Powerfleet, Inc. 10-Q

Item 1. Financial Statements (Unaudited) POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands, except per share data) March 31, 2026 June 30, 2026 (Audited) (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 36,496 $ 32,824 Restricted cash 4,322 3,895 Accounts receivable, net of allowance for credit losses of $ 9,177 and $ 9,344 as of March 31, 2026 and June 30, 2026, respectively 93,820 91,399 Inventory, net 22,448 21,645 Prepaid expenses and other current assets 22,094 23,743 Total current assets 179,180 173,506 Fixed assets, net 62,398 63,800 Goodwill 411,995 421,062 Intangible assets, net 255,518 253,933 Right-of-use asset 15,893 16,189 Severance payable fund 4,445 4,863 Deferred tax asset 4,537 5,066 Other assets 21,599 24,143 Total assets $ 955,565 $ 962,562 LIABILITIES Current liabilities: Short-term bank debt and current maturities of long-term debt $ 50,355 $ 49,092 Accounts payable 46,353 44,455 Accrued expenses and other current liabilities 37,699 39,970 Deferred revenue - current 20,159 20,857 Lease liability - current 3,386 3,646 Total current liabilities 157,952 158,020 Long-term debt - less current maturities 229,669 229,300 Deferred revenue - less current portion 4,005 3,503 Lease liability - less current portion 13,505 13,576 Accrued severance payable 5,666 6,100 Deferred tax liability 60,063 60,840 Other long-term liabilities 3,090 2,331 Total liabilities 473,950 473,670 Commitments and Contingencies (Note 22) REDEEMABLE NON-CONTROLLING INTERESTS Redeemable non-controlling interests 6,009 6,192 STOCKHOLDERS’ EQUITY Preferred stock; authorized 50,000 shares, $ 0.01 par value — — 3 Common stock; authorized 175,000 shares, $ 0.01 par value; 136,224 and 136,291 shares issued at March 31, 2026 and June 30, 2026, respectively; shares outstanding, 134,158 and 134,226 at March 31, 2026 and June 30, 2026, respectively 1,343 1,343 Additional paid-in capital 682,344 685,451 Accumulated deficit ( 226,335 ) ( 234,775 ) Accumulated other comprehensive income 29,660 42,087 Treasury stock; 2,066 and 2,066 common shares at cost at March 31, 2026 and June 30, 2026, respectively ( 11,518 ) ( 11,518 ) Total Powerfleet, Inc. stockholders’ equity 475,494 482,588 Non-controlling interest 112 112 Total equity 475,606 482,700 Total liabilities, redeemable non-controlling interests and stockholders’ equity $ 955,565 $ 962,562 See accompanying notes to condensed consolidated financial statements. 4 POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended June 30, 2025 2026 Revenues: Products $ 17,657 $ 16,480 Services 86,464 94,313 Total revenues 104,121 110,793 Cost of revenues: Cost of products 13,228 12,970 Cost of services 34,412 36,662 Total cost of revenues 47,640 49,632 Gross profit 56,481 61,161 Operating expenses: Selling, general and administrative expenses 53,663 56,531 Research and development expenses 4,857 4,360 Total operating expenses 58,520 60,891 (Loss) profit from operations ( 2,039 ) 270 Interest income 196 234 Interest expense ( 6,786 ) ( 6,983 ) Other expense ( 1,243 ) ( 405 ) Net loss before income taxes ( 9,872 ) ( 6,884 ) Income tax expense ( 362 ) ( 1,373 ) Net loss ( 10,234 ) ( 8,257 ) Non-controlling interest — ( 183 ) Net loss attributable to common stockholders $ ( 10,234 ) $ ( 8,440 ) Net loss per share attributable to common stockholders - basic and diluted $ ( 0.08 ) $ ( 0.06 ) Weighted average common shares outstanding - basic and diluted 133,313 134,169 See accompanying notes to condensed consolidated financial statements. 5 POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Comprehensive Income (In thousands) (Unaudited) Three Months Ended June 30, 2025 2026 Net loss attributable to common stockholders $ ( 10,234 ) $ ( 8,440 ) Foreign currency translation adjustment 22,519 12,427 Total other comprehensive income 22,519 12,427 Comprehensive income $ 12,285 $ 3,987 See accompanying notes to condensed consolidated financial statements. 6 POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Changes in Stockholders’ Equity (In thousands) (Unaudited) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Treasury Stock Non-Controlling Interest Total Stockholders’ Equity Number of Shares Amount Balance as of April 1, 2025 135,379 $ 1,343 $ 671,400 $ ( 205,783 ) $ ( 8,850 ) $ ( 11,518 ) $ 150 $ 446,742 Net loss attributable to common stockholders — — — ( 10,234 ) — — — ( 10,234 ) Foreign currency translation adjustment — — — — 22,519 — — 22,519 Stock-based compensation — — 1,853 — — — — 1,853 Issue of stock appreciation rights 127 — — — — — — — Balance as of June 30, 2025 135,506 $ 1,343 $ 673,253 $ ( 216,017 ) $ 13,669 $ ( 11,518 ) $ 150 $ 460,880 Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Treasury Stock Non-Controlling Interest * Total Stockholders’ Equity Number of Shares Amount Balance as of April 1, 2026 136,224 $ 1,343 $ 682,344 $ ( 226,335 ) $ 29,660 $ ( 11,518 ) $ 112 $ 475,606 Net loss attributable to common stockholders — — — ( 8,440 ) — — — ( 8,440 ) Foreign currency translation adjustment — — — — 12,427 — — 12,427 Stock-based compensation — — 3,107 — — — — 3,107 Issue of stock appreciation rights and restricted share awards 67 — — — — — — — Balance as of June 30, 2026 136,291 $ 1,343 $ 685,451 $ ( 234,775 ) $ 42,087 $ ( 11,518 ) $ 112 $ 482,700 (*) Excludes redeemable non-controlling interests. See accompanying notes to condensed consolidated financial statements. 7 POWERFLEET, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three Months Ended June 30, 2025 2026 Cash flows from operating activities Net loss $ ( 10,234 ) $ ( 8,440 ) Adjustments to reconcile net loss to cash provided by operating activities: Non-controlling interest — 183 Inventory reserve 193 558 Stock-based compensation expense 1,853 3,107 Depreciation and amortization 16,031 16,207 Right-of-use assets, non-cash lease expense 974 1,205 Derivative mark-to-market adjustment 104 ( 919 ) Bad debts expense 1,856 2,958 Deferred income taxes ( 3,157 ) ( 1,538 ) Lease termination and modification losses 59 — Other non-cash items ( 513 ) ( 1,168 ) Changes in operating assets and liabilities: Accounts receivable ( 2,391 ) 893 Inventories ( 4,733 ) 725 Prepaid expenses and other current assets ( 1,284 ) ( 2,144 ) Deferred costs ( 2,730 ) ( 2,960 ) Deferred revenue ( 420 ) 71 Accounts payable, accrued expenses and other current liabilities 9,637 722 Lease liabilities ( 881 ) ( 1,033 ) Accrued severance payable 357 16 Net cash provided by operating activities 4,721 8,443 Cash flows from investing activities Proceeds from sale of fixed assets 16 1 Capitalized software development costs ( 3,724 ) ( 4,100 ) Capital expenditures ( 8,114 ) ( 4,873 ) Net cash used in investing activities ( 11,822 ) ( 8,972 ) Cash flows from financing activities Repayment of long-term debt ( 1,341 ) ( 1,679 ) Short-term bank debt, net ( 5,428 ) ( 2,457 ) Net cash used in financing activities ( 6,769 ) ( 4,136 ) Effect of foreign exchange rate changes on cash and cash equivalents 725 566 Net decrease in cash and cash equivalents, and restricted cash ( 13,145 ) ( 4,099 ) Cash and cash equivalents, and restricted cash at beginning of the period 48,788 40,818 8 Cash and cash equivalents, and restricted cash at end of the period $ 35,643 $ 36,719 Reconciliation of cash and cash equivalents, and restricted cash, at beginning of the period Cash and cash equivalents 44,392 36,496 Restricted cash 4,396 4,322 Cash and cash equivalents, and restricted cash, at beginning of the period $ 48,788 $ 40,818 Reconciliation of cash and cash equivalents, and restricted cash, at end of the period Cash and cash equivalents 31,196 32,824 Restricted cash 4,447 3,895 Cash and cash equivalents, and restricted cash, at end of the period $ 35,643 $ 36,719 Supplemental disclosure of cash flow information: Cash paid for: Taxes $ 873 $ 1,721 Interest $ 5,994 $ 6,444 See accompanying notes to condensed consolidated financial statements. 