Powerfleet Drives SaaS Flywheel in Q1 FY2026: 6% Sequential Services Growth, Margin Expansion, and Strong Progress Towards Achieving its EBITDA Expansion Targets

Quarterly services revenue jumped by 6% sequentially to $86.5 million, increasing from $81.8 million in Q4'25.

Total revenue grew by 38% year-over-year to $104.1million driven by strength in services revenue, which increased to a record high of 83% of total revenue.

Adjusted EBITDA increased by 58% to $21.6 million, with adjusted EBITDA margin expanding 260 basis points to 21%.

Gross profit increased year over year by $16.8 million to $56.5 million, with adjusted EBITDA gross margins expanding by 3% to 67%.

The EBITDA expansion program delivered $11 million in annual savings exiting the first quarter of FY26, achieving 60% of the full-year target of $18 million.

FY26 total revenue guidance raised to $430-$440 million from $420-$440 million.

Powerfleet, Inc.(Nasdaq: AIOT)reported its financial results for the first quarter ended June 30, 2025.

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MANAGEMENT COMMENTARY

“Q1 marked a strong start to FY26 as we delivered profitable growth ahead of expectations, anchored by a standout 6% sequential increase in services revenue,” said Steve Towe, Chief Executive Officer of Powerfleet. “This performance underscores accelerating adoption of Unity's AI-driven SaaS solutions and validates the long-term value we're creating as we transition deeper into a recurring, high-margin business model.”

“Our AI Video annual recurring revenue (ARR) bookings grew 52% quarter-over-quarter, reflecting robust market demand, particularly through our major indirect channel partners.” Towe continued. “We also achieved a 14% sequential increase in new logo wins, alongside six-figure ARR deals across 11 diverse industry sectors – clear indicators that our growth engine is scaling efficiently across verticals.”

“In parallel, we're driving structural improvements across the business,” he added. “This quarter, services revenue represented a record 83% of total revenue, highlighting our shift to higher-quality SaaS revenue. We accomplished this while successfully navigating tariff headwinds, accelerating supply chain efficiencies, and executing decisively on our adjusted EBITDA expansion initiatives. These results reflect our sharpened focus on scaling profitably while building long-term enterprise value.”

FIRST QUARTER FY2026 OPERATIONAL AND FINANCIAL HIGHLIGHTS

Powerfleet's first quarter results underscore the strength of its bold business combination strategy, reflected in accelerated service revenue growth and rapid progress toward EBITDA expansion targets.

Go-To-Market Momentum

— 11 diverse sectors contributed to ARR wins over $100k.

— Indirect channel partner momentum was strong, with sales success contributing significantly toARR in AI video bookings surging 52% quarter-over-quarter.

— Major new strategic sales channel partnership signed withMTN Group, one of the world's largest network providers, to white label Powerfleet's portfolio of solutions to enterprise customers. MTN supports approximately 300 million customers across 16 markets.

Technology and Innovation

— Powerfleet ranked by ABI Research as one of the 7 most innovative global tech companies

— Launched new AI-powered automated risk application to drive top tier quantifiable enterprise safety benefits

— Announcing Powerfleet will host an Investor Innovation Session showcasing Unity AIoT product and technology, in November 2025.

First Quarter Financial Highlights

Total revenue for the first quarter increased 38% year-over-year to $104.1 million, benefiting from the Fleet Complete acquisition and organic growth in recurring services.

Services revenue was particularly strong, rising 53% year-over-year and 6% sequentially to $86.5 million. Services revenue accounted for 83% of total revenue, up from 75% in the prior year and 79% in the prior quarter, underscoring the continued shift toward high-quality, recurring revenue streams.

The improved revenue mix, combined with strong and stable service adjusted EBITDA gross margins of 75%, contributed to meaningful margin expansion. Adjusted EBITDA gross margin increased 300 basis points year-over-year to 67%, up from 64% in the same period last year.

Total operating expenses were $58.5 million in the quarter, which included $4.2 million in one-time transaction and restructuring costs. Excluding these items, adjusted operating expenses totaled $54.3 million.

