EROAD is reporting quarterly growth in contracted units in New Zealand and Australia but has experienced “challenging conditions” in North America relating to COVID-19 and the US election.
The transport technology services company grew by 1284 units for the three months to December 31 reflecting growth in New Zealand and Australia.
However, a “higher than usual” number of units were returned in its North America market, down 39 units for the quarter.
Overall, the company continues to see an asset retention rate of around 95% for the group.
In New Zealand, EROAD’s growth was 1071 units for the quarter. It also secured a large enterprise account of approximately 800 units. This figure was not included in Q3 results as units will start to be installed in the final quarter of FY21.
Sales of EROAD’s add-on SaaS products “grew significantly” in the quarter with an additional 2602 ‘EROAD Day Logbook’ subscriptions in the three-month period plus 255 subscriptions to customers who do not currently have EROAD hardware installed.
The company also more than doubled the number of active ‘EROAD Where’ tags from 2640 to 5660 units and almost doubled the number of customers using this product from 95 to 185 customers in the quarter.
North America ‘challenging’
Conditions in North America were challenging during the quarter “due the widespread second wave of COVID-19 across mainland America and the unrest and uncertainty surrounding the US Presidential election,” the company says.
Sales of 942 units were offset by returns of 981 units which were “predominately due to COVID-19 impacts”.
“Despite the continued challenging conditions in North America, EROAD continues to work to improve the SME and Enterprise pipelines and to close out sales, notwithstanding the lockdown restrictions in many states.
“The launch of ‘EROAD Go’ in late September 2020 and ‘EROAD Clarity’ Dashcam in Q4 FY21 will help to extend EROAD North America product suite into larger fleet sizes,” the company reports.
Meanwhile, growth in Australia continued in the small and medium customer segment through “predominantly new customers across a range of industries”.
“While, growth in this quarter more than doubled from the previous quarter, EROAD remains focussed on securing large enterprise opportunities within its pipeline. One opportunity in particular, progressed further during the quarter and is targeted to be contracted in Q4,” it reports.
Positive second-half guidance remains
In November, EROAD reported first-half FY21 revenue of $45.8 million, up 19% from the same period a year prior.
The company says despite “continued and more challenging” conditions in North America, it remains confident in its H2 FY21 and FY22 guidance which anticipates a small increase in revenue compared to the first half.
EBITDA is anticipated to be similar to the first half’s figure (adjusted for one-off items) “reflecting the acceleration of product development and increased sales and marketing costs associated with the launches of key products”.
