Rekor Systems (REKR) 27 Mar 232022 Q4 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to today's Rekor Systems Inc. Conference Call. My name is Ciarmoli and I will be your coordinator for today. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes.

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

disclaimer full the our to refer you that ask release. in We earnings

You review contained description the is only. and the in the non-GAAP also call. of our results informational of for provides with provided presentation the be information Non-GAAP concerning should company's filings The useful a ongoing also the data purposes risk company discussed on operations annual factors and SEC. believes will quarterly supplementary

want Eyal Mr. over to Hen, CFO presentation turn I Rekor Systems. to the of

time end us everyone. taking join for Thank to year the Rekor's for you Hi, results.

share over on our key We you are team's business update that excited the ended XX, and progress to topics. XXXX, December year

Berman, call Robert are and additional on will and offerings business with today on President provide Desharnais. remarks our will recent our have me color our COO, CEO, standards. provide others the David and On David and

relevant But first, I'll review our metrics.

in revenue model. sales XXXX, services the growth With from months revenue X,XXX under our the of and six last traffic we returned have accelerated

strategic shift point business recall may than XXXX, our the made third in you in a to of As revenue. revenue emphasize quarter model time in more recurring we

software our services and more to through customers subscription-based offers. provide and is goal for value Our data flexibility

XX, in long-term. XX revenue of solid This recurring December strength has us the XX% a foundation strong XXXX months recurring for compared for the ended was revenues provided XX% As revenue in our XXXX. growth revenues the December saw months The XX in stability consequences, for to XXXX. and XX, with ended in of percentage total selected we

undertook also achieve of in XXXX, notable In reduction expenses. third significant we operating a to streamlining the quarter measures

these fourth administrative, marketing activities. quarter quarter decreased the of and scale back to across of opportunities full projects third and This spending expenses infrastructure of fourth impact by to development near-term $X and reduction XXXX. the Operating North-America. in During research were as compared and the XXXX expenses our longer-range we general saw during concentrate million quarter designed we the on sales

highlight recent XX, in financial December more Now me results the some XXXX some let for other developments. details XX months and the ending

quarter $XX.X discontinued December we traffic significant million low-margin in-market $X.X we the in of third XXXX. operation our results result for our million impairment on categorized a as change of XX, capitalization, In units enforcement business of P&L. legacy As a it XXXX safety automated recognized goodwill and our sold

transaction On XXXX, senior offering, was our Berman. led Robert we note January a $XX CEO, priced of also million market secured Friday, the we $XX Nasdaq registered Rules. finalized direct which under at a In finalized by million

discontinued million XX, operations XXXX. year period ended Revenue XX, compared XX, million an the ended increase with million last year Total XX%. the the $XX.X for XXXX of $XX.X year, in million for December was year December was compared $XX.X December to same revenue to ended $XX.X for the XXXX

$X.X XXX% to compared an increase million Recurring for represents recurring increased This December revenue period XXXX, December XX, XX the XXXX, the the same year. period of ended the ended period for the XX, same year. XX-month months by to last in previous compared revenue

as to Performance XX, $XX.X to XX, December of million XXXX increased compared $XX.X of million obligations December XXXX. as

improvements particularly to climb are pleased XXXX. our revenue to that to significant compared in have and We share revenue continued recurring XXXX with

in months revenue recurring XX% revenue the was compared to same total In for period XX% the of December only previous XXXX of ended XX fact, XX, year. the

at hard streamlining bit mentioned work business. I before, our we're As

latest We new our as growth our of first adding integrated teams half of invested the marketing sales XXXX into in we offerings. the and to in service engineering, our technology hires and by suite product

relating payroll-related increase to STS our experienced payroll expenses acquisition. also We in and

ended compared Total were and to XX, evaluated XX, grip months including to have not six for $X.X on results despite XXXX. six $XX the pleased firm to inclusion expenses. in our year already compared STS on million managed a of expenses, operating XXXX expenses. keeping have year, December off, the reduce the the the managed operating of first $XX.X been goodwill we of to have our December These we But watchful million maintain ended we million, to a and the expenses XXXX our the expenses our efforts year during eye paid last carefully share full months by of are that months six the impairment

about we'll we While future, and growth the are delivering expenses value excited to our to manage our in while the our continue stakeholders. possible investing best

and drive forward profitability. continuing look and With to interested we're future the these to growth remarkable results, about

of in we quarter a significant our third the to event market XXXX, a goodwill. decline deemed we which During capitalization, related experienced triggering

assessment XXXX we've goodwill impairment As and the of amount in an that we XX, to made impairment as related million. $XX.X a September an determined result, had

