COLUMBIA, MD / ACCESSWIRE / August 18, 2023 / The lucrativeness of the AI industry has surpassed expectations, providing a much-needed boost for the tech industry. The tech industry was experiencing a downturn at the beginning of the year due to excessive costs incurred during pandemic hiring sprees coupled with rising concerns over macroeconomic trends. However, the public's rapid adaptation of artificial intelligence has sparked significant growth in the industry. Breakthroughs in generative AI led by ChatGPT have propelled the blue-chip S&P 500 index upwards by 18.6% in 2023, with the tech-heavy Nasdaq composite surging significantly by 35.7% in just six months.
According to data obtained by Finbold, the AI industry's estimated market size was valued at $207.9 billion in 2023 and is expected to increase dramatically by 788.64% to reach an unprecedented $1.87 trillion by 2030. This remarkable growth trajectory is projected to exceed the $1 trillion benchmark in 2028, presenting a once-in-a-generation opportunity for investors seeking to tap into a hugely profitable future industry.
Rekor Systems (NASDAQ:REKR), a leading company in the field of AI technology solutions, has posted noteworthy Q2 results that highlight significant growth in revenue, performance obligations, recurring revenue, and total contract value. The surge in financial performance underscores the potential of AI technology to change the landscape of industries while representing a boon to investors.
Rekor is best known for its AI-driven digital infrastructure operating system, Rekor OneTM. This system ingests billions of data points from multiple sources to transform data into knowledge that can be used to improve transportation systems into fully functioning and safe roadways. Rekor can obtain data from its IOT roadside sensors and also collect, connect and organize third-party data from sources like Waze, and existing roadway infrastructure information and then process those data points through Rekor OneTM, which customers can then use to make the best decisions for infrastructure investment.
The company reports that there are no strong competitors for roadway intelligence, and the transportation infrastructure market is only expected to grow. The transportation infrastructure market was worth $1.7 trillion in 2021, and the market is expected to grow at a compound annual growth rate (CAGR) of 7.2% from 2022 to 2031, bringing the total market size to $3.6 trillion.
Rekor Systems reported gross revenue of $8.6 million in Q2 2023, representing a 132% increase over the same period last year. Additionally, recurring revenue surged by 178% to $5.8 million, demonstrating that the company has embraced a profitable model essential for predictable and sustainable growth. High-value performance obligations stood at $31.8 million as of June 30, 2023, compared to $21.4 million in 2022.
The surge in total contract value to $17.6 million was another critical indicator of the growth of Rekor systems. The uptick in value recorded a 31% increase from the last quarter and a superlative 411% from the same period last year. Rekor remains an early adopter and a prime mover in AI-driven technologies. The eventual boost in the stock price for investors was predictable, representing a significant win for the long-term investor.
Adjusted EBITDA improved significantly compared to last year, narrowing the loss from $12.0 million in Q2 2022 to a loss of $7.2 million in Q2 2023. It seems evident that the company has, over time, focused on improving efficiency and increasing revenues from recurring sources.
Robert A. Berman, Chair and CEO of Rekor shared, "What sets Rekor apart is our ability not only to innovate but also to translate that innovation into sustainable growth. The revenue consistency we're achieving is a testament to the strong demand for our solutions, our effective go-to-market strategy, and the immense value we're creating for our customers and shareholders alike. We are pioneering a new era of AI roadway intelligence, and this strong financial performance underlines the unique position Rekor has attained in the industry."
With AI having promising growth prospects predicted to surpass the $1 trillion threshold by 2028, it's safe to assume that AI isn't going anywhere anytime soon. Rekor and its proprietary systems seem well-positioned to continue to grow revenue in a rapidly growing industry. The company's advanced artificial intelligence, machine learning technologies, and IoT Edge devices create a unique opportunity for continuous operational learning to accelerate the digitalization of America's and the world's roadways.
SOURCE: Rekor Systems
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