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Item 2. Management’s Discussion and Analysis

2025-11-10 compared with 2025-08-11 · 142 added, 101 removed, 129 unchanged (65% of the section changed)

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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 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.

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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 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;

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;

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Recent Developments

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.

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.

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.

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 remains highly uncertain, and such effects could exist for an extended period of time.

Risks to Our Business

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Critical Accounting Policies

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.

For the three- and six-month periods ended September 30, 2025, there were no significant changes to our critical accounting policies as identified in our 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 June 30,

Three Months Ended September 30, Six Months Ended September 30,

Products 26.3 % 20.0 % 25.6 % 18.5 %

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Total operating expenses 52.9 % 52.2 % 64.7 % 54.2 %

Loss from operations (24.2) % (2.1) %

Profit (loss) from operations 0.7 % 3.8 % (11.6) % 1.0 %

Interest income 0.2 % 0.2 % 0.3 % 0.2 %

Interest expense, net (5.2) % (6.2) % (4.4) % (6.4) %

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

Other income (expense), net 2.2 % (0.5) % 0.7 % (0.8) %

Net loss before income taxes (2.1) % (2.7) % (15.0) % (6.0) %

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Net loss attributable to common stockholders (2.5) % (3.8) % (15.9) % (6.7) %

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.

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

Revenues increased by $34.7 million, or 45.0%, to $111.7 million in the three months ended September 30, 2025, from $77.0 million in the same period in 2024.

Revenues from products increased by $2.1 million, or 10.2%, to $22.4 million in the three months ended September 30, 2025, from $20.3 million in the same period in 2024.

The increase in product revenues was primarily due to the Fleet Complete business acquired which contributed $2.1 million i n product revenues for the three months ended September 30, 2025.

Revenues from services increased by $32.6 million, or 57.4%, to $89.3 million in the three months ended September 30, 2025, from $56.7 million in the same period in 2024.

The increase in services revenues was principally due to the Fleet Complete business acquired which contributed $25.9 million in services revenues for the three months ended September 30, 2025, together with a $6.7 million increase in services revenues from existing business.

COST OF REVENUES.

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.

Cost of revenues increased by $13.4 million, or 37.6%, to $49.1 million in the three months ended September 30, 2025, from $35.7 million for the same period in 2024.

The Fleet Complete business acquired contributed $11.5 million for the three months ended September 30, 2025.

Gross profit was $62.6 million in the three months ended September 30, 2025, compared to $41.3 million for the same period in 2024.

As a percentage of revenues, gross profit increased to 56.0% in the three months ended September 30, 2025 from 53.7% in the same period in 2024.

This was primarily driven by high margin services revenue comprising 80.0% of total revenues in the three months ended September 30, 2025, compared to 73.7% for the same period in 2024.

Cost of products increased by $1.4 million, or 10.0%, to $15.3 million in the three months ended September 30, 2025, from $13.9 million in the same period in 2024.

Gross profit for products was $7.1 million in the three months ended September 30, 2025, compared to $6.4 million in the same period in 2024.

As a percentage of product revenues, gross profit increased to 31.5% in the three months ended September 30, 2025 from 31.4% in the same period in 2024.

Cost of services increased by $12.0 million, or 55.3%, to $33.8 million in the three months ended September 30, 2025, from $21.7 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 $6.7 million and $4.6 million, respectively, to cost of services for the three months ended September 30, 2025.

Gross profit for services was $55.5 million in the three months ended September 30, 2025, compared to $35.0 million in the same period in 2024.

As a percentage of services revenues, gross profit increased to 62.2% in the three months ended September 30, 2025, from 61.7% 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.

SG&A expenses increased by $16.8 million, or 45.0%, to $54.2 million in the three months ended September 30, 2025, compared to $37.3 million in the same period in 2024, principally due to the Fleet Complete business acquired which contributed $14.0 million for the three months ended September 30, 2025.

SG&A expenses included $0.1 million in acquisition-related expenses, $0.9 million in integration-related expenses and $1.1 million in restructuring-related costs for the three months ended September 30, 2025, compared to $1.4 million in acquisition-related expenses, $1.4 million in integration-related expenses and $1.1 million in restructuring-related costs in the same period in 2024 .