9 POWERFLEET, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements June 30, 2026 In thousands (except per share data) (Unaudited) NOTE 1 - DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION Description of the Company Powerfleet, Inc. (the “Company” or “Powerfleet”) is a global provider of Artificial Intelligence-of-Things (“AIoT”) solutions providing valuable business intelligence for managing high-value enterprise assets that improve operational efficiencies. The Company has a primary listing on The Nasdaq Global Market and a secondary listing on the Main Board of the Johannesburg Stock Exchange. Basis of Preparation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated on consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the consolidated financial position of the Company as of March 31, 2026 and June 30, 2026, the consolidated results of its operations for the three-month periods ended June 30, 2025 and 2026, the consolidated change in stockholders’ equity for the three-month periods ended June 30, 2025 and 2026, and the consolidated cash flows for the three-month periods ended June 30, 2025 and 2026. The results of operations for the three-month period ended June 30, 2026 are not necessarily indicative of the operating results for the full year. These financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures for the fiscal year ended March 31, 2026 included in the Company’s Annual Report on Form 10-K for the year then ended. NOTE 2 - USE OF ESTIMATES The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such management estimates include, but are not limited to, assumptions used in business combinations, allowance for credit losses, income taxes, realization of deferred tax assets, accounting for uncertain tax positions, the impairment of intangible assets, including goodwill and long-lived assets, capitalized software development costs, standalone selling prices (“SSP”), valuation of the derivative asset, redeemable non-controlling interest, and market-based stock-based compensation costs. Actual results could differ materially from those estimates and assumptions made. NOTE 3 - ACQUISITION RTS Acquisition On February 1, 2026, MiX Telematics Africa (Pty) Ltd. (“MiX Africa”), a wholly owned subsidiary of the Company, acquired 100 % of the issued and outstanding share capital of RTS Solutions Africa (Pty) Ltd. (“RTS”) from Macrocomm Group (Pty) Ltd (“Macrocomm”) (such acquisition, the “RTS Acquisition”). As consideration for the RTS Acquisition, 127 MiX Africa shares were issued to Macrocomm, representing an 11.27 % interest in MiX Africa, with an acquisition-date fair value of $ 8,765 . The RTS Acquisition was accounted for as a business combination using the acquisition method under ASC 805, Business Combinations, with the Company identified as the accounting acquirer. 10 Allocation of Purchase Price The purchase price was allocated to the assets acquired and liabilities assumed based on their estimated acquisition-date fair values, with the excess recorded as goodwill. Goodwill primarily reflects the assembled workforce and expected revenue and cost synergies and is not deductible for tax purposes. RTS contributed revenue of $ 1,328 and net income of $ 66 to the Company’s consolidated statement of operations for the three-month period ended June 30, 2026. The purchase price allocation remains provisional and may be adjusted as the Company completes its valuation analyses and obtains additional information regarding facts and circumstances existing as of the February 1, 2026 acquisition date. Measurement period adjustments, if any, will be recognized in the period in which adjustments are determined, including the effect on earnings of amounts that would have been recorded in prior periods had the accounting been completed. The measurement period ends January 31, 2027. The Company will finalize the purchase price allocation no later than one year from the acquisition date. Acquired Identifiable Intangible Assets The following table sets forth preliminary estimated fair values of the components of the identifiable intangible assets acquired (in thousands) and their estimated useful lives: Fair value Weighted-average useful lives Trade name $ 586 14 years Developed technology 558 5 years $ 1,144 Acquisition - Related Expenses The Company expensed a total of $ 202 of acquisition-related costs in the consolidated statements of operations related to the RTS Acquisition for the three-month period ended June 30, 2026. Acquisition-related costs are classified as selling, general and administrative expenses in the consolidated statements of operations. Financial Information If the business acquired in the RTS Acquisition had been acquired with an effective date as of April 1, 2025, it would have contributed revenue of $ 1.0 million and a net loss of $ 8 for the three months ended June 30, 2025, of which $ 34 related to the amortization of acquired identifiable intangible assets. Redeemable Non-Controlling Interests In connection with the RTS Acquisition, MiX Africa and MiX Telematics Ltd (“MiX Telematics”) entered into a shareholders agreement with Macrocomm, which provides, among other things, Macrocomm with an option, exercisable within six months following the fifth year anniversary of consummation of the RTS Acquisition, to require MiX Africa or its nominee to purchase all equity interests in MiX Africa held by Macrocomm for either (i) the greater of (x) an amount based on a predetermined formula applied to MiX Africa’s revenue for the immediately preceding financial year and (y) R 90,000 , with settlement in cash, and (ii) a fixed number of shares of the Company’s common stock (provided that the Company’s common stock is then-listed on the Johannesburg Stock Exchange) (the “Put Option”). Because redemption under the Put Option is not solely within the Company’s control, the non-controlling interest is classified as temporary equity. The balance is adjusted each reporting period for attributable income or loss and distributions and, under the Company’s elected immediate method, to the greater of its redemption value or carrying amount. The acquisition-date fair value of the redeemable non-controlling interest, including the Put Option, was $ 8,765 based on an estimate using a Monte Carlo simulation that incorporated expected revenue growth, market correlation, volatility and an appropriate discount rate. 11 The table below presents the reconciliation of changes in redeemable non-controlling interests as of March 31, 2026 and June 30, 2026 (in thousands): March 31, 2026 June 30, 2026 Opening balance $ — $ 6,009 Issuance of redeemable non-controlling interest 8,765 — Rebalancing of ownership percentage between parent and subsidiaries ( 3,364 ) — Net income attributable to redeemable non-controlling interest 608 183 Closing balance $ 6,009 $ 6,192 In February 2026, the issuance of 127 MiX Africa shares to Macrocomm changed the relative ownership interests in MiX Africa while the Company retained control. Accordingly, the Company recorded the transaction as an equity transaction under ASC 810, decreasing redeemable non-controlling interests and increasing additional paid-in capital by $ 3,364 as of March 31, 2026. NOTE 4 - CASH AND CASH EQUIVALENTS The Company considers all highly liquid debt instruments with an original maturity of three months or less when purchased to be cash equivalents unless they are legally or contractually restricted. The Company’s cash and cash equivalent balances exceed Federal Deposit Insurance Corporation and other local jurisdictional limits. Restricted cash at March 31, 2026 totaled $ 4,322 and consisted primarily of cash of $ 3,156 held in escrow related to the Company’s acquisition of the Fleet Complete business (the “FC Acquisition”) to secure certain tax liabilities, cash of $ 312 held in escrow for purchases from a vendor, cash of $ 720 held by MiX Telematics Enterprise BEE Trust to be used solely for the benefit of its beneficiaries, cash securing guarantees of $ 58 issued in respect of property lease agreements entered into by MiX Telematics Australasia and cash securing guarantees of $ 76 issued in respect of property lease agreements entered into by Fleet Complete Australia. Restricted cash at June 30, 2026 consisted of cash of $ 2,694 held in escrow related to the FC Acquisition to secure certain tax liabilities, cash of $ 312 held in escrow for purchases from a vendor, cash of $ 750 held by MiX Telematics Enterprise BEE Trust to be used solely for the benefit of its beneficiaries, cash securing guarantees of $ 59 issued in respect of property lease agreements entered into by MiX Telematics Australasia and cash securing guarantees of $ 80 issued in respect of property lease agreements entered into by Fleet Complete Australia. NOTE 5 - REVENUE RECOGNITION The Company generates revenue from sales of products and from customer software-as-a-service (“SaaS”), data integration and hosting infrastructure fees. The revenue streams are categorized as product revenue and services revenue, based on the nature of the underlying goods and services provided. Product revenues consists primarily of revenue derived from the sale of hardware devices. Service revenue consists primarily of revenue derived from the provision of recurring subscription services, as well as professional implementation and other non-recurring services. The Company also generates revenue through distributor and channel partner arrangements and, to a lesser extent, leasing arrangements. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Sales, value add, and other taxes collected concurrently with revenue-producing activities are excluded from revenue. The Company applies the following five‑step model under ASC 606, Revenue from Contracts with Customers (“ASC 606”), to determine revenue recognition: (i) identification of the contract with a customer; (ii) identification of the performance 12 obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when, or as, the performance obligations are satisfied. The Company utilizes significant judgment to determine whether control of the hardware has transferred to the customer (i.e., distinct to the customer separate from SaaS services provided). For products which are not distinct to the customer separate from the SaaS services provided, the Company considers both hardware and SaaS services a bundled performance obligation. Product Revenue Product revenue consists primarily of hardware, parts and accessories relating to artificial intelligence (“AI”)-enabled cameras, in-vehicle telematics devices and in-warehouse devices and sensors. Product revenue is recognized at a point in time when control transfers to the customer, typically upon shipment or delivery in accordance with contractual terms. Recurring Subscription Services Recurring subscription services revenue consists primarily of access to the Company’s cloud‑based software platforms, data analytics, hosted applications, and connectivity services that enable data transmission between devices and the Company’s systems. Subscription arrangements are generally non‑cancellable and range from one to five years . Recurring subscription services represent a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. Accordingly, these services are accounted for as a single performance obligation satisfied over time, as customers simultaneously receive and consume the benefits of the services. Revenue is recognized ratably over the contractual service period beginning when the services are made available to the customer. Professional Implementation and Other Non-Recurring Services Professional and other non-recurring services consist primarily of implementation, installation, configuration, training, and technical support services. Revenue from professional services is recognized at a point in time when the services are performed, as these services are typically short-term in nature and customers receive the benefit upon completion of the services provided. Distributor and Partner Arrangements The Company sells its products and services both directly to customers and indirectly through distributors and channel partners. When another party is involved in providing products or services to the end customer, the Company evaluates the nature of its promise to determine whether it is acting as an agent or principal in the sales transaction. The Company considers itself acting as a principal if it controls the specified products or services before they are transferred to the end customers, otherwise the Company is acting as an agent. The Company determines control as the ability to direct the use of, and obtain substantially all of the remaining benefits from, the products or services. Control includes the ability to prevent others from directing the use of, and obtaining the benefits from, the products or services. Revenue is recognized based on the gross amount of consideration to which the Company expects to be entitled to in exchange for the specified products or services when acting as a principal and is recognized based on any fee or commission to which it expects to be entitled to in exchange for arranging for the specified products or services to be provided by the other party. Transaction Price and Allocation - Standalone Selling Price (SSP) For contracts containing multiple performance obligations, the Company applies judgment in identifying performance obligations and determining whether promised goods or services are distinct or should be combined as a single performance obligation. 13 The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative SSP. Judgment is required to determine the SSP for each distinct performance obligation. The Company generally determines standalone selling prices based on observable prices charged to customers. Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of its transactions, the customer demographic, price lists, its go-to-market strategy and historical and current sales and contract prices. As the Company’s go-to-market strategies evolve, it may modify its pricing practices in the future, which could result in changes to SSP. In certain cases, the Company is able to establish SSP based on observable prices of products or services sold separately in comparable circumstances to similar customers. The Company uses a single amount to estimate SSP when it has observable prices. If SSP is not directly observable, for example when pricing is highly variable, the Company uses a range of SSP. The Company determines the SSP range using information that may include pricing practices or other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size. Contract Balances Contract liabilities (deferred revenue) consist of amounts invoiced or received in advance of satisfying performance obligations, primarily related to subscription, connectivity, maintenance, and support services. Deferred revenue is recognized over the applicable service period and classified as current or long‑term based on the timing of expected satisfaction of performance obligations. Costs to Obtain Contracts Incremental costs of obtaining contracts, primarily sales commissions paid to employees and distributors, are capitalized when the Company expects to recover those costs. These costs are amortized on a systematic basis over the estimated period of benefit, generally one to five years . Warranties The Company’s standard hardware warranties represent assurance-type warranties and are not separate performance obligations under ASC 606. Expected costs associated with these warranties are recognized as an expense when the related products are sold and are accounted for in accordance with ASC 460, Guarantees. Remaining Performance Obligations The Company has elected the practical expedients permitted under ASC 606 and therefore does not disclose the value of remaining performance obligations for: (i) contracts with original expected durations of one year or less; and (ii) contracts for which revenue is recognized in an amount corresponding directly with the value transferred to the customer. The following table presents the Company’s revenues disaggregated by revenue source for the three months ended June 30, 2025 and 2026 (in thousands): Three Months Ended June 30, 2025 2026 Products $ 17,657 $ 16,480 Services 86,464 94,313 $ 104,121 $ 110,793 14 The balances of contract assets and contract liabilities from contracts with customers are as follows as of March 31, 2026 and June 30, 2026 (in thousands): March 31, 2026 June 30, 2026 Contract Assets: Deferred contract costs (1) $ 12,431 $ 14,177 Deferred costs - current $ — $ 172 Contract Liabilities: Deferred revenue – services (2) $ 23,337 $ 23,759 Deferred revenue – products (2) 827 601 24,164 24,360 Less: Deferred revenue – current ( 20,159 ) ( 20,857 ) Deferred revenue – long term $ 4,005 $ 3,503 (1) Deferred contract costs are included in Other assets on the condensed consolidated balance sheet. (2) The Company records deferred revenues when cash payments are received or due in advance of the Company’s performance. For the year ended March 31, 2026 and the three-month period ended June 30, 2026, the Company recognized revenue of $ 22,203 and $ 6,620 , respectively, which was included in the deferred revenue balance at the beginning of each reporting period. The Company expects to recognize as revenue through fiscal year 2029, when it transfers those goods and services and, therefore, satisfies its performance obligation to the customers. NOTE 6 - ALLOWANCE FOR CREDIT LOSSES The Company’s accounts receivable were evaluated to determine an appropriate allowance for credit losses. For accounts receivable, the Company’s historical collections were analyzed by the number of days past due to determine the uncollectible rate in each range of days past due and considerations of any changes expected in the future. The estimate of the allowance for credit losses is charged to the allowance for credit losses based on the age of accounts receivable multiplied by the historical uncollectible rate for the range of days past due or earlier if the account is deemed uncollectible for other reasons. Recoveries of amounts previously charged as uncollectible are credited to the allowance for credit losses. An analysis of the allowance for credit losses for the periods ended June 30, 2025 and 2026 is as follows (in thousands): Three Months Ended June 30, 2025 2026 Allowance for credit losses, March 31 $ 4,057 $ 9,177 Current period provision for expected credit losses 5,388 3,747 Write-offs charged against the allowance ( 1,634 ) ( 3,705 ) Foreign currency translation 626 125 Allowance for credit losses, June 30 $ 8,437 $ 9,344 15 NOTE 7 - PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other current assets comprise the following (in thousands): March 31, 2026 June 30, 2026 Sales-type lease receivables, current $ 831 $ 757 Prepaid expenses 8,865 9,059 Contract assets 5,017 3,536 Tax receivables 1,190 1,401 VAT receivable 1,669 1,084 Sundry debtors 4,037 6,934 Other current assets 485 971 $ 22,094 $ 23,743 NOTE 8 - INVENTORY Inventory, which primarily consists of finished goods and components used in the Company’s products, is stated at the lower of cost or net realizable value using the weighted-average cost method or the first-in first-out (FIFO) method. Inventories consist of the following (in thousands): March 31, 2026 June 30, 2026 Components $ 8,495 $ 7,272 Finished goods, net 13,953 14,373 $ 22,448 $ 21,645 NOTE 9 - FIXED ASSETS Fixed assets are stated at cost, less accumulated depreciation and amortization, and are summarized as follows (in thousands): March 31, 2026 June 30, 2026 Installed and uninstalled products $ 73,750 $ 78,073 Computer software 11,807 12,421 Computer and electronic equipment 8,596 8,949 Furniture and fixtures 4,004 4,462 Leasehold improvements 650 729 Plant and equipment 278 309 Assets in progress 107 23 99,192 104,966 Accumulated depreciation and amortization ( 36,794 ) ( 41,166 ) $ 62,398 $ 63,800 Depreciation and amortization expense for the three-month periods ended June 30, 2025 and 2026 was $ 6,172 and $ 5,744 , respectively . 