Rekor Systems Reports Revenue Decline and Improved Net Loss in Q2 2025

Rekor Systems, Inc. reported a slight decline in revenue for the second quarter of 2025, generating $12.4 million compared to $12.4 million in the same period last year. For the first half of 2025, the company recorded total revenue of $21.6 million, down from $22.2 million in the first half of 2024. The decrease in revenue is attributed to adverse weather conditions and a slowdown in project activity, particularly within the government sector. Despite the revenue decline, the company managed to reduce its net loss to $8.7 million for the quarter, an improvement from a net loss of $9.8 million in the prior year, and a total net loss of $19.5 million for the first half of 2025, down from $28.4 million in the same period last year.

In terms of operational efficiency, Rekor has made significant strides in reducing its operating expenses, which totaled $13.8 million for the second quarter, down from $16.7 million a year earlier. This reduction was driven by decreases in general and administrative expenses, selling and marketing costs, and research and development expenditures. The company reported a notable 27% decrease in research and development expenses, reflecting its ongoing cost containment efforts. Additionally, the company’s adjusted gross margin for the second quarter was 49.5%, down from 53.5% in the previous year, primarily due to a shift in the mix of software and service revenues.

Rekor has also been active in strategic developments, including the acquisition of All Traffic Data Services (ATD) in January 2024, which is expected to enhance its capabilities in traffic data collection. The acquisition has positioned Rekor favorably among national and state-level departments of transportation. Furthermore, the company has entered into an At Market Issuance Sales Agreement, allowing it to raise up to $25 million through the sale of common stock, which has already generated approximately $17.7 million in net proceeds.

As of June 30, 2025, Rekor reported total assets of $80.1 million, a decrease from $82.5 million at the end of 2024. The company’s cash and cash equivalents stood at $4.8 million, with working capital of $6.2 million. The company continues to face challenges related to its ability to achieve profitability, as it has not yet generated positive operating cash flows since its inception. Management has expressed concerns regarding its ability to sustain operations without additional financing, indicating that the existing cash may not be sufficient to fund current operations for the next twelve months.

Looking ahead, Rekor remains focused on expanding its customer base and enhancing its product offerings. The company is optimistic about the growth potential in the smart city market and the increasing demand for AI-driven solutions in transportation management. However, it acknowledges the risks associated with market conditions, competition, and the need for continued investment in technology and personnel to maintain its competitive edge.