EROAD is reporting $182 million in revenue for its FY24 result, up 10% on last year with the firm meeting or exceeding all guidance measures and achieving a significant milestone of 250,000 units connected globally.
The NZX and ASX-listed transportation technology services firm saw total net profit increase 88% to $346,000 compared to a $3m loss in FY23.
It achieved positive free cash flow of $1.3m compared to negative free cash flow of $29.9m in the previous financial year. This was attributed to growth in units, price increases and cost control.
The market reacted positively to the result with the stock price moving up by around 15% to NZ$1 per share.
Annualised monthly recurring revenue increased by $24.1m (15.7%) to $177.8m in FY24 from $153.7m in FY23, reflecting growth across all markets and support by favourable foreign exchange.
It posted EBIT of $800,000 in FY24 compared to $1.7m in FY23. Normalised EBIT increased to $4.4m in FY24 with 4G hardware upgrade costs of $3.6m for the period and integration costs of $3.4m and one-off acquisition revenue of $9.6m in FY23.
Customer retention of contracted units remains at 94.8% in FY24 (NZ 95%; AU 96%; NA 95%), same as last year.
Key enterprise customer wins and expansions during the period include Programmed in Australia (more than 3000 connections), renewed and expanded Boral (more than 1300) and SkyBitz (more than 1500) in Australia and NZ Bus owner Kinetic (more than 1000 connections) in New Zealand, and expanded US Foods (more than 1300 connections) in North America.
Expansions from existing customers accounted for 68% of new enterprise units.
‘Disciplined delivery’
Globally, EROAD has now hit the 250,000 unit milestone, driving operating scale.
Co-chief executives Mark Heine and David Kenneson say they are pleased with the progress EROAD is making.
“It’s been a year of disciplined delivery. Last year, we made a commitment that we would return the focus of EROAD to our customers, remove non-essential costs, and put the foundations in place to take advantage of growth opportunities, including in our largest market in North America.
“This has provided us with a robust operating platform and the leverage to expand, diversify and grow in coming years.
“With a renewed focus on customer, in FY24 we have achieved global revenue of $182m – ahead of guidance – with top line growth being delivered in all three markets.”
‘Stronger, leaner, smarter’
Chair Susan Paterson says the FY24 financial and operational results demonstrate the company “is on the right track”.
“The FY24 result met or exceeded all of the guidance metrics set at the start of the year, demonstrating the discipline and progress made as EROAD moves the business to consistently generating cash in the latter part of calendar year 2024.
“Today, EROAD is stronger, leaner, smarter and more sustainable. We believe it has the right skills, capital structure, cost-base, product-set and customer focus to capitalise on growth opportunities ahead to decarbonise transport as government look to sustainable revenue streams,” Paterson says.
Outlook
EROAD is posting revenue guidance of $190m to $195m; FY25 EBIT guidance of $5m to $10m, normalised for the 4G hardware upgrade program; and the firm expects to be free cash flow positive in FY25.
“Having executed the operational changes required to realign the business around our enterprise customers, and implement tighter cost controls, we have commenced FY25 with confidence in our strategy, and our ability to execute against our FY26 targets,” Heine and Kenneson add.
“For FY25 and beyond we will remain focused on fiscal and operational discipline, with considered investment in growth, through expansion within key markets, deepening engagement with existing customers, and partnering where appropriate to meet the evolving needs of the market.
“Our FY25 guidance acknowledges that while we have turned the corner on costs and productivity, we are now accelerating our new product introductions and go-to-market strategies in all markets. This work is well underway and expect this will be in-place in mid-to-late Q2,” they say.