16 NOTE 10 - INTANGIBLE ASSETS AND GOODWILL The Company capitalizes certain development costs for software to be sold, marketed, or leased to customers. Costs incurred internally in researching and developing software products are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, software development costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. The amortization of these capitalized development costs is included in cost of revenue over the estimated life of the products. The following table summarizes identifiable intangible assets of the Company as of March 31, 2026 and June 30, 2026 (in thousands): June 30, 2026 Useful Lives (In Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived: Customer relationships 9 - 13 $ 214,972 $ ( 46,099 ) $ 168,873 Trademark and tradename 3 - 15 23,926 ( 8,956 ) 14,970 Patents 7 - 11 2,128 ( 1,086 ) 1,042 Technology 5 - 7 86,252 ( 36,243 ) 50,009 Software to be sold or leased 3 - 7 27,295 ( 8,421 ) 18,874 354,573 ( 100,805 ) 253,768 Indefinite-lived: Customer list 104 — 104 Trademark and tradename 61 — 61 165 — 165 Total $ 354,738 $ ( 100,805 ) $ 253,933 March 31, 2026 Useful Lives (In Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived: Customer relationships 9 - 13 $ 213,107 $ ( 40,868 ) $ 172,239 Trademark and tradename 3 - 15 23,637 ( 8,291 ) 15,346 Patents 7 - 11 2,128 ( 961 ) 1,167 Technology 3 - 5 85,187 ( 36,165 ) 49,022 Software to be sold or leased 3 - 5 22,875 ( 5,296 ) 17,579 346,934 ( 91,581 ) 255,353 Indefinite-lived: Customer list 104 — 104 Trademark and tradename 61 — 61 165 — 165 Total $ 347,099 $ ( 91,581 ) $ 255,518 17 The weighted-average remaining amortization periods for customer relationships, trademarks and tradenames, patents, technology, and capitalized software to be sold or leased at June 30, 2026 were 10.3 , 10.1 , 2.1 , 2.5 , and 2.7 years , respectively, and at March 31, 2026 were 10.2 , 9.8 , 3.0 , 2.8 , and 2.8 years, respectively . Amortization expense for the three-month periods ended June 30, 2025 and 2026 was $ 9,859 and $ 10,463 , respectively. Estimated future amortization expense for each of the five succeeding fiscal years for these intangible assets is as follows: Fiscal Year Estimated Future Amortization Expense 2027 (remaining) $ 31,760 2028 41,183 2029 32,364 2030 23,898 2031 17,818 Thereafter 106,745 $ 253,768 Reconciliation of Total Goodwill The following table is a reconciliation of the carrying amount of goodwill as of March 31, 2026 and June 30, 2026 (in thousands): Goodwill Carrying Amount Balance at March 31, 2025 $ 383,146 Businesses acquired Powerfleet Africa Sky 552 RTS Acquisition 5,637 Foreign currency translation difference 22,660 Balance at March 31, 2026 411,995 Foreign currency translation difference 9,067 Balance at June 30, 2026 $ 421,062 For the three-month period ended June 30, 2026, the Company did not identify any indicators of impairment. 18 NOTE 11 - STOCK-BASED COMPENSATION [A] Stock Options: During the three-month period ended June 30, 2026, the Company did not grant any market-based stock options. The following table summarizes the activity relating to the Company’s market-based stock options for the three-month period ended June 30, 2026: Options (in thousands) Weighted- Average Exercise Price ($) Weighted-Average Contractual Remaining Term (years) Aggregate Intrinsic Values (in thousands) Outstanding as of April 1, 2026 5,090 14.09 — — Granted — — — — Exercised — — — — Forfeited — — — — Outstanding as of June 30, 2026 5,090 14.09 5.68 $ 687 Exercisable as of June 30, 2026 — — — $ — During the three-month period ended June 30, 2026, the Company did no t grant any options to purchase shares of common stock with time-based vesting conditions. The following table summarizes the activity relating to the Company’s stock options, excluding the market-based stock options, for the three-month period ended June 30, 2026: Options (in thousands) Weighted- Average Exercise Price ($) Weighted-Average Contractual Remaining Term (years) Aggregate Intrinsic Values (in thousands) Outstanding as of April 1, 2026 1,807 4.51 — — Granted — — — — Exercised — — — — Forfeited ( 182 ) 4.66 — — Outstanding as of June 30, 2026 1,625 4.49 5.50 $ 346 Exercisable as of June 30, 2026 1,575 4.50 5.42 $ 346 The Company recorded stock-based compensation expense of $ 447 and $ 231 for the three-month periods ended June 30, 2025 and 2026, respectively, in connection with awards made under the stock option plans, including market-based and time-based options. The fair value of options vested during the three-month periods ended June 30, 2025 and 2026 amounted to $ 100 and $ 67 , respectively. There were no option exercises that occurred during the three-month periods ended June 30,2025 and 2026. As of June 30, 2026, there was $ 123 of total unrecognized compensation costs related to unvested options granted under the Company’s stock option plans excluding the market-based stock options that were granted to certain senior managers, including the Company’s executive officers. That cost is expected to be recognized over a weighted-average period of 0.34 years. 19 As of June 30, 2026, there was $ 853 of total unrecognized compensation costs related to unvested options granted under the Company’s stock option plans for the market-based stock options that were granted to certain senior managers, including the Company’s executive officers. That cost is expected to be recognized over a weighted-average period of 0.98 years. The Company estimates forfeitures at the time of valuation and reduces expenses ratably over the vesting period. This estimate is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate. [B] Restricted Stock Awards, Restricted Stock Units and Performance Stock Units: The Company has granted from time to time restricted stock, restricted stock units (“RSUs”) and performance stock units (“PSUs”) to employees under its equity incentive plans. Each RSU represents a contingent right to receive one share of the Company’s common stock upon vesting. RSUs are generally subject to service-based vesting conditions and vest in equal installments over a three-year period, provided the recipient remains employed by, or continues to provide service to, the Company through each applicable vesting date. PSUs represent the right to receive a variable number of shares of the Company’s common stock upon vesting, subject to the achievement of specified performance criteria and continued service requirements. The stock awards are unvested at the time of grant, and, upon vesting, there are no legal restrictions on the stock. Some participants have the option to have their shares withheld for their taxes upon vesting. Shares withheld for taxes are treated as a purchase of treasury stock. The fair value of each share is based on the Company’s closing stock price on the date of the grant. During the three-month period ended June 30, 2025, the Company granted 373 restricted shares of common stock to the Company’s senior management team, which vest in equal installments over a three-year period, provided that they remain employed by the Company on each scheduled vesting date. The Company also granted an additional 11 restricted shares of common stock to the Company’s senior management team, which vest in equal installments over a 12 -month period, provided that they remain employed by the Company on each scheduled vesting date. The grant date for these awards was determined to be April 23, 2025. During the three-month period ended March 31, 2026, the Company granted 1,335 RSUs to the Company’s senior management team, which vest in equal installments over a three-year period, provided that they remain employed by the Company on each scheduled vesting date. The grant date for these awards was determined to be February 25, 2026. During the three-month period ended June 30, 2025, the Company granted 1,475 restricted shares of common stock to the Company’s executive officers and senior management team, which vest in full if specified performance targets are achieved and provided that they remain employed by the Company on the scheduled vesting date. The grant date for these awards was determined to be April 23, 2025. During the three-month period ended March 31, 2026, the Company granted 2,671 PSUs to the Company’s senior management team, which vest in full if specified performance targets are achieved and provided that they remain employed by the Company on the scheduled vesting date. The grant date for these awards was determined to be February 25, 2026. 