What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-11 compared with 2025-02-10 · 87 added, 176 removed, 143 unchanged (65% of the section changed)

1 unchanged sentence

The following discussion and analysis of the consolidated financial condition and results of operations of Powerfleet, Inc.

and its subsidiaries (“Powerfleet,” the “Company,” “we,” “our” or “us”) should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing in Part I, Item 1 of this report and Part II, Item 7 of our Form 10-KT.

In the following discussions, most percentages and dollar amounts have been rounded to aid presentation, and, accordingly, all amounts are approximations.

and its subsidiaries (“Powerfleet,” the “Company,” “we,” “our” or “us”) should be read in conjunction with the condensed consolidated financial statements and related notes thereto appearing in Part I, Item 1 of this report and Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (the “Form 10-K”).

Many of the amounts and percentages in this section have been rounded for convenience of presentation, but actual recorded amounts have been used in computations.

Accordingly, some information may appear not to be computed accurately.

Cautionary Note Regarding Forward-Looking Statements

4 unchanged sentences

We believe there is a reasonable basis for its expectations and beliefs, but there can be no assurance that we will realize our expectations or that our beliefs will prove to be correct.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this report.

There are risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this report.

Important factors that could cause our actual results to differ materially from those expressed as forward-looking statements herein include, but are not limited, to:

the ability to recognize the anticipated benefit of the MiX Combination and the FC Acquisition;

the possibility that we may not be able to integrate successfully the businesses, operations and employees of MiX Telematics and Fleet Complete;

the ability of our supply chain to deliver certain key components;

changes in technology or products, which may be more difficult or costly, or less effective, than anticipated;

our ability to secure our information technology systems against breaches;

the effects of competition from a wide variety of local, regional, national and other providers of wireless solutions;

our ability to navigate the international political, economic and geographic landscape;

future economic and business conditions, including the conflict between Israel and Hamas;

the failure of the markets for our products to continue to develop;

our inability to adequately protect our intellectual property;

changes in laws and regulations or changes in generally accepted accounting policies, rules and practices;

and other risks detailed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), including our Transition Report on Form 10-KT for the period ended March 31, 2024 (the “Form 10-KT”).

the ability to realize all of the anticipated benefits of the MiX Combination and the FC Acquisition, and the potential challenges associated with the ongoing integration of the businesses;

global economic conditions as well as exposure to political, trade and geographic risks, including tariffs and the conflict in the Middle East;

disruptions or limitations in our supply chain, particularly with respect to key components;

technological changes or product developments that may be more complex, costly, or less effective than expected;

cybersecurity risks and our ability to protect our information technology systems from breaches;

competitive pressures from a broad range of local, regional, national and other providers of wireless solutions;

our ability to effectively navigate the international political, economic and geographic landscape;

risks related to the protection and enforcement of our intellectual property rights;

changes in applicable laws and regulations or changes in generally accepted accounting policies, rules and practices;

and other risks and uncertainties disclosed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), including our Form 10-K.

There may be other factors of which we are currently unaware or which we currently deem immaterial that may cause our actual results to differ materially from the forward-looking statements.

1 unchanged sentence

Except as may be required by law, we undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances occurring after the date they were made or to reflect the occurrence of unanticipated events, or otherwise.

We are a global leader of Artificial Intelligence-of-Things (“AIoT”) solutions providing valuable business intelligence for managing high-value enterprise and mid-market assets that improve operational efficiencies.

Powerfleet is a global provider of Internet-of-Things (“IoT”) solutions providing valuable business intelligence for managing high-value enterprise assets that improve operational efficiencies.

We are headquartered in Woodcliff Lake, New Jersey, with offices located around the globe.

Our Unity data highway and AIoT ecosystem is the centerpiece of our strategy.

Unity has the capability to ingest data from multiple data sources, harmonizing and transforming the dataset, and delivering simply understood insights through a unified Software-as-a-Service (“SaaS”) platform.

Unity provides mission-critical solutions from warehouse to trailer to vehicle, allowing customers to consolidate suppliers and gain end-to-end in a single pane of glass.

Unity enables customers to consume their data in multiple ways, from data-powered applications to unified operations integrations, which provide the ability to improve performance of the asset, the individual in charge of the asset and the business process, continuously improving our customers’ business performance.

Within the Unity ecosystem, our Powerfleet for Warehouse AIoT solutions are designed to provide on-premise or in-facility asset and operator management, monitoring, and visibility for warehouse and factory trucks such as forklifts, man-lifts, tuggers and ground support equipment at airports.

These solutions utilize a variety of communications capabilities such as Bluetooth®, WiFi, and proprietary radio frequency.

Additionally, within the Unity ecosystem, our Powerfleet for On-Road AIoT solutions are designed to provide bumper-to-bumper AIoT asset management, monitoring, and visibility for over-the-road based assets such as heavy trucks, dry-van trailers, refrigerated trailers and shipping containers and their associated cargo.

These AIoT solutions provide mobile-asset tracking and condition-monitoring solutions to meet the transportation market’s desire for greater visibility, safety, security, and productivity throughout global supply chains.

