EROAD (ERD) H2 2025 earnings summary

Executive summary

• Achieved strong execution in FY 2025, reaching the top end of guidance with revenue of NZ$194.4 million, up 6.8% year-over-year, and returned to profitability.

• Delivered NZ$16 million in free cash flow, up NZ$14.7 million from FY 2024, and normalized free cash flow (excluding 4G upgrade) at NZ$23.6 million, exceeding guidance.

• Normalized EBIT was NZ$9.9 million, up from NZ$3.8 million in FY24, also exceeding guidance.

• Growth driven by enterprise customer expansion, disciplined cost control, and product innovation, supported by key partnerships.

• Maintained strong liquidity with NZ$63.2 million after repaying NZ$11.3 million in debt.

Financial highlights

• Reported revenue of NZ$194.4 million, up 6.8% year-over-year, mainly from subscription growth and price increases.

• Normalized EBIT reached NZ$9.9 million, a 161% improvement from FY 2024.

• Free cash flow of NZ$16 million, with normalized free cash flow (excluding 4G upgrade) at NZ$23.6 million.

• Net profit after tax was NZ$1.4 million, reversing a NZ$0.8 million loss in FY24.

• R&D spend was NZ$35 million (18% of revenue), focused on support, maintenance, and innovation.

Outlook and guidance

• FY 2026 guidance: minimum ARR of NZ$188 million and total revenue of at least NZ$205 million.

• Free cash flow yield expected between 8% and 10% for FY 2026, normalized for 4G upgrade costs.

• ARR growth for FY 2026 expected to be split 50/50 between new and existing customers, with North America as the largest contributor.

• Medium-term ARR CAGR target remains 11–13%, with upside as economic conditions improve.

• Revenue and ARR growth above baseline depend on closing large deals, FX, and stable economic conditions.