20 A summary of all unvested restricted stock, RSUs and PSUs for the three-month period ended June 30, 2026 is as follows: Time-Based Awards Market-Based Awards Performance-Based Awards Number of Unvested Shares (in thousands) Weighted- Average Grant Date Fair Value ($) Number of Unvested Shares (in thousands) Weighted- Average Grant Date Fair Value ($) Number of Unvested Shares (in thousands) Weighted- Average Grant Date Fair Value ($) Unvested, March 31, 2026 1,985 4.24 834 5.35 3,993 4.05 Granted — — — — — — Vested/Exercised ( 1 ) 4.75 — — — — Forfeited or expired — — — — — — Unvested, June 30, 2026 1,984 4.23 834 5.35 3,993 3.62 The Company recorded stock-based compensation expenses of $ 820 and $ 2,503 for the three-month periods ended June 30, 2025 and 2026, respectively, in connection with restricted stock, RSU and PSU grants. As of June 30, 2026, there was $ 13,496 of total unrecognized compensation cost related to unvested shares, RSUs and PSUs. [C] Stock Appreciation Rights: The following table summarizes the activity relating to the Company’s stock appreciation rights (“SARs”) for the three-month period ended June 30, 2026: Number of SARs (in thousands) Weighted- Average Exercise Price ($) Weighted-Average Contractual Remaining Term (years) Aggregate Intrinsic Values (in thousands) Outstanding as of April 1, 2026 2,369 2.36 Granted — — Exercised ( 312 ) 2.52 Forfeited 0 — Outstanding as of June 30, 2026 2,057 2.34 2.26 Exercisable as of June 30, 2026 971 2.42 2.06 $ 1,367 The total stock-based compensation expense recognized during the three-month periods ended June 30, 2025 and 2026 was $ 361 and $ 325 , respectively. As of June 30, 2026, there was $ 5,788 of unrecognized compensation cost related to unvested SARs. This amount is expected to be recognized over a weighted-average period of 1.55 years. [D] Warrants: On April 21, 2025, the Company issued to Private Capital Management Holdings, L.P., an affiliate of Private Capital Management, LLC (“PCM”), a warrant to purchase 130 shares of common stock in lieu of granting certain equity compensation to Andrew Martin, one of the Company’s directors and a partner and member of the investment research team at PCM. The warrants become exercisable in 10 equal installments on the last day of each quarter starting June 30, 2024. 21 The fair value of each warrant on grant date is estimated using the Black-Scholes option-pricing model reflecting the following assumptions: Expected volatility 70.0 % Expected life of warrants 5.2 Risk free interest rate 4.0 % Dividend yield — Fair value of warrants granted during the quarter $ 2.79 The total stock-based compensation expense recognized during the three-month period ended June 30, 2025 and 2026 was $ 226 and $ 14 , respectively. As of June 30, 2026, there was $ 6 of unrecognized compensation expense related to unvested warrants. This amount is expected to be recognized over a weighted-average period of 0.25 years. NOTE 12 - NET LOSS PER SHARE Net loss per share for the three-month periods ended June 30, 2025 and 2026 are as follows (in thousands, except per share data): Three Months Ended June 30, 2025 2026 Basic and diluted loss per share Net loss attributable to common stockholders $ ( 10,234 ) $ ( 8,440 ) Net loss per share attributable to common stockholders - basic and diluted $ ( 0.08 ) $ ( 0.06 ) Weighted-average common share outstanding - basic and diluted 133,313 134,169 Basic loss per share is calculated by dividing net loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution assuming common shares were issued upon the exercise of outstanding options and the proceeds thereof were used to purchase outstanding common shares. Dilutive potential common shares include outstanding stock options, warrants and restricted stock and performance share awards. We include participating securities (unvested share-based payment awards and equivalents that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of earnings per share pursuant to the two-class method. The Company’s participating securities consist solely of preferred stock, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. NOTE 13 - SHORT-TERM BANK DEBT AND LONG-TERM DEBT Amounts outstanding under short‑term and long‑term debt were classified on the consolidated balance sheets as follows (in thousands): March 31, 2026 June 30, 2026 Short-term bank debt $ 44,072 $ 42,410 Current maturities of long-term debt $ 6,283 $ 6,682 Long-term debt - less current maturities $ 229,669 $ 229,300 As of June 30, 2026, the Company had debt outstanding under credit facilities with Bank Hapoalim B.M. (“Hapoalim”) and FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”). As of June 30, 2026, short-term bank debt consisted of $ 42,396 of borrowing facilities and $ 14 of book overdrafts. 22 Summary of Debt Facilities Short-Term Debt The following table summarizes the Company’s revolving credit facilities as of June 30, 2026 (in thousands): Facility Denominated Currency Total Committed Amount (USD equivalent at balance sheet date) Amount Outstanding (Drawn) Available Borrowing Capacity (Undrawn) Interest Rate Final Maturity Classification RMB General Facility ZAR $ 21,332 $ 18,067 $ 3,265 SA Prime – 0.75 % On demand (April 2, 2026) Current RMB Revolving Credit Facility A USD $ 10,000 $ 5,000 $ 5,000 SOFR + 2.5 % February 1, 2027 Current RMB Revolving Credit Facility B ZAR $ 10,971 $ — $ 10,971 South African rand overnight index average + 1.95 % February 1, 2027 Current Hapoalim Revolving Credit Facility C USD/NIS $ 10,000 $ 6,648 $ 3,352 USD-denominated: SOFR + 2.15 % NIS-denominated: Hapoalim Prime + 2.5 % February 27, 2027 Current Hapoalim Revolving Credit Facility D USD $ 20,000 $ 12,681 $ 7,319 SOFR + 2.59 % February 27, 2027 Current $ 72,303 $ 42,396 $ 29,907 RMB General Facility As part of the business combination with MiX Telematics in April 2024 (the “MiX Combination”), MiX Telematics entered into a committed general banking facility with RMB in the principal amount of R 350,000 (the equivalent of $ 21,332 at June 30, 2026) (the “RMB General Facility”). The RMB General Facility was repayable on demand and had a contractual term of 365 days from the available date. Repayment, including capitalized interest, was due by April 2, 2026, unless extended by agreement between MiX Telematics and RMB. Interest was calculated on the daily outstanding balance, compounded monthly in arrears and payable quarterly. Subsequent to June 30, 2026, the Company 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 the Company’s 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. The Company expects 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. 23 2026 RMB Revolving Credit Facilities On February 5, 2026, the Company, together with certain wholly owned subsidiaries, entered into a facilities agreement with RMB (the “RMB Revolving Credit Facilities Agreement”) providing revolving credit facilities in the aggregate principal amounts of $ 10,000 (“RMB Revolving Credit Facility A”) and R 180,000 (“RMB Revolving Credit Facility B” and, together with RMB Revolving Credit Facility A, the “RMB Revolving Credit Facilities”), respectively. The RMB Revolving Credit Facilities are available for general corporate purposes. The RMB Revolving Credit Facilities will mature one year from closing. Loans made under the RMB Revolving Credit Facilities may be voluntarily prepaid, in whole or in part, without penalty or premium, at any time upon prior written notice. In addition, the RMB Revolving Credit Facilities Agreement provides for certain customary mandatory prepayment requirements. The Company was required to pay a non-refundable upfront fee in the amount of $ 0.1 million. In addition, the Company is required to pay a commitment fee on the undrawn portion of each RMB Revolving Credit Facility during the availability period, calculated at a rate equal to (i) 35 % per annum of the applicable margin if utilization is less than 50 % of the applicable RMB Revolving Credit Facility, (ii) 20 % per annum of the applicable margin if utilization is equal to or greater than 50 % of RMB Revolving Credit Facility A, and (iii) 26 % per annum of the applicable margin if utilization is equal to or greater than 50 % of RMB Revolving Credit Facility B. Hapoalim Revolving Credit Facilities On March 18, 2024, Powerfleet Israel Ltd. (“Powerfleet Israel”) and Pointer Telocation Ltd. (“Pointer” and, together with Powerfleet Israel, the “Borrowers”) entered into an amended and restated credit agreement (as amended, the “A&R Credit Agreement”). The A&R Credit Agreement provides for two revolving credit facilities to Pointer in an aggregate principal amount of $ 20,000 (composed of two revolvers in the aggregate principal amounts of $ 10,000 and $ 10,000 , respectively) (“Hapoalim Revolving Credit Facility C” and “Hapoalim Revolving Credit Facility D,” respectively, and, collectively, the “Hapoalim Revolving Credit Facilities”). On December 30, 2024, the Borrowers entered into an amendment to the A&R Credit Agreement, which increases the principal amount available under Hapoalim Revolving Credit Facility D from $ 10,000 to $ 20,000 . The proceeds of the Hapoalim Revolving Credit Facilities may be used by Pointer for general corporate purposes, including working capital and capital expenditures. The Company is required to pay non‑utilization and credit allocation fees on undrawn balances equal to 0.5 % per annum on undrawn and uncancelled amounts. The Hapoalim Revolving Credit Facilities are secured by first‑ranking and exclusive fixed and floating charges, including by Powerfleet Israel over the entire share capital of Pointer and by Pointer over its assets, as well as cross‑guarantees between Powerfleet Israel and Pointer, subject to specified exclusions. The weighted-average interest rate on short-term borrowings as of March 31, 2026 and June 30, 2026 was 7.90 % and 7.94 %, respectively. 