REKR

Image source: The Motley Fool. Thursday, Aug. 13, 2026 at 4:30 p.m. ET Chief Executive Officer - Robert Alan Berman Chief Financial Officer - Joseph Nalepa Operator: Good afternoon, ladies and gentlemen, and welcome to today's Rekor Systems, Inc. Conference Call. My name is Melissa and I will be your coordinator for today. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. For replay purposes. Before we start, I must remind you that statements made in this conference call concerning future revenues results of operations, financial position, markets, economic conditions, products and product releases, partnerships, and any other statement that is made to be construed as a prediction of future performance or events are forward looking statements. Such statements can involve known and unknown risks. Uncertainties and other factors, which may cause actual results to differ materially from those expressed or implied by such statements. We ask that you refer to the full disclaimers in our earnings release. You should also review a description of the risk factors contained in our annual and quarterly filings with the SEC. Non GAAP results will also be discussed on the call. The company believes that the presentation of non GAAP information provides useful supplementary data concerning the company's ongoing operations and is provided for informational purposes only. I now would like to turn the presentation over to Rekor's CEO, Mr. Robert Alan Berman. Robert Alan Berman: Thank you and good afternoon everyone. I will keep this brief Q2 shows the impact of the actions we said we were taking in the second half of 26. Revenue grew gross margins expanded and our adjusted EBITDA loss narrowed sharply year over year to approximately $1.2 million Joel will walk you through the details. The key point is that this is not a 1-quarter effect. We are nearing the end of a judicious cost reduction program and have absorbed many of the 1-time costs associated with that. So the savings are showing up in the run rate now. And we continue to expect additional cost efficiencies and further expansion of our recurring revenue base in the second half of 26. Our focus now is on continued execution, recurring growth and reaching profitability. On growth, I would like to start with GoSecure. We launched GoSecureVideo in June to cryptographically sign video at capture and prove frame by frame whether it has been altered. This is not a probability score. it is a determination. We have now extended the same approach to recorded audio. Addressing splicing, deletion, and synthetic replacement under 1 authenticity framework. In a world of inexpensive voice cloning, altered clips and disputed evidence, we believe the need to prove that both video and audio are real will only grow. We are now in active discussions with prospective launch partners. And we are being deliberate about commercial terms because we believe both can extend beyond the initial launch markets and has the potential to become an important media authenticity standard. Based on where those discussions stand today, our objective is to finalize initial launch partner commercial terms during the third quarter with definitive agreements to follow as appropriate. While we see great potential in GoSecure demand remains meaningful in our core transportation business. As reflected in recent procurement trends, agencies are moving away from in road sensors towards non intrusive AI driven systems. Discover and our data as a service model have positioned us well for that shift. And our recurring revenue continues to grow in that area. I also want to address ALPR. This environment is more challenging. With increased public scrutiny, new rules around retention sharing, and access and a more active litigation environment around data practices. That has affected sales cycles across the industry. But over time, we believe the scrutiny favors companies like ours that have taken privacy responsible use, customer control auditability seriously and Rekor has been delivered across these issues for years. Agencies and oversight bodies demand demonstrable compliance rather than after the assurance that the problems will be addressed in the future, We believe vendors whose offerings have been designed to address these issues from the start will be better positioned. To summarize, the efficiency work is showing through the numbers we remain confident in achieving our goals in the back half of 26. And see meaningful opportunities and GoSecure recurring roadway data revenue and responsible vehicle recognition. And with that, I will now turn it over to Joel. Joseph Nalepa: Thanks, Robert, and good afternoon, everyone. I am going to walk you through the second quarter and first half of 26 and close with cash and our outlook. Second quarter revenue was $12.7 million, up 2% from $12.4 million in the second quarter of 25. For the first 6 months, revenue was $22.9 million, up 6% year over year. An important indicator for us is recurring revenue. Compared with the respective prior year periods, recurring revenue grew 14% in the quarter to $6.7 million and increased 21% for the first 6 months of the year to $13.3 million. That growth rate is running ahead of total revenue. Indicating the mix of business is shifting towards the type of revenue we have been focused on growing. Contracted, repeatable, and higher margin. The improvement in revenue this quarter did not depend on a large nonrecurring software transaction. It reflects the ongoing economics of the business as it is structured today. Turning now to adjusted gross profit. Adjusted gross profit increased for both the 3- and 6-month periods. Adjusted gross margin expanded to 56% in the second quarter from 50% in the second quarter of 25. For the first half of 26, adjusted gross margin rose to 55% from 49%. 2 things primarily drove that improvement. First, revenue growth allowed us to operate more efficiently across deployments and second, improvement in our product mix. Adjusted gross margin in our business is largely a function of how much higher margin software and recurring revenue we carry relative to service related work. And that mix has been moving in our favor. Shifting to operating expenses, this is where the work from the first half of the year becomes visible. Across all major areas, general and administrative, selling and marketing, research and development. Expenses decreased by $4 million in the quarter and $4.3 million for the first 6 months ended June 30, 2026 compared to the prior year periods. That reduction comes from the actions we have discussed over the past few quarters. We reduced headcount during the first half of the year and worked towards optimizing our engineering operations. We have also identified further efficiencies unrelated to workforce that we expect to produce several million dollars worth of additional annualized savings. We expect to execute on these in the third quarter with the noticeable impact in the fourth quarter of 26 and into 2027. The quarter also included a 1-time gain of $2.8 million associated with the remeasurement of 1 of our lease liabilities. This was an expected noncash item and was tied to our continued operational realignment. As a result, the company recorded income from operations in the second quarter. This was driven by the onetime gain related to the remeasurement along with revenue growth higher adjusted gross profit and the organizational efficiency measures we took at the beginning of the year now flowing through the numbers. Adjusted EBITDA loss for the quarter was $1.2 million, a 79% improvement from the second quarter of 25 Lower payroll and payroll related costs drove most of that improvement, and revenue growth and margin expansion contributing as well. Turning to cash. We ended Q2 26 with a healthy amount of cash slightly exceeding $10 million while our operating cash burn for the quarter was reduced to $2.4 million For the 6 months ended 06/30/2026 compared to 2025, our cash used from operations improved by $9.6 million or 61%. This highlights the improvement in our cash consumption and reinforces our belief that the underlying business is moving in the right direction. We are actively evaluating options to refinance our existing prime revenue sharing notes. Our growing contract portfolio and the impact of our recent win in South Carolina should help support the refinancing. We will provide additional information when there is something definitive to report. Looking to the back half of the year, 3 things give us confidence: First, the full period benefit of the majority of the cost reductions. Many of these actions were taken during the first half, so the third and fourth quarter should reflect a cleaner expense base than the first half of the year did. Second, continued revenue growth in our recurring revenue. Third, continued discipline around capital management. Taken together, we expect to reach profitability on an adjusted EBITDA basis during the second half of 26, assuming continued execution and cost discipline. Thank you for your time and your continued support, With that, I will turn it back to the operator for questions. Operator: Thank you. Choosing speaker equipment, it may be necessary to pick up your handset. Before pressing the star key. Our first question comes from the line of Mike Latimore with Northland Capital Markets. Please proceed with your question. Mike Latimore: Hi, this is Vijay Devar for Mike Latimore. couple of questions. 1, so how does the new South Carolina contract expand your opportunity versus the prior, I mean, the contract? Robert Alan Berman: Joel, do you want to handle that 1? Joseph Nalepa: Yes. Thanks for the question. The South Carolina contract will expand our current footprint in South Carolina. It will also give us the ability similar to Georgia to go out and get additional work in South Carolina and really expand our footprint in that market. Mike Latimore: Understood. How is the pipeline for Command? Do you expect new wins this calendar year? Robert Alan Berman: Joel, do you want to handle that? Joseph Nalepa: Yes. The pipeline for Command, we continue to monitor it. I do believe that there is the potential for new wins. I mean, 1 of the things I continually mention is working with the government, it is sometimes difficult to predict when they will put pen to paper. But we do have a pipeline and we are in communication with different DOTs and different jurisdictions. Mike Latimore: Got it. Thank you. Joseph Nalepa: You are welcome. Thank you. Robert Alan Berman: Thank you. Operator: Our next question comes from the line of Mark Sokol, Private Investor. Proceed with your question. Analyst: Yeah. Hi, everyone. Thank you for the time. I am just trying to get a little bit more understanding regarding, like, the privacy issues that your competitors are, you know, facing and what your sales team is doing to hopefully you know, alleviate some of those concerns and possibly get more wins in the future. Thank you. Robert Alan Berman: Mike, are you-- this is Robert. Are you referring to the private issues around ALPR? Yes. ALPR. Look, sure. As we said, the industry is in quite a flux. there is been a massive amount of press over the last, you know, even several months, 6 months, a year. But it is becoming more every day. And I think, you know, we are headed into a world where people are trying to figure out how you deploy technology, especially when you have AI and you know, you do this to help public safety and, at the same time, not create a surveillance state. And RECORE has always been about privacy. If you look at some of the patents we filed, you know, half a decade ago, they were always around how this data is used. So I think, as I said in the call, that the industry is the law enforcement agencies, governments, city councils, and all are kind of pausing things. Some of our competitors are losing contracts. I mean, they are turning around and hiring another vendor to replace them. They are trying to sort