EROAD (ERD) H1 2025 earnings summary

Executive summary

• Revenue for H1 FY25 rose 8% year-over-year to NZD 95.9 million, driven by unit growth, price increases, and strong progress in all key markets.

• EBIT improved to NZD 2.4 million from NZD 0.1 million, reflecting operational efficiency, cost control, and positive unit growth.

• Consistently positive free cash flow, with normalized free cash flow of NZD 6.2 million after adjusting for 4G hardware upgrades.

• Annual recurring revenue (ARR) reached nearly NZD 178 million, up 8% in constant currency terms, with gains across all regions.

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

Financial highlights

• Revenue: NZD 95.9 million, up 8% year-over-year; EBITDA rose to NZD 29.2 million from NZD 25.6 million.

• EBIT: NZD 2.4 million, up from NZD 0.1 million; normalized EBIT (excluding 4G upgrade) at NZD 4.7 million.

• Net loss after tax was NZD 1.5 million, similar to prior period; basic and diluted loss per share improved.

• Operating costs reduced to 69% of revenue, reflecting successful cost-out initiatives.

• R&D spend at NZD 16.5 million (17% of revenue), focused on AI safety, decarbonization, and product expansion.

Outlook and guidance

• On track to meet FY25 guidance: revenue NZD 190–195 million, normalized EBIT NZD 5–10 million, and positive free cash flow.

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

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

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

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