Good afternoon, everyone. I'm incredibly proud of what the Rekor team has accomplished this quarter, the best-performing quarter in our company's history, I'm pleased to lead off today's call.

We are going to switch things up a bit today. Before diving into the business and technology updates, I'll first turn the call over to our CFO, Eyal Hen, for some important financial and organizational updates.

Eyal, the floor is yours.

Thank you, Robert, and good afternoon to everyone joining us. After nearly 7 years with Rekor, I've made the decision to step down from my role as Chief Financial Officer.

It's been a tremendous privilege to help lead the company through its transformation and growth journey, and I'm deeply proud to conclude this chapter with the strongest quarterly and year-to-date results in Rekor's history. It's truly a testament to the dedication and talent of our entire team.

I'm also very pleased to introduce my successor, Joe Nalepa, who will take over as Chief Financial Officer. Joe has served as Rekor's Corporate Controller for the past 6.5 years and has been deeply involved in every aspect of the CFO role over the past year.

Joe brings both internal institutional knowledge and financial rigor, with prior experience as a manager at KPMG. His long-term tenure at Rekor and commitment to excellence make him the ideal person to step into this role.

There will be no learning curve with Joe. His appointment by our board ensures a seamless transition, maintaining continuity and stability.

I remain overwhelmingly optimistic about Rekor's future and leave with complete confidence in the company's strategy, our team, and the tremendous momentum the company has built. It's been an honor working alongside such a talented and mission-driven team.

Rekor's future is bright, and I look forward to watching its continued success. With that, it's my pleasure to turn the call over to our incoming CFO, Joe Nalepa, to discuss the financial performance for the quarter.

Thank you, Eyal, and best of luck to you and your family. I'd also like to thank all our investors who have joined us on today's call.

Today, I'll walk you through our financial results for the 3 and 9 months ended September 30th, 2025. We've been focusing on execution and operational efficiency, and are encouraged by the progress we continue to make.

During the third quarter of 2025, Rekor delivered its best financial performance in its history, marking our third consecutive quarter of positive results. We delivered record revenue of $14.2 million, an increase of 35% compared to Q3 2024 and 15% compared to Q2 2025.

On a year-to-date basis, we recorded revenue of $35.8 million, up 9% from the first 9 months of 2024. This increase represents continued growth across our public safety and urban mobility businesses.

We continue to see strong momentum in our sales pipeline and active deployments, giving us confidence in our ability to continue to drive growth going forward. Recurring revenue for the third quarter of 2025 totaled $6.5 million, representing an 18% increase compared to recurring revenue in Q3 2024.

For the 9 months ended September 30th, 2025, recurring revenue was $17.5 million, up 5% year-over-year. This reflects our long-term strategy of expanding our recurring revenue base through long-term software and Data-as-a-Service subscription contracts.

Our adjusted gross margin for the quarter was 63%, compared to 44% in Q3 2024. For the first 9 months of 2025, adjusted gross margin was 55%, versus 48% in the prior year period.

This improvement was largely driven by a greater portion of high-margin software sales compared to our service and hardware-based contracts. As Eyal has noted previously, we expect margins to continue to fluctuate over time, but to gradually stabilize as our software and Data-as-a-Service businesses become a larger share of total revenue.

A key highlight this quarter was our continued focus on operating efficiency. Total operating expenses, excluding depreciation and amortization, declined 24% quarter-over-quarter, representing a $3.7 million reduction.

Year-to-date, we've reduced operating expenses by $7.8 million, an 18% improvement compared to the same period last year. These reductions were achieved across all major areas of the business and reflect disciplined cost containment and a deliberate realignment of resources to support our strategy.

The combination of record revenue and operational efficiencies resulted in significant improvements in our profitability. Adjusted EBITDA loss for Q3 2025 was $1.5 million, an improvement of $7.9 million, or 84%, from Q3 2024.

On a year-to-date basis, adjusted EBITDA loss improved by $10.8 million to $14.5 million, compared to $25.3 million in the prior year period. These results reflect record performances across the company as we continue to manage our operating expenses to align with our growth as our revenue base continues to expand.

