PowerFleet, Inc. (AIOT) FY2026 Earnings: Revenue $444M (+22.4%)
AIOT — FY2026 Financial Report Analysis
Full Year · Fiscal year 2026 · Published by Pham Hop
Powerfleet's FY2026 (to March 2026) revenue rose 22.4% to $443.8m and it swung to a $19.6m operating profit as acquisition costs fell, but a $20.6m net loss and negative free cash flow leave FY2027's $30–35m cash target as the test.
Revenue
$444M
+22.4% YoY
Net income
-$21M
Diluted EPS
$-0.15
Operating margin
4.4%
This period vs a year ago
Same period last year
This period
Revenue▲+22.4%
≈$363M
$444M
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
Overview
Powerfleet sells tracking devices and, more importantly, the subscription software that sits on top of them: it tells trucking fleets, warehouses and car-rental firms where their vehicles and forklifts are, how they are being driven, and whether cargo is safe. In the fiscal year to March 31, 2026 (FY2026), revenue rose 22.4% to $443.8 million and the company posted its first full-year operating profit since combining with South Africa's MiX Telematics in April 2024 and buying Canada's Fleet Complete in October 2024: $19.6 million, against a $25.9 million operating loss a year earlier. Most of the revenue jump came from owning Fleet Complete for a full twelve months instead of six. The bigger change is underneath: one-off deal and restructuring costs shrank, and subscription services grew to 81.1% of sales. The company still lost $20.6 million after interest and tax, and it still spent more cash than it generated over the full year.
At a glance
$443.8 million revenue, up 22.4% — about $55.8 million of the $81.3 million increase was Fleet Complete's extra six months of service revenue; the rest of the business grew roughly 7%.
$19.6 million operating profit vs a $25.9 million loss — the swing came mainly from $19.6 million less spent on acquisition costs and $5.2 million less on restructuring, not from a step-change in day-to-day costs.
-$9.6 million free cash flow (our calculation) — operating cash flow turned positive at $30.5 million, but $40.1 million of equipment and software spending pushed the full year below zero; the second half was positive at $4.1 million, per the company.
The numbers
Metric
FY2026 (to Mar 2026)
FY2025 (to Mar 2025)
YoY change
Revenue
$443.8m
$362.5m
+22.4%
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Services revenue
$359.8m
$276.9m
+29.9%
Product (hardware) revenue
$84.0m
$85.6m
-1.9%
Services share of revenue
81.1%
76.4%
+4.7 pts
Gross margin
55.5%
53.7%
+1.8 pts
Operating income (loss)
$19.6m
$(25.9)m
swung to profit
Operating margin
4.4%
-7.1%
+11.5 pts
Net loss to common shareholders
$(20.6)m
$(51.0)m
loss narrowed 60%
EPS (basic and diluted)
$(0.15)
$(0.43)
loss narrowed $0.28
Adjusted EBITDA (non-GAAP)
$97.0m
$67.3m
+44.1%
Adjusted EBITDA margin
21.9%
18.6%
+3.3 pts
Operating cash flow
$30.5m
$(3.3)m
+$33.8m
Free cash flow (our calc.)
$(9.6)m
$(37.1)m
+$27.5m
Free cash flow here is operating cash flow minus purchases of fixed assets ($21.6 million) and capitalized software development ($18.5 million), all as reported in the 10-K. Adjusted EBITDA is the company's own measure of earnings before interest, tax, depreciation and amortization, with further items stripped out (listed below).
Takeaway: FY2026 is the first year Powerfleet's acquisition-built business earned an operating profit, but that $19.6 million doesn't cover the $27.5 million interest bill on roughly $280 million of debt — so the equity story now rests on delivering the $30–35 million of free cash flow management has guided for FY2027, after a year in which free cash flow was still negative.
Where the growth came from
Powerfleet reports as a single business segment, so the 10-K gives revenue only by type (hardware vs services) and by region.
Services — mainly recurring subscriptions, which the filing says are generally non-cancellable contracts of one to five years — rose $82.9 million to $359.8 million. The 10-K attributes $55.8 million of that to Fleet Complete, which in FY2025 only counted from October 1, 2024. The rest it puts down to "underlying organic growth initiatives across the combined business, partially offset by the continued strategic de-emphasis of certain non-core lines of business." Stripping out the $55.8 million leaves about $25.5 million of growth, roughly 7% on last year's base. That figure still includes currency moves and two months of RTS Solutions Africa (bought February 1, 2026; about $4.1 million of annual revenue on a full-year basis), neither of which the filing separates out.
Hardware slipped 1.9% to $84.0 million. Management cites "the continued transition toward bundled service offerings" (selling the device as part of a subscription rather than as a one-off sale) and higher US tariffs. Hardware margins actually improved, from 27.6% to 29.6%, on a richer mix that included in-warehouse products.
By region, North America grew 31% to $159.3 million (the main home of Fleet Complete), Africa 12% to $109.7 million, Australia 39% to $43.0 million, Europe and Middle East 18% to $51.1 million and Israel 18% to $58.4 million.
