Good afternoon. I'm Louie DiPalma. I cover aerospace, defense, and smart cities on William Blair's equity research team. This is day 2 of the 44th Annual William Blair Growth Stock Conference. We're pleased to be hosting a presentation with the management team of Rekor. And joining me today are newly appointed CEO, David Desharnais, and the CFO, Eyal Hen. I am required to inform the audience that a complete list of disclosures and potential conflicts of interest are available on our website at williamblair.com. David and Eyal will be providing a presentation, and then we will have a Q&A in the Burnham A breakout room. So with that, the floor is yours.
All right.
Thank you. Thank you for coming.
Thank you. Good morning, everybody. Pleasure to be with you. I'm excited to be able to talk to you about Rekor, the momentum that we're seeing, the growth trajectory that we see also ahead, and what we believe is one of the most fundamental, frankly, but profound transformations happening in roadways and infrastructure, for the 21st century. But it's an exciting time for us. We're seeing a lot of, a lot of momentum in our business, and again, like I said, I'd like to share that with you. There's a, what I would consider a super cycle happening, which is really the convergence of AI and data, which you hear everywhere, of course, but AI data coupled with software and cloud, and basically, the connectedness of everything.
And we're very much at the forefront of that, so I'm excited to share some of that with you today. Clearly, our disclosure statement. You know, one of the things that may surprise you, if you look at roadways today, the number one killer of people from ages 5 to 29, so that's a lot of, lot of folks, is not—it's not cancer, it's not diabetes, it's not suicide, homicide, or gun violence even. It's actually roadway fatalities. That's a big deal, 'cause if anything else happens, there's all kinds of walks and all kinds of events that happen to support these other things, and a lot of support is now pouring into the infrastructure space, particularly transportation infrastructure, to rectify some of the stuff that's happening out there. Infrastructure is the backbone of our economy.
Another thing that would surprise you, or maybe not, 'cause you drive on roadways, is that the roadways we drive on, 65% of them are considered structurally deficient by government standards, to give you sort of a sense. Bridges in the nation, 660,000 bridges, we've seen some come down in not too recent past, but at the same time, a good 35% of them are considered structurally deficient through underinvestment for years and years and years in the space. So we're committed to rectifying that. At Rekor, what we do is we collect and connect roadway and mobility data, and we serve that up as insights to customers, in this case, departments of transportation, public safety, elements that are responsible for managing everything that's happening on roadways.
So you can imagine there's a problem to solve. Technology will be the answer. It will be technology-driven. It's not gonna be more concrete, it's not gonna be more asphalt or steel or iron. The new concrete is code, the new asphalt is AI and data, and the new steel, if you will, and or iron, is gonna be edge, IoT, edge compute devices that are out there in roadways. Even your car that you drive today is kind of an edge device, and there's a lot of compute, computational power on a vehicle today. So our mission is to drive the world to be safer, smarter, and greener. My name is David Desharnais, as I was introduced, as the President and CEO of the company.
I've been with the company for a couple of years, so it's not, it's not my first week at the job. I've actually been been here for a whole time. I'm joined here by Eyal Hen, who's gonna, who's not gonna speak on stage here, but we'll be together in the breakout afterwards for Q&A, so we look forward to that. But in addition to that, I'm joined at a company with close to 400 people globally, deep data scientists, software, hardware, and also 3,000 man-years of roadside experience. So not only are we a technology company and a data and AI company, but we're also very much in tight relationships with departments of transportation, law enforcement, public safety officials as well. It's a great combination, and that's what we bring to the table.
In my time, in the time of my leadership team, we've worked at small companies, large companies, public, private companies, VC, private equity, Fortune 500, Fortune 100, and even startups. So we've had a lot of diverse experiences in a lot of different sectors, and we see this as the biggest opportunity ahead for a transformation. So we're excited for that, and our employees are too. So what do we do? If I look at the term roadway intelligence, which is something that, you know, we think of, is we provide intelligence about everything that's moving in, on, and around roadways for our customers. That becomes vitally, vitally important. We turn that into knowledge and actionable insights for the people whose job it is to respond to incidents on roadways and keep the public safe and communities safe.
