A label rewind machine counts labels on a label roll having an elongated web with labels attached. The rewind machine has an unwind spindle and a rewind spindle, and a first label sensor and a second label sensor. The label roll is placed on the unwind spindle, and the web is threaded through the first and second sensors and attached to the rewind spindle, creating a web path. As the web is drawn along the web path, each sensor detects the presence or absence of a label on the web proximate that sensor and generates an electronic signal. Together, the sensors generate a specific quadrature sequence dictated by the presence of labels on the web. If the detected sequence mimics a selected sequence, the rewind machine records a unitary count of one label. The label count is indexed by one each time the rewind machine detects the selected sequence.