EROAD (ERD) investor relations material

Executive summary

• FY 2026 was marked by a strategic reset and operational transformation, with a focus on ANZ markets, significant non-cash accounting adjustments totaling NZD 152.9 million, and a new executive leadership team including John Scott as Executive Chair.

• Revenue remained stable at NZD 195.2 million (up 0.4% year-over-year), with strong growth in Australia, steady performance in New Zealand, and declines in North America due to customer loss and market headwinds.

• Transformation initiatives centered on operational and product excellence, customer intimacy, AI integration, and platform modernization, with five strategic priorities including winning eRUC.

• The company is midway through an 18-month transformation program, aiming for improved customer engagement, operational efficiency, and sustainable growth.

• Recruitment for a new CEO is well progressed, with major customer-focused programs underway.

Financial highlights

• Reported revenue was NZD 195.2 million (or $195.2m), broadly stable year-over-year; subscription revenue at NZD 185.4 million (or $185.9m).

• Normalized free cash flow margin was 7.4%, with normalized free cash flow at NZD 14.4 million after adjusting for the 4G upgrade.

• Reported EBIT was a loss of NZD 155.9 million (or $155.9m), impacted by non-cash adjustments, mainly a $134.7m impairment to North American assets.

• Normalized EBIT was NZD 2.9 million, down from NZD 9.9 million last year, reflecting higher investment and one-off costs.

• Total liquidity at year-end was NZD 49 million (or $49m), including cash, available facilities, and a $65m credit facility.

Outlook and guidance

• Guidance is for continued free cash flow positivity, with no revenue guidance due to early transformation stage.

• Australia expected to maintain strong mid-digit to double-digit growth in FY 2027, with most growth pre-contracted.

• North America targeted to be free cash flow neutral, managed with a disciplined, cash-focused approach.

• Focus on reducing OpEx run rate, improving operational efficiency, and delivering sustainable growth.

• Trading update to be provided in September.