Today, they're flying blind. What we do is we're able to provide them tools and insights they've never been able to have access to before. Now, we didn't just come up with this last week. We've been building our technology for the past 6-7 years. We have a very deep bench of AI and technology folks at our company, and we've been proving our technology over and over again, and it's really starting to lift off. When I look at some of the statistics that may be relevant for you, we've had an impressive growth rate. We have 40% CAGR since 2020. Last year, we're seeing that accelerate. We're at 75% year-over-year. The statistics that we can share about, you know, customer acquisition, our unit economics, all very favorable.
We have long-term contracts. It's a very, very sticky business. So if you're thinking about, you know, where you would want to invest and see how this transitions over the next, you know, not three minutes or three days, but literally over the next three quarters and three years, I think you'd be really blown away on how this transforms the industry. A lot of customer use cases, we deal with data from pretty much every sensor company out there today that comes into our system, we surface that up to our customers. So again, a very, very complete system, and I'll walk you through some of that. So what is the problem that we're solving out there? I think it's something that you would see 'cause you drive on roadways every single day.
But if I think about the roads that you drive on, nothing's really fundamentally changed since the 1950s, since the Eisenhower administration. It's the same concrete, just more of it, asphalt, steel, you know, iron, all the stuff that's out there is out there, including the roadway sensors that, that have been placed there to help monitor things that are moving on roadways. Unfortunately, a lot of those don't really work all that well today, to the extent that states tell us between 50% to nearly two-thirds of the roadside units and devices that they depend on for information and insights and data aren't functioning. That's a problem, because they're flying blind, and their job is to make sure that they're keeping us safe.
So tools that we provide really allow them to identify things that are happening, respond to them quickly, send out the right level of support and, and resolve it, and then keep things flowing. And that's a very important thing. And right now, the way it is, with a C-minus and with the fatalities being the number one killer of this particular age group, there's a problem. And we haven't even talked about electric vehicles and the weights of those. We haven't talked about things like air quality, which is becoming more and more of a sustainability issue that states have to report on. All of that stuff, they're flying blind on. So there's a real opportunity, and the need is now. So what do we do?
As I mentioned, we are working every single day to make sure that we are collecting and connecting mobility data globally, being able to surface that for our customers in a way that they can use it and get information that's useful out of it. In some cases, I'll talk through some specific use cases in a moment of where our technology is deployed and being used already for years with some of the most mission-critical customers that are out there. But what we do is very accurate. It's to the point of it's in the 97%-99% accuracy of human annotation, those kinds of things. So it's very accurate and very comprehensive. And again, it's already proven over the last several years as the technology's been developing.
Today, we collect thousands of data collection sites. So we have thousands that are about. We have literally millions of vehicles that are in our system on a monthly recurring basis. We see billions of miles of roadway, and also trillions of data points that are coming in from anything from weather to work zones to events like a Taylor Swift concert and what that does to traffic, as an example. You can imagine that all these kinds of data feeds coming in really don't mean anything in isolation, but together, they actually can provide the insight necessary to respond effectively and keep things moving and people safe. So let's dive a little bit deeper. There's a lot of stuff on a roadway today, including your vehicle.
Just think about your vehicle, which I'm sure is a fairly modern vehicle. Maybe even not even an electric vehicle, but just a regular combustion vehicle today will have in excess of upwards of 1,000 sensors on them, okay? You're a rolling data center. You're connected, and you're constantly spewing information. Your exhaust, your data exhaust is enormous. That's one thing that today, departments of transportation have no visibility into. Now, being able to access that would be very important, but it's not that alone. It's that plus roadway sensors. It's that plus weather data. It's that plus, you know, pretty much everything and anything that could impact or change weather. If you're from the southeast area, you deal with things like hurricanes, right? Hurricanes come through all the time. You have to move massive amounts of people.
