Rekor Systems Reports First Quarter 2026 Financial Results
Rhea-AI Summary
Rekor Systems (NASDAQ: REKR) reported Q1 2026 results with revenue of $10.3 million, up 12% year over year, driven by data-as-a-service and roadway intelligence.
Gross margin reached 53%; loss from operations improved to $8.8 million, and Adjusted EBITDA loss improved to $6.5 million. Headcount fell 16% and GoSecure™ is targeted for Q3 2026 launch.
AI-generated analysis. Not financial advice.
Positive
- Revenue increased 12% year over year to $10.3 million
- Adjusted gross margin rose to 52.5% from 48.2% year over year
- Loss from operations improved by $1.3 million to $8.8 million
- Adjusted EBITDA loss improved to $6.5 million from $7.4 million
- Cash used in operating activities decreased by $4.3 million, or 54%
- Headcount reduced by 16% (45 positions) to lower operating expenses
- Planned GoSecure product introduction in Q3 2026 targeting evidence authentication markets
Negative
- Company still generated a net loss of $9.4 million in Q1 2026
- EBITDA and Adjusted EBITDA remained negative at $7.4 million and $6.5 million
- Sequential cash balance declined due to seasonal patterns and restructuring costs
- One-time restructuring and wind-down costs impacted Q1 2026 results
News Market Reaction – REKR
On the day this news was published, REKR declined 6.82%, reflecting a notable negative market reaction. Argus tracked a trough of -15.1% from its starting point during tracking. Our momentum scanner triggered 11 alerts that day, indicating notable trading interest and price volatility. This price movement removed approximately $9M from the company's valuation, bringing the market cap to $119.23M at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
Sector peers showed mixed action: Helport AI (HPAI) appeared in momentum scanners, moving up 11.02%, while Sangoma (SANG) was down 0.96%. Scanner data flags this as stock-specific rather than a broad sector move.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Mar 31 | Full-year 2025 earnings | Positive | -8.5% | Modest revenue growth with significant margin gains and lower Adjusted EBITDA loss. |
| Nov 13 | Q3 2025 earnings | Positive | +4.9% | Record quarterly revenue, strong adjusted gross margin, and sharply lower operating expenses. |
| Aug 12 | Q2 2025 earnings | Positive | +4.5% | Stable revenue with reduced operating expenses and smaller Adjusted EBITDA loss. |
| May 14 | Q1 2025 earnings | Neutral | +1.0% | Revenue decline but improved EBITDA loss and better gross margin through cost controls. |
| Mar 31 | Full-year 2024 earnings | Positive | +1.5% | Record 2024 revenue with substantial growth and narrowing Q4 Adjusted EBITDA loss. |
Earnings releases have typically led to modest positive moves, with one notable negative reaction despite improving fundamentals, suggesting occasional disconnects between results and short-term trading.
Across the last five earnings events from Mar 31, 2024 through Mar 31, 2026, Rekor consistently emphasized revenue growth, margin expansion, and narrowing Adjusted EBITDA losses. Record 2024 revenue and strong Q3 2025 results were followed by improved full-year 2025 metrics, including a 38% improvement in Adjusted EBITDA loss to $(18.10)M. Q1 2025 showed revenue pressure but better efficiency. Today’s Q1 2026 report extends this theme with 12% revenue growth, higher gross margins, and a smaller EBITDA loss, fitting the multi-period focus on disciplined scaling.
Historical Comparison
Over the last five earnings releases, average next‑day move was +0.67%. Today’s +1.63% reaction to Q1 2026 results sits modestly above that typical response.
Earnings updates show a progression from record 2024 revenue to improving 2025 margins and losses, with Q1 2026 extending the trend of revenue growth, higher gross margins, and narrowing EBITDA loss.