Our On-Road AIoT solutions extend to all mobile assets, whether it is a rental car, a private fleet, or automotive original equipment manufacturer (“OEM”) partners.

We achieve this by providing critical information that can be used to increase revenues, reduce costs, enhance safety and sustainability, deliver compliance, and improve customer service.

Our patented technologies are proven solutions for organizations that must monitor and analyze their assets to improve safety, increase efficiency, reduce costs, and drive profitability.

Our offerings are sold under the global brands Powerfleet, Pointer, Cellocator, MiX by Powerfleet and Fleet Complete.

We have an established history of Internet-of-Things (“IOT”) device development, AI and data science expertise, and innovation creating devices that can withstand harsh and rugged environments.

With 51 patents and patent applications and over 25 years’ experience, we believe we are well positioned to evolve our offerings for even greater value to customers through our cloud-based applications for unified operations.

We deliver advanced data solutions that connect mobile assets to increase visibility, operational efficiency and profitability.

Across our spectrum of vertical markets, we differentiate ourselves by developing mobility platforms that collect data from unique sensors.

Because we are data source and OEM agnostic, we help organizations view and manage their mixed assets homogeneously.

All of our solutions are paired with SaaS and analytics platforms to provide an even deeper level of insights and understanding of how assets are utilized and how drivers and operators operate those assets.

These insights include a full set of key performance indicators to drive operational and strategic decisions.

Our customers typically get a return on their investment in less than 12 months from deployment.

Our enterprise software applications have AI and machine learning capabilities and are built to integrate with our customers’ management systems to provide a single, integrated view of asset and operator activity across multiple locations while providing real-time enterprise-wide benchmarks and peer-industry comparisons.

We look for analytics, as well as the data contained therein, to differentiate us from our competitors, adding significant value to customers’ business operations, and helping to contribute to their bottom line.

Our solutions also feature open application programming interfaces for additional integrations and development to boost other enterprise management systems and third-party applications.

We market and sell our Unity ecosystem and our connected AIoT data solutions to a wide range of customers in the commercial and government sectors.

Our customers operate in diverse markets, such as manufacturing, automotive manufacturing, wholesale and retail, food and grocery distribution, pharmaceutical and medical distribution, construction, mining, utilities, aerospace, vehicle rental, as well as logistics, shipping, transportation, energy and field services.

Traditionally, these businesses have relied on multiple vendors, as well as manual, often paper-based, processes or on-premise legacy software to operate their high-value assets, manage workforce resources, and distributed sites;

and face environmental, safety, and other regulatory requirements.

In today’s landscape, it is crucial for these businesses to invest in solutions that enable easy analysis and sharing of real-time information, increasingly consolidating their suppliers.

On April 2, 2024, we acquired MiX Telematics, and on October 1, 2024, we acquired Fleet Complete.

Since the closing of these acquisitions, we have made significant progress in integrating the businesses into our operations, with alignment of core functions and early realization of operational synergies.

Recent Developments

On April 2, 2024, we consummated the MiX Combination, pursuant to which MiX Telematics became our indirect, wholly owned subsidiary.

MiX Telematics is a leading global provider of fleet and mobile asset management solutions delivered as SaaS to over one million global subscribers spanning more than 120 countries.

MiX Telematics’ products and services provide enterprise fleets, small fleets, and consumers with efficiency, safety, compliance, and security solutions.

The acquisition is expected to provide us with operational synergies and access to a broader base of customers.

The consolidated financial statements as of and for the three- and nine-month periods ended December 31, 2024 include the financial results of MiX Telematics and its subsidiaries from the closing date of the MiX Combination.

See Note 3, “Acquisition” in Part I, Item 1, “Financial Statements (Unaudited)” for additional information.

No operating results for MiX Telematics are included in the comparative period for the three- and nine-month periods ended December 31, 2023.

On May 8, 2024, our Board of Directors approved a change in our fiscal year end from December 31 to March 31 in order to better align our reporting calendar with the April 2, 2024 close of the MiX Combination and MiX Telematics’ historical March 31 fiscal year end.

This decision was already being considered by Powerfleet executives before the MiX Combination, as part of a broader finance transformation initiative, which includes shifting and outsourcing back-office functions (including central corporate accounting) from the United States to a more cost-effective solution in South Africa.

The decision was also driven by aligning the fiscal year with the close of the MiX Combination for investors and aligning the timing of audit work with the winter months in South Africa to help attract and retain accounting talent.

On October 1, 2024, we consummated the FC Acquisition, pursuant to which we acquired Fleet Complete.

Fleet Complete is a leading provider of essential fleet, asset, and mobile workforce management solutions across North America, Australia, and Europe.

A majority of Fleet Complete’s revenue is generated through strong distribution partnerships with major international telecommunications providers and market-leading original equipment manufacturer (“OEM”) partners.

The consolidated financial statements as of and for the three- and nine-month periods ended December 31, 2024 include the financial results of Fleet Complete and its subsidiaries from the closing date of the FC Acquisition.

See Note 3, “Acquisition” in Part I, Item 1, “Financial Statements (Unaudited)” for additional information.

No operating results for Fleet Complete are included in the comparative period for the three- and nine-month periods ended December 31, 2023.

