The following discussion contains forward-looking statements that are subject to risks and uncertainties including, but not limited to, the impact of competitive products, product demand and market acceptance risks, fluctuations in operating results, and other risks detailed from time to time in I.D. Systems filings with the Securities and Exchange Commission.
These risks could cause the company’s actual results for the current fiscal year and beyond to differ materially from those expressed in any forward-looking statements made by or on behalf of the company.
The second quarter of 2012 continued a positive trend for I.D. Systems. Revenue increased from Q2 of last year to $8.7 million, marking our 10th consecutive quarter of year-over-year revenue growth. For the six-month period, revenues were up 14% to a first-half revenue of $18.5 million. So we are on pace to make 2012 our second year in a row of record annual revenue.
Revenue contributions in Q2 of 2012 continued to come from a balanced mix of products and services across multiple market segments led by increased sales of both vehicle and transportation asset management systems. As a sign of our growing diversification of sources of revenue, I am pleased to report that only one of our customers accounted for more than 10% of our revenue in the first half of the year.The predictability of our revenue stream was also a positive. Recurring revenue was 49% of total revenue in Q2 and 46% of total revenue year to date. Our gross margin remains strong, at more than 50% in both the three and six month periods, consistent with historic levels. As a result, our cash flow from operations was positive in Q2, and our net loss for the first six months of 2012 improved over last year, as Ned will detail in a moment. Overall, we are making progress toward our long-term strategic growth objectives, and we look forward to building on this positive momentum for the remainder of this year and into 2013. Our outlook for the rest of 2012 is especially strong due to expected deliveries of rental fleet management systems to Avis Budget Group.