Rekor Systems (REKR) 14 Aug 242024 Q2 Earnings call transcript

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

Before we start, I want 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 statements. differ Such implied may cause which and other statements can factors or involve expressed known results and materially to unknown by those such risks and uncertainties from actual that to refer disclaimers our you full ask We earnings you in the release.

You should description SEC. of filings factors risk annual the the our and also review with a contained in quarterly

and results will purposes only. provided would believes provides CEO company non-GAAP David for now Non-GAAP The I information Systems. the and turn President like Mr. be of operations also useful to supplementary the Rekor the presentation is call. presentation Desharnais, concerning over of on informational the data to discussed ongoing company's

for Good afternoon, you thank and today. joining us

as of for the my solid quarter vision first strategic As to am and progress in and our Rekor, President full future. I share pleased I the conclude quarter CEO

Over that will set team's progress direction I'm Rekor the is and And the positive that that structures into transform operations. aspect processes, government our establish scaling the strengthen this far. I've help made to stepping since field operational sales priorities so have our to business. refining focusing relations we commitment mechanisms a governance work excellence and every are been driving response on doing My enhancing and of the we've growth and substantial delved I've the past more financial the XX our team role, into days, by encouraged deeply into in across engine. and predictable and

with our many Also, over engaging and I've globally. privilege the the investors of shareholders X months, of had past

and insights know you I'm to been invaluable to want Your listening. have I me, that

necessary about and Today, capital significant growth market our and eagerness themes: and customer Our trajectory provide enthusiasm for finally, to key uncertainty insight concerns cycles amidst I'll X conversations have our strong opportunities, meaningful contracting forward. areas our macroeconomic path securing for position reinforced X these and government into continue address slow traction.

begin the But and local also opportunity procurement with state provides agencies is of processes that federal, navigating complex let To me stress government and potential. unparalleled stability it with, challenging. an growth long-range

and and states, multiple others the While for pace, traffic in moved just New rapid fielding including this Kansas, AI-based multiple a works. we a preference Colorado, have at solutions transportation Carolina, year Discover Maryland, across we've segments Georgia, Texas, South been Oregon Command our at over adoption the point, namely and Oklahoma, and Florida, platforms, awareness, gaining our Ohio, in Mexico,

given However, and its and realistic that expectations line. is it pace important expansion. government something at with setting the It as is own remain to that in opaque relates has to of and that best deals will is we timing continue it process contracting conservative we time be

and call, U.S. $XX states of AI Edge Along to this you revenue they potential our update an Discover to as upcoming the as in in I of million finalized the on deployment earnings wanted up units update upside last line, and policy. to largest their the in X approximately X,XXX of to equating a

I'm that today, deployments of in region. initiated As pleased the to share we've

hurricane deployments, conditions expected has hazardous state citizens. continuous work for response We state line efforts storm, up aftermath. time in the the but by weather things, emergency of don't has season, roadside period multiple to its Debbie. Hurricane leading these for as immediate the itself, this impacted in of storm during recently course, also resulting not is hampered permit the the the control but interruptions our this prioritizing been progress However, Understandably, from in by anybody most storms does of to course,

insights But and state's conditions be already have plays, Rekor delivering trusted sites already This proven underscores our which the have vital support emergency performed the this to operations will extreme cementing pay mission-critical, role activated have state, these under the partner routes these storms. to technology essential and initial flawlessly as evacuation further to in during a we dividends. center indispensable

to million our As we never I flows within generational footprint in undergoing generate has industry the infrastructure the over which is potential years. partner nationwide an see previous execute growth also stronger, and massive our as estimated X,XXX trusted Southeast the in call, closely that $XXX highlighted by strategy. the cash the could other add alone, existing to in and to refresh, to a our being as million is transportation states X,XXX $XXX and success sites, been a states we Southeastern coming Rekor's monitored reputation continue technology

Given strongly our more our the us recent states these it during for performance region. expansion with crises, positions only these continued in

to that spot Our ideal on transformative the with puts in in is growing an happening, recognition us period the reputation, industry. overhaul and ongoing this capitalize infrastructure along

local state So the the durable processes must also run. and that believe we investors growth navigate to a we benefit of procurement while for it long provides and our and long-term will governments, slow-moving often us in continue complex unique opportunity

