Rekor Systems (REKR) 11 May 212021 Q1 Earnings call transcript

Good afternoon ladies and gentlemen, and welcome to today's Rekor Systems, Inc. Conference Call. My name is Darrel and I’ll be your coordinator for today. At this time all participant lines are in a listen-only mode. The question-and-answer session will follow the formal presentation. Instructions]. [Operator

this being reminder, purposes. for call conference a recorded is replay As

can you are prediction in cause or the construed involve We of to we to revenues, materially full refer conditions, statements statement. and that future safe remind like started, or statements. a results statements statements. I'd other actual any may by other that product expressed implied statements you to release. differ known Before events risks, which position, I'd forward-looking products disclaimers abbreviated and of or read operations, get markets, to uncertainties concerning from in conference this call unknown those the as financial you company's like earnings ask releases, be that such future Such performance and made economic factors, results may harbor our partnerships

supplementary the and Non-GAAP contained also company should description factors the call. presentation Eyal in also provides believes SEC. the Rekor I to data would the like the to operations and company's risk useful with The of the is annual of of purposes provided our now results information non-GAAP discussed turn over filings on presentation the a review only. Hen, ongoing CFO for Mr. informational be You concerning Systems. will quarterly

you first an us today. business joining provide Rekor’s the key and Today for well for March quarter ended Thank topics. thank you, XX, everyone on Good Darrel. discuss results XXXX update afternoon as we’ll as

finished be as will Robert call metrics. President with CEO our soon with giving who relevant further the today you is update the Berman, On me as I and

XXXX was last increase ended the growth first million quarter period compared XXXX compared period of the $X.X of XXXX. first year, achieved for of $X.X the a significant in same XXX%. March revenue Our for Revenue to to million company quarter same the XX, robust

from $XX.X XX, million million $XX.X XX, XXXX. of as increased capital working December as Our of XXXX March to

SaaS a quarter The offerings million we in expansion significant revenues the in our the of started as during as raised in XXXX. offering. public services of in quarter profits we recognized product an period, cash In first this During increase e-commerce beginning as Uninsured $XX.X Diversion UVED platform we of well initiated and our to increase first initiatives XXXX of revenue at Program $XXX,XXX our in with the marketing net to of revenue Vehicle attributable Enforcement this quarter. or the XXXX,

sales increase and had also We in partner related our direct program. to revenue

as same additional initiated last recruiting our manpower and to attributable This M&A to marketing to as activities growth, $XXX,XXX $XXX,XXX three Our in sales first eCommerce efforts. represent first the grew XXXX approximately month margin XX, margin quarter sales Gross lower months we ended XXXX. the period from growth for sales over time. to lower of attributable had expenses of operating the during XXXX $X.X three hardware basis. $X.X which first million which Total was March a to March of recognize which three the compared really of sales on period professional and services rise XX, related revenue quarter, XX% is year. compared period the XXX% in included quarter-over-quarter well in same XXXX, subscription support The in months the is to ended higher of to XXXX The month increases in XXXX million XX% was for a margin. our of the level the hardware for software,

in increase service. The that of was in million sectors $X.X loss for the before. our of also increases a last as to a the million to improve the loss $X compared year. explained keep ahead R&D Adjusted line We of due opportunities and in operating our develop loss and the to see expenses was curve continue R&D we new we products expenses increase technologies in same of us to as quarter EBITDA period

cash $XX.X and was capital XX, working was term million Our balance $XX.X million. investments XXXX our on and March short

before, of continue raised XXXX in offering capitalization potential during significantly we market which quarter cash and we mentioned M&A summary, first completed As public our activities In we increased the opportunities. financial see or net million plan a our boosted and where proceeds, $XX.X to flexibility. with

excited opportunities are customer of across that sales ahead Our and growing base many lie channels us. is all about we the

Now, over to I Robert. turn the call like would to Robert.

to is leader to we shareholder think I when us to think to have want you in bright efforts country's highlights, our potential responding future today's they efforts rebuilt including let capable can partners but we its continue know business who give moving you help reach explore can those infrastructure going brief Thank as that We of an is each Rekor and a creating accretive value. you, with to out can productive, we opportunities to away, see a to our them. in respond technologies stands call on are our as aggressive make we of demands If work to growth. before If update demand. the future In Eyal. that the welcome. own. we expect efforts mutually key be we'll and going M&A don't and continue some continue remarkable they see counterparties interested to and forward I'm today. meet than some organic it right other, review more believe see afternoon on to where a most developments of Good everyone overview we’ll set we I'm

