Total Revenue rose 6.8% to $194.4m. The firm forecast a “minimum” $205.0m in FY2026 or 5.5% growth.

Annualised recurring revenue (ARR) from monthly subscriptions rose 6.1% to $165m.

Eroad guided to “a minimum $188m” or 7.5% growth in ARR for FY2026 with “a free cashflow yield of 8 to 10%”.

In Eroad’s three key geographic markets, New Zealand revenue rose 12.9% to $103.9m, North America revenue rose 1.5% to $81.2m while Australia was up 28% – albeit off a much lower base – to $13.7m.

Tariff impact

Speaking to the Herald soon after the results were released, co-chief executive David Kenneson said the Auckland-based firm – which uses contract manufacturers – had seen some deal times increase because of US President Donald Trump’s “Liberation Day” tariffs (those above 10% are currently on a 90-day pause that expires in July).

“We had one pilot customer sign with us and we’ve gone live at one of their larger locations in California, but they’re putting a brief pause on any other capex spending on other projects until the tariffs come into a bit more clarity … they’re slowing their entire rollout for about six months.”

Kenneson declined to name the customer.

North America is Eroad’s second-largest market, with 126,944 of its vehicle-tracking units deployed (its largest is New Zealand with 126,944, while third is Australia on 24,515).

Software and services are exempt from Trump’s tariffs which so far (beyond a threat to levy films made offshore) have only been applied to physically manufactured goods.

Kenneson said many customers – especially larger customers – paid no money upfront then paid a monthly service fee that covered both the hardware and software elements of Eroad’s systems, which do everything from calculating the most fuel-efficient routes to warning about engine failure to monitoring safety with road- and driver-facing cameras.

He said the company does not break out how much of a monthly fee covers hardware and how much covers software and services.

But the big picture is limited exposure. The company said in an NZX filing today: “Eroad generates 42% of its revenue from the US market, of which approximately 88% is revenue from services not subject to the US import tariffs.”

Kenneson said there was also an upside to tariffs slowing purchasing decisions.

“What’s interesting is it’s actually giving us a tailwind on the churn side,” the co-CEO said.

“Right now, customers who might otherwise have churned [switched to a competitor] are staying put.”

Trump announced his tariffs in the first week of April after FY2025 closed, so investors will have to wait for Eroad’s FY2026 half-year result to see how the “churn” and “pause” impacts play out in black and white.

Eroad’s investor materials don’t mention where it makes its hardware. A spokesman told the Herald: “Eroad mainly manufactures in the Philippines, with a bit of manufacturing in Vietnam as well.”

In his Liberation Day speech, Trump said the Philippines would be hit with a 17% tariff (on top of existing levies) and Vietnam 46%. Both were subsequently downgraded to 10% during the pause. Both countries are in negotiations for a permanently lowered tariff.

3G shutdown impact

A second major issue for Eroad – at least in New Zealand – is One NZ’s 3G network shutdown, which the telco says will definitely happen by the year’s end (Spark and 2degrees are also shuttering their 3G networks; Eroad partners exclusively with One NZ).

Eroad’s investor presentation says its upgrade of customers using hardware with 3G Sim cards to 4G will be completed by December – now at a total cost of $32m (from the previous estimate of $30m).

Was that taking it down to the wire?

Co-chief executive Mark Heine said: “We’ve been working for the last couple of years and are really confident around our delivery against the One NZ switch-off.”

“Inertia” was the biggest risk, especially with smaller customers, Heine said. “Comprehensive campaigns” were ongoing.

The firm had underspent on its 4G upgrade programme in FY2025, spending $7.6m of $8m to $10m allocated.

The remaining $13m to $15m of spend is expected to occur in FY2026 (which began on April 1), the firm said. “These costs are covered from existing cashflow.”

The firm remains focused on the commercial market but Heine reiterated it had shared a “proof-of-concept” with the Government for an electronic monitoring system for Road User Charges for household vehicles.

“We’re waiting for the Government to hit ‘play’,” Heine said.

Last year, then Transport Minister Simeon Brown – addressing the imposition of Road User Charges (RUCs) on electric vehicles (EVs) – said RUCs would eventually be extended to all vehicles as fuel taxes were phased out, but did not give a timetable.

Eroad’s NZX gains today are relative.

The stock has a one-year high of $1.50 and hit a high of $6.70 in July 2021 before its defensive merger with Coretex.

Heine, the company’s Kiwi CEO, was joined by US marketing consultant Kenneson as co-chief executive in March last year.

In 2023, the dual New Zealand- and Australian-listed firm fought off a $150m/$1.30-per-share takeover bid by Volaris, the Australian subsidiary of Canadian firm Constellation Software, then raised $50m in new equity.

Chris Keall is an Auckland-based member of the Herald‘s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.