What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-10 compared with 2026-02-09 · 122 added, 145 removed, 133 unchanged (67% of the section changed)

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Cautionary Note Regarding Forward-Looking Statements

This report contains “forward-looking statements” (within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which may include information concerning our beliefs, plans, objectives, goals, expectations, strategies, anticipations, assumptions, estimates, intentions, future events, future revenues or performance, capital expenditures and other information that is not historical information.

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,” “continue,” “intend,” “believe” and variations of such words or similar expressions are intended to identify forward-looking statements.

This report contains “forward-looking statements” (within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which may include statements concerning our beliefs, plans, objectives, goals, expectations, strategies, anticipations, assumptions, estimates, intentions, future events, future revenues or performance, capital expenditures, integration and transformation initiatives, product and technology development, and other information that is not historical information.

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

When used in this report, the words “seek,” “estimate,” “expect,” “anticipate,” “project,” “plan,” “contemplate,” “continue,” “intend,” “believe,” “may,” “will,” “could,” “should,” “would” 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.

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 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 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 IT 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.

We believe there is a reasonable basis for our 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.

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

• we may not fully realize the anticipated benefits of our acquisitions and ongoing business transformation initiatives, and these integration and business transformation initiatives may adversely affect our business, financial condition and results of operations;

• significant losses, accumulated deficits and an inability to achieve or sustain profitability may adversely affect our financial condition and the market price of our common stock;

• future global economic, political and business conditions, including inflation, interest rate increases, foreign exchange instability, geopolitical conflicts, sanctions, export controls and the potential imposition of tariffs;

• the commercial, financial, reputational and regulatory risks to our business associated with operating across multiple geographies, including exposure to foreign exchange fluctuations and economic instability in certain emerging markets;

• disruptions in our global supply chain, performance issues or failures by subcontractors, and reliance on a limited number of suppliers for critical components and services;

• the loss of any of our key customers, reductions in customer demand or purchasing levels, and reliance on third-party channel partner relationships, including telecommunication companies and regional distributors;

• changes in technology, products and customer expectations, which may be more rapid, costly or difficult to address, or less effective, than anticipated;

• risks associated with the deployment and use of artificial intelligence and machine learning technologies, including operational, legal, regulatory and reputational risks arising from their development, use or outputs;

• potential breaches, disruptions or failures of our information technology systems, including risks that could impair operations, customer access to services, or vendor and customer relationships;

• our inability to adequately protect our intellectual property rights or defend against third-party intellectual property claims;

• our ability to obtain additional capital to fund our operations;

• other risks and uncertainties disclosed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), including the risks set forth under “Risk Factors” in 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.

All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date they are made and are expressly qualified in their entirety by the cautionary statements included in this report.

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 Artificial Intelligence-of-Things solutions providing valuable business intelligence for managing high-value enterprise assets that improve operational efficiencies.

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 the statement was made or to reflect the occurrence of unanticipated events, or otherwise.

We are a global provider of Artificial Intelligence-of-Things solutions providing valuable connected business intelligence for managing high-value enterprise and mid-market assets that improve operational efficiencies.

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

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Recent Developments

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

High interest rates, moderating but persistent inflationary pressures, fluctuations in currency exchange rates, continued supply chain disruptions, and ongoing geopolitical conflicts, such as the conflicts in the Middle East, have contributed to significant global economic uncertainty.

In addition, disruptions in global trade, including the imposition of tariffs, export controls and other trade restrictions, as well as evolving monetary and fiscal policies in major economies, have further effected macroeconomic stability and created additional uncertainty for global commerce.

More recent disruptions, including periodic shipping constraints in key maritime routes, have also contributed to supply chain volatility.

Our products incorporate specialized electronic components, including cellular communication modules, GPS chipsets and other semiconductors, which are available from a limited number of suppliers.

Integrating new components can require modification of our device firmware.

During the three months ended June 30, 2026, we experienced production delays within one of our product lines that resulted in the deferral of certain customer orders.

A contributing factor to these delays was firmware compatibility issues that we identified while validating certain new components.

We are working to resolve these issues and currently expect to do so during the quarter ending September 30, 2026, although we can provide no assurance as to the timing of resolution.

Component transitions of this nature may require additional engineering time and expense and could delay the completion and delivery of finished products in future periods.

While we have identified the effects of these matters on our results for the quarter, as discussed under “Results of Operations” below, the dynamic and uncertain nature of the current macroeconomic environment means we cannot reasonably estimate the ultimate impact of these developments on our financial condition, results of operations or cash flows in future periods.

