What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-02-09 compared with 2025-11-10 · 93 added, 86 removed, 185 unchanged (49% of the section changed)

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Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

When used in this report, the words “seek,” “estimate,” “expect,” “anticipate,” “project,” “plan,” “contemplate,” “plan,” “continue,” “intend,” “believe” and variations of such words or similar expressions are intended to identify forward-looking statements.

When used in this report, the words “seek,” “estimate,” “expect,” “anticipate,” “project,” “plan,” “contemplate,” “continue,” “intend,” “believe” and variations of such words or similar expressions are intended to identify forward-looking statements.

All forward-looking statements are based upon our current expectations and various assumptions.

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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;

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

the possibility that the anticipated cost savings, synergies and operational benefits from the MiX Combination and FC Acquisition may not be fully realized or may take longer than expected, and that the combined business may not perform as expected;

global economic conditions as well as exposure to foreign exchange, 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;

operational risks, including the successful implementation of internal business and information technology (“IT”) systems;

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;

cybersecurity risks and our ability to protect our IT systems from breaches;

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

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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.

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.

Powerfleet is a global provider of Artificial Intelligence-of-Things 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.

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Critical Accounting Policies

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.

For the three- and nine-month periods ended December 31, 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 September 30, Six Months Ended September 30,

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

Products 23.2 % 19.7 % 24.6 % 19.0 %

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Total operating expenses 56.4 % 49.6 % 61.3 % 52.6 %

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

(Loss) profit from operations (1.2) % 5.6 % (7.3) % 2.6 %

Interest income 0.3 % 0.1 % 0.3 % 0.2 %

Interest expense, net (7.5) % (6.0) % (5.7) % (6.3) %

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

Other (expense) income, net (1.9) % — % (0.4) % (0.5) %

Net loss before income taxes (10.2) % (0.3) % (13.0) % (4.0) %

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Net loss attributable to common stockholders (13.5) % (3.0) % (14.9) % (5.4) %

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.

Three Months Ended December 31, 2025 Compared to Three Months Ended December 31, 2024

Revenues increased by $7.1 million, or 6.6%, to $113.5 million in the three months ended December 31, 2025, from $106.4 million in the same period in 2024.

Revenues from products decreased by $2.3 million, or 9.3%, to $22.4 million in the three months ended December 31, 2025, from $24.7 million in the same period in 2024.

The decrease in product revenues was primarily due to the increased mix of bundled customer contracts across the Company for the three months ended December 31, 2025 that reduced standalone product revenues.

Revenues from services increased by $9.3 million, or 11.4%, to $91.1 million in the three months ended December 31, 2025, from $81.7 million in the same period in 2024.

The increase in services revenue was driven by increased adoption of the Company’s AI-powered SaaS solutions and strong global demand across both direct and indirect channels, centered on differentiated safety and compliance solutions.

COST OF REVENUES.

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.

Cost of revenues increased by $3.2 million, or 6.6%, to $50.8 million in the three months ended December 31, 2025, from $47.6 million for the same period in 2024.

Gross profit was $62.7 million in the three months ended December 31, 2025, compared to $58.8 million for the same period in 2024.

As a percentage of revenues, gross profit was 55.2% in the three months ended December 31, 2025 consistent with 55.2% in the same period in 2024.

Cost of products decreased by $1.8 million, or 10.6%, to $15.3 million in the three months ended December 31, 2025, from $17.1 million in the same period in 2024, primarily due to increased mix of bundled customer contracts across the Company that reduced standalone product sales.

Gross profit for products was $7.1 million in the three months ended December 31, 2025, compared to $7.6 million in the same period in 2024.

As a percentage of product revenues, gross profit increased to 31.6% in the three months ended December 31, 2025 from 30.6% in the same period in 2024, reflecting the improved sales mix.

Cost of services increased by $5.0 million, or 16.3%, to $35.5 million in the three months ended December 31, 2025, from $30.5 million in the same period in 2024.

Gross profit for services was $55.6 million in the three months ended December 31, 2025, compared to $51.2 million in the same period in 2024.

As a percentage of services revenues, gross profit was 61.0% in the three months ended December 31, 2025, compared to 62.7% in the same period in 2024 due to an increase in in-vehicle device depreciation and amortization (including the amortization of acquisition intangibles for the MiX Telematics and Fleet Complete transactions).

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

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.

SG&A expenses decreased by $3.6 million, or (6.6)%, to $51.8 million in the three months ended December 31, 2025, compared to $55.4 million in the same period in 2024.

SG&A expenses included $0.3 million in acquisition-related expenses, $1.3 million in integration-related expenses and $0.8 million in restructuring-related costs for the three months ended December 31, 2025, compared to $5.3 million in acquisition-related expenses, $0.5 million in integration-related expenses and $0.8 million in restructuring-related costs in the same period in 2024 .

As a percentage of revenues, SG&A expenses decreased to 45.6% in the three months ended December 31, 2025, compared to 52.1% for the same period in 2024.

