PowerFleet reports a pronounced top-line acceleration in QQ1 2026 with revenue of $104.1 million, up 204.5% year over year and 38.0% quarter over quarter. Gross profit reached $56.48 million, yielding a solid gross margin of 54.2%, underscoring the strength of its IoT hardware and software-enabled solutions. Despite the revenue strength, the company remains unprofitable on a GAAP basis, with operating income of approximately -$2.04 million and net income of -$10.23 million for the quarter, driven by sizable selling/general and administrative expenses, interest costs, and amortization-related charges. Cash from operations was positive at $4.72 million, but free cash flow was negative at -$3.39 million as capital expenditure and working capital movements weighed on liquidity. Management commentary (where available) centers on continued investments to scale deployments, expand software as a service (SaaS) offerings, and capitalize on the growing IoT asset management market, suggesting the near-term focus remains on growth and platform expansion rather than immediate profitability. The balance sheet shows a strong cash position ($35.64 million at period end) and manageable leverage, albeit with high goodwill and intangible assets reflecting past acquisitions and ongoing technology investments.
Key Performance Indicators
Revenue
104.12M
QoQ: 38.04% | YoY:204.49%
Gross Profit
56.48M
54.25% margin
QoQ: 42.46% | YoY:230.01%
Operating Income
-2.04M
QoQ: 88.82% | YoY:37.40%
Net Income
-10.23M
QoQ: 54.18% | YoY:-178.55%
EPS
-0.08
QoQ: 63.43% | YoY:23.20%
Revenue Trend
Margin Analysis
Key Insights
Indicates a sharp rebound in activity, potentially from new deployments or acquisitions and an expanded customer base.
Gross Profit: 56.481M; Gross Margin 54.25%; YoY +230.01%; QoQ +42.46% - Healthy margin supports Hang onto pricing power in IoT hardware/subscription mix; margins benefited from higher utilization of existing platforms and favorable product mix.
Operating Income: -2.039M; Margin -1.96%; YoY +37.40%; QoQ +88.82% - Loss narrowed versus prior periods, but profitability remains elusive due to ongoing investment in SG&A and R&D, as well as depreciation and amortization.
EBITDA: -2.039M; Margin ~-2.0% - Reflects current profitability trajectory and investment phase; suggests path to breakeven requires either revenue scale or cost discipline.
Net Income: -10.234M; Net Margin -9.83%; YoY -178.55%; QoQ +54.18% - Large net loss driven by non-operating costs and amortization; QoQ improvement in bottom-line loss but still negative.
EPS (Diluted): -0.0768; YoY +23.20%; QoQ +63.43% - Loss per share reduced sequentially but remains negative; reflects the same mix of operating losses and non-cash charges.
Cash Flow: Operating Cash Flow 4.721M; Free Cash Flow -3.393M; CapEx -8.114M - Positive operating cash flow demonstrates underlying cash generation; negative free cash flow driven by capex and working capital needs linked to growth investments.
Liquidity & Balance Sheet: Cash & equivalents 31.196M; Total assets 930.782M; Total debt 50.385M; Net debt 19.189M; Cash at end 35.643M; Current ratio ~1.07; Quick ratio ~0.72 - Solid cash cushion but substantial non-cash assets and goodwill imply impairment risk and longer-term balance sheet volatility if growth investments underperform. Goodwill 394.668M; Intangible assets 263.745M; Retained earnings -216.017M; Total stockholders’ equity 460.880M - Indicates elevated intangible/intellectual property value on the books and potential impairment exposure if market conditions deteriorate.
Financial Highlights
Revenue: 104.121M; YoY +204.49%; QoQ +38.04% - Indicates a sharp rebound in activity, potentially from new deployments or acquisitions and an expanded customer base.
Gross Profit: 56.481M; Gross Margin 54.25%; YoY +230.01%; QoQ +42.46% - Healthy margin supports Hang onto pricing power in IoT hardware/subscription mix; margins benefited from higher utilization of existing platforms and favorable product mix.
Operating Income: -2.039M; Margin -1.96%; YoY +37.40%; QoQ +88.82% - Loss narrowed versus prior periods, but profitability remains elusive due to ongoing investment in SG&A and R&D, as well as depreciation and amortization.
EBITDA: -2.039M; Margin ~-2.0% - Reflects current profitability trajectory and investment phase; suggests path to breakeven requires either revenue scale or cost discipline.
