Executive Summary

Q4 FY2025 revenue was $103.6M (+42% YoY) with adjusted EBITDA of $20.4M; total adjusted gross margin exceeded 60% as recurring services revenue drove mix-shift and margin expansion .
EPS was a GAAP loss of $0.09, but non-GAAP EPS was $0.02, reflecting restructuring, integration, amortization and FX adjustments; net debt ended at $225.0M (cash $48.8M, total debt $273.8M) .
Management outlined FY2026 targets of ~$430M revenue (+~20% YoY on rebased $352M base) and ~$105M EBITDA, with a path to >25% EBITDA margins in 2H and net debt/EBITDA <2.25x by year-end, driven by synergy realization and indirect channel activation (Telus, AT&T, a new EU telco) .
Catalysts: expanded EverDriven AI video deployment (~4,000 subs), telco partner launches, and Unity “single pane-of-glass” deployments; macro and tariff-related CapEx timing elongation temper early FY26 growth, with expected acceleration in 2H .

What Went Well and What Went Wrong

What Went Well

Record Q4 adjusted gross margin above 60% as adjusted service margin expanded to 68.8% and adjusted product margin to 28.7%, aided by recurring SaaS mix and cost synergies .
Management on flywheel momentum: “We delivered $104 million in total revenue… and generated $20 million in adjusted EBITDA… recurring revenue made up 79% of the total” .
Indirect channels advancing: “Telus launched on May 15th… all of the reps have an AIOT quota… they can sell the full IoT platform today” .

What Went Wrong

GAAP EPS loss ($0.09) and continued GAAP net loss reflect higher interest expense, taxes, and one-time integration/restructuring costs despite non-GAAP profitability .
Q4 adjusted operating expenses rose to $54.2M vs $37.6M YoY primarily from Fleet Complete addition; product margins impacted by planned inventory rationalization ($2.6M write-off) .
Macro/tariff headwinds elongating customer CapEx decisions in in‑warehouse solutions; management paused ~50% of planned $8M go-to-market investment until clearer macro outlook .

Financial Results

Core performance across the last three quarters (oldest → newest)

Metric	Q2 FY2025 (Sep 30, 2024)	Q3 FY2025 (Dec 31, 2024)	Q4 FY2025 (Mar 31, 2025)
Total Revenue ($USD Millions)	$77.018	$106.429	$103.638
Services Revenue ($USD Millions)	$56.725	$81.742	$81.772
Products Revenue ($USD Millions)	$20.293	$24.687	$21.866
Adjusted EBITDA ($USD Millions)	$14.477	$22.495	$20.424
Adjusted Total Gross Margin %	56.1%	60.3%	60.3%
Adjusted Service Margin %	63.7%	69.3%	68.8%
Adjusted Product Margin %	35.0%	30.6%	28.7%
GAAP Diluted EPS ($)	$(0.02)	$(0.11)	$(0.09)
Non-GAAP EPS ($)	$0.02	$0.01	$0.02

Segment breakdown (Q4 FY2025)

Segment	Revenue ($USD Millions)	Gross Profit ($USD Millions)	Adjusted Margin %
Services	$81.772	$51.049 (services GP)	68.8% (adj)
Products	$21.866	$3.714 (products GP)	28.7% (adj)
Total	$103.638	$54.763 (GAAP) / $62.6 (adj)	60.3% (adj total)

KPIs and balance sheet

KPI/Metric	Q4 FY2025 Value
Recurring Revenue %	79% of total
Subscribers	2.8M
Net Debt	$225.0M
Cash and Equivalents	$48.8M
Total Debt	$273.8M
Adjusted Operating Expenses	$54.2M

Results versus Wall Street consensus (Q4 FY2025)

Metric	Consensus	Actual	Surprise
Revenue ($USD Millions)	$103.808*	$103.638	In-line to slight miss*
Primary EPS ($)	$(0.022)*	$0.02	Beat*
EBITDA ($USD Millions)	$21.585*	$20.424 (adj)	Slight miss vs adj; consensus likely GAAP defn*

Values retrieved from S&P Global.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue	FY2025	>$362.5M	Actual $362.5M	Met
Adjusted EBITDA	FY2025	>$75M	Actual $71.1M (reported); $76M incl run-rate synergies	Slightly below reported; above pro forma
Total Revenue	FY2026	20–25% growth off $352.5M base	~~$430M (~~+22% YoY on rebased base)	Maintained/Specified
Adjusted EBITDA	FY2026	+45–55% YoY	~$105M; path to >25% margins in 2H	Maintained/Specified
Net Debt/EBITDA	FY2026 YE	N/A	<2.25x; delever by ~$10M FY26	New
Capex	FY2026	N/A	~11.5% of revenue (temporarily elevated)	New
Interest expense (eff. rate)	FY2026	N/A	~9%	New
Cash Taxes	FY2026	N/A	~10% of EBITDA	New
Annualized Cost Synergies	By FY2026 YE	$27M 2-year target (MiX)	$34M total (MiX + Fleet Complete) phased $16M (FY25 exit), +$13M 1H26, +$5M 2H26	Raised