The earnings release (June 15, 2026) adds context the 10-K doesn't: fourth-quarter revenue rose 11% to $114.5 million with services up 14% to $92.9 million — a quarter whose year-ago figure already included Fleet Complete, so this is closer to a like-for-like growth rate. The company says it has nearly three million subscribers across 50,000 customers. It does not disclose annual recurring revenue (ARR) in the 10-K.
Integration: where the cost savings showed up
Gross margin — revenue left after the direct cost of devices and of running the service — rose to 55.5% from 53.7%, because higher-margin services became a bigger share of sales; the services margin itself was flat at 61.6% vs 61.7%. That flat services margin carries a $22.8 million charge (vs $14.8 million) for amortizing the customer relationships and technology Powerfleet paid for in its acquisitions, a non-cash accounting cost.
Selling, general and administrative (SG&A) costs rose only 2.0% to $208.5 million despite a full year of Fleet Complete. The reason is the drop in deal-related items inside SG&A:
Item inside SG&A
FY2026
FY2025
Acquisition-related expenses
$1.7m
$21.3m
Integration-related costs
$3.9m
$4.9m
Restructuring charges
$4.9m
$10.1m
Accelerated stock-based compensation
—
$4.7m
Those four lines fell by about $30.5 million combined, which is essentially the whole improvement in net loss. The release says Powerfleet achieved more than $18 million of cost savings in FY2026 and $34 million in total over two years from combining the businesses.
What the headline numbers hide
The adjusted-to-GAAP gap is wide. Adjusted EBITDA of $97.0 million versus a net loss of $20.6 million. The bridge: $60.3 million of depreciation and amortization, $26.7 million net interest, $8.7 million tax, $7.5 million stock-based pay, $4.9 million restructuring, $3.9 million integration, $3.9 million currency losses, $1.7 million acquisition costs, and smaller items. Restructuring and integration charges have appeared in both years, so treating them as one-offs is generous.
Cash conversion is improving but still incomplete. Operating cash flow of $30.5 million compares with adjusted EBITDA of $97.0 million — about 31 cents of cash per dollar of the adjusted profit figure, before any capital spending. After $40.1 million of capital spending and capitalized software, the year's free cash flow was about -$9.6 million. The release splits that into -$13.7 million in the first half and +$4.1 million in the second.
Bad debts nearly doubled. The provision for customers who won't pay rose to $16.8 million from $9.4 million (3.8% of revenue vs 2.6%), the allowance on the balance sheet more than doubled to $9.2 million, and net receivables grew 19.3% to $93.8 million while fourth-quarter revenue grew 11%. The filing doesn't explain the increase; it's the line to watch for collection problems, particularly in emerging-market customers.
Tax despite a loss. Powerfleet booked $8.7 million of income tax on an $11.3 million pre-tax loss — consistent with profits being taxed in some countries while losses elsewhere generate no offsetting credit, a common pattern for a business stitched together across the US, South Africa, Israel and Canada.
Debt costs outrun operating profit. Interest expense rose to $27.5 million from $20.3 million (it includes $3.9 million of currency losses on debt). Net debt was $239.2 million at year end; the company's own net debt to adjusted EBITDA ratio improved to 2.47x from 3.39x. $50.4 million of debt is due within a year, much of it revolving and on-demand bank lines in South Africa and Israel that need to keep being rolled over.
Currency likely flattered the reported figures. The 10-K doesn't quantify currency effects on revenue, but the balance sheet's accumulated currency-translation line swung by $38.5 million in Powerfleet's favour over the year, which points to the rand and other currencies strengthening against the dollar on balance — something that would also lift reported Africa and Israel revenue.
No buyback boost. Weighted shares rose to 133.8 million from 119.9 million (the Fleet Complete share placement), so per-share figures improved despite dilution, not because of buybacks.
Goodwill check. A falling share price in the March quarter triggered an extra goodwill test; no impairment was booked, but goodwill of $412.0 million is most of the $475.5 million of shareholders' equity.
Outlook
Management's FY2027 guidance (year to March 2027), from the June 15 release:
Metric
FY2027 guidance
FY2026 actual
Revenue
$485m–$490m (~10% growth at midpoint)
$443.8m
Services revenue
more than $400m
$359.8m
Net income
$4m–$8m
$(20.6)m net loss
Adjusted EBITDA
$122m–$125m (~25% margin)
$97.0m
Free cash flow
$30m–$35m
about $(9.6)m
The main new driver is a five-year contract with South Africa's National Treasury to deploy Powerfleet's safety products, which the company expects to be worth $100–120 million in total, starting in the second quarter and ramping over 18 months. Management also expects first-half FY2027 spending on automation and AI projects, with savings arriving in the second half.
Our read: the guidance asks for a sharp turn in cash generation — from roughly -$10 million to +$30 million or more — in a year when Fleet Complete no longer adds acquisition-driven growth, so the ~10% revenue target is mostly organic (RTS adds only about $4 million a year), above the roughly 7% the existing business managed in FY2026. Two things decide whether it lands: whether the Treasury contract starts on schedule, and whether rising bad debts stop eating into the cash that adjusted EBITDA implies. Results for the June 2026 quarter (Q1 FY2027) were filed in August and are the first check against this plan.