Rekor Systems ((REKR)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Rekor Systems’ recent earnings call painted a picture of robust growth and strategic advancements, underscoring a positive sentiment despite some challenges. The company celebrated record revenue growth, significant contract wins, and improved financial metrics, which collectively highlight a promising trajectory. However, the transition in financial leadership and ongoing losses were noted as areas requiring attention.
Record Revenue Achieved
Rekor Systems reported a record revenue of $14.2 million for the third quarter of 2025, marking a 35% increase compared to the same period in 2024 and a 15% rise from the previous quarter. The year-to-date revenue reached $35.8 million, reflecting a 9% increase from the first nine months of 2024. This growth showcases the company’s ability to expand its market presence and capitalize on its strategic initiatives.
Strong Recurring Revenue Growth
The company achieved a recurring revenue of $6.5 million for Q3 2025, representing an 18% increase from Q3 2024. For the nine months ending September 30, 2025, recurring revenue was $17.5 million, up 5% year-over-year. This steady growth in recurring revenue indicates Rekor’s successful efforts in building a sustainable revenue stream.
Improved Gross Margin
Rekor Systems reported an adjusted gross margin of 63% for Q3 2025, a significant improvement from 44% in Q3 2024. For the first nine months of 2025, the adjusted gross margin was 55%, up from 48% in the prior year period. This improvement is attributed to a higher proportion of high-margin software sales, enhancing the company’s profitability potential.
Significant Reduction in Operating Expenses
Operating expenses, excluding depreciation and amortization, saw a 24% decline quarter-over-quarter, translating to a $3.7 million reduction. Year-to-date, operating expenses were reduced by $7.8 million, marking an 18% improvement compared to the same period last year. This reduction demonstrates Rekor’s commitment to operational efficiency and cost management.
Major Contract Wins
Rekor secured a major statewide multiyear contract with the Georgia Department of Transportation, valued at a minimum of $50 million. Additionally, the company received recognition for its work in South Carolina, highlighting strong performance across its core portfolio and reinforcing its market leadership.
Continued Expansion and Adoption
Rekor’s Discover and Command technologies have gained considerable attention, with new deployments in Georgia, Florida, and other states. This expansion reflects the growing adoption of Rekor’s innovative solutions and its ability to meet diverse market needs.
CFO Transition
The earnings call also addressed the transition in financial leadership, with CFO Eyal Hen announcing his decision to step down after nearly seven years. This change marks a significant shift in the company’s financial management, necessitating a smooth transition to maintain strategic momentum.
Adjusted EBITDA Loss
Despite the positive developments, Rekor Systems reported an adjusted EBITDA loss of $1.5 million for Q3 2025. While this indicates ongoing challenges in achieving profitability, it also represents an 84% improvement from the previous year, suggesting progress towards financial stability.
Forward-Looking Guidance
Rekor Systems delivered its best financial performance in the company’s history during the third quarter of 2025, with record revenue and improved margins. The company emphasized its strategic focus on expanding its recurring revenue base and enhancing operational efficiency, setting a strong foundation for future growth. These efforts are expected to drive continued success and profitability in the coming quarters.
In conclusion, Rekor Systems’ earnings call highlighted a period of impressive growth and strategic achievements. The company’s record revenue, strong recurring revenue growth, and improved margins reflect a positive outlook, despite the challenges of a CFO transition and ongoing losses. With a focus on operational efficiency and market expansion, Rekor is well-positioned for future success.