Rekor Systems (REKR) Q1 2026 earnings summary

Executive summary

• Revenue for Q1 2026 increased 12% year-over-year to $10.3 million, with growth across all product lines and a focus on AI-driven roadway intelligence solutions for public safety, urban mobility, and transportation management.

• Gross margin expanded to 53% from 48% in Q1 2025, reflecting improved product mix and higher-margin software and recurring revenue.

• EBITDA loss improved to $6.5 million from $7.4 million in Q1 2025, with net loss narrowing to $9.36 million from $10.87 million.

• Operating expenses were reduced, including a 16% headcount reduction and office closures, with further benefits expected in Q2 2026.

• Established Rekor Labs and developed GoSecure, a proprietary video authentication system targeting law enforcement and legal markets, set for Q3 2026 launch.

Financial highlights

• Q1 2026 revenue was $10.3 million, up from $9.2 million in Q1 2025, with Scout, Discover, and Command contributing $281,000, $682,000, and $102,000 in growth, respectively.

• Adjusted gross margin improved to 53% (or 52.5%) from 48% (or 48.2%) in Q1 2025.

• EBITDA loss narrowed to $6.5 million, and net loss per share improved to $(0.07) from $(0.10) year-over-year.

• Cash and equivalents at quarter-end were $12.2 million, down from $16.6 million at year-end 2025, reflecting expected seasonal and restructuring outflows.

• Recurring revenue grew 28% year-over-year to $6.6 million, representing 64% of total Q1 2026 revenue.

Outlook and guidance

• Cost savings from headcount reductions and operational realignment are expected to be more fully realized in Q2 2026, with a sharp drop in operating expenses anticipated.

• Targeting EBITDA positive by year-end 2026 and near EBITDA neutral by end of Q2 or early Q3.

• Management expects continued focus on recurring revenue contracts, cost containment, and disciplined execution.

• Substantial doubt exists regarding the ability to continue as a going concern over the next twelve months without additional capital.

• The company is actively exploring external financing and may reduce or defer expenses if needed.