Our XX, lower year same XX, to to year revenue primarily which year. the decline STS XXXX, on we for last are adjusted new technology. to December margin in is gross ended attributable XX% decreased for the from improve the with period ended XX% margin working December XXXX margin The in

to improvements the footprint of base, we see installed the With in margin gross future. customer our our technology and adjusted in expansion expect

million loss loss discussed I've in the EBITDA XX, million, increase to of growth. future $XX.X a to ended This increased respectively. us due the for Adjusted to position XXXX investments was year for XXXX previously December of $XX.X and loss a from

recent activities, more result loss quarter in as have seen However, the of streamlining a decrease XXXX. of the a we second from

that and time. believe these enhanced our We changed indicators give and released KPIs of our detailed in performance business will September as shareholders more insight over Rekor progress provide better to success visibility key view model into our our has better a XXXX. we've revenue a

ended won period same $XX year we XXXX, won in $X.X total contracts XXXX. new December compared the the only XX, to during million on contract million in During value

XX, amounted to December contract As million. $XX.X XXXX, of our performance remaining obligation

of We recognize and compared increase approximately relationships represents to believe expect continue XX% improve obligations million over to or months. to this of our We XX, KPIs XX This amount $X.X $XX.X of our performance XX% remarkable as a the presence. will to XXXX. continue as expand we succeeding that December build million of

financial need condition transaction on to liquidity. elaborate the liquidity The for and our we later. Friday, we continue registered direct with will Robert announced million. On to the Moving provides strategy. execute us $XX a offering and transaction our

result our shortly. transaction, file will the of a we As XX-K

XXXX of was The this primarily had XXXX. required market Our position working decrease loss $XX.X million, sales cash $XX.X the cash XX, the STS. offset XX, December operations XX, our capital our year. December by from $XX.X capital cash a part inflow due decline of and cash terminated of as and equivalent. in net acquire future of to as cash December to the a was balance million, million increase to deficit primarily XXXX, December cash of company was of million on reduction at December million as agreement of growth in in of XXXX. $X down This working capital was working We as The the was XX, from XXXX in partially $X.X from a for decrease a which reflect as decrease we due in

million With Robert of In led Berman. funded. January, was senior the by we in investors. announced CEO, $XX.X million closing to $XX amount our new notes existing other aggregate participation the secured and of closing, up At from

We are Rekor's growth prospects, confident in strong because we momentum market. are our regarding experiencing

strategic investments, rapidly increasing the profitability. you'll focusing in in margins With our As hear a fully approach, improvements to moment, approach our to margins see just to on David near future. our are in this taking we from significant expect we a maximize

committed Our value and making shareholder our long-term to company decisions firmly will benefit shareholders. that remains creating

We lie are the dedicated delivering ahead. and about are to that growth opportunities consistent excited

we goals your toward for achieving as you continued Thank work our support together.

now will I that, the David? David. to With over call turn

you us Good I'm joining for and COO you, David Rekor. today. Desharnais, afternoon, Thank of President the Eyal. thank and everyone,

leadership highlights given year and year the passed an just the been future our it uncertainty, overall has geopolitical, and opportunity must the been it's of the future challenging macroeconomic recently transformation, of we've for part team past as some And Though an entire year I've our what in quite market Rekor. a privilege for accomplished remarkable shape opportunity course of have one-year volatility of of to change the and to forward a sharing here. and say, plans the growth. honor and also it to company and been incredible I'm I mark looking industry. the growth has

a the as charge mobility Rekor the Roadway stands leading and on of the forefront scale. Intelligence insights data-driven innovation, of provider at premier global

changing segments are public the we for safer of safety, market urban cutting-edge, and solutions, enabling with company, our smarter, technology all AI-driven course mobility, streets more the sustainable communities. a and As transportation

just past across you highlighted And efficiencies and prioritized on have Over technology. indicators in and people, also year, of his the heard obligations in key all we year-over-year. revenue, as XXXX achieved significant and from remarks, both revenue, annual recurring had such progress driving Eyal, as performance as metrics operational we performance these processes quarter-over-quarter Eyal

technologies. and rightsize operational instill operational continued to our across many important to help processes efficiencies, we and with like tough and but companies, make tech Starting choices people, disciplines financial business