Before I turn it back to Robert, I want to say how truly honored and excited I am to serve as CFO and move forward with our efforts to focus on transparency, financial discipline, and execution that supports our long-term strategy. We have a clear strategy, a strong foundation, and a dedicated team driving results to create value for our shareholders.

I look forward to building on the progress we have made and helping lead the next phase of growth. Thank you for your attention.

Robert, back to you.

Thanks, Joe, and welcome officially to your new role. We've had a long-standing relationship, and I am pleased to see you take on this leadership position.

With your prior experience at KPMG and long tenure at Rekor, we are fortunate to have you here and to take the reins from Eyal. As outlined, this quarter represents the third straight quarter of positive results for both investors and the company.

We are seeing clearer signs that Rekor is reaching a point where the growth of recurring revenue and expanding market demand are aligning with operational discipline to drive sustainable growth. These results reflect the momentum outlined in our prior announcement where we stated that Rekor expected record quarterly revenue, along with a significantly improved and adjustment in EBITDA and gross margin.

We continue to work towards these objectives. In early October, we achieved a major milestone by securing our largest statewide multi-year contract with the Georgia Department of Transportation, valued at a minimum of $50 million over the contract's full term.

This contract further validates our leadership in roadway intelligence and data infrastructure, providing a long-term growth foundation in one of the most strategically important transportation markets in the country. We also received recognition for our work in South Carolina, where Rekor technology powers the state's virtual weigh station network.

The program was recently awarded a State Technology Innovation Award for establishing a nearly 100% accuracy rate in overweight truck targeting, a model that other states can follow. This project showcases Rekor's ability to effectively use AI and connected infrastructure to deliver measurable value and efficiency to state agencies.

Furthermore, three new and very large states have begun using Rekor Discover. Beyond our core operations, I'd like to briefly mention a new initiative Rekor plans to enter: the global deepfake detection market.

While we can't speak in detail yet, this opportunity builds on Rekor's years of experience in the video analytics for government agencies, and particularly law enforcement. For some time, even before deepfakes were a notion in the public's mind, we've considered the evidential implications of synthetic media and deepfake technologies and positioned ourselves to protect our customers and the public at large in this critical area.

These efforts have now been concentrated in Rekor Labs, which is operating as an independent entity, and there's more to come on this when the time is right. We continue to see strong performance across our core portfolio.

Rekor Discover and Command have generated considerable attention and adoption in the market. More importantly, we are now seeing an organic convergence of these two technologies in new RFPs issued by transportation authorities.

This reflects a growing industry movement towards integrated data and intelligent solutions, an approach that Rekor has been pioneering for years. Importantly, too, our Data-as-a-Service business model is proving to be a major differentiator.

Agencies increasingly want data without the hardware burden, deployment headaches, and maintenance issues. Rekor is perfectly positioned to meet that demand with AI-driven solutions that are scalable, cloud-based, and high margin.

I also want to take a moment to recognize the continued strength of Rekor Scout. While Discover and Command received much of the public attention, a significant portion of our revenue continues to come from Scout, which remains a cornerstone of our technology portfolio and a recognized leader in vehicle and license plate recognition.

As part of our ongoing efforts to strengthen and expand this business, I am pleased to announce that Jennifer, "Jen," Candelaria will join Rekor as General Manager of Scout. Jen will be based in our Columbia, Maryland office and report directly to me.

Jen brings more than a decade of global leadership experience across North America, Europe, Asia, Latin America, and the Caribbean. She has a strong track record in technical sales, product management, and business development, with prior leadership roles at Motorola Solutions and Milestone Systems' AI business unit, BriefCam.

Her experience building high-performance teams and driving strategic growth aligns perfectly with our goals for Scout. Jen will oversee the full P&L for Scout business, lead sales strategy, market share expansion, and partner channel engagement to accelerate both revenue and margin.

Her appointment significantly strengthens our overall leadership team and reinforces our commitment to operational excellence across all business lines. As we enter the fourth quarter of the year and look ahead to 2026, Rekor continues to be positioned for substantial growth.

The momentum we built across our technology platforms, customer base, and financial performance underscores that Rekor's transformation is delivering lasting value. We would like to thank our shareholders, employees, and partners for their continued trust and support.

Lastly, I'd like to publicly thank Eyal once again for his dedicated service to Rekor. With that, operator, we'll now turn the call over for questions.