On an adjusted EBITDA basis, general and administrative expense represented 26% of revenue, a 400 basis point improvement from the prior year, reflecting continued progress from the Company's EBITDA expansion program. Sales and marketing expenses increased to 17% of revenue, up 500 basis points year-over-year, in line with planned reinvestments to drive growth. Research and development expense was 5% of total revenue up from 4% in the prior year.

Adjusted EBITDA increased 58% to $21.6 million, up from $13.7 million in the prior year, reflecting contributions from the Fleet Complete acquisition, organic growth, gross margin expansion and cost synergies net of planned reinvestment in sales and marketing. Net loss attributable to common stockholders was $0.08 per share, compared to $0.21 per share in the prior year, reflecting improved financial performance and an increase in shares outstanding. After adjusting for one-time expenses and amortization of acquisition-related intangibles, adjusted net income per share was $0.01 compared with $0.00 in the prior year.

Adjusted net debt to adjusted EBITDA was 2.97x, an improvement from the 3.22x at the end of fiscal year 2025. Net debt at quarter end was $234.8 million, consisting of $35.6 million in cash and $270.4 million total debt.

FULL-YEAR 2026 FINANCIAL OUTLOOK

The company is increasing its financial guidance for revenue, with revenue now expected to be in the range of $430 million to $440million versus the prior guidance of approximately $420 million to $440 million.

The company is maintaining its annual guidance for:

— Annual adjusted EBITDA, with annual growth of 45% to 55%

— Adjusted net debt to adjusted EBITDA leverage ratio which is expected to improve from 3.2x as of March 31, 2025, to below 2.25x by March 31, 2026

INVESTOR CONFERENCE CALL AND BUSINESS UPDATE

Powerfleet management will hold a conference call on Monday, August 11, 2025, at 8:30 a.m. Eastern time (5:30 a.m. Pacific time) to discuss results for the first quarter fiscal 2026 ended June 30, 2025, and provide a business update.

Date: Monday, August 11, 2025 Time: 8:30 a.m. Eastern time (5:30 a.m. Pacific time) Toll Free: 888-506-0062 International: 973-528-0011 Participant Access Code: 321752

The conference call will be broadcast simultaneously and available for replay here. Additionally, both the webcast and accompanying slide presentation will be available via the investor section of Powerfleet's website atir.powerfleet.com.

NON-GAAP FINANCIAL MEASURES

To supplement its financial statements presented in accordance with Generally Accepted Accounting Principles (GAAP), Powerfleet provides certain non-GAAP measures of financial performance. These non-GAAP measures include adjusted EBITDA, adjusted EBITDA gross margin, adjusted EBITDA gross profit, adjusted EBITDA service margin, adjusted product margin, adjusted EBITDA operating expenses, adjusted net income per share and net debt. Reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, or superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of Powerfleet's current financial performance. Specifically, Powerfleet believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses and fluctuations in currency rates that may not be indicative of its core operating results and business outlook. These non-GAAP measures are not measures of financial performance or liquidity under GAAP and, accordingly, should not be considered as an alternative to net income, gross margin, gross profit, total debt, cash flow from operating activities or earnings per share as an indicator of operating performance or liquidity. Because Powerfleet's method for calculating the non-GAAP measures may differ from other companies' methods, the non-GAAP measures may not be comparable to similarly titled measures reported by other companies. Reconciliation of all non-GAAP measures included in this press release to the most directly comparable GAAP measures can be found in the financial tables included in this press release.

ABOUT POWERFLEET

Powerfleet (Nasdaq: AIOT; JSE: PWR) is a global leader in the artificial intelligence of things (AIoT) software-as-a-service (SaaS) mobile asset industry. With more than 30 years of experience, Powerfleet unifies business operations through the ingestion, harmonization, and integration of data, irrespective of source, and delivers actionable insights to help companies save lives, time, and money. Powerfleet's ethos transcends our data ecosystem and commitment to innovation; our people-centric approach empowers our customers to realize impactful and sustained business improvement. The company is headquartered in New Jersey, United States, with offices around the globe. Explore more atwww.powerfleet.com. Powerfleethas a primary listing on The Nasdaq Global Market and a secondary listing on the Main Board of the Johannesburg Stock Exchange (JSE).