I Rekor passed XXXX, for on important said it what last first It quarter call. what is what we is like I in the have not. to would and to you know As the reiterate is

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So, our let's software. the with first fundamentals; start

edge Our can engine direction signature, It erratic for plate It process a accurately. data on in insights. the simply AI and make, more real-time travel. body of more information captures number, also additional traffic type, detect core color behavior provides and state, model, complete vehicle

that better simply So results more decisions. better intelligence provides in data

hardware. our Next,

in systems remotely. Our real lower source hybrid Recently weather complete with operate scalability and finalized cloud Rekor allows all provide alerting, that processing which a edge alongside enable processing we ruggedized is on-device bandwidth time through that with advance awareness Rekor capturing the roadway provides by processing be Rekor to sensors development algorithm conditions Box, on the faster, almost versus costs. unique to at edge. the system deployed is any climates. and Box

unprecedented the technicians keep pulse Next, user Rekor to of of remote finger on monitoring experience. It's system easy service a devices. interconnected Vision large and intuitive, and their use provides enables to number tools.

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revenue comprehensive embedded learning quarter states our multitude all of have platform future, data to helps time. and One One smart platform we expanded and is various information potential bridges modern evolves security. approach This areas. addressing cities, forming safety infrastructure, as takes It a all and with of over promote enables And concept One and in sustainability, customers source Rekor cities city capability needs intelligence these to improve introduce started supports that providing actionable Rekor the Rekor the counties Rekor roadway platform an single for and initiatives the government the of continuously meaning to multi-dimensional improves furthermore, date to One city metropolitan of that components more. a a sectors. the increase generation

launched some First can the We all the in customers. ready quarter to briefly sector the highlights. potential for Rekor to platform quarter commercial ‘XX I review public One show and was a is of this and year start and great

Park ideal and partner well expanded Rekor significant for department launched parks we enable about the later. selected One inquiries. Vision in plan will the finalized a Dakota's saw for We help Rekor portal Box State One know you using it channel Rekor I'll with as usage future also and now also Rekor tell recreation first opportunity has you this and Partners use Vehicle leadership relevant e-commerce understand tracking which Oklahoma is a as partner Diversion an statewide growth visitor been and support Uninsured the connect and our our platform Enforcement Rekor needs. little to Program training collateral We as resources, development case and patterns platform for of and our and Dashboard. revenue and North program One more

ALPR financial tangible North to Rekor collected actionable just not Dakota that in information just statewide are demonstrating data results chose a Oklahoma to So and license is receive way read plates, not our Rekor an points. but company. from

a note the service entire the want with to needs As ward, who about UVED. was just their could I add bidder accountability. the of Rekor source a single Oklahoma only said program in

As that working you know, we've produce in other been would hard to bills see programs authorize many similar of states. that

experience easy up not, process, more headwinds. and than tell time never can I you significant of often brought years it's political has bills are first that Form with the

happening officials program program larger administrative disappointments don’t use State We on Florida did in let department conduct We study to Tennessee understand In more legislation The language. complications not own and study a This they did know the on shift. political in. any Rule. will their In did through integrate no the meeting sum, legislative gathers Expressed session modernization level program and there the We're ability in are a not Safety back done down move for there. [inaudible] in result of session process this the the session things matter that is In This UVED. what out a the the still with through the Home seen the CFO. are to offered of that of that state that summer of and want legislative how bring department decided opportunities a both. flush wasn't budget advance now unit solid legislature weeks preferred the a session, why. sands new the to interested here's what concerns technology is North the In modernization about Highway to program. discuss to we’ve isolation high stand talk us to Park in be the States pilot it and are the the help few have before we and additional that Rekor cities director While determine path Florida system Dakota. department and have a and middle in some Texas will legislation are can bill excited amended on the total with technology as we our from and we Department up of strategy to with One

change full innovations in many One the many XXXX challenges and a of recently systems commerce to with park Here we’ll we’ve escalating unlock our patented demands climate they use and provide can is to address With To and new are access possibilities provide. international that the world chance as monitoring. channel a our customers address usage the pressing around your but the intelligence and the platform hazardous that have assist prepared fleet the this reading use. needs rapidly and One permit to seeing license just unlock further and signature launch unique, and click. management, of fire using to that from array the can the Identification of improvement enabled heart traffic our ultimately in first plate responsible credit see Rekor quarter We issuance forest waste as potential Rekor the of advanced includes of the network we of sales customers' perimeter Vehicle quick The of solar-power even card with communications enforcement access stations, with a already results. roadway to and Solutions broad for and vehicle

that advanced technology organization on par technology breaking believe industry, technology. most roadway in ground with we’ve aspect develop our of be well So the working been management sales most advanced We as the every tools. our should as to the

this point back turn I'd our to coordinator questions. like to As call the for

Thank you.

