Good afternoon, ladies and gentlemen, and welcome to today's Rekor Systems conference call. My name is Matt, and I'll be your coordinator for today. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. 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 that may be construed as 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 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. Non-GAAP results will also be discussed on the 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. I would now like to turn the conference over to Mr. Robert Berman, Interim President and CEO of Rekor Systems. Thank you. You may begin. Thank you, Matt, and good afternoon, everyone. We appreciate you joining us today to discuss Rekor Systems' First Quarter 2025 Results. Normally, we begin our presentation by having our CFO, Eyal Hen, review the numbers. As described in our last earnings call, we've been going through an extensive review and realignment of our operations since the end of last year. We anticipated that the market and the economy might face a period of uncertainty. For the long-term benefit of our shareholders, we felt it would be less important to concentrate on future projects at this point than it would be to emphasize the revenue potential of what we've already achieved. As you've been told repeatedly, Rekor has seen adoption of its tech and is now in the early stages of launching it into larger markets that are overdue for it. Competitors are racing to catch up, but everyone is meeting the current challenges in the markets and the economy. For now, we want to remain focused on exploiting the commercial potential of what we've already produced. It's important to put the numbers Eyal discussed into perspective. As we began our review process, we prioritized steps that would immediately reduce our expenses. In some cases, this led to a temporary increase in expenses, but you'll see solid evidence of the success of these efforts. These expense reductions haven't been done blindly, and they're not finished. Our overall objective was to position Rekor for stronger, more predictable, and scalable growth moving forward. We've learned that our prior approach, while visionary, was not sufficiently grounded in the revenue-driven execution our shareholders deserve. We spent too much time building a company in anticipation of growth rather than ensuring that our approach and leadership were structured toward delivering revenue, sustaining revenue against defined milestones. That was a mistake, and it needed to be addressed. Beginning in Q2, Rekor is implementing a new general manager structure to sharpen our focus on customers and accelerate the adoption of our products in a way that produces a business with sustainable revenues. We've been in the process of evolving the structure over the last few months and expect you to see the benefits very shortly. Under this structure, each core business unit is led by a dedicated general manager with clear profit and loss responsibility. By reorganizing into focused units, we aim to improve operational accountability, foster greater innovation, and enhance our customer focus. This structure also positions Rekor to scale revenue more effectively as we expand our reach into domestic and international markets. Our new GM structure is anchored by experienced leaders who bring deep industry expertise and a global perspective to Rekor. One of these is Mark Phillips, a seasoned roadway technology executive with significant international experience. Mark's global background at Q-Free and elsewhere in scaling businesses will help position Rekor's solutions on a worldwide stage. He will leverage his international expertise to drive global market penetration and ensure that Rekor's offerings meet the needs of customers across different regions. Mark's leadership is also expected to strengthen Rekor's domestic presence, aligning our products with international opportunities and partnerships. Mark is both a talented business leader and a skilled electrical engineer. In the early 2000s, Mark founded a company that developed an innovative data logger used by DOTs around the world, which was later acquired by Q-Free, a Norwegian technology company specializing in intelligent traffic systems. The company operates globally with offices in Europe, Asia, Australia, and the Americas. Following the acquisition, he remained with Q-Free to help establish a global distribution network. We expect the full scope of our organizational changes to be completed and formally announced in Q2. Leaders will manage their respective business units with an entrepreneurial approach, enabling each unit to respond quickly and effectively to customers' needs. The GMs will be supported by shared services, including engineering, which is now led by Shobhit Jain as Chief Product and Technology Officer. Shobhit has held senior leadership roles at both Verra Mobility and HERE Technologies. He served as Vice President of Product and Innovation for Government Solutions at Verra Mobility, a leading provider of smart mobility technology solutions for government agencies and commercial fleets. He was previously head of innovation at HERE Technologies, a global leader in mapping and location-based platform