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of federal securities laws. Powerfleet's actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements may be identified by words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions.

These forward-looking statements include, without limitation, our expectations with respect to our beliefs, plans, goals, objectives, expectations, anticipations, assumptions, estimates, intentions and future performance, as well as anticipated financial impacts of the business combination with MiX Telematics and the acquisition of Fleet Complete. Forward-looking statements involve significant known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. Most of these factors are outside our control and are difficult to predict. The risks and uncertainties referred to above include, but are not limited to, risks related to: (i) our ability to realize all of the anticipated benefits of the business combination with MiX Telematics and the acquisition of Fleet Complete, and the potential challenges associated with the ongoing integration of the businesses; (ii) global economic conditions as well as exposure to political, trade and geographic risks, including tariffs and the conflict in the Middle East; (iii) disruptions or limitations in our supply chain, particularly with respect to key components; (iv) technological changes or product developments that may be more complex, costly, or less effective than expected; (v) cybersecurity risks and our ability to protect our information technology systems from breaches; (vi) our inability to adequately protect our intellectual property; (vii) competitive pressures from a broad range of local, regional, national and other providers of wireless solutions; (viii) our ability to effectively navigate the international political, economic and geographic landscape; (ix) changes in applicable laws and regulations or changes in generally accepted accounting policies, rules and practices; and (x) such other factors as are set forth in the periodic reports filed by us with the Securities and Exchange Commission (SEC), including but not limited to those described under the heading “Risk Factors” in our annual reports on Form 10-K, quarterly reports on Form 10-Q and any other filings made with the SEC from time to time, which are available via the SEC's website at http://www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by these forward-looking statements. Therefore, you should not rely on any of these forward-looking statements.

The forward-looking statements included in this press release are made only as of the date of this press release, and except as otherwise required by applicable securities law, we assume no obligation, nor do we intend to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

Powerfleet Investor Contacts Carolyn Capaccio and Jody Burfening Alliance Advisors IR AIOTIRTeam@allianceadvisors.com

Powerfleet Media Contact Jonathan Bates jonathan.bates@powerfleet.com +44 121 717-5360