Higher interest rates and inflation, fluctuations in currency values, supply chain disruptions and the conflicts between Russia and Ukraine, and between Israel and Hamas, have resulted in significant economic disruption and adversely impacted the broader global economy, including our customers and suppliers.

Higher interest rates, fluctuations in currency values, continued supply chain disruptions, changes in tariff policies and import and export restrictions, and the conflict in the Middle East have resulted in significant economic disruption and

adversely impacted the broader global economy, including our customers and suppliers.

Given the dynamic and uncertain nature of the current macroeconomic environment, we cannot reasonably estimate the impact of such developments on our financial condition, results of operations or cash flows into the foreseeable future.

The ultimate extent of the effects of these developments remain highly uncertain, and such effects could exist for an extended period of time.

While we do not currently believe that inflation and recently pronounced tariffs have had a material impact on our condensed consolidated financial statements, the ultimate extent of the effects of these developments remain highly uncertain, and such effects could exist for an extended period of time.

Risks to Our Business

13 unchanged sentences

• develop and commercialize new products and technologies.

We have incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of $193.3 million as of December 31, 2024.

Management believes our cash and cash equivalents and restricted cash of $38.6 million as of December 31, 2024 in conjunction with the debt proceeds from our lenders, plus cash generated from the execution of our strategic plan over the next 12 months, are sufficient to fund the projected operations for at least the next 12 months from the issuance date of these condensed consolidated financial statements (February 10, 2025) and service our outstanding obligations.

Additional risks and uncertainties to which we are subject are described under the heading “Risk Factors” in Part II, Item 1A of this report and in the Form 10-KT.

Additional risks and uncertainties to which we are subject are described under the heading “Risk Factors” in our Form 10-K.

Critical Accounting Policies

For the three- and nine-month periods ended December 31, 2024, there were no significant changes to our critical accounting policies as identified in the Form 10-KT.

For the three-month period ended June 30, 2025, there were no significant changes to our critical accounting policies as identified in the Form 10-K.

Results of Operations

The following table sets forth, for the periods indicated, certain operating information expressed as a percentage of revenue:

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024

Three Months Ended June 30,

Products 24.8 % 17.0 %

12 unchanged sentences

Interest income 0.4 % 0.2 %

Interest expense (3.3) % (7.5) % (1.5) % (5.7) %

Bargain purchase - Movingdots 4.4 % — % 1.8 % — %

Interest expense, net (3.6) % (6.5) %

Other expense, net (0.8) % (1.2) %

Net loss before income taxes (28.2) % (9.5) %

Income tax benefit/(expense) 0.3 % (3.3) % (0.2) % (1.9) %

Income tax expense (1.4) % (0.3) %

Net loss before non-controlling interest (29.6) % (9.9) %

1 unchanged sentence

Net loss (29.5) % (9.9) %

Accretion of preferred stock (5.4) % — % (5.4) % — %

Preferred stock dividend 0.0% — %

Net loss attributable to common stockholders (29.5) % (9.9) %

Three Months Ended December 31, 2024 Compared to Three Months Ended December 31, 2023

Revenues increased by $71.9 million, or 208.0%, to $106.4 million in the three months ended December 31, 2024, from $34.6 million in the same period in 2023.

Revenues from products increased by $11.8 million, or 91.1%, to $24.7 million in the three months ended December 31, 2024, from $12.9 million in the same period in 2023.

The increase in product revenues was primarily due to the MiX Telematics business acquired which contributed $7.9 million , and the Fleet Complete business acquired which contributed $4.9 million i n product revenues for the three months ended December 31, 2024.

Revenues from services increased by $60.1 million, or 277.8%, to $81.7 million in the three months ended December 31, 2024 from $21.6 million in the same period in 2023.

The increase in services revenues was principally due to the MiX Telematics business acquired which contributed $35.0 million, and the Fleet Complete business acquired which contributed $24.8 million in service revenues for the three months ended December 31, 2024.

COST OF REVENUES.

Cost of revenues increased by $30.5 million, or 177.5%, to $47.6 million in the three months ended December 31, 2024, from $17.2 million for the same period in 2023.

The MiX Telematics business acquired contributed $17.3 million to cost of revenues, and the Fleet Complete business acquired contributed $9.2 million for the three months ended December 31, 2024.

The remaining increase was mainly due to the amortization of MiX Telematics and Fleet Complete acquisition-related intangibles.

Gross profit was $58.8 million in the three months ended December 31, 2024, compared to $17.4 million for the same period in 2023.

As a percentage of revenues, gross profit increased to 55.2% in the three months ended December 31, 2024 from 50.3% in the same period in 2023.

Cost of products increased by $7.1 million, or 71.1%, to $17.1 million in the three months ended December 31, 2024, from $10.0 million in the same period in 2023.

Gross profit for products was $7.6 million in the three months ended December 31, 2024, compared to $2.9 million in the same period in 2023.

As a percentage of product revenues, gross profit increased to 30.6% in the three months ended December 31, 2024 from 22.5% in the same period in 2023.

The increase in gross profit as a percentage of product revenues was principally due to a larger proportion of sales being driven by higher margin product lines including in-warehouse solutions.