We session. question-and-answer Instructions]. conducting be will now [Operator a

first comes with Schmidt Our question Jaeson questions. proceed Please line from Lake with the Street. of

for has goal happened on this Robert, differ the on Hey in But is curious if you another a guys, all what the builds taking color state state. recently, my I just still given year table. thanks the appreciate each think of getting questions.

definite over said and a I would a in many that know is times Rekor that you make a us do. could add still XXXX, I that that if state happy possibility. very

budget ongoing some legislatures these don’t recessions of You gather They because issues. out. have know just

whole they of different how you of and mean a in to and the party different a that what on about committee that this a have can legislators things I hearing it's XX you over the of lived to little went involved no bit have become for gaming that one have get till agencies would tell live those Texas, administer other know a but that sometimes states, there's too in industry it’s they and just other bills on bunch through know You of and parties, the it's you going saw us; and hearing way amazing never much actually over, for moved I've no have said the in state evening. minutes you because and you few things know not of bunch whole wanted role. to you more I do. It’s state They was sanctions had before committee. that that hours, a about of front vocal these watched us, I in mean, forward

got have they’ve and know you So all them to lot think of not details. the about a all

the know sausage, you it know there's refer a for people as reason it. to it's process making legislative and and you So

I going states these to of So doing just supportive everybody and look, still I we it's what one, a you takes state forward what year, and forward we’ll to twist, move maybe year than have from mean, enthusiastic but shareholders a trying is this and far believe bunch and way even know is and figure out legislators whole over. are so there with a the the it more doing, the see. we'll moves but and are turn sometimes the it get

sense instead level that's based would in make talking on comments cites, And maybe state these Texas, if guys thinking helpful. negotiating the of with if Okay, about just you or on I’m that then states. at your are curious some

the then a Home continue at in over you Home to they, to Well, host we're because up the it, mindset whole can down it's it's approached But opened hadn’t motor Texas and this the vehicle first us such fees new can pull if passed by and respect road, of there. about which our the for with of We things that going trying ordinance and with route, whole and larger cities thought Rule, where we to a the they and we is to one imagine recently state an this city they it's problem they know like do going Frankly, did were law thought Rule. a a of approach has enforcement we cities that. you hadn't through impound they have you Rule it. cities the and about do, year were other pay impound on identified uninsured can Home more

identified So there's We them. our plenty of Home it. at thought Groups We've about number where they the Government and work able Affairs never that. just have they of that, be type to a is do hard cities Rule, where of right can

So it’s this came plays political contactless which it. that's us about. and law Look, at also can't money just right. say to know narrative, into how something enough imagine in coming. things would I that's that that plenty that I cities I all and country, we And enforcement, it happen something these we to of need looking the are think

XX registration, we're because vehicle – that without same happened our have tag thinking we and the XXst Home We know it and coming camera can in doing to about these so. horrific the there's the just no everybody And a uninsured solutions inspection reason at but or century to patrol going be less vehicles, same or expired the that all by stops system Rule, time you politics, that highway vehicle things, have explore stuff. over an pulling traffic you But And as real things the off capable right. better this for a to well, lapsed the be. have officer could all way, are is the motor see of the an police or politics no would there's that doing

at. looking it’s So something certainly we're

for here rest one QX. in of How mean last queue. is should obviously and I me about that the year? we back a OpEx into the sequentially think just ramping then and jump up Okay, I'll

so and know revenue know know in forth Rekor to the know margin when be the breakeven thought with to that you we able and towards $XX and know you One get where frankly be the saying the said from – but know that, processing you of the the to close I think it cost getting quarter you this overhead side, to of It's into hardware always things because market platform, discussions you Mostly you you standpoint all million we backend filters, more mix without of edge ecosystem you know from you software about this going the the here to the scale future of of you than thinking know we platform. the maybe did. department right. where to guys the you to had data to most able more this roughly the went the I scale pretty build think in thing be. be we're a you as just of Rekor get I of think size is quickly as that's a and we're we develop look, from R&D, keep SaaS previous know algorithms. stuff that operating a certain know as organization, know the the you a the – at It's to to cost And we I we've know distribution, going engineering to more consistent is know shifts level build have less move to our devices, system privacy processing that towards

Okay, lot thanks guys. a

thank you. Yes,

you. Thank

Please Our B. next the comes with your Riley. of Zach question questions. Cummins from line with proceed

an you my afternoon. Robert, for Yeah, Oklahoma program. on Thanks us UVED taking hi! can update Good give the questions.

