Rekor Systems Inc (REKR) 2023 Q2 法說會逐字稿

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

下午好，女士們、先生們，歡迎參加今天的 Rekor Systems, Inc. 電話會議。我叫瑪麗亞，我將擔任你們今天的協調員。 （操作員說明）謹此提醒，本次電話會議正在錄音以供重播之用。

Before we start, I want to read you the company's abbreviated Safe Harbor statement. I want to remind you that statements made in this conference call concerning future revenues, results of operations, financial position, markets, economic conditions, products and product releases, partnerships, and any other statements may be construed as predictions of future performance or events are forward-looking statements.

在我們開始之前，我想向您宣讀該公司的簡短安全港聲明。我想提醒您，本次電話會議中有關未來收入、運營業績、財務狀況、市場、經濟狀況、產品和產品發布、合作夥伴關係以及任何其他聲明的陳述都可能被解釋為對未來業績或事件的預測。前瞻性陳述。

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

此類陳述可能涉及已知和未知的風險、不確定性和其他因素，可能導致實際結果與此類陳述明示或暗示的結果存在重大差異。我們要求您參閱我們的收益報告中的完整免責聲明。您還應該查看我們向 SEC 提交的年度和季度文件中包含的風險因素的描述。

Non-GAAP results will be also discussed on this call. The company believes the presentation of non-GAAP information provides useful supplementary data concerning the company's ongoing operations and is provided for informational purposes only.

本次電話會議還將討論非 GAAP 業績。該公司認為，非公認會計準則信息的呈現提供了有關公司持續運營的有用補充數據，僅供參考。

I want to turn the presentation over to Mr. Eyal Hen, CFO of Rekor Systems.

我想將演講交給 Rekor Systems 首席財務官 Eyal Hen 先生。

Hi, everyone. Thank you for joining us to discuss our results for the six and three months ending June 30, 2023. We're excited to share our continuing progress with you. I'd like to begin by underscoring our continuous revenue momentum and the accelerated achievements we have seen recently.

大家好。感謝您與我們一起討論我們截至 2023 年 6 月 30 日的六個月和三個月的結果。我們很高興與您分享我們的持續進展。首先，我想強調我們持續的收入增長勢頭以及我們最近取得的加速成就。

Our journey on the rapid growth trajectory began with the strategic acquisition of the company formerly known as Waycare in September of 2021. This acquisition not only marked a significant milestone for us but was seamlessly integrated becoming the cornerstone of our Rekor Command AI transportation management platform.

我們的快速增長之旅始於2021 年9 月對前身為Waycare 的公司的戰略收購。此次收購不僅對我們來說是一個重要的里程碑，而且無縫集成成為我們Rekor Command 人工智能運輸管理平台的基石。

Building on that milestone, in June of 2022, we closed the acquisition of the company formerly known as Southern Traffic Services, STS, which has now been integrated and flourished as the Rekor Traffic Services Division of Rekor. The second integration was the linchpin to the recent introduction of our Rekor Discover urban mobility platform, delivering a breakthrough AI-based approach to Count, Class, and Speed studies for the state Departments of Transportation and municipalities. All this underscores our ability to recognize growth catalysts, swiftly execute on them, and successfully achieve synergies and drive expansion by integrating people, processes, and technologies into the heart of our business operations.

在此里程碑的基礎上，我們於 2022 年 6 月完成了對原名為 Southern Traffic Services, STS 的公司的收購，該公司現已整合為 Rekor 的 Rekor Traffic Services 部門並蓬勃發展。第二次集成是我們最近推出的 Rekor Discover 城市交通平台的關鍵，為州交通部和市政府提供了基於人工智能的突破性計數、等級和速度研究方法。所有這些都凸顯了我們識別增長催化劑、迅速執行這些催化劑的能力，並通過將人員、流程和技術整合到我們業務運營的核心來成功實現協同效應並推動擴張。

As a result of these achievements, we are pleased to highlight an unprecedented top-line growth. We have witnessed consecutive quarter of remarkable quarter-over-quarter growth above 35%. It's notable that we were also able to achieve this quarterly result, while simultaneously reducing our SG&A expenses. We think we have demonstrated that we can be financially prudent even as we integrated significant acquisitions. It's also notable to mention that we achieved this while continuing to make key investments in our future through research and development.

由於這些成就，我們很高興地強調前所未有的收入增長。我們見證了連續一個季度顯著的環比增長超過 35%。值得注意的是，我們還能夠實現這個季度業績，同時減少我們的銷售管理費用。我們認為，我們已經證明，即使我們整合了重大收購，我們也可以在財務上保持謹慎。還值得注意的是，我們在實現這一目標的同時，繼續通過研發對未來進行關鍵投資。

While we are seeing expansion in both our non-recurring and recurring revenue channels, our recurring revenue as a proportion of our total revenue is on an upward trajectory. We are confident that this trend will persist as we tap into the abundant opportunities that lie ahead. As such, we are maintaining our earnings guidance for 2023 as announced before.

雖然我們的非經常性和經常性收入渠道都在擴張，但我們的經常性收入佔總收入的比例呈上升趨勢。我們相信，隨著我們充分利用未來的豐富機遇，這一趨勢將持續下去。因此，我們維持之前宣布的 2023 年盈利指引。

Now let's talk about some other significant additional details for Q2. Highlighting the tangible growth and forward momentum we have experienced, we are pleased to share that the proportion of recurring revenue in our overall revenue portfolio for the three months ending June 30, 2023, stood an impressive 67.4%, up from 56.2% in the same period the prior year. This upward trajectory was sustained over the first half of 2023, registering at 67.6% compared to 56.5% during the same time frame in 2022. These figures underscore the successful execution of our strategy to concentrate in generating recurring revenue, putting us on the path towards enduring strength and stability.

