Rekor Systems (REKR) Q1 2026 earnings summary

Executive summary

• Revenue increased 12% year-over-year in Q1 2026 to $10.3 million, with growth across all product lines and a focus on AI-driven roadway intelligence solutions.

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

• 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.

• Undertook a comprehensive organizational review, including a 16% workforce reduction and operational realignment, with full financial impact expected from Q2 2026 onward.

• Launched Rekor Labs and GoSecure™, a proprietary video authentication system targeting public safety and legal markets, with commercial release set for Q3 2026.

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% (52.5% reported in some filings) from 48% (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–$12.6 million, down from $16.6–$16.9 million at year-end 2025, reflecting seasonal and restructuring outflows.

• 64% of Q1 2026 revenue was recurring, with recurring revenue up 28% year-over-year to $6.6 million.

Outlook and guidance

• Targeting EBITDA positive by year-end 2026, with expectations to reach EBITDA neutral by end of Q2 or early Q3.

• Cost reductions and operational efficiencies executed in Q1 are expected to drive significant expense drops and improved results from Q2 onward.

• Management expects continued focus on recurring revenue contracts, cost containment, and sustainable growth.

• Substantial doubt exists regarding the ability to continue as a going concern over the next twelve months without additional capital; external financing is being explored.