Cost of services increased by $23.4 million, or 326.1%, to $30.5 million in the three months ended December 31, 2024, from $7.2 million in the same period in 2023.

The MiX Telematics business acquired contributed $11.7 million, the Fleet Complete business acquired contributed $5.6 million, and the amortization of MiX Telematics and Fleet Complete acquisition-related intangibles contributed $5.4 million to cost of services for the three months ended December 31, 2024.

Gross profit for services was $51.2 million in the three months ended December 31, 2024, compared to $14.5 million in the same period in 2023.

As a percentage of service revenues, gross profit decreased to 62.7% in the three months ended December 31, 2024 from 66.9% in the same period in 2023, as a result of the commencement of amortization of MiX Telematics and Fleet Complete acquisition-related intangibles.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

Selling, general and administrative (“SG&A”) expenses increased by $36.1 million, or 186.5%, to $55.4 million in the three months ended December 31, 2024, compared to $19.3 million in the same period in 2023, principally due to the MiX Telematics business acquired which contributed $19.8 million, and the Fleet Complete business acquired which contributed $30.7 million, $15.6 million of which was one-time costs, of SG&A expenses for the three months ended December 31, 2024.

SG&A expenses included $5.3 million in acquisition-related expenses, $0.5 million in integration related expenses and $0.8 million in restructuring costs for the three months ended December 31, 2024.

As a percentage of revenues, SG&A expenses, excluding $6.7 in a cquisition-related expenses costs and restructuring costs, decreased to 45.8% in the three months ended December 31, 2024, from 56.0% in the same period in 2023.

RESEARCH AND DEVELOPMENT EXPENSES.

Research and development (“R&D”) expenses increased by $2.6 million, or 129.9%, to $4.6 million in the three months ended December 31, 2024, compared to $2.0 million in the same period in 2023, principally due to $1.4 million incurred by the MiX Telematics business post-transaction, and $1.2 million incurred by the Fleet Complete business post-transaction.

As a percentage of revenues, R&D expenses decreased to 4.3% in the three months ended December 31, 2024, from 5.8% in the same period in 2023.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.

Net loss attributable to common stockholders was $14.3 million, or $(0.11) per basic and diluted share, for the three months ended December 31, 2024, as compared to net loss of $6.5 million, or $(0.18) per basic and diluted share, for the same period in 2023.

The net loss was primarily the result of $5.3 million in a cquisition-related expenses , $0.5 million in integration-related costs , $0.8 million in restructuring costs, $5.4 million

from the commencement of amortization of MiX Telematics and Fleet Complete acquisition-related intangibles, and $1.7 million loss from the derivative mark-to-market adjustment .

Nine Months Ended December 31, 2024 Compared to Nine Months Ended December 31, 2023

Revenues increased by $158.0 million, or 156.6%, to $258.9 million in the nine months ended December 31, 2024, from $100.9 million in the same period in 2023.

Revenues from products increased by $26.5 million, or 71.1%, to $63.7 million in the nine months ended December 31, 2024, from $37.2 million in the same period in 2023.

The increase in product revenues was primarily due to the MiX Telematics business acquired which contributed $25.6 million, and the Fleet Complete business acquired which contributed $4.9 million in product revenues for the nine months ended December 31, 2024, offset by lower demand from logistics customers in North America.

Revenues from services increased by $131.5 million, or 206.6%, to $195.2 million in the nine months ended December 31, 2024, from $63.7 million in the same period in 2023.

The increase in services revenues was principally due to the MiX Telematics business acquired which contributed $104.8 million, and the Fleet Complete business acquired which contributed $24.8 million in service revenues for the nine months ended December 31, 2024.

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Revenues increased by $28.7 million, or 38.0%, to $104.1 million in the three months ended June 30, 2025, from $75.4 million in the same period in 2024.

Revenues from products decreased by $1.1 million, or 5.8%, to $17.7 million in the three months ended June 30, 2025, from $18.7 million in the same period in 2024.

The decrease in product revenues was primarily due to lower product revenue of $2.5 million in North America and $1.1 million in Europe, partially offset by the Fleet Complete business acquired which contributed $3.2 million in product revenues for the three months ended June 30, 2025.

Revenues from services increased by $29.8 million, or 52.5%, to $86.5 million in the three months ended June 30, 2025, from $56.7 million in the same period in 2024.

The increase in services revenues was principally due to underlying growth initiatives, offset in part by proactive measures to de-emphasize non-core lines of business, and the acquisition of Fleet Complete which contributed $26.2 million in services revenues.

COST OF REVENUES.

Cost of revenues increased by $68.7 million, or 136.4%, to $119.1 million in the nine months ended December 31, 2024, from $50.4 million for the same period in 2023.

The MiX Telematics acquired business contributed $54.2 million, and the Fleet Complete business acquired contributed $9.2 million to cost of revenues for the nine months ended December 31, 2024.

Gross profit was $139.8 million in the nine months ended December 31, 2024, compared to $50.5 million for the same period in 2023.

As a percentage of revenues, gross profit increased to 54.0% in the nine months ended December 31, 2024 from 50.1% in the same period in 2023.