and our This and from the businesses As which late light technology towards part as a services a a data core serve Automated commonly efficiencies, and core Safety prioritizing had focus. our refresh was our the red Traffic camera as operational in ticket margins ATSE into our move intensive distraction speed was was of business, divested we business would low-profit shift strategic labor XXXX, known Enforcement as entering business. cycle, heavy

our leading in with Highway as State expertise our Highway Intelligent completing Waycare advantages and Association Southern of input AASHTO. has influencers acquisitions, Traffic major simultaneously markets as the Administration, business we Systems such and strategic This ATSE the resulted significant front at we or transportation in XXXX, us of and expand industry focused synergies divested on advance we technology and or interests, technology Rekor's Transportation, momentum the the on to same the U.S vertical Rekor American enter our Federal while STS. Department the and and ITS footprint, time, our two Services allowing of and increasing or for While visibility integration Transportation

As well Wejo, Drakewell, transportation new Web Amazon Blyncsy, Tomorrow.io, of Safe including as others. many iQ, and data Waze, partnerships Services Predict dozens leaders and forged technology Fleet, Cintra, with

transportation, and providers, Rekor is An been considered example advantages which from the recently the mobility, comprehensive ago. to started we the extends announced and of information has with years and network, most that data third-party expanded formation partner hubs of the the for be way and in data work And synergies industry. several of significant acquisitions, our now one

Rekor points vehicles connected XX% gas network. recorded. auto $XX and and and data a With millions network roadways, from year-on expanding informed boasts $XX tragic municipalities, in connecting positioned our XX predictably never partner traffic injured U.S that is communities and with various proactive Today OEMs, there decisions. Rekor take and exactly redwood and to their measuring partner globally. greenhouse condition states, call immediate roadways for and of trillion answer close electric growing data and XX,XXX sources seriously in XX% streets to partners that city ready our poor U.S million the cover in does XX% every congestion roadways more and moving And Rekor emissions, Why call real-time this matter. on demand uniquely of highest-ever fatalities to understand what is their has and been managers to more

STS's our forged XX significant have traffic, departments state of multiple brought and expertise with where is engineering, deep collection years acquisitions coupled with of entities. advantages they commercial and have example the transportation and Another of relationships data across synergies

traffic infrastructure XXXX, system expertise connected, operating of the In STS's next-generation data and technologies collection always half the roadways. with new learning Rekor's edge always-on, a machine-learning integrated and devices connected a AI second we and and digital always for IoT forming successfully

always across project the to roadway, important and where public planning data differentiation intersection from shines. the in Rekor's roadway literally every is millions this are speed there provide class, Administration and count funds. transportation to state to country traffic, and to required that and It with And really collecting private always is municipality planning reports starts the traffic studies conducted and is starts strength Federal with Highway of federal and every annually note U.S or receive the these

lanes, data This positioned and than the Edge real-time pipeline expanding hundreds the Rekor management, growth these collection across both integration industry. with to be collection us of revenue under and more for miles XXXX. XX,XXX analytic drivers already sites, now non-intrusive services over recently-announced of has XX,XXX STS provider traffic and leading With studies. of permanent into and Flex AI-driven roadway of we traffic for our in solutions significant solutions, data We the and footprint of short-term see Edge Max breakthrough U.S as are this thousands and

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of emerging Federal Transportation. according to in speed high-resolution our Highway collection using of U.S holistic our data AI-based Max and the fall insights classification, AI XXXX, opportunity of transform to vehicle capture standards Edge new and customers exacting we Administration for Flex help the traffic it pre-announced counts systems, the into and Seamless roadway and roadway Edge designed data Department

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including traffic wins, City XX examples, a of highlight AI-based pleased significant I'm several Florida contract customers to collection and to of the secured extended across task Alabama, new Florida. state contracts Mississippi, also proud region, departments We're as with Department Transportation as Panhandle to counties seven-year data to the in have and such Ohio. Pennsylvania, the transportation including U.S. and provide and the Tallahassee, orders of

of collection data digitization is support states. these being edge-based non-intrusive advanced technology the Our used to shift infrastructure and AI-based across transportation ubiquitous to studies the traffic

pleased the and project the our visitors Web as types Navy a boundaries emission traffic as laboratory a Amazon sites electric of with Love critical capabilities of environmental traffic station also that greenhouse analytics including of and and kind of our analytics. Yard and of with impact to metro Services. a skilled of the insights push those Brotherly the to large highlight City analyzing is solutions one partnership and Rekor's I'm in public-private the Philadelphia visitors such the charging patterns insights, vehicles, providing volumes, vehicles flow, full-scope technology electric the vehicle of traffic across placement vehicle area, gas volume, real-world

that is work cake icing practical smart done is urban worldwide. Competency a AI-based companies transportation, The held with only handful City earned us is on the distinction shining here Smart also smart applications. this here a The and-now AWS Philadelphia city of by which the of that a example for we've project