I'm against technology the and Despite Later accelerated sustain and to continuous been we're in traction the experiencing. some the growth, quarter new in we've the of ability a time market, discuss in relatively meaningful our I'll short confident last we're secured we've during the momentum. our contracts call, this deploying experiencing

proactive taking the the current protect discuss diving capital environment macroeconomic shareholders position the Hen, hand we as domain. our steps Before and quarter call I'll Eyal? of BXG uncertainties highlights review solidify Eyal and now CFO. these our over to Rekor's navigate He'll into to and financial our we're the details, the for

agreement repay conversions joining provide designed up cap on including strong equity like facility protection, and $X.X us XX, you, with with a another short Hello, dilution to million Thank shareholder our need which should X would or can to them provided and balance notes we infused David. agreement and less and early have concerning in I been the company months counterparty, the contracts that ended financing, recent now. it. discuss start X-K selling a for announcement million have ban into X June our for the in just prepaid Full this to draw our that the for million capital thanks the I everyone, XXXX. us minimizes to into allows our today about $XX $XX delve is expected materialize. once details to The a capital we by on and monthly won't results

We'll government we've been say funds this delays us facing. necessary to as growth the it same the this. have year-over-year injection to by we our of drive cash resources And manage This us that shown and gives at time, making flow Suffice continue our improved recent performance, to solid but our are to metrics ensure our and position QX it we is carefully effectively, progress XXXX the operational to meet address efficiencies is against contract quarter-over-quarter. targets. used

prioritize as series larger some significant contracts to for to options, we additional sharing our recurring forward, notes. plan upfront needed issuing implementation, involve of installation revenue Going may pursuing this an are financing we the If additional such capital non-dilutive revenue expenses. is

address fulfilling customer industry to continue leadership capital [indiscernible]. our expanding commitment our and to expect needs We prudently, our

as engaged future revenue-sharing in and issuances connection to this we placement Company, market agent regard, notes. with a have Ziegler specialty of our and In B.C. maker service investment bank,

this fully months, in as use their on few anticipate with which with to the getting reduce We continuing help them source aligns future Over primary a to been agencies these performing growth improve overall capital. rating rated, of past we've cost potential to marketability. structure, funding debt growth of as as discussions the additional well notes work should contracts and which

highlights the X of of X June Now XXXX, marking XX, significant year. XXXX. ended the million pleased from second million, a revenue same months I'm our of for talk In our a to about period in growth quarter reached XX% the $X.X revenue last increase $XX.X and record the financial

same million in the quarter also year. QX months $X.X from of achieved by from XXXX, the the of In marked XXXX. the revenue, same also demonstrated Recurring over June quarter robust $XX.X increased in an above last we revenue increase in million million at XXXX same ended growth in We XXXX. $X.X a to X XX% period XX, of XX% million the $XX.X revenue we quarter-over-quarter X.X% compared

gross XX.X% ] adjusted [ increase months X to the the in higher for sales margin June Our ended quarter XXXX. from XX.X%, an XX, This of margin of during was primarily second XXXX, due this quarter. mix was increase

allow of technology over our expect previously to margin efforts lower to refresh margin explained, sales to As move us higher time. from primary a benefit we

The However, choppy, we the the for XX.X% months beginning beginning mainly from decrease as year. at experienced during a growth margin this for XX.X%, of decrease to period ended X be was phase in, evolution the margins The we saw due is the at XXXX are the the year. we adjusted of XX, gross early this June year. same last the may lower

also improvements our to EBITDA adjusted loss. continue We in see

now For loss period was ended EBITDA in the from from months million The for XXXX the period to our same year. down at same million $X.X million, $XX.X million X the $XX.X $X.X it's XX% improvement quarter, in second an over of June year. adjusted set last last the XX,

July which of the we development company, up in in after balance course, the Also circumstances. has the for X,XXX,XXX Public was cash our which million. $XX resulted earlier, XX.X% sheet ownership provide Global agreement, second June significant quarter million received And ] to prepaid received $X.X [ million another in remaining XXXX, under million of advance as of $X.X the our warrants structured in million under to was $X.X which highlighted appropriate Lastly, sold July, of XXXX of been $XX of Safety exercise date. in to we

our with and impact summary, we solid very recent of results are quarter synergistic our accretive acquisition. In the second pleased and

the industry. and position are to Ziegler leadership engagement in our enablers continuing the raise capital secure Our in instrumental with

Our are future financial growth capitalize and operational on opportunities. designed to strategies

confident acquisitions continue our we support potential of of be Looking strategic and in developments, investors. the grateful forward, are continued our for technological to

to turn highlights the will quarter. Now from David? I back cover David additional to business call the

Eyal. Thanks,

into expect our a year-over-year driving what growth, continued with plans QX, healthy heading our support place highest our highlighted, all growth, pipeline And dynamic history. Eyal we are laser-focused achieving strong executing with revenue will customer on performing a As and the now against line we to we in in top be the expansion a delivered solid well capital XXXX. metrics along and