Cost of products increased by $16.4 million, or 59.9%, to $43.8 million in the nine months ended December 31, 2024, from $27.4 million in the same period in 2023.

Gross profit for products was $19.9 million in the nine months ended December 31, 2024, compared to $9.8 million in the same period in 2023.

As a percentage of product revenues, gross profit increased to 31.2% in the nine months ended December 31, 2024 from 26.4% in the same period in 2023.

The increase in gross profit as a percentage of product revenues was principally due to a larger proportion of sales being driven by higher margin product lines including in-warehouse solutions.

Cost of services increased by $52.3 million, or 227.7%, to $75.3 million in the nine months ended December 31, 2024, from $23.0 million in the same period in 2023.

The MiX Telematics acquired business contributed $36.6 million, the Fleet Complete business acquired contributed $5.6 million, and the amortization of MiX Telematics and Fleet Complete acquisition-related intangibles contributed $9.6 million to cost of services for the nine months ended December 31, 2024.

Gross profit for services was $119.9 million in the nine months ended December 31, 2024, compared to $40.7 million in the same period in 2023.

As a percentage of service revenues, gross profit decreased to 61.4% in the nine months ended December 31, 2024 from 63.9% in the same period in 2023.

The decrease in gross profit as a percentage of revenues was mainly due to the commencement of amortization of MiX Telematics and Fleet Complete acquisition-related intangibles.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

SG&A expenses increased by $93.2 million, or 171.6%, to $147.5 million in the nine months ended December 31, 2024, compared to $54.3 million in the same period in 2023, principally due to the MiX Telematics business acquired which contributed $63.8 million, $8.6 million of which was one-time costs , and the Fleet Complete business acquired which contributed $30.7 million, $15.6 million of which was one-time costs, of SG&A expenses, $20.9 million in acquisition-related expenses, $4.7 million in accelerated stock-based compensation costs and $3.1 million in restructuring costs for the nine months ended December 31, 2024.

As a percentage of revenues, SG&A expenses, excluding $30.9 million in acquisition-related, restructuring and accelerated stock-based compensation costs, decreased to 45.0% in the nine months ended December 31, 2024, from 53.8% in the same period in 2023.

RESEARCH AND DEVELOPMENT EXPENSES.

R&D expenses increased by $4.5 million, or 67.6%, to $11.2 million in the nine months ended December 31, 2024, compared to $6.7 million in the same period in 2023, principally due to $4.3 million incurred by the MiX Telematics, and $1.2 million incurred by the Fleet Complete business post-transaction.

As a percentage of revenues, R&D expenses decreased to 4.3% in the nine months ended December 31, 2024, from 6.6% in the same period in 2023.

Cost of revenues increased by $11.9 million, or 33.1%, to $47.6 million in the three months ended June 30, 2025, from $35.8 million for the same period in 2024.

The Fleet Complete business acquired contributed $12.1 million to cost of revenues for the three months ended June 30, 2025.

Gross profit was $56.5 million in the three months ended June 30, 2025, compared to $39.6 million for the same period in 2024.

As a percentage of revenues, gross profit increased to 54.2% in the three months ended June 30, 2025 from 52.6% in the same period in 2024.

Cost of products increased by $0.5 million, or 3.7%, to $13.2 million in the three months ended June 30, 2025, from $12.8 million in the same period in 2024.

Gross profit for products was $4.4 million in the three months ended June 30, 2025, compared to $6.0 million in the same period in 2024.

As a percentage of product revenues, gross profit decreased to 25.1% in the three months ended June 30, 2025 from 32.0% in the same period in 2024.

Gross profit as a percentage of product revenues was negatively impacted by tariffs in the US which increased underlying costs and delayed demand for high margin in-warehouse solutions.

Cost of services increased by $11.4 million, or 49.4%, to $34.4 million in the three months ended June 30, 2025, from $23.0 million in the same period in 2024.

The acquisition of Fleet Complete and the amortization of acquisition intangibles for the MiX Telematics and Fleet Complete transactions contributed $6.6 million and $2.8 million, respectively, to cost of services for the three months ended June 30, 2025.

Gross profit for services was $52.1 million in the three months ended June 30, 2025, compared to $33.7 million in the same period in 2024.

As a percentage of services revenues, gross profit increased to 60.2% in the three months ended June 30, 2025 from 59.4% in the same period in 2024.

SELLING, GENERAL AND ADMINISTRATIVE (“SG&A”) EXPENSES.

SG&A expenses decreased by $1.1 million, or 2.0%, to $53.7 million in the three months ended June 30, 2025, compared to $54.8 million in the same period in 2024, principally due to Fleet Complete business acquired which contributed $15.8 million and higher investments in go to market, offset in part by a decrease in acquisition-related expenses of $13.4 million, a decrease in accelerated stock-based compensation costs of $4.7 million and cost saving synergies realized for the three months ended June 30, 2025.

As a percentage of revenues, SG&A expenses decreased to 51,5% in the three months ended June 30, 2025, from 72.6% in the same period in 2024.

As a percentage of revenues, SG&A, excluding $4.2 million in acquisition-related, integration-related and restructuring-related expenses, increased to 47.5% in the three months ended June 30, 2025, from 45.6% in the same period in 2024.