As a percentage of revenues, SG&A expenses remained unchanged at 48.5% in the three months ended September 30, 2025, compared to the same period in 2024.

As a percentage of revenues, SG&A expenses, excluding $2.1 million in a cquisition-related expenses, integration-related expenses and restructuring-related costs, increased to 46.6% in the three months ended September 30, 2025, from 43.4% in the same period in 2024.

The increase is primarily due to higher stock-based compensation.

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.

R&D expenses increased by $0.8 million, or 22.1%, to $4.2 million in the three months ended September 30, 2025, compared to $3.4 million in the same period in 2024, principally due to $1.1 million incurred by the Fleet Complete business post-transaction.

As a percentage of revenues, R&D expenses decreased to 3.8% in the three months ended September 30, 2025, from 4.5% in the same period in 2024.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.

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.

Net loss attributable to common stockholders was $4.3 million, or $(0.03) per basic and diluted share, for the three months ended September 30, 2025, as compared to net loss of $1.9 million, or $(0.02) per basic and diluted share, for the same period in 2024.

The net loss was primarily the result of $1.5 million foreign currency losses , $0.9 million in integration-related costs , and $1.1 million in restructuring-related costs .

Six Months Ended September 30, 2025 Compared to Six Months Ended September 30, 2024

Revenues increased by $63.4 million, or 41.6%, to $215.8 million in the six months ended September 30, 2025, from $152.4 million in the same period in 2024.

Revenues from products increased by $1.0 million, or 2.6%, to $40.0 million in the six months ended September 30, 2025, from $39.0 million in the same period in 2024.

The increase in product revenues was primarily due to the Fleet Complete business acquired which contributed $5.2 million in product revenues, partially offset by $4.2 million decline in the existing business for the six months ended September 30, 2025, which was adversely impacted by higher tariffs in the United States.

Revenues from services increased by $62.4 million, or 55.0%, to $175.8 million in the six months ended September 30, 2025, from $113.4 million in the same period in 2024.

COST OF REVENUES.

Cost of revenues increased by $25.3 million, or 35.4%, to $96.7 million in the six months ended September 30, 2025, from $71.5 million for the same period in 2024.

The Fleet Complete business acquired contributed $19.6 million to cost of revenues for the six months ended September 30, 2025.

Gross profit was $119.1 million in the six months ended September 30, 2025, compared to $81.0 million for the same period in 2024.

As a percentage of revenues, gross profit increased to 55.2% in the six months ended September 30, 2025, from 53.1% in the same period in 2024.

This was primarily driven by high margin services revenue comprising 81.5% of total revenues in the six months ended September 30, 2025, compared to 74.4% for the same period in 2024.

Cost of products increased by $1.9 million, or 7.0%, to $28.5 million in the six months ended September 30, 2025, from $26.7 million in the same period in 2024.

Gross profit for products was $11.5 million in the six months ended September 30, 2025, compared to $12.4 million in the same period in 2024.

As a percentage of product revenues, gross profit decreased to 28.7% in the six months ended September 30, 2025, from 31.6% in the same period in 2024.

Gross profit as a percentage of product revenues was negatively impacted by tariffs in the United States, which increased underlying costs and delayed demand of in-warehouse solutions in three months ended June 30, 2025.

Cost of services increased by $23.4 million, or 52.3%, to $68.2 million in the six months ended September 30, 2025, from $44.8 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 $13.3 million and $7.5 million, respectively, to cost of services for the six months ended September 30, 2025.

Gross profit for services was $107.6 million in the six months ended September 30, 2025, compared to $68.6 million in the same period in 2024.

As a percentage of services revenues, gross profit increased to 61.2% in the six months ended September 30, 2025, from 60.5% in the same period in 2024.

SG&A EXPENSES.