24 Long-Term Debt The following table summarizes the Company’s loan facilities as of June 30, 2026 (in thousands): Facility Denominated Currency Original Principal Amount (USD equivalent) Outstanding Balance Interest Rate Final Maturity Classification Hapoalim Term Facility A NIS $ 20,000 $ 14,260 Hapoalim Prime ( 5.25 %) + 2.2 % March 18, 2029 Non-current Hapoalim Term Facility B ** NIS $ 10,000 $ 12,267 Hapoalim Prime ( 5.25 %) + 2.3 % March 18, 2029 Non-current RMB Term Facility A USD $ 42,500 $ 42,500 8.699 % to March 31, 2027, thereafter SOFR + 4.85 % March 31, 2028 Non-current RMB Term Facility B USD $ 42,500 $ 42,500 8.979 % fixed March 31, 2029 Non-current New RMB Term Facility USD $ 125,000 $ 125,000 5.0 % + SOFR October 31, 2029 Non-current $ 240,000 $ 236,527 ** The outstanding balance of the Hapoalim Term Facility B exceeds the original USD equivalent principal amount due to foreign currency fluctuations with no required principal payments until maturity. Hapoalim Term Facilities The A&R Credit Agreement also provides for two senior secured term loan facilities denominated in NIS to Powerfleet Israel in an aggregate principal amount of $ 30,000 (composed of two facilities in the aggregate principal amounts of $ 20,000 and $ 10,000 , respectively) (“Hapoalim Term Facility A” and “Hapoalim Term Facility B,” respectively, and, collectively, the “Hapoalim Term Facilities”). Hapoalim Term Facility A amortizes in quarterly installments over its five-year term, while Hapoalim Term Facility B does not amortize and is payable in full at maturity. The A&R Credit Agreement was accounted for as a modification of the prior term loan facilities, as the change in the present value of future cash flows was less than 10% under the guidance in ASC 470‑50. The proceeds ($ 30,000 ), less the prepayment of the prior term loan facilities (approximately $ 11,200 ), amounting to approximately $ 18,800 , were recorded as an increase in the carrying value of the prior term loan facilities that was recognized previously. For the three-month periods ended June 30, 2025 and 2026, the Company recorded a cost of $ 15 and $ 15 , respectively, net of additional deferred costs and credit to the original debt issuance costs and amortization of the original debt issuance costs. The Company recorded charges of $ 624 and $ 624 to interest expense on its condensed consolidated statements of operations for the three-month periods ended June 30, 2025 and 2026, respectively, related to interest expense associated with the Hapoalim debt. Hapoalim Covenants The A&R Credit Agreement contains certain customary affirmative and negative covenants, including financial covenants with respect to Pointer’s net debt levels which must be less than 100 % of Working Capital as (defined in the A&R Credit Agreement), the ratio of each Borrower’s total debt to Pointer’s EBITDA must not exceed 4.75 , Powerfleet Israel’s minimum equity which must not be less than $ 60,000 , and the ratio of Powerfleet Israel’s equity to its total assets which must be greater than 35 % and the ratio of Pointer’s net debt to EBITDA ratio must not exceed 2 . The occurrence of any event of default under the A&R Credit Agreement may result in all outstanding indebtedness under the Hapoalim Credit Facilities becoming immediately due and payable. As of June 30, 2026, the Company was in compliance with all applicable financial and non‑financial covenants, and no events of default had occurred. 25 RMB Term Facilities On March 7, 2024, the Company, together with certain of its wholly owned subsidiaries, entered into a facilities agreement (the “Facilities Agreement”) with RMB, pursuant to which RMB agreed to provide the Company with two term loan facilities in an aggregate principal amount of $ 85,000 , composed of Facility A and Facility B, each with a principal amount of $ 42,500 (“RMB Term Facility A” and “RMB Term Facility B,” respectively, and, collectively, the “RMB Term Facilities”). The RMB Term Facilities were drawn in full and used to redeem all the then-outstanding shares of the Company’s Series A convertible preferred stock (“Series A Preferred Stock”) and for general corporate purposes. On October 31, 2025, the Company and RMB entered into a first amendment and restatement agreement (the “ First Amendment and Restatement Agreement”), which amended and restated the Facilities Agreement to, among other things, extend maturities and modify interest terms. Under the terms of the First Amendment and Restatement Agreement, RMB Term Facility A matures on March 31, 2028, and RMB Term Facility B matures on March 31, 2029. Interest is payable quarterly in arrears. The Company may prepay the RMB Term Facilities at any time, subject to a minimum reduction of $ 5,000 and multiples of $ 1,000 . If the Company prepays any amount during the first or second annual period of the funding, a refinancing fee equal to 2 % or 1 %, respectively, of the prepayment will be payable. Also, the RMB Term Facilities are mandatorily prepayable upon the occurrence of uncertain future events, such as a change of control or a transfer of the business. In the event that either prepayment occurs, the respective prepayment amount will be adjusted for RMB’s break gains or losses, which relate mainly to the unwinding of interest rate derivatives (the “Prepayment Derivative”) which RMB entered into with third parties to fix the interest rates on the RMB Term Facilities. Certain optional and contingent prepayment features within the RMB Term Facilities were determined to be embedded derivatives requiring bifurcation under of ASC 815-15 Embedded Derivatives. The embedded derivatives were separated from the debt host contracts and accounted for at fair value, with the debt host contracts recorded at amortized cost. Upon initial recognition of the RMB Term Facilities, a Prepayment Derivative asset of $ 610 and $ 1,616 for RMB Term Facility A and RMB Term Facility B, respectively, was recognized with a corresponding increase in the initial carrying amount of each debt-host contract. The fair value of the embedded derivative is estimated using a “with-and-without” approach as the difference between the value of the RMB Term Facilities with and without the embedded derivative using both the binomial lattice model and discounted cash flow analysis. The following key assumptions were used in June 30, 2026: Facility A Facility B Risk-free interest rate volatility 31 % 26 % Risk-free rate 4.10 % 4.15 % Credit rating B B The Prepayment Derivative is classified as a Level 3 in the fair value hierarchy due to the use of at least one significant unobservable input which is the credit spread volatility . At inception, the credit spread was an observable input based on the transaction price of the debt; however, in future periods, it will also be an unobservable input. For the Prepayment Derivative asset in RMB Term Facility A, a change of -10% in credit spread volatility would result in an increase in the derivative asset of $1, while a change of +10% in credit spread volatility would result in no change in the derivative asset. For the Prepayment Derivative asset in RMB Term Facility B, a change of -10% in credit spread volatility would result in an increase in the derivative asset of $ 8 , while a change of +10% in credit spread volatility would result in an increase in the derivative asset of $ 6 . The Prepayment Derivative assets are included in Other assets and their fair values were $ 1,215 and $ 2,291 for RMB Term Facility A and RMB Term Facility B, respectively, as of March 31, 2026 and $ 1,640 and $ 2,785 for RMB Term Facility A and RMB Term Facility B, respectively, as of June 30, 2026. The debt-host contracts are accounted for at amortized cost. Total debt issuance costs of appr oximately $ 1,000 were incurred. For the three-month periods ended June 30, 2025 and 2026, the Co mpany recorded $ 72 and $ 55 , respectively, of amortization of the original debt issuance costs and the refinancing fee to RMB. For the three-month periods ended June 30, 2025 and 2026, the Company recorded interest expense of $ 1,920 and $ 1,920 , respectively. 