RESEARCH AND DEVELOPMENT (“R&D”) EXPENSES.

R&D expenses increased by $1.8 million, or 56.6%, to $4.9 million in the three months ended June 30, 2025, compared to $3.1 million in the same period in 2024, principally due to $1.4 million incurred by Fleet Complete.

As a percentage of revenues, R&D expenses increased to 4.7% in the three months ended June 30, 2025, from 4.1% in the same period in 2024.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.

Net loss attributable to common stockholders was $38.6 million, or $(0.33) per basic and diluted share, for the nine months ended December 31, 2024, as compared to net loss of

$19.2 million, or $(0.54) per basic and diluted share, for the same period in 2023.

The net loss was primarily the result of $20.9 million in a cquisition-related expenses , $2.3 million in integration-related costs , $3.1 million in restructuring costs, $4.7 million in accelerated stock-based compensation costs and $9.6 million from the commencement of amortization of MiX Telematics and Fleet Complete acquisition-related intangibles, partially offset by $0.5 million gain in other income from the derivative mark-to-market adjustment .

Net loss attributable to common stockholders was $10.2 million, or $(0.08) per basic and diluted share, for the three months ended June 30, 2025, as compared to net loss of $22.3 million, or $(0.21) per basic and diluted share, for the same period in 2024.

The net loss was primarily the result of $5.8 million from the amortization of MiX Telematics and Fleet Complete acquisition-related intangibles;

and $4.2 million in acquisition, integration and restructuring related expenses.

Non-GAAP Financial Information

3 unchanged sentences

An explanation of the relevance of the non-GAAP measure, a reconciliation of the non-GAAP measure to the most directly comparable measure calculated and presented in accordance with GAAP and a discussion of its limitations is set out below.

We do not regard this non-GAAP measures as a substitute for, or superior to, the equivalent measure calculated and presented in accordance with GAAP or that calculated using financial measure that is calculated in accordance with GAAP.

We do not regard this non-GAAP measure as a substitute for, or superior to, the equivalent measure calculated and presented in accordance with GAAP or that calculated using financial measure that is calculated in accordance with GAAP.

Adjusted EBITDA

We define adjusted EBITDA as net loss attributable to common stockholders before non-controlling interest, preferred stock dividend and accretion, interest expense (net), income tax benefit/expense, depreciation and amortization, stock-based compensation, foreign currency losses/gains, restructuring-related expenses, gain on bargain purchase (Movingdots), derivative mark-to market adjustment, recognition of pre-October 1, 2024 contract assets (Fleet Complete), acquisition-related expenses and integration-related expenses.

We define adjusted EBITDA as net loss attributable to common stockholders before non-controlling interest, preferred stock dividend, interest expense (net), other expense (net), income tax expense, depreciation and amortization, stock-based compensation, foreign currency losses, restructuring-related expenses, derivative mark-to market adjustment, recognition of pre-October 1, 2024 contract assets (Fleet Complete), acquisition-related expenses and integration-related expenses.

We have included adjusted EBITDA in this Quarterly Report on Form 10-Q because it is a key measure that our management and board of directors use to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short and long-term operational plans.

4 unchanged sentences

Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA

Three Months Ended December 31, Nine Months Ended December 31,

2024 2023 2024

Three Months Ended June 30,

(In thousands)

1 unchanged sentence

Non-controlling interest 13 —

Preferred stock dividend and accretion 3,007 — 8,870 25

Preferred stock dividend

Interest expense, net 2,916 6,590

Income tax (benefit)/expense

(92) 3,513 197 4,821

Other expense, net

Income tax expense

Depreciation and amortization 10,335 16,031

Stock-based compensation 5,929 1,853

Foreign currency losses/(gains)

152 543 (259) 1,288

Foreign currency losses

Restructuring-related expenses 1,198 2,442

Gain on bargain purchase - Movingdots (1,517) — (1,800) —

Derivative mark-to-market adjustment — 104

Recognition of pre-October 1, 2024 contract assets (Fleet Complete)

— 2,041 — 2,041

Acquisition-related expenses 14,494 1,130

Integration-related expenses

— 520 — 2,259

Adjusted EBITDA $ 13,735 $ 21,640

6 unchanged sentences

• other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure;

• certain of the adjustments (such as restructuring costs) made in calculating adjusted EBITDA are those that management believes are not representative of our underlying operations and, therefore, are subjective in nature.

• certain of the adjustments (such as restructuring-related expenses and integration-related expenses) made in calculating adjusted EBITDA are those that management believes are not representative of our underlying operations and, therefore, are subjective in nature.

Because of these limitations, adjusted EBITDA should be considered alongside other financial performance measures, including loss from operations, net loss and our other results.

8 unchanged sentences

The Hapoalim Term Facilities will mature on March 18, 2029.

The Hapoalim Revolving Facilities are available for successive one-month periods until and including March 18, 2025, unless the Borrowers deliver prior notice to Hapoalim of their request not to renew the Hapoalim Revolving Facilities.

The Hapoalim Revolving Facilities are available for successive one-month periods until and including February 27, 2026, unless the Borrowers deliver prior notice to Hapoalim of their request not to renew the Hapoalim Revolving Facilities.