You have to flip the polarity of roadways and get people out of town very quickly. Hard to do. If you're in the Baltimore area right now, you're grappling with, you know, 12 million vehicles that are diverted that can no longer go through the or go over the Francis Scott Key Bridge. That's a big deal. They're going through neighborhoods that were never designed for them. They're hitting, you know, areas and signaling and timing that was never built for something like this, and that is happening all over the country. So what we do is we're able to pull all of that data together and create a secret decoder ring, effectively, that we call Rekor One, and we demystify that.
We stitch that together so our customers don't have to, and make it make sense to three very particular segments that we're focused on today, which I'll get into a little bit more detail. But the key is our IP, our technology expertise, is to literally understand everything that's moving in and on or around roadways and make that make sense to the people that can use that information to respond and make sure that our communities are safe. Rekor One is our asset. Rekor One is the brain, if you will, that provides insights for our customers. Now, our customers run the, run the gamut from public safety, and public safety means a lot of things to a lot of people.
You might think of it as law enforcement, but it's not just law enforcement in your community, it's at the state level, it's at the federal level that we support customers. You might think of it as security companies, security campuses on a corporate or an education basis. There's lots of things happening there that our technology supports. But in addition to public safety, we also deal with urban mobility. Urban mobility is all about data analytics on the roadways, and I'll get into some of that more specifically. And then the third is traffic management and transportation management. These are all very large and fast-growing areas that absolutely are going through transformation. This is all about that convergence of data and AI and this connected Internet of Things....
So looking at particular use cases, in the first segment, we talked about public safety. Public safety is, again, if you think about law enforcement, the ability to identify vehicles of interest is a big deal, and you can do that through license plate recognition, which is a very commoditized type of thing. We have that, too. It's not the core, but it's something that is very important, and you have to do it well. We use a technology around AI, not optical character recognition, but an AI-based approach to that that is fundamentally different and very successful. It's why some of the most mission-driven, critical agencies in public safety depend on our technology.
But for vehicle identification, we have also commercial use cases that tap this from tolling to what we do for theme parks to what we do for different commercial enterprises that, again, trying to understand everything that's moving in and out of their parking lot or in and out of their facility or whatever, what have you. When you deploy our technology, it's not uncommon that we see a precipitous drop in crime in an area. We've got a great reputation for that. We have a lot of customer endorsements and case studies around that, but it's not unusual for us to see close to 50% reduction in crime. Crime is on the rise today. Crime is on the rise today. This is becoming mission critical, and it's important to know that 70% of all crime, all crime, involves a vehicle.
And so understanding what is happening on that roadway and the patterns and recognition of patterns is vitally important, and it's not something that you can do by looking at a video. You have to be able to find it and connect the dots, and that's what we do very well. So that's public safety and licensing. We have a platform that we call Rekor Scout. If I go to the middle section, transportation management, that's another segment, that we serve with a platform that we call Rekor Command. And you can think of it as, how do departments of transportation that are managing traffic take command of their roadways? Now, what does that mean?
It means incident detection, and it could be anything from a stalled vehicle to a deer, to a mattress, to a Christmas tree that blew off the car, and it stopped traffic, or people rubbernecking. You've seen it, and you've seen it all. It creates congestion, stopped traffic, which, if you're like me, it demystifies you most of the time. "Why am I stuck in this traffic jam?" The job of the traffic management center is to identify that as quickly as possible, get whatever that is out of the way, and get things moving again. Incident detection, you know, I made some remarks about mattresses and trees, but, you know, more practically, it's car wrecks, and people are in danger, and it's a problem, and it's a very scary situation for if you're in that situation.
So traffic management center becomes the vital link between literally people's survival. The ability to respond using our technology has increased upwards of 23 minutes per incident. That is absolutely game-changing. In addition to that, we're able to see close to 50% more incidents that otherwise would not even have been noticed because they're on some remote stretch of roadway, or there was nowhere that, you know, somebody could call in a 911 call. This is a very big deal, and it's something unique that we provide to the transportation management and traffic management departments. The third, certainly not the least, in fact, I would say it's probably the fastest growth trajectory for us and pillar of strength, is what we do in the urban mobility space. This is all about traffic analytics, which may sound a little bit boring, right?