SG&A expenses increased by $15.7 million, or 17.0%, to $107.8 million in the six months ended September 30, 2025, compared to $92.1 million in the same period in 2024, principally due to Fleet Complete business acquired which contributed $29.8 million and higher investments in go-to-market, offset in part by a decrease in acquisition-related expenses of $14.4 million, a decrease in accelerated stock-based compensation costs of $4.7 million and cost saving synergies realized for the six months ended September 30, 2025.

As a percentage of revenues, SG&A expenses decreased to 50.0% in the six months ended September 30, 2025, from 60.4% in the same period in 2024.

R&D EXPENSES.

R&D expenses increased by $2.5 million, or 38.5%, to $9.1 million in the six months ended September 30, 2025, compared to $6.5 million in the same period in 2024, principally due to $2.7 million incurred by Fleet Complete.

As a percentage of revenues, R&D expenses decreased to 4.2% in the six months ended September 30, 2025, from 4.3% in the same period in 2024.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.

Net loss attributable to common stockholders was $14.5 million, or $(0.11) per basic and diluted share, for the six months ended September 30, 2025, as compared to net loss of $24.2 million, or $(0.23) per basic and diluted share, for the same period in 2024.

The net loss was primarily the result of $6.3 million in acquisition, integration and restructuring related expenses.

Non-GAAP Financial Information

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Adjusted EBITDA

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.

In particular, the exclusion of certain expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business.

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, acquisition-related expenses and integration-related expenses.

Upon further review of our non-GAAP financial reporting, we refined our definition of adjusted EBITDA by removing recognition of pre-October 1, 2024 contract assets (Fleet Complete).

Comparative information has been adjusted to conform with the updated presentation.

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 business and ongoing operating performance, to prepare and approve our annual budget, and to develop short and long-term operational plans.

We believe adjusted EBITDA eliminates the uneven effect of considerable amounts of non-cash depreciation and amortization, stock-based compensation and other items that might otherwise make comparisons of our ongoing business with prior periods more difficult and obscure trends in ongoing operations.

Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results.

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Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA

Three Months Ended June 30,

Three Months Ended September 30, Six Months Ended September 30,

2024 2025 (1)

(In thousands)

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Interest expense, net 3,345 6,715 6,261 13,305

Other expense, net

Other income, net

— (52) — (29)

Income tax expense

256 1,271 1,309 1,633

Depreciation and amortization 9,064 15,793 19,399 31,824

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Foreign currency losses

636 1,562 745 2,723

Restructuring-related expenses 1,069 1,137 2,267 3,579

Derivative mark-to-market adjustment (2,197) (890) (2,197) (786)

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

Acquisition-related expenses 1,406 57 15,571 1,187

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Adjusted EBITDA $ 14,477 $ 24,777 $ 28,212 $ 44,914

(1) Following the closing of the FC Acquisition, we included an EBITDA adjustment related to the recognition of pre-October 1, 2024, contract assets.

This adjustment represented recoveries, through customer billings, of the contract asset recognized at acquisition for hardware delivered by Fleet Complete prior to October 1, 2024.

This adjustment was intended to give investors a clearer view of underlying operating performance and cash generation.

The goal was to better align adjusted EBITDA with operating cash flows.

For the three and six months ended September 30, 2025, in addition to adjusted EBITDA of $24.8 million and $44.9 million, respectively, we invoiced recoveries of $1.3 million and $2.8 million, respectively.

These amounts are included in cash flow from operating activities in the condensed consolidated statement of cash flows.

Our use of adjusted EBITDA has limitations as analytical tools and should not be considered as performance measures in isolation from, or as a substitute for, analysis of our results as reported under GAAP.

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• 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.

Restructuring-related expenses include inventory write-downs.

retention, leadership transaction, and other professional costs associated with the restructuring activities.

Because of these limitations, adjusted EBITDA should be considered alongside other financial performance measures, including profit (loss) from operations, net loss attributable to common stockholders and our other results.

Liquidity and Capital Resources

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

The Implementation Agreement required, as a condition to closing of the MiX Combination, that we obtain debt and/or equity financing in an amount sufficient to provide for the redemption in full of all outstanding shares of our Series A Preferred Stock.