$XXX,XXX during just said in you think revenue I under QX.

maybe terms just could of if the early seeing more granularity versus I with mix a insurance on interaction traction you're wondering little us what you So enrollments give early the – of side. in was

the the respond diversion it have are second then, little notice certainly time second the when in every this that quarter maybe out all People they because people so What's a revenues know is, program interesting fully noticed from going that were to of the program people they you been been cycles we're know getting the but number Yeah, that rate is when different the have getting The XX a it, that tied are and certain days. database notice are in in higher a last in real beta of the get so… we as is we've people expect insurance are goes reason short growing period conversions. responding you not a that But are few know learning. it. good time part We've a respond and hasn't to that and and there's than industry, with increasing. the insurance operational be quarter They that learning, QX, earlier, we’d quite I it but was and news us. is insured as day. through for There you were are in we're quarter getting you in because testing ways conversion high out think wouldn’t of notice a of in we're

we that go, I was when the was the it was completely database, been the perspective hotlist, premium state's we which other and to as diversion states that remember, they from the were primary inaccurate. that quotes real path time in we from have people issue But partners. and against get to changing were things the way compared program industry The state's to tell database you for easier our the insurance the can the and compliant database insurance way people paying get through make know by the platform. providing goal freeway finance You

database So number, a – accurate much but was and down. lower know you the but insurance was it's coming frankly more

very is the very it. with program means job the happy state's it So it, really with the a doing and good happy state that is

because up with clear small into prior you as prior different to well we for it's so way, fulfilling they had a it's vendor, know it a step and out really a a the and website, other to program's so had to confusion had mess So there for were going month you website that so confusion there, look, that that up they a well. some and know state think Oklahoma, different running clean there a it's some no doing program or but there's and mission a try there's I are was question there so its been

development I major partners some has start that a and your seems talk in you ramping your versus you good of what of holding with year. to side understood, can business job this about XXXX. done the some It up like of did

Yes.

of So – middle and – in we XXXX of QX were It's up a variation part it’s e-commerce, picked know doing had of doing tolling only variation you of although latter in now. we Canada, processing an the processing product, pilot do card and primarily the that a check operators use major the not EXXX for up image their country. on the product it. right of roadway We Colorado or e-commerce a largest we we for all one a just in in

but high price, volume, ramping. very very it's it's low and it's automated but it's So

I processing now – think right we are they there? are what

over rates hour per processing We’re X,XXX right now.

Yeah, that's think X and – week. XX hours days that's a I

XX/X.

added and one this customer has Right that's customer. only

happens customer add the their additional second what we're the they of process when in onboarding customers. So and

source of and of the know image of processor. and changes in something we gave the us key use primary know they process our customers believe you up we're more onboarding a – to we have and that in have unless they intend You it to dataset the to we system

they've and major the –in and they’ve would areas and you that the customers their you the four metropolitan large part U.S. got of middle. the know country include corners all know know You got all the major, across

well, kind you focused, So but end. things, act. nice a we’re a thing, that's good some it's disappear again is out business business bit the interest going the rolling because progressed company's is is Folks we meetings. platform it's going that's where we believe and do Look, big demoing grey. and value know not not it's a people but this an really all to other probably to our as it's that platform now, means think I be don’t see for be revenue hard shareholder and we're to in little that that of that because we're is tolling Rekor business of to a a its as One One it's going data which to other a know operators Because understand model at Rekor where you it’s

who on at business know platform think built think the that other data are and the nice I to of folks grow, we But collect you all that the those for this it'll the are this know see call of so to understand going meeting, points I to think to we're focus is. that from regard of things the vehicles know platform it we to you tolling will we do the that every do, the is continue see and be things you'll that's you business know and counting everyone value understand where just you So where headed a we with you it, to to like tonnage when amount roadways, intelligent different weight the and greenhouse know to to you gases the data scores smart electric and different sustainability and day.