Such effects could persist for an extended period of time.

Risks to Our Business

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Critical Accounting Policies

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.

For the three-month period ended June 30, 2026, 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 December 31, Nine Months Ended December 31,

Three Months Ended June 30,

Products 17.0 % 14.9 %

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Interest income 0.2 % 0.2 %

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

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

Interest expense (6.5) % (6.3) %

Other expense (1.2) % (0.4) %

Net loss before income taxes (9.5) % (6.2) %

Income tax expense (0.3) % (1.2) %

Net loss before non-controlling interest (13.5) % (3.0) % (14.9) % (5.4) %

Non-controlling interest — % — % — % — %

Net loss (9.9) % (7.5) %

Preferred stock dividend — % — % (0.0)% — %

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

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 $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 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 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.

Non-controlling interest — % (0.2) %

Net loss attributable to common stockholders (9.9) % (7.6) %

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.

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.

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

Revenues increased by $6.7 million, or 6.4%, to $110.8 million in the three months ended June 30, 2026, from $104.1 million in the same period in 2025.

Product revenues decreased by $1.2 million, or 6.7%, to $16.5 million for the three months ended June 30, 2026, from $17.7 million in the prior-year period.

The decrease primarily reflected the timing of late-in-the-quarter shipments within one of our product lines, including the deferral of certain customer orders arising from production delays, to which firmware compatibility issues associated with new components were a contributing factor.

Services revenue increased by $7.8 million, or 9.1%, to $94.3 million in the three months ended June 30, 2026, compared to $86.5 million in the same period in 2025.

The increase in services revenues for the combined business (reflecting Powerfleet following the completion of the MiX Combination and FC Acquisition) was driven primarily by Unity safety and AI video solutions.

COST OF REVENUES.

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 $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 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.

Cost of revenues increased by $2.0 million, or 4.2%, to $49.6 million in the three months ended June 30, 2026, from $47.6 million for the same period in 2025, primarily attributable to higher costs associated with the growth in services revenue, partially offset by lower product-related costs resulting from the decline in product revenues.

Gross profit was $61.2 million in the three months ended June 30, 2026, compared to $56.5 million for the same period in 2025.

As a percentage of revenues, gross profit increased to 55.2% in the three months ended June 30, 2026, from 54.2% in the same period in 2025.

This was primarily driven by an increase in higher margin services revenue that comprised 85.1% of total revenues in the three months ended June 30, 2026, compared to 83.0% for the same period in 2025.

Cost of products decreased by $0.3 million, or 2.0%, to $13.0 million in the three months ended June 30, 2026, from $13.2 million in the same period in 2025.

Gross profit for products was $3.5 million in the three months ended June 30, 2026, compared to $4.4 million in the same period in 2025.

As a percentage of product revenues, gross profit decreased to 21.3% in the three months ended June 30, 2026, from 25.1% in the same period in 2025.

Gross profit as a percentage of product revenues was negatively impacted by an unfavorable shift in product mix.

Cost of services increased by $2.2 million, or 6.5%, to $36.7 million in the three months ended June 30, 2026, from $34.4 million in the same period in 2025.

The amortization of acquisition intangibles for the MiX Telematics, Fleet Complete and RTS transactions contributed $6.1 million and $5.8 million in the aggregate to cost of services for the three months ended June 30, 2026 and 2025, respectively.

Gross profit for services was $57.7 million in the three months ended June 30, 2026, compared to $52.1 million in the same period in 2025.

As a percentage of services revenues, gross profit increased to 61.1% in the three months ended June 30, 2026, compared to 60.2% in the same period in 2025.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

Selling, general and administrative (“SG&A”) expenses increased by $2.9 million, or 5.3%, to $56.5 million in the three months ended June 30, 2026, compared to $53.7 million in the same period in 2025.

The increase was driven primarily by higher investments in go-to-market initiatives, including higher sales and marketing costs.

These increases were partially offset by a $0.9 million and $1.4 million decrease in acquisition-related and restructuring charges for the period ended June 30, 2026, compared to June 30, 2025.

As a percentage of revenues, SG&A expenses were 51.0% for the three months ended June 30, 2026, compared to 51.5% in the same period in 2025.

RESEARCH AND DEVELOPMENT EXPENSES.

Research and development (“R&D”) expenses decreased by $0.5 million, or 10.2%, to $4.4 million in the three months ended June 30, 2026, compared to $4.9 million in the same period in 2025, primarily due to an increase in R&D costs capitalized as a result of a greater portion of employee hours being devoted to projects that qualified for capitalization.