this all out. And we think that the way we have positioned ourselves and we have stood fast for the last number of years on how we will allow our data to be used and how our systems work. To protect privacy. And I think that will work in our favor in the months to come as the government sorts it out. Thank you. Operator: Mr. Berman, it seems there are no other questions at this time. I will turn the floor back to you for final comments. Robert Alan Berman: Okay. Well, listen, thanks, everyone, and stay tuned because at the back half of the year, we are going to deliver the same way we did in the first 6 months of the year. So appreciate all your support, and look forward to talking to you again soon. Be well. Bye. Operator: Thank you. This concludes today's conference You may disconnect your lines at this time. Thank you for your participation. Before you buy stock in Rekor Systems, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rekor Systems wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance improvement was driven by a judicious cost reduction program and a shift toward higher-margin recurring revenue streams. The company is capitalizing on a market shift in transportation from in-road sensors to non-intrusive AI-driven systems like Rekor Discover. Management attributes gross margin expansion to increased operational efficiency across deployments and a favorable product mix favoring software. The launch of GoSecureVideo and GoSecureAudio addresses the growing market need for cryptographic authenticity in media to combat voice cloning and synthetic alterations. Strategic positioning in the ALPR market focuses on privacy-by-design to navigate increased public scrutiny and evolving data retention regulations. Operational realignment included a headcount reduction and engineering optimization, resulting in a significant narrowing of adjusted EBITDA losses. Management expects to reach profitability on an adjusted EBITDA basis during the second half of 2026, contingent on continued cost discipline. Additional annualized savings of several million dollars are expected to be executed in Q3, with a full impact visible by Q4 2026 and into 2027. The company aims to finalize initial launch partner commercial terms for GoSecure during the third quarter of 2026. Refinancing of existing prime revenue sharing notes is being actively evaluated, supported by a growing contract portfolio and recent wins. Growth projections assume the full-period benefit of cost reductions and continued expansion of the recurring roadway data revenue base. A one-time non-cash gain of $2.8 million was recorded due to the remeasurement of a lease liability tied to operational realignment. Increased litigation and public scrutiny regarding data practices in the ALPR industry are currently impacting sales cycles across the sector. Management noted that while the industry is in flux, Rekor's historical focus on auditability and customer control serves as a competitive differentiator. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. The contract expands Rekor's current footprint and provides a framework to secure additional work within the state, similar to their strategy in Georgia. Management views this as a key driver for supporting future refinancing efforts of revenue sharing notes. Management confirmed a healthy pipeline and active communication with various Departments of Transportation and jurisdictions. Specific timing remains difficult to predict due to the nature of government procurement and the time required for agencies to 'put pen to paper'. The industry is facing a 'pause' as governments and city councils navigate the balance between public safety and avoiding a 'surveillance state'. Management believes competitors are losing contracts due to these issues, while Rekor's long-standing privacy patents and data usage policies position them to gain market share as regulations stabilize.

Interested in Rekor Systems, Inc.? Here are five stocks we like better. Improved financial performance: Q2 revenue rose 2% year over year to $12.7 million, while recurring revenue increased 14% to $6.7 million. Adjusted gross margin expanded to 56%, and the adjusted EBITDA loss narrowed 79% to approximately $1.2 million. Cost controls and profitability outlook: Operating expenses fell by $4 million, cash burn declined, and management identified several million dollars in additional annualized savings. Rekor expects to achieve adjusted EBITDA profitability in the second half of 2026, although it is also evaluating refinancing options for its existing notes. Product and market expansion: Rekor is pursuing commercial partnerships for its Go-Secure.Video and audio-authentication technology, while its South Carolina contract and Rekor Command pipeline support potential transportation-sector growth. However, ALPR sales cycles remain pressured by privacy scrutiny, regulation and litigation concerns. Rekor Systems (NASDAQ:REKR) reported higher second-quarter revenue, expanding gross margins and a substantially narrower adjusted EBITDA loss as cost-cutting measures and growth in recurring revenue began to affect results. Chief Executive Officer Robert Berman said the company is nearing the end of a cost-reduction program and expects additional efficiencies and recurring-revenue growth during the second half of 2026. He said Rekor’s focus is on execution, recurring revenue growth and reaching profitability. → Lumentum Just Delivered the AI Growth Investors Wanted Revenue for the second quarter was $12.7 million, up 2% from $12.4 million in the year-earlier quarter, Chief Financial Officer Joe Nalepa said. Revenue for the first six months of 2026 rose 6% year over year to $22.9 million. Recurring revenue increased faster than overall sales. Quarterly recurring revenue rose 14% from the prior-year period to $6.7 million, while first-half recurring revenue increased 21% to $13.3 million. Nalepa said the trend reflects a shift toward contracted, repeatable and higher-margin revenue. → Joby’s Defense Pivot Accelerates With $500M Resonant Sciences Deal Adjusted gross margin expanded to 56% in the second quarter from 50% a year earlier. For the first half, adjusted gross margin rose to 55% from 49%. Nalepa attributed the improvement to more efficient deployment operations as revenue grew and a more favorable mix of software and recurring revenue relative to service-related work. Operating expenses across general and administrative, selling and marketing, and research and development declined by $4 million in the quarter and $4.3 million in the first half compared with the respective 2025 periods. The reductions followed headcount cuts during the first half and efforts to optimize engineering operations. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be The company also recorded a one-time, non-cash gain of $2.8 million from the remeasurement of a lease liability tied to its operational realignment. Rekor reported income from operations for the quarter, which Nalepa said reflected the lease-related gain along with revenue growth, higher adjusted gross profit and organizational efficiency measures. Adjusted EBITDA loss narrowed 79% year over year to approximately $1.2 million. Lower payroll and payroll-related costs accounted for much of the improvement, with revenue growth and margin expansion also contributing, Nalepa said. Rekor ended the second quarter with slightly more than $10 million in cash. Operating cash burn was reduced to $2.4 million during the quarter. Cash used in operations for the first six months improved by $9.6 million, or 61%, from the same period in 2025. Nalepa said the company has identified additional non-workforce efficiencies expected to generate several million dollars in annualized savings. Rekor expects to execute those measures in the third quarter, with a more noticeable impact anticipated in the fourth quarter and into 2027. The company is evaluating options to refinance its existing Prime Revenue Sharing Notes. Nalepa said Rekor’s growing contract portfolio and a recent South Carolina win could help support a refinancing, though he said the company would provide more information only when something definitive is available. Management said it expects to reach adjusted EBITDA profitability in the second half of 2026, assuming continued execution and cost discipline. Nalepa cited the full-period impact of first-half cost reductions, continued recurring-revenue growth and capital-management discipline as reasons for that outlook. Berman highlighted the June launch of Go-Secure.Video, which cryptographically signs video at capture and is designed to determine frame by frame whether footage has been altered. Rekor has extended the approach to recorded audio to address splicing, deletion and synthetic replacement under the same authenticity framework. He said the company is in active discussions with potential GoSecure launch partners and is seeking to finalize initial commercial terms in the third quarter, with definitive agreements to follow where appropriate. Berman said Rekor believes the offering could extend beyond its initial launch markets and potentially become a media-authenticity standard. In transportation, Berman said agencies are moving away from in-road sensors and toward non-intrusive, AI-driven systems. He said Rekor Discover and the company’s Data-as-a-Service model are positioned for that shift, while recurring roadway-data revenue continues to grow. Management also addressed a more challenging environment for automatic license plate recognition, or ALPR, citing increased public scrutiny, rules covering data retention, sharing and access, and more active litigation regarding data practices. Berman said those developments have affected sales cycles across the industry. He said Rekor believes its emphasis on privacy, responsible use, customer control and auditability could position it favorably as government agencies and oversight bodies seek demonstrable compliance. In response to an investor question, Berman said agencies and governments are pausing to assess how to deploy technology for public safety without creating what he called a surveillance state. Nalepa said Rekor’s new South Carolina contract will expand the company’s existing footprint in the state and create an opportunity to pursue additional work there, similar to its operations in Georgia. On the Rekor Command pipeline, Nalepa said the company is communicating with multiple departments of transportation across jurisdictions and sees potential for new wins. However, he noted that it can be difficult to predict when government customers will finalize contracts. Rekor Systems, Inc is a U.S.-based technology company specializing in real-time vehicle recognition solutions powered by artificial intelligence and machine learning. The company develops software and hardware systems that capture, analyze and store vehicle data—such as license plate images, make and model, color and vehicle characteristics—by leveraging advanced computer vision algorithms. Rekor's platforms enable public safety agencies, transportation departments and private enterprises to automate vehicle identification, enhance situational awareness and improve operational efficiency. The company's flagship offering is a suite of intelligent camera and analytics products that include built-in license plate recognition (LPR) and vehicle attribute classification. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Rekor Systems Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue grew 2% year-over-year in Q2 2026 to $12.7 million, with recurring revenue up 14% to $6.7 million. Adjusted gross margin expanded to 56% in Q2 2026 from 50% in Q2 2025, driven by improved product mix and operational efficiency. Adjusted EBITDA loss narrowed sharply by 79% year-over-year to approximately $1.2 million in Q2 2026. Operating expenses decreased by $4 million in Q2 2026 and $4.3 million in the first half of 2026, reflecting successful cost reduction measures. Cash used in operations improved by $9.6 million (61%) for the first half of 2026, with Q2 cash burn reduced to $2.4 million. Launched GoSecure Video and extended to audio, positioning the company as a potential standard for media authenticity with active launch partner discussions. Won a new South Carolina contract, expanding footprint and supporting refinancing efforts for existing revenue sharing notes. Expect to reach profitability on an adjusted EBITDA basis in the second half of 2026, assuming continued execution and cost discipline. Total revenue growth was modest at only 2% year-over-year in Q2 2026, indicating slower overall expansion. ALPR market faces increased public scrutiny, new rules on data retention and sharing, and a more active litigation environment, lengthening sales cycles. The company recorded a one-time gain of $2.8 million from lease remeasurement, which artificially boosted operating income and may not be repeatable. Cash balance remains relatively low at just over $10 million, with ongoing operating cash burn of $2.4 million in Q2 2026. The company is still evaluating refinancing options for its prime revenue sharing notes, indicating potential financial restructuring risk. GoSecure commercial terms are not yet finalized, with definitive agreements expected only in the third quarter, creating uncertainty. The company's profitability target for the second half of 2026 is conditional on continued execution and cost discipline, which may not be sustained. Warning! GuruFocus has detected 5 Warning Signs with REKR. Is REKR fairly valued? Test your thesis with our free DCF calculator. Q: How does the new South Carolina contract expand your opportunity versus the prior contract?A: Joe (CFO): The South Carolina contract will expand our current footprint in the state. It will also give us the ability, similar to our work in Georgia, to go out and secure additional projects in South Carolina and really expand our market presence there. Q: How is the pipeline for command? Do you expect new wins this calendar year?A: Joe (CFO): The pipeline for command is being actively monitored, and I believe there is potential for new wins. However, working with government entities makes it difficult to predict exactly when they will finalize agreements. We have a robust pipeline and are in communication with multiple Departments of Transportation (DOTs) and various jurisdictions. Q: Can you provide more understanding regarding the privacy issues your competitors are facing and what your sales team is doing to alleviate those concerns and potentially secure more wins in the future, specifically regarding ALPR?A: Robert (CEO): The ALPR industry is in a state of flux due to increased public scrutiny and new regulations. While some competitors are losing contracts, agencies are pausing to figure out how to deploy technology without creating a surveillance state. Rekor has always prioritized privacy, as evidenced by patents filed half a decade ago. We believe our steadfast positioning on responsible data use and privacy protection will work in our favor as governments sort out these issues, making our compliant offerings more attractive. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Revenue Grew 23% Sequentially to $12.7 Million, Adjusted Gross Margin Reached 56%, and Adjusted EBITDA Loss Narrowed 79% Year Over Year as the Company Reaffirms Its Path to Adjusted EBITDA Profitability in the Second Half of 2026 COLUMBIA, Md., Aug. 13, 2026 (GLOBE NEWSWIRE) -- Rekor Systems, Inc. (NASDAQ: REKR) ("Rekor" or the "Company"), which builds trusted data, privacy, and security solutions for real-world video and sensor networks, reported financial and operational results for the second quarter ended June 30, 2026. Second Quarter 2026 Highlights Revenue of $12.7 million, up 23% sequentially and 2% year over year. Recurring revenue increased 14% year over year to $6.7 million in Q2 and 21% to $13.3 million for the first six months of 2026. Adjusted gross margin of 56%, up from 50% in Q2 2025. Adjusted EBITDA loss of $1.2 million, a 79% improvement from Q2 2025. Cash used in operating activities improved 61% year over year for the first six months of 2026. Headcount decreased by 20% in the first half of 2026. Outlook: Adjusted EBITDA profitability expected during the second half of 2026. Product: Launched Go-Secure.Video and the Rekor Scout Axis Agent integration during the quarter. What Drove the QuarterRekor reduced headcount by 20% during the first half of 2026 and realigned its engineering operations. Management has identified further efficiencies, unrelated to workforce which are expected to produce several million dollars of additional annualized savings. Second quarter revenue rose to $12.7 million, up 23% from the first quarter and 2% in the prior-year period. The increase did not include any large, non-recurring software transactions. It reflects the ongoing economics of the business as it is structured today and meaningful growth in the Company’s recurring revenue base. Adjusted gross margin improved to 56% from 50% in the second quarter of 2025. Higher-margin software and recurring revenue made up a larger share of total revenue, and greater deployment volume allowed the Company to operate more efficiently. Adjusted EBITDA loss narrowed to $1.2 million, a 79% improvement over the second quarter of 2025. Lower payroll and payroll-related costs, together with revenue growth and improved gross margin, drove the Adjusted EBITDA improvement. Tighter working capital management also contributed to the improvement in operating cash consumption. "The second quarter highlights the financial impact of the operating changes we implemented during the first half of the year." said Joseph Nalepa, Chief Financial Officer, Rekor. "During the second quarter of 2026, Adjusted EBITDA loss improved by $4.6 million to a loss of $1.2 million. At the same time, recurring revenue continued to grow and we materially reduced our operating expense base. Taken together, these results demonstrate the operating leverage we believe exists in the business as we continue our progress toward Adjusted EBITDA profitability." Cash Position and Outlook: The Company ended the second quarter of 2026 with $10.0 million in cash. Operating cash burn for the quarter was $2.4 million. For the six months ended June 30, 2026, cash used in operating activities improved by $9.6 million, or 61%, compared with the prior-year period. The improvement reflects the Company’s lower operating expense base, improved gross profit and continued focus on working capital management. Management believes the reduction in cash consumption provides further evidence that the operational changes implemented during the first half of the year are translating into improved financial performance as the Company progresses toward Adjusted EBITDA profitability. The Company is also evaluating options to refinance its existing Prime Revenue Sharing Notes. The refinancing has been supported by increases in the size of Rekor's contract portfolio and improvements in operations. Three and Six Months Ended June 30, 2026 Financial Results This section highlights the changes for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025. Revenues and Cost of Revenue, excluding Depreciation and Amortization Second-quarter revenue increased to $12.7 million, up about 2% from $12.4 million. First-half revenue rose to $22.9 million, up about 6% year over year. Importantly, recurring revenue increased 14% in the quarter and 21% for the first six months, reaching $6.7 million and $13.3 million, respectively. Adjusted gross profit increased for the three and six months ended June 30, 2026, while adjusted gross margin expanded from 50% to 56% for the three months ended June 30, 2026. For the first half, adjusted gross margin rose from 49% to 55%. This improvement reflects the benefits of revenue growth and product mix, as Adjusted Gross Margin is generally influenced by the proportion of higher-margin software sales relative to service-related work. Adjusted Gross Margin is a non-GAAP financial measure calculated as Adjusted Gross Profit divided by revenue and should not be considered in isolation from, or as a substitute for, GAAP financial measures. Gain (Loss) from Operations The Company’s operating performance improved meaningfully during the second quarter, reflecting revenue growth, higher Adjusted Gross Profit and the impact of organizational efficiency measures implemented earlier in the year. For the three and six months ended June 30, 2026, combined general and administrative, selling and marketing, and research and development expenses decreased by $4.0 million and $4.3 million, respectively, compared with the prior-year periods. The second quarter also included a one-time gain of $2.8 million related to the remeasurement of a lease liability. While this gain contributed to reported operating income for the quarter, the improvement in the Company’s underlying operating results also reflected the cost reductions and efficiency initiatives implemented during the first half of the year as it continues to progress toward breakeven. EBITDA and Adjusted EBITDA The Company calculates EBITDA as net loss before interest, taxes, depreciation, and amortization. The Company calculates Adjusted EBITDA as net loss before interest, taxes, depreciation, and amortization, adjusted for (i) impairment of intangible assets, (ii) loss on extinguishment of debt, (iii) stock-based compensation, (iv) losses or gains on sales of subsidiaries, and (v) other unusual or non-recurring items. EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the U.S. ("U.S. GAAP") and should not be considered as an alternative to net earnings or cash flow from operating activities as indicators of our operating performance or as a measure of liquidity or any other measures of performance derived in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA are presented because we believe they are frequently used by securities analysts, investors, and other interested parties to evaluate a company’s ability to service and/or incur debt. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do. These non-GAAP measures should not be considered in isolation from, or as a substitute for, GAAP measures. The following table sets forth the components of the EBITDA and Adjusted EBITDA for the periods included (dollars in thousands): The Company will host its earnings conference call today at 4:30 p.m. ET. Conference Call InformationRekor will host its earnings conference call today at 4:30 p.m. ET.North America Dial-In: 877-407-8037 / +1 201-689-8037Webcast: Click here to access the live webcast Replay InformationReplay Dial-In: 877-660-6853 / 201-612-7415Access ID: 13762046Replay Duration: Two weeks About Rekor Systems, Inc. Rekor Systems, Inc. (NASDAQ: REKR) builds trusted data, privacy, and security solutions for real-world video and sensor networks. Rekor's AI-powered roadway intelligence platforms are deployed across the United States, delivering real-time data and actionable insights to transportation agencies, law enforcement, and commercial operators. For more information, visit Rekor.ai; for Go-Secure.Video, visit go-secure.video. Forward-Looking StatementsThis press release and its links and attachments contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning Rekor Systems, Inc. that involve substantial risks and uncertainties, including particularly statements regarding our future results of operations and financial position, business strategy, prospective products and services, timing and likelihood of success, plans and objectives of management for future operations and future results of current and anticipated products and services. These statements involve uncertainties, such as known and unknown risks, and are dependent on other important factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance or achievements we express or imply. For this purpose, any statements that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expect," "plan," "anticipate," "could," "intend," "target," "project," "contemplates," "believes," "estimates," "predicts," "potential," or "continue," or the negative of these terms or other similar expressions. These forward-looking statements speak only as of the date they are made and are subject to a number of risks, uncertainties and assumptions described under the sections in our Annual Report on Form 10-K for the year ended December 31, 2024 entitled "Risk Factors" and in our subsequent Quarterly Reports on Form 10-Q filed with the SEC. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this Press Release and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business. The forward-looking statements in this Press Release do not reflect the potential impact of any divestiture, merger, acquisition, or other business combination that had not been completed as of the date of this filing. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. These forward-looking statements are qualified in their entirety by reference to the risks discussed in our SEC filings. This cautionary statement also applies to any forward-looking statements made during the conference call referenced herein. We do not undertake any obligation to publicly update any forward-looking statements, whether as a result of the receipt of new information, the occurrence of future events, or otherwise. Company ContactJoseph Nalepa, Chief Financial OfficerPhone: +1 (410) [email protected] Charles Degliomini, Media & Investor [email protected]