現在我們來談談第二季度的一些其他重要的附加細節。我們很高興地與大家分享，截至2023 年6 月30 日的三個月中，經常性收入在我們整體收入組合中所佔的比例達到了令人印象深刻的67.4%，高於2023 年56.2% 。上一年期間。這種上升趨勢在 2023 年上半年持續存在，達到 67.6%，而 2022 年同期為 56.5%。這些數字強調了我們專注於產生經常性收入的戰略的成功執行，使我們走上了通往持久的強度和穩定性。

Our fiscal discipline is further highlighted in the first half of 2023, where we achieved a commendable reduction in cash used for operations down to $19.2 million from $23.1 million in the same period last year. It's worth noting that our 2023 figures include one-time payments for accrued accounts payable from 2022, professional fees, and deployment of new systems.

我們的財務紀律在 2023 年上半年得到進一步凸顯，我們用於運營的現金從去年同期的 2,310 萬美元減少至 1,920 萬美元，值得稱讚。值得注意的是，我們 2023 年的數據包括從 2022 年起應計應付賬款的一次性付款、專業費用和新系統的部署。

Adjusting for this, our actual cash expenditure was approximately $12.5 million for the first six months and just a bit of $5.5 million for Q2 of 2023. This showcases our commitment to efficient financial management as we position Rekor for growth and scale.

對此進行調整後，我們前6 個月的實際現金支出約為1250 萬美元，2023 年第二季度僅為550 萬美元。這體現了我們在為Rekor 的增長和規模定位時對高效財務管理的承諾。

Turning your attention to the financial metrics for the period ending June 30, 2023, and other recent developments, I'll cover several promising trends in all of our key metrics. Q2 2023 revenue, we achieved a robust $8.6 million in revenue, suppressing consensus expectations and showcasing a remarkable 132.4% surge from the $3.7 million recorded during the same period in 2022.

將您的注意力轉向截至 2023 年 6 月 30 日的財務指標以及其他近期發展，我將介紹我們所有關鍵指標中的幾個有希望的趨勢。 2023 年第二季度的收入，我們實現了 860 萬美元的強勁收入，低於市場普遍預期，較 2022 年同期的 370 萬美元大幅增長 132.4%。

Our first six months of 2023 revenue totaled $14.7 million, up 121% from the $6.7 million of the same period in 2022. As mentioned earlier, our revenues have continued to grow organically in all of the quarters since the operations of our recent acquisitions have been fully included, as demonstrated by revenue increases of more than 35% quarter over quarter.

我們2023 年前六個月的收入總計1,470 萬美元，比2022 年同期的670 萬美元增長121%。如前所述，自從我們最近收購的業務運營以來，我們的收入在所有季度都持續有機增長。收入季度環比增長超過 35% 就證明了這一點。

Turning to adjusted gross margin. We have also seen remarkable improvements in this category, up to 51.8% for the second quarter of 2023 from 39.4% in the second quarter of 2022. This performance has been fueled by new valuable technology advancements and the use of automation and process control, enabling us to optimize cost and bolster margins.

轉向調整後的毛利率。我們還看到這一類別的顯著進步，從2022 年第二季度的39.4% 上升到2023 年第二季度的51.8%。這種表現得益於新的有價值的技術進步以及自動化和過程控制的使用，使我們優化成本並提高利潤。

Operating losses, as a result of our improved margins and reduction in SG&A expenses, we have successfully decreased our operating loss from $15.7 million in the second quarter of 2022 to $10.3 million in the second quarter of 2023. Furthermore, the first half of 2023 saw a reduction from $28.4 million in the group's corresponding period in 2022, down to $23.0 million, even as we work intently to complete the integration of the STS acquisition.

運營虧損，由於我們提高了利潤率並減少了 SG&A 費用，我們成功地將運營虧損從 2022 年第二季度的 1,570 萬美元減少到 2023 年第二季度的 1,030 萬美元。此外，2023 年上半年儘管我們正在全力完成對STS 收購的整合，但該金額仍從2022 年集團同期的2840 萬美元減少至2300 萬美元。

Adjusted EBITDA for the second quarter of 2023, the loss stands at $7.2 million, a significant improvement of over 40% from the $12 million in the same period last year. For the first six months of 2023, reduced the EBITDA loss by 23.5% to $16.5 million, down from $21.6 million in the same period last year. The quarter-to-quarter improvement from Q1 2023 was roughly a $2.3 million reduction or approximately 24%. We anticipate this trend to continue as we continue to grow our topline and manage our operating expenses prudently.

2023 年第二季度調整後 EBITDA 虧損為 720 萬美元，較去年同期的 1200 萬美元大幅改善 40% 以上。 2023 年前 6 個月，EBITDA 損失減少 23.5% 至 1,650 萬美元，低於去年同期的 2,160 萬美元。與 2023 年第一季度相比，季度環比減少了約 230 萬美元，即約 24%。隨著我們繼續增加收入並謹慎管理運營費用，我們預計這種趨勢將持續下去。

As we have moved forward, we've borne one-time expenses linked to payable management, assets and inventories, systems deployment, and associated professional services fee. We continue to maintain a disciplined approach on operating expenses and diligently review each of our financial metrics, with the objective of strategically allocating resources to areas that provide the best opportunities to drive revenue acceleration.

隨著我們的前進，我們承擔了與應付管理、資產和庫存、系統部署以及相關專業服務費相關的一次性費用。我們繼續對運營支出保持嚴格的態度，並認真審查每一項財務指標，目標是將資源戰略性地分配到提供最佳機會以推動收入加速的領域。

To provide a more granular insight into our upward trajectory, we've been providing enriched key performance indicators. Our goal is to empower you to assess not only our prowess in obtaining new contracts, but to appreciate the enduring value these contracts bring to our performance commitments.

為了更詳細地了解我們的上升軌跡，我們一直在提供豐富的關鍵績效指標。我們的目標是使您不僅能夠評估我們獲得新合同的能力，而且能夠欣賞這些合同為我們的績效承諾帶來的持久價值。

In the second quarter of 2023, we secured contracts worth of $17.6 million, a 411% increase over the $3.5 million total contract value in the same quarter of 2022. Additionally, through the six months ended June 30, 2023, we secured contracts worth of $29.7 million, a 497% increase over the $5 million total contract value in the same period of 2022.

