Rekor Systems reports 108% revenue increase in first quarter 2023
Global artificial intelligence company Rekor Systems Inc (NASDAQ: REKR) has announced increases across the board for the three month period to end March.
The company posted a 108% increase in gross revenues to $6.2 million, reflecting a $3.2 million jump over the March 2022 quarter.
Recurring revenue for the period — generated from software as a service, eCommerce, data aggregation and customer support areas of the business — also increased by $2.5 million (or 148%) to $4.2 million, compared to $1.69 million for the same time last year.
Adjusted gross profit increased to $3.3 million (including an adjusted gross margin of 54%) compared to $1.4 million (48% adjusted gross margin) for the previous corresponding period.
The increase was attributed to a higher mix of software revenue.
Operating expenses
Operating expenses jumped to $16 million for the quarter, compared to $14.1 million for the three months to March 2022.
While a certain amount of this increase was expected as Rekor grows its size and overall revenue base, the company attributed most of it to depreciation and amortisation costs as a result of additional technology, targeted research and development efforts.
During the three months to end March, Rekor won contracts to the value of $12.08 million, compared to $1.5 million for the previous corresponding period and representing $10.55 million (or 692% growth) quarter-on-quarter growth.
Performance obligations
At end March, Rekor had approximately $24.3 million in remaining performance obligations not yet satisfied or partially satisfied.
The figure represents an increase of approximately 14% on the $21.4 million in remaining performance obligations recorded at the end of the December quarter.
Rekor said it expects to recognise approximately 67% of this amount as revenue over the coming year, with the remainder recognised within four years.
Substantial progress
Chief financial officer Eyal Hen said the company had made substantial progress during the first three months of the year.
“This trend is a tangible result of our ongoing efforts to optimise business operations… the full impact of additional reduction measures which were implemented this quarter will be realised in the next quarter and beyond and will reinforce our commitment to achieving sustainable financial performance,” he said.
“Successfully implementing strategic cost reductions is part of prudent financial management and has helped us adapt to challenging market conditions while sustaining remarkable growth and accelerating our path to future profitability.”
He said a recent capital raising would help pursue new opportunities.
“We are pleased to have raised additional funds during the first quarter in light of the extraordinary opportunities we will be chasing this year,” he said.
“These funds will be vital in sustaining our most important strategic initiatives and preserving the momentum of our first mover advantage in key areas.”
Intelligent infrastructure
Rekor is a global authority on artificial intelligence, machine learning and holistic data which support the intelligent infrastructure that is essential for smart mobility.
With its disruptive technology, the company delivers integrated solutions, actionable insights and predictions which increase roadway safety.
Chairman Robert A Berman said the next decade would see an “overwhelming need” for thousands of permanent and portable data collection systems worldwide.
“These systems won’t just be shiny new, more efficient versions of the tens of thousands of outdated legacy systems they replace, but systems which overcome serious limitations that users have struggled with for years,” he said.
“In many cases, these systems have been left to languish [and] significant voids in essential data gathering have gone unaddressed because of safety and congestion concerns that have made their value even more marginal.”
He said Rekor was well-positioned to meet the demand by offering accurate count, class and speed capabilities which can be implemented without safety and operational drawbacks.
“By deploying our cutting-edge artificial intelligence solution, we provide unparalleled accuracy in data collection and become the crucial Internet of Things nodes that form the backbone of a robust roadway operating system,” he said.