[Executive Summary & Q1 FY2026 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q1%20FY2026%20Highlights) Powerfleet reported a strong start to FY2026, with significant sequential growth in services revenue, robust year-over-year total revenue growth, and substantial expansion in Adjusted EBITDA and gross margins, leading to raised full-year revenue guidance [Key Financial & Operational Achievements](index=1&type=section&id=Key%20Financial%20%26%20Operational%20Achievements) Powerfleet reported a strong start to FY2026, with significant sequential growth in services revenue, robust year-over-year total revenue growth, and substantial expansion in Adjusted EBITDA and gross margins. The company also raised its full-year revenue guidance | Metric | Q1 FY2026 | Q4 FY2025 | Sequential Change | YoY Change | | :-------------------------------- | :---------- | :---------- | :---------------- | :--------- | | Services Revenue (Millions USD) | $86.5 | $81.8 | +6% | +53% | | Total Revenue (Millions USD) | $104.1 | - | - | +38% | | Services Revenue as % of Total | 83% | 79% | +4 pp | +8 pp | | Adjusted EBITDA (Millions USD) | $21.6 | - | - | +58% | | Adjusted EBITDA Margin | 21% | - | +260 bps | - | | Adjusted EBITDA Gross Margins | 67% | - | +3% | - | - The EBITDA expansion program delivered **$11 million in annual savings**, achieving **60% of the full-year target of $18 million**[2](index=2&type=chunk) | Metric | New FY2026 Guidance (Millions USD) | Prior FY2026 Guidance (Millions USD) | | :-------------------- | :------------------ | :-------------------- | | Total Revenue | $430-$440 | $420-$440 | [Management Commentary](index=1&type=section&id=MANAGEMENT%20COMMENTARY) CEO Steve Towe highlighted the strong Q1 performance, attributing it to accelerating adoption of Unity's AI-driven SaaS solutions and a successful transition to a recurring, high-margin business model. He emphasized robust market demand, particularly through indirect channels, and efficient scaling across verticals - The company's performance underscores accelerating adoption of Unity's AI-driven SaaS solutions and validates the long-term value creation through a transition to a recurring, high-margin business model[5](index=5&type=chunk) | Metric | Q1 FY2026 | | :-------------------- | :---------- | | AI Video ARR Bookings | +52% QoQ | | New Logo Wins | +14% Sequential | | Six-figure ARR Deals | Across 11 diverse industry sectors | - Services revenue represented a record **83% of total revenue**, highlighting a successful shift to higher-quality SaaS revenue while navigating tariff headwinds and accelerating supply chain efficiencies[5](index=5&type=chunk) [Detailed Q1 FY2026 Performance](index=2&type=section&id=FIRST%20QUARTER%20FY2026%20OPERATIONAL%20AND%20FINANCIAL%20HIGHLIGHTS) This section provides an in-depth review of Powerfleet's operational achievements and financial results for Q1 FY2026, highlighting growth drivers and efficiency gains [Operational Momentum](index=2&type=section&id=Operational%20Momentum) Powerfleet demonstrated strong operational momentum in Q1 FY2026, marked by significant ARR wins across diverse sectors, robust indirect channel performance, and strategic partnerships. The company also received industry recognition for its innovation and launched a new AI-powered risk application [Go-To-Market Momentum](index=2&type=section&id=Go-To-Market%20Momentum_sub) The company achieved over $100k ARR wins across 11 diverse sectors and saw strong indirect channel partner momentum, with AI video bookings surging 52% quarter-over-quarter. A major strategic sales channel partnership was signed with MTN Group - **11 diverse sectors** contributed to ARR wins over **$100k**[12](index=12&type=chunk) | Metric | Q1 FY2026 | | :-------------------- | :---------- | | AI Video Bookings | +52% QoQ | | Indirect Channel Partner Momentum | Strong, contributing significantly to ARR | - A major new strategic sales channel partnership was signed with MTN Group, one of the world's largest network providers, to white label Powerfleet's portfolio of solutions to enterprise customers[12](index=12&type=chunk) [Technology and Innovation](index=2&type=section&id=Technology%20and%20Innovation) Powerfleet was recognized by ABI Research as one of the 7 most innovative global tech companies and launched a new AI-powered automated risk application. The company also announced an upcoming Investor Innovation Session - Powerfleet was ranked by ABI Research as one of the **7 most innovative global tech companies**[12](index=12&type=chunk) - Launched new AI-powered automated risk application to drive top-tier quantifiable enterprise safety benefits[12](index=12&type=chunk) - Powerfleet will host an Investor Innovation Session showcasing Unity AIoT product and technology in November 2025[12](index=12&type=chunk) [Financial Performance](index=2&type=section&id=First%20Quarter%20Financial%20Highlights) The first quarter saw significant financial improvements, including substantial revenue growth driven by services, expanded gross margins, and a notable increase in Adjusted EBITDA. The company also improved its net loss per share and reduced its net debt leverage ratio [Revenue and Gross Profit](index=2&type=section&id=Revenue%20and%20Gross%20Profit) Total revenue increased by 38% year-over-year to $104.1 million, primarily due to the Fleet Complete acquisition and organic growth in recurring services. Services revenue surged 53% YoY and 6% sequentially, now comprising a record 83% of total revenue, contributing to a 300 basis point expansion in adjusted EBITDA gross margin to 67% | Metric | Q1 FY2026 (Millions USD) | Q1 FY2025 (Millions USD) | YoY Change | | :-------------------- | :---------- | :---------- | :--------- | | Total Revenue | $104.1 | $75.43 | +38% | | Services Revenue | $86.5 | $56.69 | +53% | | Services Revenue as % of Total | 83% | 75% | +8 pp | | Adjusted EBITDA Gross Margin | 67% | 64% | +300 bps | [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total operating expenses were $58.5 million, with adjusted operating expenses at $54.3 million after excluding one-time transaction and restructuring costs. General and administrative expenses improved by 400 basis points as a percentage of revenue, while sales and marketing expenses increased due to planned growth reinvestments | Metric | Q1 FY2026 (Millions USD) | Q1 FY2025 (Millions USD) | Change (Millions USD) | | :------------------------------------------ | :---------- | :---------- | :-------------------- | | Total Operating Expenses | $58.5 | $57.88 | +$0.64 | | Adjusted Operating Expenses | $54.3 | $37.49 | +$16.78 | | G&A Expense as % of Revenue (Adjusted EBITDA) | 26% | 30% | -400 bps | | Sales & Marketing Expense as % of Revenue | 17% | 12% | +500 bps | | R&D Expense as % of Total Revenue | 5% | 4% | +100 bps | [Adjusted EBITDA and Net Loss](index=3&type=section&id=Adjusted%20EBITDA%20and%20Net%20Loss) Adjusted EBITDA increased 58% to $21.6 million, driven by the Fleet Complete acquisition, organic growth, margin expansion, and cost synergies. Net loss attributable