Market Pulse Summary
The stock moved -6.8% in the session following this news. A negative reaction despite operational progress would fit the pattern seen after some prior earnings, notably full‑year 2025 results where improved margins met a sharp price decline. In that context, pressure could reflect focus on continuing net losses or concerns about execution and capital structure rather than Q1 2026 improvements alone. Historical data show earnings moves averaging roughly +0.67%, so a sizeable downside would stand out versus typical responses.
Key Terms
ebitda financial
adjusted ebitda financial
adjusted gross margin financial
u.s. gaap financial
restricted stock units (rsus) financial
AI-generated analysis. Not financial advice.
Quarter-over-quarter Revenue Growth Across All Product Lines, Margin Expansion and Reduced Operating Expenses
COLUMBIA, Md., May 11, 2026 (GLOBE NEWSWIRE) -- Rekor Systems, Inc. (NASDAQ: REKR) ("Rekor" or the "Company"), a leader in AI-powered roadway intelligence, today reported financial and operational results for the first quarter ended March 31, 2026.
Q1 2026 Financial Highlights
- Revenue grew
12% year over year, driven by continued growth in the Company's data-as-a-service and roadway intelligence businesses. - Gross margin reached
53% , up from48% in Q1 2025. - EBITDA loss came in at approximately
$6.5 million , an improvement from the$7.4 million loss recorded in Q1 2025. - Cash used in operating activities improved by
$4.3 million , or54% , compared to the same period in Q1 2025. - Reduced headcount by approximately
16% or 45 positions from the end of 2025 through Q1 2026 with the majority of the financial benefit to be reflected in Q2 2026.
"Q1 went largely as we expected," said Joseph Nalepa, Chief Financial Officer, Rekor. "Revenue is growing and margins are expanding while we continue to improve operational efficiency. The one-time charges that hit Q1 were planned and several of the operational actions we took during the quarter were not fully reflected in the Q1 results, and we expect the benefit of those initiatives to become more visible in future periods."
Cash Position and Outlook
The sequential decline in cash from year-end 2025 was expected. It reflects a combination of seasonal Q1 patterns and one-time restructuring costs tied to headcount reductions completed over the past two quarters.
The costs savings and combined with the Company’s revenue growth trajectory reinforces the Company’s view that the underlying business is moving in the right direction and is positioned for continued EBITDA improvement as we move through 2026.
The Company is also evaluating options to refinance its existing Prime Revenue Sharing Notes. The refinancing is intended to reduce the Company's cost of capital, which is supported by Rekor's growing contract portfolio and improvements in operations.
"The first quarter included costs we knew were coming and temporary," said Robert A. Berman, Chairman of Rekor Systems. "The organization we have now is smaller, faster, and better positioned than the one we had 12 months ago. Q1 showed improvement from last year; however, we believe Q2 is where investors will start to see what that actually means for the numbers."
Rekor Labs: GoSecure™ Coming to Market in Q3 2026
GoSecure™ originated from a question a law-enforcement customer raised in 2024: Can public-safety video footage be deepfaked? Prosecutors and defense attorneys were relying on that footage in court and needed to know whether its authenticity could be challenged. Rekor took the question seriously and filed patents for a proprietary authentication system. Unlike probabilistic approaches that estimate the likelihood of tampering, GoSecure™ produces a deterministic result: the evidence is either authentic or it is not.
Target markets include law enforcement agencies, insurance companies, courts, and any organization or individual requiring proof that video or photo evidence has not been altered.
Rekor Labs is chaired by Professor Sanjay Sarma, Professor of Mechanical Engineering at MIT, where he previously served as Vice President for Open Learning. Professor Sarma also served as a director of Rekor Systems. "The question that started this was the right one to ask," said Professor Sarma. "We built a technology that answers it completely. The rapid advancement of AI has made this a necessity."
Quarter Ended March 31, 2026 Financial Results
This section highlights the changes for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.