But if you think about it, traffic analytics are happening on every single roadway all the time, and I'll give you an example. Anytime that you see a new strip mall getting built or a new stop sign or a new signal or some sort of road construction project, I can absolutely promise you with 100% confidence there was a traffic study. And those traffic studies are, they're done in the millions every single year, and they're done in a myriad of ways. And I'll explain a little bit more on that with some visuals, so you'll see that. But this is fundamentally changing the game.
How we are bringing AI to that whole picture is it's basically resetting how departments of transportation are managing traffic analytics and reporting statistics on the roadways, which is job number zero for departments of transportation. In this case, we are able to provide 99.7% accuracy, which is statistical, which is something that we've proven over and over and over again, versus human annotation or ground truth. If I take a zoom back out now, 'cause I covered a lot of information, we have three main platforms. They're all connected through that decoder ring that I call Rekor One, the brain. All of the data that we take in is served to three specific platforms for three different markets that we support. First one is the Scout, which is our public safety. Second one is Rekor Command.
That's our transportation management, our traffic management, software as a service capability, and then Rekor Discover, and this is where states use our system to be able to report statistics on the roadways to the Federal Highway Administration, U.S. Department of Transportation, and a myriad of other agencies that use this data. We are trusted by both public and private sector. Some of the most strict customers that demand absolute accuracy depend on our technology and our software. We do business in 93 countries around the world. We have a footprint here in the United States. That's our focus. However, our technology is deployed in a lot of places.
When we look at sort of customers that we can point to, 'cause we do a lot of licensing of our technology, so sometimes we don't know who the end user will be, but we look at on our books, around 500 customers that we're serving today. These are typically multiyear contracts in the 5-year average range, some average range, sometimes 3, sometimes 7, but around 5 years on average. And the gross retention for revenue is 96%. What does this mean? It means we have, as a small company, as a micro-cap company, we've got a stable set of customers that depend on our technology. It's real. It's not in the lab, hoping it works. This is proven technology to be very accurate, and it is very sticky.
It stays in for a long time and continues to be used, and we have a high degree of success. From an example perspective, I'll use Texas. Texas is the largest roadway network in the United States, so if you're gonna do something somewhere, that's not a bad place to start. It creates a domino effect. If you are at all following Department of Transportation, I don't know why you would necessarily on a day-to-day basis, but I can tell you that if you hear the CIO of Texas talking about what they're doing on their roadways, it's built on our technology, and that's a very, we're proud of that. We just started working with them last year. What have they done?
In a matter of months, they were able to demonstrate exactly the value propositions that we promise with our Rekor Command for traffic management across the state. In Austin alone, we did that as the initial push into the state. Within months, they were able to achieve, on average, 11 minutes faster response times. That's a big deal when it's life and death, right? And that meant something to Texas, right? And everything's a long drive in Texas, right? So if you can pinpoint where it is and respond, that's a big deal. In addition to that, in this case, we saw 70% incident more incidences that otherwise would have not been detected, and that's a problem, right? When you think about, again, number one killer of people on roadways in 5-29 is fatalities on roadways.
This is a big deal. In addition to that, the unique thing is 34%, but even more, 29% reduction in secondary crashes. And you've been there, right? When you weren't paying attention, and the car in front of you stopped, and you came in at 70 miles an hour, and you may not have done it, but you've seen it happen. It's called a secondary crash. 29%. Much more fatal than the original crash, by the way. 29% reduction like that, in a heartbeat. 44 minutes, average time for traffic to return to normal. That's happy as a driver. That brings Fahrvergnügen, right? You can enjoy driving again if you know you can get to where you need to get to.
I'd say probably the more economical thing for them is $8 million in savings just in Austin alone, in terms of what operational savings our solutions provide. So this is a big deal, right? And this is being stamped and repeated across the United States in different traffic management centers, and this is just the beginning. We've had this out for a year, right? And this is the beginning of something that we see as a tremendous wave. If I switch to our urban mobility segment, this is where I talked about Discover. Here's what's happening on roadways today. I think it's important for this audience to understand that every state must report statistics on the roadways to the federal government. It is mandated, okay?