Net Income: -10.234M; Net Margin -9.83%; YoY -178.55%; QoQ +54.18% - Large net loss driven by non-operating costs and amortization; QoQ improvement in bottom-line loss but still negative.
EPS (Diluted): -0.0768; YoY +23.20%; QoQ +63.43% - Loss per share reduced sequentially but remains negative; reflects the same mix of operating losses and non-cash charges.
Cash Flow: Operating Cash Flow 4.721M; Free Cash Flow -3.393M; CapEx -8.114M - Positive operating cash flow demonstrates underlying cash generation; negative free cash flow driven by capex and working capital needs linked to growth investments.
Liquidity & Balance Sheet: Cash & equivalents 31.196M; Total assets 930.782M; Total debt 50.385M; Net debt 19.189M; Cash at end 35.643M; Current ratio ~1.07; Quick ratio ~0.72 - Solid cash cushion but substantial non-cash assets and goodwill imply impairment risk and longer-term balance sheet volatility if growth investments underperform. Goodwill 394.668M; Intangible assets 263.745M; Retained earnings -216.017M; Total stockholders’ equity 460.880M - Indicates elevated intangible/intellectual property value on the books and potential impairment exposure if market conditions deteriorate.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
104.12M
204.49%
38.04%
Gross Profit
56.48M
230.01%
42.46%
Operating Income
-2.04M
37.40%
88.82%
Net Income
-10.23M
-178.55%
54.18%
EPS
-0.08
23.20%
63.43%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript data not provided in the dataset. No management call quotes or themes could be extracted from QQ1 2026 materials within the provided text. If a transcript becomes available, the highlights would typically center on: (1) growth strategy and deployment scale, (2) product roadmap and SaaS monetization, (3) gross margin discipline and cost-control measures, (4) cadence of customer wins and concentration, and (5) near-term profitability targets and capital allocation priorities.
Transcript data not provided.
— N/A
Transcript data not provided.
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Forward Guidance
There is no explicit forward guidance in the provided data. Based on the QQ1 2026 results and typical sector dynamics for IoT asset management players, the near-term outlook is skewed toward growth investment rather than near-term profitability. Key factors likely to influence guidance include: momentum in software subscription adoption and recurring revenue mix, onboarding of new customers across verticals, and operating expense management to drive EBITDA/bottom-line improvements. Observable metrics to monitor include:
- Revenue growth trajectory (sustainability of YoY acceleration).
- Gross margin trend (to determine pricing power and product mix stability).
- Operating expense ratio (SG&A/R&D as a percentage of revenue) to gauge profitability leverage.
- Cash flow conversion and capital expenditure intensity, as capex impact on FCF remains meaningful.
- Impairment risk on goodwill/intangibles given high asset base; watch for impairment charges if demand softens.
Overall assessment: The company appears to be investing to scale platforms and expand SaaS offerings; investors should monitor the revenue mix, profitability trajectory, and balance sheet resilience as growth initiatives mature.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
PWFL.TA Focus
54.25%
N/A
N/A
N/A
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Quantitatively, QQ1 2026 showcases a compelling revenue growth trajectory, but profitability remains the major overhang. The company is in an advancement phase, investing in R&D, sales capacity, and platform expansion to monetize a growing IoT asset-tracking market. If the growth investments translate into higher recurring revenue, improved gross margins, and EBITDA uplift, PowerFleet could realize a stronger earnings profile in the medium term. However, investors should be mindful of impairment risk tied to goodwill and intangible assets, sensitivity to capex cycles, and potential volatility in working capital. The absence of formal forward guidance requires a cautious but constructive stance: monitor SaaS revenue contribution, gross margin stability, and the pace of cost optimization. Key catalysts include accelerated SaaS adoption, larger multi-year contracts, and disciplined capital allocation that drives free cash flow improvements.
Key Investment Factors
Growth Potential
Strong top-line growth in QQ1 2026, with revenue of $104.1M and a 204.5% YoY increase, suggesting the expansion of deployed assets and software-enabled services across new and existing customers.
Profitability Risk
Near-term profitability remains negative with EBITDA and net income losses; high goodwill/intangible asset base implies potential impairment risk; reliance on continued capex for growth could pressure free cash flow and liquidity; reliance on external financing or continued cash generation to fund growth.
Financial Position
Healthy liquidity with $35.6M of cash, positive operating cash flow in the quarter, and modest net debt (~$19.2M). However, sizable intangible assets and goodwill ($658.4M combined) warrant impairment risk if market conditions deteriorate or post-acquisition synergies underperform.
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