Rekor Systems, Inc. (REKR) reported break-even quarterly earnings per share versus the Zacks Consensus Estimate of a loss of $0.03. This compares to a loss of $0.07 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +100.00%. A quarter ago, it was expected that this company would post a loss of $0.04 per share when it actually produced a loss of $0.07, delivering a surprise of -75%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Rekor Systems, which belongs to the Zacks Internet - Software industry, posted revenues of $12.66 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.41%. This compares to year-ago revenues of $12.36 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Rekor Systems shares have lost about 50.5% since the beginning of the year versus the S&P 500's gain of 13.2%. While Rekor Systems has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Rekor Systems was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.02 on $14.38 million in revenues for the coming quarter and -$0.13 on $51.58 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the top 36% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Affirm Holdings (AFRM), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 27. This operator of digital commerce platform is expected to post quarterly earnings of $0.33 per share in its upcoming report, which represents a year-over-year change of +65%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Affirm Holdings' revenues are expected to be $1.11 billion, up 26.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Rekor Systems, Inc. (REKR) : Free Stock Analysis Report Affirm Holdings, Inc. (AFRM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Company will host earnings call on Thursday, August 13, 2026 COLUMBIA, Md., July 29, 2026 (GLOBE NEWSWIRE) -- Rekor Systems, Inc. (NASDAQ: REKR) (“Rekor” or the “Company”), which builds trusted-data, privacy, and security solutions for real-world video and sensor networks, today announced that it will release its financial results for the second quarter of 2026 on Thursday, August 13, 2026, after market close. On the same day, the Company will host its earnings conference call at 4:30 p.m. Eastern Time to discuss financial and operating results. CONFERENCE CALL INFORMATION Any person interested in participating in the call should please dial-in approximately 10 minutes before the start of the call using the following information: North America: Participant Dial-In: 877-407-8037 / +1 201-689-8037 Click here for participant International Toll-Free access numbers Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=5dmJIyUY REPLAY INFORMATION A replay will be available online approximately two hours after the live call for a period of two weeks. To access the replay, use the following numbers: Replay Dial-In: 877-660-6853 / 201-612-7415 Access ID: 13762046 Replay Duration: Two weeks. An archived webcast will also be available for replay on the Company’s website, directly under Investors, Events & Presentations. About Rekor Systems, Inc. Rekor Systems, Inc. (NASDAQ: REKR) builds trusted data, privacy, and security solutions for real-world video and sensor networks. Rekor's AI-powered roadway intelligence platforms are deployed across the United States, delivering real-time data and actionable insights to transportation agencies, law enforcement, and commercial operators. For more information, visit Rekor.ai; for Go-Secure.Video, visit go-secure.video. Forward-Looking StatementsThis press release and its links and attachments contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning Rekor Systems, Inc. that involve substantial risks and uncertainties, including particularly statements regarding the Company's future results of operations and financial position, business strategy, prospective products and services, timing and likelihood of success, plans and objectives of management for future operations and future results of current and anticipated products and services. These statements involve uncertainties, including known and unknown risks, and are dependent on other important factors that may cause the Company's actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied. Any statements that are not statements of historical fact may be deemed to be forward-looking statements.In some cases, forward-looking statements may be identified by terms such as "may," "will," "should," "expect," "plan," "anticipate," "could," "intend," "target," "project," "contemplates," "believes," "estimates," "predicts," "potential" or "continue," or the negative of these terms or other similar expressions. These forward-looking statements include, among other matters, statements concerning the Company's preliminary financial results; anticipated future financial and operating performance; expected achievement of profitability on an Adjusted EBITDA basis during the second half of 2026; revenue growth; additional cost efficiencies; cost structure; operating leverage; the Company's evaluation of refinancing alternatives for the Prime Revenue Sharing Notes; the Company's liquidity and financial flexibility; the market opportunity for Go-Secure.Video; discussions with potential launch partners, OEMs and other commercial counterparties; the timing, structure, and completion of any potential commercial arrangement; and the potential effect of an initial commercial integration on broader adoption. These forward-looking statements speak only as of the date they are made and are subject to the risks, uncertainties, and assumptions described under the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, and in subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the disclosures made in this press release and in other documents the Company files from time to time with the SEC. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond the Company's control, these statements should not be relied upon as predictions of future events. The forward-looking statements are qualified in their entirety by reference to the risks discussed in the Company's SEC filings. The Company does not undertake any obligation to publicly update any forward-looking statements, whether as a result of receiving new information, the occurrence of events, or otherwise. Media & Investor Relations Contact:Rekor Systems, Inc.Charles [email protected]

Company Expects Adjusted EBITDA Loss to Narrow 78% Year Over Year to Approximately $1.3 Million Company Expects Second Quarter Adjusted EBITDA Loss to Improve to $1.3 Million $12.6 Million in Revenue, 55% Adjusted Gross Margin and $10 Million in Cash at Quarter-End Validates Rekor's More Efficient Operating Model Company Expects to Achieve Profitability During the Second Half of 2026 COLUMBIA, Md., July 15, 2026 (GLOBE NEWSWIRE) -- Rekor Systems, Inc. (NASDAQ: REKR) ("Rekor" or the "Company"), which builds trusted-data, privacy, and security solutions for real-world video and sensor networks, today announced preliminary and unaudited financial results for the second quarter ended June 30, 2026. Preliminary Second Quarter 2026 Financial Highlights Based on currently available information, the Company expects to report: Revenue of approximately $12.6 million, representing growth of approximately 22% sequentially and approximately 2% compared with the second quarter of 2025; Adjusted Gross Margin of approximately 55%, compared with approximately 53% in the first quarter of 2026; Adjusted EBITDA loss of approximately $1.3 million; and Cash at quarter-end of approximately $10 million. The expected results demonstrate the outcomes of Rekor's operational realignment and cost-reduction initiatives, while also showing that these actions did not impair the Company's ability to support customers, execute existing programs, introduce new technologies, and grow revenue. During the first half of 2026, Rekor completed a series of actions designed to align its operating structure with the current state of its business. These actions included optimizing engineering operations, reducing headcount, eliminating duplicative functions, and concentrating resources on customer delivery, revenue-generating products, and near-term commercial opportunities. While the majority of the Company's headcount-related actions have now been completed, Rekor has identified additional efficiencies unrelated to workforce reductions and expects to implement them. These additional savings are expected to further improve Rekor's operating leverage without reducing the resources devoted to customer delivery, product development, or commercial expansion. As the Company implements these measures they are expected to generate several million dollars of additional annualized cost savings. With the Company's operating structure substantially realigned, management is increasingly directing its attention toward revenue growth, market adoption, and scale. The Company believes its expected second-quarter results demonstrate that the improvement in its operating performance is structural and sustainable, rather than the result of a single transaction or unusually favorable revenue mix. Improved Operating Performance, Cash Preservation and Financial Flexibility "The second quarter marks the point at which the benefits of our operational realignment became clearly visible in our financial results," said Joseph Nalepa, Chief Financial Officer of Rekor. "Revenue is expected to increase both sequentially and year over year, adjusted Gross Margin is expected to remain strong, and our Adjusted EBITDA loss is expected to decline to approximately $1.3 million." Nalepa continued, "The revenue improvement was not dependent on a large, non-recurring software transaction. It reflects the ongoing economics of the business as it is structured today. In addition to the savings already realized, we have identified opportunities that could generate several million dollars of further annualized savings, none of which are currently expected to require additional headcount reductions. We expect those efficiencies to further strengthen our operating performance as we direct our focus toward growth and scale." "We ended the quarter with approximately $10 million in cash, despite absorbing costs associated with the operational realignment during the first half of the year," Nalepa said. "We believe our ability to preserve this level of liquidity while substantially reducing our Adjusted EBITDA loss demonstrates that the actions we have taken are producing meaningful