On March 18, 2024, Powerfleet Israel drew down $30 million in cash under the Hapoalim Term Facilities and used the proceeds to prepay approximately $11.2 million, representing the remaining outstanding balance, of the term loans extended to Powerfleet Israel under the Prior Credit Agreement and distributed the remaining proceeds to us.

The proceeds of the Hapoalim Revolving Facilities may be used by Pointer for general corporate purposes, including working capital and capital expenditures.

As of December 31, 2024, Powerfleet Israel had utilized approximately $14.2 million under the Hapoalim Revolving Facilities.

On December 30, 2024, the Borrowers entered into an amendment (the “Amendment”) to the A&R Credit Agreement.

The Amendment increases the principal amount available under Hapoalim Facility D from $10 million to $20 million and provides that the total principal amount of Hapoalim Facility D may be distributed to us or any of our subsidiaries by no later than December 31, 2025, subject to certain terms and conditions of the A&R Credit Agreement.

As of June 30, 2025, Powerfleet Israel had utilized approximately $15.4 million under the Hapoalim Revolving Facilities.

The Hapoalim Credit Facilities continue to be secured by first ranking and exclusive fixed and floating charges, including by Powerfleet Israel over the entire share capital of Pointer and by Pointer over all of its assets, as well as cross guarantees between Powerfleet Israel and Pointer, except that the Borrowers’ holdings in Pointer do Brasil Comercial Ltda., Pointer Argentina and Pointer South Africa are excluded from such floating charges.

1 unchanged sentence

The interest rates for borrowings under Hapoalim Facility A and Hapoalim Facility B are Hapoalim’s prime rate + 2.2% per annum, and Hapoalim’s prime rate + 2.3% per annum, respectively.

Hapoalim’s prime rate at December 31, 2024 was 6%.

Hapoalim’s prime rate at June 30, 2025 was 6%.

Interest is payable quarterly on March 25, June 25, September 25, and December 25 over five years.

8 unchanged sentences

dollars, with respect to Hapoalim Facility D, in each case, equal to 0.5% per annum on undrawn and uncancelled amounts of the revolving facilities during the period commencing on March 18, 2024 and ending on the last day of the applicable availability period of such revolving facilities.

Borrowers have also paid certain upfront fees and other fees and expenses to Hapoalim in connection with the A&R Credit Agreement.

On December 30, 2024, the Borrowers entered into an amendment (the “Amendment”) to the A&R Credit Agreement.

The Borrowers have also paid certain upfront fees and other fees and expenses to Hapoalim in connection with the A&R Credit Agreement.

On March 7, 2024, we entered into the Facilities Agreement with RMB, pursuant to which RMB agreed to provide us with the RMB Facilities in an aggregate principal amount of $85 million, composed of RMB Facility A and RMB Facility B, each having a principal amount of $42.5 million.

8 unchanged sentences

Interest rate for the RMB General Facility is calculated at South African prime rate minus 0.75% per annum and will be calculated on the daily outstanding balance, compounded monthly in arrears and repaid quarterly.

As of December 31, 2024, $15,944 of the RMB General Facility was utilized.

As of June 30, 2025, $16,579 of the RMB General Facility was utilized.

During April 2025, the RMB General Facility repayment terms were extended on the same terms and conditions of the Facilities Agreement.

On September 27, 2024, we entered into the Facility Agreement with RMB, pursuant to which RMB agreed to provide us with the New RMB Term Facility in an aggregate principal amount of $125 million.

2 unchanged sentences

The principal is repayable in one installment on October 31, 2029.

As a result of global supply chain disruptions, the conflicts between Russia and Ukraine and between Israel and Hamas, rising interest rates, fluctuations in currency values, inflation and other cost increases, there remains uncertainty surrounding the potential impact of such events on our results of operations and cash flows.

As a result of global supply chain disruptions, the conflicts in the Middle East, fluctuations in currency values, inflation and other cost increases, there remains uncertainty surrounding the potential impact of such events on our results of operations and cash flows.

We are proactively taking steps to increase the available cash on hand including, but not limited to, targeted reductions in discretionary operating expenses and capital expenditures and borrowing under our revolving credit facility.

Capital Requirements

As of December 31, 2024, we had cash and cash equivalents (including restricted cash) of $38.6 million and working capital of $30.5 million compared to cash and cash equivalents (including restricted cash) of $109.7 million and working capital of $126.2 million as of March 31, 2024.

As of June 30, 2025, we had cash and cash equivalents (including restricted cash) of $35.6 million and working capital of $11.2 million compared to cash and cash equivalents (including restricted cash) of $48.8 million and working capital of $18.1 million as of March 31, 2025.

Our primary sources of cash are cash flows from sales of products and services, our holdings of cash, cash equivalents and proceeds from the sale of our capital stock and borrowings under our credit facilities.

The FC Acquisition is a source of positive cash flow, together with the MiX Combination completed on April 2, 2024.

The FC Acquisition and MiX Combination are also expected to be a source of positive cash flow.

To date, we have not generated sufficient cash flow solely from operating activities to fund our operations.