Why: FY2026 outlook reflects pipeline momentum (AI video, in-warehouse, Data Highway), indirect channel ramp (Telus, AT&T, new EU telco), and identified synergy levers; tempered 1H due to tariff-driven customer CapEx timing and prudent GTM spend deferral .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 FY2025)	Current Period (Q4 FY2025)	Trend
AI/Technology initiatives (Unity, AI Video)	Focus on Unity, safety-centric solutions; AI camera sales up 52% YoY via largest channel partner	Unity recognized #1 by ABI Research; AI Video pipeline +120% QoQ; large EverDriven expansion	Strengthening
Supply chain/tariffs & macro	Execution momentum post MiX; synergy program on track; no tariff commentary yet	Tariff-related CapEx timing elongation; supply chain mitigation reducing CoS risk to < $5M	Near-term headwind, mitigated
Product performance (in‑warehouse, AI Video)	In‑warehouse product drove growth; adjusted product margin improved to 30.6%	In‑warehouse grew 71% in key verticals; AI Video deployments +52% via largest US indirect partner	Accelerating
Regional trends	Resilient global portfolio; international operations growth cited	International operations +13% FY25 organic; three consecutive quarters of improved retention	Improving
Indirect channels (telcos)	Expanded opportunity through Fleet Complete telco partnerships	Telus launched; AT&T pre-launch enterprise; new NA & EU telcos signed	Activation underway
R&D execution	Cap software ~$4M in Q4; platform unification underway	Unity engineering headcount quadrupled to >400 FTE; device-agnostic Data Highway scaling thousands of subs	Scaling
Regulatory/legal/audit	N/A	Deloitte’s first-year audit requiring modest additional time; filing well ahead of 15-day grace period	Administrative cadence

Management Commentary

CEO on transformation: “This was a truly foundational year… now positions us for durable, efficient, and scalable growth into FY26 and beyond” .
CFO on margin drivers: “Adjusted service margins… expanded by 8% to 69%… combined adjusted gross margins exceeded 60%” .
EVP Sales on telco channel: “All of the reps have an AIOT quota… can sell the full IoT platform today” .
CEO on macro prudence: “We’ve just paused [~$8M GTM]… until there is greater stability… macro is having a little bit of weathering on us, but not substantial” .
Strategic positioning: “Unity is the only system of record… customers seeing 30%+ reduction in vendor spend… and a 35% increase in value” .

Q&A Highlights

Macro/tariff impact: Customers delaying in‑warehouse CapEx decisions due to tariff uncertainty; management implementing third‑party financing to ease affordability and expects acceleration once clarity emerges .
Telco partnerships: AT&T in pilot pre‑launch; Telus launched with full seller enablement; two new telcos (NA and EU) signed, EU impact expected in FY2027 .
Growth bridge: Expect ~10% exit growth rate in Q4 FY26; 1H growth ~40% absolute (adjusted for FSM exit and GAAP changes), with 2H acceleration via indirect channel and sales capacity ramp .
Deal quality/mix: Nine verticals with $100K+ ARR wins; AI Video and in‑warehouse comprise 50%+ of new sales in Q4 .

Estimates Context

Q4 FY2025 vs consensus: Revenue $103.808M* vs actual $103.638M (in-line to slight miss); EPS $(0.022) vs actual $0.02 (beat*); EBITDA $21.585M* vs adjusted $20.424M (slight miss vs adj; consensus likely standard EBITDA definition)* .
Forward consensus (next quarters): Revenue ~$105.5M*, ~$111.8M*; EPS ~$(0.008), ~$0.004; EBITDA ~$24.0M*, ~$25.7M* (trajectory consistent with margin expansion narrative).
Values retrieved from S&P Global.

Metric	Q4 FY2025 Consensus*	Q4 FY2025 Actual	Q2 FY2026 Consensus*	Q3 FY2026 Consensus*
Revenue ($USD Millions)	103.808*	103.638	105.498*	111.783*
Primary EPS ($)	(0.022)*	0.02	(0.008)*	0.004*
EBITDA ($USD Millions)	21.585*	20.424 (adj)	23.987*	25.711*

Key Takeaways for Investors

Mix-led margin expansion is durable: adjusted total GM at 60%+ and services margins approaching 70% reflect SaaS recurring revenue scaling and synergy capture .
Non-GAAP profitability and EPS beat amid GAAP headwinds suggests operating leverage once integration and interest burdens normalize .
Indirect channels are the near-term accelerant: Telus is live, AT&T pre‑launch, and a new EU telco signed; expect 2H FY26 ramp and rising deal velocity .
Unity’s device-agnostic Data Highway is winning larger, multi-thousand sub deployments; EverDriven’s expanded contract is an execution proof point .
FY2026 targets (~$430M revenue, ~$105M EBITDA) hinge on synergy realization ($34M annualized by YE), margin expansion to >25% in 2H, and macro stabilization; management paused GTM spend prudently but will reactivate .
Near-term risk: tariff-driven CapEx timing in in‑warehouse solutions; management is mitigating via supply chain actions and customer financing .
Deleveraging path credible: target net debt/EBITDA <2.25x by YE FY26 and ~$10M deleveraging for FY26 with capex/interest/taxes parameters well-telegraphed .

Appendix: Additional Q4 FY2025 Details (from 8‑K/Press Release)

Operating expenses: $61.7M GAAP; adjusted $54.2M (ex one-time items) .
Planned inventory rationalization: $2.6M write-off; adjusted product margin 28.7% .
Net debt: $225.0M; adjusted net debt $228.6M (incl $3.6M unsettled transaction costs) .
FY2025 outcomes: total revenue $362.5M; adjusted EBITDA $71.1M; adjusted total GM 58.6% .

References: Q4 FY2025 Press Release and 8-K ; FY2025/Q4 Earnings Call Transcript –; Q3 FY2025 8-K/Press Release – –; Q2 FY2025 8-K/Press Release – –; EverDriven press release ; May 23 business update and 8-K – –.

Powerfleet, Inc. (AIOT)·Q4 2025 Earnings Summary