financial results." Nalepa continued, "Our improved operating profile and liquidity position are also expected to support our previously announced evaluation of refinancing alternatives for the Prime Revenue Sharing Notes." Rekor Delivers on Its First-Half Commitments As part of the operational realignment announced earlier this year, Rekor reduced its headcount by approximately 20%, with most of the resulting financial benefit expected to begin appearing during the second quarter. The Company also consolidated certain overseas engineering operations, which it previously estimated would reduce annual operating expenses by approximately $7.5 million. "We told our shareholders that the first half of 2026 would be focused on rightsizing the Company and that the second half would be focused on growth and profitability," said Robert A. Berman, Chairman and Chief Executive Officer of Rekor. "We delivered on the first part of that commitment without sacrificing revenue, customers, near-term product development or the capabilities essential to our future growth." Berman continued, "Q2 demonstrates the results of the operating model we have built and reflects the Company we are today. Rekor is smaller, faster, more accountable and substantially more efficient. We increased revenue despite a significant reduction in headcount, maintained strong margins, preserved approximately $10 million in quarter-end cash and reduced our expected Adjusted EBITDA loss to a level dramatically better than our historical performance." "We are not finished improving the business and have identified several million dollars of additional cost efficiencies that do not depend on further workforce reductions. At the same time, the center of gravity is now shifting and our principal focus during the second half of 2026 will be returning to growth, expanding adoption of our platforms and scaling the business from a more efficient operating base." "Based on our current outlook, we expect to achieve profitability on an Adjusted EBITDA basis during the second half of 2026. We believe these results indicate that we have materially changed the underlying economics of the Company while preserving the technologies, customer relationships and market opportunities required to accelerate growth." Go-Secure.Video Expands Rekor's Growth Opportunity During the quarter, Rekor launched Go-Secure.Video, a proprietary media-authentication technology that creates cryptographic proof of video authenticity from the moment of capture. Go-Secure.Video is intended to help camera manufacturers, technology platforms, public agencies, media organizations, and other enterprises determine whether video is authentic, complete, and unchanged. The platform is designed to preserve authentication when video is clipped or exported, ensuring a persistent, verifiable connection between an excerpt and the original recording session. Rekor also launched the Rekor Scout Axis Agent with Go-Secure.Video, bringing trusted and tamper-evident video capabilities to supported Axis cameras used with the Rekor Scout platform. The Company has received strong initial industry interest following the launch and is engaged in discussions with several large global companies whose products and platforms present clearly defined use cases and an identifiable need for authenticated video. These discussions include potential launch-partner relationships and broader device, platform, and OEM integrations. "We believe Go-Secure.Video addresses a rapidly emerging and increasingly urgent need," Berman said. "As artificial intelligence makes manipulated and synthetic video more difficult to distinguish from authentic recordings, the ability to establish trust at the moment of capture is becoming essential across public safety, security, media, insurance, transportation and numerous other markets." "Although these discussions are ongoing and there can be no assurance of the timing or completion of any particular engagement, based on the current progress of these discussions, we believe an initial commercial launch-partner transaction could occur in Q3 2026. We are currently engaged with several very large companies that have both a compelling use case and an identifiable need for this technology." Second-Half Outlook The Company expects second-half performance to benefit from: Its materially lower operating expense base; Additional annualized efficiencies unrelated to further headcount reductions; Continued revenue growth across its core roadway intelligence businesses; Expansion of its data-as-a-service offerings; Execution across its public safety, urban mobility and transportation management businesses; and Potential commercial partnerships and integrations involving Go-Secure.Video. Having substantially completed the primary rightsizing of the organization, Rekor is now focusing its principal efforts on growth, commercial execution and scale. The Company expects the combination of revenue growth, additional efficiencies, continued cost discipline and operating leverage to support profitability during the second half of 2026. Preliminary and Unaudited Financial Information The Company's preliminary second-quarter results remain subject to completion of its normal quarter-end closing and review procedures. Rekor will provide complete financial results, including the applicable GAAP financial statements and reconciliations of non-GAAP financial measures, when it reports its second-quarter 2026 results and files its Quarterly Report on Form 10-Q. The financial information contained in this press release is preliminary, unaudited, and based on information currently available to management. The Company's normal quarter-end closing and review procedures have not yet been completed. Actual results may differ from the preliminary estimates contained in this release as a result of the completion of those procedures, final adjustments, and other developments arising between the date of this release and the date on which the Company reports its complete second-quarter financial results. Non-GAAP Financial Measures Adjusted EBITDA and adjusted Gross Margin are non-GAAP financial measures. The Company calculates EBITDA as net loss before interest, taxes, depreciation, and amortization. The Company calculates Adjusted EBITDA as net loss before interest, taxes, depreciation, and amortization, adjusted for impairment of intangible assets, loss on extinguishment of debt, stock-based compensation, currency translation adjustments, losses or gains on sales of subsidiaries, and other unusual or non-recurring items. EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the United States and should not be considered as alternatives to net income or loss or cash flow from operating activities as indicators of operating performance, measures of liquidity, or substitutes for other measures derived in accordance with U.S. GAAP. Adjusted Gross Margin is calculated as Adjusted Gross Profit divided by revenue and should not be considered in isolation from, or as a substitute for, GAAP financial measures. The Company presents these measures because management believes they provide useful supplemental information to investors regarding the Company's operating performance, progress in aligning expenses with revenue, and ability to service or incur debt. Other companies may calculate these measures differently. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures will be provided when Rekor reports its complete financial results for the quarter ended June 30, 2026. About Rekor Systems, Inc. Rekor Systems, Inc. (NASDAQ: REKR) builds trusted-data, privacy, and security solutions for real-world video and sensor networks. Rekor's AI-powered roadway intelligence platforms are deployed across the United States, delivering real-time data and actionable insights to transportation agencies, law enforcement, and commercial operators. For more information, visit Rekor.ai; for Go-Secure.Video, visit go-secure.video. Forward-Looking Statements This press release and its links and attachments contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning Rekor Systems, Inc. that involve substantial risks and uncertainties, including particularly statements regarding the Company's future results of operations and financial position, business strategy, prospective products and services, timing and likelihood of success, plans and objectives of management for future operations and future results of current and anticipated products and services. These statements involve uncertainties, including known and unknown risks, and are dependent on other important factors that may cause the Company's actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied. Any statements that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, forward-looking statements may be identified by terms such as "may," "will," "should," "expect," "plan," "anticipate," "could," "intend," "target," "project," "contemplates," "believes," "estimates," "predicts," "potential" or "continue," or the negative of these terms or other similar expressions. These forward-looking statements include, among other matters, statements concerning the Company's preliminary financial results; anticipated future financial and operating performance; expected achievement of profitability on an Adjusted EBITDA basis during the second half of 2026; revenue growth; additional cost efficiencies; cost structure; operating leverage; the Company's evaluation of refinancing alternatives for the Prime Revenue Sharing Notes; the Company's liquidity and financial flexibility; the market opportunity for Go-Secure.Video; discussions with potential launch partners, OEMs and other commercial counterparties; the timing, structure, and completion of any potential commercial arrangement; and the potential effect of an initial commercial integration on broader adoption. These forward-looking statements speak only as of the date they are made and are subject to the risks, uncertainties, and assumptions described under the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and in subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the disclosures made in this press release and in other documents the Company files from time to time with the SEC. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond the Company's control, these statements should not be relied upon as predictions of future events. The forward-looking statements are qualified in their entirety by reference to the risks discussed in the Company's SEC filings. The Company does not undertake any obligation to publicly update any forward-looking statements, whether as a result of receiving new information, the occurrence of events, or otherwise. Media & Investor Relations Charles DegliominiExecutive Vice PresidentRekor Systems, [email protected]