As a percentage of revenues, R&D expenses were 3.9% in the three months ended June 30, 2026, compared to 4.7% in the same period in 2025.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS.

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.

Net loss attributable to common stockholders was $8.4 million, or $(0.06) per basic and diluted share, for the three months ended June 30, 2026, as compared to net loss of $10.2 million, or $(0.08) per basic and diluted share, for the same period in 2025.

The $1.8 million decrease in net loss was driven primarily by an increase in gross profit, partially offset by the increase in SG&A 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 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.

We define adjusted EBITDA as net loss attributable to common stockholders before non-controlling interest, 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.

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.

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 December 31, Nine Months Ended December 31,

2024 2025 (1)

Three Months Ended June 30,

(In thousands)

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Non-controlling interest — 183

Preferred stock dividend

Interest expense, net 6,590 6,749

Other income, net

— (146) — (175)

Other expense, net 23 26

Income tax expense 362 1,373

3,513 2,991 4,821 4,624

Depreciation and amortization 16,031 16,207

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Foreign currency losses 1,161 1,336

543 1,059 1,288 3,782

Restructuring-related expenses 2,442 1,038

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The goal was to better align adjusted EBITDA with operating 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.

For the three months ended June 30, 2025 and 2026, we reported adjusted EBITDA of $20.1 million and $21.5 million, respectively.

During the same periods, we also invoiced recoveries of $1.5 million and $0.9 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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• 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.

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.

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

Liquidity and Capital Resources

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.

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 Term Facilities and incremental borrowing capacity available under our refinanced Hapoalim credit facilities.

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.

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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).

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 Term Facility A and Hapoalim Term Facility B) and two revolving credit facilities totaling $20 million (Hapoalim Revolving Credit Facility C and Hapoalim Revolving Credit 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, which was subsequently extended to June 30, 2026.

As of December 31, 2025, Powerfleet Israel had utilized approximately $18.8 million under the Hapoalim Revolving Facilities.

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

As of June 30, 2026, Powerfleet Israel had utilized approximately $19.3 million under the Hapoalim Revolving Credit 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 December 31, 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.

Interest rates for borrowings under Hapoalim Term Facility A and Hapoalim Term Facility B are Hapoalim’s prime rate + 2.2% per annum and Hapoalim’s prime rate + 2.3% (Hapoalim’s prime rate was 5.25% at June 30, 2026), respectively.

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

Interest rates for borrowings under Hapoalim Revolving Credit 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 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.

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 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.

Borrowings under Hapoalim Revolving Credit Facility D bear interest at SOFR + 2.59%.

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 Credit Facilities during the period commencing on March 18, 2024 and ending on the last day of the applicable availability period of the Hapoalim Revolving Credit Facilities.

The Hapoalim Revolving Credit Facilities are available for successive one-month periods until and including February 27, 2027, unless the Borrowers deliver prior notice to Hapoalim of their request not to renew the Hapoalim Revolving Credit Facilities.

On March 7, 2024, we entered into the Facilities Agreement with RMB, pursuant to which RMB agreed to provide us with the RMB Term Facilities totaling $85 million, composed of RMB Term Facility A and RMB Term 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, 4.85% 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.

On October 31, 2025, we and RMB agreed to amend and restate the Facilities Agreement to, among other things, (i) extend the final maturity date of RMB Term Facility A by 12 months, (ii) update the interest rates of the RMB Term Facilities, and (iii) update certain financial covenants to conform to the facility agreement (the “Facility Agreement”) with RMB relating to the New RMB Term Facility.

Pursuant to a First Amendment and Restatement Agreement with RMB, which amended and restated the Facilities Agreement (as amended and restated, the “Amended and Restated Facilities Agreement” and, together with the Facility Agreement, the “RMB Facilities Agreements”), interest is payable quarterly, at a fixed annual rate of 8.699% until March 31, 2027 and, thereafter, 4.85%

per annum plus the applicable term SOFR reference rate, with respect to RMB Term Facility A, and a fixed annual rate of 8.979%, with respect to RMB Term Facility B, with principal repayments for RMB Term Facility A and RMB Term 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 December 31, 2025, $21.4 million of the RMB General Facility was utilized.

As of June 30, 2026, $18.1 million of the RMB General Facility was utilized.

Subsequent to June 30, 2026, we continued discussions with RMB regarding the establishment of a new general banking facility, which would extend and replace the RMB General Facility, and certain additional operational banking facilities in connection with the transition of our South African transactional banking relationship to RMB.