to common stockholders improved to $0.08 per share from $0.21 per share in the prior year, with adjusted net income per share reaching $0.01 | Metric | Q1 FY2026 (Millions USD) | Q1 FY2025 (Millions USD) | YoY Change | | :------------------------------------------ | :---------- | :---------- | :--------- | | Adjusted EBITDA | $21.6 | $13.7 | +58% | | Net Loss Attributable to Common Stockholders per Share (USD) | $(0.08) | $(0.21) | Improved | | Adjusted Net Income per Share (USD) | $0.01 | $0.00 | Improved | [Debt and Leverage](index=3&type=section&id=Debt%20and%20Leverage) The adjusted net debt to adjusted EBITDA ratio improved to 2.97x from 3.22x at the end of fiscal year 2025. Net debt at quarter end stood at $234.8 million, comprising $35.6 million in cash and $270.4 million in total debt | Metric | Q1 FY2026 | FY2025 End | | :-------------------------------- | :---------- | :--------- | | Adjusted Net Debt to Adjusted EBITDA | 2.97x | 3.22x | | Net Debt at Quarter End (Millions USD) | $234.8 | - | | Cash and Cash Equivalents (Millions USD) | $35.6 | - | | Total Debt (Millions USD) | $270.4 | - | [Financial Outlook & Investor Information](index=3&type=section&id=FULL-YEAR%202026%20FINANCIAL%20OUTLOOK) This section outlines Powerfleet's updated full-year 2026 financial guidance, details for the investor conference call, and explanations of non-GAAP financial measures [Full-Year 2026 Financial Outlook](index=3&type=section&id=FULL-YEAR%202026%20FINANCIAL%20OUTLOOK_sub) Powerfleet increased its full-year 2026 revenue guidance to $430-$440 million, while maintaining its guidance for annual adjusted EBITDA growth of 45% to 55% and an improved adjusted net debt to adjusted EBITDA leverage ratio below 2.25x by March 31, 2026 | Metric | New FY2026 Guidance (Millions USD) | Prior FY2026 Guidance (Millions USD) | | :-------------------- | :------------------ | :-------------------- | | Total Revenue | $430-$440 | $420-$440 | | Metric | FY2026 Guidance | | :------------------------------------------ | :-------------- | | Annual Adjusted EBITDA Growth | 45% to 55% | | Adjusted Net Debt to Adjusted EBITDA Leverage Ratio | Below 2.25x by March 31, 2026 (from 3.2x as of March 31, 2025) | [Investor Conference Call Details](index=3&type=section&id=INVESTOR%20CONFERENCE%20CALL%20AND%20BUSINESS%20UPDATE) Powerfleet announced an investor conference call on Monday, August 11, 2025, at 8:30 a.m. Eastern time to discuss Q1 FY2026 results and provide a business update, with access details provided for participants and webcast replay - A conference call to discuss Q1 FY2026 results and provide a business update will be held on Monday, August 11, 2025, at **8:30 a.m. Eastern time**[16](index=16&type=chunk) - Access details for the conference call include toll-free (888-506-0062), international (973-528-0011), and participant access code (321752) A webcast and accompanying slide presentation will be available via ir.powerfleet.com[16](index=16&type=chunk) [Non-GAAP Financial Measures Explanation](index=3&type=section&id=NON-GAAP%20FINANCIAL%20MEASURES) Powerfleet provides several non-GAAP financial measures, such as adjusted EBITDA and adjusted net income per share, to supplement GAAP financial statements. These measures are intended to enhance investors' understanding of core operating results by excluding certain non-recurring or non-operational items - Powerfleet provides non-GAAP measures including adjusted EBITDA, adjusted EBITDA gross margin, adjusted EBITDA gross profit, adjusted EBITDA service margin, adjusted product margin, adjusted EBITDA operating expenses, adjusted net income per share, and net debt[17](index=17&type=chunk) - These non-GAAP measures are provided to enhance investors' overall understanding of Powerfleet's current financial performance by excluding certain expenses, gains, losses, and currency fluctuations that may not be indicative of core operating results[17](index=17&type=chunk) [Company Information & Disclosures](index=4&type=section&id=ABOUT%20POWERFLEET) This section presents an overview of Powerfleet's business, cautionary statements regarding forward-looking information, and contact details for investor and media relations [About Powerfleet](index=4&type=section&id=ABOUT%20POWERFLEET_sub) Powerfleet is a global leader in the Artificial Intelligence of Things (AIoT) software-as-a-service (SaaS) mobile asset industry, with over 30 years of experience. The company unifies business operations through data ingestion and integration, delivering actionable insights to help clients save lives, time, and money - Powerfleet is a global leader in the artificial intelligence of things (AIoT) software-as-a-service (SaaS) mobile asset industry, unifying business operations and delivering actionable insights[19](index=19&type=chunk) - The company is headquartered in New Jersey, United States, with offices globally, and is listed on The Nasdaq Global Market (AIOT) and the Johannesburg Stock Exchange (JSE: PWR)[19](index=19&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=4&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section advises readers that the press release contains forward-looking statements, which are subject to various known and unknown risks and uncertainties. Actual results may differ materially from expectations, and readers should not place undue reliance on these statements - The press release contains forward-looking statements, which are predictions of future events and are subject to significant known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[20](index=20&type=chunk)[21](index=21&type=chunk) - Key risks include challenges related to business combinations (MiX Telematics, Fleet Complete), global economic conditions, supply chain disruptions, technological changes, cybersecurity, intellectual property protection, competitive pressures, international political and economic landscapes, and changes in laws and regulations[21](index=21&type=chunk) [Investor & Media Contacts](index=5&type=section&id=Powerfleet%20Investor%20Contacts) Contact information is provided for investor relations and media inquiries for Powerfleet - Investor contacts are Carolyn Capaccio and Jody Burfening at Alliance Advisors IR (AIOTIRTeam@allianceadvisors.com)[23](index=23&type=chunk) - Media contact is Jonathan Bates (jonathan.bates@powerfleet.com, +44 121 717-5360)[23](index=23&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=POWERFLEET%2C%20INC.