Record revenue of $115.7 million, a 4% increase from the previous quarter.
Principled terms have been reached on a device financing arrangement to support scaled growth.
Operating profit increased to $1.4 million
On-Site, AI Video, and IoT as well as Connected Services are showing strong business momentum.
Confirm that the guidance for fiscal year 2027 remains unchanged.
Lake Woodcliff, New Jersey, November 9, 2026 / PRNewswire / -- Global leader in artificial intelligence and the Internet of Things ( AIoT ) SaaS for the mobile assets industry, Powerfleet , Inc . (" Powerfleet " or "the Company") (Nasdaq ticker: AIOT ) today announced its financial results for the second quarter of fiscal year 2027, as of September 30, 2026.
Powerfleet CEO Steve Towe stated: "The results of the second fiscal quarter show that we are disciplined in executing our established plans, achieving a record revenue of $115.7 million and seeing an improvement in profit margins compared to the previous quarter. On-Site, AI Video, IoT and Connected Services – these three differentiated growth drivers – continue to perform strongly. Coupled with the fact that the progress of our major contract in South Africa is faster than initially anticipated, this further proves that we are on track to meet our annual targets."
Powerfleet, President and Chief Financial Officer, Paul Lalljie stated: "Service revenue increased by 7% year-over-year, highlighting the strength of our service-led business model. This equipment financing arrangement is aimed at providing financial support for our largest growth opportunities during the expansion process. We are still on track to meet our annual targets and expect to achieve an exit operating rate of $495 million and a EBITDA profit margin of 27% before entering the next fiscal year."
Financial Results for the Second Fiscal Quarter of Fiscal Year 2027
Compared to the second fiscal quarter of fiscal year 2026:
- Revenue increased by 4% to $115.7 million, compared to $111.7 million in the same period last year.
- Service revenue increased by 7% to $95.2 million, compared to $89.3 million in the same period last year.
- Service revenue accounted for 82%, compared to 80% in the same period last year.
- Gross profit margin is 53%, compared to 56% in the same period last year.
- The net loss attributable to common shareholders was $6.9 million, compared to $4.3 million in the same period of the previous year.
- After adjustment, EBITDA is set at $24.9 million, compared to $24.8 million in the same period last year.
After adjustment, EBITDA is changed to a non-GAAP financial indicator. For related non-GAAP disclosures and adjustments, please refer to the accompanying notes.
New device financing arrangements
The company has in principle agreed to sign a equipment financing arrangement with Rand Merchant Bank ( RMB ), which is mainly intended to support its deployment under the contract with the South African Ministry of Finance. According to the proposed arrangement, RMB is expected to provide funding for the initial costs of the equipment and will be repaid through payments from the customer contract during the contract period. The company will retain its customer relationships and continue to provide services as well as issue invoices.
The company stated that the proposed financing arrangement is expected to support its “hardware as a service” model, allowing deployment costs to expand in line with customer demand, rather than with the company’s cash expenditures. The proposed arrangement still requires the completion of final document signing.
Product Innovation and Market Expansion
Powerfleet continues to expand the capabilities of its Unity platform by launching a new AI driver solution, aiming to enhance customer value and cover a wider range of interconnected assets.
- Unity Foresight:Released today. Unity Foresight is a AI predictive analytics solution designed to provide deeper operational insights. The company believes that this will bring new recurring revenue opportunities for the On-Site and On-Road customer bases.
- Unity Asset Intelligence:Also released today, Unity Asset Intelligence extends the capabilities of Powerfleet from vehicles to pallets, containers, equipment, and a wide range of powered and unpowered assets, opening up new opportunities for asset-intensive industries. The company states that it can serve a market of over 100 million assets, with a potential interconnected services market size of up to 30 billion US dollars.
Second Quarter Earnings Discussion
Compared to the second fiscal quarter of fiscal year 2026, Powerfleet's total revenue increased by $4 million, or 4%, from $111.7 million to $115.7 million. Service revenue increased by $5.9 million, or 7%, to $95.2 million. Product revenue decreased by $1.8 million, or 8%, to $20.5 million.
Operating expenses increased by 4% from $58.3 million to $60.5 million. Selling, general and administrative expenses rose from $54.2 million to $55.7 million, mainly reflecting the company's planned increase in sales and marketing investments, which was partially offset by lower general and administrative expenses as well as depreciation and amortization included in operating expenses. Research and development expenses increased from $4.2 million to $4.8 million.
Net interest expenses decreased from $6.7 million to $6 million, while other expenses increased from $500,000 to $1.8 million.
The net loss attributable to common shareholders was $6.9 million, compared to $4.3 million in the same period of the previous year.
After adjustment, EBITDA has increased from 24.8 million US dollars to 24.9 million US dollars.
The adjustment between EBITDA and its most directly comparable indicator GAAP – the net loss attributable to common shareholders – is shown in Attachment A.
Balance Sheet and Capital Resources
As of September 30, 2026, cash and cash equivalents (including restricted cash) totaled 29.8 million US dollars.
