Rekor Systems, Inc. reported its financial results for the three and nine months ended September 30, 2024, showing significant revenue growth but continued operating losses. For the third quarter of 2024, the company generated revenue of $10.5 million, a 16% increase from $9.1 million in the same period of 2023. For the nine months ended September 30, 2024, total revenue reached $32.8 million, up 37% from $23.9 million year-over-year. This growth was partly driven by the acquisition of All Traffic Data Services, LLC (ATD), which contributed $1.7 million in revenue for the quarter and $7.4 million for the nine-month period.

Despite the revenue increase, Rekor reported a net loss of $12.6 million for the third quarter of 2024, compared to a loss of $10.6 million in the prior year. For the nine months, the net loss widened to $41.1 million from $34.4 million in 2023. The company's operating expenses also rose, totaling $17.5 million for the third quarter and $51.6 million for the nine months, reflecting increased costs associated with the ATD acquisition and higher payroll expenses.

The company’s cash and cash equivalents decreased to $10.6 million as of September 30, 2024, down from $15.4 million at the end of 2023. Rekor reported a working capital deficit of $7.4 million, raising concerns about its ability to continue operations without additional financing. Management indicated that existing cash is insufficient to fund operations for the next twelve months and is exploring external financing options.

Rekor's strategic developments included the acquisition of ATD on January 2, 2024, for approximately $20.6 million, which is expected to enhance its market presence, particularly in the western U.S. The company also completed a public offering in February 2024, raising approximately $26.4 million in net proceeds.

The company continues to face challenges, including reliance on external financing, integration risks from acquisitions, and the need to achieve profitability. As of September 30, 2024, Rekor's total assets were $101.2 million, with total liabilities of $60.9 million, resulting in stockholders' equity of $40.3 million. The company is also addressing identified material weaknesses in its internal controls related to the accounting treatment of the ATD acquisition.