%20AND%20SUBSIDIARIES%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This section contains the official GAAP financial statements, including statements of operations, balance sheets, and cash flows for the reported periods [Condensed Consolidated Statements of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This section presents the condensed consolidated statements of operations for the three months ended June 30, 2025, and 2024, detailing revenues, cost of revenues, gross profit, operating expenses, and net loss attributable to common stockholders | | Three Months Ended June 30, 2024 (Thousands USD) | Three Months Ended June 30, 2025 (Thousands USD) | | :------------------------------------------ | :------------------------------- | :------------------------------- | | **Revenues:** | | | | Products | $18,738 | $17,657 | | Services | 56,692 | 86,464 | | **Total revenues** | **75,430** | **104,121** | | **Cost of revenues:** | | | | Cost of products | 12,751 | 13,228 | | Cost of services | 23,031 | 34,412 | | **Total cost of revenues** | **35,782** | **47,640** | | **Gross profit** | **39,648** | **56,481** | | **Operating expenses:** | | | | Selling, general and administrative expenses | 54,782 | 53,663 | | Research and development expenses | 3,101 | 4,857 | | **Total operating expenses** | **57,883** | **58,520** | | **Loss from operations** | **(18,235)** | **(2,039)** | | Interest income | 304 | 196 | | Interest expense, net | (2,691) | (6,786) | | Other expense, net | (624) | (1,243) | | **Net loss before income taxes** | **(21,246)** | **(9,872)** | | Income tax expense | (1,053) | (362) | | **Net loss before non-controlling interest** | **(22,299)** | **(10,234)** | | Non-controlling interest | (13) | — | | **Net loss** | **(22,312)** | **(10,234)** | | Preferred stock dividend | (25) | — | | **Net loss attributable to common stockholders** | **$(22,337)** | **$(10,234)** | | Net loss per share attributable to common stockholders - basic and diluted (USD) | $(0.21) | $(0.08) | | Weighted average common shares outstanding - basic and diluted | 107,136 | 133,313 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section provides the condensed consolidated balance sheets as of June 30, 2025, and March 31, 2025, detailing the company's assets, liabilities, and stockholders' equity | | March 31, 2025 (Thousands USD) | June 30, 2025 (Thousands USD) | | :------------------------------------------ | :------------- | :------------ | | **ASSETS** | | | | Current assets: | | | | Cash and cash equivalents | $44,392 | $31,196 | | Restricted cash | 4,396 | 4,447 | | Accounts receivables, net | 78,623 | 81,482 | | Inventory, net | 18,350 | 23,892 | | Prepaid expenses and other current assets | 23,319 | 26,762 | | **Total current assets** | **169,080** | **167,779** | | Fixed assets, net | 58,011 | 62,712 | | Goodwill | 383,146 | 394,668 | | Intangible assets, net | 258,582 | 263,745 | | Right-of-use asset | 12,339 | 11,935 | | Severance payable fund | 3,796 | 4,097 | | Deferred tax asset | 3,934 | 3,926 | | Other assets | 21,183 | 21,920 | | **Total assets** | **$910,071** | **$930,782** | | **LIABILITIES** | | | | Current liabilities: | | | | Short-term bank debt and current maturities of long-term debt | $41,632 | $37,426 | | Accounts payable | 41,599 | 48,341 | | Accrued expenses and other current liabilities | 45,327 | 48,755 | | Deferred revenue - current | 17,375 | 17,116 | | Lease liability - current | 5,076 | 4,965 | | **Total current liabilities** | **151,009** | **156,603** | | Long-term debt - less current maturities | 232,160 | 232,954 | | Deferred revenue - less current portion | 5,197 | 5,133 | | Lease liability - less current portion | 8,191 | 7,994 | | Accrued severance payable | 6,039 | 6,754 | | Deferred tax liability | 57,712 | 57,387 | | Other long-term liabilities | 3,021 | 3,077 | | **Total liabilities** | **463,329** | **469,902** | | **STOCKHOLDERS' EQUITY** | | | | Preferred stock | — | — | | Common stock | 1,343 | 1,343 | | Additional paid-in capital | 671,400 | 673,253 | | Accumulated deficit | (205,783) | (216,017) | | Accumulated other comprehensive loss | (8,850) | 13,669 | | Treasury stock | (11,518) | (11,518) | | **Total stockholders' equity** | **446,592** | **460,730** | | Non-controlling interest | 150 | 150 | | **Total equity** | **446,742** | **460,880** | | **Total liabilities and stockholders' equity** | **$910,071** | **$930,782** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section presents the condensed consolidated statements of cash flows for the three months ended June 30, 2025, and 2024, outlining cash flows from operating, investing, and financing activities, as well as the effect of foreign exchange rate changes on cash | | Three Months Ended June 30, 2024 (Thousands USD) | Three Months Ended June 30, 2025 (Thousands USD) | | :---------------------------------------------------- | :------------------------------- | :------------------------------- | | **Cash flows from operating activities** | | | | Net loss | $(22,312) | $(10,234) | | Adjustments to reconcile net loss to cash (used in) provided by operating activities: | | | | Non-controlling interest | 13 | — | | Inventory reserve | 257 | 193 | | Stock based compensation expense | 5,929 | 1,853 | | Depreciation and amortization | 10,335 | 16,031 | | Right-of-use assets, non-cash lease expense | 760 | 974 | | Derivative mark-to-market adjustment | — | 104 | | Bad debts expense | 1,993 | 1,856 | | Deferred income taxes | 1,021 | (3,157) | | Shares issued for transaction bonuses | 889 | — | | Lease termination and modification losses | — | 59 | | Other non-cash items | 482 | (513) | | Changes in operating assets and liabilities: | | | | Accounts receivables | (6,973) | (2,391) | | Inventories | (624) | (4,733) | | Prepaid expenses and other current assets | (1,518) | (1,284) | | Deferred costs | (1,789) | (2,730) | | Deferred revenue | (142) | (420) | | Accounts payable, accrued expenses and other current liabilities | 4,993 | 9,637 | | Lease liabilities | (927) | (881) | | Accrued severance payable, net | (2) | 357 | | **Net cash (used in) provided by operating activities** | **(7,615)** | **4,721** | | **Cash flows from investing activities:** | | | | Acquisition, net of cash assumed | 27,531 | — | | Proceeds from sale of fixed assets | — | 16 | | Capitalized software development costs | (2,308) | (3,724) | | Capital expenditures | (5,586) | (8,114) | | **Net cash provided by (used in) investing activities** | **19,637** | **(11,822)** | | **Cash flows from financing activities:** | | | | Repayment of long-term debt | (493) | (1,341) | | Short-term bank debt, net | 4,161 | (5,428) | | Purchase of treasury stock upon vesting of restricted stock | (2,836) | — | | Payment of preferred stock dividend and redemption of preferred stock | (90,298) | — | | Cash paid on dividends to affiliates | (4) | — | | **Net cash used in financing activities** | **(89,470)** | **(6,769)** | | Effect of foreign exchange rate changes on cash and cash equivalents | (823) | 725 | | **Net decrease in cash and cash equivalents, and restricted cash** | **(78,271)** | **(13,145)** | | Cash and cash equivalents, and restricted cash at beginning of the period | 109,664 | 48,788 | | **Cash and cash equivalents, and restricted cash at end of the period** | **$31,393** | **$35,643** | | **Reconciliation of cash, cash equivalents, and restricted cash, end of the period** | | | | Cash and cash equivalents | 30,242 | 31,196 | | Restricted cash | 1,151 | 4,447 | | **Cash, cash equivalents, and restricted cash, end of the period** | **$31,393** | **$35,643** | | **Supplemental disclosure of cash flow information:** | | | | Cash