Q1 2026 Financial Highlights
- Revenue grew 12% year over year, driven by continued growth in the Company's data-as-a-service and roadway intelligence businesses.
- Gross margin reached 53%, up from 48% in Q1 2025.
- EBITDA loss came in at approximately
$6.5 million , an improvement from the$7.4 million loss recorded in Q1 2025. - Cash used in operating activities improved by
$4.3 million , or 54%, compared to the same period in Q1 2025. - Reduced headcount by approximately 16% or 45 positions from the end of 2025 through Q1 2026 with the majority of the financial benefit to be reflected in Q2 2026.
"Q1 went largely as we expected," said
Cash Position and Outlook
The sequential decline in cash from year-end 2025 was expected. It reflects a combination of seasonal Q1 patterns and one-time restructuring costs tied to headcount reductions completed over the past two quarters.
The costs savings and combined with the Company’s revenue growth trajectory reinforces the Company’s view that the underlying business is moving in the right direction and is positioned for continued EBITDA improvement as we move through 2026.
The Company is also evaluating options to refinance its existing Prime Revenue Sharing Notes. The refinancing is intended to reduce the Company's cost of capital, which is supported by
"The first quarter included costs we knew were coming and temporary," said
GoSecure™ originated from a question a law-enforcement customer raised in 2024: Can public-safety video footage be deepfaked? Prosecutors and defense attorneys were relying on that footage in court and needed to know whether its authenticity could be challenged.
Target markets include law enforcement agencies, insurance companies, courts, and any organization or individual requiring proof that video or photo evidence has not been altered.
Quarter Ended
This section highlights the changes for the three months ended
Revenues and Cost of Revenue, excluding Depreciation and Amortization
| Three Months Ended March 31, | |||||||||||||||
| 2026 | 2025 | Change | |||||||||||||
| (Dollars in thousands, except percentages) | $ | % | |||||||||||||
| Revenue | $ | 10,263 | $ | 9,198 | $ | 1,065 | 12 | % | |||||||
| Cost of revenue, excluding depreciation and amortization | 4,879 | 4,761 | 118 | 2 | % | ||||||||||
| Adjusted Gross Profit | $ | 5,384 | $ | 4,437 | $ | 947 | 21 | % | |||||||
| Adjusted Gross Margin | 52.5 | % | 48.2 | % | 4.3 | % | 9 | % | |||||||
We delivered quarter-over-quarter revenue growth across each of our product lines, resulting in an overall revenue increase of 12%, or approximately
Cost of revenue, excluding depreciation and amortization, increased by 2% for the three months ended
Adjusted Gross Margin also improved for the three months ended
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
| Three Months Ended March 31, | Change | ||||||||||||||
| (Dollars in thousands, except percentages) | 2026 | 2025 | $ | % | |||||||||||
| Loss from operations | $ | (8,817 | ) | $ | (10,139 | ) | $ | 1,322 | 13 | % | |||||
Loss from operations improved for the three months ended
The first quarter also included certain one-time costs associated with the Company’s operational realignment, including costs related to the wind down of certain operations and engineering activities. In addition, revenue in the first quarter was impacted by normal seasonality, which typically results in lower activity levels compared to later periods in the year.
We expect loss from operations to continue to improve as revenue benefits from seasonal trends and as the full impact of our cost reduction initiatives is realized in future periods.