2023 年第二季度，我們獲得了價值1,760 萬美元的合同，比2022 年同一季度的350 萬美元合同總價值增長了411%。此外，截至2023 年6 月30 日的六個月，我們獲得了價值2970萬美元，比2022年同期的500萬美元合同總價值增長497%。

Finally, as of June 30, 2023, our remaining contract performance obligations stood at $31.8 million, a notable jump of $10.4 million, or 48% when compared with $21.4 million as of December 31, 2022. We project that approximately 69% of the residual performance obligations as of June 30, 2023, will be realized in the coming 12 months.

最後，截至2023 年6 月30 日，我們的剩餘合同履行義務為3,180 萬美元，與截至2022 年12 月31 日的2,140 萬美元相比，顯著增加了1,040 萬美元，即48%。我們預計剩餘合同履行義務的大約69%截至2023年6月30日的履約義務將在未來12個月內實現。

Moving to our financial condition and liquidity. In January, we completed the closing of senior secured notes in the aggregated amount of up to $15 million, led by our CEO, Robert Berman, with participation from other new and existing investors. At closing, $12.5 million was funded. In March 2023, we also completed a registered direct offering of $10 million. This transaction gave us the liquidity we needed to continue and execute our strategy.

轉向我們的財務狀況和流動性。一月份，我們在首席執行官羅伯特·伯曼 (Robert Berman) 的帶領下，在其他新老投資者的參與下，完成了總金額高達 1500 萬美元的高級擔保票據的交割。交易結束時，已籌集 1,250 萬美元資金。 2023年3月，我們還完成了1000萬美元的註冊直接發行。這項交易為我們提供了繼續和執行我們的戰略所需的流動性。

Our cash balance on June 30, 2023, was $2.4 million, an increase from $1.9 million as of December 31, 2022. In July, a warrant holder exercised his warrants, which resulted cash proceeds of approximately $11 million.

截至2023 年6 月30 日，我們的現金餘額為240 萬美元，較截至2022 年12 月31 日的190 萬美元有所增加。7 月，認股權證持有人行使其認股權證，產生了約1100 萬美元的現金收益。

Our working capital position has also improved significantly. As of June 30, 2023, we had a working capital deficit of $1.7 million as compared to a deficit of $6.2 million as of December 31, 2022. The improvement in working capital was primarily due to an increase in cash and cash equivalents and accounts receivables.

我們的營運資金狀況也顯著改善。截至2023年6月30日，我們的營運資金赤字為170萬美元，而截至2022年12月31日的赤字為620萬美元。營運資金的改善主要是由於現金和現金等價物以及應收賬款的增加。

In summary, we are pleased to see continuing strong results and synergistic impacts from our strategic moves. This continues to give us confidence in our forward-looking guidance and the company's upward trajectory, operational efficiencies, and commitment to long-term growth and shareholder value generation.

總之，我們很高興看到我們的戰略舉措持續取得強勁成果和協同影響。這繼續讓我們對我們的前瞻性指導、公司的上升軌跡、運營效率以及對長期增長和股東價值創造的承諾充滿信心。

With that, I will now turn the call over to David. David?

現在，我將把電話轉給大衛。大衛？

Thanks, Eyal. Good afternoon to everyone joining us on the call today.

謝謝，埃亞爾。今天參加我們電話會議的所有人下午好。

As Eyal covered with the financial metrics, Q2 represented another quarter of solid execution and revenue growth across all business lines. This was accompanied by new breakthrough product and technology deployments, operational efficiency gains contributing to significant margin improvements, new key public-private partnerships for the Rekor partner network, and significant national news and media coverage on the unique value that we are delivering to customers. All of this contributes to our record $17.6 million in total contract value and margin improvements achieved in Q2, a new high watermark for Rekor.

正如 Eyal 介紹的財務指標一樣，第二季度代表著所有業務線又一個季度的穩健執行和收入增長。與此同時，新的突破性產品和技術部署、有助於顯著提高利潤的運營效率提升、Rekor 合作夥伴網絡的新的關鍵公私合作夥伴關係，以及對我們為客戶提供的獨特價值的重要全國新聞和媒體報導。所有這些都有助於我們在第二季度實現創紀錄的 1760 萬美元總合同價值和利潤率改善，這是 Rekor 的新高水位。

In the quarter, we've gained new customers and expanded contracts with existing customers across all of our product lines, including public safety and licensing, urban mobility, and transportation management.

本季度，我們在所有產品線中贏得了新客戶，並擴大了與現有客戶的合同，包括公共安全和許可、城市交通和交通管理。

For public safety and licensing, some Q2 highlights include a significant increase in the adoption and contract expansion for our AI-based vehicle recognition and insights across OEM licensing partners, reseller channels, and through our direct sales efforts for leading law enforcement agencies in New Jersey, Illinois, California, Florida, Oklahoma, and more.

在公共安全和許可方面，第二季度的一些亮點包括我們基於人工智能的車輛識別的採用和合同擴展的顯著增加以及OEM 許可合作夥伴、經銷商渠道以及我們為新澤西州領先執法機構的直接銷售工作的見解、伊利諾伊州、加利福尼亞州、佛羅里達州、俄克拉荷馬州等。

Given that 70% of all crime involved a vehicle, our leading scout platform, which provides AI-based real-time vehicle recognition continues to be a proven mission-critical solution that local, state, and federal law enforcement agencies increasingly depend on to support officers as they work to reduce crime in the cities and communities they serve.

鑑於 70% 的犯罪涉及車輛，我們領先的偵察平台提供基於人工智能的實時車輛識別，仍然是經過驗證的關鍵任務解決方案，地方、州和聯邦執法機構越來越依賴它來支持官員們致力於減少他們所服務的城市和社區的犯罪。

One example for Q2 was the national news coverage Rekor received in FOX Business for the indispensable role that our AI technology played in aiding Westchester County in New York to crack a major and very public drug trafficking and weapons investigation. In addition to our direct sales efforts in the quarter, we also added and expanded multiple value-added reseller relationships that will further accelerate our go-to-market activities moving forward.