services. Under the GM structure, Rekor's operations are now organized into dedicated business units centered around our customers' needs in each of our core solution areas. Each unit is empowered to focus on its product portfolio and customer base, enabling more agility and specialized attention. By restructuring Rekor around these solution-focused units, each led by strong management, we can better serve the needs of each new and existing customer. Customer centricity is a core objective, and each GM is tasked with staying close to the customer base and their domain and rapidly responding to feedback and tailoring offerings to solve specific problems for those user groups. The shift to a GM-structured-led organization is designed to deliver several strategic benefits: greater accountability, where each GM will be responsible to build a team that focuses on sustainable growth within their own segment; enhanced innovation. By giving them more control, each unit will be able to concentrate on innovations that are most valuable to their customers on a near-term basis. Top priority in product development will be given to customer value. Improved customer focus. By concentrating more intensively on the needs of new and existing customers, our teams will be more focused on learning what their current needs are rather than imagining what their needs might be in the future. Scalable revenue growth. By concentrating on distinct product lines and regions, each unit can pursue growth opportunities more effectively. Mark Phillips' international expertise, for example, will help replicate successful go-to-market strategies across global markets. This focused approach lays the groundwork for scalable revenue streams as each business unit expands its market share. The new structure also makes it easier to integrate future acquisitions or partnerships directly into the relevant unit, fueling further growth. We expect the structure to unlock new levels of performance, resulting in a more agile company that can sustainably scale revenue and maintain a leadership role in our industry. Thank you for your continued support as we embark on this new chapter, and we're confident that these changes will drive meaningful improvements in our operations and accelerate Rekor's growth trajectory on a global stage. Now I'll turn the call over to our CFO, Eyal Hen, for a deeper look at our financial results for Q1 2025. Eyal? Thank you, Robert, and thanks to all of you joining us today to discuss our first quarter of 2025 results. We reported revenue of $9.2 million for Q1 2025, representing a 6% decrease compared to the same quarter last year. Despite this reduction, we achieved a $2 million improvement in our adjusted EBITDA loss, thanks to meaningful reductions in our operating expenses. Revenue was impacted across all three of our business segments. Factors such as adverse weather conditions in the Southeast, delays in contract signings, and budget constraints from DOTs and public safety agencies, largely due to the uncertainty surrounding the new administration, created significant headwinds to sales execution. That said, we did see stability in our recurring revenue, which totaled $5.1 million for the quarter, making a modest 3% increase from Q1 2024. Adjusted gross margin for the first quarter of 2025 was 48.2%, up from 46% in the same period last year, primarily driven by a higher mix of margin-creative offerings. Looking forward, we anticipate continued gross margin expansion, supported by a growing share of SaaS-based revenue and increased contributions from our pay-for-data contracts. Adjusted EBITDA loss was $7.4 million, significantly improved from $9.4 million in Q1 2024. This was a result of the efforts Robert mentioned to optimize our cost structure, which we started in November of 2024. Moving forward, we will continue to work toward steady declines in adjusted EBITDA losses as revenue grows, supported by an improving gross margin. It's worth noting that our cost optimization initiatives, which included targeted workforce realignments and voluntary compensation reductions in exchange for equity, were initiated to improve our cash flow and operational efficiency. By sharpening our focus and reducing expenses, we have been able to deliver tangible financial benefits. As a result, operating expenses in Q1 2025 were significantly lower than they would have been without these initiatives, contributing directly to our nowhere EBITDA loss. We remain diligent in managing our cost structure as we balance growth investments with path to profitability. Our first quarter in 2025 was affected by seasonal and other factors that we do not expect to continue throughout the year. Looking ahead, we anticipate continued improvements in adjusted EBITDA as we progress through 2025. The combination of revenue growth and expanding gross margins gives us confidence that our adjusted EBITDA losses will keep narrowing down in upcoming quarters. We expect gross margins to improve steadily, driven by an increasing mix of higher-margin SaaS revenue and data services, as well as efficiencies in our delivery of solutions. At the same time, our cost optimization efforts are ongoing. We will maintain the discipline that we established last