Now I'd from share highlights like the some business quarter. to important

investors high-profile enthusiasm a roadway intelligence for each As I'm we've in in past share as opportunity leader to growing, and forums eagerness the meaningful and that theme continued I mentioned and Rekor's growth. strong continues across our quarter the pleased major the segments position market business reputation progress traction. and see foundation multiple AI-based customer probed made earlier, a of the is from our solid is recognition for brand lay institutions. our is solutions to gaining steadily across and industry with to

and of are to leadership and thought our underscoring regularly the share transportation. and invited We AI in insights national stories local in media, future success

We digitizing our commitment region, the also recognizes across to company as as nation. as in well were highlight transportation fastest-growing #X proud Baltimore Business have Journal recently the the the to critical infrastructure

Additionally, leaders invitation a from we honored Amazon/AWS. TxDOT and a alongside with special panel high-profile join were to

and resolution During leadership significant roadways. Notably, their Command industry incident achieve role the lives a credited with event, improvement the in Rekor Texas. technology and of in efforts their a in CIO mission-critical reduction to on underscoring was vital of XX% save secondary impact our in crashes our TxDOT helping Rekor's highlighted times, XX-minute the

ITS for with This new digital to award are quarter, safety of citizen where transportation. along roadway force prominently to state-of-the-art a across America the the received year, and roadways. record highlighted featured They the by we our local in multiple this technology intelligence. and multiple state and ongoing we commitment proving transportation future as reflects of cases This Rekor improve infrastructure team's AI patents landscape advancing recognition, and was current use leading

Our are transportation our Scout around proven pillars: mobility our Discover. technology safety X public management urban solutions platform, with centered with with growth and Command

safety We market. fragmented that recognition and and is our is public start well the what strategy. our first existing leader industry this principles a future safety and to be continues infrastructure, as known public integration to defined by growth pillar, Scout. and license reputation grow noisy open in central vehicle a plate AI-based sector to believe that of and with like in are Rekor's platforms growth will I'd seamless into

while focus expanding our remains integrating enforcement reach on been through resellers such, and systems and law our technology third-party existing into market channels. As OEMs, with security has and our partnerships

law for example delivering safety key security enforcement is strategy A solutions civic action known professionals. partnership this a announced our AI of with data-driven in leaders recently to company and leading technology SoundThinking, public and

end-to-end their trusted we key integrating for go-to-market Scout offering thousands with in are agencies the presence ShotSpotter strengthens detection SoundThinking safety channels is By and enhances safety cities by U.S. providing technology already an immediately that public safety gunshot of public new markets. solution, across through Rekor's public major

audience. offerings also brings enabling seamlessly In to also Amazon the of through the It stamp industry more by first channels. only ensuring Scout accessible customers this procurement speak in Scout achievement was to the Amazon not Marketplace. Business differentiation approval, joining the recognized us access addition, the Web our distribution integrate with wider This but this highly partner does and to in volumes by AWS is the technology our leading the quarter, that technology, into a our rest of as well-architected network our marketplace. because about This Scout of selective AWS Services platforms, are to the important achieve reach strength and expands and portfolio positions

Also, we as NVIDIA our most network, upon participation with for advanced technology in Metropolis relationship our expanded well partner customers. NVIDIA's as our building Jetpack their

powers to for market Our vision new collaboration features and deep our with technical computer customer simplifying accelerating machine advanced adoption. technologies, learning time and NVIDIA

e-commerce innovative we ahead approach create focused SDK market This core. empower leverage recognition Public new licensing to that third-party on vehicle developers their portals. third-party applications our are Safety in and Looking Rekor segment, will at developer technology through the platforms

to this, of the In Scout. developing addition generation next we're

and sector, innovation the not and the industry but promises our Our growth our for with strengthen public way partners. the next-gen continued only leadership platform across pave also to safety in

the safety Pillar keep Transportation moving. roadway in environment traffic are on Management ensure to Command and platform. complex mission Rekor confronting X, Moving and our Departments segment Transportation of and to increasingly an demanding their

Compounding that keep With The DOTs interruptions, the seasoned infrastructure traffic agencies the traffic from driving, these navigate of roadway and distracted the to the difficulties further to struggle recruit is and people by the organizational increase never-ending strained and try multiplying sophisticated deep are of agencies. must to are enough to escalating skilled quickly situation growing challenges for professionals road vehicles, meet silos retirement the demands. talent these work aging issue safe. flowing the of these rapidly increasing and and DOT data ongoing

that The departments predictive mobility agencies turning them enabling insights Rekor view This and integrate and leverage single these demands that limited of data the addresses are manage be in provides resources. truth a to stack despite providing real-time increasing in process and platform silos. challenges single can AI and effectively full the situational agents tools source payment blast. comprehensive massive and more, by actionable of Command that versus awareness, across data disparate sets, solutions And to shared roadway visualization, analytics roadways and into

