Powerfleet Drives SaaS Flywheel in Q1 FY2026: 6% Sequential Services Growth, Margin Expansion, and Strong Progress Towards Achieving its EBITDA Expansion Targets

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]