Image source: The Motley Fool. Monday, May 11, 2026 at 4:30 p.m. ET Chief Executive Officer — Robert A. Berman Chief Financial Officer — Joseph Nalepa Joseph Nalepa: Good afternoon, everyone. I'd like to start by thanking all of our investors and stakeholders who have joined us on today's call. Today, I'll walk through our financial results for the year ended December 31, 2025. We've been focusing on execution and operational efficiency and are encouraged by the progress we continue to make. During 2025, we continued to deliver top line revenue growth while also finding efficiencies within our operations. For the year ended December 31, 2025, we recognized revenue of $48.5 million, an increase of 5% compared to revenue of $46 million in 2024. This increase represents continued growth across our public safety and urban mobility businesses. Throughout 2025, we continue to see growth in our sales pipeline and active deployments. As of December 31, 2025, our remaining performance obligations increased to $25.9 million, a nearly 80% increase from December 31, 2024, which highlights strong momentum, giving us confidence in our ability to drive growth into 2026. For the year ended December 31, 2025, recurring revenue was $23.9 million, up 6% year-over-year. This reflects our long-term strategy of expanding our recurring revenue base through software and Data-as-a-Service subscription contracts. Adjusted margin for 2025 was 56% versus 49% in 2024. This improvement was largely driven by a greater portion of high-margin software sales relative to our service and hardware-based contracts as well as operational efficiencies within our deployments. As we continue to grow, we expect margins to fluctuate over time, but to gradually stabilize as our Software and Data-as-a-Service businesses become a larger share of total revenue. As mentioned in our recent press release, we made the decision to onshore our engineering efforts to optimize our engineering operations and cost containment efforts. As a result of this decision, we recognized a noncash asset impairment charge of $3.8 million in 2025. A key highlight this year was our continued focus on optimizing our operations. Total operating expenses, excluding depreciation, amortization and asset impairment charges, declined 20% year-over-year, representing an $11.4 million reduction. These reductions were achieved across all major areas of the business and reflect continuing disciplined cost containment and a deliberate realignment of resources to support our strategy. The combination of revenue growth and improved operational efficiency resulted in significant profitability improvements. Adjusted EBITDA loss for 2025 was $18.1 million, an improvement of $11 million or 38% compared to 2024. A meaningful indicator of our progress in 2025 is the trajectory of our adjusted EBITDA loss throughout the year. Our adjusted EBITDA loss in the first half of 2025 was $13.1 million compared to a loss of $5 million in the second half of 2025, demonstrating that the operational improvements and cost discipline we've implemented throughout the year are taking hold and moving us in the right direction. We are encouraged by this trend and believe it reflects the early results of our strategic realignment. As we continue to evaluate our operations and identify further efficiencies heading into 2026, we do anticipate incurring onetime charges in the first and second quarters, primarily related to the cancellation and restructuring of existing agreements. While these charges are near term in nature, we view them as necessary steps in building a leaner, more scalable operating structure that positions the company for improved performance and long-term value creation. We entered 2026 with strong momentum and remain committed to driving sustainable growth and long-term shareholder value. I'm grateful for your continued support and partnership. Thank you for your attention. Robert, over to you. Robert Berman: Thank you, Joe, and good afternoon, everyone. 2025 was a defining year for the company. We made a deliberate shift away from building the company of the future and refocused the organization on executing a pragmatic, profitable business model. That shift is now clearly reflected in our results. We are a more disciplined, efficient and resilient company, having transitioned from a development-heavy R&D-driven organization to a customer-focused business with fully productized solutions. As our rightsizing actions conclude towards the end of Q2 and the bulk of our efficiency work moves behind us, we are entering a new phase of the company, one focused on scaling. In the back half of 2026, we expect to aggressively ramp sales execution and drive accelerated growth, supported by strong and expanding demand environment and a platform now built for scale. From a financial standpoint, we delivered solid progress. Revenue grew year-over-year despite a significant focus on efficiency. More importantly, our mix towards higher-value recurring revenue and tighter cost controls drove gross margins to 56%. We reduced net loss by 49% and importantly, achieved operating cash flow positivity in the fourth quarter of 2025. Combined with meaningful improvement in adjusted EBITDA, this makes a critical inflection point and demonstrates that our model is both viable and scalable. We have already captured substantial efficiencies through our rightsizing efforts and expect additional gains as we continue to align the cost structure with the current scale of the business. That said, we want to be clear, there may be some quarter-to-quarter variability as we complete this process. The long-term trajectory, however, remains firmly intact. We are also taking a disciplined approach to innovation spend. We are reducing and normalizing R&D to a run rate of 7% to 10% of gross revenue by the back half of 2026, aligning investment levels with a company of our size. At the same time, we are improving development efficiency through the use of modern tooling and focusing resources on near-term customer-driven priorities. Operationally, the decision to onshore our engineering team is already delivering results. We are seeing faster development cycles, improved responsiveness and stronger customer engagement. This is not only a cost and efficiency improvement, it enhances our competitive positioning. Between late '21 and late 2023, we completed 3 acquisitions, each with distinct technologies, teams and operating models, making integration a complex undertaking, after which we navigated a period of leadership transition across both the Board and executive teams, which added another layer of complexity. That work is now largely behind us. Integration is substantially complete, and we are operating on a unified platform and the organization is now aligned, stable and focused. Importantly, we continue to execute and make meaningful progress throughout this period, positioning us to fully leverage these assets as we enter a growth phase in 2026. We also launched Rekor Labs in 2025, focused on identifying synthetically created and modified media known as deep fakes. This initiative builds on technology we have been developing internally for years. Professor Sanjay Sarma has agreed to chair Rekor Labs and stepped down from the parent company Board to do so. In closing, we have materially strengthened the foundation of the business. We now have a more efficient cost structure, higher quality revenue base and a clear path to sustained profitability. With the heavy lifting behind us and a platform built to scale, we are entering our next phase focused on execution, growth and value creation. We believe we are well positioned to drive meaningful, scalable long-term value for our shareholders. Thank you for your continued support. And operator, we can now turn the call and open it up for questions. Operator: [Operator Instructions] Our first question is coming from Michael Latimore from Northland Capital Markets. Mike Latimore: Congrats on getting cash flow positive here in the fourth quarter. I guess as you look to '26 here, do you think -- do you expect the year to be cash flow positive, maybe excluding maybe onetime items? Robert Berman: Joe? Joseph Nalepa: Yes. So without -- I don't want to provide specific profitability guidance, but we are encouraged by the progress we made at the end of 2025, and we hope to continue to build on that momentum as we enter 2026. I think you'll see some additional cost savings related to the onshoring of engineering efforts as well as some other things that we're working on to kind of help reduce our expense base while also maintaining top line revenue growth. I do want to be conscious that there are going to be those onetime charges that come in as we look to restructure the business. But I think it all gets back to ensuring that we're running a lean operation and working towards that goal of becoming profitable. Mike Latimore: Yes. Great. Okay. Sounds good. And then maybe an update on the Georgia deployment. That was a big contract you guys won last year. Maybe talk a little bit about any deployments in the fourth quarter? How does that kind of play out through '26? Robert Berman: Yes. So Mike, typically, the state agencies or DOTs usually shut down between Thanksgiving and New Year's. It will let you do a lot of work. And then obviously, around the country, depending on the weather, it may be impossible. So we just started to crank things up there, probably towards the second half of the first quarter. And we're working down there right now at a pace that's more than we've ever done in Georgia before, and hopefully, it will continue. Mike Latimore: Right. Great. And you highlighted -- for '25, you highlighted the public safety sector growing. Can you just describe a few of the more important customers you had in '25 for public safety? [indiscernible] said in the press release. Robert Berman: Yes. We have a couple of large OEM customers. Unfortunately, that -- where we cannot use their name, but they've been using our engine and software for years. And the LPR business is growing. It's picking up, and we're seeing that. We still have probably one of the best engines there is given that it operates not only in the U.S. but in 90 other countries. So we're seeing more licensing of our software, which is where our focus is. And we're going to continue those efforts going into '26 because it's just a better business model, right? Less overhead, boots on the ground, sales churn and so forth. So we're focused more on the software side of it now, which is good. Mike Latimore: Great. And last one for me. There's been some talk about just political and, I guess, regulatory resistance to ALPR technologies. How do you view that? I mean is that elongating sales cycles? Is that creating obstacles? Or is it accelerating opportunities since you have some solutions there? Robert Berman: We -- the majority of our software license sales are not in the law enforcement arena. They are theme parks, parking companies and others. So we don't have that issue there. In law enforcement, it's always been an issue, Mike. It's not going away. But we don't operate like others. We don't have data lakes. We don't sell the data to third parties. That's where you see a lot of issues. So we kind of stay in the background and let others battle that out. Mike Latimore: I guess I'll sneak one more in, if that's all right. In Texas, there's a good kind of, I guess, master contract there and you have Austin and you're trying to sell other big cities. Maybe update on kind of the receptivity of other big cities to Command in Texas? Robert Berman: Only that it's moving forward. It's a very slow grind. These agencies do not move quickly, although we would like them to, and sometimes we're naive to think that, that was a much faster process. I do think the good news is that we're in front of them. I know we have a couple of meetings coming up later in April with a number of the districts. So there is interest. And we are in the process of working on a couple of new contracts and a couple of renewals of existing contracts. So I think onshoring command was a good thing for us to do because it brought us closer to the customer. And frankly, it fixed a lot of bugs that the system had that where attention wasn't being paid to it. So we'll be able to get that to scale a lot faster now and tweak it. Operator: Our next question is coming from Louie DiPalma from William Blair. Louie Dipalma: For Robert and Joe, for both of you, you referenced the Georgia DOT $50 million contract. In another geography during the summer of 2024, you won the 1,000-plus camera contract with the Florida DOT. What has been the progress of the Florida rollout? And do you expect that program to generate further growth in 2026? And what are the other prospects in Florida besides that particular contract? Robert Berman: Yes. So Florida, it wasn't 1,000. It was 150 systems and District 7. And it was a pilot as a state is looking to move to a Data-as-a-Service model for the entire state, and it's gone well, and we're in discussions with them now and the program is expanding. It's not public. I can't talk about it yet, but we're making good