On April 2, 2024, concurrently with the closing of the MiX Combination, we used the net proceeds received from the RMB Facilities described above and incremental borrowing capacity as a result of the refinancing of Credit Facilities to redeem the full $90.3 million value of the outstanding shares of Series A Preferred Stock.

In addition, our wholly owned subsidiaries, Powerfleet Israel and Pointer (collectively, the “Borrowers”) were party to the Prior Credit Agreement with Hapoalim, pursuant to which Hapoalim agreed to provide Powerfleet Israel with two senior secured term loan facilities denominated in NIS in an initial aggregate principal amount of $30 million (composed of two facilities in the aggregate principal amounts of $20 million and $10 million, respectively) and a five-year revolving credit facility to Pointer denominated in NIS in an initial aggregate principal amount of $10 million.

The proceeds of the term loan facilities were used to finance a portion of the cash consideration payable in our acquisition of Pointer.

On March 18, 2024, the Borrowers entered into the A&R Credit Agreement, which refinanced the facilities under, and amended and restated, the Prior Credit Agreement.

The A&R Credit Agreement provides for (i) two senior secured term loan facilities denominated in NIS to Powerfleet Israel in an aggregate principal amount of $30 million (composed of Hapoalim Facility A and Hapoalim Facility B in the aggregate principal amounts of $20 million and $10 million, respectively) and (ii) two revolving credit facilities to Pointer in an aggregate principal amount of $20 million (composed of Hapoalim Facility C and Hapoalim Facility D in the aggregate principal amounts of $10 million and $10 million, respectively).

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

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.

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.

No other assets of our company will serve as collateral under the Hapoalim Credit Facilities.

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 June 30, 2025 was 6%.

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

The first interest period ended on June 25, 2024.

Hapoalim Facility A amortizes in quarterly installments over its five-year term and will be payable in the following aggregate annual amounts:

(i) 10% of the principal amount of Hapoalim Facility A from March 18, 2024 until March 18, 2025, (ii) 25% of the principal amount of Hapoalim Facility A from March 18, 2025 until March 18, 2026, (iii) 27.5% of the principal amount of Hapoalim Facility A from March 18, 2026 until March 18, 2027, (iv) 27.5% of the principal amount of Hapoalim Facility A from March 18, 2027 until March 18, 2028, and (v) 10% of the principal amount of Hapoalim Facility A from March 18, 2028 until March 18, 2029.

Hapoalim Facility B does not amortize and will be payable in full on March 18, 2029.

The interest rate for borrowings under Hapoalim Facility C is, with respect to NIS-denominated loans, Hapoalim’s prime rate + 2.5%, and with respect to U.S.

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

Concurrently with the closing, we redeemed all outstanding shares of our Series A Preferred Stock for approximately $90.3 million using proceeds from the RMB Facilities and incremental borrowing capacity available under our refinanced Hapoalim credit facilities.

Since the closing of the MiX Combination, we have continued to optimize our capital structure through the refinancing of existing debt facilities, including the A&R Credit Agreement and RMB Facilities Agreements.

These transactions have enhanced our liquidity and extended our debt maturities, while increasing our available revolving borrowing capacity to support working capital and growth initiatives.

Debt Facilities

Hapoalim Debt

On March 18, 2024, our wholly owned subsidiaries Powerfleet Israel and Pointer entered into the A&R Credit Agreement with Hapoalim, which refinanced the prior facilities under, and amended and restated, the Prior Credit Agreement.

The A&R Credit Agreement provides an aggregate borrowing capacity of approximately $50 million, consisting of two NIS-denominated term loans totaling $30 million (Hapoalim Facility A and Hapoalim Facility B) and two revolving credit facilities totaling $20 million (Hapoalim Facility C and Hapoalim Facility D).

Powerfleet Israel drew $30 million in March 2024, using a portion to repay approximately $11.2 million under the prior term loans under the Prior Credit Agreement and distributing the remainder to us.

In December 2024, the Borrowers entered into an amendment to the A&R Credit Agreement, increasing the principal amount available under Hapoalim Facility D from $10 million to $20 million, available through December 31, 2025.