Good afternoon, Robert, Eyal, and Jonah. Eyal, it was a pleasure working with you.

Congrats, Jonah, on your appointment as CFO. My first question for Robert: what type of product does the Rekor team envision developing with the deepfake detection division?

Would the product be Software-as-a-Service, or do you imagine it would be more of a solutions in which it requires your personnel combined with your software?

This is Robert, and thanks for the question. By the way, it's Joe Nalepa, right?

Who is assuming the role of CFO. Let me answer you by saying that the product that we have previously announced is being developed by a subsidiary which is operating independently as Rekor Labs under the management of a director.

Given what's going on in that space and the competition and competition for IP and other things, there's not much more we can say about what we're doing than what we've said. I know that's probably not satisfying, but we expect to get a product in the market in '26, and we just want to be careful.

Look, Rekor has a long history of working with AI, machine vision, which is video and audio. This came to our attention back in '23, it's not something that just kind of popped up one day and we decided, "Oh, my god, deepfakes," right?

We had been looking at it. We actually started developing some technology around it for our customers that were requesting, okay, this technology.

That's really all we can say about it at this point in time. I wish I could say more.

That's really,

definitely exciting. How should we think about the EBITDA trajectory and margins over the next several quarters?

I think you've been able to take OpEx out of the model, and you're also in the process of scaling the Georgia contract. How should we think of margins and EBITDA?

I think the way you should think about it is exactly what we've been saying. We've always said that we expect, as things progress, that our margins will increase.

We expect that they will stabilize higher than we've reported this quarter. That's just part of the building process of the technology that we're putting in the field.

I think the most important thing is what was said earlier about our clients are looking for the Data-as-a-Service business model. They're not interested in the technology and hardware and maintenance contracts and so forth.

They need the data that they need to operate the roadways. Look, everyone here understands what's happening.

You hear all these things about robotaxis and companies doing this, that, and the other thing. The DOTs have to keep pace.

They've got to keep the roadways safe, and they have to do that through managing data. The idea of delivering the Data-as-a-Service as opposed to delivering technology and supplying it, maintaining it as a contractor is where it's headed.

That means higher margins, longer-term contracts, and a better business model for a company like Rekor. I think it's consistent with where we projected that we were going, and we're seeing that.

We're seeing that results today, right?

Great. Do you see many other contracts similar to the Georgia contract in your pipeline such that other states will look at Georgia as the model or the paradigm, and they perhaps won't need to do a rigorous RFP process?

They can trust that Georgia did the proper due diligence, and they can expedite the process and go straight with you?

Yeah. Look, I think, obviously, states procure the way they procure, but I think the good news is that they do follow each other.

At the end of the day, I believe that what we're seeing, okay, which we pioneered, was the concept of Data-as-a-Service and delivering the solutions that these agencies are looking for. That's where it's headed, and what we're seeing now, which I think we said during the call, is that this is unprompted.

We're seeing RFPs come out that we're responding to that are asking for this business model with the solutions that we have. What's really interesting about it is we're seeing a convergence of both the Discover and the Command platform.

What I mean by that is, when people think about DOTs, they have two sides. They have operations, which is maintaining roadways, operating roadways, public safety, and all the things that go along with that.

Then you have more longer-term things like planning for how you maintain your roadways over the next 10, 15, 20 years. What we're seeing is now the DOTs are looking to combine that into a single pane of glass where they can get the data that they need through one supplier, okay, not by buying hardware and not by having a contractor install equipment and have to worry about is it working, is it not working, but by a company like Rekor that says, "Guess what?

We'll give you all of this data that you need to do both planning and operations with, and pay us for the data. If it's not giving you what you need to operate your roadway system, then don't pay us," right?

If people think about today's world, everyone's used to getting things as a service, and that's something that I'm proud to say we pioneered, okay? We fought long and hard to make that business model work.

When we first started years ago, people said, "Oh, I'm not sure that that's going to work," but that's exactly what we're starting to see. We're seeing RFPs come from states that, again, are unprompted.

They're just showing up, and they're looking for exactly what Rekor does. The way we do business, more importantly, they're asking for that from the companies that are going to bid that.

I think Rekor is uniquely positioned to offer those services and solutions because, frankly, we pioneered a lot of it.