paid (received) for: | | | | Taxes | $41 | $873 | | Interest | $3,057 | $5,994 | | **Noncash investing and financing activities:** | | | | Common stock issued for transaction bonus | $9 | $— | | Shares issued in connection with MiX Combination | $362,005 | $— | [Reconciliation of Non-GAAP Financial Measures](index=10&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20ADJUSTED%20EBITDA%20FINANCIAL%20MEASURES) This section provides detailed reconciliations of GAAP figures to non-GAAP measures like Adjusted EBITDA, non-GAAP net income, and adjusted gross profit margins [Reconciliation of GAAP to Adjusted EBITDA](index=10&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20ADJUSTED%20EBITDA%20FINANCIAL%20MEASURES_sub) This section provides a reconciliation of Net Loss Attributable to Common Stockholders (GAAP) to Adjusted EBITDA (Non-GAAP) for the three months ended June 30, 2025, and 2024, detailing various adjustments | | Three Months Ended June 30, 2024 (Thousands USD) | Three Months Ended June 30, 2025 (Thousands USD) | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Net loss attributable to common stockholders | $(22,337) | $(10,234) | | Non-controlling interest | 13 | — | | Preferred stock dividend | 25 | — | | Interest expense, net | 2,916 | 6,590 | | Other expense, net | — | 23 | | Income tax expense | 1,053 | 362 | | Depreciation and amortization | 10,335 | 16,031 | | Stock-based compensation | 5,929 | 1,853 | | Foreign currency losses | 109 | 1,161 | | Restructuring-related expenses | 1,198 | 2,442 | | Derivative mark-to-market adjustment | — | 104 | | Recognition of pre-October 1, 2024 contract assets (Fleet Complete) | — | 1,503 | | Acquisition-related expenses | 14,494 | 1,130 | | Integration-related expenses | — | 675 | | **Adjusted EBITDA** | **$13,735** | **$21,640** | [Reconciliation of GAAP to Non-GAAP Net Income](index=11&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20NET%20INCOME%20FINANCIAL%20MEASURES) This section reconciles Net Loss (GAAP) to Non-GAAP Net Income for the three months ended June 30, 2025, and 2024, by adjusting for items such as intangible asset amortization, stock-based compensation, foreign currency impacts, and acquisition-related expenses | | Three Months Ended June 30, 2024 (Thousands USD) | Three Months Ended June 30, 2025 (Thousands USD) | | :---------------------------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(22,312) | $(10,234) | | Incremental intangible assets amortization expense as a result of business combinations | 2,995 | 5,830 | | Stock-based compensation (non-recurring/accelerated cost) | 4,693 | — | | Foreign currency losses | 109 | 1,161 | | Income tax effect of net foreign exchange losses | (747) | (496) | | Restructuring-related expenses | 1,198 | 2,442 | | Income tax effect of restructuring costs | (103) | (66) | | Derivative mark-to-market adjustment | — | 104 | | Acquisition-related expenses | 14,494 | 1,130 | | Integration-related expenses | — | 675 | | Inventory rationalization and other | — | 415 | | **Non-GAAP net income** | **$327** | **$961** | | Weighted average shares outstanding | 107,136 | 133,313 | | **Non-GAAP net income per share - basic (USD)** | **$0.00** | **$0.01** | [Adjusted Gross Profit Margins](index=12&type=section&id=ADJUSTED%20GROSS%20PROFIT%20MARGINS) This section details the adjusted gross profit and gross profit margins for products, services, and total operations for the three months ended June 30, 2025, and 2024, including adjustments for depreciation and amortization | | Three Months Ended June 30, 2024 (Thousands USD) | Three Months Ended June 30, 2025 (Thousands USD) | | :------------------------------------------ | :------------------------------- | :------------------------------- | | **Products:** | | | | Product revenues | $18,738 | $17,657 | | Cost of products | 12,751 | 13,228 | | Products gross profit | $5,987 | $4,429 | | Products gross profit margin | 32.0% | 25.1% | | Depreciation and amortization | $— | $— | | Adjusted products gross profit | $5,987 | $4,429 | | Adjusted products gross profit margin | 32.0% | 25.1% | | **Services:** | | | | Services revenues | $56,692 | $86,464 | | Cost of services | 23,031 | 34,412 | | Services gross profit | $33,661 | $52,052 | | Services gross profit margin | 59.4% | 60.2% | | Depreciation and amortization | $8,729 | $13,241 | | Adjusted services gross profit | $42,390 | $65,293 | | Adjusted services gross profit margin | 74.8% | 75.5% | | **Total:** | | | | Total revenues | $75,430 | $104,121 | | Total cost of revenues | 35,782 | 47,640 | | Total gross profit | $39,648 | $56,481 | | Total gross profit margin | 52.6% | 54.2% | | Depreciation and amortization | $8,729 | $13,241 | | Adjusted total gross profit | $48,377 | $69,722 | | Adjusted total gross profit margin | 64.1% | 67.0% | [Non-GAAP Expense Ratios](index=13&type=section&id=NON-GAAP%20EXPENSE%20RATIOS) This section presents non-GAAP selling, general and administrative expenses and research and development expenses, both in absolute terms and as a percentage of total revenues, for the three months ended June 30, 2025, and 2024 | | Three Months Ended June 30, 2024 (Thousands USD) | Three Months Ended June 30, 2025 (Thousands USD) | | :---------------------------------------------------- | :------------------------------- | :------------------------------- | | Total revenues | $75,430 | $104,121 | | **Selling, general and administrative expenses** | | | | Selling, general and administrative expenses | 54,782 | 53,663 | | Restructuring-related expenses | (1,198) | (2,442) | | Acquisition-related expenses | (14,494) | (1,130) | | Integration-related costs | — | (675) | | Depreciation and amortization | (1,606) | (2,790) | | Stock-based compensation | (5,929) | (1,853) | | Non-GAAP selling, general and administrative expenses | 31,555 | 44,773 | | Non-GAAP sales and marketing expenses | 9,052 | 17,958 | | Non-GAAP general and administrative expenses | 22,503 | 26,815 | | Non-GAAP selling, general and administrative expenses | $31,555 | $44,773 | | Non-GAAP sales and marketing expenses as a percentage of total revenue | 12.0% | 17.2% | | Non-GAAP general and administrative expenses as a percentage of total revenue | 29.8% | 25.8% | | **Research and development expenses** | | | | Research and development incurred | $5,213 | $8,559 | | Research and development capitalized | (2,112) | (3,702) | | Research and development expenses | $3,101 | $4,857 | | Research and development incurred as a percentage of total revenues | 6.9% | 8.2% | | Research and development expenses as a percentage of total revenues | 4.1% | 4.7% | [Adjusted Operating Expenses](index=14&type=section&id=ADJUSTED%20OPERATING%20EXPENSES) This section reconciles total operating expenses to adjusted operating expenses for the three months ended June 30, 2025, and 2024, by excluding one-off costs such as acquisition-related expenses, integration costs, stock-based compensation, and restructuring-related expenses | | Three Months Ended June 30, 2024 (Thousands USD) | Three Months Ended June 30, 2025 (Thousands USD) | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Total operating expenses | $57,883 | $58,520 | | Adjusted for once-off costs | | | | Acquisition-related expenses | 14,494 | 1,130 | | Integration-related costs | — | 675 | | Stock-based compensation (non-recurring/accelerated cost) | 4,693 | — | | Restructuring-related expenses | 1,198 | 2,442 | | Total adjustments | 20,385 | 4,247 | | **Adjusted operating expenses** | **$37,498** | **$54,273** |

