PowerFleet(PWFL) - 2024 Q3 - Quarterly Results

Revenue Performance - Q2 FY25 revenue increased by 7% year-over-year to $77.0 million, with product revenue rising 13% to $20.3 million[4] - First half FY25 revenue reached $152.4 million, up 9% year-over-year, exceeding annual guidance[6] - Full-year 2025 revenue is expected to exceed $352.5 million, with adjusted EBITDA anticipated to exceed $72.5 million[15] - Total revenues for the three months ended September 30, 2024, increased to $77,018 thousand, up from $72,004 thousand in the same period of 2023, representing a growth of 6.0%[22] - Total revenues for Powerfleet, Inc. reached $66,335,000, while MiX Telematics reported $74,112,000, leading to a combined pro forma revenue of $140,447,000[34] Profitability and Margins - Adjusted EBITDA for Q2 FY25 grew by 41% to $14.5 million, benefiting from expanded gross profit and cost synergies[5] - Adjusted gross margins for product revenue expanded by 3% sequentially to 35%, exceeding guidance of +30%[4] - Gross profit for the six months ended September 30, 2024, was $80,991 thousand, compared to $79,512 thousand for the same period in 2023, reflecting a slight increase of 1.9%[22] - The total gross profit margin for the three months ended September 30, 2024, was 53.1%, down from 56.1% in the same period of 2023[31] - The service margin for the three months ended September 30, 2024, was 60.5%, down from 62.7% in the same period of 2023[31] Expenses and Cost Management - Achieved $13.5 million in annual cost synergies within the first six months of the MiX combination, representing 50% of the two-year target of $27 million[2] - Operating expenses for the three months ended September 30, 2024, decreased to $40,770 thousand from $41,003 thousand in the same period of 2023, a reduction of 0.6%[22] - Adjusted operating expenses for the three months ended September 30, 2024, were $36,885 thousand, a decrease from $38,819 thousand in the same period of 2023, indicating a reduction of 5.0%[32] - Research and development expenses for the six months ended September 30, 2024, were $6,536 thousand, down from $7,626 thousand in the same period of 2023, a decrease of 14.3%[22] - Acquisition-related expenses for the six months ended September 30, 2023, were $2,251,000, with a significant increase to $15,571,000 projected for 2024[30] Net Income and Loss - Adjusted earnings per basic share improved to $0.02, compared to a loss of $(0.01) in the prior period[12] - Net loss attributable to common stockholders for the three months ended September 30, 2024, was $1,888 thousand, compared to a net loss of $6,262 thousand in the same period of 2023, indicating an improvement of 69.8%[22] - The net loss for 2023 Pro Forma Combined was $4,959,000, while the consolidated net loss for 2024 is projected to be $24,200,000[24] - The company reported a net loss before income taxes of $1,627 thousand for the three months ended September 30, 2024, compared to a net loss of $709 thousand in the same period of 2023[22] - The net loss attributable to common stockholders for the three months ended September 30, 2024, was $(6,510) thousand, compared to a net income of $248 thousand in the same period of 2023[33] Cash Flow and Liquidity - Cash and cash equivalents decreased from $51,091 thousand as of March 31, 2024, to $25,962 thousand as of September 30, 2024[23] - The company experienced a net decrease in cash and cash equivalents of $5,924,000 in 2023, with a larger decrease of $20,628,000 expected in 2024[25] - Cash provided by operating activities for 2023 was $11,366,000, but it is expected to be a cash used of $10,792,000 in 2024[24] - The total cash and cash equivalents at the end of the period for 2023 was $49,822,000, compared to $89,036,000 for 2024[27] - Cash flows from operating activities showed a net cash used of $2,072 for Powerfleet Inc. and a net cash provided of $13,438 for MiX Telematics, resulting in a pro forma combined cash flow of $11,366[37] Balance Sheet and Financial Position - Pro forma net debt increased to $121 million, primarily due to higher net working capital following strong top-line performance[14] - Total assets increased significantly from $484,274 thousand to $748,335 thousand between March 31, 2024, and September 30, 2024[23] - Total liabilities rose from $251,477 thousand to $297,225 thousand during the same period, indicating a growth of 18.2%[23] - The company’s accumulated deficit increased from $(78,516) thousand to $(178,996) thousand between March 31, 2024, and September 30, 2024[23] - The company reported a total stockholders' equity of $142,414,000, with Powerfleet, Inc. at $38,531,000 and MiX Telematics at $103,883,000[36]