The proposed arrangements include a general banking facility intended to support working capital and cash management requirements, as well as additional operational banking facilities supporting transactional banking activities.

The proposed facilities have received credit approval from RMB and remain subject to the execution of definitive documentation and receipt of certain corporate approvals.

We expect to finalize the arrangements following completion of these internal approval and documentation processes.

RMB has not demanded, and has indicated that it does not intend to demand, repayment of the RMB General Facility.

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.

On February 5, 2026, we entered into the RMB Revolving Credit Facilities Agreement with RMB, pursuant to which RMB agreed to provide us and MiX Telematics with the RMB Revolving Credit Facilities, composed of RMB Revolving Credit Facility A in the aggregate principal amount of $10 million and RMB Revolving Credit Facility B in the aggregate principal amount of R180 million.

RMB Revolving Credit 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).

RMB Revolving Credit 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.

The RMB Revolving Credit Facilities will mature one year from the closing date of the RMB Revolving Credit Facilities Agreement.

As of June 30, 2026, $5.0 million of the RMB Revolving Credit Facilities was utilized.

Debt obligations are further discussed in Note 13, “Short-Term Bank Debt and Long-Term Debt” to our condensed consolidated financial statements included elsewhere in this Form 10-Q.

Liquidity Position

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.

As of June 30, 2026, we had cash and cash equivalents (including restricted cash) of $36.7 million and working capital of $15.5 million, compared to cash and cash equivalents (including restricted cash) of $40.8 million and working capital of $21.2 million as of March 31, 2026.

As of June 30, 2026, Pointer had $19.3 million outstanding under the Hapoalim Revolving Credit Facilities, with $10.7 million of remaining borrowing capacity.

As of June 30, 2026, $18.1 million of the RMB General Facility was outstanding.

As of June 30, 2026, $5.0 million of the RMB Revolving Credit Facilities was outstanding and the $5.0 million remained available for borrowing.

No amounts were outstanding under the RMB Revolving Credit Facility B, which had available borrowing capacity of R180 million or $11.0 million at June 30, 2026.

In the aggregate, we had approximately $29.9 million of available short-term borrowing capacity as of June 30, 2026.

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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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.

Although we expect 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:

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Operating Activities

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.

During the three months ended June 30, 2026, net cash provided by operating activities was $8.4 million, compared to net cash provided by operating activities of $4.7 million for the same period in 2025.

The net cash provided by operating activities for the three months ended June 30, 2026 primarily included $16.2 million for depreciation and amortization expense, $3.0 million for bad debts expense, $3.1 million of non-cash charges for stock-based compensation, $0.6 million for inventory reserve adjustments, $1.2 million for ROU asset amortization and $1.2 million for other non-cash items, partially offset by $1.5 million for deferred income taxes and $0.9 million for derivative mark-to-market adjustment.

Changes in operating assets and liabilities included:

• an increase in accounts receivables of $15.7 million;

• a decrease in accounts receivables of $0.9 million;

• an increase in deferred costs of $3.0 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 inventory, net of reserve of $0.7 million;

• an increase in prepaid expenses and other assets of $2.1 million;

• a decrease in lease liabilities of $1.0 million;

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

partially offset by

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• an increase in deferred revenue of $0.1 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.

Cash flows from operating activities for the three months ended June 30, 2026 include approximately $0.9 million ($1.5 million for the three months ended June 30, 2025), 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 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.

Net cash used in investing activities for the three months ended June 30, 2026 was $9.0 million, compared to net cash used in investing activities of $11.8 million for the same period in 2025.

The net cash used by investing activities was primarily due to $4.9 million for the purchase of fixed assets and $4.1 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.

The net cash used in investing activities of $11.8 million in the same period in 2025 was primarily due to $8.1 million for the purchase of fixed assets and $3.7 million for capitalized software development costs.

Financing Activities

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.

During the three months ended June 30, 2026, net cash used in financing activities was $4.1 million, compared to $6.8 million net cash used in financing activities for the same period in 2025.

The cash used in financing activities was

primarily due to the repayment of long-term debt of $1.7 million and repayment in short-term bank debt of $2.5 million.

The net cash used in financing activities during the three months ended June 30, 2025 was primarily due to the repayment of short-term bank debt of $5.4 million and repayment of long-term debt of $1.3 million.

Off-Balance Sheet Arrangements

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Impact of Recently Issued Accounting Pronouncements

The Company is subject to recently issued accounting standards, accounting guidance and disclosure requirements.

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.

The Company is subject to recently issued acc ounting standards, accounting guidance and disclosure requirements.

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