Rekor Systems Reports Full Year 2025 Results
Rhea-AI Summary
Rekor Systems (NASDAQ: REKR) reported full-year 2025 results, highlighting disciplined execution and improved margins. Revenue was $48.45M, up ~5% year-over-year; Adjusted Gross Margin rose to 55.9% from 49.3%. Adjusted EBITDA loss narrowed ~38% to $(18.10)M, and the company achieved positive operating cash flow in Q4 2025.
Operational moves include on-shoring Rekor Command engineering, integration of STS and ATD, a patent for incident-based data retention, launch plans for Rekor Labs, and increased Remaining Performance Obligations tied to Georgia DOT.
Positive
- Adjusted EBITDA loss reduced by 38% to $(18.10)M
- Adjusted gross margin expanded 660 bps to 55.9%
- Positive operating cash flow achieved in Q4 2025
- Net loss improved ~49% to $(31.46)M
- Increased RPO for Georgia DOT provides multi-year revenue visibility
Negative
- Company remains net loss of $(31.46)M for 2025
- Adjusted EBITDA remains negative at $(18.10)M
- Asset impairment charges of $3.754M in 2025
News Market Reaction – REKR
On the day this news was published, REKR declined 8.54%, reflecting a notable negative market reaction. Argus tracked a peak move of +2.5% during that session. Argus tracked a trough of -13.8% from its starting point during tracking. Our momentum scanner triggered 16 alerts that day, indicating notable trading interest and price volatility. This price movement removed approximately $10M from the company's valuation, bringing the market cap to $111.91M at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
REKR slipped 0.95% while scanner peers showed mixed moves: ARBE up 1.64%, HPAI up 1.33%, SANG up 4.51%, and ZENA down 1.81%. This pattern points more to stock-specific trading around earnings than a unified sector rotation.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Nov 13 | Q3 2025 earnings | Positive | +4.9% | Record Q3 revenue, higher margins, and narrowed Adjusted EBITDA loss. |
| Aug 12 | Q2 2025 earnings | Positive | +4.5% | Operational efficiency gains with flat revenue and reduced expenses and losses. |
| May 14 | Q1 2025 earnings | Neutral | +1.0% | Revenue declined but losses and margins improved under new structure. |
| Mar 31 | 2024 annual earnings | Positive | +1.5% | Record 2024 revenue with better EBITDA and product/partnership expansion. |
| Mar 17 | 2024 prelim results | Neutral | -4.6% | Preliminary growth guidance with cost cuts and leadership realignment. |
Recent earnings and guidance updates typically produced modestly positive next-day moves, suggesting investors have often rewarded evidence of operational improvement.
Over the past year, Rekor’s earnings-related releases highlighted rising revenue, expanding adjusted gross margins, and narrowing Adjusted EBITDA losses. The company moved from 2024 record annual revenue to Q1–Q3 2025 results focused on cost control, statewide contracts, and product expansion. Price reactions to these earnings and preliminary results were generally positive in the first 24 hours, indicating that the market has often viewed incremental financial and operational progress constructively compared to prior periods.
Historical Comparison
In the past 12 months, REKR had 5 earnings-related releases with an average next-day move of 1.46%, generally modestly positive. Today’s -0.95% reaction to improved 2025 results marks a weaker response than prior earnings updates.
Earnings releases have tracked Rekor’s shift from 2024 record revenue into 2025 quarters emphasizing margin expansion and shrinking Adjusted EBITDA losses, supported by statewide contracts and product commercialization.
Market Pulse Summary
The stock moved -8.5% in the session following this news. A negative reaction despite operationally better 2025 results would contrast with prior earnings releases, which typically saw modest gains averaging 1.46%. The company reported revenue of $48,450 (thousands), improved adjusted gross margin of 55.9%, and a narrower Adjusted EBITDA loss of $(18,101) (thousands). Such selling could reflect concerns about ongoing losses or past dilution, making future contract execution and cash flow trends key variables to watch.