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
The following table sets forth the components of the EBITDA and Adjusted EBITDA for the periods included (dollars in thousands):
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net loss | $ | (9,361 | ) | $ | (10,874 | ) | ||
| Interest, net | 493 | 590 | ||||||
| Depreciation and amortization | 1,461 | 1,556 | ||||||
| EBITDA | (7,407 | ) | (8,728 | ) | ||||
| Share-based compensation | 922 | 1,370 | ||||||
| Adjusted EBITDA | $ | (6,485 | ) | $ | (7,358 | ) | ||
The Company will host its earnings conference call today at
Conference Call Information
North America Dial-In: 877-407-8037 / +1 201-689-8037
Webcast: Click here to access the live webcast
Replay Information
Replay Dial-In: 877-660-6853 / 201-612-7415
Access ID: 13760466
Replay Duration: Two weeks
About
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
Company Contact
Phone: +1 (410) 762-0800
jnalepa@rekor.ai
ir@rekor.ai
CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share and per share amounts) | ||||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 12,175 | $ | 16,566 | ||||
| Restricted cash | 424 | 297 | ||||||
| Accounts receivable, net of allowance for credit losses of | 7,675 | 8,770 | ||||||
| Inventory | 2,939 | 3,072 | ||||||
| Note receivable, current portion | 85 | 198 | ||||||
| Other current assets | 2,431 | 1,825 | ||||||
| Total current assets | 25,729 | 30,728 | ||||||
| Long-term assets | ||||||||
| Property and equipment, net | 8,157 | 8,632 | ||||||
| Right-of-use operating lease assets, net | 4,400 | 4,716 | ||||||
| Right-of-use financing lease assets, net | 1,313 | 1,634 | ||||||
| 24,313 | 24,313 | |||||||
| Intangible assets, net | 12,950 | 13,250 | ||||||
| Note receivable, long-term | – | – | ||||||
| Deposits | 1,639 | 2,114 | ||||||
| Total long-term assets | 52,772 | 54,659 | ||||||
| Total assets | $ | 78,501 | $ | 85,387 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | 5,869 | 4,362 | ||||||
| Series A Prime Revenue Sharing Notes, net of debt discount of | 9,901 | 9,869 | ||||||
| Series A Prime Revenue Sharing Notes – related party, net of debt discount of | 4,951 | 4,934 | ||||||
| Loans payable, current portion | 79 | 83 | ||||||
| Lease liability operating, short-term | 1,155 | 2,720 | ||||||
| Lease liability financing, short-term | 650 | 787 | ||||||
| Contract liabilities | 4,500 | 4,604 | ||||||
| Liability for ATD Holdback Shares, at fair value | – | – | ||||||
| Other current liabilities | 2,351 | 1,729 | ||||||
| Total current liabilities | 29,456 | 29,088 | ||||||
| Long-term Liabilities | ||||||||
| Series A Prime Revenue Sharing Notes, net of debt discount of | – | – | ||||||
| Series A Prime Revenue Sharing Notes – related party, net of debt discount of | – | – | ||||||
| Loan payable, long-term | 89 | 112 | ||||||
| Lease liability operating, long-term | 12,058 | 10,570 | ||||||
| Lease liability financing, long-term | 537 | 665 | ||||||
| Contract liabilities, long-term | 1,213 | 1,402 | ||||||
| Deferred tax liability | 93 | 93 | ||||||
| Other non-current liabilities | 587 | 587 | ||||||
| Total long-term liabilities | 14,577 | 13,429 | ||||||
| Total liabilities | 44,033 | 42,517 | ||||||
| Commitments and contingencies (Note 7) | ||||||||
| Stockholders' equity | ||||||||
| Preferred stock, | – | – | ||||||
| Common stock, | 13 | 13 | ||||||
| (902 | ) | (900 | ) | |||||
| Additional paid-in capital | 336,271 | 335,310 | ||||||
| Accumulated deficit | (300,914 | ) | (291,553 | ) | ||||
| Total stockholders’ equity | 34,468 | 42,870 | ||||||
| Total liabilities and stockholders’ equity | $ | 78,501 | $ | 85,387 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except share and per share amounts) (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | 10,263 | $ | 9,198 | ||||
| Cost of revenue, excluding depreciation and amortization | 4,879 | 4,761 | ||||||
| Operating expenses: | ||||||||
| General and administrative expenses | 8,339 | 7,286 | ||||||
| Selling and marketing expenses | 915 | 1,757 | ||||||
| Research and development expenses | 3,486 | 3,977 | ||||||
| Depreciation and amortization | 1,461 | 1,556 | ||||||
| Total operating expenses | 14,201 | 14,576 | ||||||
| Loss from operations | (8,817 | ) | (10,139 | ) | ||||
| Other expense: | ||||||||
| Interest expense, net | (493 | ) | (590 | ) | ||||
| Other expense | (51 | ) | (145 | ) | ||||
| Total other expense, net | (544 | ) | (735 | ) | ||||
| Net loss | $ | (9,361 | ) | $ | (10,874 | ) | ||
| Loss per common share | $ | (0.07 | ) | $ | (0.10 | ) | ||
| Weighted average shares outstanding | ||||||||
| Basic and diluted | 136,649,149 | 106,815,912 | ||||||