has this this and Program TxDOT's $XXX roadways citizen-facing safety earlier, across zone in for the XX been a Texas Command by vital monitoring mentioned with roadway the with mobility designed Building transportation TxDOT record-breaking powered real-time app Texas work to As billion Partner our infrastructure on the particularly TxDOT. over U.S. with and incident launched and alignment through investment impactful work and Construction next recognized we enhance quarter management. is across years, PPP momentum

visually improvement, benefits like in the and helping Command congestion efficiency University Texas monetary our with on and metrics agency Austin, crash benefit that they collaboration and validates key transportation and an Additionally, see assesses and understand return make economic the at we platform. reduction investment TxDOT clearly of of calculator developed in any the

intelligence in DOT's as Umatilla build adoption platform smart Similarly, charge road further of across vehicle our state's to bringing work nationally. Kansas, supporting County challenges and of announce and our the to adoption limited we in regionally Texas. to announced state Oregon, usage communities connected a Oklahoma roadway in areas the statewide. of rural with lines Oregon isn't influence ability the ecosystem, facing progress also Command doing their Command and network the reach out and extending roadways unique connected pleased program with the adoption and we're conjunction both advanced drive to initial But We're and

of the of traffic The visibility offer. by footprint to insights and across These recognition in unprecedented our can't developments commitment transforming expansion management country. Command the segment and this roadway underscores that legacy systems adoption growing and highlight just our delivering

to silos AI-driven to the in vastly Our reduce traffic utilize takes agencies time, time solutions roads insights enable to monitor data break normal. to real and and incidences get faster, and times organizational respond the back improve to response it

to safer that will efficient Our roadways. needed for the continued ensure innovations continue way providing partnerships in we smarter, more and the strategic and and technology lead insights

quarter pillar, that Last and in like progress growth the Mobility we've this Discover share but our platform. segment not some made Rekor I'd least, Urban to our third

our a where for significant Rekor. technology As legacy will We industry collection data mentioned sites pivotal AI-driven growth replaced we at are outdated study across call, of of U.S., moment, last refreshes believe leading millions largest the roadways earnings legacy-based in a and is traffic X advanced traffic collection is the be in driver with U.S. which the the solutions. data

for Our the of transformed year, acquisition Traffic of this permanent Services and XXXX earlier on by strengthened Discover us to enhancing built integrate our our short-term the AI-based Traffic further All secure, foundation platform, our has existing and seamlessly connected infrastructure, solutions Data of customers. into study initially systems landscape. Southern acquisition that and replace It with modular legacy safety traffic allows and greatly sustainability

status Hurricane operations. time, routes emergency in the evacuation demonstrated safety we mission-critical in where real during is Debbie, states and during roadways multiple recently platform's Southeast The in clearly managing supported citizen ensuring

data infrastructure. Texas. maintenance traffic westward to Notably, These management digitize and we and of and with pleased worth statewide and Texas that contracts I'm the Command, independent legacy contracts we illustrating expand $XX contracts, cover also reporting but existing our noting expanded that this action. land for strong not failing the reach only with from we're across Ohio and AI state. roadway the already to the data new transition in as in contract strategy collection pave in their were traffic share repair our highlighting doing It's awarded infrastructure, replacement modernize is quarter, look Texas to over states million sites to better the way work This new Discover in demand

value-added our a our portfolio the Our way, over electric with next. top, value weight air the X the opportunity studies, as layer to to deliver then to have state new and in next state on tonnage penetrate by services to value of we increasing the is then delivering and such approach the platform in along we revenue platforms continue to potential. and And our and quality, vehicle the the clear more, expand

and $X.X sustainability, reduction, also state. our offering, platform opportunities As another while example across concerns, through is of traction, help carbon new of management further heavily million tonnage of monitoring I-XXX. the customer Maryland quarter focuses environmental and the to nations analytics by enhancements some and corridors, door will used improve [ our and traffic has class AI-based addressing counting I-XX, this Vehicle lane management air environmental announced volume incorporating EV, a on and new like I-XXX the This within above and advanced opened quality additional with and Department weight to Maryland solution. ] deploy Insight These win, including Transportation Discover count we contract the over and which most speed

grow highly into and in the area Pitkin services our deploying to of infrastructure. to In addition, This roadway better environmental planning class well supports offering, surrounding we new improvements. footprint we Colorado's showcasing a region over quality count as trafficked and monitoring, ability the maintenance region. again speed where as known Discover contract County, sustainability in by includes existing project once Aspen expanded value-added Discover air and drive also top providing This our our are

significant ahead, and we for opportunities Discover. Looking momentum continue to emerging see

state recent our for to data with mobility for and management intelligence reach partnership the dozens of connecting transportation counties and expanding and exchange a useful becoming the Rekor and DOTs to the This with Our durable accessible strategic our organizing across positions cities the roadway data of at success, strong leader value fast laying is combined numerous path make collecting, MSX, a collaboration, to and it world's states, mission U.S. the new enormous leading on our insights, unique in for strategy. of holding industry, core the data foundation for a continued