Thanks, Robert, and thanks, everyone.

Yeah. Thank you.

Thanks. Eyal, best wishes for your next phase outside of Rekor.

I remember meeting at your headquarters a year ago and speaking many times since then, good luck with everything.

Thank you.

My first question is about your Command win that you were piloting a few years back in Austin, Texas. That contract clearly came through quite well in June or so.

Just wondering, is Austin starting to ramp up? Then is the plan there to kind of tackle Austin because that's where the pilot was and then really go out to Dallas, Fort Worth, and then to Houston?

Is there any kind of just color you can add on that and the ramp-up?

That's a great question. Austin has issued a PO, okay, under the RFP that Rekor won.

We have an expanded contract with them. Eyal, I think it's or Joe, it's for 3 years.

I'm not sure what it is. It took the full benefit of the pricing that was in the RFP.

We've been working closely with TxDOT procurement group, they wanted to kind of roll this out to the other districts in a certain way, and when you work with states, you follow their lead and you do the best you can to support what they're asking you to do. I think we'll see a successful roll-out in Texas beyond Austin, right?

We're just in that process right now with the TxDOT procurement team, right? Look, one additional thing about our business is, it's B2G.

Always hard, but the good news is that when you win, you're in, and you're there for a long time. That's the nice thing about this business, right?

It's a double-edged sword: a little painful on the front end, but on the back end, it's very rewarding. I think that we're on the back end, especially given Georgia and other states like Texas and others as well.

So.

Great. Just to play on that thread of you win and you're in, which is great.

How does the Caltrans value of Discover contracts stack up? Do you think that's a third the value of what you'd be doing either in Georgia or Texas?

Just kind of curious.

Look, California is a large state, and I'd love to talk about the size of that potential opportunity, but I'd hate to get ahead of ourselves and then have the folks at Caltrans get all upset. "Wait a second.

We're just doing this, that, or the other thing." Look, it's a massive opportunity, and we were pleased to be asked by them to come out and showcase the tech for Caltrans and all their districts, and that's exactly what we're doing.

Look, we're going to slow things down a bit and be more methodical about what we're telling the market. The good news is tech is being adopted, the business model is being adopted, the states have to do this stuff, and Rekor is in a premium position to be able to deliver these services because, again, we pioneered a lot of this.

I think it just makes us very unique, right?

Good, good. I just have one last question, and for Eyal, Joe, you, Robert, whoever wants to answer it.

Now that you nailed down the Texas contract, the extended higher-value Georgia contract, that Caltrans, do you expect to do revenue sharing note again? Because that would definitely help improve liquidity.

I'm just kind of curious what the thoughts are around that.

Eyal, you can certainly handle that because you've been working on it and transferring it over to Joe. Please.

As part of improving our liquidity, we are working with a banker, as we announced before, to have another series of these notes. Now with Georgia and Texas coming in to add to the pool, that gives us the opportunity to raise money through this revenue sharing notes tool that we have last a year and a half.

Definitely, yes, we are working towards this, and you will know when this is being executed. We are working with a banker, as we announced before, to release a second series of notes.

Okay. Thanks, Eyal, and best wishes again.

I'll turn it back over.

Thank you.

hi. This is Aditya Devar for Mike Latimore.

Should we get a full pro rata portion of the new Georgia contract in the fourth quarter?

I'm not sure I caught that. Eyal, Joe?

Can you repeat the question, please?

Can you repeat the question, please?

Yeah. Do you expect a full pro rata portion of the new Georgia contract in the fourth quarter?

Yes, we do. Georgia contract is in effect since October, and we anticipate to bill them under the new contract soon.

Okay. Can you tell me the status of the Discover deployments in Georgia?

Can you repeat the question again?

The status of Discover deployments in Georgia?

I think we can't get into the detail, but we have new Discover deployments going in in Georgia, in Florida, and a couple of other states as well. I'm not sure that we have all those exact numbers.

Just so kind of towards the end of the year, we shift our resources around because some states slow down work over the Thanksgiving to New Year's holiday, and other states allow the work. Trust that we're taking full advantage of working everywhere we can, getting as many systems in as possible.