progress down there. The growth of the model and Data-as-a-Service is clearly starting to scale. So that's a good thing. And we're seeing that across a number of states, right? Louie Dipalma: Maybe the opportunity was 1,000 and your deployment was in the 100. Thank you for that clarification. Robert Berman: Yes. Yes, we deployed 150 systems in District 7. We have more cameras in Florida than 150. We deployed at least, I think, another 50, maybe a little bit more, and we're deploying now. But if you look at what the apparatus that we deploy does, okay, and you look at what it can replace, yes, there's thousands of systems that this technology can replace just in Florida alone, right? Louie Dipalma: And for the year that just concluded 2025, did you disclose what percentage of the $49 million in revenue came from recurring revenue versus equipment revenue? And what was the growth of your recurring revenue? Robert Berman: Yes, Joe, you want to take that? Joseph Nalepa: Yes. So it was about a 50-50 split, and we had about a 6% growth in our recurring revenue year-over-year. Louie Dipalma: Great. And should we think of that trend continuing in 2026? Joseph Nalepa: I think so. I think it is part of our strategy, we're working to push customers more to a recurring revenue model, and then that aligns well with Data-as-a-Service, Software-as-a-Service it's a little dependent on the buying power of the certain DOTs, but we do expect as part of our strategy to continue to push that into a recurring model. Robert Berman: One way to think about it is that the -- look, when we first went to the LPR business way back when law enforcement agencies, PDs, large and small, were not doing subscription-based procurement. They were buying hardware and software with maintenance packages. And that's traditionally how DOTs have operated. And we were the pioneers, the company we acquired SCS was the pioneer of the concept of Data-as-a-Service. So the idea that you get what you need to be able to have the data to manage your roadways, both for planning and public safety, but you don't have to buy anything. You just pay a company for the data, and they're responsible for the hardware, the software and the maintenance is a very appealing model. It's just that it takes government a little bit of time to catch on to that, but it is catching on. And we've got multiple states doing that now. So that's going to continue to expand because they get -- they can stretch the dollars that they spend much further, right? Operator: [Operator Instructions] And we reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments. Robert Berman: Look, everybody, thanks for your support. If you recall, back during the call, -- it was just a few years ago that we completed the acquisitions of these 3 disparate companies. And we've gone through a lot, and Rome isn't built in a night, right, or a day. And I think we've got the company stable. We're focused on profitability. I would encourage you to look at the back half of 2025 with regard to the EBITDA loss compared to the first half of 2025. And I would remind you that a lot of the rightsizing and cost savings and efficiencies that we're doing have taken place here in the first quarter of this year, which will probably be equal to, if not greater, than what we did last year. So you can look at the balance sheet and you can do the math, and you can see that the company is headed in the right direction. And the back half of '26, we're going to focus on scale, and then you'll see the company grow but grow profitably and smartly. So it's growing anyway, but growing a lot faster. So anyway, thanks, everyone. Appreciate it. Operator: Take care. Thank you. Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today. Before you buy stock in Rekor Systems, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rekor Systems wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $463,900!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,294,401!* Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of June 1, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Rekor (REKR) Q4 2025 Earnings Call Transcript was originally published by The Motley Fool

Interested in Rekor Systems, Inc.? Here are five stocks we like better. Rekor Systems said its Q1 revenue rose 12% year over year, helped by growth in Scout, Discover and Command, while recurring revenue made up about 64% of quarterly revenue. The company’s adjusted gross margin improved to 53% from 48% a year earlier, and its EBITDA loss narrowed to about $6.5 million as cost-cutting efforts began to take hold. Management said it has cut roughly 16% of its workforce and expects expenses to drop sharply in Q2, with a goal of reaching EBITDA neutral by late Q2 or early Q3 and positive by the end of 2026. Rekor Systems (NASDAQ:REKR) said its first-quarter results reflected early benefits from a broad cost-reduction effort, while management pointed to stronger margins, higher recurring revenue and a path toward improved EBITDA performance later in 2026. Chief Executive Officer Robert Berman told investors that the company conducted a comprehensive review of headcount, contracts and expenses beginning near the end of 2025 and continuing into the first quarter of 2026. He said Rekor reduced headcount by approximately 45 positions, or roughly 16% of its workforce, between year-end 2025 and the end of the first quarter. → Beyond NVIDIA: Picks-and-Shovels AI Plays with Strong Momentum “The organization we are running today is leaner, faster, and more focused than the one we had a year ago,” Berman said. He added that the financial impact of the restructuring was not fully visible in the first quarter because some actions occurred mid-quarter and some one-time costs were recorded during the period. Eyal Koursh, who reviewed the financial results on the call, said first-quarter revenue increased 12% year over year, with approximately $1.1 million of growth realized across Rekor’s Scout, Discover and Command product lines. Scout contributed $281,000 to the year-over-year increase. Discover contributed $682,000. Command contributed approximately $102,000. → 3 Ways to Target the Resources Powering AI and Data Centers Adjusted gross margin rose to 53% in the first quarter of 2026 from 48% in the first quarter of 2025. Koursh attributed the five-percentage-point improvement to revenue growth, improved deployment efficiency and a more favorable product mix, including higher-margin software sales and recurring revenue representing a larger share of total revenue. During the question-and-answer portion of the call, management said recurring revenue accounted for about 64% of first-quarter revenue. → Quantum Earnings Season Is Ramping Up—What to Watch From 2 Major Players Rekor reported an EBITDA loss of approximately $6.5 million for the quarter, compared with a $7.4 million loss in the same period a year earlier. Koursh said the improvement was driven by revenue growth and cost containment, though he emphasized that the first quarter did not fully reflect the savings from actions implemented during the period. Koursh said first-quarter expenses were likely to be “on the higher end” for the year because the company incurred one-time costs tied to workforce reductions and other restructuring actions. He said investors should expect “a stark drop in expenses” beginning in the second quarter, particularly in operating expenses, with the lower cost structure continuing through the rest of the year. Berman said severance costs and expenses tied to office shutdowns and lease negotiations were largely finalized toward the end of the first quarter. He said the company expects the results of those efforts to become more visible in the second quarter and beyond. Management said Rekor is targeting EBITDA positive performance by the end of 2026 and expects to be close to EBITDA neutral by the end of the second quarter or in early third quarter. Berman described that outlook as based on the cost reductions already executed and the company’s current revenue trajectory. Rekor ended the first quarter of 2026 with $12.2 million in cash, down from $16.6 million at the end of 2025. Koursh said the sequential decline was expected and reflected normal first-quarter seasonality as well as one-time restructuring costs. On a year-over-year basis, Koursh said operating cash consumption improved, which he said supported management’s view that the underlying business is moving in the right direction. The company is also evaluating options to refinance its existing Series A Prime Revenue Sharing Notes, with the goal of reducing its cost of capital. Koursh said Rekor’s growing contract portfolio supports that refinancing effort and that management expects to provide more information later in 2026. In response to a question from Michael Latimore of Northland Capital Markets, Berman said the Georgia Department of Transportation deployment took longer to finalize but is now producing growth. He said the agreement functions as a contract vehicle, allowing other entities in Georgia to purchase through it. Without providing specific details, Berman said Rekor is already working with several counties and a couple of large cities in the state. He said the company continues to believe the value of the Georgia contract could be “substantially higher” than its base value, which he described as roughly $60 million. Berman also said Rekor received a price increase on equipment already in the ground, which he said should support higher margins. Asked about Oklahoma’s uninsured vehicle enforcement diversion, or UVED, program, Berman said Rekor is speaking with several other states about similar programs. He said government adoption takes time but pointed to the benefits such programs can provide to states and the insurance industry. Berman also discussed Rekor Labs, a unit created to develop technology for public safety and commercial markets. Its first product, GoSecure, is on track for commercial release in the third quarter of 2026, he said. According to Berman, GoSecure was developed in response to a question from a law enforcement customer about whether video evidence captured by Rekor’s platform could be faked. He said the product is designed to certify whether video or photo content has been altered, including down to a single frame, while verifying the camera of origin, timestamp, GPS location and file integrity from capture. Berman said the product is intended to address concerns created by increasingly accessible deepfake technology and the need to authenticate surveillance video used by law enforcement, insurers and courts. Rekor Labs is chaired by Professor Sanjay Sarma, an MIT professor of mechanical engineering and former vice president for open learning at MIT. Sarma previously served as a director of Rekor Systems. Rekor Systems, Inc is a U.S.-based technology company specializing in real-time vehicle recognition solutions powered by artificial intelligence and machine learning. The company develops software and hardware systems that capture, analyze and store vehicle data—such as license plate images, make and model, color and vehicle characteristics—by leveraging advanced computer vision algorithms. Rekor's platforms enable public safety agencies, transportation departments and private enterprises to automate vehicle identification, enhance situational awareness and improve operational efficiency. The company's flagship offering is a suite of intelligent camera and analytics products that include built-in license plate recognition (LPR) and vehicle attribute classification. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Rekor Systems Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