Revenues and Cost of Revenue, excluding Depreciation and Amortization
| Three Months Ended March 31, | |||||||||||||||
| 2026 | 2025 | Change | |||||||||||||
| (Dollars in thousands, except percentages) | $ | % | |||||||||||||
| Revenue | $ | 10,263 | $ | 9,198 | $ | 1,065 | 12 | % | |||||||
| Cost of revenue, excluding depreciation and amortization | 4,879 | 4,761 | 118 | 2 | % | ||||||||||
| Adjusted Gross Profit | $ | 5,384 | $ | 4,437 | $ | 947 | 21 | % | |||||||
| Adjusted Gross Margin | 52.5 | % | 48.2 | % | 4.3 | % | 9 | % | |||||||
We delivered quarter-over-quarter revenue growth across each of our product lines, resulting in an overall revenue increase of
Cost of revenue, excluding depreciation and amortization, increased by
Adjusted Gross Margin also improved for the three months ended March 31, 2026, compared to the prior-year period. This improvement reflects the benefit of revenue growth and product mix, as Adjusted Gross Margin is generally influenced by the proportion of higher-margin software sales relative to service-related work.
Adjusted Gross Margin is a non-GAAP financial measure calculated as Adjusted Gross Profit divided by revenue and should not be considered in isolation from, or as a substitute for, GAAP financial measures.
Loss from Operations
| Three Months Ended March 31, | Change | ||||||||||||||
| (Dollars in thousands, except percentages) | 2026 | 2025 | $ | % | |||||||||||
| Loss from operations | $ | (8,817 | ) | $ | (10,139 | ) | $ | 1,322 | 13 | % | |||||
Loss from operations improved for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to continued revenue growth and disciplined cost containment efforts, including reductions in payroll and payroll-related costs to better align our cost structure with current operations.
The first quarter also included certain one-time costs associated with the Company’s operational realignment, including costs related to the wind down of certain operations and engineering activities. In addition, revenue in the first quarter was impacted by normal seasonality, which typically results in lower activity levels compared to later periods in the year.
We expect loss from operations to continue to improve as revenue benefits from seasonal trends and as the full impact of our cost reduction initiatives is realized in future periods.
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 March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net loss | $ | (9,361 | ) | $ | (10,874 | ) | ||
| Interest, net | 493 | 590 | ||||||
| Depreciation and amortization | 1,461 | 1,556 | ||||||
| EBITDA | (7,407 | ) | (8,728 | ) | ||||
| Share-based compensation | 922 | 1,370 | ||||||
| Adjusted EBITDA | $ | (6,485 | ) | $ | (7,358 | ) | ||
The Company will host its earnings conference call today at 4:30 p.m. ET.
Conference Call Information
Rekor will host its earnings conference call today at 4:30 p.m. ET.
North America Dial-In: 877-407-8037 / +1 201-689-8037
Webcast: Click here to access the live webcast
Replay Information
Replay Dial-In: 877-660-6853 / 201-612-7415
Access ID: 13760466
Replay Duration: Two weeks
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 other advanced technologies. Our solutions provide actionable insights to government agencies and businesses in a secure, collaborative, privacy-protected environment that drives the world to be safer 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 in our subsequent Quarterly Reports on Form 10-Q filed with the SEC. 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.
