/ODYS; therefore, estimate comparisons (EPS/revenue/EBIT vs consensus) are not provided [SpgiEstimatesError].
Values presented are sourced exclusively from SEC filings and company press releases.

Key Takeaways for Investors

Q4 2023 materially de-risked the revenue trajectory: a ~$1.95M quarter (derived from filings) and ~55% gross margin underscore the impact of formalized pricing and volume ramp—an important setup for FY 2024 .
Near-term visibility is enhanced by $3.3M of FY 2024 PO commitments with the healthcare customer; watch shipment cadence and additional aerospace orders as potential incremental catalysts .
Profitability timeline still depends on OpEx discipline: R&D and G&A will need leverage against revenue scale; monitor quarterly operating loss progression and gross margin sustainability .
Customer concentration remains the key risk—diversification of revenue via aerospace/industrial PdM deployments is strategic and should be tracked across announced prototypes and purchase orders .
Liquidity (~$17.0M cash/short-term deposits) supports execution through commercialization phases; capital raises appear unnecessary near term if PO conversion remains on track .
With no formal guidance or consensus benchmarks, rely on filed shipment/revenue mix and order updates; additional press releases or SEC filings on aerospace programs could shift the narrative and the stock.

Sources: SEC filings and company press releases cited throughout:

Q4/annual press release and 8-K (Item 2.02)
FY 2023 10-K (financials, MD&A, risk factors, legal/regulatory)
Q3 2023 10-Q (quarterly financials, disaggregation, RPO, liquidity)
Q2 2023 10-Q (quarterly financials, disaggregation, RPO)
Partnership/press releases: SIPAL , CTO appointment , AI/Big Data presentation , expanded healthcare commitment ($3.3M FY24 PO) , board additions .

Odysight.ai Inc. (SCTC)·Q4 2023 Earnings Summary