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for making for and customers access multiple eight expansion adapt approach And Transportation U.S next-generation to launching pad and Rekor's real-time AI-based opportunities, for traffic is Department everywhere include our international our two the analytics. Department Transportation. simple a of it of partnership

this of our shift management. being segment in management agencies integrated to approach their transportation let our and help shift traffic centers in In from one to called help segments cities. modern is them mission and to gears tools Now me another business proactive being pollution the managing reduce improve our lives, to necessary roadways, interoperable reactive to and and traffic siloed providing save flow

their unparalleled and for the safety, predictive new traffic complete Intelligent and platform operations tools decision-makers standard providing efficiency set operate Management. With insight traffic and of to an communities, their management centers roadways. management Rekor's revolutionizes citizens setting empowers to and Traffic the enhance action holistic most and effective across platform view of take swift a real-time for way sustainability this the and

Our and agencies to and management conventional methods traffic citizens crash in have management through solutions more to including to and to alerts stakeholders connecting public. identify a faster this and than enable the incidents proactive proven advanced traffic way collaborative notifications consistently predictions risk do

offers on patrol, As better cross-agency first traffic the manage incidents, and from challenges the aligning for roadways. responders identify, arming applications traffic irregularities with Rekor events specific platform, recover the address crews while freeway them to vital all needed to and information maintenance comprehensive and management, service

from in are pipeline unlocked be increase law, our in continue milestones we bilateral Now business to wins to $X.X and highlight seeing customers management segment. trillion some I'm transportation as recent excited XXXX, in it's Along growth funds infrastructure well. the an our this of the opportunities line, and

for intelligence with our TxDOT Using of Rekor, a example Department or building first-ever in Texas the Texas, source state. comprehensive state multiyear U.S. win real-time the of the roadway Transportation is recent is contract largest One the second

and providing predictive high-potential hotspots, crash will third-party serve data hub real-time sources. traffic data the Our for accurate management for TxDOT connected vehicle leveraging as multiple Rekor insights platform

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partnership successes XXXX, bellwether a included in Other Cintra.

been other that gas This multiple rapidly of result the tax states. of And of infrastructure ownership is as with the by a we and program major Oregon supports has was being contract the road work selection private data largest the state achievement multi-year vehicle we the important One This world serve platform initiatives developers to monitored given pool the down-selected ecosystem. XX usage is charge electric secured our from an and doing closely where are connected Oregon's federal displacing for revenues. a in transportation technology of vehicle together, and Oregon statewide competitors.

across all expanded In as and Metropolitan California's Rekor. Commission, of Oregon to transportation new State in well we other U.S. departments contracts Transportation Colorado, addition as multi-year in representing including also solutions and with to our Cintra, XXXX Alabama partnership Kansas the our

industry. highways excellence These Israel, contract evolving And we evidence the significant deliver in successes to customers in for every achieved day scale. to differentiation ability needs global reputation addition, Ayalon and the extension highlighting our are of our the serve tangible of the and we transportation our with a

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across with in prime of past partnership and public segments. business the our Fleet Our Safe year traction is another example safety growth

As a Fleet a provider vehicles nationally, leads and law enforcement, for for transit, violation our for of school safety next-generation a enforcements, Safe solutions and platforms We bus deploying platforms. range the announced Safe the law in industries market violation including their and transit detection wide nationwide. with market multi-year detection fleet of school licensing for agreement stop advanced arm recently Fleet technology renowned bus

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is safeguarding playing addition of Rekor nation. mission-critical the role in our security a also In

is technology locations utilized agencies federal vehicle worldwide. meets of recognition standards being key Our and the at exacting

domestically extension And and the to and they purchase We order agencies across multiple significant are our serve already. proud for government deployment received have software another internationally. federal technology yet

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you There's business This part regarding channel area I platform, want my one of more update. as Rekor is that with highlight our that recognition. to e-commerce the deserves

