Rekor Systems Reports Second Quarter 2026 Financial Results
Rhea-AI Summary
Rekor Systems (NASDAQ: REKR) reported second quarter 2026 revenue of $12.7 million, up 23% sequentially and about 2% year over year, with recurring revenue rising 14% to $6.7 million. Adjusted gross margin expanded to 56% from 50% in Q2 2025, driven by a higher mix of software and recurring revenue.
Adjusted EBITDA loss narrowed to $1.2 million, a 79% improvement year over year, while Q2 income from operations reached $0.2 million, helped by a $2.8 million one-time lease remeasurement gain and lower operating expenses. For the first half, revenue grew 6% to $22.9 million and recurring revenue increased 21% to $13.3 million. Headcount decreased by 20% in the first half of 2026 and cash used in operating activities fell 61% year over year. Rekor ended Q2 with $10.0 million in cash and is evaluating options to refinance its Prime Revenue Sharing Notes as it continues to target Adjusted EBITDA profitability in the second half of 2026.
Positive
- Sequential revenue growth of 23% to $12.7 million in Q2 2026
- Recurring revenue up 14% YoY to $6.7 million in Q2; 21% to $13.3 million for H1
- Adjusted gross margin improved from 49.5% to 56.2% year over year in Q2
- Adjusted EBITDA loss reduced by 79% to $1.2 million in Q2 2026
- Operating expenses (G&A, S&M, R&D) down $4.0 million YoY in Q2 and $4.3 million for H1
- Cash used in operating activities for H1 2026 improved 61%, or $9.6 million, year over year
- Q2 2026 income from operations turned positive at $0.2 million versus a loss of $7.7 million in Q2 2025
Negative
- Q2 2026 still reported a net loss of $0.6 million, with H1 net loss at $9.9 million
- Year-over-year revenue growth remained modest at about 2% for Q2 and 6% for H1
- Cash and cash equivalents declined to $9.8 million from $16.6 million at December 31, 2025
- Total stockholders’ equity decreased to $34.1 million from $42.9 million at year-end 2025
- Interest expense remained significant at $0.5 million in Q2 and $1.0 million for H1 2026
- Total liabilities of $40.2 million compare with cash of about $9.8 million, indicating leverage to manage
News Explained
At
Market reaction after 2Q26 earnings report: REKR +5.42%
Following this news, REKR has gained 5.42%, reflecting a notable positive market reaction. Our momentum scanner has triggered 7 alerts so far, indicating moderate trading interest and price volatility. The stock is currently trading at $0.72. Trading volume is exceptionally heavy at 13.0x the average, suggesting very strong buying interest.
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Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Jul 15 | Preliminary earnings results | Positive | +6.1% | Preliminary revenue, margin, cash, and adjusted EBITDA improvements were announced. |
| May 11 | Q1 earnings report | Positive | -6.8% | Revenue and operating metrics improved, but the stock declined 6.82%. |
| Mar 31 | FY2025 earnings report | Positive | -8.5% | Margins and adjusted EBITDA improved, while the stock declined 8.54%. |
| Nov 13 | Q3 earnings report | Positive | +4.9% | Revenue, margins, losses, expenses, and contract awards improved. |
| Aug 12 | Q2 earnings report | Positive | +4.5% | Revenue held steady as expenses and adjusted EBITDA loss improved. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Tag-specific earnings history showed three aligned positive reactions and two divergences despite positive earnings-related announcements.
Key Terms
adjusted ebitda financial
non-gaap financial measure financial
lease liability financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Revenue Grew
COLUMBIA, Md., Aug. 13, 2026 (GLOBE NEWSWIRE) -- Rekor Systems, Inc. (NASDAQ: REKR) ("Rekor" or the "Company"), which builds trusted data, privacy, and security solutions for real-world video and sensor networks, reported financial and operational results for the second quarter ended June 30, 2026.
Second Quarter 2026 Highlights
- Revenue of
$12.7 million , up23% sequentially and2% year over year. - Recurring revenue increased
14% year over year to$6.7 million in Q2 and21% to$13.3 million for the first six months of 2026. - Adjusted gross margin of
56% , up from50% in Q2 2025. - Adjusted EBITDA loss of
$1.2 million , a79% improvement from Q2 2025. - Cash used in operating activities improved
61% year over year for the first six months of 2026. - Headcount decreased by
20% in the first half of 2026. - Outlook: Adjusted EBITDA profitability expected during the second half of 2026.
- Product: Launched Go-Secure.Video and the Rekor Scout Axis Agent integration during the quarter.
What Drove the Quarter
Rekor reduced headcount by
Second quarter revenue rose to
Adjusted gross margin improved to
Adjusted EBITDA loss narrowed to
"The second quarter highlights the financial impact of the operating changes we implemented during the first half of the year." said Joseph Nalepa, Chief Financial Officer, Rekor. "During the second quarter of 2026, Adjusted EBITDA loss improved by
Cash Position and Outlook:
The Company ended the second quarter of 2026 with
The Company is also evaluating options to refinance its existing Prime Revenue Sharing Notes. The refinancing has been supported by increases in the size of Rekor's contract portfolio and improvements in operations.
Three and Six Months Ended June 30, 2026 Financial Results
This section highlights the changes for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025.
Revenues and Cost of Revenue, excluding Depreciation and Amortization
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| (Dollars in thousands, except percentages) | (Dollars in thousands, except percentages) | ||||||||||||||
| Revenue | $ | 12,662 | $ | 12,359 | $ | 22,925 | $ | 21,557 | |||||||
| Cost of revenue, excluding depreciation and amortization | 5,551 | 6,245 | 10,430 | 11,006 | |||||||||||
| Adjusted Gross Profit | $ | 7,111 | $ | 6,114 | $ | 12,495 | $ | 10,551 | |||||||
| Adjusted Gross Margin | 56.2 | % | 49.5 | % | 54.5 | % | 48.9 | % | |||||||
Second-quarter revenue increased to
Adjusted gross profit increased for the three and six months ended June 30, 2026, while adjusted gross margin expanded from
This improvement reflects the benefits 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.
Gain (Loss) from Operations
| Three Months Ended June 30, | Change | Six Months Ended June 30, | Change | ||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | |||||||||||||||||||||
| Income (loss) from operations | $ | 222 | $ | (7,735 | ) | $ | 7,957 | 103 | % | $ | (8,595 | ) | $ | (17,874 | ) | $ | 9,279 | 52 | % | ||||||||||
The Company’s operating performance improved meaningfully during the second quarter, reflecting revenue growth, higher Adjusted Gross Profit and the impact of organizational efficiency measures implemented earlier in the year. For the three and six months ended June 30, 2026, combined general and administrative, selling and marketing, and research and development expenses decreased by
The second quarter also included a one-time gain of
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 June 30, | Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net loss | $ | (551 | ) | $ | (8,658 | ) | $ | (9,912 | ) | $ | (19,532 | ) | |||
| Interest, net | 517 | 586 | 1,010 | 1,176 | |||||||||||
| Depreciation and amortization | 1,372 | 1,561 | 2,833 | 3,117 | |||||||||||
| EBITDA | 1,338 | (6,511 | ) | (6,069 | ) | (15,239 | ) | ||||||||
| Share-based compensation | 212 | 723 | 1,134 | 2,093 | |||||||||||
| Gain on lease remeasurement, net | (2,753 | ) | - | (2,753 | ) | - | |||||||||
| Adjusted EBITDA | $ | (1,203 | ) | $ | (5,788 | ) | $ | (7,688 | ) | $ | (13,146 | ) | |||
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: 13762046
Replay Duration: Two weeks
About Rekor Systems, Inc.
Rekor Systems, Inc. (NASDAQ: REKR) builds trusted data, privacy, and security solutions for real-world video and sensor networks. Rekor's AI-powered roadway intelligence platforms are deployed across the United States, delivering real-time data and actionable insights to transportation agencies, law enforcement, and commercial operators.
For more information, visit Rekor.ai; for Go-Secure.Video, visit go-secure.video.
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) | |||||||
| June 30, 2026 | December 31, 2025 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 9,766 | $ | 16,566 | |||
| Restricted cash | 275 | 297 | |||||
| Accounts receivable, net of allowance for credit losses of | 8,157 | 8,770 | |||||
| Inventory | 2,770 | 3,072 | |||||
| Note receivable, current portion | - | 198 | |||||
| Other current assets | 2,118 | 1,825 | |||||
| Total current assets | 23,086 | 30,728 | |||||
| Long-term assets | |||||||
| Property and equipment, net | 7,397 | 8,632 | |||||
| Right-of-use operating lease assets, net | 4,476 | 4,716 | |||||
| Right-of-use financing lease assets, net | 1,029 | 1,634 | |||||
| Goodwill | 24,313 | 24,313 | |||||
| Intangible assets, net | 12,650 | 13,250 | |||||
| Deposits | 1,379 | 2,114 | |||||
| Total long-term assets | 51,244 | 54,659 | |||||
| Total assets | $ | 74,330 | $ | 85,387 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities | |||||||
| Accounts payable and accrued expenses | $ | 4,980 | $ | 4,362 | |||
| Series A Prime Revenue Sharing Notes, net of debt discount of | 9,934 | 9,869 | |||||
| Series A Prime Revenue Sharing Notes - related party, net of debt discount of | 4,967 | 4,934 | |||||
| Loan payable, current portion | 80 | 83 | |||||
| Lease liability operating, short-term | 2,320 | 2,720 | |||||
| Lease liability financing, short-term | 528 | 787 | |||||
| Contract liabilities | 5,021 | 4,604 | |||||
| Other current liabilities | 1,854 | 1,729 | |||||
| Total current liabilities | 29,684 | 29,088 | |||||
| Long-term Liabilities | |||||||
| Loan payable, long-term | 68 | 112 | |||||
| Lease liability operating, long-term | 8,225 | 10,570 | |||||
| Lease liability financing, long-term | 423 | 665 | |||||
| Contract liabilities, long-term | 1,121 | 1,402 | |||||
| Deferred tax liability | 93 | 93 | |||||
| Other non-current liabilities | 587 | 587 | |||||
| Total long-term liabilities | 10,517 | 13,429 | |||||
| Total liabilities | 40,201 | 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 June 30, 2026 and December 31, 2025, respectively | (902 | ) | (900 | ) | |||
| Additional paid-in capital | 336,483 | 335,310 | |||||
| Accumulated deficit | (301,465 | ) | (291,553 | ) | |||
| Total stockholders’ equity | 34,129 | 42,870 | |||||
| Total liabilities and stockholders’ equity | $ | 74,330 | $ | 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 June 30, | Six Months Ended June 30, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenue | $ | 12,662 | $ | 12,359 | $ | 22,925 | $ | 21,557 | |||||||
| Cost of revenue, excluding depreciation and amortization | 5,551 | 6,245 | 10,430 | 11,006 | |||||||||||
| Operating expenses: | |||||||||||||||
| General and administrative expenses | 5,149 | 6,936 | 13,488 | 14,222 | |||||||||||
| Selling and marketing expenses | 686 | 1,700 | 1,601 | 3,457 | |||||||||||
| Research and development expenses | 2,435 | 3,652 | 5,921 | 7,629 | |||||||||||
| Gain on lease remeasurement, net | (2,753 | ) | - | (2,753 | ) | - | |||||||||
| Depreciation and amortization | 1,372 | 1,561 | 2,833 | 3,117 | |||||||||||
| Total operating expenses | 6,889 | 13,849 | 21,090 | 28,425 | |||||||||||
| Income (loss) from operations | 222 | (7,735 | ) | (8,595 | ) | (17,874 | ) | ||||||||
| Other income (expense): | |||||||||||||||
| Interest expense, net | (517 | ) | (586 | ) | (1,010 | ) | (1,176 | ) | |||||||
| Loss on remeasurement of ATD Holdback Shares | - | - | - | (120 | ) | ||||||||||
| Other expense | (256 | ) | (337 | ) | (307 | ) | (362 | ) | |||||||
| Total other (expense) income, net | (773 | ) | (923 | ) | (1,317 | ) | (1,658 | ) | |||||||
| Net loss | $ | (551 | ) | $ | (8,658 | ) | $ | (9,912 | ) | $ | (19,532 | ) | |||
| Loss per common share | $ | (0.00 | ) | $ | (0.07 | ) | $ | (0.07 | ) | $ | (0.17 | ) | |||
| Weighted average shares outstanding | |||||||||||||||
| Basic and diluted | 137,612,028 | 117,435,953 | 137,140,972 | 112,459,949 | |||||||||||