year, ensuring that any expense growth stays well below our revenue growth rate. In practical terms, this means we plan to deliver sequentially better EBITDA results as the year unfolds, supported by both top-line momentum and margin expansion. Our sales pipeline remains strong and we remain encouraged by the traction we're seeing with state departments of transportation and public safety agencies. As these opportunities convert into revenue, the incremental sales should flow through at higher contribution margins, further bolstering our profitability. We are also targeting additional operational efficiencies in 2025, which we expect will help offset inflationary pressures and sustain the trajectory of EBITDA improvements. Overall, our goal is to exit 2025 on significantly stronger financial footing than we entered. We are working toward achieving break-even adjusted EBITDA in the foreseeable future, and each quarter, we intend to move closer to that milestone. The first quarter's results, while not where we ultimately want them to be, show that we are making progress in the right direction. Before I conclude, I want to acknowledge our shareholders. We recognize that our Q1 performance came in below our expectations and likely below the expectations of some of you listening today. We do not take this lightly. Rest assured, the entire management team is focused on improving execution and delivering the results you expect from us. We have a clear plan in place to drive growth and margin improvement, and we are confident in our path forward. Importantly, we are grateful for the continued support and patience of our investors as we navigate these changes and strive to unlock Rekor's full potential. Your support has been crucial as we implement necessary changes and invest for future success. We remain committed to building shareholder value and rewarding that trust through our actions and results in the coming quarters. Thank you for your attention and for your support. We are confident that the steps we've taken to optimize costs, strengthen our capital structure, and drive growth will position Rekor for improved performance throughout 2025. Now I'll turn the call back to Robert. Robert? Thank you. I'd now like to open the call for questions from our shareholders. Operator? Great, thank you. At this time, we will be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation code will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull up for questions. First question is from Mike Latimore from Northland Capital. Please go ahead. Hi, this is Aditya on behalf of Mike Latimore. Could you give some color on the pipeline for Scout and how are the bookings in one queue for Scout? Yeah, sorry, I'm not clear with the question. How has the pipeline been for Scout and bookings? How are the bookings for Scout in one queue? Yeah, I think that's a fair question. Yeah, we were just looking at Scout the other day. Since launching Scout in 2019, it's grown by more than 4,700% in revenue. And frankly, we dropped the ball with it a bit in 2024. Part of this reorganization is getting back to Scout, less on the law enforcement side and more on the commercial side, which is where the majority of our ARR is from, Scout. I think that you'll see a lot more activity with Scout as a product over the next, actually, 30-60 days. Got it. Are there any partnerships that you're working on, just like SoundThinking last year? We do have some that are actively in discussion that we just can't talk about because they're not concluded and it's nonpublic, but we're always working on those, and primarily with Scout, for sure. Also with Discover now, having brought Mark Phillips on and changing a little bit the way we approach the sales methodology with Discover as a piece of technology that's fully productized that we can sell out of the box through distributors and others and markets that we've not penetrated yet. We're just entering now. All right. Got it. Thank you. Thank you. Next question is from Tim Moore from Clear Street. Please go ahead. Thanks. Just trying to build a bit more conviction in the possibility for maybe double-digit organic sales growth drivers this year. I know there was a weather issue and the election overhang in the March quarter. I think the September quarter was probably negative organic growth if you strip out the ETD acquisition contribution. We know that many legacy transportation and monitoring device systems are inaccurate. They're not effective, and they're pretty much simply obsolete. Can you provide us maybe a better sense of how the task order side, not big projects or new big wins, but the task order side might backfill or help sales growth this year instead of waiting for a lumpy new sales state win? Are you expecting to roll out a lot of Discover and Edge units for repair and replacement this year, Waves? That's a really good question. I think, as we said earlier in the call with regard to the reorganization, the way we're structured now with this GM structure, Discover is fully productized. It takes time to get governments to adopt technology. We're seeing broad adoption with Discover. I think as we get deeper into this quarter, okay, and we announce the reorg, we'll be able to give you some