They have to do it, and they do it by the pictures that you see on the left-hand side on the screen. You've seen rubber tubes. You've seen people on the side of the road doing counting. You've seen radars. You've seen a jigsaw puzzle of cutouts on roadways. These are all legacy methods of doing data collection, and you've experienced all of them, okay, in where you are. Problem is, these are honestly 40, 50, sometimes 60 years old technology. Majority, again, according to the states, don't even work, and if they are working, they're intermittent. So the ability for a state to report on mandated statistics, very, very difficult. What does that mean? It means the state has got a revenue ability... They lose their ability to get the investments they need for their infrastructure.
So why do we have poor infrastructure? Why do we have a C-minus? Comes down to reporting. What we do in this space, I'm giving you some examples of Texas and Maryland and New Jersey, and you can see nationwide. Those dots that you see on the map are literally where there is data collection happening today. So this is not a hopeful thing. This is literally happening today already with old technology that is failing, okay? There's anywhere between 3-5 million, by our estimation, of these data collection points that are ripe for disruption. To give you a sort of a sense, one lane in one location, one lane, and no road's one lane, but one lane will cost anywhere from $25,000-$40,000 to do a traditional method of an inductive loop or a piezo sensor.
We do that for a fraction of the cost. Think about an old legacy method is that the moment you put it in the ground, it degrades, right? It starts as mechanical. It's a mechanical thing. It starts to break down. If you understand the value of AI, it gets smarter and smarter and smarter. It just gets better. So this is very real. It's very present. This is program money. This is not grant money that we're hoping that a Department of Transportation can get ahold of. This is money they spend already, and their choices when these broken systems are to be replaced, "Do I do the same expensive thing that fails, or do I do something different?" And we are a unique player in this space, and we see this as a massive growth trajectory, frankly, that will tie in the rest of our business lines.
So a very exciting time. If we look at the market size, by our estimations, it's about, roughly a $100 billion market size globally. That's a good size market for us to participate in. We're focused in the United States. As I mentioned, we do business in 93 countries around the world. We do that through third parties and reselling technology and licensing technology. So our focus is in the United States. This is a decent market size, but a couple of things that are tailwinds, to be mindful of: the fact that new legislation coming down, with air quality, with fatality reduction, the Road to Zero, which is all nomenclature. Road safety is becoming a big deal. Worker safety, it's a public outcry.
That is driving enormous reallocation of existing money to be spent on modernization, and that modernization is going to be that super cycle of AI, data, and edge, edge-connected, devices. And that's exactly the intersection that we are. So it's a very exciting time for us. That's one tailwind, this public demand for action now. The other thing is that there is an absolute groundswell of investment happening, called the Bipartisan Infrastructure Law, that puts $1.2 trillion of additional funding in addition to what's already been spending every year, which is about $250 billion in infrastructure. This is lots of big numbers with B's and T's here. But, that money is in addition to that $100 billion. So we see some tailwinds. Now, not all of it will apply to Rekor, just to be clear.
If I look at the breakdown of what that new funding on top of is really about $550 billion that's being spent within—it's year 3 of 5. So it's a five-year window, and then there's another bunch that comes after that. They've already deployed $320 billion of that. So this is not a wishful thing; it's actually happening. And states are loosening up their purse strings, and they're investing heavily to make that happen.
We believe of that, of that $1.2 trillion of additional investment, that about $350 billion of that would apply to the stuff that we deal with on the roadside, whether it's public safety, modernization, or what we do for traffic analytics on the AI side, and also around traffic management. So it's a very exciting time, I'd say, for us. The market's certainly there, and there's urgency. So the natural question is, well, are there other people in the market that you compete with? The answer is yes, absolutely. If you look at every single segment, think about three segments: public safety, urban mobility, and transportation management. There's competitors in every one of those segments.
