Rekor Systems, Inc.

Q2 revenue was $12.7 million, up 2% from $12.4 million in Q2 2025; first-half revenue was $22.9 million, up 6% year over year. Recurring revenue grew 14% in the quarter to $6.7 million and 21% in the first half to $13.3 million. Adjusted gross margin expanded to 56% from 50% in Q2 2025 and to 55% from 49% in the first half of 2025. Operating expenses decreased by $4 million in the quarter and $4.3 million in the first half versus prior-year periods. The company recorded a one-time $2.8 million noncash gain from remeasuring a lease liability, and adjusted EBITDA loss was $1.2 million, down 79% year over year. Cash ended Q2 at slightly above $10 million, with operating cash burn of $2.4 million for the quarter and cash used from operations improving by $9.6 million, or 61%, for the first half. Management did not give specific revenue guidance, but said it expects additional cost efficiencies in Q3 and a noticeable impact in Q4 and into 2027, and reiterated expectations to reach adjusted EBITDA profitability in the second half of 2026.

Robert Alan Berman framed the quarter as evidence that the company’s cost actions are flowing through the P&L, saying revenue grew, gross margins expanded, and the adjusted EBITDA loss narrowed sharply. He emphasized that the savings are not a one-quarter effect and said Rekor is nearing the end of a judicious cost reduction program. Strategically, he highlighted GoSecure as a potential media authenticity standard, recurring roadway data revenue, and responsible vehicle recognition as the company’s main growth opportunities. His tone was confident but measured, with repeated focus on execution and profitability.

Joseph Nalepa provided the financial detail: revenue rose to $12.7 million, recurring revenue reached $6.7 million, adjusted gross margin improved to 56%, and operating expenses fell by $4 million in the quarter. He attributed margin improvement to better operating leverage and mix, especially a higher share of software and recurring revenue. He also cited the $2.8 million lease-liability remeasurement gain, cash slightly above $10 million, and reduced operating cash burn of $2.4 million. On capital allocation and balance sheet actions, he said the company is evaluating refinancing options for its existing prime revenue sharing notes and believes its contract portfolio, including South Carolina, should help support that process.

Analysts asked about the South Carolina contract, and management said it expands Rekor’s footprint in the state and could create opportunities to win additional work there, similar to Georgia. On Command, management said the pipeline is being monitored and there is potential for new wins, but government procurement timing is hard to predict. A question about privacy issues in ALPR prompted Berman to say the industry is in flux, some competitors are losing contracts, and Rekor believes its long-standing privacy-focused design and data-use controls will help it win business as agencies sort out the rules.