clarity with respect to the growth in that. I think you're going to see a substantial change with that because of a little bit of modification with our pricing structure on Discover and the go-to-market strategy with it. Look, it's been a learning process, right? We're dealing with government. We're replacing legacy technology that they've been using for decades and decades. To think that we were trying to push certain business models into the way governments do business maybe was a mistake on our part. I think now that we understand more the way that the DOTs buy, I think you're going to see a lot more growth with Discover. It's a fantastic model because it's got a strong ability to deliver a piece of a device that provides a service, but also has strong recurring revenue and higher margins to it. A little bit of a learning curve, right? Having launched in 2022, it takes some time, but I think we're there. I think you'll see more of that in the coming weeks. That's helpful to hear on that color. Just switching gears, as you mentioned, you narrowed the EBITDA loss by $2 million despite the sales decline. That was pretty good. Just wondering, how much of the $15 million annualized cost savings, expense realignment, have you implemented this year? I was just wondering if that $15 million figure from, I think it was November, is that dependent on a certain level of sales growth this year? You got to put up teens growth to achieve that? I'm just curious if you have any color on cost implementation. I think it's realizing that we've got things that are fully productized, and we're focusing on those. We have a lot of expenses that were related to R&D of products that we can't tie revenue to in the near term. It is changing our focus and looking at things that we can do today. I think you're going to see more reductions. I think as you see additional revenue, you're going to see incremental margin along with the reduction in cost. Eyal, would you agree with that? Yeah, absolutely. That's true. As you said, the $15 million will go along the year and not just the first quarter. We'll see, as we mentioned, continued reduction in the cost and improvement in the EBITDA as we go. Look, it's a really good point you're raising. We're developing technology to replace decades-old legacy tech, and it's a learning curve. We had to get there and understand the customer. I think now, with the approach we're taking to it, we get it. We don't need to do the R&D. The product's there. It works. It's just delivering the product and not thinking about three years from now. It's about thinking about today. I think that's the big change here. I think you'll see the incremental savings as well as the revenue growth come from that, which is going to give us margin to eliminate the burn and drive the company to profitability. No, that'd be really good if you can come up with the $15 million. My last question is really a different question. I mean, you aggregate, I think, more than 20 trillion data points for roadway intelligence. Is there any other way to maybe monetize that, or can you license some of that out to maybe a user fee to some cities that you don't have any contracts with? That's also a good question. I think I'm going to drop back and say what we've realized is we've got three really healthy product platforms here: Discover, Command, and Scout. Scout is the most mature, obviously. It's been out there for a while. We're focused more on the commercial side now than on law enforcement. With the Command and Discover, I think what I'm trying to say, we're going to stop where we are and sell what we have. We've realized that that's what we need to do because there's demand for it. That's where we're going to stay focused. The nice thing about the way that the technology is developed is that we can always import additional data and provide additional services, but that's not a necessity in driving revenue today and growth today and profit today. I think that was the mistake that we made historically. As I said earlier, building a company for future growth and revenues as opposed to focusing and realizing what we have is, I hate to say good enough, but it is good enough, okay? There is demand for it, and we are seeing adoption. That is what we need to focus on rather than confusing customers with just more and more and more and more. Understood. No, thanks for that color and for answering my questions. That's it for my questions. Thank you. Thank you. As a reminder, if you'd like to ask a question, it is star one. Next question is from Noah Levitz from William Blair. Please go ahead. Good afternoon, Robert and Eyal. Thanks for taking my questions. To start off, I thought it was interesting about your new GM structure, your particular hire of Mark. You noted that he has a lot of international experience in particular. I am curious, with the procurement environment being as difficult as it is in the U.S., are you already selling in international markets, or do you see a particularly high level of demand there and opportunity there that Mark, for example, could help Rekor take advantage of? Almost every developed nation uses some form of collection of data for planning, but also for traffic operations. That's the thing