Rekor Systems reported record third‑quarter 2025 results, with revenue climbing to $14.2 million— a 35 % year‑over‑year increase and 15 % sequential growth—surpassing the consensus estimate of $12.85 million. The jump was driven by a higher mix of software and data‑as‑a‑service (DaaS) contracts, including a new statewide Georgia Department of Transportation agreement that will generate at least $50 million over eight years.
The company’s earnings per share of $‑0.03 beat the analyst expectation of $‑0.05, a $0.02 improvement that reflects disciplined cost management and the leverage of higher‑margin software sales. Adjusted gross margin expanded to 63 % from 44 % in the same quarter of 2024, underscoring the shift toward more profitable offerings and the operational efficiency of the DaaS model.
Operating loss narrowed to an adjusted EBITDA loss of $1.5 million, an 84 % improvement over the $7.5 million loss reported in Q3 2024. The reduction is largely attributable to payroll and related expense cuts, as well as the higher margin mix that offsets the company’s ongoing investment in product development and market expansion.
Management highlighted the progress toward its 2025 goal of breakeven adjusted EBITDA and positive cash flow. CFO Eyal Hen noted that “expanding adoption of our DaaS model, as well as software solutions, is driving operating leverage and improving economics.” The company also announced that John Nalepa will succeed Hen as CFO, signaling continuity in financial stewardship while the firm scales its technology platform.
Rekor’s record quarter demonstrates the company’s ability to grow revenue while tightening margins, positioning it closer to profitability. The results also validate the strategic focus on software and DaaS, which are expected to drive future growth and margin expansion as the company secures additional state and federal contracts.
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