Our the a and shopping seamless vehicle over technology secure customers and worldwide world e-commerce around licensing, globally. the expanding XX platform offers experience highlighting countries and identification for in LPR serving demand products services for our

of surpassing marketing. growth XXXX from astounding in The over has in over SaaS past business licensing subscribers revenue with million remarkable period with million representing in been XXX% investment our $X.X all the software-as-a-service monthly XXXX in or the years little and $X.X increasing XXXX growth XXXX active to an

our look business As growth expect well. continued course and each XXXX, of ahead e-commerce channel across in of segments we we and accelerated of our as

yet to we best is into the truly now moving Rekor, come. and So believe scale are

help been the it once honor year my year transformation been To President of industry. an this COO. as Rekor guide remarks and again, has past to and of It are we reshaping the a conclude growth a today, remarkable opportunity transformation has and privilege and over

to navigate significant made strategic tirelessly our possible against advancements leading-edge work committed results. and by climate business employees, and by partnerships who deliver progress in and our Our dedicated growth the technology objectives and the challenging and XXXX and financial were and

and growth for well-positioned scale. Rekor Looking-forward is

Company market each to support and clients flywheel, lines, advantage, a the continued us the partnerships our strong business tailwinds, growth that to technical trust about a differentiation contributing in and and our grateful leadership. highest to in first-mover hold We're our all have We standards path continued to success. shareholders excited our of forward massive the Company and in

all thank you CEO you remarks the for Q&A. soon. final with today, like for joining me I Robert? pleased call over speaking our now Robert to and to Berman, to look-forward I'd for to and hand I'm

David. Thank you,

earlier call, offering on in we Friday registered $XX the million. As announced for direct a Eyal mentioned

to was headwinds, banking earnings in creating market made this severe decision Given the overnight and world turmoil access sector the shelf the call. the before

filing For remeasured Rules, the those are aware at needed. Shelf of couple market not would of shelf but million Company for Baby you fallen allowing have of the less the XX-K than is dollars shelf that our present our access if its a best cap, to company to with

Our conversations strategic offers. with investors had and continue we've

The put However, balance those conditions continue too funding impaired. and will we overnight to of almost Mind offering broader cash and with about all strengthened growth. with talking come have Rekor's do date, to our companies on hand the Rekor's sheet way a and business strengths relationship capital. we're to were independents be many you, the

out about be So careful to bathwater. tossing the need we baby the with

$XX pleased As David stated, and look are for profitable in XXXX. for of end of negative accelerated EBITDA the time, all first the and growth year, be fiscal to by and we segments. $XX of as revenue million year to this $XX we business million XXXX ahead XXXX, providing million in in revenue our range to expect across we of the continued million Consequently, with $XX the guidance

with the more in the our $XXX which technology $XX than achievable are changed range of million which replacing revenue we technology, million XXXX's EBITDA. growth because forecasting legacy end-of-life, at not is in positive million $X.X in Furthermore, million XX $XXX is to is years. This has to

are about have with For judicious we those share of will the you that I over extremely say our been past years. stock concerned Rekor count, that

in $XXX our million We more have technology. than invested

prudently equity addition at acquisitions able did resources two we $XX the $X.XX maintain to share. advantage, significant now fully-diluted pricing $XX R&D on the scale. less basis. shares funded this million solutions with because We with prudently we access a are at than markets We we have focused were to to per to and first-mover various our various a accomplish making In when first-mover advantage. the from and and productization on of efficiencies And times a maintaining important

customer this price market technology share than share as believe seasoned given and and see technology one, trust, reflected the be size come opportunity, attire the now might are less monetized will one think. to our of a public will credibility, we this in company when The what a time start-up entity and in our Rekor through. count I is this resources a started and with

like to to transparency you questions Please We're I all would or may Operator? address and any here ask. provide don't Now, hesitate may concerns to and open floor any you for and the inquiries have. we're have. eager to clarify