Key Terms
adjusted ebitda financial
ebitda financial
non-gaap financial
u.s. gaap financial
alpr technical
AI-generated analysis. Not financial advice.
Company Reduced Adjusted EBITDA Loss by
COLUMBIA, Md., March 31, 2026 (GLOBE NEWSWIRE) -- Rekor Systems, Inc. (NASDAQ: REKR), ("Rekor" or the "Company"), a leader in developing and implementing cutting-edge roadway intelligence systems, today reported financial and operational results for the full year ended December 31, 2025, highlighting a year of disciplined execution, operational efficiency, and strategic repositioning.
“2025 was a transformative year for Rekor,” said Joseph Nalepa, Rekor’s Chief Financial Officer. “The maturity of our development efforts has enabled us to make a deliberate shift to operate as a pragmatic, product-focused business. That discipline has resulted in a stronger, leaner company with a clear path to sustainable profitability.”
Financial Highlights
- Revenue increased approximately
5% year-over-year, reflecting steady top-line growth despite a strong prior-year comparison. - Gross margins expanded to
56% , up from49% in 2024, driven by a focus on higher-value, recurring revenue streams. - Adjusted EBITDA loss reduced by approximately
38% , reflecting successful cost alignment and operational efficiencies. - Achieved positive operating cash flow in Q4 2025, marking the Company’s first quarter of cash inflow from operations.
Operational Highlights
Reduced non-recurring engineering spending and aligned cost structure with current revenue scale.
- Drove further efficiency with the integration of our STS and ATD subsidiaries, eliminating legacy complexity and unlocking operational synergies.
- On-shored Rekor Command® engineering and product operations to the United States, improving customer coordination, responsiveness, and service delivery.
This resulted in enhanced customer service and product responsiveness, with transportation agencies reporting faster turnaround times and improved engagement. - Secured a landmark patent for “Incident-Based” data retention, replacing outdated ALPR and vehicle dragnets with privacy-sensitive intelligent storage.
- Announced plans to launch Rekor Labs, a new subsidiary pioneering a suite of patented products to identify synthetically created and modified media.
These initiatives have strengthened collaboration across product, engineering, and customer success teams while improving overall operational performance.
Strategic Highlights
Rekor also made significant progress in positioning the Company for scalable growth
- Transitioned from a development-heavy theoretical model to a product-first portfolio, with Rekor Scout®, Rekor Discover®, and Rekor Command® fully commercialized
- Shifted engineering focus from large-scale development to product maintenance and targeted enhancements, enabling a planned significant reduction in R&D spend
- Increased Remaining Performance Obligations for Georgia Department of Transportation-related work, adding multi-year contracted revenue visibility
Year Ended December 31, 2025 Financial Results
This section highlights the changes for the year ended December 31, 2025, compared to the year ended December 31, 2024.
Revenues and Cost of Revenue, excluding Depreciation and Amortization
| Year ended December 31, | Change | |||||||||||||
| 2025 | 2024 | $ | % | |||||||||||
| (Dollars in thousands, except percentages) | ||||||||||||||
| Revenue | $ | 48,450 | $ | 46,028 | $ | 2,422 | 5 | % | ||||||
| Cost of revenue, excluding depreciation and amortization | 21,379 | 23,344 | (1,965 | ) | 8 | % | ||||||||
| Adjusted Gross Profit | $ | 27,071 | $ | 22,684 | $ | 4,387 | 19 | % | ||||||
| Adjusted Gross Margin | 55.9 | % | 49.3 | % | 6.6 | % | 13 | % | ||||||
The increase in revenue for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily attributable to our Public Safety product line.
During the year ended December 31, 2025, revenue attributable to our Public Safety product line was
For the year ended December 31, 2025, cost of revenue, excluding depreciation and amortization decreased compared to prior year primarily due to a favorable revenue mix of software versus hardware, which resulted in higher margins from increased software license sales.
