Rekor Systems Reports $9.2 Million Revenue in Q1 2025, Sees 6% Decline

Rekor Systems, Inc. reported a revenue of $9.2 million for the first quarter of 2025, a decrease of 6% from $9.8 million in the same period last year. The company attributed this decline primarily to adverse weather conditions and a slowdown in project activity, particularly within the government sector. Despite the drop in revenue, the cost of revenue, excluding depreciation and amortization, decreased by 10% to $4.8 million, reflecting reduced personnel and direct costs. The company recorded a net loss of $10.9 million, an improvement from the $18.6 million loss reported in the prior year, driven by lower operating expenses.

Total operating expenses for the quarter were $14.6 million, down 16% from $17.4 million in the previous year. This reduction was largely due to decreased general and administrative expenses, selling and marketing costs, and research and development expenditures, which collectively fell as a result of cost containment efforts. Notably, research and development expenses decreased by 20% to $4.0 million, reflecting the company's focus on efficiency amid ongoing financial challenges.

In terms of strategic developments, Rekor completed 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 to better serve national and state-level departments of transportation. The company also entered into an At Market Issuance Sales Agreement in February 2025, allowing it to raise up to $25 million through the sale of common stock, which it has begun to utilize to bolster its financial position.

As of March 31, 2025, Rekor had cash and cash equivalents of $3.9 million, down from $5.0 million at the end of 2024. The company reported a working capital of $3.1 million, an increase from $1.7 million at the end of the previous year. However, management expressed concerns regarding the company's ability to sustain operations over the next twelve months without additional financing, given its ongoing losses and cash burn rate. The company is actively exploring external financing options to support its operations and has contingency plans to reduce expenses if necessary.

Looking ahead, Rekor remains focused on expanding its customer base and improving its financial metrics. The company anticipates that its recurring revenue model will provide a more predictable revenue stream, with approximately $14.5 million in performance obligations expected to be recognized over the next twelve months. Despite the challenges, Rekor is committed to leveraging its technology and strategic acquisitions to enhance its market position in roadway intelligence and traffic management solutions.