第二季度的一個例子是Rekor 在福克斯商業頻道(FOX Business) 收到的全國新聞報導，表彰我們的人工智能技術在幫助紐約威徹斯特縣破獲一項重大且非常公開的販毒和武器調查方面發揮了不可或缺的作用。除了本季度的直接銷售工作外，我們還增加和擴大了多個增值經銷商關係，這將進一步加速我們的市場推廣活動。

Switching gears to our urban mobility product line, in Q2, we continued to see significant interest, engagement and expanded deployments of our Discover platform Count, Class, and Speed applications for permanent and short-term studies across Departments of Transportation in South Carolina, Georgia, and Florida, as well as 11 additional states across the US that are in initial stages of deployment and assessment.

在第二季度，轉向我們的城市交通產品線，我們繼續看到我們的Discover 平台計數、等級和速度應用程序受到極大的興趣、參與和擴大部署，用於佐治亞州南卡羅來納州交通部門的永久和短期研究、佛羅里達州以及美國其他 11 個州正處於部署和評估的初始階段。

In addition to gaining footprint in Q2, Rekor was also featured across multiple local and state television news stations in South Carolina, Georgia, and Florida, highlighting the important work that we are doing to help states use our leading-edge vehicle classification, count, and speed to prove and to recover federal dollars back to their states to fund infrastructure investments. For the urban mobility product line, we are heads down and in full execution mode here and believe our technology continues to significantly outperform all other approaches currently on the market.

除了在第二季度獲得關注外，Rekor 還在南卡羅來納州、佐治亞州和佛羅里達州的多個地方和州電視台新聞台上進行了專題報導，強調了我們為幫助各州使用我們領先的車輛分類、計數、並迅速證明並將聯邦資金收回回各州，以資助基礎設施投資。對於城市交通產品線，我們正全力以赴並處於全面執行模式，並相信我們的技術將繼續顯著優於目前市場上的所有其他方法。

In addition to being able to uniquely capture all 13 specialized Department of Transportation vehicle classes across multiple lanes and highway speeds at high volumes, day and night, in all kinds of weather, our Discover platform does all of this in real time at a fraction of the cost and without having to block traffic for long periods or having to dig up the roadway. Our solution is non-intrusive and is implemented using AI from the side of the road without shutting down lanes for construction and/or putting roadway workers in harm's way.

除了能夠以獨特方式捕獲所有13 種專門的交通運輸部車輛類別，無論白天黑夜，在各種天氣條件下，在多條車道和高速公路上以高速度行駛，我們的Discover 平台都可以實時完成所有這些工作成本，並且無需長時間阻塞交通或挖掘道路。我們的解決方案是非侵入式的，是在路邊使用人工智能實施的，不會關閉施工車道和/或使道路工人受到傷害。

In addition, over the past quarter, we've been building and proving out a commercial-based solution using the same Discover AI technology that has proven to unlock unprecedented customer insights and growth for brick-and-mortar businesses, enabling them to better attract, engage, and serve their customers. We call this newly launched Discover application Vehicle Insite. By fusing our cutting-edge AI and unmatched expertise in roadway intelligence, our new Vehicle Insite application goes beyond near data to provide businesses with unparalleled immersion into the end-to-end customer journey right from the moment a customer drives onto a property.

此外，在過去的一個季度中，我們一直在使用相同的Discover AI 技術構建和證明基於商業的解決方案，該技術已被證明可以釋放前所未有的客戶洞察和實體企業的增長，使他們能夠更好地吸引、吸引並服務客戶。我們將這個新推出的 Discover 應用程序稱為 Vehicle Insite。通過融合我們尖端的人工智能和無與倫比的道路智能專業知識，我們的新車輛現場應用程序超越了近數據，從客戶開車進入物業的那一刻起，為企業提供無與倫比的端到端客戶旅程沉浸感。

As a part of the Vehicle Insite application, companies can access and facilitate a rich set of features and capabilities on demand, including loyalty programs, premier customer services, and access visitation metrics that assist in the analysis of traffic flow patterns, helping organizations to better understand, prepare, and plan for customer volume fluctuations, vehicle characteristics that provide vehicle analytics, such as state of origin of the vehicle, to help with geo-based marketing efforts, plus electric vehicle statistics, delivering EV volumes and patterns to support data-driven EV services and initiatives.

作為 Vehicle Insite 應用程序的一部分，公司可以按需訪問和促進豐富的特性和功能，包括忠誠度計劃、優質客戶服務以及訪問訪問指標，以幫助分析交通流模式，從而幫助組織更好地了解、準備和規劃客戶數量波動、提供車輛分析的車輛特徵（例如車輛的原產地狀態）以幫助進行基於地理的營銷工作，以及電動汽車統計數據，提供電動汽車數量和模式以支持數據 -驅動的電動汽車服務和舉措。

From restaurants, shopping malls and major retail outlets to hotels, theme parks, casinos, resorts and more, our Vehicle Insite application gives bricks-and-mortar businesses real insight in the customers' desires and needs in real time so they can better shape the customer experience and drive growth.

從餐館、購物中心和主要零售店到酒店、主題公園、賭場、度假村等，我們的 Vehicle Insite 應用程序使實體企業能夠實時了解客戶的願望和需求，以便他們更好地塑造客戶體驗並推動增長。

Turning our attention to our third product line, transportation management, in Q2, we also continued to expand our footprint and presence with our Command platform, while at the same time, delivering new innovations into the market.

第二季度，我們將注意力轉向第三條產品線——運輸管理，我們還繼續擴大我們的指揮平台的足跡和影響力，同時向市場提供新的創新。

Building on our recent win in Q1 with Texas Department of Transportation, where we are being deployed as the backbone of their entire new traffic management system across the state, which, by the way, is the largest roadway network in the United States. While in Q2, we extended our relationship into multiple other districts across Texas, including our new contract and expansion into the Central Texas Regional Mobility Authority, otherwise known as CTRMA, for incident management. This new, multi-year contract with CTRMA further solidifies and enables our ability to service multiple agencies across Texas with a single source of truth and a single pane of glass as they work to build smarter, safer, greener, and more equitable roads based on our Rekor partner network and our Rekor technologies.