complexities Rekor, Colorado, key Maryland, close of full our As of all first dollar CEO encouraged secured growth Ohio, Kansas procurement, expanded into progress multimillion and contracts the reach and We've made out like states by we we've across of pillars. to continued as quarter solid my the our Oklahoma. multiple Texas, government I'm navigate

partnerships presence Our leader to SoundThinking industry strategic strengthening leaders as a and with are the further providing NVIDIA, industry. as market roadway Rekor our MSX such AWS, positioning and in intelligence

our with in investors needs my discussions been expanding opportunities, over have securing new of days, As of these top as and made XX and market in themes quarter, growth, I the each mind We've key market raised continue the meaningful footprint. necessary mentioned to earlier, winning areas many capital strides contracts such me. you past capital important our in traction the for

vision. remain committed we to path. due the is strong unpredictability indication Operator? look We'll our you on traction on of we're I Thank a continuing complexities momentum this quarter inherent contracting, to this to we've building QX. Q&A. that right to government to our on you. continued gained updating We're on forward strategic the now deliver and and move While cautious in progress the

Thank you.

Michael with first Northland question Latimore from Our Capital Markets. comes

Yes. this of from the you. a in terms see [ to the here. the now? and Thank Yes, great highlighted right. sequential then quarter going -- contracts get basically that? kind guess in large them? your locations these manage And there new recently to XX% what's I All you time also news here, contract ] into X,XXX to upgrade are of on you all potentially, deployed with growth one, locations that Or guess, currently and go you thought units those all I are embedded --

question. for you on have good Mike, call. the the Thanks to

done. of of management But contract, these. well been that the term, portable areas or mixture a of because large solution would have existing responsibility to short done a of have not areas will terms as as for can with now be that have mixture more it's number move a permanent The do otherwise we it normally new that in done. would yes, So been

lot for opportunity to direct for there and not question, answer is ones are mixture your new scheduled been ones new us. of that a done. have But could it of a replacement existing that's So otherwise that

sounds to Great. you deploy deploy units. the to And you how And it -- say? have what there is expect to started let's like many be -- quarters the what over do -- or months X,XXX, able

we Well, area, would it's a November. -- -- area X say, XX understand, expected hurricanes to storms XX would Like the -- the in June few expect that XX probably about on, between predicted you I things. to depends be and it named there's to like hope in I and

could that the that again, be based to higher existing with probably on sunny what in But say happen, X-month And So say get I'd it if days, I that's would expect. range I those would clear we'd through go resources. didn't that.

near I'm very those to and Yes. attuned Coast Yes. Gulf Yes. forecasts. the

So for sure.

Yes, indeed.

pricing the is here can't the X maintenance of full maybe and is it, subscription model hardware kind about the you pricing -- the one? or then And model talk and

is area, talking mixture a states the subscription a But particular it about, In together. because hardware the about regional varies Southeast. in referring and that cases of we're the the talking to X bundle I'm by we're that in

through that is state procurement to time. very But would that like in over way do say together. their the processes. upfront But is would much I So bundled it paid the it

Great. the And then just you Okay. news on Texas had.

just about. And what in that an is X similar of is just think, I X two, X, large then you characterize we repair. and You kind -- I that the deal see that's to clarify maintenance to discussed? opportunity that, guess -- that as, do the Texas

the trusted valuable AI. of the we evaluating, to So existing replace -- us the on device to what to is the that the is every incredibly the also maintaining, of repairing things and makes That, to with provision frankly, infrastructure. do X But do on opportunity, well, we're opportunity Texas on looking replacing, have line states. sight to roadway well

So both and those just opportunities, right getting we're now, we of access started. to have

So we're that as dollar dollar every we make and sure existing need for single will opportunity, able to being extract AI. well to from both every earn equate to and that replacement maintenance single it as

How helped Great. on they recent expectations? that some of with Have is with your And just ATD. tracking wins? last these X

I'm for with done. very integrating acquisition work states time STS workflow. into the have team, as well. pleased We're in very market well. also never as Actually we've new AI the that with we broadened been Excellent doing acquisition us. over our it now our And technologies the

I really but team that happier and integration, in making truly progress business. with the not of So be we're also could new terms with also

well, So yes, very actually.