As of September 30, 2026, the total debt amounted to 291.4 million US dollars; the net debt was 261.6 million US dollars. Net debt is defined as the total debt minus cash, cash equivalents, and restricted cash.
In the first six months of the fiscal year 2027, operating activities provided net cash of $4.8 million, compared to $10.2 million in the same period of the previous year. Investing activities utilized a total of $21.8 million in cash, mainly reflecting capital expenditures of $12.6 million, of which a large portion was for upfront investment in equipment to support the ramp-up of contracts with the South African Ministry of Finance; in addition, there were capitalized software development costs of $9.6 million. Financing activities provided $4.5 million in cash. The company expects that future equipment investments will be primarily funded through new RMB financing arrangements.
Financial Outlook
Powerfleet Confirms that the revenue guidance for the fiscal year 2027 and the adjusted EBITDA guidance previously released on August 10, 2026, remain unchanged. This guidance reflects the company's decision to forego some short-term revenue opportunities in order to reallocate capital and operational resources.
The company expects its revenue for the fiscal year 2027 to be between $468 million and $473 million, representing a year-over-year increase of about 6% based on the median figure. After adjustments, EBITDA is projected to be between $111 million and $114 million, with a profit margin of approximately 24% based on the median value. The company also anticipates that free cash flow will be around $20 million, with a weighted average number of outstanding shares at about 136 million, interest expenses at $27 million, and taxes at $10 million.
The company expects that revenue and profitability will increase in the second half of the fiscal year 2027. The supporting factors include the continued growth of service revenue, particularly the expected contribution from projects deployed by the South African Ministry of Finance, the sustained momentum of its three strategic growth engines, and the ongoing efforts to improve operational efficiency. The company still anticipates achieving an annualized revenue run rate of approximately $495 million for the fourth quarter by the end of the fiscal year 2027, along with an adjusted EBITDA profit margin of around 27%.
The adjusted EBITDA and adjusted EBITDA profit margins and free cash flow guidelines provided by Powerfleet are not GAAP financial indicators. The company stated that since it is not possible to predict the timing or amount of certain items without making unreasonable efforts, they have not provided the most direct comparable GAAP financial indicators or adjustments between forward-looking non-GAAP indicators and GAAP indicators. These items may include equity incentives, merger and acquisition-related expenses, fair value adjustments, restructuring costs, and other non-recurring items. The company noted that fluctuations in these items may have a significant impact on future GAAP financial results, and therefore, adjustments cannot be provided at this time.
Investor Teleconference and Business Updates
Powerfleet Management will hold a teleconference on November 9, 2026 (Monday), at 8:30 AM Eastern Time (5:30 AM Pacific Time) to discuss the financial results for the second quarter ending September 30, 2026, and to provide business updates.
Date: November 9, 2026 (Monday)
Time: 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time)
US toll-free phone: 888-506-0062
International phone number: 973-528-0011
Participation code: 906580
The teleconference will be broadcast live online simultaneously, and replays will also be available. The live webcast and accompanying presentation materials will also be provided through the Powerfleet Investor Relations website ir.powerfleet.com.
Use of non-GAAP financial indicators
Management evaluates the company's business financial performance through a number of key indicators, including adjusted EBITDA, adjusted EBITDA profit margin, adjusted EBITDA gross margin, adjusted earnings per share, adjusted EBITDA leverage ratio, free cash flow, net debt, and adjusted net debt, among other non-GAAP indicators. The company states that these indicators should be considered in conjunction with the results prepared in accordance with current accounting standards, but they cannot replace the GAAP results, nor are they superior to the GAAP results.
Powerfleet indicates that providing these non-GAAP indicators is to help investors understand the company's current financial performance more comprehensively. Specifically, the company believes that by excluding certain expenses, revenues, and losses, as well as exchange rate fluctuations, these non-GAAP indicators can provide useful information for management and investors, as these factors may not necessarily reflect their core operating results and business prospects.
The company also provides a indicative annualized revenue operating rate indicator, which is based on the currently signed ARR and assumes that all deployments under the contract with the South African Ministry of Finance have been completed. The company states that this indicative indicator is not prepared based on GAAP, nor is it intended to represent the revenue guidance for the fiscal year 2027 or future revenue forecasts. It should not be considered as a substitute indicator for GAAP revenue.
About Powerfleet
Powerfleet (Nasdaq ticker: AIOT; Johannesburg Stock Exchange ticker: PWR) is a leader in the global artificial intelligence Internet of Things (AIoT) and SaaS mobile assets industry. The company states that, with its rich experience, it Powerfleet by capturing, coordinating, and integrating data from various sources to unify business operations and provide actionable insights, helping companies save lives, time, and money. Headquartered in New Jersey, USA, the company has offices around the world. For more information, please visit: www.powerfleet.com. Powerfleet is primarily listed on the Nasdaq Global Market and also listed on the main board of the Johannesburg Stock Exchange.