us me. seems Castle. final White a kind pilots sort rollout, national can just question And with any Understood! for like you MasterCard? larger with I closer of update with of mean It to they're provide but moving a

into have say, MasterCard, the folks Orlando some We we their Castle always penetrate invest another to find there a solution there's companies out dealing everything does did does, can't Yes, folks, roll that this you company, seen a and articles in out time, them. so sure lot would this of with White and the just so at money it’s thing They I right. into it as market their product. look, and of solution but out fairly effort, push we effort see. not now could there gigantic it soon, a MasterCard, it, that I don't that resources large make they that on look, But don't think are we'll that is and have sincere the unimaginable the so out solution of update know. turn again put the know the with middle were and MasterCard remember, doing them again, did in they and we I would mean an expect to nothing. that But

dealing live and they quickly, is start folks see. they're again, with they forward, they we and know none you do these we’ll die move food by know you hope will the and forward. Rekor us so what that move scale when not franchises to we to going But MasterCard So but with of right, move fast benefit or big that

thanks appreciate for taking the questions. time. my understood. I Well, I

Yeah, you. yeah, thank

you. question with proceed of Thank Please Mike Northland your from Our line [Operator next questions. Instructions] the comes with Capital. Latimore

Hi! This legislation. Could behalf what get York of you past expect end you is Michael tell of me do this by it is of on to New status Like year? Aditya the the Latimore.

you know different a York. has in hard it's what's happening to there. problems route political right Yeah, taking and New legislation some York New was unique say The there

but to a concept so watch, we think mean problems mean in the just things kind hard of wrestling we is know Motor has the to has the of politicized of I look, Governor sit stakeholders New I there, are say; his is really don't so again, with and hard So it's to because York know. Uninsured have I going that one say. mean it's you while I very program. the some issues, Vehicles Everything New of sideways, of York great become back

And editorials sits a makes you other making this can stop by all patrol next it and avoid century, it to the for. right know this, the news calling for I is newspapers. think that’s the on Talking XXst on think moving you think Heads that tags all country all to expired sides, seen in and that a major that direction we’ve seen in And sense traffic things we've that again, I networks in all I and do narrative this. the car out cable

and our cities know you violations thing, that place, in it that resources hill, maybe we helping with to number municipalities And for right. you I even keen is the right they the folks time, larger say think right. group sense stops a as administration reduce So you affairs traffic it's discussions it government technology that good work on is we the use the makes of that our well. ministerial think on know right because with mean or providing know the

has sense. mean doesn’t it I end just make logic, it has to; right, any there, to up it So just

that's So we you know believe. what

use did Alright, any coming see quarter? border patrol And fine. this from the revenue you cases in

border? The

what? The Sorry.

The border patrol use cases.

The boarder stuff, absolutely. yeah

Yeah.

Yeah absolutely.

– Okay, me. tell the you anything in yeah, and do see

it the held we is prior There there is which lot know had with been August, and them, vendor with quite and major as we’ve bids has wins the vendors by we you know, whoever up you where stuff of think been there used compete with other we’ll we’re you by covered an the contract it. is working a in incumbent lanes well equipment positioned extensively quarter. for also We respect and there well, so we’ve replacing a are now in our pretty see know. – last But

Alright, alright, Thank you, it. fine. that’s

welcome. You’re

call time. this questions the any further you. I'd the phone via Instructions] closing questions webcast for at comments. back are to There Thank over management potential [Operator or to like turn no

strategic value to we go say with to just buying deliver positioned to going I ones summary know we that shareholders exist, Rekor us Well, looking and on combined and business, But to well fundamentals not out are be it. customers it’s of needs we're is and want of buy Okay. to even confident acquisitions something look, at our with know you to the still. right, sake enable serve that for long the the M&A, regard know going term don't strong to the we'll our in that you

mostly But do to data we right data. looking the have it you know it's base, than products about right discussions, last going for far with it's we're to you in those years, relates now, us at about You acquire to back position less that doing we you years, we’re we're expensively continuing acquisition. the and time, and not we're to we bright as growing sales and know same pay X.X the the in estate, putting know you with and real spent and enough to all estate are right an know exactly ourselves all remember you with a and customer other our in place, real looks the intently what go the to for ways on of X global we think the focused business know future and expanded it improve

I keep support for know and and thanks you it So the you an afternoon, and eye we’ll on time this appreciate everybody's speak soon. to

participation. for your does teleconference. This today's you conclude Thank

at your disconnect lines Have this may time. great a day! You