Thank you. Noah [Operator Instructions] Our next question comes from Levitz with Blair. William

Louie for DiPalma. is Levitz on Noah This

you're gain your of stack to Will of new then the on some color, any As versus that with comparatively provide? is some market? other solutions differentiators existing it to the the And going solution going more for priced SoundThinking to elaborate to also just how on it up relates partnership to PlateRanger, some you your can others? be already

question. very a yes, about We're relationship. this So excited good

a is law name brand and respected enforcement the area. SoundThinking in

thrilled the with we're so them. opportunity work to And with

ShotSpotter, into, go-to-market pricing, and with their will powered In that that vehicle Rekor PlateRanger, does installed terms under including to a really how by of hood our approach LPR compare and that connecting and it of to SoundThinking got recognition the They've the connection to is expand and base that's competitively. which how market. their up large wants

things One is top technology and third-party vehicle I through can of recognition the of recognition plate objectively the benchmarking the say stack. is that license Rekor's

that. about very feel good very So from -- we a competitive nature, still

stacks leading heard that In enough terms evidence the of this how we believe, a SoundThinking and in their technology our is we've technology up, and from ShotSpotter customers market.

coming so it's me, need together, now for really have the safety. like to you public that solution tools an law end-to-end and enforcement to So peanut butter chocolate have they to increase

And customers, how structure which SoundThinking, us. be up is not that with pricing, to to going so it's our to

is where SoundThinking that. with we SoundThinking I a market. comment our as channel So with on are together can't effectively working But to solution

really that And the support that engagement Does but will SoundThinking. it, so understand, Noah? starts it of rest with you again, help

Will very that? Yes. utilizing power was on No, that. with follow-up be And a doing a Interested will be if lot that and it cameras. little then solar LPR helpful. PlateRanger also just of solar? traction There's

hood, indeed, again, AI Yes, physicality The Yes. as run. will. under a both is standpoint Rekor as perspective and software the it the from perspective from that a well the agents hardware technology technology,

So we've been always solar.

of us part well. it. solar for absolutely as So differentiator is it's, a And strong in fact,

me. it was That from Great.

And question our with comes Ambrecht Capital. next Shay from K.C.

David, to hear good update quarter. this

of Just that That be that wanted based comes million quarter guys minimum, going assume if about on about a depending online? I just Florida. straight contract that to probably adds revenue following if Rekor -- of comment quarter. think adds $X just about it's to But that equal, it's months do size there, how which this you it The $X a the about I line, today, mentioned when it's over it's this probably at we a it's last if year. X for more the contract $X time of just a sounds get sense million, hurricane of million How the million couple talked clarifications $XX on here. like it's you like profitability

I'm -- trying know question the don't I to better understand than I you understand maybe do? -- Eyal,

impact how contract, a we going take if lost a it's you should that bringing EBITDA $X.X X And add $X think if million you I in of say to mean $XX just this this How about revenue, do does month quarter. million contract. start your that you in it's -- profitability? guys months, million

once. it So you do wouldn't all at

Let I understand. sure make me

X months, you're per et span of, and number putting going per quarter, cetera. over to an x So a say, per month be week effectively,

that going So over you're to ramp into time.

-- contract be way so would and structured And that the that would paying be here upfront. is it

So you that of would time. the through period realize linearly

of As that heart things turns question, I faster to put fast can getting am the answer as -- your on. you Does that the in, K.C.?

it do would much Is a more like about think how kind of versus And SaaS? Like Yes. how then hardware Is type SaaS that? of contract? we be that than XX-XX? hardware it

detail... the have you do Eyal,

hardware the SaaS the on more time. over and it's upfront is K.C., Yes,

million for but your million years and to it are recognize the some that's about contracts $X SaaS only So all upfront as SaaS. not we on as if question for go of go. maybe The cash in talk the revenues every hardware, the the month, we X well, $X

recognize time. the we it So all

Okay. of big you contract mentioned it about Can different talked previous size size? Or And questions be? Texas. over type How then this as can be the it a Texas is same time?

the So important United we're K.C. Texas largest -- in question, roadway a is States. really that's the network

a imagine state. of you think of if disproportionate sensors, there, so you can a right? the so And big opportunity it's there, amount about And miles the road

The also you're other state that top referring nation. the to large of the X a in is X state,

I able remarks. states my is there in these and sure. landing as being opportunity expand, The prepared to enormous in for So described during Texas also

producing the to And so aren't X/X a from statistically lot lot described and as roadways of they the that's sensors, today, customers of a our they've roadways really results what half understand stuff a on need. from and we

a opportunity provides tremendous it for sure. So

you before. today on is an Okay. then big you there How clear your lastly, numbers? that mentioned Georgia And commentary. Georgia annual basis It in guys your in prepared wasn't were guys

you talk can Eyal, to that?

