EROAD (ERD) H1 2025 earnings summary

Executive summary

• Revenue grew 8% year-over-year to $95.9m/NZD 95.9 million for H1 FY25, with growth across all markets and strong progress in key regions.

• EBIT improved to $2.4m from $0.1m, with normalized EBIT at $4.7m, reflecting operational efficiency and cost control.

• Free cash flow turned positive at $0.1m, with normalized free cash flow of $6.2m after adjusting for 4G hardware upgrades.

• Annual recurring revenue (ARR) reached $177.9m/NZD 178 million, up 8% in constant currency terms.

• Strategic focus on product innovation, partnerships (notably with Geotab), and expansion into light commercial vehicles.

Financial highlights

• Revenue: $95.9m/NZD 95.9 million, up 8% year-over-year.

• EBIT: $2.4m, normalized EBIT $4.7m; EBITDA rose to $29.2m from $25.6m.

• Operating costs at 69% of revenue, reflecting cost-out initiatives; operating expenses increased to $66.7m.

• R&D spend at $16.5m (17% of revenue), with FY25 guidance increased to $35m.

• Free cash flow positive, with normalized FCF of $6.2m; cash at period end was $11.3m, total liquidity $54.6m.

Outlook and guidance

• FY25 revenue guidance set at $190m–$195m, normalized EBIT $5m–$10m, and positive free cash flow.

• Confident in achieving FY26 targets, underpinned by price increases, new product momentum, and enterprise expansion.

• R&D spend expected to trend back to 13–15% of revenue by FY26 after current step-up.

• Focus on North American customer base expansion, continued NZ growth, and Australian enterprise momentum.

• Anticipate increased free cash flow as 4G upgrade program completes by end of 2025.