PowerFleet(PWFL) - 2025 Q3 - Quarterly Report

Revenue Growth - Revenues increased by $34.7 million, or 45.0%, to $111.7 million in the three months ended September 30, 2025, compared to $77.0 million in the same period in 2024[167] - Revenues from services increased by $32.6 million, or 57.4%, to $89.3 million in the three months ended September 30, 2025, primarily due to the Fleet Complete acquisition[169] - Revenues increased by $63.4 million, or 41.6%, to $215.8 million in the six months ended September 30, 2025, from $152.4 million in the same period in 2024[176] - Product revenues increased by $1.0 million, or 2.6%, to $40.0 million for the six months ended September 30, 2025, primarily due to the acquisition of Fleet Complete, which contributed $5.2 million[177] - Service revenues rose by $62.4 million, or 55.0%, to $175.8 million for the six months ended September 30, 2025, driven by growth initiatives and the Fleet Complete acquisition, which added $52.1 million[178] Profitability - Gross profit was $62.6 million in the three months ended September 30, 2025, with a gross profit margin of 56.0%, up from 53.7% in the same period in 2024[170] - The gross profit for services was $55.5 million in the three months ended September 30, 2025, with a gross profit margin of 62.2%, up from 61.7% in the same period in 2024[172] - Gross profit was $119.1 million for the six months ended September 30, 2025, with a gross profit margin of 55.2%, up from 53.1% in the same period in 2024[179] Expenses - SG&A expenses increased by $16.8 million, or 45.0%, to $54.2 million in the three months ended September 30, 2025, primarily due to the Fleet Complete acquisition[173] - SG&A expenses increased by $15.7 million, or 17.0%, to $107.8 million for the six months ended September 30, 2025, with a decrease in acquisition-related expenses contributing to a lower percentage of revenues at 50.0%[182] - R&D expenses increased by $0.8 million, or 22.1%, to $4.2 million in the three months ended September 30, 2025, primarily due to costs incurred by the Fleet Complete business[174] - R&D expenses rose by $2.5 million, or 38.5%, to $9.1 million for the six months ended September 30, 2025, primarily due to costs incurred by Fleet Complete[183] - Cost of revenues increased by $13.4 million, or 37.6%, to $49.1 million in the three months ended September 30, 2025, with the Fleet Complete acquisition contributing $11.5 million[170] - Cost of revenues increased by $25.3 million, or 35.4%, to $96.7 million for the six months ended September 30, 2025, with Fleet Complete contributing $19.6 million[179] Net Loss - Net loss attributable to common stockholders was $4.3 million, or $(0.03) per share, for the three months ended September 30, 2025, compared to a net loss of $1.9 million, or $(0.02) per share, for the same period in 2024[175] - Net loss attributable to common stockholders was $14.5 million, or $(0.11) per share, for the six months ended September 30, 2025, an improvement from a net loss of $24.2 million, or $(0.23) per share, in the same period in 2024[184] Cash Flow and Liquidity - Net cash provided by operating activities for the six months ended September 30, 2025 was $10.2 million, compared to a net cash used of $10.8 million for the same period in 2024[211] - Net cash used in investing activities for the six months ended September 30, 2025 was $23.9 million, primarily due to $12.5 million for fixed assets and $11.5 million for capitalized software development costs[215] - During the six months ended September 30, 2025, net cash used in financing activities was $3.3 million, a decrease from $22.3 million for the same period in 2024[216] - As of September 30, 2025, the company had cash and cash equivalents of $32.5 million and working capital of $11.5 million, down from $48.8 million and $18.1 million, respectively, as of March 31, 2025[207] - The company expects its current cash balances and expected cash flows from operations to be sufficient to meet operating, debt service, and capital expenditure requirements for at least the next 12 months[210] Acquisitions and Integration - The company has made significant progress in integrating the businesses from the MiX Telematics and Fleet Complete acquisitions, realizing early operational synergies[159] - The company completed the MiX Combination on April 2, 2024, enhancing its capital structure and liquidity[198] - The company has drawn $125 million from the New RMB Term Facility to fund a portion of the Purchase Price for the FC Acquisition, with an interest rate of 5% per annum plus the applicable term SOFR reference rate[206] - The company utilized $20.2 million of the RMB General Facility as of September 30, 2025[205] Interest Rates and Economic Conditions - Interest rates in South Africa remained stable, while the U.S. dollar denominated loans are based on the SOFR, which was 4.35% as of September 30, 2025, down from 5.31% a year earlier[225][226] - The company is proactively managing liquidity through reductions in discretionary operating expenses and capital expenditures due to inflation and geopolitical instability[208]