about Rekor Discover. It does both. It eliminates the need for multiple devices out on the roadway. We do see demand, and it's a subtle difference of classifications here in the U.S. We have 13 bins. In places like Ireland, as an example, they have seven. Other countries have more or less, but they're all pretty much the same. It's just a matter of machine learning and training, and I think our customers understand that. Mark is actually in Europe right now doing an installation for a pilot in another country. We think there's demand for this product across the board. That's our point about being box-ready and the point about having the GM structure because we've got these products. They're proven. The adoption is there. We need the ability for the people that are leading each one of these verticals to be able to control the P&L, be responsible for sales, and make it happen. I think we're shifting from this mentality of R&D for this tech, for this changing world that we're living in to, "Hey, we've got some good stuff here. Let's go sell it." Let's go from there. I think that's where we are. No, that's great. Thank you. My last question is on your partnership for PlateRanger with SoundThinking. Can you just provide a little bit of color on the adoption of that system and whether or not you're currently recognizing any revenue or when you would hope to see that start to hit? Thanks. We have a contract that was negotiated with SoundThinking that gives us guaranteed revenue in 2025, 2026, and 2027. They're out there selling, and they're a great company. I think the law enforcement market is a market that they're built to operate in, a lot of blocking and tackling and so forth. You'll have to talk to them about that, but we think they're going to be successful with it. The early indications are that they will be. They've committed to it and put some dollars behind it. We'll let them do that while we're working on the commercial side of it because that's what differentiates what Scout does from folks that are purely in law enforcement and doing LPR, right? Frankly, that's the majority of the ARR in Scout. It is just that, and I said it earlier, we dropped the ball with it in 2024, having grown it from over 4,000% in a few years, mostly on the commercial side. We just dropped the ball, and we are going back to that now. I think SoundThinking will do well with the product, and I think their focus is there, and you should chat with them about that. Did we lose you? Okay. Questions from Ray Yagul, a private investor. Please go ahead. Yes. Hi. Thanks for taking my call. A couple of questions. Actually, the last caller tapped into my question. I had mentioned a couple of quarters ago to David about overseas contracts, and he mentioned there was enough revenue to be focused in the U.S.. I saw, I believe you'll be attending the ITS European Congress May 19th. Can we expect more of that? Yeah, we're over there. I think that's one of the things that we're trying to point out here. Once you have a technology that's productized, let's call it box-ready, and you have the support materials necessary to sell that through channel partners, you can go ahead and do that. Again, every developed nation does some form of account class and speed, just like we do here in the U.S., and they use that same data for traffic operations. We have the ability to sell that product now internationally, and that's exactly what we're doing. Not that we've even penetrated the tip of the iceberg here in the U.S., but we're starting to see the adoption. Things take a little longer. We know we've talked about a lot of states and contracts and other things, but nothing's changed. We think those things are coming. There is no reason for us not to be focused on the international market because there is demand for the product, and we can send it there. That is our plan. Thank you. Last quarter, you mentioned a little over 15 proof of concepts. I would have thought maybe by today's release of the revenue that we would have maybe heard one or two. Can we expect that slow drip to continue throughout the year, or will there be a little bit of a quicker process? I can tell you that almost all of the states where we have proof of concept systems, New York as an example, has actually acquired technology. The majority of the other states, when I say adoption, we're now seeing more orders. We're seeing larger contracts. I think that, to be frank about it, I think we had the sales approach and pricing in such a way that was not consistent with the way that these agencies procure. If you think about how complicated it is, we needed to make sure that we configured the way we sell into the way they buy as opposed to swimming upstream. I think we figured that out over the last few months, and we made those changes, and I think you'll see the results of that very soon. In today's press release, you mentioned about the adverse weather conditions with a slowdown in the revenue. With hurricane season not too far away, do you focus on planning on having more personnel in that area before that happens, or? In one of our customers in the most southern state, we actually had to get out there and help them in between the two hurricanes they had last year, and the