[Operator first with Cummins question. B. question Instructions] comes Securities. with line And from Zach our Riley of proceed you. the Please Thank your

forward to Yes, can for that hi, questions. I here. afternoon, point, Robert. for more this taking going mean to you into mean, given I some good appreciate insight business potential some this that thanks pretty of robust my you where I just in providing years, we and couple at for speak only kind of but driving assumptions the XXXX. next growth versus are ended confidence the of underlying not guidance

on So additional would sort that of very front be any helpful? insight

gasoline class years. fall every at exactly the ourselves the And Yes, to ITS which the thing mean, people call, bill layer right? that And. positioned with does there. spent same speed years, you. for XX government infrastructure right? the When mandate the that to concept digital World And for I new Look, a attention I it. or infrastructure, excise the a count several 'XX we've technology infrastructure do just whole There's Thank by state, same think taxes, putting and positioning this this paying is distribute of ourselves and How over mean, right. federal Zach. sure XX many what's world it's Congress, not not is it. the that's just we we many back on that does introduced believe I moving which every state people and I to

introduced And on up so right? of and that traffic growth technology engineers roadways want Right. and interesting carriages a congestion they fact to way in DLTs the So, don't so forth. So inductive therefore, that and get a it. from. comes create and people, work on do people where and not the the intruding digging to that this and comes forth. we've attention They lot counters, loops, and without that's mechanical whips from And pay at confidence buggy is a and This harmed having so to that want. it roadways the so

David come mentioned you do as of inquiries almost us. show reverse the this the really by saying, XX% it see state we okay, And can

the working there, that's with we've all and for been So towards, it's technology the working demand out what this the it's and states year. for there being seeing and

we're So and it's there gives deploying now. this confidence we technology and that's what know fair us the out

So it's It's aspirational do can about what something and that's and happen. we All confidence that today. this developing we're And or it making doing not beyond. gives us right. the

at this that's but of where have his able accelerate And to some some it, might some in to it's deployments. David to of starting think infrastructure commentaries, of these mentioned end-customers, point Got your access get I funding are it helpful.

what on seeing you're that curious on Just front?

Zack but that's already bill is funding a really what there. transportation from interesting want I the separate question, to

and about that there we're decades. is the there funding past what talking So has been for

XX years stuff can and the for the go talking things do But stuff coming David, to with year new XX and that we're out into that doing acquisition, they're Okay, year last or about right? has in that we're the with years. the doing, Waycare

that is It's the stuff to that's and have funding, talking maybe already of about they it right? they're doing on funded. Zach can a some you that, just stuff talk outside that's of going it, doing David, So way of we're better the anyway. but So

be technology working put grants the digitization. technology these grants Yes, infrastructure layer Robert. and to applications of with that's are or it's to gaining that accessible layer, In as regards Those of on called. already grants some now access help that. to these infrastructure digital I in and submission law to able required the required are for them help Department the can and are Transportation we submitting in to bill through states, complement states the to bilateral process the

are up aggressively we cases be fair their are states some or that and in so funds. to be to see capture able starting now, open those moving may unfair to And shares that to capture share

now we uptick management yes, our particular. driving are transportation starting what is in to So our business that it is happen, a in in significant see pipeline

that that's point look Robert's mobility and us, tied the all. today. are at This is now. urban to funds ahead at opportunity back when It's to going there not infrastructure these access money speed count to are and classification we But funds bill available the of

both future those monetize as ability into of the have the to as today, well we sources. So using

appreciate here guidance direct Got you it, obviously, Robert. year? adjusted question ramp-up potential continue capital-raising to helpful. the that's as side the can into second you I well. from talk about the I overnight, me, needs into EBITDA of but mean, recent mean, And final significantly the I as this cash pretty half

between Company I XXXX. profitability, can feel note and offering mean drive in think, right I Yes. very the we we that confident Zach to I registered the look think direct,

pay lot we we $XX,XXX road acquired inductive that data, and the it for that up real concept pioneered the loop usually that already put without to and XX STS dig with where we are. good so along cost installing So the and or do comes again, the So, do And had right, I XX, of the from all can think so in feel they a for fraction when it it the right? of time is forth, right? up a road difference something about of spent system goes as damage digging days up and a on for

that's coming this there there's you're more, growth important because be and we from several to it's truly think right? the so see hundred break looks, urban ones, there'll mobility frankly someday, self I I So thousand out, because think on all right? people few - call, primarily the And it's right, fortunate several is - this where

the we've is for that do not can this are that of that's do okay, we and this mandated if with doing more technology disrupting same that developing Rekor has to years what way done we're now something of concept that's and they has the using the been XX, technology The XX starts point not the been looking changed, something delivered. edge years, vision nobody hearing with the for proficiency [indiscernible] which the so has to about, but and several for been classifications and roadside then that forth right, it And that And is vehicle this and have right? and processing, machine and transfer is you states recognition. vehicle of ID vehicle and

are, we here So right.