26 New RMB Term Facility On September 27, 2024, the Company, together with certain of its wholly owned subsidiaries, entered into a term loan facility with RMB in an aggregate principal amount of $ 125,000 (the “New RMB Term Facility”), the proceeds of which were used to pay a portion of the purchase price of approximately $ 190,000 in connection with the FC Acquisition. Interest on the New RMB Term Facility is payable quarterly in arrears. The stated interest rate at June 30, 2026 was 8.70 %. The Company paid a non-refundable deal structuring fee of $ 1,250 to RMB on October 1, 2024. Total debt issuance costs incurred were $ 1,433 , inclusive of the non-refundable deal structuring fee. For the three-month periods ended June 30, 2025 and 2026, the Company recorded $ 58 and $ 64 , respectively, of amortization of these costs and $ 2,938 and $ 2,905 , respectively, of interest expense . The New RMB Term Facility is guaranteed, on a joint and several basis, by certain wholly owned subsidiaries and secured by first‑priority security interests over their share capital. RMB Covenants The RMB facilities agreements contain certain customary affirmative and negative covenants, including financial covenants with respect to the ratio of the Company’s consolidated total net borrowings to consolidated EBITDA, which must be less than (i) 2.75 from June 30, 2026 through March 30, 2027, and (ii) 2.50 thereafter, and the ratio of the Company’s consolidated EBITDA to consolidated total finance costs, which must exceed (i) 3.00 from September 30, 2025 through September 29, 2026 and (ii) 3.50 thereafter. The RMB facilities agreements also include representations, warranties, events of default and other provisions customary for financings of this type. The occurrence of any event of default under the RMB facilities agreements may result in all outstanding indebtedness under the RMB Term Facilities or New RMB Term Facility, as applicable, becoming immediately due and payable. The RMB facilities agreements include an equity cure provision, allowing the Company to remedy a breach of the above financial covenants by receiving a qualifying shareholder contribution (a “Cure Amount”) within 45 days of the applicable Measurement Date (as defined in each of the RMB facilities agreements). The Cure Amount may be applied as a notional reduction in net borrowings or finance costs solely for covenant compliance purposes. The use of this provision is limited to (i) no more than two consecutive Measurement Periods (as defined in each of the RMB Facilities Agreements) and (ii) a maximum of three times over the life of RMB facilities agreements, as applicable. All Cure Amounts must be applied toward mandatory prepayment of outstanding loans under the RMB Term Facilities or New RMB Term Facility, as applicable. As of June 30, 2026, the Company was in compliance with all applicable financial and non‑financial covenants, and no events of default had occurred. Contractual Maturities Scheduled contractual maturities of the long-term debt as of June 30, 2026 are as follows (in thousands): Fiscal Year Contractual Maturities 2027 (remaining) $ — 2028 5,060 2029 49,247 2030 57,220 2031 125,000 Thereafter — 236,527 Less: Current portion ( 6,682 ) Less: Debt costs and prepayment ( 545 ) Total $ 229,300 27 NOTE 14 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following (in thousands): March 31, 2026 June 30, 2026 Accrued warranty $ 959 $ 924 Accrued compensation 22,890 24,654 Government authorities 10,533 10,573 Other current liabilities 3,317 3,819 $ 37,699 $ 39,970 The following table summarizes warranty activity for the three months ended June 30, 2025 and 2026 (in thousands): Three Months Ended June 30, 2025 2026 Accrued warranty reserve, beginning of year $ 3,618 $ 2,202 Accrual for product warranties issued 97 225 Product replacements and other warranty expenditures ( 229 ) ( 334 ) Expiration of warranties ( 45 ) — Foreign currency translation difference 66 30 Accrued warranty reserve, end of period (1) $ 3,507 $ 2,123 (1) Includes non-current accrued warranty included in other long-term liabilities at June 30, 2025 and 2026 of $ 2,134 and $ 1,199 , respectively. NOTE 15 - RESTRUCTURING EXPENSES The Company initiated restructuring actions in connection with the integration of MiX Telematics and Fleet Complete to streamline operations and capture operating synergies. These actions included workforce reductions and employee terminations related to consolidation of overlapping functions. The Company’s restructuring plans are generally country- or region-specific and are typically completed within a one-year period. For the three-month periods ended June 30, 2025 and 2026, the Company recognized restructuring expenses of $ 1,995 and $ 727 , respectively, primarily consisting of employee termination costs. Restructuring expenses are recorded in selling, general and administrative expenses in the condensed consolidated statements of operations. The following table summarizes the details of the Company’s restructuring liability (included in accrued expenses and other current liabilities on the condensed consolidated balance sheets) (in thousands): March 31, 2026 June 30, 2026 Opening balance $ 1,324 $ 1,207 Charges 3,463 727 Cash payments ( 3,580 ) ( 753 ) Foreign currency translation — ( 23 ) Closing balance $ 1,207 $ 1,158 From April 1, 2024 through June 30, 2026, the Company incurred expenses of $ 8,863 in connection with restructuring activities and expects to incur additional charges, primarily for severance, with most related cash outflows expected within the next 12 months. 28 In addition to these restructuring expenses, the Company recognized inventory write-downs related to hardware rationalization (included in cost of revenue) and retention, leadership transition, and other professional costs (included in selling, general and administrative expenses) associated with the restructuring activities. Lease-related impairments and modifications, if any, are accounted for under ASC 842 (included in other income/expenses). NOTE 16 - ACCUMULATED OTHER COMPREHENSIVE INCOME Comprehensive income includes net loss and foreign currency translation gains and losses. The accumulated balances for each classification of other comprehensive income for the three-month period ended June 30, 2026 are as follows (in thousands): Accumulated other comprehensive income Balance at April 1, 2026 $ 29,660 Foreign currency translation adjustment 12,427 Balance at June 30, 2026 $ 42,087 The accumulated balances for each classification of other comprehensive (loss) income for the three-month period ended June 30, 2025 are as follows (in thousands): Accumulated other comprehensive (loss) income Balance at April 1, 2025 $ ( 8,850 ) Foreign currency translation adjustment 22,519 Balance at June 30, 2025 $ 13,669 There were no reclassification adjustments out of accumulated other comprehensive (loss) income during the period. NOTE 17 - SEGMENT INFORMATION The Company operates in one reportable segment, wireless AIoT asset management. The Company has a single operating and reportable segment. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer, who reviews financial information presented on a consolidated basis. The CODM makes operating decisions, assesses financial performance, and allocates resources based on consolidated net loss attributable to common stockholders as reported on the Company’s consolidated statements of operations. The Company derives its revenue from product revenue and service revenue. Product revenue consists primarily of the sale of hardware devices. Service revenue consists primarily of recurring subscription services as well as professional implementation and other non-recurring services. The measure of segment assets is reported on the consolidated balance sheets as net fixed assets. 29 The following table summarizes the revenues and significant expenses and regularly provided to the CODM (in thousands): Three Months Ended June 30, 2025 2026 Total revenues $ 104,121 $ 110,793 Total cost of revenues 47,640 49,632 Selling and marketing expenses 17,597 21,168 General and administrative expenses 33,275 33,081 Development costs incurred 8,559 9,283 Development costs capitalized ( 3,702 ) ( 4,923 ) Depreciation and amortization 2,790 2,282 Interest income 196 234 Interest expense ( 6,786 ) ( 6,983 ) Other expense ( 1,243 ) ( 405 ) Income tax expense ( 362 ) ( 1,373 ) Net loss ( 10,234 ) ( 8,257 ) Non-controlling interest — ( 183 ) Net loss attributable to common stockholders $ ( 10,234 ) $ ( 8,440 ) The following table summarizes revenues by geographic region (in thousands): Three Months Ended June 30, 2025 2026 North America $ 37,425 $ 34,430 Israel 13,295 17,735 Africa 25,462 29,230 Europe and Middle East 12,352 12,066 Australia 10,618 11,207 Other 4,969 6,125 $ 104,121 $ 110,793 The following table summarizes long-lived assets by geographic region (in thousands): March 31, 2026 June 30, 2026 North America $ 16,409 $ 16,819 Israel 1,576 1,528 Africa 33,004 34,015 Europe and Middle East 6,098 6,254 Australia 550 455 Other 4,761 4,729 $ 62,398 $ 63,800 30 NOTE 18 - INCOME TAXES The Company records its interim tax provision based upon a projection of the Company’s annual effective tax rate (“AETR”). This AETR is applied to the year-to-date consolidated pre-tax income to determine the estimated interim provision for income taxes before discrete items. The Company updates the AETR on a quarterly basis as the pre-tax income projections are revised and tax laws are enacted. The effective tax rate (“ETR”) each period is impacted by a number of factors, including the relative mix of domestic and foreign earnings and adjustments to recorded valuation allowances. The currently forecasted ETR may vary from the actual year-end due to the changes in these factors. Three Months Ended June 30, 2025 2026 Domestic pre-tax book loss $ ( 10,345 ) $ ( 10,437 ) Foreign pre-tax book income 473 3,553 Total loss before income taxes ( 9,872 ) ( 6,884 ) Income tax expense ( 362 ) ( 1,373 ) Net loss before non-controlling interest $ ( 10,234 ) $ ( 8,257 ) Effective tax rate ( 3.67 ) % ( 19.94 ) % For the three-month periods ended June 30, 2025 and 2026, the effective tax rate differed from the statutory tax rates primarily due to the mix of domestic and foreign earnings amongst taxable jurisdictions, recorded valuation allowances to fully reserve against deferred tax assets in jurisdictions, and certain discrete items. NOTE 19 - LEASES The Company determines whether an arrangement is a lease at inception. The Company has operating leases for office space, office equipment and vehicles. The Company’s leases have remaining lease terms ranging from approximately 1 to 9 years. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. The operating lease ROU asset also includes any lease payments made in advance of lease commencement and excludes lease incentives. The lease terms used in the calculations of the operating ROU assets and operating lease liabilities include options to extend or terminate the lease when the Company is reasonably certain that it will exercise those options. Lease expense for lease payments is recognized on a straight-line basis over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company has lease agreements with lease and non-lease components, which are generally not accounted for separately. Where lease terms are 12 months or less, and meet the criteria for short-term lease classification, no ROU asset and no lease liability are recognized. Lease costs associated with the short-term leases are included in selling, general and administrative expenses on the Company’s condensed consolidated statements of operations. The components of lease cost are as follows (in thousands): Three Months Ended June 30, 2025 2026 Short-term lease cost $ 419 $ 326 31 Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands): Three Months Ended June 30, 2025 2026 Non-cash activity: Right-of-use assets obtained in exchange for lease obligations $ 200 $ 855 Weighted-average remaining lease term and discount rate for our operating leases are as follows: June 30, 2026 Weighted-average remaining lease term - operating leases (in years) (1) 5.34 Weighted-average discount rate 7.2 % (1) Including expected renewals where appropriate. Scheduled maturities of operating lease liabilities outstanding as of June 30, 2026 are as follows (in thousands): July 2026 - March 2027 $ 4,286 2028 4,740 2029 3,316 2030 2,056 2031 1,427 Thereafter 4,437 Total lease payments 20,262 Less: Imputed interest ( 3,040 ) Present value of lease payments $ 17,222 NOTE 20 - FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying value of finance lease receivables approximates fair value due to the interest rate implicit in the instruments approximating current market rates. The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities and short-term bank debt approximates their fair values due to the short period to maturity of these instruments. The fair value of the Company’s debt is based on observable relevant market information and future cash flows discounted at current rates, which are Level 2 measurements. The Prepayment Derivative within the RMB Term Facilities is classified as a Level 3 in the fair value hierarchy due to the use of at least one significant unobservable input which is the credit spread volatility (see Note 13). There were no transfers between Level 1 or Level 2, or transfers in or out of Level 3, of the fair value hierarchy during the year ended March 31, 2026 and the three months ended June 30, 2026. As of June 30, 2026 Fair Value Carrying Amount Total Fair Value Level 1 Level 2 Level 3 Debt $ 278,392 $ 282,435 $ — $ 282,435 $ — Prepayment derivative $ 4,425 $ 4,425 $ — $ — $ 4,425 32 As of March 31, 2026 Fair Value Carrying Amount Total Fair Value Level 1 Level 2 Level 3 Debt $ 280,024 $ 281,081 $ — $ 281,081 $ — Prepayment derivative $ 3,505 $ 3,505 $ — $ — $ 3,505 NOTE 21 - CONCENTRATION OF CUSTOMERS For the three-month periods ended June 30, 2025 and 2026, there were no customers that generated revenues greater than 10% of the Company’s consolidated total revenues or generated greater than 10% of the Company’s consolidated accounts receivable. NOTE 22 - COMMITMENTS AND CONTINGENCIES From time to time, the Company is involved in various litigation matters involving claims incidental to its business and acquisitions, including employment matters, acquisition-related claims, patent infringement and contractual matters, among other issues. While the outcome of any such litigation matters cannot be predicted with certainty, management currently believes that the outcome of these proceedings, including the matters described below, either individually or in the aggregate, will not have a material adverse effect on its business, results of operations or financial condition. The Company records reserves related to legal matters when losses related to such litigation or contingencies are both probable and reasonably estimable. Mobile Telephone Networks Proprietary Limited (“MTN”), a network service provider of MiX Telematics Africa, a subsidiary of the Company, is entitled to claw back payments from MiX Telematics Africa in the event of early cancellation of the agreement or certain base connections not being maintained over the term of an amended network services agreement between the parties. No connection incentive s will be received in terms of the amended network services agreement. The maximum potential liability under the arrangement as of March 31, 2026 and June 30, 2026 was $ 386 and $ 330 , respectively. No loss is consider ed probable under this arrangement. NOTE 23 - RECENT ACCOUNTING PRONOUNCEMENTS In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ” (“ASU 2024-03”), which requires disclosure in a tabular format, on an annual and interim basis, purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion for each income statement line item that contains those expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the effect of adopting ASU 2024-3. On September 18, 2025, the FASB released ASU 2025-06, which amends certain aspects of the accounting for, and disclosure of, software costs under ASC 350-40. The amendments also supersede the guidance on website development costs in ASC 350-50 and relocate that guidance, along with the recognition requirements for development costs specific to websites, to ASC 350-40. Although the ASU makes targeted improvements to ASC 350-40, it does not fully align the framework for accounting for internally developed software costs that are subject to ASC 350-40 with the framework applied to software to be sold or marketed externally that is subject to ASC 985-20. The FASB also chose not to amend the guidance on costs of software licenses that are within the scope of ASC 985-20. The amendments “are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.” Early adoption is permitted as of the beginning of an annual reporting period. The Company is evaluating the effect of adopting ASU 2025-06. 33 In December 2025, the FASB issued ASU 2025‑12, Codification Improvements (“ASU 2025-12”), which includes technical corrections and clarifications to various Topics in the FASB Accounting Standards Codification. The amendments are intended to improve the clarity and consistency of existing guidance and are not expected to significantly change current accounting practice. The amendments are effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the effect of adopting ASU 2025-12. In December 2025, the FASB issued ASU 2025‑11, Interim Reporting (Topic 270): Narrow‑Scope Improvements (“ASU 2025-11”), which clarifies the application of interim reporting guidance and improves the organization’s required interim disclosures. The standard is effective for interim reporting periods beginning after December 15, 2027 for public business entities. Early adoption is permitted. The Company is evaluating the effect of adopting ASU 2025-11. Effective April 1, 2026, the Company adopted ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). The standard provides an optional practical expedient that permits entities to estimate expected credit losses for eligible current accounts receivable and current contract assets by assuming that conditions existing as of the reporting date remain unchanged throughout the remaining expected life of those assets. The adoption of ASU 2025-05 did not have a material impact on the Company’s consolidated financial statements or related disclosures and has been applied prospectively in accordance with the transition provisions of the standard. 34