Rekor Systems Announces Strategic On-Shoring of Overseas Engineering Operations to Advance Cost Discipline and Operational Efficiency
Rhea-AI Summary
Rekor Systems (NASDAQ: REKR) will consolidate worldwide engineering into U.S. teams, shifting work from Israel to the United States to boost coordination and reduce costs. The company expects this action to lower annual operating expenses by approximately $7.5 million and to be substantially complete by the end of February 2026.
The move centralizes product development under CTO Chris Kadoch, aims to improve responsiveness to federal, state, and local customers, and intends to align the cost base with current revenue levels while minimizing disruption to customer programs and roadmaps.
Positive
- Annual operating expenses cut by approximately $7.5 million
- Engineering consolidated under CTO Chris Kadoch in the U.S.
- Transition expected substantially complete by end of February 2026
Negative
- Some longer-range initiatives will be affected by the consolidation
- Concentration of engineering in the U.S. may reduce international capacity
News Market Reaction – REKR
On the day this news was published, REKR gained 2.22%, reflecting a moderate positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
REKR was down 6.33% while momentum-flagged peers like ZENA and LIDR moved up, and broader peers showed mixed moves. This points to a stock-specific reaction rather than a sector-wide move.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Jan 21 | Executive change (peer) | Neutral | -4.1% | Former Rekor CFO appointed at another company, referencing prior experience. |
| Dec 16 | Financing closed | Negative | -1.2% | $15.0M underwritten registered direct offering of units with seven-year warrants. |
| Dec 15 | Financing priced | Negative | -4.6% | Pricing of $15.0M registered direct offering with stock and warrants at $1.75. |
| Nov 19 | Patent / product | Positive | -4.5% | Announcement of U.S. patent for privacy-protective ALPR and vehicle data framework. |
| Nov 13 | Earnings update | Positive | -7.3% | Record Q3 2025 revenue, improved margins, and major state contract wins. |
Recent history shows REKR often trading lower after both positive business updates (patent win, record Q3 results) and dilutive financings, indicating a tendency for selling pressure around news events.
Over the last six months, Rekor reported record Q3 2025 results with higher revenue and improved margins, secured large state contracts, and announced a new privacy-focused ALPR patent, yet shares fell after each update. The company also completed and priced a $15.0M underwritten registered direct offering with attached warrants, which coincided with further share price weakness. Governance changes included a CFO transition in November 2025. Today’s on-shoring and cost-reduction initiative fits into a broader push to improve financial efficiency after prior capital raises.
Market Pulse Summary
This announcement outlines a strategic consolidation of engineering operations into the U.S., with management targeting an annualized burn-rate reduction of about $7.5 million. The move follows a period of record quarterly results, large state contracts, and recent equity financing. Investors may track whether on-shoring supports customer confidence, improves coordination across product teams, and leads to visibly lower operating expenses and cash usage in upcoming financial reports.
Key Terms
artificial intelligence technical
data governance technical
burn rate financial
AI-generated analysis. Not financial advice.
Action Bolsters Support for Customer Base While Cutting Annual Operating Expenses by Approximately
COLUMBIA, Md., Feb. 24, 2026 (GLOBE NEWSWIRE) -- Rekor Systems, Inc. (NASDAQ: REKR) ("Rekor or the "Company"), a global leader in roadway intelligence, today announced a strategic consolidation of its worldwide engineering operations aimed at increasing operational efficiency and aligning the Company's cost structure with current revenue levels.
As part of this initiative, Rekor will move engineering work from Israel to its U.S.-based teams, consolidating all key product development and technology functions in the United States. This move supports the Company's ongoing efforts to streamline operations and focus resources on initiatives that have the most immediate impact on revenue, customer delivery, platform performance, and scalable growth.
This shift also mirrors a broader industry movement to relocate to the U.S. artificial intelligence development work, especially where these technologies support U.S. government agencies and critical infrastructure, and address heightening geopolitical risks. Continued regional instability and the potential for wider unrest in the Middle East have prompted firms to prioritize operational resilience. By focusing its engineering operations domestically, Rekor is better able to respond to concerns of federal, state, and local customers who are increasingly emphasizing secure, U.S.-based technology development and data governance.
Engineering functions previously managed by multiple international teams will now report to Rekor Chief Technology Officer Chris Kadoch. This change brings engineering leadership and product development closer to Rekor's U.S.-based commercial, customer success, and deployment teams, boosting collaboration and speeding up execution across the Company's Rekor Command® platform.
The consolidation is expected to significantly reduce the Company's cash outlays and strengthen its overall financial health.
Rekor Chief Financial Officer Joe Nalepa stated, "After closely examining our global footprint, we have taken this step to ensure that we are operating in line with current revenue while maintaining the ability to execute our strategic priorities. Consolidating our engineering operations in the United States improves coordination across our product and delivery teams and is a significant step toward lowering our annual operating expenses. We expect this and other actions to reduce our burn rate by approximately
The Company expects the transition to be substantially complete by the end of February. Although some longer-range initiatives will be affected, the Company does not anticipate disruption to existing customer programs or product roadmaps.
Nalepa concluded, "Rekor remains focused on driving disciplined growth while continuing to evaluate opportunities to improve efficiency and deliver long-term shareholder value."
About Rekor Systems, Inc.
Rekor Systems, Inc. (NASDAQ: REKR) is a leader in developing and implementing state-of-the-art roadway intelligence systems using AI-enabled computer vision and machine learning. As a pioneer in the implementation of digital infrastructure, Rekor is collecting, connecting, and organizing the world's mobility data – laying the foundation for a digitally-enabled operating system for the roadway. With our Rekor One® Roadway Intelligence Engine at the core of our technology, we aggregate and transform trillions of data points into intelligence through proprietary computer vision, machine learning, and big data analytics that power our platforms and applications. Our solutions provide actionable insights that give governments and businesses a comprehensive picture of roadways while providing a collaborative environment that drives the world to be safer, greener, and more efficient. To learn more, please visit our website: https://rekor.ai, and follow Rekor on social media on LinkedIn, X (formerly Twitter), Threads, and Facebook.
Forward-Looking Statements
This 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 elsewhere in our Quarterly Reports on Form 10-Q. 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.
Media & Investor Relations Contact:Rekor Systems, Inc.
Charles Degliomini
ir@rekor.ai
FAQ
What change did Rekor (REKR) announce on February 24, 2026 regarding engineering operations?
How much does Rekor (REKR) expect to save annually from the on-shoring action?
When will Rekor (REKR) complete the engineering consolidation announced February 24, 2026?
Will Rekor (REKR) customers face disruptions from the engineering shift to the U.S.?
Why is Rekor (REKR) moving AI and engineering work to U.S. teams now?
