TomTom (TOM2) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue rose 9% to €584.8m; adjusted free cash flow reached €32m, or 5% of revenue.

• Record Automotive backlog reached €2.5bn after robust order intake, supporting the stated foundation for sustained revenue growth and improved profitability.

Financial highlights

• Q4 revenue increased 3% YoY to €143.4m; EBIT was a €10.4m loss and net result a €11.6m loss.

• FY revenue was €584.8m; gross profit rose 10% to €495.8m, with gross margin up 1 percentage point to 85%.

• FY EBIT loss narrowed to €20.0m from €97.6m; net loss narrowed to €21.0m from €102.7m.

• Reported FY free cash flow was €20.8m versus an outflow of €41.6m; excluding €11m of Maps realignment payments, FCF was €32m, or 5% of revenue.

• Q4 operating expenses rose €12m YoY to €137m, including a €10m one-off R&D reorganization charge; excluding restructuring, expenses rose €2m.

Outlook and guidance

• 2024 revenue guidance is €570m–€610m, including Location Technology revenue of €490m–€520m; FCF is expected to exceed 5% of revenue.

• Mid-term ambition remains €600m Location Technology revenue in 2025 and FCF of 10% of revenue, supported by Automotive backlog and interest in Orbis Maps.

• Priorities include product innovation, accelerating sales-funnel conversion, growing Location Technology and improving cash generation; Enterprise contract conversions are expected to build gradually through 2024.