So we 'XX. we that's do, into to the going to what and right, we be confidence do to have able that can believe why we're 'XX going level, say

my questions of best taking in the and luck quarters. for thanks here Well, coming Understood.

Zach. thanks, Yes,

from And your of comes Please [Operator proceed [indiscernible], a our with the line Private question next Instructions] question. Investor.

of with Yes, shows reflection thanks the team for management taking impressed ALPRs. and my call. Definitely it

it of questions technology, be to but can the and the One we with besides a little change? it's outside States expect the my within to contracts seems is, overseas United lot that Israel quiet, U.S., been of activity

question. that's Well, good really a

saying extrapolate right? road in and me every require countries XX roadways? the XX, the across that almost time, the Even and by road replace, at tonnage let to it of okay in start do world, years how So look very slowly going over a they what the an developing government, might they budget this, think they XX, maintain right, period idea of X, well. repair, They

this do people mechanical of they vehicles, with rudimentary on count they ways. actually put So do counting places and very and in vehicles some roads They right?

uses out the roadways. replace concept the how repair, and So same everybody maintain to to figure

earlier, David starts analytics it as starts with So with and planning and starts said planning with It all that. data.

globe way the if that's same it thing, does to begins, the is there collect across different then roadways, So on a right, well, so right. where everybody data

has to a ability created about the just single with starts and collect system data has capabilities. the beauty Rekor it what it's multiple done, So that

collect used the can can public device off. tonnage safety in and then right, also you touching after a that much one that, emissions so without road, cases once the things and go goes crossing can tonnage the is your data, only from not its if it's toggle forth, but crossing the So device, there, other and we things right, be how you tell and toggle on, what's for on so the roadways,

are beyond U.S. extend this you're to to we going It's that we And what know borders, loops are there can these right? going much in world. over think is in installing they I doing companies you because expand all beyond is around the tell well technology that that U.S. the things So the They're doing to see going place installing is same. today the whole Korea, pretty inductive Europe, the South they're

U.S. is? your the almost to intersection, the measures Certainly, the your don't this and the That's XXst traffic loop, vehicle then answer triggers and and it road intersection, what timer. to any look right, that an that, it weight you to need technologies axles if on number the you inductive used do and that Well, same world. a is the drive crossing field to see you you'll when feels some magnetic If the get majority of there century, is you developed so it there's the question the the of so of outside cuts

expand. see hopefully, we'll it So

believe, Israel. I also mentioned, And since I

the I technology transit I future? plan read somewhere think in the bus also on implementing

schedule. that schedule okay, Well, that's Ohio X with early, phone, real-time my where can can their minutes route and the XX we're able doing look we're buses minutes figure, somebody at buses bus the what COTA late. same because my all to is is their looking are at used plan them and it's I helping we're thing to they're so more which

license comes that that of a know of does few from years, technology that right? right? vehicle and been and start, this, it, So And vehicle and train takes of and It's our of that's at we the for ID, this learning does their you again, and got machine we all at things. for So right? following started where same train and all the looking look you have the technology and from over you train train those it one-piece that's recognition, point, can you different with plate just Rekor

So point. that's exactly the

all okay, system that So, tractor-trailers of is, schedules, that, schedules, out right. it doesn't ports, at what matter whether can looking of it the you're in train we built and bus do pulling

the can video, for you the a infrastructure, but the stages very not all largest around to of at investment segment world, reason, probably right. that whatever here They us tunnels we're so the when are So look community. is you TikTok that is roads, post the economy bridges, of it early this brough there exciting

infrastructure and So you we're infrastructure what put over that's digital layer to of a doing. have part

there several And be someday, so thank the like question. these thousands you not I you thousands calls, and that on hundred of for just there'll said are, the

motor uninsured from and states other today with that also PR the drawing also? is Oklahoma vehicles, with any the interest Yes,

that road. I is in But Oklahoma, hasn't interested, motor reduce no would we owners a it the program know, -- state's we're we of number We uninsured running have a why self-funded had started number roadway little that right, exactly told we've point, on in happen, which of what uninsured the it's only since by a stage and number You idea. of at couple it. vehicles on the states the years the been, this we've program. reduced vehicles XX%, a Oklahoma over motor of

a motor be that I century uninsured, might it whether whatever this knowing things contactless or registration officers given minor XXst do infractions. or people compliance, is there for over enforcement to be that better inspections law time over is vehicle it's think calling for traffic

count built this that system, and well. is But count, again, after that Rekor it's works a class, that's system speed. same So the

Right.