基於我們最近在第一季度與德克薩斯州交通部取得的勝利，我們被部署為全州整個新交通管理系統的骨幹，順便說一句，這是美國最大的道路網絡。在第二季度，我們將我們的關係擴展到德克薩斯州的多個其他地區，包括我們的新合同以及擴展到德克薩斯州中部地區交通管理局（也稱為CTRMA）的事件管理。與CTRMA 簽訂的這份新的多年期合同進一步鞏固了我們為德克薩斯州多個機構提供單一事實來源和單一管理平台的服務能力，幫助他們致力於建設更智能、更安全、更環保和更公平的道路我們的 Rekor 合作夥伴網絡和 Rekor 技術。

One final area to highlight for Q2 is the public-private partnership that we have forged with some of the most prominent academic institutions in the US and on an international scale, in the areas of data and analytics, transportation, traffic, and infrastructure engineering. Along this line, we are pleased to announce our collaboration with Tel Aviv University, specifically with their distinguished Laboratory for AI, Machine Learning, Business and Data Analytics, or LAMBDA for short. Much more to come in this domain, and I look forward to providing continued updates on this front.

第二季度要強調的最後一個領域是我們與美國和國際範圍內一些最著名的學術機構在數據和分析、運輸、交通和基礎設施工程領域建立的公私合作夥伴關係。為此，我們很高興地宣布與特拉維夫大學的合作，特別是與他們傑出的人工智能、機器學習、商業和數據分析實驗室（簡稱 LAMBDA）的合作。這個領域還有更多內容，我期待著在這方面提供持續的更新。

In conclusion, I want to thank our talented team for their ceaseless dedication, our partners for their trust, and our shareholders for their unwavering confidence in our journey. The future is bright, and we're driving at full speed.

最後，我要感謝我們才華橫溢的團隊的不懈奉獻，感謝我們的合作夥伴的信任，感謝我們的股東對我們的旅程堅定不移的信心。未來是光明的，我們正在全速前進。

At this point, I'll turn the call over to Robert Berman, our CEO and Chairman of Rekor for final remarks. Robert?

此時，我將把電話轉給 Rekor 首席執行官兼董事長 Robert Berman，讓其發表最後講話。羅伯特？

Thank you, David. Good afternoon, everyone. First and foremost, I want to take this moment to extend my heartfelt gratitude to our dedicated team. The accomplishments we've discussed today aren't just numbers on a spreadsheet. They are testament to the hard work, innovation, and relentless drive of every single member of our Rekor family.

謝謝你，大衛。大家下午好。首先，我想藉此機會向我們敬業的團隊表示衷心的感謝。我們今天討論的成就不僅僅是電子表格上的數字。它們證明了 Rekor 家族每一位成員的辛勤工作、創新和不懈努力。

Driving such significant revenue growth within the short span is no small feat. It is the result of countless hours of dedication, tireless effort, and a shared vision. And while our financial achievements are indeed laudable, I want to particularly emphasize the seamless assimilation of our two strategic acquisitions. This integration showcases our team's ability and adaptability and commitment ensuring that we not only acquire but truly incorporate the value of these new entities into Rekor.

在短時間內推動如此顯著的收入增長絕非易事。這是無數時間的奉獻、不懈的努力和共同願景的結果。雖然我們的財務成就確實值得稱讚，但我想特別強調我們兩次戰略收購的無縫融合。此次整合展示了我們團隊的能力、適應性和承諾，確保我們不僅獲得這些新實體的價值，而且真正將其納入 Rekor。

We've ventured beyond and have pioneered an entirely new category, AI Roadway Intelligence. This isn't just a niche. It's a revolution in the way we perceive, analyze, and utilize roadway data, and it's a category that we at Rekor are proud to lead. This dominance in AI Roadway Intelligence is a testament to our team's innovative spirit and positions us at the forefront of our industry.

我們勇於突破並開創了一個全新的類別：AI 道路智能。這不僅僅是一個利基市場。這是我們感知、分析和利用道路數據方式的一場革命，Rekor 很自豪能夠引領這一領域。 AI 道路智能領域的主導地位證明了我們團隊的創新精神，並使我們處於行業的前沿。

And some more good news, I'm pleased to share that we have nominated two new Directors for election at the upcoming shareholder meeting this fall. The two new additions are Professor Sanjay Sarma, Head of Mechanical Engineering at MIT, and President, CEO, and Dean of the Asia School of Business; and Mr. Tim Davenport, Chief Operating and Chief Compliance Officer for Arctis Global.

還有一些好消息，我很高興地告訴大家，我們已經提名了兩名新董事，以便在今年秋天即將舉行的股東大會上進行選舉。這兩位新成員分別是麻省理工學院機械工程系主任、亞洲商學院院長、首席執行官兼院長 Sanjay Sarma 教授；以及 Arctis Global 首席運營官兼首席合規官 Tim Davenport 先生。

Professor Sarma has long been recognized as a thought leader in urban mobility and as a co-founder at MIT of the Auto-ID Center and a pioneer who helped develop the Internet of Things. Mr. Davenport also brings a vast wealth of financial and operational expertise to the Board. His keen financial insight will be invaluable in helping to shape Rekor's financial strategies.

Sarma 教授長期以來一直被認為是城市交通領域的思想領袖、麻省理工學院自動識別中心的聯合創始人以及幫助開發物聯網的先驅。達文波特先生還為董事會帶來了豐富的財務和運營專業知識。他敏銳的財務洞察力對於幫助制定 Rekor 的財務戰略非常寶貴。

In closing, I want to express my deep gratitude to our shareholders. Your trust, support, and belief in our vision have been the foundation of our achievements. Together, we are not just navigating the future, we are shaping it.

最後，我要向我們的股東表示深深的感謝。您的信任、支持和對我們願景的信念是我們取得成就的基礎。我們不僅共同引領未來，而且正在塑造未來。

Now I'd like to open the floor for any questions you may have. So please don't hesitate to ask. We're here to provide transparency and clarity, and we're eager to address any concerns or inquiries you may have. Operator?

現在我想回答大家可能提出的任何問題。所以請不要猶豫詢問。我們在這裡提供透明度和清晰度，並且我們渴望解決您可能有的任何疑慮或詢問。操作員？

(Operator Instructions) Michael Latimore, Northland Capital Markets.

（操作員說明）Michael Latimore，Northland Capital Markets。

Thanks. Yeah. Congrats on the really strong results here. Looks good. In terms of the total contract value, one, is it fair to say that the contributor there sort of was public safety, first, urban mobility, second, and transportation, third, given that's kind of how you laid out the drivers here?