We with a customer. customers large acquisition. the is numbers largest but of over your It's very before And Yes. X Georgia customer, per to this that is XX years point, provide not STS have. we do the customer

when you size Georgia And company, over that took upsell the Did did increase STS? of that you you contract?

now, in contracts AI of but we Georgia. size did units the put Yes,

Okay, which increased the revenue, right?

did some price, of existing is based the sort with from parameters Georgia not we from increase but current other yes, Georgia, revenues contracts. The fixed overall on contract the

in a relationship beyond contract. revenues We with the had current Georgia the source and Georgia us have expand It's help have well. that as we of

Okay.

hurricane -- you Florida, I'll Georgia guys can is X state, just but you in say say states So outlined the union. Texas significant and

getting size this it's state, capital, how Like the walk have are So that's see. then on against significant on you contract? facility the of that's and you're it just to Like get in type new much the it's credit you kind you of a how structured? behind like West up -- dropped like a Coast, set say, going new Ziegler, think of values I good can to strategy And with What loan you that? to through contracts?

revenue sharing contract? about talking you Are the

new the facility today. No, you guys financing announced

Ziegler. I think it's I called think --

No.

some XXXX. upward oversee Yes. structure it's same we Ziegler, we set a confusing the upfront equity called you're cash, an With Yes, with think million the of over conversion time get I $XX a million a that upfront note. revenue-sharing We is basically, convertible. cash. back announced and So that's We will there $XX It's be that we thing. retain in get. same. to sort agreement, prepaid which advanced It's that the the

hardware, on paid this which structure, the which data. hardware. the on as own before pay the data have states, for became want don't So we for upfront that new procurement is $XX the to contract actually, talked require to in opposed some They of the we a contract, when the million,

over worth million -- indenture the XX%, we dollar, So the for That's X current for notes, with the to with software. the the meaning they million. value structure pay up just the factor said smaller SaaS, years, get and can have fees current so a the $X.XX that $XX sharing total hardware sharing monthly of grow for current X on revenue have maintenance, that $XX we every contract And we notes. we revenue if years

now contracts And then, have large but Great. for for there starting these for you a expectation run been really have cross kind you that threshold? a of company online? considering what's Okay. over years, been that do now, to your you've David, When there the of quarter that coming profitability couple

Yes.

XXXX, bleed early into in I that it such ambitions XXXX. that here believe but the We XXXX, may season but have given hurricane and

of a have I you. being of there's that's between But can the and we of tell a So the lot lot now time executed. and end stuff that's year, what

So again, fair, direct that's about but see, have would you. -- I with we be and I optimism, practical if deal the a we'll have and wait say thing again, we but would

half. into but we So how may goes, the bleed we'll see first XXXX in this

Okay. momentum. lot A Great. of

K.C. Thanks, bet. You

question Michael Latimore an from We Capital Northland with have Instructions] additional [Operator Markets.

Yes.

Just on Or kind competitive roll it city these anything does there dynamic Does recent replacing? of statewide Command it wins, is can And city? by you explain it you're this the or is the how out kind roll greenfield? Is there? out? of

Thanks, Mike. Yes.

announced meant Kansas regional Kansas and we -- based, I State. is to not So It we City really or fully was -- for Oklahoma what this that that Command state. What's from about is say. interesting Kansas into statewide the will sorry, expect extend here, and the City, contracts regional, that it so

of completely a is these us I'm into communities, important move because pleased are strategic a role, One new to we a entering level, us gives the footprint that's friction. smaller things dynamic. At different the for very with state dealing as a say coming with that it you're less

pace, able to these particular at Oklahoma. talked that being regional accelerated state about, in an as with So situation and with a the well is X level a enter as Kansas I that's

we're at that enormous Oregon, level. that County, this traffic, facing have talked that state doing work in actually And about represents the the same in sees in Oregon, particular, amount they're challenges What rural we line, along that a Umatilla this is already community Oregon. surprisingly. of an the

things. this So allows doing to start X them

didn't and operate they to source have the of of access all, same First off as glass same the of statewide, but system. pane truth the

future ecosystem also vehicle Oregon. on have they access connected that and So system, is to that working connects into the the now with the we're of it going

it's dynamic. So little a different

there it very really way in take for Gulf to future across approach. if buts Oklahoma, lines. relative and corridor these know that a a Gulf the you could done I-XX interesting and to And -- the you expansion. that, But state Texas for buts month. can path kind say -- up becomes area to be state I It Mike. that to does out, right? an the Kansas. area, And can see of XX pave up helps regional in to would fast you're that net Nobody Coast a you months going state, approach sometimes is through It

progress really that about the there, continue the we're expect So we at regional level, to to we're is at really, but level this expand which an like the state also interesting seeing. level, local making excited thing both we're

Very good, very good.

and then -- Now just...

don't just replacing know, I cameras. We're anything. something replacing, question. sort I spreadsheets -- second remembered. not replacing The and the you're -- asked or of You like we're

