Rekor Systems Reports Second Quarter 2025 Financial Results
Improved Adjusted EBITDA: Substantially narrowed Adjusted EBITDA loss by $2 million for the six-month period.
Operating Expense Reduction: Reduced operating expenses by 17% quarter over quarter and year over year, reflecting strong cost discipline.
Quarterly Gross Revenue: Quarterly gross revenue of $12.4 million, showing the expected rebound from the prior quarter and resulting in revenue nearly flat year-over-year.
ATM Offering has been terminated as part of strategic capital initiatives.
COLUMBIA, Md., Aug. 12, 2025 (GLOBE NEWSWIRE) -- Rekor Systems, Inc. (NASDAQ:REKR), a global leader in roadway intelligence, today announced its financial results for the three- and six-month periods ending June 30, 2025.
"In Q2, we made significant progress on both operational efficiency and financial performance," said Eyal Hen, Chief Financial Officer of Rekor. "We substantially reduced our operating expenses and improved our year-over-year EBITDA, even in a challenging environment. As we look to the second half of 2025, our focus remains on disciplined execution, expanding margins, and positioning the Company for sustained long-term growth."
Operational & Strategic Highlights
Texas Department of Transportation (TxDOT):In Q2, the Company received a statewide blanket purchase order for Rekor Command® from TxDOT—one of the largest and most advanced transportation agencies in the U.S.-- Command® is now operational in Austin and the Company expects to onboard additional districts gradually over the coming quarters as early results in Austin show substantial operational and safety benefits.
Central Texas Regional Mobility Authority (CTRMA):CTRMA extended its use of Rekor Command® with an additional $1.4 million, five-year contract. The expansion is based on measurable results from previous deployments, including a 324% increase in incident detection and an 11-minute reduction in average response time. The new features include two-way driver communication and predictive AI insights, supporting over 35 major infrastructure projects in Central Texas.
Sun Belt State Rekor Discover® Deployment:Rekor has begun installing 150 Rekor Discover® systems as part of a $1.2M Data-as-a-Service (DaaS) agreement for a major Sun Belt state. This Federal Highway Administration (FHWA)-compliant, AI-enabled traffic data platform eliminates the need for intrusive sensors while providing safer, more actionable insights. Installations are progressing toward completion soon. Agencies are increasingly adopting Rekor's Discover DaaS to gain access to high-quality, per-vehicle traffic data. This model boosts recurring revenue for Rekor while reducing complexity and costs for government partners. The platform is now active in states including Arizona, Colorado, Florida, Georgia, New Mexico, New York, and South Carolina.
Expansion of RoadView:Rekor expanded its RoadView—an intuitive situational awareness platform—to municipalities and counties that lack 24/7 traffic operations centers. RoadView provides live alerts for incidents, congestion, and work zones, offering smaller agencies real-time visibility without requiring significant infrastructure investment.
"We're building the connected intelligence infrastructure that modern transportation demands," said Robert A. Berman, CEO of Rekor. "Our expanding work with agencies like TxDOT, another major state located in the Sun Belt, and CTRMA reflects growing trust in our technology and a broader industry shift toward AI-powered data fusion. Whether it's enabling real-time response or informing long-term planning, Rekor's platforms are helping agencies make smarter, faster, and safer decisions."
Berman continued, "As we reported last quarter, we've implemented a General Manager structure that brings clear accountability and customer focus to the forefront of everything we do. Each business unit now operates under dedicated leadership with full P&L responsibility—allowing us to drive innovation more quickly, scale operations more effectively, and deliver greater value across both domestic and international markets."
Three and Six Months Ended June 30, 2025 Financial Results
This section highlights the changes for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024.
Revenues and Cost of Revenue, excluding Depreciation and Amortization
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
Change
2025
2024
Change
(Dollars in thousands, except percentages)
$
%
(Dollars in thousands, except percentages)
$
%
Revenue
$
12,359
$
12,427
$
(68
)
-1
%
$
21,557
$
22,205
$
(648
)
-3
%
Cost of revenue, excluding depreciation and amortization
6,245
5,776
469
8
%
11,006
11,061
(55
)
-0
%
Adjusted Gross Profit
$
6,114
$
6,651
$
(537
)
-8
%
$
10,551
$
11,144
$
(593
)
-5
%
Adjusted Gross Margin
49.5
%
53.5
%
(4.0
)%
-7
%
48.9
%
50.2
%
(1.3
)%
-3
%
The decrease in revenue for the three and six months ended June 30, 2025, compared to the six months ended June 30, 2024, is primarily attributable to adverse weather conditions and a slowdown in project activity, partially driven by ongoing uncertainty within the government sector.
For the three months ended June 30, 2025, cost of revenue, excluding depreciation and amortization increased compared to the corresponding prior period primarily due to the mix of software and hardware revenue which resulted in an increase in personnel and other direct costs.
Adjusted Gross Margin is typically correlated to the mix of software sales versus service-type work. Typically, our software sales carry a higher Adjusted Gross Margin. As a result of the increase in cost of revenue, Adjusted Gross Margin For the three and six months ended June 30, 2025, decreased compared to the three and six months ended June 30, 2024. Adjusted Gross Margin is a non-GAAP measure calculated as Adjusted Gross Profit divided by revenue and should not be considered in isolation from, or as a substitute for, GAAP measures.
Loss from Operations
Three Months Ended June 30,
Change
Six Months Ended June 30,
Change
(Dollars in thousands)
2025
2024
$
%
2025
2024
$
%
Loss from operations
$
(7,735
)
$
(10,075
)
$
2,340
-23
%
$
(17,874
)
$
(22,991
)
$
5,117
-22
%
Loss from operations for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, decreased primarily due to a reduction in payroll and payroll related costs as a result of cost containment efforts intended to conform to current operations.
We realized an improvement of $2,404,000 or 24%, in our loss from operations for the three months ended June 30, 2025 compared to March 31, 2025.
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):
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Net loss
$
(8,658
)
$
(9,795
)
$
(19,532
)
$
(28,409
)
Interest
586
544
