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| Supporting this, I’m pleased to report that we strengthened and deepened our position with the largest states in the United States and on the largest roadway networks in the nation, including Texas, Florida and California |
| Q3 2023 revenue achieved a robust $9.1 million in revenues, demonstrating significant growth of 34.5 million -- 34.5% from the $6.8 million recorded during the same period in 2023 |
| We also worked to exponentially increase our distribution capacity, scale our internal systems and processes and strengthen our brand promise as a leading provider in roadway intelligence solutions |
| And I think Rekor, look, I think, we had a fantastic quarter |
| During this time, we quickly gained a significant foothold in the transportation market and are becoming well recognized as top leaders within the industry |
| As you can see on the left, the revenue per share for Rekor is significantly higher than the other three companies and was accomplished in much less time |
| This past quarter, in particular, has been pivotal for us in cementing our position as an essential innovator in AI for digital infrastructure and delivering significant breakthroughs in our products and platforms in each of these market segments |
| So I think Urban Mobility will lead the way and that’s a great business, because long-term state contracts, recurring revenue, very profitable and that pulls in the ability to do the other pieces |
| As a result of our continued growth and progress, we are pleased to announce an unprecedented topline for the third quarter of 2023, with a consecutive quarter over quarter increase of 6.5% |
| We built our Rekor Discover solution to provide an unmatched value proposition for our customers |
| I am particularly proud of the fact that the revenue growth the company has experienced over the last 12 months is entirely organic |
| As we expect to have yet another record quarter meeting or beating the current revenue estimates for the fourth quarter of 2023, Rekor will have again more than doubled its topline |
| Highlighting the tangible growth and forward momentum we just discussed, we’re pleased to share that our revenue for the third quarter increased to $9.1 million, 35 -- 34.5% higher than the $6.8 million experienced in the same period last year and about 6.5% higher than the second quarter of 2023 |
| Building upon Eyal’s comments about our financial performance and momentum, I am pleased to report that the third quarter has marked yet another period of continued performance and growth for Rekor |
| Shifting gears to our Transportation Management Market, I’m excited to share that we have also made significant progress here in the quarter as well, including major new technological advancements, expanded partner programs and customer growth |
| Thanks to the continued execution of the entire team, this remarkable growth was achieved more swiftly than many of our peers, as reflected in the revenue per share comparisons that Eyal shared with you earlier |
| We have momentum and believe our relentless focus and execution against our vision and mission will continue to propel us into further exceptional growth and opportunity ahead |
| Really good to see the growth accelerator |
| We also continued our growth quarter-over-quarter, which was 6.5% above Q2 of 2023 |
| By almost any measure, Rekor is in a stronger position now than at any time in our past |
| This continues to give us confidence in our upward trajectory, operational efficiencies and commitment to long-term growth and shareholder value generation |
| We’ve also seen remarkable improvement in adjusted gross margins, up to 52.6% for the third quarter of 2023 from 46.1% in the third quarter of 2022 |
| This margin performance has been fueled both by technology advancement and the use of automation and process controls, enabling us to optimize costs and bolster margins |
| In summary, the third quarter has been another period of solid performance for our company, marked by substantial product innovations across each of our customer markets and growth in both the size and the strength of our relationships with clients |
| And at the same time, we’ve also solidified our market presence and emerged as industry thought leaders in roadway intelligence |
| We also expect to have a strong fourth quarter and meet or beat the current estimates for the full year |
| Overall, we are encouraged with the progress that we’ve made this quarter in the Transportation Management Customer segment and believe the best is yet to come as we continue to expand and scale our technology, partners and customer growth |
| We are well positioned to help connect the dots and enable sharing and collaboration between agencies at all levels, across the state and even across multiple states |
| As David outlined, the strength of our differentiated products and technology, and our ability to scale is allowing us to grow more quickly and with less equity investment than comparable companies |
| As we work to prudently manage our equity, we’ve been able to reach these milestones while avoiding the heavy dilution that is often seen in the sector |
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| In addition, as our footprint grows from east to west, the opportunity to transact in states where we have no direct presence or people continues to be a challenge |
| As we look ahead, customers in this segment have told us they often struggle to manage through arcane complexities and timeliness of traditional government procurement systems and processes |
| For the first nine months of 2023, we reduced the adjusted EBITDA loss by 28.5% to $23.2 million, down from $32.4 million in the same period last year |
| This perpetual lack of underinvestment is also a reason why roadways and bridges in the U.S |
| In closing, I want to recognize that while we’re not immune to the significant and continuous market, financial and geopolitical upheavals faced here in the U.S |
| Today, states struggle to collect and report traffic data for most of their roadways due to the cost of collection and the inability for legacy technologies and manual approaches to keep up with and meet the evolving standards |
| KC Ambrecht … models and you have losses |
| It’s the inability to get out there in preparation for the weather and then if there is a weather event, it’s the cleanup afterwards |
| Furthermore, the first nine months of 2023 show a reduction from $40.9 million in the corresponding period in 2022, down to $32.8 million, even as we worked intently to complete the integration of the SDS acquisition |
| In the quarter, despite incredibly challenging weather conditions from an intense hurricane season in our southeast markets that continuously disrupted roadway operations, our dedicated teams in Georgia, Florida, Alabama, the Carolinas and Virginia rose to the occasion |
| The increasing number of roadway collapses and the overall deterioration of roads have created heightened public awareness and intense political pressure to address the continued decline in Public Safety stemming from sharp increases in traffic congestion, environmental concerns and roadway fatalities |
| In the third quarter of 2023, our recurring revenue percentage from total revenue was 52.6%, a decrease from 71.4% during the same period last year |
| During the third quarter, our cash burn continued to decline |
| In the first nine months of 2023, we also achieved a reduction in cash use for operations, down to $26.7 million from $13.4 million in the same period last year |
| The inability to properly report these traffic studies means states cannot recoup the much-needed funding to build and maintain their vital infrastructure |
| This has become urgent |
| This has included multiple challenges and times when we have been constrained by limited resources |
| Traditional tools and methods for managing and optimizing this vital infrastructure are proving inadequate and there is an immediate need and urgent call for innovative approaches and transformative solutions |
| Recurring revenue for the nine months ended September 30, 2023 accounted for 62% of total revenue, a small decrease from 64% in the same period last year |
| There’s no question about it, right? And it’s just a matter of being able to execute the business and get out there and do it and that’s a high class problem |
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