2 unchanged sentences

Operating Activities

During the nine months ended December 31, 2024, net cash used in operating activities was $16.9 million, compared to net cash provided by operating activities of $2.6 million for the same period in 2023.

The net cash used in operating activities for the nine months ended December 31, 2024 primarily included non-cash charges of $8.4 million for stock-based compensation, $33.0 million for depreciation and amortization expense, $7.2 million for bad debts expense, $0.9 million for shares issued for transaction bonuses related to the MiX Combination, $1.6 million for inventory reserve, $0.7 million for other non-cash items, $4.3 million for ROU asset amortization, partially offset by $0.5 million for derivative mark-to-market adjustment .

During the three months ended June 30, 2025, net cash provided by operating activities was $4.7 million, compared to net cash used in operating activities of $7.6 million for the same p eriod in 2024.

The net cash provided by operating activities for the three months ended June 30, 2025 primarily included $16.0 million for depreciation and amortization expense, $1.9 million for bad debts expense, non-cash charges of $1.9 million for stock-based compensation, $1.0 million for ROU asset amortization, $0.1 million for derivative mark-to-market adjustment p artially offset by $0.5 million for other non-cash items .

Changes in operating assets and liabilities included:

• an increase in inventory, net of reserve of $4.7 million inclusive of inventory build to negate the impact of tariffs;

• an increase in accounts receivables of $2.4 million;

• a decrease in accounts payable of $15.7 million;

• an increase in deferred costs of $5.1 million;

• a decrease in deferred costs of $2.7 million;

• a decrease in lease liabilities of $0.9 million;

• a decrease in net severance fund of $0.6 million;

• a decrease in prepaid expenses and other assets of $2.1 million;

• a decrease in inventory, net of reserve of $2.6 million;

• an increase in deferred revenue of $1.0 million.

• an increase in prepaid expenses and other assets of $1.3 million;

• a decrease in deferred revenue of $0.4 million;

partially offset by

• an increase in accounts payable of $9.6 million;

• an increase in accrued severance payable of $0.4 million.

Investing Activities

Net cash used in investing activities for the nine months ended December 31, 2024 was $160.5 million, compared to net cash used in investing activities of $5.3 million for the same period in 2023 .

The net cash used by investing activities was primarily due to $137.1 million in acquisitions, net of cash assumed from the MiX Combination and FC acquisition, $16.6 million for the purchase of fixed assets and $7.3 million for capitalized software development costs.

The net cash used in investing activities of $5.3 million in the same period in 2023 was primarily for the purchase of fixed assets of $2.4 million and $2.9 million for capitalized software development costs.

Net cash used in investing activities for the three months ended June 30, 2025 was $11.8 million, compared to net cash provided by investing activities of $19.6 million for the same period in 2024 .

The net cash used by investing activities was primarily due to $8.1 million for the purchase of fixed assets and $3.7 million for capitalized software development costs.

The net cash provided by investing activities of $19.6 million in the same period in 2024 was primarily due to $27.5 million in net cash assumed from the MiX Combination, partially offset by $5.6 million for the purchase of fixed assets and $2.3 million for capitalized software development costs.

Financing Activities

During the nine months ended December 31, 2024 , net cash provided by financing activities was $107.6 million, compared to $2.3 million net cash used in financing activities for the same period in 2023 .

The cash provided by financing activities was primarily due to proceeds from long-term debt of $125.0 million, less payment of debt costs of $1.4 million, $66.5 million received from the P rivate Placement related to the FC Acquisition, less costs, $11.9 million received from s hort-term bank debt, and $0.9 million proceeds from exercise of stock options, partially offset by the repayment of Series A Preferred Stock of $90.3 million following the MiX Combination, purchase of treasury stock upon vesting of restricted stock of $2.8 million, and r epayment of long-term debt of $2.1 million.

During the three months ended June 30, 2025 , net cash used in financing activities was $6.8 million, compared to $89.5 million net cash used in financing activities for the same period in 2024 .

The cash used in financing activities was primarily due to the repayment of short-term bank debt of $5.4 million, and r epayment of long-term debt of $1.3 million.

The decrease in net cash used in financing activities was primarily due to the repayment of Series A Preferred Stock of $90.3 million during the three months ended June 30, 2024.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Inflation and other macroeconomic conditions in the United States have resulted in higher costs of raw materials, freight, and labor, which has impacted our operating costs.

In addition, we operate in several emerging market economies that are particularly vulnerable to the impact of inflationary pressures that could materially and adversely impact our operations in the foreseeable future.

Business Acquisitions

In addition to focusing on our core applications, we adapt our systems to meet our customers’ broader asset management needs and seek opportunities to expand our solution offerings through strategic acquisitions.

On April 2, 2024, we consummated the MiX Combination, pursuant to which MiX Telematics became our indirect, wholly owned subsidiary.

On October 1, 2024, we consummated the FC Acquisition, pursuant to which Fleet Complete became our wholly owned subsidiary.

See Note 3, “Acquisition,” in Part I, Item 1, “Financial Statements (Unaudited)” for additional information.

Impact of Recently Issued Accounting Pronouncements

1 unchanged sentence

For a description of these new accounting standards, see Note 23 to our consolidated financial statements contained in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis