Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $12.4 million, consistent with the same quarter of last year, while year-to-date revenue was $21.6 million, down 3% from 2024 [12][13] - Recurring revenue for Q2 totaled $5.9 million, representing 48% of total revenue compared to 50.6% in Q2 2024 [13] - Adjusted gross margin for the quarter was 49.5%, down from 53.5% in Q2 2024, attributed to a greater proportion of hardware-based contracts [14] - Total operating expenses for Q2 declined 17% year-over-year, representing a $2.9 million reduction [15] - Adjusted EBITDA loss for Q2 2025 was $5.8 million, in line with the prior year, but improved year-to-date by $2 million to $13.1 million compared to $15.2 million in the same period last year [16][17] Business Line Data and Key Metrics Changes - The company secured a $4 million contract expansion with the Central Texas Regional Mobile Authority, demonstrating increased trust in its RECORP Command technology [6] - RECOR Discover systems are being deployed under a $1.2 million contract in a Sunbelt state, reflecting growing momentum for safer, non-intrusive solutions [7] - The RECORE RoadView platform is being rolled out to provide real-time alerts for smaller agencies, enhancing operational response without heavy infrastructure investments [8] Market Data and Key Metrics Changes - The company is expanding its footprint across multiple states, including Arizona, Colorado, and Florida, supporting future international expansion [7] - The transportation landscape is evolving, with increasing recognition of transportation data as a national asset, shaping conversations with agency partners [9] Company Strategy and Development Direction - The company aims to grow its recurring revenue base through SaaS and data subscription models, despite a slight decline in recurring revenue this quarter [13][14] - The focus remains on operational efficiency and cost containment, with a commitment to improving adjusted EBITDA in the remainder of 2025 [16][18] - The company plans to continue executing current deployments while deepening relationships with state departments of transportation [10] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the second half of the year, citing a strong sales pipeline and anticipated sequential growth across all business lines [17][35] - The company is confident in its ability to navigate the challenges posed by the macro environment and government sector uncertainties [12][18] - Management highlighted the importance of data in transportation infrastructure discussions, indicating a shift in focus that aligns with the company's offerings [43] Other Important Information - The company is participating in key industry events, including the ITE 2025 and ITS World Congress, to reinforce its leadership position [10] - Management emphasized the importance of building an ecosystem for data management in transportation [43] Q&A Session Summary Question: What drove the strong sequential growth in the quarter? - Management indicated that the stronger performance was due to an improved pipeline and better weather conditions compared to Q1 [21] Question: Which business line will be more important for second-half growth? - Management expects sequential growth across Discover, Command, and Scout business lines [22] Question: What are the interesting use cases for Scout in public safety? - The focus is primarily on the commercial sector, including vehicle recognition and parking management [25] Question: How important is the data as a service option for Discover? - Management stated that it is very important as it provides recurring revenue and aligns with government needs [27] Question: Are there any large pilots or studies nearing contracts? - Management confirmed ongoing pilots and POCs, with optimism about converting these into revenue [34][35] Question: How does the company plan to address unpredictable weather impacts? - Management noted that as the company scales, weather will have less impact on revenue, particularly with the SaaS product Command [47][48]