POWERFLEET, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data) Three Months Ended June 30, 2024 2025Revenues:Products $ 18,738 $ 17,657Services 56,692 86,464Total revenues 75,430 104,121Cost of revenues:Cost of products 12,751 13,228Cost of services 23,031 34,412Total cost of revenues 35,782 47,640Gross profit 39,648 56,481Operating expenses:Selling, general and administrative expenses 54,782 53,663Research and development expenses 3,101 4,857Total operating expenses 57,883 58,520Loss from operations (18,235) (2,039)Interest income 304 196Interest expense, net (2,691) (6,786)Other expense, net (624) (1,243)Net loss before income taxes (21,246) (9,872)Income tax expense (1,053) (362)Net loss before non-controlling interest (22,299) (10,234)Non-controlling interest (13) -Net loss (22,312) (10,234)Preferred stock dividend (25) -Net loss attributable to common stockholders $ (22,337) $ (10,234)Net loss per share attributable to common stockholders – basic and diluted $ (0.21) $ (0.08)Weighted average common shares outstanding – basic and diluted 107,136 133,313POWERFLEET, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except per share data) March 31, 2025 June 30, 2025ASSETSCurrent assets:Cash and cash equivalents $ 44,392 $ 31,196Restricted cash 4,396 4,447Accounts receivables, net 78,623 81,482Inventory, net 18,350 23,892Prepaid expenses and other current assets 23,319 26,762Total current assets 169,080 167,779Fixed assets, net 58,011 62,712Goodwill 383,146 394,668Intangible assets, net 258,582 263,745Right-of-use asset 12,339 11,935Severance payable fund 3,796 4,097Deferred tax asset 3,934 3,926Other assets 21,183 21,920Total assets $ 910,071 $ 930,782LIABILITIESCurrent liabilities:Short-term bank debt and current maturities of long-term debt $ 41,632 $ 37,426Accounts payable 41,599 48,341Accrued expenses and other current liabilities 45,327 48,755Deferred revenue – current 17,375 17,116Lease liability – current 5,076 4,965Total current liabilities 151,009 156,603Long-term debt – less current maturities 232,160 232,954Deferred revenue – less current portion 5,197 5,133Lease liability – less current portion 8,191 7,994Accrued severance payable 6,039 6,754Deferred tax liability 57,712 57,387Other long-term liabilities 3,021 3,077Total liabilities 463,329 469,902STOCKHOLDERS' EQUITYPreferred stock – -Common stock 1,343 1,343Additional paid-in capital 671,400 673,253Accumulated deficit (205,783) (216,017)Accumulated other comprehensive loss (8,850) 13,669Treasury stock (11,518) (11,518)Total stockholders' equity 446,592 460,730Non-controlling interest 150 150Total equity 446,742 460,880Total liabilities and stockholders' equity $ 910,071 $ 930,782POWERFLEET, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Three Months Ended June 30, 2024 2025Cash flows from operating activitiesNet loss $ (22,312) $ (10,234)Adjustments to reconcile net loss to cash (used in) provided by operating activities:Non-controlling interest 13 -Inventory reserve 257 193Stock based compensation expense 5,929 1,853Depreciation and amortization 10,335 16,031Right-of-use assets, non-cash lease expense 760 974Derivative mark-to-market adjustment – 104Bad debts expense 1,993 1,856Deferred income taxes 1,021 (3,157)Shares issued for transaction bonuses 889 -Lease termination and modification losses – 59Other non-cash items 482 (513)Changes in operating assets and liabilities:Accounts receivables (6,973) (2,391)Inventories (624) (4,733)Prepaid expenses and other current assets (1,518) (1,284)Deferred costs (1,789) (2,730)Deferred revenue (142) (420)Accounts payable, accrued expenses and other current liabilities 4,993 9,637Lease liabilities (927) (881)Accrued severance payable, net (2) 357Net cash (used in) provided by operating activities (7,615) 4,721Cash flows from investing activities:Acquisition, net of cash assumed 27,531 -Proceeds from sale of fixed assets – 16Capitalized software development costs (2,308) (3,724)Capital expenditures (5,586) (8,114)Net cash provided by (used in) investing activities 19,637 (11,822)Cash flows from financing activities:Repayment of long-term debt (493) (1,341)Short-term bank debt, net 4,161 (5,428)Purchase of treasury stock upon vesting of restricted stock (2,836) -Payment of preferred stock dividend and redemption of preferred stock (90,298) -Cash paid on dividends to affiliates (4) -Net cash used in financing activities (89,470) (6,769)Effect of foreign exchange rate changes on cash and cash equivalents (823) 725Net decrease in cash and cash equivalents, and restricted cash (78,271) (13,145)Cash and cash equivalents, and restricted cash at beginning of the period 109,664 48,788Cash and cash equivalents, and restricted cash at end of the period $ 31,393 $ 35,643Reconciliation of cash, cash equivalents, and restricted cash, beginningof the periodCash