Here's how I would characterize that. I would say that there's a patchwork of literally hundreds of technology providers, and they run the gamut of data providers, or software providers, or hardware device providers, and they run 20, 30, 40, 50 years old in terms of where they are. So legacy technology. It is siloed, it is isolated, it frustrates the heck out of customers because they are left trying to stitch together in an ever-increasing level of complexity. Again, think about your car, how sophisticated your vehicle is, and the roads it drives on are not, right? And so these companies are leaving that stitching together to the states.
What makes Rekor different is that not only are we in the AI, and data, and software, and edge units, we also bring 3,000 man-years of roadside experience. So when you're talking to law enforcement, and when you're talking to public safety officials, and departments of transportation, and, and the nature of the... We are them. We've done this for years, 20 and 30 years, as I look at the composition of our team. What makes us stand apart is that we're not serving just one segment. We serve each segment, and we do it very well. I walked you through some use cases that are absolutely game-changing.
But the fact that we tether between them and allow them to operate on a single source of truth and a single pane of glass is an enormous differential for us, and that moat is only getting bigger. So from a competitive landscape, we see all of these guys. But here's the other interesting thing: being legacy players, which they are, somebody had to be, right? They're also the install. They're the current incumbent, and they're struggling to hold onto their footprint. So what we have found is that they've opened the doors for us to be able to take our modular technology and embed it in their systems. So we actually are sitting inside of a lot of these players already today.
So much so that we created something called the Rekor Partner Network, where today we view this and believe it to be the case, where this is the largest combination of roadside and mobility data available anywhere, highest volume, the velocity, the variety, and it's everything from CAD systems and RMS systems, if you're in the first responders' sorta side or public safety, to what we do for DMS signs or digital signs, and sensor technology, and connected vehicle technology, on and on and on. A lot of the competitors you saw on the previous slide are actually partners of ours, so it's really quite an interesting landscape. What we do differently is we actually connect the dots, and we make all of that data, all of those sensors, all of that existing infrastructure. We don't ask our customers to rip it up and replace it.
We say, "Keep it. We'll use it. We'll just suck it into our system. We'll connect it to the brain, so you'll get even a better, better, insight to what's happening on your roadways." That is what Rekor does. So we have this very large, I would say, moat, of what we see as data. Data and analytics, that is really the superpower, to be able to understand everything that's moving on the roadways. And I will tell you, whether it's thousands and millions and billions and trillions of data points, which we actually can show you, it's over 20 trillion data points that we're dealing with today, that's a big deal. But it's not lost on us that there's other industries that would benefit from this.
You know, our focus today is in departments of transportation, law enforcement, at the local and state and the federal level. But there's 14 additional industries that we have targeted that would find enormous value in the insights that we derive from the datasets that we have. So the winning hand here is the moat around data and technology. We are device-agnostic, and we're infrastructure-agnostic, so it puts us in a very, very unique, investable position. So some of the... As wrapping up here, some of the financial things that would be of interest to you, as I mentioned, 75% year-over-year growth. Recurring revenue is high at 60%, very unusual in a traffic-related or department of transportation thing, so this tells you a lot about our technology. In terms of gross retention, as I mentioned, very sticky.
The gross margins are 53%. When we look at the our long-term value to the customer acquisition cost, it's absolutely a benchmark in the industry. 7.7x is a big deal. Our ambition for profitability is this year, and so we're at the tipping point for what we see as a massive lift-off. In summary, we believe we have a first-mover advantage. We believe it's an exciting time to be in this industry, one of the biggest sea changes in transportation and infrastructure in this era, and it will be once in a generation. It is a massive market. You see the $100 billion, plus the infrastructure bill puts a lot more, loosening up purse strings and allows people to think differently. Very high growth potential.
We believe that we have a very disruptive technology that would be incredibly difficult to displace and actually to even rebuild. So we have a unique position, and we're already the trusted authority across departments of transportation and public safety at the local, state, and federal level. So we encourage you to check us out. We'll be available for a breakout session to do some Q&A, and I appreciate your time today. Thanks for joining us.
Great. Thanks, David. Yes, we're gonna move to the Burnham A room for the breakout.