Core Insights - Powerfleet, Inc. reported a strong financial performance for Q1 FY26, with total revenue increasing by 38% year-over-year to $104.1 million, driven by a significant rise in services revenue, which accounted for 83% of total revenue [1][5][6] - The company achieved an adjusted EBITDA of $21.6 million, reflecting a 58% increase from the previous year, with an adjusted EBITDA margin expanding by 260 basis points to 21% [1][10] - The EBITDA expansion program has already delivered $11 million in annual savings, achieving 60% of the full-year target of $18 million [2] Financial Performance - Services revenue rose by 53% year-over-year and 6% sequentially to $86.5 million, marking a record high proportion of total revenue [1][6] - Gross profit increased by $16.8 million year-over-year to $56.5 million, with adjusted EBITDA gross margins expanding by 3% to 67% [1][8] - The company raised its FY26 total revenue guidance to a range of $430 million to $440 million, up from the previous guidance of $420 million to $440 million [2][12] Operational Highlights - The company noted a 52% quarter-over-quarter growth in AI Video annual recurring revenue (ARR) bookings, indicating strong market demand [3][7] - Powerfleet secured six-figure ARR deals across 11 diverse industry sectors, showcasing efficient scaling of its growth engine [3][7] - The company has signed a major strategic sales channel partnership with MTN Group, enhancing its market reach [7] Cost Management - Total operating expenses for the quarter were $58.5 million, which included $4.2 million in one-time transaction and restructuring costs [8] - Adjusted operating expenses totaled $54.3 million, reflecting ongoing efforts to manage costs effectively [8][32] - General and administrative expenses represented 26% of revenue, showing a 400 basis point improvement from the prior year [9] Debt and Equity - The adjusted net debt to adjusted EBITDA ratio improved to 2.97x from 3.22x at the end of FY25, with net debt at quarter end reported at $234.8 million [11][16] - The net loss attributable to common stockholders was $0.08 per share, an improvement from $0.21 per share in the prior year [10][21]

Core Insights - Powerfleet, Inc. has formed a strategic partnership with MTN Business South Africa to enhance enterprise IoT value creation through AI-driven data insights [1][2] - The collaboration aims to provide a unified platform that combines MTN's connectivity with Powerfleet's AIoT solutions, enabling real-time data intelligence across the supply chain [2][3] Partnership Overview - The partnership is described as a foundational growth initiative, leveraging MTN's extensive network and Powerfleet's Unity AIoT platform to deliver predictive and scalable data solutions [2][4] - MTN will white label Powerfleet's Unity AIoT platform, facilitating wide-scale adoption of intelligent data-driven insights across various sectors [4][5] Market Impact - This joint solution is designed to overcome legacy telematics and fragmented data silos, enhancing the enterprise value of data points and decisions through AI-powered intelligence [3][4] - MTN's recognition as the 1 Most Admired African Brand positions it to effectively scale the partnership's offerings across logistics, mining, transportation, utilities, and manufacturing sectors [5] Company Background - Powerfleet is a leader in AI-powered data solutions, serving 48,000 customers in 120 countries, focusing on optimizing mobile asset performance, safety, and sustainability [6][7] - The Unity platform utilizes advanced AI, machine learning, and IoT connectivity to provide critical insights across various industries [6][7]

Core Viewpoint - Powerfleet, Inc. will hold a conference call on August 11, 2025, to discuss its financial results for the first quarter of fiscal 2026, which ended on June 30, 2025 [1][2] Company Overview - Powerfleet is a global leader in AI-powered data solutions that optimize mobile asset performance, safety, and sustainability [4] - The company serves 48,000 customers across 120 countries, providing data-driven intelligence to enhance safety, efficiency, and workforce productivity [4] Financial Information - Powerfleet provides non-GAAP financial measures such as adjusted EBITDA and net adjusted debt to enhance understanding of its financial performance [3] - These non-GAAP measures are intended to exclude certain expenses and fluctuations that may not reflect the core operating results [3]

Core Insights - Powerfleet, Inc. has been recognized as one of ABI Research's Most Innovative Technology Companies of 2025, specifically as the top innovation leader in AIoT for Supply Chain operations [1][2] - This accolade highlights Powerfleet's position at the forefront of data-driven digital transformation globally, alongside other notable companies in various tech sectors [3][4] Company Recognition - ABI Research's recognition is exclusive, awarded to only one standout innovator in each of seven technology sectors, emphasizing the significance of Powerfleet's achievement [1][3] - The recognition builds on Powerfleet's earlier accolade where its Unity platform was named the 1 global AIoT solution portfolio [4][5] Innovation and Execution - The evaluation by ABI Research confirms the Unity platform's capabilities in delivering rapid ROI, enterprise-grade modularity, and device-agnostic connectivity, which are essential for large-scale digital transformation [5][6] - Powerfleet's Chief Innovation Officer highlighted that this recognition reflects the trust large global brands place in Powerfleet for their digital transformation needs [6] Company Overview - Powerfleet is a leader in AI-powered data solutions that enhance mobile asset performance, safety, and sustainability, serving 48,000 customers across 120 countries [7]

Core Insights - Powerfleet, Inc. has been selected by SIXT Mexico to modernize its on-road operations using Unity's AIoT-powered data intelligence, which will enhance control and efficiency across a multi-thousand vehicle deployment [1][2][3] Company Overview - Powerfleet is a leader in AI-powered data solutions, optimizing mobile asset performance, safety, and sustainability, serving 48,000 customers in 120 countries [5] - SIXT Mexico is a national subsidiary of a global vehicle rental company, recognized for innovation and high-quality service, operating in over 100 countries [4] Partnership Details - The multi-year engagement with SIXT Mexico highlights the increasing demand for AIoT solutions and aims to address operational challenges while driving cost reductions [2][3] - The partnership emphasizes a shift from reactive to proactive management through AI-powered control, enhancing efficiency and accountability [3][4] Technological Impact - Powerfleet's Unity SaaS platform will provide SIXT Mexico with advanced data capabilities, enabling customer-led growth and market expansion [3] - The deployment will facilitate automated security, operational accountability, and insights into fuel and energy management [6]