Company Contact
Joseph Nalepa, Chief Financial Officer
Phone: +1 (410) 762-0800
jnalepa@rekor.ai
Charles Degliomini, Media & Investor Relations
ir@rekor.ai
| REKOR SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share and per share amounts) | ||||||||
| March 31, 2026 | December 31, 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 12,175 | $ | 16,566 | ||||
| Restricted cash | 424 | 297 | ||||||
| Accounts receivable, net of allowance for credit losses of | 7,675 | 8,770 | ||||||
| Inventory | 2,939 | 3,072 | ||||||
| Note receivable, current portion | 85 | 198 | ||||||
| Other current assets | 2,431 | 1,825 | ||||||
| Total current assets | 25,729 | 30,728 | ||||||
| Long-term assets | ||||||||
| Property and equipment, net | 8,157 | 8,632 | ||||||
| Right-of-use operating lease assets, net | 4,400 | 4,716 | ||||||
| Right-of-use financing lease assets, net | 1,313 | 1,634 | ||||||
| Goodwill | 24,313 | 24,313 | ||||||
| Intangible assets, net | 12,950 | 13,250 | ||||||
| Note receivable, long-term | – | – | ||||||
| Deposits | 1,639 | 2,114 | ||||||
| Total long-term assets | 52,772 | 54,659 | ||||||
| Total assets | $ | 78,501 | $ | 85,387 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | 5,869 | 4,362 | ||||||
| Series A Prime Revenue Sharing Notes, net of debt discount of | 9,901 | 9,869 | ||||||
| Series A Prime Revenue Sharing Notes – related party, net of debt discount of | 4,951 | 4,934 | ||||||
| Loans payable, current portion | 79 | 83 | ||||||
| Lease liability operating, short-term | 1,155 | 2,720 | ||||||
| Lease liability financing, short-term | 650 | 787 | ||||||
| Contract liabilities | 4,500 | 4,604 | ||||||
| Liability for ATD Holdback Shares, at fair value | – | – | ||||||
| Other current liabilities | 2,351 | 1,729 | ||||||
| Total current liabilities | 29,456 | 29,088 | ||||||
| Long-term Liabilities | ||||||||
| Series A Prime Revenue Sharing Notes, net of debt discount of | – | – | ||||||
| Series A Prime Revenue Sharing Notes – related party, net of debt discount of | – | – | ||||||
| Loan payable, long-term | 89 | 112 | ||||||
| Lease liability operating, long-term | 12,058 | 10,570 | ||||||
| Lease liability financing, long-term | 537 | 665 | ||||||
| Contract liabilities, long-term | 1,213 | 1,402 | ||||||
| Deferred tax liability | 93 | 93 | ||||||
| Other non-current liabilities | 587 | 587 | ||||||
| Total long-term liabilities | 14,577 | 13,429 | ||||||
| Total liabilities | 44,033 | 42,517 | ||||||
| Commitments and contingencies (Note 7) | ||||||||
| Stockholders' equity | ||||||||
| Preferred stock, | – | – | ||||||
| Common stock, | 13 | 13 | ||||||
| Treasury stock, 316,439 and 314,129 shares as of March 31, 2026 and December 31, 2025, respectively | (902 | ) | (900 | ) | ||||
| Additional paid-in capital | 336,271 | 335,310 | ||||||
| Accumulated deficit | (300,914 | ) | (291,553 | ) | ||||
| Total stockholders’ equity | 34,468 | 42,870 | ||||||
| Total liabilities and stockholders’ equity | $ | 78,501 | $ | 85,387 | ||||
| REKOR SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except share and per share amounts) (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | 10,263 | $ | 9,198 | ||||
| Cost of revenue, excluding depreciation and amortization | 4,879 | 4,761 | ||||||
| Operating expenses: | ||||||||
| General and administrative expenses | 8,339 | 7,286 | ||||||
| Selling and marketing expenses | 915 | 1,757 | ||||||
| Research and development expenses | 3,486 | 3,977 | ||||||
| Depreciation and amortization | 1,461 | 1,556 | ||||||
| Total operating expenses | 14,201 | 14,576 | ||||||
| Loss from operations | (8,817 | ) | (10,139 | ) | ||||
| Other expense: | ||||||||
| Interest expense, net | (493 | ) | (590 | ) | ||||
| Other expense | (51 | ) | (145 | ) | ||||
| Total other expense, net | (544 | ) | (735 | ) | ||||
| Net loss | $ | (9,361 | ) | $ | (10,874 | ) | ||
| Loss per common share | $ | (0.07 | ) | $ | (0.10 | ) | ||
| Weighted average shares outstanding | ||||||||
| Basic and diluted | 136,649,149 | 106,815,912 | ||||||