As a percentage of revenues, SG&A expenses, excluding $2.4 million in acquisition-related expenses, integration-related expenses and restructuring-related costs, decreased to 43.5% in the three months ended December 31, 2025, from 45.8% in the same period in 2024.

The decrease is primarily due to cost savings from the synergies realized as a result of the MiX Combination and FC Acquisition.

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

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.

R&D expenses remained consistent at $4.6 million in the three months ended December 31, 2025 and $4.6 million in the same period in 2024.

As a percentage of revenues, R&D expenses were 4.0% in the three months ended December 31, 2025, compared to 4.3% in the same period in 2024.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.

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.

Net loss attributable to common stockholders was $3.4 million, or $(0.03) per basic and diluted share, for the three months ended December 31, 2025, as compared to net loss of $14.3 million, or $(0.11) per basic and diluted share, for the same period in 2024.

The net loss was primarily the result of $1.1 million foreign currency losses, $1.3 million in integration-related costs, and $0.8 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.

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 $52.1 million in services revenues.

Nine Months Ended December 31, 2025 Compared to Nine Months Ended December 31, 2024

Revenues increased by $70.4 million, or 27.2%, to $329.3 million in the nine months ended December 31, 2025, from $258.9 million in the same period in 2024.

Product revenues decreased by $1.3 million, or 2.0%, to $62.4 million for the nine months ended December 31, 2025, from $63.7 million in the prior-year period.

The Fleet Complete acquisition added an incremental $3.0 million of product revenues for the nine months ended December 31, 2025.

Excluding the acquisition contribution, the decline in product revenues reflects the continued transition toward bundled service offerings and the impact of higher tariffs in the United States.

Services revenue increased by $71.7 million, or 36.7%, to $266.9 million in the nine months ended December 31, 2025, compared to $195.2 million in the same period in 2024.

The Fleet Complete acquisition added an incremental $53.6 million of service revenues for the nine months ended December 31, 2025.

The increase in services revenues for the combined business was driven primarily by underlying organic growth initiatives, partially offset by proactive actions to de-emphasize certain non-core lines of business.

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.

Cost of revenues increased by $28.4 million, or 23.9%, to $147.5 million in the nine months ended December 31, 2025, from $119.1 million for the same period in 2024.

Gross profit was $181.8 million in the nine months ended December 31, 2025, compared to $139.8 million for the same period in 2024.

As a percentage of revenues, gross profit increased to 55.2% in the nine months ended December 31, 2025, from 54.0% in the same period in 2024.

This was primarily driven by high margin services revenue comprising 81.0% of total revenues in the nine months ended December 31, 2025, compared to 75.4% for the same period in 2024.

Cost of products increased by $0.1 million, or 0.1%, to $43.9 million in the nine months ended December 31, 2025, from $43.8 million in the same period in 2024.

Gross profit for products was $18.6 million in the nine months ended December 31, 2025, compared to $19.9 million in the same period in 2024.

As a percentage of product revenues, gross profit decreased to 29.7% in the nine months ended December 31, 2025, from 31.2% 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.

Cost of services increased by $28.4 million, or 37.7%, to $103.7 million in the nine months ended December 31, 2025, from $75.3 million in the same period in 2024.

The Fleet Complete acquisition added an incremental $14.8 million of cost of services for the nine months ended December 31, 2025.

The amortization of acquisition intangibles for the MiX Telematics and Fleet Complete transactions contributed an incremental $7.8 million in the aggregate to cost of services for the nine months ended December 31, 2025.

Gross profit for services was $163.2 million in the nine months ended December 31, 2025, compared to $119.9 million in the same period in 2024.

As a percentage of services revenues, gross profit remained relatively consistent at 61.2% in the nine months ended December 31, 2025, compared to 61.4% 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.

SG&A expenses increased by $12.1 million, or 8.2%, to $159.6 million in the nine months ended December 31, 2025, compared to $147.5 million in the same period in 2024.

The increase was driven primarily by the acquisition of Fleet Complete, which added an incremental $29.4 million of SG&A expenses for the nine months ended December 31, 2025, as well as higher investments in go-to-market initiatives.

These increases were partially offset by a $19.4 million decrease in acquisition-related expenses for the nine-month period ended December 31, 2025.

As a percentage of revenues, SG&A expenses decreased to 48.5% for the nine months ended December 31, 2025, compared to 57.0% in the same period in 2024, reflecting improved operating leverage following the Fleet Complete acquisition.

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.

R&D expenses increased by $2.5 million, or 22.1%, to $13.6 million in the nine months ended December 31, 2025, compared to $11.2 million in the same period in 2024.

The Fleet Complete acquisition added an incremental $2.5 million of R&D expenses for the nine months ended December 31, 2025.

As a percentage of revenues, R&D expenses were 4.1% in the nine months ended December 31, 2025, compared to 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.

Net loss attributable to common stockholders was $17.9 million, or $(0.13) per basic and diluted share, for the nine months ended December 31, 2025, as compared to net loss of $38.6 million, or $(0.33) per basic and diluted share, for the same period in 2024.

