Rekor Systems (NASDAQ: REKR) grows Q1 2026 revenue 12% while narrowing losses
Rhea-AI Filing Summary
Rekor Systems reported Q1 2026 revenue of $10.3 million, up 12% from Q1 2025, driven by data-as-a-service and roadway intelligence growth. Gross margin improved to 53%, compared with 48% a year earlier, reflecting a higher mix of software and data revenue.
Loss from operations narrowed to $8.8 million from $10.1 million, while net loss improved to $9.4 million from $10.9 million. Adjusted EBITDA loss was about $6.5 million, better than the $7.4 million loss in Q1 2025. Cash and equivalents were $12.2 million as of March 31, 2026, down from $16.6 million at year-end, reflecting seasonal patterns and restructuring costs.
The company reduced headcount by about 16% (45 positions) from the end of 2025, with most savings expected in Q2 2026. Rekor is evaluating refinancing its Prime Revenue Sharing Notes to lower its cost of capital and plans to bring its GoSecure™ evidence-authentication product to market in Q3 2026.
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Insights
Rekor shows double-digit revenue growth with narrower losses but remains unprofitable.
Rekor Systems delivered Q1 2026 revenue of $10.3M, up 12% year over year, with adjusted gross margin rising to 52.5%. Higher-margin software and data products helped expand margins despite ongoing operating losses.
Loss from operations improved to $(8.8M) from $(10.1M), and Adjusted EBITDA loss narrowed to $(6.5M) from $(7.4M). Cash declined to $12.2M from $16.6M at December 31, 2025, reflecting seasonal cash use and restructuring charges, while management cut headcount by 16% to reduce expenses.
The company is evaluating refinancing its Prime Revenue Sharing Notes to lower financing costs and expects further EBITDA improvement through 2026 as cost actions flow through. Launch of the GoSecure™ authentication product planned for Q3 2026 adds a new offering but its financial impact is not quantified here.
8-K Event Classification
Key Figures
Key Terms
Adjusted Gross Margin financial
EBITDA financial
Adjusted EBITDA financial
Prime Revenue Sharing Notes financial
non-GAAP financial measures financial
seasonality financial
Earnings Snapshot
Management expects continued EBITDA improvement through 2026 as seasonal revenue trends and cost reductions take full effect.
UNITED STATES
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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The
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Item 2.02
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Results of Operations and Financial Condition.
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Item 9.01.
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Financial Statements and Exhibits.
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Exhibit
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Title
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99.1
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Press Release dated May 11, 2026.
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104
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Cover Page Interactive Data File (embedded with the Inline XBRL document).
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REKOR SYSTEMS, INC.
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| Date: May 11, 2026 |
/s/ Joseph Nalepa
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Name:
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Joseph Nalepa
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Title:
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Chief Financial Officer
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Exhibit 99.1
REKOR SYSTEMS REPORTS FIRST QUARTER 2026 FINANCIAL RESULTS
Quarter-over-quarter Revenue Growth Across All Product Lines, Margin Expansion and Reduced Operating Expenses
COLUMBIA, MD – May 11, 2026 – 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
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Revenue grew 12% year over year, driven by continued growth in the Company's data-as-a-service and roadway intelligence businesses. |
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Gross margin reached 53%, up from 48% in Q1 2025. |
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EBITDA loss came in at approximately $6.5 million, an improvement from the $7.4 million loss recorded in Q1 2025. |
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Cash used in operating activities improved by $4.3 million, or 54%, compared to the same period in Q1 2025. |
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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
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Three Months Ended March 31, |
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2026 |
2025 |
Change |
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(Dollars in thousands, except percentages) |
$ |
% |
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Revenue |
$ | 10,263 | $ | 9,198 | $ | 1,065 | 12 | % | ||||||||
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Cost of revenue, excluding depreciation and amortization |
4,879 | 4,761 | 118 | 2 | % | |||||||||||
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Adjusted Gross Profit |
$ | 5,384 | $ | 4,437 | $ | 947 | 21 | % | ||||||||
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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 12%, or approximately $1,065,000. Revenue attributable to our Scout product line increased by $281,000, revenue attributable to our Discover product line increased by $682,000, and revenue attributable to our Command product line increased by approximately $102,000 over the same period.
Cost of revenue, excluding depreciation and amortization, increased by 2% for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily as a result of higher revenue during the 2026 period.
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
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Three Months Ended March 31, |
Change |
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(Dollars in thousands, except percentages) |
2026 |
2025 |
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% |
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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):
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Three Months Ended March 31, |
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2026 |
2025 |
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Net loss |
$ | (9,361 | ) | $ | (10,874 | ) | ||
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Interest, net |
493 | 590 | ||||||
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Depreciation and amortization |
1,461 | 1,556 | ||||||
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EBITDA |
(7,407 | ) | (8,728 | ) | ||||
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Share-based compensation |
922 | 1,370 | ||||||
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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)
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March 31, 2026 |
December 31, 2025 |
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(Unaudited) |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
$ | 12,175 | $ | 16,566 | ||||
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Restricted cash |
424 | 297 | ||||||
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Accounts receivable, net of allowance for credit losses of $534 and $519, respectively |
7,675 | 8,770 | ||||||
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Inventory |
2,939 | 3,072 | ||||||
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Note receivable, current portion |
85 | 198 | ||||||
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Other current assets |
2,431 | 1,825 | ||||||
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Total current assets |
25,729 | 30,728 | ||||||
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Long-term assets |
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Property and equipment, net |
8,157 | 8,632 | ||||||
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Right-of-use operating lease assets, net |
4,400 | 4,716 | ||||||
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Right-of-use financing lease assets, net |
1,313 | 1,634 | ||||||
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Goodwill |
24,313 | 24,313 | ||||||
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Intangible assets, net |
12,950 | 13,250 | ||||||
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Note receivable, long-term |
- | - | ||||||
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Deposits |
1,639 | 2,114 | ||||||
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Total long-term assets |
52,772 | 54,659 | ||||||
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Total assets |
$ | 78,501 | $ | 85,387 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities |
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Accounts payable and accrued expenses |
5,869 | 4,362 | ||||||
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Series A Prime Revenue Sharing Notes, net of debt discount of $99 and $131, respectively |
9,901 | 9,869 | ||||||
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Series A Prime Revenue Sharing Notes - related party, net of debt discount of $49 and $66, respectively |
4,951 | 4,934 | ||||||
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Loans payable, current portion |
79 | 83 | ||||||
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Lease liability operating, short-term |
1,155 | 2,720 | ||||||
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Lease liability financing, short-term |
650 | 787 | ||||||
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Contract liabilities |
4,500 | 4,604 | ||||||
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Liability for ATD Holdback Shares, at fair value |
- | - | ||||||
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Other current liabilities |
2,351 | 1,729 | ||||||
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Total current liabilities |
29,456 | 29,088 | ||||||
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Long-term Liabilities |
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Series A Prime Revenue Sharing Notes, net of debt discount of $0 and $0, respectively |
- | - | ||||||
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Series A Prime Revenue Sharing Notes - related party, net of debt discount of $0 and $0, respectively |
- | - | ||||||
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Loan payable, long-term |
89 | 112 | ||||||
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Lease liability operating, long-term |
12,058 | 10,570 | ||||||
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Lease liability financing, long-term |
537 | 665 | ||||||
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Contract liabilities, long-term |
1,213 | 1,402 | ||||||
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Deferred tax liability |
93 | 93 | ||||||
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Other non-current liabilities |
587 | 587 | ||||||
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Total long-term liabilities |
14,577 | 13,429 | ||||||
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Total liabilities |
44,033 | 42,517 | ||||||
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Commitments and contingencies (Note 7) |
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Stockholders' equity |
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Preferred stock, $0.0001 par value, 2,000,000 authorized, 505,000 shares designated as Series A and 240,861 shares designated as Series B as of March 31, 2026 and December 31, 2025, respectively. No preferred stock was issued or outstanding as of March 31, 2026 or December 31, 2025, respectively. |
- | - | ||||||
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Common stock, $0.0001 par value; 137,923,985 and 136,791,826 shares issued as of March 31, 2026 and December 31, 2025, respectively; 137,607,546 and 136,477,697 shares outstanding as of March 31, 2026 and December 31, 2025, respectively |
13 | 13 | ||||||
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Treasury stock, 316,439 and 314,129 shares as of March 31, 2026 and December 31, 2025, respectively |
(902 | ) | (900 | ) | ||||
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Additional paid-in capital |
336,271 | 335,310 | ||||||
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Accumulated deficit |
(300,914 | ) | (291,553 | ) | ||||
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Total stockholders’ equity |
34,468 | 42,870 | ||||||
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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)
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Three Months Ended March 31, |
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2026 |
2025 |
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Revenue |
$ | 10,263 | $ | 9,198 | ||||
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Cost of revenue, excluding depreciation and amortization |
4,879 | 4,761 | ||||||
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Operating expenses: |
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General and administrative expenses |
8,339 | 7,286 | ||||||
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Selling and marketing expenses |
915 | 1,757 | ||||||
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Research and development expenses |
3,486 | 3,977 | ||||||
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Depreciation and amortization |
1,461 | 1,556 | ||||||
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Total operating expenses |
14,201 | 14,576 | ||||||
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Loss from operations |
(8,817 | ) | (10,139 | ) | ||||
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Other expense: |
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Interest expense, net |
(493 | ) | (590 | ) | ||||
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Other expense |
(51 | ) | (145 | ) | ||||
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Total other expense, net |
(544 | ) | (735 | ) | ||||
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Net loss |
$ | (9,361 | ) | $ | (10,874 | ) | ||
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Loss per common share |
$ | (0.07 | ) | $ | (0.10 | ) | ||
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Weighted average shares outstanding |
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Basic and diluted |
136,649,149 | 106,815,912 | ||||||