technology performed well. I do not think it is a question of having the personnel out there. I think it is the ability to have the product ready to be deployed as a technology company as opposed to being a contractor. That is the difference. At the end of the day, Rekor is a technology software data company and not a construction company. That is why we have changed the model of the way we run the company and manage the company because we can deploy the technology, and we do not necessarily have to do that work. We can get the same revenue and recurring revenue from having others do it because the products are ready to be deployed that way. It took a little bit of time to get it there, and now we're there. I think it's not a question of how much manpower we have. I think it's a question of the demand for the product. I think now that we've modified the way we're doing business, I think you're going to see the scale coming with that. My last question. That's frankly what we were hoping to do, so. My last question is, I mentioned a couple of quarters ago to David, and he said, "Stay tuned." Is the QSR kind of a dead sector right now, or are you still focused on that, or revenue isn't as high there? That's a good question. I can tell you that it's an interesting area because Scout started out as LPR, vehicle recognition. We produce a lot more data from Scout and hold a variety of patents on how to anonymize that data so privacy information that goes out doesn't become a problem with respect to commercial customers not wanting the same information that, let's say, a law enforcement agency would have. I think that that sector is going to open up more for us. We've had success with it in the past with companies like Six Flags and others, casino companies that we've announced. We see a lot more value to that data today than we did even six months or a year ago. It's the way we were marketing and where we were focused. I think we're turning our focus back towards commercial. Yes, QSRs are very much a part of that. Look, there's an article. You guys can Google and go search it, but Chick-fil-A was flying drones over their properties to look at the traffic flow coming in and out of some of their stores. If you can just envision that and think about, and it's all on our websites, the data that we can produce from Scout for our customers, there's a lot of valuable data there for folks that are in retail businesses, whether it's a QSR, a big box store, a sports stadium, a casino, whatever it might be. That's where our focus is now. I think you're going to see more of that in the coming weeks and months. You believe we're still on track then for profitability by the end of the year? I personally believe that we are on track for profitability before the end of the year. I don't want to commit to it, but I think we're going to get there. I think it's around the corner. That's what we're doing. We're working to drive the company to scale revenue, become efficient, not just from the standpoint of being efficient, meaning cutting costs and overhead, but being able to deliver the product to the customer with less bureaucracy. Look, Rekor was just overbuilt, okay, too bureaucratic for its size, with great products that there was demand for that we couldn't get out the door because we just had this process here that just didn't work. We're going to fully announce the structural changes that are coming with this GM structure. The board is still actively looking. I'll stay here as long as it takes to make this work and help this continue to stay on the board. I believe in the company, but we're going to find the right person to manage it and the right people to do what we're doing. I think we have that structure in place now. I think you're going to see the results of that, and it's not going to take a long time. Okay. Will there be any updates from Mexico? I can't speak to that right now because it's just, again, it's non-public stuff, but as soon as we have something to update, we will. I understand. That's all I have. I appreciate your time. Yeah. Thank you. This concludes the question and answer session. I'd like to turn the floor back to management for any closing comments. Yeah. Thank you. Look, everybody, thanks again for your patience. I think every company has growing pains, and I think Rekor is on the backside of ours because I think we realized some of the things that we were doing that were inhibiting the growth and the scale and the profitability and the margins. Look, the board is fully involved in this, and we think we've come up with the right structure, the right plan. We think we have the right people as GMs in place. Again, we're going to be talking more about that in the coming weeks, this quarter. We'll also continue to look for a permanent person to come here as an interim CEO, but not going anywhere until we make this work, right? When we find the right person, we'll make those changes as well. We're going to get through this, and I think you'll see that. It's not going to be quarters and quarters away. I think it's just a matter of weeks here. Appreciate everybody's patience, and thank you so much for staying with us. This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation. Thank you.