謝謝。是的。恭喜這裡取得了非常強勁的成績。看起來不錯。就合同總價值而言，第一，可以公平地說，那裡的貢獻者是公共安全，第一，城市交通，第二，交通，第三，因為你是這樣安排司機的？

I'm going to -- Mike, I think Eyal should answer that for you.

我要——邁克，我認為埃亞爾應該為你回答這個問題。

Yeah. Mike, thank you for the question. I'll say the order that you said, it's not quite right. It was urban mobility and then the licensing services, the traffic management all contributed significant value to the TCV.

是的。邁克，謝謝你的提問。我就按你說的順序來說吧，不太對。城市交通、牌照服務、交通管理都為 TCV 貢獻了巨大的價值。

Okay. And then on the urban mobility opportunity here, I just want to be clear. So is it fair to say you have -- it sounds like you have contracts in South Carolina, Florida, and Georgia. So I just wanted to clarify that you do have official contracts there for production rollouts?

好的。關於這裡的城市交通機會，我只想澄清一下。那麼，公平地說，你有——聽起來你在南卡羅來納州、佛羅里達州和佐治亞州都有合同。所以我只是想澄清一下，你們確實有正式的生產推廣合同嗎？

We have. Yeah, that's right. Eyal?

我們有。是啊，沒錯。埃亞爾？

Yes, you're right. We have official contracts with the states that you mentioned.

你是對的。我們與您提到的各州簽訂了正式合同。

And are those -- are the type of payments there the fully recurring model? Or would some of them be by the hardware and then pay maintenance?

那裡的付款類型是完全循環模式嗎？或者其中一些是通過硬件然後支付維護費用？

It's a combination of both -- it's a combination of both, Mike.

這是兩者的結合——這是兩者的結合，邁克。

Exactly.

確切地。

Got it. And then so you have basically 11 -- sounds like 11 other state trials going on, is that right?

知道了。然後基本上就有 11 項——聽起來像是其他 11 項州審判正在進行，對嗎？

Well, Mike, we're working with almost half of the states in the United States right now. And we're doing everything that we can to try to line them up like an air traffic controller would, right, based on our resources and based on timing and so forth. We're focused where the revenue and the margin is right now and are looking for that. And as we sort things out, we'll work with the states as best we can, but everybody is interested in this technology, and that's the most important thing.

邁克，我們現在正在與美國幾乎一半的州合作。我們正在盡一切努力，根據我們的資源和時間等，像空中交通管制員那樣將它們排列起來。我們目前關注的是收入和利潤，並正在尋找這一點。當我們解決問題時，我們將盡最大努力與各州合作，但每個人都對這項技術感興趣，這是最重要的事情。

I think in urban mobility, we introduced this product not that long ago, and we've got significant adoption. And that, as Eyal said, that's the majority of the additional total contract value, and it just started. It's just starting, right? So we're excited about it.

我認為在城市交通領域，我們不久前推出了這個產品，並且得到了廣泛的採用。正如埃亞爾所說，這是額外合同總價值的大部分，而且才剛剛開始。一切才剛剛開始，對吧？所以我們對此感到興奮。

Great. Last one, I guess, just in terms of those, of that interest, how many states do you think might make a decision on a kind of commercial rollout by year-end?

偉大的。最後一個，我想，就這些利益而言，您認為有多少個州可能會在年底前做出某種商業推廣的決定？

I think -- David, I mean, do you have a sense of that?

我想——大衛，我的意思是，你有這種感覺嗎？

By year-end, I would expect almost three-quarters of those to have made the decision to move forward.

到年底，我預計其中近四分之三的人會做出繼續前進的決定。

Great. Thanks very much.

偉大的。非常感謝。

Thank you, Mike.

謝謝你，邁克。

(Operator Instructions) Zach Cummins, B. Riley Securities.

（操作員指令）Zach Cummins，B. Riley Securities。

Hi, good afternoon. Thanks for taking my question and congrats on strong results here in Q2.

嗨，下午好。感謝您提出我的問題，並祝賀第二季度取得的強勁成果。

Robert, can you just give us a sense of maybe the size of the opportunities that you're looking at within that urban mobility pipeline? I know you have some pretty substantial contracts with South Carolina and Florida, but just trying to get a sense of maybe the size of some of the opportunities in the pipeline.

羅伯特，您能否讓我們了解一下您在城市交通管道中尋找的機會有多大？我知道你們與南卡羅來納州和佛羅里達州簽訂了一些相當重要的合同，但只是想了解一下正在醞釀中的一些機會的規模。

Zach, that's a good question, and we're still sorting it out, but they're all very substantial opportunities. And I think when you look at the total contract value increase of ['23] over '22 of 100%-plus, you get a sense of what those are, right?

扎克，這是一個很好的問題，我們仍在解決這個問題，但它們都是非常重要的機會。我認為，當你看到 ['23] 的合同總價值比 '22 增加了 100% 以上時，你就會明白這些是多少，對嗎？

So this is simply new technology that's just introduced, replacing legacy technology that's been around for seven, eight decades. And the state spends a lot of money to collect this data and get their funding from the federal government. So they're all large, Zach. They're all very large. They're all seven-, eight-, nine-figure contracts.

所以這只是剛剛推出的新技術，取代了已經存在了七、八年的傳統技術。該州花費大量資金來收集這些數據並從聯邦政府獲得資金。所以它們都很大，扎克。它們都很大。它們都是七位數、八位數、九位數的合同。

So we're just getting going. So we're just getting our footing in our sea legs. So I think we're excited about it but I'm hesitant to lunge at numbers, but I will say that it's coming. It's happening, it's coming. And we see it. We see it right now. So.

所以我們才剛剛開始。所以我們才剛剛在海上站穩腳跟。所以我認為我們對此感到興奮，但我對是否要公佈數字猶豫不決，但我會說它即將到來。它正在發生，它即將到來。我們看到了。我們現在就看到了。所以。

Understood. That's helpful. And Robert, I mean, in terms of the overall landscape, is it essentially that Rekor is just displacing all these legacy technologies within that urban mobility segment? Or are you seeing other approaches or competitors on this front with this new emerging opportunity?

