PowerFleet 2026 Q1 Earnings Strong Performance as Net Loss Narrows 54.1%

PowerFleet (AIOT) reported its fiscal 2026 Q1 earnings on August 11, 2025, delivering a better-than-expected performance amid continued strategic transformation. The company posted a 38% year-over-year revenue increase and significantly narrowed its net loss, aligning with its guidance of sustained SaaS growth and margin expansion.

PowerFleet’s total revenue rose to $104.12 million in 2026 Q1, a 38.0% increase from $75.43 million in the same period a year ago. The revenue growth was driven by robust performance across both products and services segments, with the services division now accounting for 83% of total revenue. Products revenue stood at $18.74 million, while services revenue reached $56.69 million, underscoring the company’s successful pivot toward recurring, software-driven solutions.

The company significantly improved its profitability, narrowing its net loss to $10.23 million in 2026 Q1, a 54.1% reduction from $22.30 million in the prior year. On a per-share basis, the loss decreased to $0.08 from $0.21, representing a 61.9% improvement and reflecting disciplined cost management and pricing strategies.

The earnings performance indicates a positive trend in the company’s financial health, with a notable reduction in losses and strong services growth.

The stock price of PowerFleet edged up 0.46% during the latest trading day and surged 13.44% during the most recent full trading week, showing positive short-term investor sentiment. Month-to-date, the stock is up 0.46%.

The post-earnings price action review highlights a mixed outcome for a specific trading strategy. Buying AIOT following a revenue miss and holding for 30 days resulted in a -3.69% return, significantly underperforming the benchmark return of 13.61%. The strategy showed an excess return of -17.30%, indicating a substantial negative relative performance. Despite a maximum drawdown of 0.00%, the lack of growth and high volatility—measured at 72.54%—led to a Sharpe ratio of -0.05, emphasizing the strategy’s poor risk-adjusted returns.

CEO Steve Towe described Q1 as a high-impact quarter, marked by SaaS revenue growth and stronger customer traction through the Unity platform strategy. Towe highlighted external challenges, including macroeconomic uncertainty and tariff pressures, which were mitigated through disciplined pricing, supply chain adjustments, and a shift to software-led solutions. The Unity platform now contributes to 83% of total revenue, a 6% sequential increase, with service-adjusted EBITDA gross margin at 76%. Strategic wins included 11 high-value deals over $100,000 ARR and a partnership with MTM Business, enabling global expansion. Towe expressed optimism about the business’s transformation, noting increased ARPU, cross-sell opportunities, and growing demand for AI-driven safety and compliance modules.

Looking ahead, Steve Towe and David Wilson provided guidance on continued SaaS growth, with adjusted EBITDA gross margins expected to expand and services revenue projected to reach 85%+ of total revenue in the long term. Product margins are expected to remain in the mid-20% range, while sales and marketing expenses will stay around 18% of revenue. The company aims to reduce net leverage below 2.25x by year-end, with $30 million in net debt improvement expected in the second half of FY ’26. This will be driven by top-line growth, reduced CapEx, and working capital improvements. The company also plans to redeploy cost synergies into go-to-market investments, particularly in key indirect channels, to accelerate growth.

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