Core Insights - Powerfleet, Inc. has launched an automated AI risk intervention application aimed at redefining real-time risk detection and prevention in the mobile asset industry [1][3] - The application is integrated into Powerfleet's Unity ecosystem and leverages over 20 years of expertise in safety management [2][4] - The new AI-powered module shifts safety operations from reactive to proactive, utilizing advanced AI to detect risky behaviors and trigger automatic workflows [3][5] Market Context - The global AI video market is projected to exceed $10 billion by 2030, with AI-based solutions expected to drive the majority of new spending [5] - There is increasing demand for proactive safety and compliance solutions due to ESG and regulatory pressures [5] Expected Impact - The AI risk intervention module is already showing significant results, including an 80% reduction in video review time and a 95% reduction in fatigue and distraction alerts [5] - Customers can expect enhanced operational control, reduced insurance liabilities, and measurable ROI in safety outcomes [4][5] - The application is positioned to fill a gap in the market for real-time risk management, which is currently underserved by outdated telematics providers [5][6] Strategic Value - The launch of this application reinforces Powerfleet's strategy to expand its high-margin SaaS portfolio and strengthen its competitive position [4][6] - The company aims to deliver scalable AI solutions that enhance customer value and data monetization [6]

Company Overview - PowerFleet is a leading global B2B mobile fleet and asset management company[5] - The company has over 500,000 monthly subscription units, with over 57% of revenue being high-margin recurring revenue[5] - PowerFleet is an essential service provider to the industrial, logistics, and commercial vehicle industries[5] Market Opportunity and Growth - The global logistics market is projected to grow from $8.1 trillion in 2015 to $15.5 trillion in 2023, representing a 7.5% CAGR[17] - The global asset tracking market is estimated to reach $32 billion by 2024[18] - The global cold chain market is projected to reach $447 billion by 2025, with the North American cold chain market reaching $142.5 billion by 2024[18] - The global warehouse management system market is expected to grow from $2.1 billion in 2018 to $4.8 billion in 2024, a 15.2% CAGR[20] - The connected vehicle market is projected to grow from $73.2 billion in 2018 to $237 billion in 2025, a 14.2% CAGR[20] - Worldwide spending on the Internet of Things (IoT) is forecast to reach $745 billion in 2019, a 15.4% increase over the $646 billion spent in 2018[23] Financial Performance (Q1 2020) - Total revenue was $30.8 million[38] - Service revenue accounted for $17.6 million (57% of total revenue)[38] - Product revenue accounted for $13.2 million (43% of total revenue)[38] - Gross margins were 48.3%, with service margins at 62.3% and product margins at 29.6%[38] - Operating cash flow was $2.8 million[38] Financial Performance (Annual) - The company's target model aims for $200 million+ in revenue, with 50% ($100 million) from services/recurring revenue, a 55% gross profit ($110 million), and a 25% adjusted EBITDA ($50 million)[43]

Company Overview - PowerFleet is a leading global B2B mobile fleet and asset management company serving the industrial, logistics, and commercial vehicle industries[5] - The company has an expanding patent portfolio, including 53 granted and pending patents[5] - PowerFleet projects combined revenue of $150 million in 2020, including $75 million in high-margin service revenue[13] - As of December 31, 2019, PowerFleet had $164 million in cash and cash equivalents, $349 million in debt, and $10 million available under an unused credit facility[46] Market Opportunity and Growth - The global logistics market is projected to grow from $81 trillion in 2015 to $155 trillion in 2023, representing a 75% Compound Annual Growth Rate (CAGR)[18] - The global warehouse management system market is expected to grow from $21 billion in 2018 to $48 billion in 2024, a 152% CAGR[21] - The connected vehicle market is projected to grow from $732 billion in 2018 to $237 billion in 2025, a 142% CAGR[21] - Worldwide spending on the Internet of Things (IoT) is forecast to reach $745 billion in 2019, a 154% increase over the $646 billion spent in 2018[24] Financial Performance - Q4 2019 total revenue was $351 million, up 17% year-over-year on a pro forma basis, with $165 million in product revenue (47% of revenue) and $187 million in service revenue (53% of revenue)[39] - The company targets $200 million+ in revenue, with 50% from services/recurring revenue ($100 million), a 55% gross profit ($110 million), and a 25% adjusted EBITDA ($50 million)[44]

[Part I](index=5&type=section&id=PART%20I) [Business](index=7&type=section&id=Item%201.%20Business) Powerfleet provides AIoT solutions via its Unity platform, managing high-value assets for over 50,000 global customers, expanded by 2024 acquisitions - The company's core strategy revolves around its 'Unity' data highway and AIoT ecosystem, which ingests, harmonizes, and analyzes data from multiple sources to provide customers with a unified view of their operations[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - Powerfleet completed two major strategic transactions: the MiX Telematics combination on April 2, 2024, and the Fleet Complete acquisition on October 1, 2024, making both entities indirect, wholly-owned subsidiaries[30](index=30&type=chunk)[31](index=31&type=chunk) - The company serves over **50,000 enterprise and mid-market customers** across various industries, including logistics, manufacturing, and vehicle rental. Notable global customers include Avis, Walmart, Toyota, and XPO Logistics[64](index=64&type=chunk)[67](index=67&type=chunk) - As of June 4, 2025, the company had **2,518 full-time employees** globally[97](index=97&type=chunk) [Our Solutions](index=8&type=section&id=Our%20Solutions) The Unity platform provides SaaS-based modules for vehicle, video, and in-warehouse IoT, enabling comprehensive asset management - The Unity platform provides SaaS-based modules for vehicle, video, and in-warehouse IoT, enabling customers to manage asset utilization, safety, fuel, compliance, and high-risk incidents in a single interface. It was recognized by ABI Research as the **number one global platform solution** in its market in 2025[33](index=33&type=chunk)[58](index=58&type=chunk) - Key applications of the AIoT solutions include: **End-to-End Visibility**, **Regulatory Compliance**, **Safety Improvement**, **Operational