Company commences implementation of Rekor Discover™ in Florida after receiving FDOT-approved product list certification
Highlights
- Q3 2024 gross revenue increased 16% to $10.5 million compared to $9.1 million in Q3 2023
- Q3 recurring revenue increased 14% to $5.5 million compared to $4.8 million
- Rekor Discover™ now on the Florida DOT Approved Product List, and deployments commenced
- Our CEO, David Desharnais, was inducted into the ITS America Board
Rekor Discover™ was recently added to the Florida DOT's Approved Product List and is now beginning implementation across all Florida DOT districts simultaneously. In October, we amended the Pre-Paid advance Agreement with an affiliate of Yorkville Global Advisors, LP and eliminated the option for additional advances to the Company of $20 million. Below are some highlights of the Company's other achievements during the quarter:
- Rekor Highlighted by Texas DOT: The Texas Department of Transportation presented the Rekor Command™ solution to the Texas House Legislature as a model for the future of roadway management. Rekor's deployment and its successful outcomes were also showcased in a recent video featuring testimonials from the department's senior leaders.
- New York Moves to Procurement: The New York State Department of Transportation has advanced Rekor Discover™ from the proof-of-concept stage to the procurement phase. This initial implementation establishes a foundation for Rekor to collaborate with various engineering and construction firms, inviting bids for numerous data collection sites across the state.
- New Mexico Selects Rekor for AI Count Class and Speed: In New Mexico, Rekor Discover™ has been selected to replace the side-firing radars on major roadwork along I-25. This decision highlights Rekor's ability to enhance roadside intelligence and monitor critical infrastructure as part of New Mexico's $200 million improvement initiative.
- Partnership with Goldwings Establishes Hawaiian Presence: Rekor Discover™ is now available to the communities in Hawaii with high demand for roadway intelligence through a new partnership with Goldwings.
- Nvidia Case Study: NVIDIA recently published a case study highlighting Rekor's integration of its comprehensive accelerated computing platform for roadway intelligence. By leveraging NVIDIA's AI technologies, Rekor is advancing new generative AI applications, including enhanced internal data annotation, streamlined workflows, and more effective calibration and configuration of systems.
Our President and CEO, David Desharnais, was recently appointed to the Board of ITS America. "I am truly honored to be inducted into the ITS America Board of Directors and to join forces with visionary leaders from both the public and private sectors to shape the future of transportation,” said Mr. Desharnais. "ITS America is leading the way in transforming the movement of people and goods, championing innovation, and advancing intelligent transportation systems to build safer, more resilient, and connected communities. I look forward to contributing to this bold mission and helping to accelerate the adoption of groundbreaking solutions that will shape the future of our transportation infrastructure."
Three and Nine Months Ended September 30, 2024 Financial Results
This section highlights the changes for the three and nine months ended September 30, 2024, compared to the three and nine months ended September 30, 2023.
Revenues
| Three Months Ended
September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||
| (Dollars in thousands) | 2024 | 2023 | $ | % | 2024 | 2023 | $ | % | |||||||||||||||
| Revenue | $ | 10,546 | $ | 9,119 | $ | 1,427 | 16 | % | $ | 32,751 | $ | 23,867 | $ | 8,884 | 37 | % | |||||||
Cost of Revenue, excluding Depreciation and Amortization
| Three Months Ended
September 30, | Change | Nine Months Ended
September 30, | Change | ||||||||||||||||||||
| (Dollars in thousands) | 2024 | 2023 | $ | % | 2024 | 2023 | $ | % | |||||||||||||||
| Cost of revenue, excluding depreciation and amortization | $ | 5,903 | $ | 4,320 | $ | 1,583 | 37 | % | $ | 16,964 | $ | 11,319 | $ | 5,645 | 50 | % | |||||||
Loss from Operations
| Three Months Ended
September 30, | Change | Nine Months Ended September 30, | Change | ||||||||||||||||||||
| (Dollars in thousands) | 2024 | 2023 | $ | % | 2024 | 2023 | $ | % | |||||||||||||||
| Loss from operations | $ | (12,854) | $ | (9,803) | $ | (3,051) | 31 | % | $ | (35,845) | $ | (32,770) | $ | (3,075) | 9 | % | |||||||
Additional Key Performance Indicators and Non-GAAP Measures
Performance Obligations
As of September 30, 2024, the Company had approximately $23,613,000 in remaining performance obligations not yet satisfied or partially satisfied. This is a decrease of approximately 11%, down from $26,390,000 of remaining performance obligations as of December 31, 2023. Total performance obligations have decreased over time as the contract term of certain of the Company's large long-term contracts begin to near.