As of September 30, 2025, Powerfleet Israel had utilized approximately $17.2 million under the Hapoalim Revolving Facilities.

Borrowings are secured by first ranking and exclusive fixed and floating charges, including over the entire share capital of Pointer and over the assets of Pointer and excluding the Borrowers’ holdings in specified foreign subsidiaries.

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% (Hapoalim’s prime rate was 6% at September 30, 2025), respectively.

The Hapoalim Term Facilities will mature on March 18, 2029, with Hapoalim Facility A amortizing quarterly and Hapoalim Facility B due at maturity.

Interest rates for borrowings under Hapoalim Facility C is, with respect to NIS-denominated loans, Hapoalim’s prime rate + 2.5% and, with respect to U.S.

dollar-denominated loans, SOFR + 2.15%.

Borrowings under Hapoalim Facility D will bear interest at the applicable interest rate set forth in the standard form documents entered into in connection with each utilization of Hapoalim Facility D.

In addition, Pointer is required to pay a credit allocation fee in NIS, with respect to Hapoalim Facility C, and a non-utilization fee in U.S.

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.

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.

We drew down $85 million in cash under the RMB Facilities on March 13, 2024.

The interest rates of RMB Facility A and RMB Facility B are 8.699% per annum and 8.979% per annum, respectively.

Interest is payable quarterly in arrears.

The principal under RMB Facility A and RMB Facility B is repayable in one installment on March 31, 2027 and March 31, 2029, respectively.

Following the signing of the Facilities Agreement with RMB and MiX Telematics entered into the Credit Agreement on March 14, 2024, for the RMB General Facility.

The Credit Agreement and the rights and obligations of the parties are subject to the terms and conditions of the Facilities Agreement entered into on March 7, 2024.

The RMB General Facility is repayable on demand and has a term of 365 days from the Available Date (as defined therein).

Repayment of the RMB General Facility, including capitalized interest, is due by the earlier of (a) the Available Date or (b) April 2, 2025, unless extended by agreement between MiX Telematics and RMB.

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 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.

On October 1, 2024, we drew down $125 million in cash under the New RMB Term Facility to pay a portion of the Purchase Price for the FC Acquisition.

Interest is payable quarterly in arrears at an interest rate of 5% per annum plus the applicable term SOFR reference rate.

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

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 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 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.

Our capital requirements depend on a variety of factors, including, but not limited to, the length of the sales cycle, the rate of increase or decrease in our existing business base, the success, timing, and amount of investment required to bring new products to market, revenue growth or decline and potential acquisitions.

Failure to generate positive cash flow from operations will have a material adverse effect on our business, financial condition and results of operations.

Borrowings under Hapoalim Facility D bear interest at the applicable interest rate set forth in the standard form documents entered into in connection with each utilization of Hapoalim Facility D.

In addition, Pointer is required to pay a credit allocation fee in NIS, in each case, equal to 0.5% per annum on undrawn and uncancelled amounts of the Hapoalim Revolving Facilities during the period commencing on March 18, 2024 and ending on the last day of the applicable availability period of the Hapoalim Revolving Facilities.

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

We drew $85 million in March 2024, which primarily funded our Series A Preferred Stock redemption.

On October 31, 2025, we and RMB agreed to amend and restate the Facilities Agreement.

Pursuant to the Amended and Restated Facilities Agreement, interest is payable quarterly, at a fixed annual rate of 8.699% until March 31, 2027 and, thereafter, 4.86% per annum plus the applicable term SOFR reference rate, with respect to RMB Facility A, and a fixed annual rate of 8.979%, with respect to RMB Facility B, with principal repayments for RMB Facility A and RMB Facility B due March 31, 2028 and March 31, 2029, respectively.

MiX Telematics also maintains the RMB General Facility, repayable on demand, with a 365-day term and an interest rate linked to the South African prime rate minus 0.75% per annum.

Repayment of the RMB General Facility, including capitalized interest, is due by the earlier of (a) the Available Date (as defined therein) or (b) April 2, 2026, unless extended by agreement between MiX Telematics and RMB.