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
| Year ended December 31, | Change | |||||||||||||
| 2025 | 2024 | $ | % | |||||||||||
| Loss from operations | $ | (28,886 | ) | $ | (54,323 | ) | $ | 25,437 | -47 | % | ||||
Loss from operations for the year ended December 31, 2025, compared to the year ended December 31, 2024, improved primarily due to our continued revenue growth while reducing payroll and payroll-related costs as a result of cost containment efforts intended to conform to current operations.
Additionally, approximately
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):
| Year ended December 31, | |||||||
| 2025 | 2024 | ||||||
| Net loss | $ | (31,460 | ) | $ | (61,410 | ) | |
| Provision for income taxes | 42 | 45 | |||||
| Interest expense, net | 2,297 | 2,645 | |||||
| Depreciation and amortization | 6,258 | 9,493 | |||||
| EBITDA | $ | (22,863 | ) | $ | (49,227 | ) | |
| Share-based compensation | 2,908 | 4,829 | |||||
| Loss on extinguishment of debt | - | 4,693 | |||||
| Asset impairment charges | 3,754 | 10,214 | |||||
| Loss on offering costs - Prepaid Advance | - | 888 | |||||
| Loss on settlement of Prepaid Advance | - | 900 | |||||
| Gain on the sale of Global Public Safety | - | (1,500 | ) | ||||
| (Gain) loss due to the remeasurement of the STS Earnout and Contingent Consideration, net | (1,900 | ) | 100 | ||||
| Adjusted EBITDA | $ | (18,101 | ) | $ | (29,103 | ) | |
The Company will host its earnings conference call today at 4:30 p.m. ET to discuss its financial and operating results.
CONFERENCE CALL INFORMATION
Any person interested in participating in the call should please dial in approximately 10 minutes before the start of the call using the following information:
North America: Participant Dial-In: 877-407-8037 / +1 201-689-8037
Click here for participant International Toll-Free access numbers
Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=B6zEm1IS
REPLAY INFORMATION
A replay will be available online approximately two hours after the live call for two weeks. To access the replay, use the following numbers:
Replay Dial-In: 877-660-6853 / 201-612-7415
Access ID: 13759242
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, 2025 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:
Rekor Systems, Inc.
Joseph Nalepa
Chief Financial Officer
Phone: +1 (410) 762-0800
jnalepa@rekor.ai
Media & Investor Relations Contact:
Rekor Systems, Inc.
Charles Degliomini
ir@rekor.ai
| REKOR SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share and per share amounts) | |||||||
| December 31, 2025 | December 31, 2024 | ||||||
| ASSETS | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 16,566 | $ | 5,013 | |||
| Restricted cash | 297 | 316 | |||||
| Accounts receivable, net | 8,770 | 7,232 | |||||
| Inventory | 3,072 | 4,297 | |||||
| Note receivable, current portion | 198 | 340 | |||||
| Other current assets | 1,825 | 2,732 | |||||
| Total current assets | 30,728 | 19,930 | |||||
| Long-term assets | |||||||
| Property and equipment, net | 8,632 | 11,048 | |||||
| Right-of-use operating lease assets, net | 4,716 | 9,348 | |||||
| Right-of-use financing lease assets, net | 1,634 | 2,317 | |||||
| Goodwill | 24,313 | 24,313 | |||||
| Intangible assets, net | 13,250 | 14,450 | |||||
| Note receivable, long-term | - | 142 | |||||
| Deposits | 2,114 | 927 | |||||
| Total long-term assets | 54,659 | 62,545 | |||||
| Total assets | $ | 85,387 | $ | 82,475 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities | |||||||
| Accounts payable and accrued expenses | 4,362 | 4,330 | |||||
| Notes payable, current portion | - | 1,000 | |||||
| Series A Prime Revenue Sharing Notes, net of debt discount of | 9,869 | - | |||||
| Series A Prime Revenue Sharing Notes - related party, net of debt discount of | 4,934 | - | |||||
| Loans payable, current portion | 83 | 79 | |||||
| Lease liability operating, short-term | 2,720 | 2,310 | |||||
| Lease liability financing, short-term | 787 | 900 | |||||
| Contract liabilities | 4,604 | 3,439 | |||||
| Liability for ATD Holdback Shares | - | 1,036 | |||||
| Other current liabilities | 1,729 | 5,129 | |||||
| Total current liabilities | 29,088 | 18,223 | |||||
| Long-term liabilities | |||||||
| Series A Prime Revenue Sharing Notes, net of debt discount of | - | 9,737 | |||||
| Series A Prime Revenue Sharing Notes - related party, net of debt discount of | - | 4,868 | |||||
| Loans payable, long-term | 112 | 194 | |||||
| Lease liability operating, long-term | 10,570 | 12,371 | |||||
| Lease liability financing, long-term | 665 | 977 | |||||
| Contract liabilities, long-term | 1,402 | 1,298 | |||||
| Deferred tax liability | 93 | 79 | |||||
| Other long-term liabilities | 587 | 587 | |||||
| Total long-term liabilities | 13,429 | 30,111 | |||||
| Total liabilities | 42,517 | 48,334 | |||||
| Commitments and contingencies | |||||||
| Stockholders' equity | |||||||
| Preferred stock, | - | - | |||||
| Common stock, | 13 | 10 | |||||
| Treasury stock - at cost, 314,129 and 159,520 shares as of December 31, 2025 and 2024, respectively | (900 | ) | (711 | ) | |||
| Additional paid-in capital | 335,310 | 294,935 | |||||
| Accumulated deficit | (291,553 | ) | (260,093 | ) | |||
| Total stockholders’ equity | 42,870 | 34,141 | |||||
| Total liabilities and stockholders’ equity | $ | 85,387 | $ | 82,475 | |||
| REKOR SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except share and per share amounts) | |||||||
| Year ended December 31, | |||||||
| 2025 | 2024 | ||||||
| Revenue | $ | 48,450 | $ | 46,028 | |||
| Cost of revenue, excluding depreciation and amortization | 21,379 | 23,344 | |||||
| Operating expenses: | |||||||
| General and administrative expenses | 25,177 | 30,676 | |||||
| Selling and marketing expenses | 6,172 | 7,858 | |||||
| Research and development expenses | 14,596 | 18,766 | |||||
| Asset impairment charges | 3,754 | 10,214 | |||||
| Depreciation and amortization | 6,258 | 9,493 | |||||
| Total operating expenses | 55,957 | 77,007 | |||||
| Loss from operations | (28,886 | ) | (54,323 | ) | |||
| Other income (expense): | |||||||
| Loss on extinguishment of debt | - | (4,693 | ) | ||||
| Interest expense, net | (2,297 | ) | (2,645 | ) | |||
| (Loss) gain on remeasurement of ATD Holdback Shares | (120 | ) | 599 | ||||
| Loss on offering costs - Prepaid Advance | - | (888 | ) | ||||
| Loss on settlement of Prepaid Advance | - | (900 | ) | ||||
| Gain on the sale of Global Public Safety | - | 1,500 | |||||
| Other expense, net | (115 | ) | (15 | ) | |||
| Total other expense, net | (2,532 | ) | (7,042 | ) | |||
| Loss before income taxes | (31,418 | ) | (61,365 | ) | |||
| Provision for income taxes | 42 | 45 | |||||
| Net loss | $ | (31,460 | ) | $ | (61,410 | ) | |
| Loss per common share - basic and diluted | $ | (0.26 | ) | $ | (0.71 | ) | |
| Weighted average shares outstanding | |||||||
| Basic and diluted | 119,667,774 | 86,717,724 | |||||