You know what mean, I be. would the whatever like approach traditional

some not or some like So like system this something of displacement is that. ATMS

So question. answer just to that

yes. That makes sense,

like it's of So that as function Discover? like well, the of with digitization sort just

right. right. That's That's

nicely And going kind gross margin sequentially. How was think we of then I forward should here? margin, on up gross about

thank you Mike, question. the for

have as run to and the this In our can we little it refresh around our long but call, technology. margin more anticipate technology old XX%, start to XX%. with gross technology choppy, the we I a As of mentioned as with to the on more technology. here, XX% higher trajectory we for to XX%. be anticipate refresh we the do we be will see all growth anticipate the above see gross margin of as We to And meantime,

[ Our ]. comes from next Ray question Yakal

also? other Or And September, I shifts they customers any to With is their the you by it partner of offer go of them to your do the back will the with forward? rollout customers end also existing SoundThinking PlateRanger, it and have believe, going expect their that year? partnership they and forward in just

great question. Ray, that's a

observing, Because but recognition listen, you I way tell can LPR. on master an a them, not I as already their they customer existing that base. they vehicle for that or I do go-to-market So it, what can't into brilliant our mean a speak seeing and we're right? but is expectation, they've timing, for to are the we're solution, going got

So with on and stuff complement no-brainer. And a already that we've done this their is public communities like that. webinars

would in but you a seeing thing to How for out them. years, do, the yes. happen. them the sort a same, And logical on. speak we're expect they're I'm that it's I thing I can do, that understand, that's can't to for be and natural doing of sure that would So but

$XX.XX at being been [ do And half the is the holding had back XX-week my mentioned ] second the next price off what's of question the time share low, is, this profitability year profitability down if next price year? with share quarter or maybe you pushed to early believe you

yes, with. will been today and as the say, I substantial. to type I forward, really the would progress is, be things customers the believe, and of X the And the to traction stock long There's But with has thrilled consider talk the traction affect we're we're we're we of for think ability we're of getting, was to we've it working done. concerns sort more think we the we it close been be price. really going meaningful of about and things term, accordingly. In That's ball we're a to making in traction, And that that we've that think clear so Yes. the that and think I meaningful things, question. position, the right to many the short our would intercept able look And me that value the company fluctuations, the around crystal to believe the our which to The speak to I the ahead, and big valued the ability done. capital, customer and the profitability of doing be we've which our we're decisions. was do with ability technology continue continue right frankly, stock question yes, opportunity We but I day-to-day, frankly, I run, to to can't to those. demonstrate

can't crystal what executing the we're ball of to going continue against to plan. so I the doing, to we're is our do speak but which market, And

Yes.

a been long time. As shareholder, I've around a for

like since So around the days. I'm been not the day-by-day guy, I've but BFDI

So I like has and I'm anywhere, not been set. division the going

last been my last is So here. mentioned, question What I quarter believe, Mastercard? there Mastercard? about haven't -- any and -- with Has I updates

No. the Mastercard, on a Mastercard. even don't that And With Mastercard I program they're my work doing time for that program. program. what at don't I know That's I that company. think predates --

in not engaged them. expanding we're so program with that And

Mastercard. is that we opportunities say report see on quick nothing We in which very, to service that. actually without that the there's think So the I restaurant from do a very that would new domain space, QSR standpoint, interesting is

say there's for tethered not I'd to reasons stay updates on right? for mentioned. Stay tuned, that. But Mastercard, I we're But So tuned that the the no additional information. that on

X question of. just I thought last And Okay.

just with couple beside motorist of Nobody the to else I state mean, and it's that state a in quarters interested believe back program. had I the ago onshore with? Going seemed you of Ohio that? contract of Ohio

Ohio. Yes. Oklahoma. It's not It's

results. it something a problem, Oklahoma, tied very at done Yes. making overwhelmingly no is So just that level. to happy. and legislation good The such that's is state-by-state This Oklahoma state it's City. Yes, clear.

the They're roads are there. the way clear. roads. The very are safer. motors merits Uninsured off are So

want So road that How the in things would and knowing driving market. the Legislation with, about states I the for that that's the to I and all is Oklahoma you that good it, care people we're being the on mean other it's all legislation. do unpredictable.

part. merits don't there, the the legislation but control we So are

And now back time all you. management have Thank that's the to we the floor hand closing I'll today. for for remarks. questions

today. Well, questions for and across your thank we're making to the We've of financial from you our market for us all of progress each strategies and covered joining opportunities lot a ground segments. our

concerns addressing excited we move plan, in driving our forward, of we the We're the our your on deliver remain opportunities to confident day. commitments. ahead these and to committed ability as end about the executing value and at So

our everyone call. for So to support, again on thank you and your look forward updating QX we

Thank you. today's This concludes conference.

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