Note on Forward-Looking Statements
This press release contains forward-looking statements in the context of the Federal Securities Laws. The actual results of Powerfleet may differ from its expectations, estimates, and projections, and therefore such forward-looking statements should not be regarded as predictions of future events. Forward-looking statements can typically be identified by words such as "expected," "estimated," "predicted," "budgeted," "outlook," "planned," "possible," "will," "shall," "believed," "potential," "continue," and similar expressions.
These forward-looking statements include, but are not limited to: the company's views regarding beliefs, plans, objectives, expectations, assumptions, estimates, intentions, and future performance; the reaffirmed financial outlook and guidance for the fiscal year 2027; the proposed RMB equipment financing arrangements and their expected completion, terms, and benefits; the expected timing, scope, and contribution of the contract deployment by the South African National Treasury; as well as the serviceable market size and expected revenue of new products, including Unity Foresight and Unity Asset Intelligence.
The company stated that forward-looking statements involve significant known and unknown risks, uncertainties, and other factors that may lead to substantial differences between actual results, performance, or achievements and the future results, performance, or achievements implied or expressed in these statements. Except for statements of historical facts, all other statements may constitute forward-looking statements. Most of these factors are beyond the company's control and are difficult to predict.
The risks and uncertainties mentioned by the company include, but are not limited to: the possibility of not being able to fully realize the expected benefits of the acquisition and ongoing business transformation initiatives; significant losses, accumulated deficits, and the inability to achieve or maintain profitability; future global economic, political, and business environments, including inflation, rising interest rates, exchange rate instability, geopolitical conflicts, sanctions, export controls, and potential tariffs; commercial, financial, reputational, and regulatory risks associated with operating in multiple regions; disruptions or limitations in global supply chains or production processes; loss of key customers or decline in customer demand; risks associated with large-scale customer deployments and the execution of strategic contracts; changes in technology, products, and customer expectations; risks related to the deployment and use of artificial intelligence and machine learning technologies; damage, disruptions, or failures of information technology systems; insufficient protection of intellectual property rights or claims from third parties regarding intellectual property; the ability to achieve financial outlooks, growth, profitability, and cash flow targets; debt levels, debt obligations, liquidity availability, compliance with financing arrangement terms, and the ability to obtain additional capital under acceptable conditions when needed; as well as other factors listed in the periodic reports submitted by the company to the U.S. Securities and Exchange Commission (SEC), including those described in the "Risk Factors" sections of the 10-K annual reports, 10-Q quarterly reports, and other documents.
The company states that if one or more of the above risks or uncertainties materialize, or if the underlying assumptions prove to be incorrect, the actual results may differ significantly from those indicated or anticipated in these forward-looking statements. Therefore, reliance should not be placed on any such forward-looking statements.
The company further stated that the forward-looking statements in this press release are made as of the date of issuance of this press release only. Except as otherwise required by securities laws, the company assumes no obligation and has no intention of publicly updating or revising any forward-looking statements to reflect subsequent events or circumstances.
Powerfleet Investor Contact Person
Carolyn Capaccio and Jody Burfening
Alliance Advisors IR
AIOTIRTeam @ allianceadvisors.com
Powerfleet Media Contact Person
Jonathan Bates
jonathan.bates @ powerfleet.com
Attachment A: Non-GAAP Financial Indicators
To assist readers of the consolidated financial statements in understanding the operating results used by management for evaluating business and financial planning, the company provides additional metrics such as organic revenue growth, adjusted EBITDA, adjusted EBITDA profit margin, adjusted earnings per share/loss, adjusted EBITDA gross margin, adjusted EBITDA product gross margin, adjusted EBITDA service gross margin, non-GAAP sales and administrative expenses ratio, adjusted operating expenses, free cash flow, net debt, adjusted net debt, and the ratio of adjusted net debt to adjusted EBITDA as supplementary measures of operational performance.
The company stated that these indicators are beneficial to investors as they exclude certain items that some companies believe do not reflect cash operations and ongoing business performance. In addition, the company also uses these indicators as an important part of its internal reporting to measure business performance and operational strength.
The company stated that the growth in organic revenue reflects the percentage change in revenue on a year-over-year basis after excluding the impact of acquisitions; adjusted indicators such as EBITDA exclude non-controlling interests, net interest expenses, other expenses/incomes, income tax, depreciation and amortization, equity incentives, exchange losses, restructuring and one-time benefits expenses, derivative valuation adjustments based on market value, merger and acquisition-related expenses, integration-related expenses, and litigation-related expenses. The company noted that these indicators are not prepared in accordance with U.S. GAAP and should not be considered as a substitute or more meaningful measure of GAAP financial indicators. Moreover, their calculation methods may differ from those of other companies, hence the comparability is limited.
The company stated in Attachment A that the reconciliation tables between the net loss attributable to common shareholders and the adjusted EBITDA, as well as the reconciliation tables between net loss and adjusted net income, gross profit margin and adjusted EBITDA gross profit margin, selling and administrative expenses and non-GAAP selling and administrative expenses, total operating expenses and adjusted operating expenses, net cash provided by operating activities and free cash flow, and total debt and adjusted net debt, can be found in the tables below (no specific table data is attached in the original text).
Message source: Powerfleet