The $20.7 million decrease in net loss was driven primarily by a $19.4 million decrease in acquisition-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, 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 income (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).

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Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA

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

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

2024 2025 (1)

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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.

For the three and nine months ended December 31, 2024 and 2025, we reported adjusted EBITDA of $20.5 million and $48.7 million, and $25.7 million and $70.6 million, respectively.

During the same periods, we also invoiced recoveries of $2.0 million and $2.0 million, and $1.2 million and $4.0 million, respectively, which are included in cash flows 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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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.

As of December 31, 2025, Powerfleet Israel had utilized approximately $18.8 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.

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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.

As of December 31, 2025, $21.4 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.

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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.

On February 5, 2026, we entered into the New Facilities Agreement with RMB, pursuant to which RMB agreed to provide us and MiX Telematics with the New RMB Facilities, composed of New RMB Facility A in the aggregate principal amount of $10 million and New RMB Facility B in the aggregate principal amount of 180,000,000.

New RMB Facility A bears interest at 2.50% per annum (provided no event of default is continuing), plus the three-month SOFR reference rate (or, if unavailable, an interpolated, historic or interpolated historic SOFR rate, or, if none of the foregoing are available, the three-month Treasury bill rate).

New RMB Facility B bears interest at 1.95% per annum (provided no event of default is continuing), plus the South African rand overnight index average.

Interest is payable quarterly in arrears.

The New RMB Facilities will mature one year from closing.

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.

As of December 31, 2025, we had cash and cash equivalents (including restricted cash) of $35.9 million and working capital of $15.1 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 December 31, 2025, Pointer had utilized $18.8 million under the Hapoalim Revolving Facilities.

The available undrawn facility balance at December 31, 2025 was $11.2 million.

As of December 31, 2025, $21.4 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.

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Operating Activities

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 .

During the nine months ended December 31, 2025, net cash provided by operating activities was $20.5 million, compared to net cash used in operating activities of $16.9 million for the same period in 2024.

The net cash provided by operating activities for the nine months ended December 31, 2025 primarily included $47.7 million for depreciation and amortization expense, $6.5 million for bad debts expense, $5.9 million of non-cash charges for stock-based compensation, $1.8 million for inventory reserve adjustments, $2.9 million for ROU asset amortization and $0.5 million for other non-cash items, partially offset by $3.7 million for deferred income taxes and $2.1 million for derivative mark-to-market adjustment.

Changes in operating assets and liabilities included:

• an increase in inventory, net of reserve of $4.8 million;

• an increase in accounts receivables of $15.7 million;

• a decrease in deferred costs of $4.7 million;

• an increase in deferred costs of $6.6 million;

• an increase in inventory, net of reserve of $5.2 million;

• a decrease in prepaid expenses and other assets of $1.1 million;

• a decrease in lease liabilities of $2.9 million;

• an increase in prepaid expenses and other assets of $1.0 million;

• a decrease in deferred revenue of $0.6 million;

• a decrease in accrued severance payable of $1.3 million;

partially offset by

• an increase in accounts payable of $11.0 million;

• 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.

• an increase in deferred revenue of $0.6 million.

Cash flows from operating activities for the three and nine months ended December 31, 2025 include approximately $1.2 million and $4.0 million, respectively ($2.0 million and $2.0 million for the three and nine months ended December 31, 2024, respectively), 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.

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Investing Activities

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 .

Net cash used in investing activities for the nine months ended December 31, 2025 was $31.9 million, compared to net cash used in investing activities of $160.5 million for the same period in 2024.

The net cash used by investing activities was primarily due to $17.7 million for the purchase of fixed assets and $14.1 million for capitalized software development costs.

The net cash provided by investing activities of $12.9 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 $10.5 million for the purchase of fixed assets and $4.7 million for capitalized software development costs.

The net cash used in investing activities of $160.5 million in the same period in 2024 was primarily due to $137.1 million in net 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.

Financing Activities

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 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.

During the nine months ended December 31, 2025, net cash used in financing activities was $2.0 million, compared to $107.6 million net cash provided by financing activities for the same period in 2024.

The cash used in financing activities was primarily due to the repayment of long-term debt of $4.1 million, partially offset by the cash proceeds from the increase in short-term bank debt of $2.1 million.

The net cash provided by financing activities during the nine months ended December 31, 2024 was primarily due to proceeds from long-term debt of $125.0 million, less $1.4 million of related debt costs, $66.5 million of net proceeds from our private placement in connection with the FC Acquisition, $11.9 million of proceeds from short-term bank debt, and $0.9 million of proceeds from the exercise of stock options, partially offset by the repayment of $90.3 million of Series A Preferred Stock following the MiX Combination, the purchase of $2.8 million of treasury stock upon vesting of restricted stock, and the repayment of $2.1 million of long-term debt.

Off-Balance Sheet Arrangements

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What changed 10-Q

Item 2. Management’s Discussion and Analysis