As of September 30, 2025, $20.2 million of the RMB General Facility was utilized.

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 totaling $125 million.

We drew $125 million on October 1, 2024 to fund a portion of the Purchase Price for the FC Acquisition.

Interest is payable quarterly at an interest rate of 5% per annum plus the applicable term SOFR reference rate and matures on October 31, 2029.

Liquidity Position

As of September 30, 2025, we had cash and cash equivalents (including restricted cash) of $32.5 million and working capital of $11.5 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.

As of September 30, 2025, Pointer had utilized $17.2 million under the Hapoalim Revolving Facilities.

The available undrawn facility balance at September 30, 2025 was $12.8 million.

As of September 30, 2025, $20.2 million of the RMB General Facility was utilized.

We continue to monitor the effects of inflation, foreign currency volatility, and regional geopolitical instability, including the ongoing conflicts in the Middle East, on our supply chain and operating cash flows.

There remains uncertainty surrounding the potential impact of such events on our results of operations and cash flows.

Management is proactively managing liquidity through reductions in discretionary operating expenses and capital expenditures and increased utilization of available credit facilities to preserve cash.

Capital Requirements and Outlook

Our primary sources of liquidity are cash generated from operations, existing cash balances, and available borrowing capacity under our revolving facilities.

Although we expect the MiX Combination and FC Acquisition to generate incremental cash flow benefits through operational synergies, we have not yet generated sufficient cash flow solely from operations to fund all our capital and financing needs.

Our future capital requirements will depend on several factors, including, but not limited to:

• the timing and success of new product launches;

• revenue growth and margin trends;

• integration costs and realized synergies from recent business combinations and acquisitions;

• the pace of discretionary spending and capital investments;

• potential strategic acquisitions.

We believe that our current cash balances, expected cash flows from operations, and borrowing capacity under our existing credit facilities will be sufficient to meet our operating, debt service, and capital expenditure requirements for at least the next 12 months.

We may, however, seek additional financing or capital market transactions to support long-term strategic initiatives or refinance existing debt.

Operating Activities

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 .

During the six months ended September 30, 2025, net cash provided by operating activities was $10.2 million, compared to net cash used in operating activities of $10.8 million for the same p eriod in 2024.

The net cash provided by operating activities for the six months ended September 30, 2025 primarily included $31.8 million for depreciation and amortization expense, $4.4 million for bad debts expense, $4.4 million of non-cash charges for stock-based compensation, $0.6 million for ROU asset amortization and $1.6 million for other non-cash items, partially offset by $0.8 million for derivative mark-to-market adjustment .

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 inventory, net of reserve of $4.8 million;

• an increase in accounts receivables of $7.6 million;

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

Cash flow from operating activities for the three and six months ended September 30, 2025 includes approximately $1,346 and $2,849, respectively ($0 and $0, respectively for the three and six months ended September 30, 2024), which represent recoveries, through customer billings, of the contract asset recognized at acquisition for hardware delivered by Fleet Complete prior to October 1, 2024.

Under ASC 606, such hardware was identified as a separate performance obligation satisfied at the point of delivery, resulting in the recognition of a contract asset at the acquisition date for hardware delivered prior to the acquisition.

This contract asset is being recovered post-acquisition through customer billings.

Investing Activities

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 .

Net cash used in investing activities for the six months ended September 30, 2025 was $23.9 million, compared to net cash provided by investing activities of $12.9 million for the same period in 2024 .

The net cash used by investing activities was primarily due to $12.5 million for the purchase of fixed assets and $11.5 million for capitalized software development costs.

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Financing Activities

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 .

During the six months ended September 30, 2025 , net cash used in financing activities was $3.3 million, compared to $22.3 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 $0.6 million, and r epayment of long-term debt of $2.7 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.

The decrease in net cash used in financing activities during the six months ended September 30, 2024 was primarily due to the repayment of Series A Preferred Stock of $90.3 million following the MiX Combination, partially offset by $61.9 million received from our private placement, less costs, related to the FC Acquisition and $10.0 million received from short-term bank debt.

Off-Balance Sheet Arrangements

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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