Efficiency**, and **Security**[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) [Growth Strategy](index=11&type=section&id=Growth%20Strategy) The company aims to be a leading global AIoT SaaS provider, accelerating this goal through strategic 2024 acquisitions - The company's primary objective is to become a leading global provider of AIoT SaaS solutions. The acquisitions of MiX Telematics and Fleet Complete in 2024 have accelerated this strategy[57](index=57&type=chunk)[58](index=58&type=chunk) - Key growth initiatives include focusing go-to-market strategies by vertical markets, expanding customer base and cross-selling, differentiating products through analytics, and expanding partnerships and acquisitions[58](index=58&type=chunk)[66](index=66&type=chunk) [Intellectual Property](index=14&type=section&id=Intellectual%20Property) The company holds 34 U.S. patents and 3 foreign patents, plus an extensive trademark portfolio significantly expanded by recent acquisitions - As of May 23, 2025, the company's patent portfolio includes **34 U.S. patents**, 2 pending U.S. patent applications, and **3 foreign patents**, with expiration dates between 2026 and 2040[74](index=74&type=chunk) - The company holds an extensive portfolio of trademarks, significantly expanded through the acquisitions of MiX Telematics and Fleet Complete, including brands like POWERFLEET®, UNITY®, MiX Telematics®, and FLEET COMPLETE®[75](index=75&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from integrating recent acquisitions, substantial debt, supply chain disruptions, and material weaknesses in internal controls - The company may not realize all anticipated benefits from the MiX Combination and FC Acquisition due to challenges in integrating operations, technologies, and personnel, which could adversely affect financial results[104](index=104&type=chunk)[106](index=106&type=chunk)[109](index=109&type=chunk) - The company has a history of significant net losses, with an accumulated deficit of **$205.8 million** as of March 31, 2025. Failure to achieve profitability could negatively impact the stock price[111](index=111&type=chunk) - Significant additional indebtedness was incurred to finance the acquisitions and redeem preferred stock, increasing borrowing costs and reducing operational flexibility[148](index=148&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) - The company has reported material weaknesses in its internal control over financial reporting. Failure to remediate these weaknesses could impair the ability to produce accurate and timely financial statements[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - Operations are dependent on a complex global supply chain and a limited number of suppliers for critical components like semiconductors. Disruptions could materially harm the business[119](index=119&type=chunk)[120](index=120&type=chunk)[170](index=170&type=chunk) - Business operations in Israel and South Africa expose the company to specific geopolitical, economic, and regulatory risks, such as the conflict in the Middle East and B-BBEE requirements in South Africa[179](index=179&type=chunk)[182](index=182&type=chunk)[188](index=188&type=chunk) [Cybersecurity](index=36&type=section&id=Item%201C.%20Cybersecurity) Cybersecurity governance is overseen by the Board, with day-to-day management by a CISO and committee, employing structured risk management - The Board of Directors has ultimate oversight of cybersecurity risk, with the Chief Information Security Officer (CISO) and a cross-functional Information Security Steering Committee managing the program[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk) - The company's risk management strategy includes regular internal cybersecurity risk assessments, as well as engaging external firms for independent audits, penetration testing, and vulnerability assessments[201](index=201&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) - As of the report date, the company states that no risks from cybersecurity threats have materially affected or are reasonably likely to materially affect its business, operations, or financial condition[205](index=205&type=chunk) [Properties](index=37&type=section&id=Item%202.%20Properties) The company leases all its properties, including its corporate headquarters and various domestic and international offices, deemed adequate for current needs - The company leases all its properties, including its corporate headquarters in Woodcliff Lake, NJ, and other domestic and international offices[206](index=206&type=chunk)[207](index=207&type=chunk) [Legal Proceedings](index=37&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in several legal matters, including a reduced tax dispute in Brazil and two patent infringement lawsuits in the U.S - A tax dispute in Brazil regarding a deficiency notice has been reduced from approximately **$6.9 million** to **$197,000** after a favorable administrative decision, and management believes the chance of loss is not probable[539](index=539&type=chunk) - The company faces two patent infringement lawsuits from Fleet Connect Solutions LLC in the Eastern District of Texas. The company is defending the claims but is currently unable to estimate a potential loss[541](index=541&type=chunk) [Part II](index=37&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Powerfleet's common stock is dual-listed on Nasdaq (AIOT) and JSE (PWR), with no cash dividends paid or anticipated, as earnings are retained for business operations - The company's common stock is dual-listed on The Nasdaq Global Market (AIOT) and the Johannesburg Stock Exchange (PWR)[212](index=212&type=chunk) - The company has never paid a cash dividend on its common stock and does not anticipate paying one in the near future[213](index=213&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For FY2025, revenues surged 171.1% to $362.5 million, driven by acquisitions, but a net loss of $51.0 million resulted from significant acquisition and restructuring costs, with liquidity supported by cash and credit [Results of Operations](index=41&type=section&id=Results%20of%20Operations) For FY2025, total revenue increased 171.1% to $362.5 million, primarily due to acquisitions, while net loss widened to $51.0 million due to acquisition and restructuring costs Financial Performance Comparison (FY2025 vs. FY2023) | Metric | Year Ended Mar 31, 2025 | Year Ended Dec 31, 2023 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$362.5M** | **$133.7M** | **+171.1%** | | Gross Profit | $194.5M | $67.1M | +189.9% | | Gross Margin | 53.7% | 50.2% | +3.5 p.p. | | SG&A Expenses | $204.4M | $71.3M | +186.8% | | Loss from Operations | ($25.9M) | ($12.6M) | +105.6% | | Net Loss Attributable to Common Stockholders | ($51.0M) | ($17.3M) | +194.8% | - The significant increase in revenue for the year ended March 31, 2025, was primarily due to contributions from the newly acquired MiX Telematics (**$171.2 million**) and Fleet Complete (**$59.0 million**) businesses[237](index=237&type=chunk)[238](index=238&type=chunk) - The increase in net loss for FY2025 was driven by **$21.3 million** in acquisition-related expenses, **$10.1 million** in restructuring charges, **$4.9 million** in integration costs, and **$14.8 million** in amortization of acquisition-related intangibles[242](index=242&type=chunk)[244](index=244&type=chunk) Financial Performance Comparison (Q1 2025 vs. Q1 2024) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$103.6M** | **$33.7M** | **+207.2%** | | Gross Profit | $54.8M | $16.2M | +238.3% | | Gross Margin | 52.8% | 48.0% | +4.8 p.p. | | Net Loss Attributable to Common Stockholders | ($12.4M) | ($19.6M) | -36.7% | [Non-GAAP Financial Information](index=45&type=section&id=Non-GAAP%20Financial%20Information) This section provides reconciliations of non-GAAP financial measures, including Adjusted EBITDA and Headline Loss per Share, to their most directly comparable GAAP measures Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | | Year Ended Mar 31, 2025 | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | :--- | | Net loss attributable to common stockholders | $(51,012) | $(17,307) | $(16,891) | | **Adjusted EBITDA** | **$71,131** | **$6,631** | **$8,148** | Headline Loss per Share (in thousands, except per share data) | | Year Ended Mar 31, 2025 | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | :--- | | Net loss attributable to common stockholders | $(51,012) | $(17,307) | $(16,891) | | **Headline loss** | **$(51,021)** | **$(26,341)** | **$(16,891)** | | Headline loss per share | $(0.43) | $(0.74) | $(0.48) | [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by $48.8 million in cash and available credit facilities, despite incurring significant debt to fund recent acquisitions Liquidity Position | Metric | As of Mar 31, 2025 | As of Mar 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents (incl. restricted) | $48.8M | $109.7M | | Working Capital | $18.1M | $126.2M | - The company incurred significant debt to fund recent acquisitions, including an **$85 million** term loan facility and a **$125 million** term loan facility from RMB, as well as refinancing and expanding credit facilities with Bank Hapoalim[282](index=282&type=chunk)[296](index=296&type=chunk)[489](index=489&type=chunk) - In connection with the MiX Combination, the company redeemed all outstanding Series A convertible preferred stock for **$90.3 million** on April 2, 2024[282](index=282&type=chunk) Cash Flow Summary (Year Ended Mar 31, 2025) | Cash Flow Activity | Amount (in millions) | | :--- | :--- | | Net cash used in operating activities | $(3.3) | | Net cash used in investing activities | $(170.6) | | Net cash provided by financing activities | $115.7 | [Financial Statements and Supplementary Data](index=54&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The audited FY2025 financial statements reflect significant asset and liability growth due to acquisitions, resulting in a $51.0 million net loss, with the auditor issuing an unqualified opinion on financials but an adverse opinion on internal controls - The company's independent auditor, Deloitte & Touche, issued an **unqualified opinion** on the financial statements for the year ended March 31, 2025, but an **adverse opinion** on the effectiveness of the company's internal control over financial reporting[319](index=319&type=chunk)[321](index=321&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents (incl. restricted) | $48,788 | $109,664 | | Total Current Assets | $169,080 | $169,788 | | Goodwill | $383,146 | $83,487 | | Intangible assets, net | $258,582 | $19,652 | | **Total Assets** | **$910,071** | **$308,680** | | Total Current Liabilities | $151,009 | $43,590 | | Long-term debt | $232,160 | $113,810 | | **Total Liabilities** | **$463,329** | **$179,771** | | **Total Stockholders' Equity** | **$446,742** | **$38,636** | Consolidated Statement of Operations (Year Ended March 31, 2025, in thousands) | Metric | Amount | | :--- | :--- | | Total Revenues | $362,515 | | Gross Profit | $194,537 | | Loss from Operations | $(25,885) | | Net Loss | $(50,987) | | Net Loss Attributable to Common Stockholders | $(51,012) | | Net Loss Per Share | $(0.43) | - The acquisitions of MiX Telematics and Fleet Complete were accounted for as business combinations, adding a combined **$299.0 million** in goodwill and **$252.0 million** in identifiable intangible assets (customer relationships, technology, tradenames)[426](index=426&type=chunk)[438](index=438&type=chunk)[458](index=458&type=chunk) [Controls and Procedures](index=113&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of March 31, 2025, due to material weaknesses in internal control over financial reporting at subsidiaries, leading to an adverse auditor opinion and ongoing remediation - Management concluded that disclosure controls and procedures were **not effective** as of March 31, 2025, due to material weaknesses in internal control over financial reporting[545](index=545&type=chunk) - A material weakness was identified related to the design and execution of controls over manual journal entries at I.D. Systems and Pointer Mexico, citing segregation of duties issues and a lack of documented review[551](index=551&type=chunk)[556](index=556&type=chunk) - A second material weakness was identified in the financial close and reporting process at the newly acquired Fleet Complete, due to ineffective general IT controls (user access, change management) and a lack of segregation of duties for manual journal entries[553](index=553&type=chunk)[554](index=554&type=chunk)[557](index=557&type=chunk) - The company's independent registered public accounting firm, Deloitte & Touche, issued an **adverse opinion** on the effectiveness of internal control over financial reporting as of March 31, 2025[554](index=554&type=chunk)[563](index=563&type=chunk) - A remediation plan is in progress, which includes redesigning automated controls, implementing a standardized ERP system, and enhancing review procedures and IT controls at the affected subsidiaries[555](index=555&type=chunk)[558](index=558&type=chunk)[561](index=561&type=chunk) [Part III](index=119&type=section&id=PART%20III) [Directors, Executive Compensation, and Corporate Governance](index=119&type=section&id=Items%2010-14) Information for Items 10 through 14, covering directors, executive compensation, and corporate governance, is incorporated by reference from the company's 2025 Proxy Statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's 2025 Annual Meeting of Stockholders Proxy Statement[579](index=579&type=chunk)[580](index=580&type=chunk)[581](index=581&type=chunk) [Part IV](index=121&type=section&id=PART%20IV) [Exhibits and Financial Statement Schedules](index=121&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the report, including acquisition agreements, debt facilities, and executive compensation plans - This section provides a comprehensive list of all financial statements and exhibits filed with the report, including acquisition agreements, debt facilities, and executive compensation plans[585](index=585&type=chunk)[587](index=587&type=chunk)