I think we put a record number of systems in in Florida in a very short period of time. Eyal, Joe, I'm not sure you guys have those numbers handy, but they're going in.

Finally, are cities joining the Georgia procurement contract yet? I'm sorry, can you repeat that?

The Georgia contract is in full effect. We have a PO from them for the next year, it went through the whole processes within the state, and it's in effect as we speak.

Got it. Thank you.

Thank you.

Yes, hi. Thanks for taking my call.

The international market, I believe Rekor attended the ITS European back on May 19th, and Mark was over there earlier in the year. Can you give us any feedback on any of that?

Sure. This is new for us, right, because we haven't looked to do business outside of the US borders other than with the Scout platform.

We are actively engaged with a number of customers in Europe, and look, technology works here, it works there. We hope to be doing business in Europe and outside the US in 2026.

The QSR sector, is that any push for that, or are you just no revenue there, or?

Again, it's more Scout, and it's not something that we're prepared to talk to today about. Look, Rekor with its vehicle recognition software has some unique tools which allows for property owners to extract anonymized information from vehicles that are on their property.

That's something that has a lot of commercial application, and I think that's an area that we're going to be focused on in '26. Hopefully, with Jen joining us, we'll be able to produce some real results with that.

I think that's something that we think has some strong opportunity. Look, companies want to know who's on the property, where are they coming from, and if you can do that in an anonymized way, which Rekor can do, and we have some IP and we have some patents on that on how we do that, then we expect to take advantage of that in the commercial sector.

It's an area we're certainly focused on, so that's a good question. Thank you.

Do you see this technology being used anywhere else? For example, maybe seaports for shipping containers, for example, or?

That's a really good question, and without getting into too much detail, I could just tell you that state DOTs and the federal government have a strong interest in tracking what comes into a port, onto a tractor trailer, onto a highway, and so forth. That's what makes, again, Rekor unique, because not only do we have the ability to do what we do on the roadways with respect to Discover, but given the ability to recognize vehicles, also the ability to recognize DOT numbers and other things related to what might be on the side of a shipping container.

Yes, that's very much something that we're looking at and working on. I think it's a really good question, and I think that's at the end of the day how all this kind of gets stitched together and why it has value.

My last question, as a long-term shareholder, do you believe profitability is what's holding the elevation in the share price and maintaining it there, in your opinion?

Look, it's tough being a small public company in this world, right? It's just tough, right?

I think the good news is that I think we've proven that we could advance the company, we can increase our revenue, we can control our costs, we can do so without impairing revenue, and we can drive the company to profitability. At the end of the day, it's really the value of the technology.

There's a lot of value to what we've developed that took years to do, and it's not easily replicated. I personally expect that that value is going to monetize in the share price at some point, people are going to realize it.

You don't expect a slowdown in this quarter with the holidays, Thanksgiving, Christmas, New Year's?

Look, there is some seasonality in our business. Certain DOTs do limit the amount of work that you do roadside from Thanksgiving to New Year's, but we're shifting our manpower around to those states where we can work.

We think there's a good chance that the growth can overcome the little bit of seasonality that you have. At the end of the day, this stuff really doesn't matter, because once the company gets its sea legs and it grows, it's just going to grow, because it's still very early, right?

The more important thing is that the pipeline is there, the adoption's there, expansion's there. As I said earlier, the RFPs that we're seeing unprompted from our customers, it just tells you that Rekor is headed in the right direction and that we're providing what they want, right?

It's a really big market, and we haven't even touched the tip of the iceberg. Thanks, Ray.

Thank you for answering all my questions, and I appreciate all the hard work everyone's doing at Rekor.

Thanks, Ray. Appreciate it.

Thanks for the support.

Operator, I just want to make sure that there's no further questions from any shareholder, because sometimes we hear that there were and people didn't get a chance to ask. There are no further questions?

The queue is clear?

Okay. Look, everyone, thank you so much for the support.

Thank you for joining the call. It's early.

It's early in the day for Rekor, but I think we've proven that we're headed in the right direction. You just don't land contracts with states the likes of Rekor has and not have something that's really there.

Okay? It's a good sign, and again, I think we're headed in the right direction, both with the company's technology as well as the business model.

We're looking forward to a great year in 2026 and seeing you all on the next call. Thank you all.

Appreciate it.