明白了。這很有幫助。羅伯特，我的意思是，就整體格局而言，Rekor 本質上只是在取代城市交通領域的所有這些遺留技術嗎？或者您是否在這方面看到了其他方法或競爭對手在這個新出現的機會？

I'm going to answer half that question, and I'm going to ask David to answer the other half. Rekor is absolutely unequivocally displacing the legacy technology for the legacy reasons that the states have had to collect this data, okay? Where we're headed in the future has to do with the Internet of Things. And I'm going to let David answer that because that's where things converge, and it's a much different world. So maybe, David, you can take it from there.

我要回答一半問題，我要請大衛回答另一半。由於各州必須收集這些數據的遺留原因，Rekor 絕對明確地取代了遺留技術，好嗎？我們未來的發展方向與物聯網有關。我會讓大衛來回答這個問題，因為那是事物的交匯點，這是一個截然不同的世界。所以，大衛，也許你可以從那裡開始。

Yeah. It's interesting, Zach, is when you look at a footprint, that footprint extends into multiple different value-added services. So when you think about replacement of legacy tech, yeah, absolutely for sure. I don't think a road tube across the road is really going to be the way a state goes from now on, knowing that AI is available, and that's what we're seeing.

是的。扎克，有趣的是，當您查看足跡時，該足跡會擴展到多種不同的增值服務。因此，當您考慮更換傳統技術時，是的，絕對可以肯定。我不認為馬路對面的公路管道真的會成為一個州從現在開始的方式，因為知道人工智能是可用的，這就是我們所看到的。

But in addition to that, when you think about new legislation coming down the path for things like greenhouse gas emissions, that's a big deal. And how would you do that with a road tube, you really couldn't. And so the way we go to market is actually quite different and extensible. Once you're in, you're in. And once you're in, you're able to expand into multiple value-added services with the same exact footprint with the same exact device that we already have out there doing the fundamental Class, Count, and Speed.

但除此之外，當你想到即將出台的針對溫室氣體排放等問題的新立法時，你就會發現這是一件大事。你怎麼用公路管做到這一點，你真的做不到。因此，我們進入市場的方式實際上是非常不同的並且是可擴展的。一旦你加入了，你就加入了。一旦你加入了，你就能夠擴展到多種增值服務，其占地面積與我們已經擁有的執行基本類的設備相同。 、計數和速度。

I'm going to pause there for a second, Zach, so I want to make sure I'm answering your question.

我要暫停一下，扎克，所以我想確保我正在回答你的問題。

I think that completely covers it there, and it sounds like a lot of great opportunities into adjacent areas. And my final question, maybe geared towards Eyal is ending the quarter, I think just under $3 million in cash, but you did get proceeds from warrant exercises in July. I mean, how should we think about necessary proceeds to continue to execute upon your growth plans as we go second half of '23 and into 2024?

我認為這完全涵蓋了那裡，聽起來像是進入鄰近領域的很多好機會。我的最後一個問題，也許是針對 Eyal 在本季度結束時提出的，我認為現金不到 300 萬美元，但你確實從 7 月份的認股權證行使中獲得了收益。我的意思是，當我們進入 23 年下半年並進入 2024 年時，我們應該如何考慮繼續執行您的增長計劃所需的收益？

As I mentioned, we reduced significantly our cash burn in the -- our ability to have the additional funds in July, helped us a lot and will take us further into 2024. Back then, we will look for other opportunities. But as I mentioned, we are closing the gap of cash burn and reducing it significantly so the cash that we raised in July will take us a long way.

正如我所提到的，我們在 7 月份獲得額外資金的能力大大減少了現金消耗，這對我們幫助很大，並將帶領我們進一步邁向 2024 年。那時，我們將尋找其他機會。但正如我所提到的，我們正在縮小現金消耗的差距並大幅減少，因此我們 7 月份籌集的現金將幫助我們走很長的路。

I think, Zach, I just -- I want to add to what Eyal said. I think, look, we're managing resources, okay, with revenue and margin. All right. And we've got our people out there chasing the revenue and the margin so we can't be everywhere at the same time because we do have limited resources.

我想，扎克，我只是——我想補充一下埃亞爾所說的內容。我認為，看，我們正在通過收入和利潤來管理資源。好的。我們讓我們的員工追逐收入和利潤，所以我們不能同時無處不在，因為我們的資源確實有限。

The company is very focused on acquiring a debt facility to be able to implement systems, right? Because doing it with equity is inefficient. It doesn't make much sense. And as we close the gap here and come towards profitability later this year -- and it's coming -- we hope to be able to do that with debt, Zach, and I think that's what we're working on.

該公司非常注重收購債務融資以便能夠實施系統，對嗎？因為公平地做事是低效的。這沒有多大意義。當我們縮小差距並在今年晚些時候實現盈利時——它即將到來——我們希望能夠通過債務實現這一目標，扎克，我認為這就是我們正在努力的方向。

So we're very cognizant of that. And I think that the reduction of cash burn has given us the ability to extend our life much longer with much shorter dollars today. So we're getting closer and closer every day because the revenue and the margins are.

所以我們對此非常了解。我認為，現金消耗的減少使我們能夠用更少的美元來延長我們的壽命。所以我們每天都越來越接近，因為收入和利潤都在。

Understood. Well, thanks for taking my questions and best of luck with the rest of the quarter.

明白了。好吧，感謝您提出我的問題，祝本季度剩下的時間一切順利。

Yeah. Thank you.

是的。謝謝。

Michael Latimore, Northland Capital Markets.

邁克爾·拉蒂摩爾 (Michael Latimore)，北國資本市場。

Great. Thanks. Yes. So on the South Carolina, Florida, and Georgia deals, what percent of those have been deployed? And then, I guess, generally, I mean, it looks like you're going to have a very strong growth curve here. How are you feeling about your resources and ability to deploy major new contracts?