Adjusted Gross Profit and Adjusted Gross Margin
| Three Months Ended
September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (Dollars in thousands, except percentages) | (Dollars in thousands, except percentages) | ||||||||||||||
| Revenue | $ | 10,546 | $ | 9,119 | $ | 32,751 | $ | 23,867 | |||||||
| Cost of revenue, excluding depreciation and amortization | 5,903 | 4,320 | 16,964 | 11,319 | |||||||||||
| Adjusted Gross Profit | $ | 4,643 | $ | 4,799 | $ | 15,787 | $ | 12,548 | |||||||
| Adjusted Gross Margin | 44.0 | % | 52.6 | % | 48.2 | % | 52.6 | % | |||||||
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 U.S. ("U.S. GAAP") and should not be considered as an alternative to net earnings or cash flow from operating activities as indicators of our operating performance or as a measure of liquidity or any other measures of performance derived in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA are presented because we believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of a company's ability to service and/or incur debt. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.
The following table sets forth the components of the EBITDA and Adjusted EBITDA for the periods included (dollars in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net loss | $ | (12,646 | ) | $ | (10,566 | ) | $ | (41,055 | ) | $ | (34,361 | ) | |||
| Interest | 496 | 906 | 2,094 | 2,576 | |||||||||||
| Depreciation and amortization | 2,399 | 1,963 | 7,075 | 5,925 | |||||||||||
| EBITDA | $ | (9,751 | ) | $ | (7,697 | ) | $ | (31,886 | ) | $ | (25,860 | ) | |||
| Share-based compensation | $ | 1,148 | $ | 1,081 | $ | 3,430 | $ | 3,237 | |||||||
| Loss (gain) on extinguishment of debt | - | - | 4,693 | (527 | ) | ||||||||||
| Loss on offering costs - Prepaid Advance | 888 | - | 888 | - | |||||||||||
| Gain on the sale of Global Public Safety | (1,500 | ) | - | (1,500 | ) | - | |||||||||
| Adjusted EBITDA | $ | (9,215 | ) | $ | (6,616 | ) | $ | (24,375 | ) | $ | (23,150 | ()[\]\\.,;:\s@\"]+)*)|(\".+\"))@((\[[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\])|(([a-zA-Z\-0-9]+\.)+[a-zA-Z]{2,}))$/;return b.test(a)}$(document).ready(function(){if(performance.navigation.type==2){location.reload(true)}$("iframe[data-lazy-src]").each(function(b){$(this).attr("src",$(this).attr("data-lazy-src"))});if($(".owl-article-body-images").length){$(".owl-article-body-images").owlCarousel({items:1,loop:true,center:false,dots:false,autoPlay:true,mouseDrag:false,touchDrag:false,pullDrag:false,nav:true})}var a=$("#display_full_text").val();if(a==0){$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:$("#cms_article_id").val()},dataType:"json",success:function(b){},error:function(b,d,c){}})}$(".read-full-article").on("click",function(d){d.preventDefault();var b=$(this).attr("data-cmsArticleId");var c=$(this).attr("data-productId");var f=$(this).attr("data-href");dataLayer.push({event:"paywall_click",paywall_name:"the_manila_times_premium",paywall_id:"paywall_article_"+b});$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:b,productId:c},dataType:"json",success:function(e){window.location.href=$("#BASE_URL").val()+f},error:function(e,h,g){}})});$(".article-embedded-newsletter-form .close-btn").on("click",function(){$(".article-embedded-newsletter-form").fadeOut(1000)})});$(document).on("click",".article-embedded-newsletter-form .newsletter-button",function(){var b=$(".article-embedded-newsletter-form .newsletter_email").val();var d=$("#ga_user_id").val();var c=$("#ga_user_yob").val();var a=$("#ga_user_gender").val();var e=$("#ga_user_country").val();if(validateEmail(b)){$.ajax({url:"/ajax/sendynewsletter",type:"POST",data:{email:b},success:function(f){$(".article-embedded-newsletter-form .nf-message").html(f);$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000);dataLayer.push({event:"newsletter_sub",user_id:d,product_name:"newsletter",gender:a,yob:c,country:e})},error:function(f,h,g){}})}else{$(".article-embedded-newsletter-form .nf-message").html("Please enter a valid email address.");$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000)}});$(document).on("click",".article-embedded-newsletter-form .nf-message",function(){$(this).removeClass("show");$(this).html("")});
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