right? and on. install of we toggling will we to on, to difference. does that's want, out So of the If something all to understand back to on it, just need call the a And it this for pay go we're on, you'll this, don't it everybody turn So turn else, when matter right? a off, We need you it point. will we deploy that's system, it's the we it turning highway

to also to in the that's And pilot, affiliate towards we contract that expect be PR maybe the future? contract or the one any can or

just started from that more And given we it's AWS David of such of is I that a you value will but few right? that's getting I been then having public as proficiency and we've around And we're and for and maybe it information its the for And it it's for expect evolve only bulging tell pilot understand the it we're important. technology go partner years. and that expand into the as there late, something because to said, I think our early we've is AWS with a see it I - we'll that Well, will and they a as there. it think city

still it's Thank game. early this you. in So

difference mentioned like capability. away improve Carolina, pilot pilot York you are ago, What's I and had like [indiscernible], question, proof -- between other the and believe New other South requesting one of steering I mentioned from states And a a and Two many with the XX pilots. capabilities quarters the how

you. let maybe Thank These this. start can are I'll David, -- you South the with address major Carolina. and address David differences capability

no problem. Yes,

could that more that state works, roadways, that you we're for demonstrating been of to we're to particular that something environment more guess on the make proven, particular that The not of those refinement it's the concept, the but proof-of-concept trying distinction versus proof-of-concept, the has the prove a in So specific of I capability them, more a proof-of-capability. for needs. that's it's of it's their a concept

dust enough of unique or may in we they - a a like may have or environment have that want. type heavy to dust a are perspective, particular way vehicles specific not that training train machine-learning a have They we road on may that seen there from

particular put their the really which on on perfect to fast So very is capability roadside is devices a for conditions, particular environmental actually. and the in them for train the roadside

we what that's of when say, proof-of-concept. a capability mean So we versus proof

I'm sorry.

imagine. multiple there literally as because I to time, is maybe in you like it Oh, the Whereas come that But six learning I yes, that environments to at closes might called down, and transfer way. four indeed, yes. expect gap six-weeks, other something environment initially same to it's mean it one eight. on you or when the learn

the might that envelope. expect the on take and captures what So environment we all to the particular to one or that more close a and see capability really two, in is sprint terms proof will R&D more called of what environments the of

So question? your answer yes, that does

Can appreciate one in it. technology of did also of the X,XXX I that my it the locations. anything Yes, Mexico potential mentioned I does. more contract the across have length from something and the we question, be don't in definitely And revenue. last I with near-future? expect remember

question. good a Well, it's

they're if safety us of keep Monterey, public right? like on devices operating started it Mexico best primarily that a safety, do at enforcement, are an -- with And different to that, don't We because to out and accommodate years it to entities comes multi when about it people parts that have our cities right. thousand entities now of these the So governmental and we can few to the in it, public they about you ago look law several announcements. back using states. find It eye talk and a lot we

significantly. out that Same we from Well, see thing today the good news with U.S. from is places the devices DoD. grown hundred thousand few with to that there it's happening in several in It's it's grown, XXXX a business as well. grown other and Mexico our to

that If you really is - they the look we've used. to DoD, we through that technology folks being it's know the years importance being where you can't contracts I being had being and contracts. is go - these what's important but And want at think where it's used, back I they think talk the don't are don't used, and with about significant used. the it's

And call remarks. now we closing back have reached Robert the the question-and-answer end of Berman I'll over the session, for turn to

Yes, have been so. you shareholders fortunate far everybody, tell rest Rekor the got with at very thank a and that and I for of attendance Company us here. we've you. group team and I'm supported looking thanks, list sure the I speak is the and of so really fortunate great the Look, I can and feel very and

of said but that inside right. we see on we're can always Company this, office to to and opportunity. I've more years, some for this an all might do, the - but right, that's tell you few you It's not yourself creates I public listening big we're a might consider and flies the the is were And DCs not private, if wall stuff you easy thing all if not what

to around very and grow years, I part probably earlier, growth going company been longer balancing to 'XX public. went after This we're as because consider okay. no just club. of in like Rekor it's pen significantly. beyond, small ahead my very I is be This on is startup, I think a see the to to progress, you're think said significant yourselves and races fortunate tremendous of work a for going and just several to remarks been we've try we Okay, has in right? made But

thank I that, all to Thank the call. for with So everybody you coming support. your for

at And this for Thank concludes disconnect participation. may lines time. today's you this your conference and your you