偉大的。謝謝。是的。那麼，在南卡羅來納州、佛羅里達州和佐治亞州的交易中，其中已部署的百分比是多少？然後，我想，一般來說，我的意思是，看起來你會在這裡有一個非常強勁的增長曲線。您對部署重大新合同的資源和能力有何看法？

So Mike, as you alluded to earlier, we have two models, right? One is completely pay-for-data. The other is a combination of hardware acquisition and pay-for-data. And where we're focused now is where we can get revenue and margin with cash, right? So that would be hardware paid-for-data. So we're trying to extend ourselves where we can -- very small percentage, a very small percentage. We barely began to even touch the tip of the iceberg with regard to how large this opportunity is just in a few states within our footprint.

邁克，正如您之前提到的，我們有兩個模型，對吧？一種是完全按流量付費。另一種是硬件獲取和數據付費相結合。我們現在關注的重點是我們可以用現金獲得收入和利潤，對吧？所以這將是硬件付費數據。因此，我們正在努力盡可能地擴展自己——非常小的比例，非常小的比例。關於這個機會在我們足跡範圍內的幾個州有多大，我們才剛剛開始觸及冰山一角。

And as David said earlier, I mean, we've got half the country looking at this technology right now and as you suggest that three-quarters of them probably going to convert, we'll get to them when we can, right? So we're just trying to manage our way through with the resources we have as best we can until we can deploy the capital efficiency. That's all. Like any new technology, right? You can't -- you got to figure the capital deployment out, right? So that's what we're trying to figure out.

正如大衛之前所說，我的意思是，我們現在有一半的國家在關注這項技術，正如你所說，其中四分之三的人可能會進行轉換，我們會在可能的時候使用它們，對嗎？因此，我們只是盡力利用我們擁有的資源來管理我們的方式，直到我們能夠提高資本效率。就這樣。就像任何新技術一樣，對嗎？你不能——你必須弄清楚資本部署，對吧？這就是我們想要弄清楚的。

And the good news is the margins are good, the demand is there, the technology is being adopted. We have much more demand right now than we do the ability to provide the resources to go do it. So it's just a question of figuring all getting there.

好消息是利潤豐厚，需求存在，技術正在被採用。我們現在的需求遠遠超出了我們提供資源的能力。所以這只是一個計算所有到達那裡的問題。

Got it. Is there a current number per day you could deploy? Or like what's sort of the run rate?

知道了。目前您每天可以部署的數量有嗎？或者說運行率是多少？

Well, again, it's -- we're shifting resources around from state to state depending on -- maybe, David, you can answer this, but from state to state depending on where margin and revenue is, right? So David, can you help here?

好吧，再說一次，我們正在將資源從一個州轉移到另一個州，這取決於——也許，大衛，你可以回答這個問題，但從一個州轉移到另一個州取決於利潤和收入，對嗎？大衛，你能幫忙嗎？

Yeah. When you're a local -- local meaning within a 100-mile radius of where we have resources, I mean, we're looking at anywhere from 5 to 10 a day depending on distances between. If you're jumping on a flight to go somewhere and get in bucket trucks and everything over there, it's a little different story. But I would say, once there are boots on the ground, it's a very efficient process for getting things installed. But the majority of our crews are located in the Southeast and East Coast. So as we roll West Coast, we'll be looking to expand as well. So.

是的。當你是本地人時——本地意思是在我們擁有資源的 100 英里半徑範圍內，我的意思是，我們每天會尋找 5 到 10 個資源，具體取決於之間的距離。如果你搭飛機去某個地方，然後坐上斗式卡車和那裡的所有東西，那就有點不同了。但我想說，一旦地面上有靴子，這就是一個非常有效的安裝過程。但我們的大多數工作人員都位於東南部和東海岸。因此，當我們進軍西海岸時，我們也會尋求擴張。所以。

I think -- Mike, I think the good news is that the margins -- pay for data is great, and we love that model. But the margins on the -- all of what we do has a recurring revenue component, right? So there's a maintenance software component.

我認為——邁克，我認為好消息是數據付費的利潤很高，我們喜歡這種模式。但是我們所做的所有事情的利潤都有經常性收入部分，對嗎？所以有一個維護軟件組件。

Right.

正確的。

So the margins just on the hardware software as well, they're very high margins. So we're happy to do it either way, and it's a question of balancing resources. When you are small, fledgling, you're starting to grow. We're just getting our [ceilings]. The good news is the adoption is there and the demand is there. So we're trying to figure it out as best we can. It's a high-class problem.

因此，硬件軟件的利潤率也非常高。所以我們很樂意採取任何一種方式，這是一個平衡資源的問題。當你還小、羽翼未豐時，你就開始成長。我們剛剛達到[天花板]。好消息是採用已經存在並且需求也存在。所以我們正在盡力解決這個問題。這是一個高級問題。

Makes sense. Yeah, for sure.

說得通。耶，當然了。

There are no further questions at this time. I would now like to turn the floor back over to Robert Berman for closing comments.

目前沒有其他問題。我現在想把發言權交還給羅伯特·伯曼以供結束評論。

Thank you, operator. So, Mike, Zach, thank you for those questions. I know there's a lot of people out there listening that didn't ask questions. But look, this company has made tremendous progress in a relatively short period of time when you think about the introduction of new technology into a marketplace, especially when you're dealing with government, right?

謝謝你，接線員。所以，邁克、扎克，謝謝你們提出這些問題。我知道有很多人在聽，但沒有提出問題。但是，當你考慮將新技術引入市場時，特別是當你與政府打交道時，這家公司在相對較短的時間內取得了巨大的進步，對吧？

But the good news is we see the results. The adoption is there. The technology is working. It's not easy to do what we're doing. I think we've made it through the toughest period. We've got a great team. We've got great leadership, and we are just getting ready to catapult. I mean, this company is off to the races now, and I think we've made it through the most difficult period of the last few years. So thanks, everybody, for your support and continued interest. Thank you.

但好消息是我們看到了結果。收養就在那裡。這項技術正在發揮作用。做我們正在做的事情並不容易。我認為我們已經度過了最艱難的時期。我們有一支很棒的團隊。我們擁有出色的領導力，我們正準備騰飛。我的意思是，這家公司現在已經開始競爭了，我認為我們已經度過了過去幾年中最困難的時期。感謝大家的支持和持續關注。謝謝。

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。