Rekor Systems, Inc. (NASDAQ:REKR) Q1 2022 Earnings Conference Call May 16, 2022 4:30 PM ET

Company Participants

Robert Berman - President and CEO

Eyal Hen - CFO

David Desharnais - President

Conference Call Participants

Zach Cummins - B. Riley Securities

Jaeson Schmidt - Lake Street

Operator

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

We ask that you refer to the full disclaimer in our earnings release. You should also review the description of the risk factors contained in our annual and quarterly filings with the SEC. Non-GAAP results will be discussed on the call. The company believes the presentation of non-GAAP information provides useful supplementary data concerning the company's on-going operations and is provided for informational purposes only.

I would now like to turn the presentation over to Mr. Eyal Hen, CFO of Rekor Systems.

Eyal Hen

Good afternoon and thank you for joining us. Today we will discuss Rekor’s results for the quarter ended March 31, 2022 and provide you with an update on key business topics. On the call with me today is Robert Berman, CEO and he will speak briefly on the exciting news we announced just this morning regarding our acquisition of STS and be giving you additional color on our business after I go over our relevant message.

In the first quarter of 2022, we continue to show growth in recurring revenue under our new sales model, compared to the fourth quarter of 2021. We shifted our emphasis from point in time revenue to recurring revenue in the third quarter of 2021. While we will continue to engage in point in time with hardware sales, in appropriate circumstances, our new sales model provides for retaining ownership of hardware and providing software and data services on a subscription basis. This has had a near term impact on our overall revenue. But with the strong growth we're seeing in recurring revenue, we are confident that the emphasis on developing subscription revenues will have a positive impact on our overall growth for the long term.