Image source: The Motley Fool. Monday, May 11, 2026 at 4:30 p.m. ET Chief Executive Officer — Robert Berman Chief Financial Officer — Joseph Nalepa Operator Need a quote from a Motley Fool analyst? Email [email protected] Robert Berman: Good afternoon, everyone, and thank you for joining us. I want to be direct about where we are and where we are headed, because I think the story is clearer now than it has been in some time. For 2025 into Q1 2026, we decided to take a hard look at every part of this organization. Every headcount, every contract, every expense—nothing was exempt from that review. The question we asked was simply, does this make the company better? If the answer was no, or even maybe, we adjusted to improve our core business. That process produced real structural change. We reduced headcount by approximately 45 positions, roughly 16% of our workforce, between year-end 2025 and 2026. We found efficiencies and optimized engineering activities that were core to our path forward. We right-sized the cost and organizational structure to match where the business actually is today. The financial impact of those decisions was not fully visible in Q1. Some of those actions were taken mid-quarter. Some carried one-time costs that hit Q1 but will not repeat, and Joseph will walk you through all of that in detail. What I want investors to understand is that this work is done. The organization we are running today is leaner, faster, and more focused than the one we had a year ago, and Q2 will be where you start to see what that means in the numbers. Our target is to reach EBITDA positive by the end of the year, and we expect to be very close to EBITDA neutral by the end of Q2 or in early Q3. That is not a wish. It is where the math takes us when you run the full impact of the cost reductions we have already executed against our current revenue trajectory. Now let me turn to the revenue side, because the business itself is performing well. Revenue grew 12% year over year, and every product line—Scout, Discover, and Command—grew. Gross margins reached 53%, up from 48% a year ago. These are not small moves. They reflect a business that is executing. Finally, we previously announced the creation of Rekor Labs, and before I close, I want to spend a moment on Rekor Labs, because I think it deserves attention. Rekor Labs was established to develop technology that extends into public safety and the commercial markets. Its first product, GoSecure, is on track for commercial release in Q3 2026. GoSecure answers a question a law enforcement customer put to us way back in 2024. That question was, can video evidence captured by your platform be faked? Prosecutors and defense attorneys were using that footage in court and they needed a definitive answer. We built one. GoSecure certifies, with mathematical certainty, whether video or photo content has been altered, down to a single frame. It verifies the camera of origin, the timestamp, the GPS location, and the integrity of the file from the moment of capture. In a world where deepfake technology is becoming widely accessible, the credibility of surveillance video is increasingly under threat. The ability to authenticate video evidence is, therefore, becoming essential for law enforcement, insurers, and the courts. Rekor Labs is chaired by Professor Sanjay Sarma, MIT Professor of Mechanical Engineering and former Vice President for Open Learning at MIT. Professor Sarma also previously served as a Director of Rekor Systems, Inc. His involvement underscores both the technical rigor behind the platform and the seriousness with which we are bringing this technology to market. We look forward to sharing more about GoSecure as we move towards its planned Q3 launch. I will now turn the call over to Joseph Nalepa for the financial results. Joseph Nalepa: Thank you, Robert. Q1 came in largely as we planned. We expected the quarter to include normal seasonality as well as certain one-time charges tied to the cost-reduction actions we executed during the period. We also expected that the full benefit of those actions would not be meaningfully reflected until Q2. What is important to highlight is that when comparing Q1 2026 to Q1 2025, the underlying trajectory of the business is positive. Revenue increased, adjusted gross margin improved, and we continued to identify and execute on meaningful cost efficiencies, the majority of which are expected to show in Q2 2026. Revenue increased 12% year over year, approximately $1.1 million in growth realized across each of our product lines. Scout contributed $281 thousand to that increase, while Discover contributed $6.682 million, and Command contributed approximately $102 thousand. Adjusted gross margins rose to 53% in Q1 2026 compared to 48% in Q1 2025. This five-percentage-point improvement reflects revenue growth, which allows us to be more efficient when we operate deployments; a favorable product mix, with higher-margin software sales; and recurring revenue representing a larger portion of our total revenue. EBITDA loss came in at approximately $6.5 million, an improvement from a $7.4 million loss in Q1 2025. Importantly, the Q1 2026 results do not fully reflect the benefit of the cost-optimization measures implemented during the quarter, and also include certain one-time costs related to those actions. Despite those items, we still delivered year-over-year improvement, and we believe that improvement will continue through 2026. The improvement in EBITDA was driven by revenue growth and a disciplined focus on cost containment. Payroll and payroll-related costs declined as a result of the headcount reductions Robert referenced, a significant portion of which were implemented during Q1 and will begin to have their full impact in Q2. Q1 also reflected normal seasonality, which typically results in lower activity relative to later quarters. Beyond those specific actions, we evaluated every line item and policy across our cost structure. Where spending was not critical, it was eliminated, and where spending was deemed necessary, we evaluated how to improve efficiency, optimize processes, and reduce cost. This detailed review of our current operating model has already produced meaningful improvements, and we expect it to help lower overall operating costs going forward. We ended Q1 2026 with $12.2 million in cash, compared to $16.6 million at the end of 2025. The sequential decline was expected and reflects the seasonal Q1 pattern as well as the one-time restructuring costs. On a year-over-year basis, our operating cash consumption improved, which reinforces our view that the underlying business is moving in the right direction. We are actively evaluating options to refinance our existing Prime revenue sharing notes with a goal of reducing our cost of capital. Our growing contract portfolio supports the refinancing; we expect to have more to report on this as we get further into 2026. Looking ahead, the cost reductions executed during Q1 were not fully reflected in our quarter-end results because many were implemented mid-quarter. In Q2 and the remainder of the year, those savings are expected to be reflected, and combined with our revenue growth trajectory, we believe the business is positioned for continued EBITDA improvement as we move through 2026. We remain focused on disciplined execution, cost efficiency, and driving sustainable growth across the business. Thank you again for your time and continued support. I will now turn the call back to our operator for Q&A. Operator: Thank you. We will now open the call for questions. It may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. The first question comes from the line of Mike Latimore with Northland Capital Markets. Please proceed. Mike Latimore: My first question: I was just wondering about the status of the Georgia DOT deployment, and then how should we think about that building throughout the year? Thank you. Robert Berman: Hey, Mike. It is Robert. How are you? Thanks for asking. Georgia took a little longer to finalize, but we got it done last fall, and we are seeing substantial growth already because it is a contract vehicle, meaning that it is not just with the Central Office of [inaudible], but it gives the ability to all other entities in the state of Georgia to buy through that contract vehicle. So without getting into specific details, which I cannot, we are already working with several other counties, a couple of large cities, and so forth. As I think we said when we announced the contract, we think the value will be substantially higher than the base value, which was roughly $60 million, and I think we are doing well with it. Plus, we got a price bump on equipment that is already in the ground, which means higher margins. So overall, headed in the right direction. Mike Latimore: Great, good to hear. And then thinking about expenses throughout the year, do you expect the Q1 expense level to be about right for the rest of the year, or do you expect it to change? Robert Berman: I think that is a question for Joseph. Joseph? Joseph Nalepa: Thank you for the question. We expect Q1 to be on the higher end of expenses. A lot of the cost-cutting measures that we implemented in Q1 did not get their full impact—they were made towards the end of the quarter and carried some one-time costs. As we get into Q2, you will see a stark drop in expenses, especially within our operating expenses, and that will continue throughout the rest of the year. Robert Berman: Mike, just to add to what Joseph said, severance related to all those employees, office shutdowns which required negotiating out of leases, and so forth really all took place toward the end of Q1. So I think we are going to see the results of all of that in Q2. It is behind us as of Q1, and we pick up, but it is mostly Q2 where you will see the results. Mike Latimore: Cool, great. And then around the Oklahoma UVED program, was wondering if there are any additional prospects that might enter into an uninsured vehicle program that you expect to get approved this year, or maybe sitting in the pipeline currently? Robert Berman: We are talking to several other states. I scratch my head thinking, given the benefits that the states get from this type of program and the insurance industry, the natural question is, why are all the states not doing this, right? But government takes time. We are proud of the fact that they renewed for quite a long period with us, and hopefully we will see others realizing we need to be doing this. There is just no reason not to. Things just take time. Mike Latimore: Mhmm. Then just one quick final one. What percent of revenue was recurring in the quarter? Joseph Nalepa: This quarter, we had about 64% of our revenue that was recurring. Robert Berman: Awesome. Thank you. Mike Latimore: I appreciate it, guys. Operator: Thank you. There are no further questions at this time. I would like to turn the call back to Robert Berman for closing remarks. Robert Berman: Yes, Operator, I just want to make sure that there is nobody in the queue and there are no further questions. Please double check. Operator: Yes, sure. Please press 1 on your telephone keypad to ask a question. Unknown Speaker: It is not. Robert Berman: Operator, are you seeing anything, or are we clear? Operator: No, there seem to be no further questions. Robert Berman: Okay. In closing, again, thank you, everybody, for joining the call, your attendance, and your patience. What we did in late Q4 2025 and all through Q1 2026 was long overdue. We needed to do it, we focused on it, and we got it done. I think we will see the results of that now going into Q2 and beyond. We thank everyone for their support and patience. Thank you. Operator: This concludes today's conference. You may disconnect your lines at this time. We thank you for your participation. Before you buy stock in Rekor Systems, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rekor Systems wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $471,827!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,319,291!* Now, it’s worth noting Stock Advisor’s total average return is 986% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 11, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Rekor (REKR) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool