Columbia, Md., Dec. 16, 2025 (GLOBE NEWSWIRE) -- Rekor Systems, Inc. (Nasdaq: REKR) (“Rekor,” “we,” “our” or the “Company”), a leader in developing and implementing state-of-the-art roadway intelligence technology, today announced the closing of its previously announced underwritten registered direct offering of 8,571,428 units at a public offering price of $1.75 per unit, with each unit consisting of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $2.4 ...

COLUMBIA, Md., Dec. 15, 2025 (GLOBE NEWSWIRE) -- Rekor Systems, Inc. (Nasdaq: REKR) (“Rekor,” “we,” “our” or the “Company”), a leader in developing and implementing state-of-the-art roadway intelligence technology, today announced the pricing of an underwritten registered direct offering of 8,571,428 units at a public offering price of $1.75 per unit, with each unit consisting of one share of common stock and a warrant to purchase one share of common stock at an exercise price of $2.40 per share. The warran ...

Group 1 - Rekor Systems, Inc. (REKR) reported strong results for Q3 2025, with record revenues and higher margins already indicated in a prior press release in October 2025 [1] Group 2 - The investment approach focuses on long-only strategies, evaluating companies from an operational and buy-and-hold perspective, rather than market-driven dynamics [2] - The articles emphasize understanding the long-term earnings potential of companies and the competitive dynamics within their industries [2] - Most recommendations are expected to be holds, reflecting a cautious approach in a bullish market [2] Group 3 - There are no disclosed positions in any mentioned companies, and no plans to initiate such positions in the near term [3] - The articles express the author's opinions without any compensation from the companies discussed [3] Group 4 - Past performance is not indicative of future results, and no specific investment recommendations are provided [4] - The views expressed may not represent the overall stance of Seeking Alpha, and the analysts may not be licensed professionals [4]

Group 1 - Rekor Systems, Inc. (REKR) reported strong results for Q3 2025, with record revenues and higher margins, which had been partially anticipated by the market due to a prior press release in October 2025 [1]

Core Viewpoint - Rekor Systems, Inc. has developed a patented technology framework aimed at protecting personal privacy in the use of vehicle recognition data, particularly through automated license plate recognition (ALPR) systems, addressing growing concerns over surveillance and data sharing [1][2]. Technology Framework - The company has secured a patent for a method that encodes and anonymizes vehicle identification data at the point of collection, ensuring that specific vehicle information remains encrypted and accessible only with lawful authorization [2]. - This framework aims to establish consistent privacy safeguards through administrative guidance, legislation, or procurement rules, allowing public safety agencies to adopt it without disrupting current operations [4]. Privacy Safeguards - Key elements of Rekor's privacy framework include immediate encoding of vehicle identification data, real-time use of deidentified information for legitimate purposes, and the release of identifying information only upon receipt of a warrant or legally approved documentation [7]. - The framework also provides real-time access to "hot-listed" wanted vehicles to support urgent public safety needs [7]. Industry Impact - The innovative approach is designed to enhance public trust and accountability in ALPR programs, encouraging public safety agencies and policymakers to implement privacy-protected ALPR systems [5][6]. - Rekor Systems aims to provide this patented privacy framework to any authorized government agency seeking to improve privacy protections while maintaining operational efficiency [5].

Core Viewpoint - The discussion centers around the potential overinvestment in AI infrastructure and the implications for companies like ABB, which is well-positioned to benefit from the ongoing spending in this area [2][4]. Group 1: Market Trends - There is strong activity in the data center segment, driven by AI buildout, particularly in the United States [3][4]. - A significant trend towards electrification and automation is observed globally, with electricity growing at more than double the pace of other energy sources [6][7]. - The future is expected to be electric across various sectors, including buildings, industries, and transportation, indicating a robust market for ABB [7][8]. Group 2: Company Positioning - ABB has a focused portfolio with three business areas: electrification, motion, and automation, which are aligned for long-term growth ambitions of 5% to 7% over a cycle [10][11]. - The company has updated its profitability targets, increasing operational EVA from a previous range of 16% to 19% to a new range of 18% to 22% [12]. - Despite the rapid growth of the data center market, it only constitutes 7% of ABB's overall business, allowing for diversification across other electrification markets [9].

Core Insights - Rekor Systems, Inc. is entering the global deep-fake detection market with a new subsidiary named Rekor Labs, separate from its core roadway-intelligence business [1] - The global deep-fake detection market is estimated to exceed $30 billion over the next decade, with product development initiated in 2023 following government requests for verification of traffic videos [2] - The full product launch is anticipated in the first half of 2026, targeting five key verticals: news media and journalism, social-media platforms, government/security agencies, enterprise safety, and entertainment/film markets [3] Company Overview - Rekor Systems, Inc. is based in Maryland and specializes in AI-enabled computer-vision and machine-learning platforms for roadway intelligence, with flagship solutions like Rekor Discover®, Rekor Command®, and Rekor Scout® [4]

Group 1 - Rekor Systems, Inc. reported a quarterly loss of $0.03 per share, better than the Zacks Consensus Estimate of a loss of $0.05, and improved from a loss of $0.14 per share a year ago, representing an earnings surprise of +40.00% [1] - The company posted revenues of $14.19 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.39%, compared to year-ago revenues of $10.55 million [2] - The stock has gained approximately 41% since the beginning of the year, outperforming the S&P 500's gain of 16.5% [3] Group 2 - The earnings outlook for Rekor Systems is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The estimate revisions trend for Rekor Systems was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] - The current consensus EPS estimate for the upcoming quarter is -$0.04 on revenues of $14.71 million, and -$0.27 on revenues of $49.14 million for the current fiscal year [7] Group 3 - The Zacks Industry Rank places the Internet - Software sector in the top 24% of over 250 Zacks industries, suggesting that stocks in the top 50% of Zacks-ranked industries outperform those in the bottom 50% by more than 2 to 1 [8]

Financial Data and Key Metrics Changes - Rekor Systems reported record revenue of $14.2 million for Q3 2025, a 35% increase compared to Q3 2024 and a 15% increase compared to Q2 2025 [6] - Year-to-date revenue reached $35.8 million, up 9% from the first nine months of 2024 [6] - Adjusted gross margin improved to 63% in Q3 2025 from 44% in Q3 2024, and year-to-date adjusted gross margin was 55% compared to 48% in the prior year [7][8] - Adjusted EBITDA loss for Q3 2025 was $1.5 million, an improvement of $7.9 million or 84% from Q3 2024 [8][9] Business Line Data and Key Metrics Changes - Recurring revenue for Q3 2025 totaled $6.5 million, an 18% increase compared to Q3 2024, while year-to-date recurring revenue was $17.5 million, up 5% year over year [7] - The company continues to focus on expanding its recurring revenue base through long-term software and data-as-a-service subscription contracts [7] Market Data and Key Metrics Changes - Rekor secured a significant multi-year contract with the Georgia Department of Transportation valued at a minimum of $50 million, marking a major milestone for the company [11] - The company received recognition for its work in South Carolina, where its technology powers a virtual weigh station network, achieving nearly 100% accuracy in overweight truck targeting [11] Company Strategy and Development Direction - Rekor is entering the global deepfake detection market, leveraging its experience in video analytics for government agencies and law enforcement [12] - The company is focusing on a data-as-a-service business model, which is proving to be a major differentiator in the market [13] - Rekor aims to strengthen its Scout business with the appointment of Jennifer Candelaria as General Manager, focusing on market share expansion and revenue growth [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Rekor's future, highlighting the strong performance and momentum built across technology platforms and customer base [5][15] - The company anticipates continued growth driven by the increasing demand for data-as-a-service solutions and operational efficiencies [10][20] Other Important Information - The company has reduced total operating expenses by 24% quarter over quarter, reflecting discipline and cost containment [8] - Rekor is actively engaged with customers in Europe and plans to expand its business outside the U.S. in 2026 [52] Q&A Session Summary Question: What type of product does the Rekor team envision developing with the deepfake detection division? - Management indicated that the product is being developed by Rekor Labs, and more details will be shared closer to the product launch in 2026 [17][18] Question: How should we think about the EBITDA trajectory and margins over the next several quarters? - Management expects margins to stabilize higher than current levels as the company continues to focus on the data-as-a-service business model [20] Question: Do you see many other contracts similar to the Georgia contract in your pipeline? - Management noted that states often follow each other's procurement processes, and they are seeing unprompted RFPs for their business model [22] Question: Is Austin starting to ramp up with the Command contract? - Management confirmed that Austin has issued a purchase order under the RFP won by Rekor, and they are working to expand into other districts [30][31] Question: Do you expect a full ramp-up portion of the new Georgia contract in the fourth quarter? - Management confirmed that the Georgia contract is in effect since October, and they anticipate billing under the new contract [42] Question: Can you give feedback on the international market engagement? - Management stated that they are actively engaged with customers in Europe and hope to do business outside the U.S. in 2026 [52] Question: Do you believe profitability is what is holding the elevation in the share price? - Management acknowledged the challenges of being a small public company but expressed confidence in the company's ability to drive revenue and profitability [57]

AI and Technology Solutions - Rekor has positioned itself to participate in the modernization of the U.S. transportation infrastructure, focusing on AI solutions through collaborations with public and private sectors [148]. - The Rekor One® roadway intelligence engine aggregates trillions of data points from IoT devices, roadway sensors, and cameras, delivering real-time and predictive solutions [154]. - AI monitoring systems enhance roadway safety by detecting hazards and reducing incident response times, contributing to fewer injuries and fatalities [150]. - Rekor's AI-powered platforms support various use cases, including traffic analysis, operations management, and high-definition video monitoring [155]. - The company aims to optimize resource allocation through AI assistance, streamlining operations for better efficiency [157]. - Automated enforcement systems are designed to reduce uninsured drivers, thereby improving public safety [158]. - Rekor's solutions provide enhanced data accuracy, supporting better decision-making and strategic planning [159]. - The company is committed to creating a connected, data-driven infrastructure ecosystem to improve urban mobility and transportation management [144]. - Rekor's traffic analytics and monitoring capabilities assist law enforcement and support intelligence-based policing [156]. - The ongoing modernization efforts present significant opportunities for Rekor to address challenges such as traffic congestion and roadway safety [147]. - The company anticipates significant growth in the Smart City market, driven by advancements in big data and AI, addressing urban challenges as two-thirds of the global population is expected to live in urban areas by 2050 [160]. - The company expects to benefit from the Infrastructure Investment and Jobs Act, which allocates over $150 billion for roadway infrastructure, including intelligent transportation systems, and aims to capture federal funding opportunities [161]. - The company is investing in advanced vehicle recognition systems to enhance accuracy and affordability, targeting smaller municipalities and organizations that previously could not afford conventional systems [160]. - The company is focused on expanding automated enforcement of motor vehicle laws, anticipating increased legislative support for automated compliance programs [160]. - The company is leveraging improvements in GPU technology to enhance image processing capabilities, which is expected to drive growth in the GPU market due to IoT adoption [161]. Financial Performance - Revenue for the three months ended September 30, 2025, was $14,194,000, representing a 35% increase from $10,546,000 in 2024 [178]. - Revenue for the nine months ended September 30, 2025, was $35,751,000, a 9% increase from $32,751,000 in 2024 [178]. - Cost of revenue, excluding depreciation and amortization, decreased by 12% to $5,195,000 for the three months ended September 30, 2025, compared to $5,903,000 in 2024 [179]. - Total operating expenses for the three months ended September 30, 2025, were $12,969,000, a 26% decrease from $17,497,000 in 2024 [180]. - General and administrative expenses decreased by 27% to $6,299,000 for the three months ended September 30, 2025, from $8,637,000 in 2024 [181]. - Net loss for the three months ended September 30, 2025, was $4,149,000, compared to a net loss of $12,646,000 in 2024 [189]. - Interest expense, net, increased by 15% to $568,000 for the three months ended September 30, 2025, from $496,000 in 2024 [186]. - EBITDA for the three months ended September 30, 2025, was $(2,036,000), an improvement from $(9,751,000) in 2024 [189]. - The company recorded a loss on extinguishment of debt of $4,693,000 in 2024, which did not recur in 2025 [187]. - Research and development expenses decreased by 23% to $3,660,000 for the three months ended September 30, 2025, from $4,740,000 in 2024 [183]. - Adjusted Gross Profit for the three months ended September 30, 2025, was $8,999,000, compared to $4,643,000 for the same period in 2024, representing an increase of 94.5% [192]. - Adjusted Gross Margin improved to 63.4% for the three months ended September 30, 2025, up from 44.0% in 2024, indicating a significant enhancement in profitability [192]. - Recurring revenue for the three months ended September 30, 2025, was $5,511,000, an 18% decrease from $6,520,000 in 2024 [194]. - Net cash used in operating activities decreased by $6,970,000, from $27,552,000 in the nine months ended September 30, 2024, to $20,582,000 in 2025, a 25% improvement [197]. - Net cash provided by financing activities decreased by $10,722,000, from $31,367,000 in the nine months ended September 30, 2024, to $20,645,000 in 2025, a 34% decline [199]. - As of September 30, 2025, the company had cash and cash equivalents of $3,411,000, compared to $5,329,000 as of December 31, 2024 [200]. - The company reported a net loss of $23,681,000 for the nine months ended September 30, 2025, reflecting ongoing challenges in achieving profitability [203]. - Performance obligations as of September 30, 2025, included approximately $13,157,000 in contracts expected to be recognized over the next twelve months [195]. - The company issued 18,888,832 shares of common stock at a weighted average selling price of $1.23 per share, generating net cash of $22,350,000 after issuance costs [207]. - The company anticipates that existing cash is insufficient to fund operations for the next twelve months, raising substantial doubt about its ability to continue as a going concern [208]. Operational Challenges - The company is facing challenges in achieving profitability, with increasing operating expenses and capital expenditures, and has not yet reached sustainable profitability [162]. - The company is committed to significant investments in sales and marketing to increase market awareness and adoption of its products and services [168]. - The company has identified risks associated with executing its corporate strategy, particularly in acquiring and integrating established technology companies [162]. - The company is experiencing high general and administrative expenses due to growth-related costs, but expects these expenses to decrease as a percentage of revenue over the long term [167]. - The company relies on information technology for operations, facing potential cybersecurity risks that could disrupt services and impact financial condition [162].