and cash equivalents 24,354 44,392Restricted cash 85,310 4,396Cash, cash equivalents, and restricted cash, beginning of the period $ 109,664 $ 48,788Reconciliation of cash, cash equivalents, and restricted cash, end of theperiodCash and cash equivalents 30,242 31,196Restricted cash 1,151 4,447Cash, cash equivalents, and restricted cash, end of the period $ 31,393 $ 35,643Supplemental disclosure of cash flow information:Cash paid (received) for:Taxes $ 41 $ 873Interest $ 3,057 $ 5,994Noncash investing and financing activities:Common stock issued for transaction bonus $ 9 $ -Shares issued in connection with MiX Combination $ 362,005 $ –POWERFLEET, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP TO ADJUSTED EBITDA FINANCIAL MEASURES(In thousands) Three Months Ended June 30, 2024 2025Net loss attributable to common stockholders $ (22,337) $ (10,234)Non-controlling interest 13 -Preferred stock dividend 25 -Interest expense, net 2,916 6,590Other expense, net – 23Income tax expense 1,053 362Depreciation and amortization 10,335 16,031Stock-based compensation 5,929 1,853Foreign currency losses 109 1,161Restructuring-related expenses 1,198 2,442Derivative mark-to-market adjustment – 104Recognition of pre-October 1, 2024 contract assets (Fleet Complete) – 1,503Acquisition-related expenses 14,494 1,130Integration-related expenses – 675Adjusted EBITDA $ 13,735 $ 21,640POWERFLEET, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP NET INCOME FINANCIAL MEASURES(In thousands) Three Months Ended June 30, 2024 2025Net loss $ (22,312) $ (10,234)Incremental intangible assets amortization expense as a result of business 2,995 5,830combinationsStock-based compensation (non-recurring/accelerated cost) 4,693 -Foreign currency losses 109 1,161Income tax effect of net foreign exchange losses (747) (496)Restructuring-related expenses 1,198 2,442Income tax effect of restructuring costs (103) (66)Derivative mark-to-market adjustment – 104Acquisition-related expenses 14,494 1,130Integration-related expenses – 675Inventory rationalization and other – 415Non-GAAP net income $ 327 $ 961Weighted average shares outstanding 107,136 133,313Non-GAAP net income per share – basic $ 0.00 $ 0.01POWERFLEET, INC. AND SUBSIDIARIESADJUSTED GROSS PROFIT MARGINS(In thousands) Three Months Ended June 30, 2024 2025Products:Product revenues $ 18,738 $ 17,657Cost of products 12,751 13,228Products gross profit $ 5,987 $ 4,429Products gross profit margin 32.0% 25.1%Depreciation and amortization $ – $ -Adjusted products gross profit $ 5,987 $ 4,429Adjusted products gross profit margin 32.0% 25.1%Services:Services revenues $ 56,692 $ 86,464Cost of services 23,031 34,412Services gross profit $ 33,661 $ 52,052Services gross profit margin 59.4% 60.2%Depreciation and amortization $ 8,729 $ 13,241Adjusted services gross profit $ 42,390 $ 65,293Adjusted services gross profit margin 74.8% 75.5%Total:Total revenues $ 75,430 $ 104,121Total cost of revenues 35,782 47,640Total gross profit $ 39,648 $ 56,481Total gross profit margin 52.6% 54.2%Depreciation and amortization $ 8,729 $ 13,241Adjusted total gross profit $ 48,377 $ 69,722Adjusted total gross profit margin 64.1% 67.0%POWERFLEET, INC. AND SUBSIDIARIESNON-GAAP EXPENSE RATIOS(In thousands) Three Months Ended June 30, 2024 2025Total revenues $ 75,430 $ 104,121Selling, general and administrative expensesSelling, general and administrative expenses 54,782 53,663Restructuring-related expenses (1,198) (2,442)Acquisition-related expenses (14,494) (1,130)Integration-related costs – (675)Depreciation and amortization (1,606) (2,790)Stock-based compensation (5,929) (1,853)Non-GAAP selling, general and administrative expenses 31,555 44,773Non-GAAP sales and marketing expenses 9,052 17,958Non-GAAP general and administrative expenses 22,503 26,815Non-GAAP selling, general and administrative expenses $ 31,555 $ 44,773Non-GAAP sales and marketing expenses as a percentage of total revenue 12.0% 17.2%Non-GAAP general and administrative expenses as a percentage of total 29.8% 25.8%revenueResearch and development expensesResearch and development incurred $ 5,213 $ 8,559Research and development capitalized (2,112) (3,702)Research and development expenses $ 3,101 $ 4,857Research and development incurred as a percentage of total revenues 6.9% 8.2%Research and development expenses as a percentage of total revenues 4.1% 4.7%POWERFLEET, INC. AND SUBSIDIARIESADJUSTED OPERATING EXPENSES(In thousands) Three Months Ended June 30, 2024 2025Total operating expenses $ 57,883 $ 58,520Adjusted for once-off costsAcquisition-related expenses 14,494 1,130Integration-related costs – 675Stock-based compensation (non-recurring/accelerated cost) 4,693 -Restructuring-related expenses 1,198 2,442 20,385 4,247Adjusted operating expenses $ 37,498 $ 54,273

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