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  Title	PowerFleet (AIOT) Q2 2026 Earnings Call Transcript
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  Published Date	Nov. 10, 2025, 8:28 a.m.
  Summary	PowerFleet (AIOT) Q2 2026 Earnings Call Transcript Motley Fool Transcribing, The Motley Fool Mon, November 10, 2025 at 6:28 AM PST 39 min read AIOT Image source: The Motley Fool. DATE Monday, Nov. 10,
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  Content	PowerFleet (AIOT) Q2 2026 Earnings Call Transcript Motley Fool Transcribing, The Motley Fool Mon, November 10, 2025 at 6:28 AM PST 39 min read AIOT Image source: The Motley Fool. DATE Monday, Nov. 10, 2025 at 8:30 a.m. ET CALL PARTICIPANTS Chief Executive Officer — Steve Towe Chief Revenue Officer — Jeff Lautenbach Chief Financial Officer — David Wilson SVP, Transformation, Integration & Operations — Melissa Ingram Need a quote from a Motley Fool analyst? Email pr@fool.com Full Conference Call Transcript Thanks, Holly. Good morning, everyone. This presentation contains forward-looking statements within the meaning of federal securities law. Forward-looking statements include statements with respect to PowerFleet's beliefs, plans, goals, objectives, expectations, anticipations, assumptions, estimates, intentions, and future performance and involve known and unknown risks, uncertainties, and other factors, may be beyond PowerFleet's control and which may cause its actual results performance, or achievements to be materially different from future results excuse me, performance, or achievements expressed or implied by such forward-looking statements. All statements other than the statements of historical facts are statements that could be forward-looking statements. For example, forward-looking statements include statements regarding prospects for additional customers, potential contract values, market forecasts, projections of earnings, revenues, synergies, accretion or other financial information, emerging new products and plans, strategies and objectives of management for future operations, including growing revenue, controlling operating costs, increasing production volumes and expanding business with core customers. The risks and uncertainties referred to above are not limited to risks detailed from time to time in PowerFleet's filings with the Securities Exchange Commission including PowerFleet's annual report on Form 10-K for the year ended December 31, 2025. These risks could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of PowerFleet unless otherwise required by applicable law, PowerFleet assumes no obligation to update the information contained in this presentation and expressly disclaims any obligation to do so. Whether a result of new information, future events, otherwise. Now I'll turn the call over to PowerFleet CEO, Steve Towe. Steve? Steve Towe: Good morning, everyone. It's great to be here this morning with key members of the leadership group. To walk you through what's been a statement quarter for PowerFleet. This set of results marks a transition point for the company. It signals the end of an integration period following the two major acquisitions we completed and the start of a new chapter. One focused squarely on accelerating sustainable growth. Just six months into aligning into one global enterprise and to operating level, we're clicking into gear. Starting to deliver expanding revenue growth and healthy business momentum in our key operating metrics. Story Continues In Q2, our top growth metric annual services recurring revenue, reached the double-digit growth milestone originally targeted for year-end ahead of schedule. The true strength of growth is how you get there. For us, that means responsibly and efficiently. The extensive synergy programs we aggressively executed are already moving the dial meaningfully. And we're delighted to also post meaningful adjusted EBITDA expansion this quarter both sequentially and year over year. This quarter clearly demonstrates the shape of the future of PowerFleet. Integrated, efficient, and built for profitable growth. Next slide, please. When you step back and look at the quarter, you can see a clear pattern of balanced execution. Services and ARR are growing strongly. Margins are expanding both at the total gross margin level and particularly encouragingly within the services line. This consistent improvement speaks to the strength of our SaaS-led model, and our operating discipline. What's also particularly pleasing for this quarter is the return to growth in product revenue inclusive of expanding margins. It underscores the durability of our business and the effectiveness of the actions we took, to offset tariff pressures and broader macroeconomic challenges. Together, these results demonstrate a company that's accelerating profitable growth, scaling efficiently while maintaining quality and control. Next slide, please. We felt it was the right time in our evolution to add a high-quality executive as chief revenue officer. With a proven track record in driving SaaS growth at scale. Someone who's led multiple a player teams and brings deep SaaS enterprise go-to-market experience. It's a crucial role with the major accelerated growth opportunity directly in front of us. It brings executive bandwidth and further high revenue expansion experience to the global team. I'm delighted to welcome Jeff Lautenbach. Jeff, over to you. Thanks, Steve. Great to be here. Having spent time with the teams and customers, I've been able to see for myself momentum building across the business. One key element of our future success is North America, and it's been encouraging to walk into a double-digit year-over-year revenue performance in that region. A clear sign of traction and developing brand strength. One of the proof points of our scale strategy was that as PowerFleet grew, we'd see more invitations to large and greater visibility in the enterprise market. That's now happening with a 26% increase in new logo wins as more customers recognize us as a top-tier provider. Our core value proposition safety, compliance, sustainability, and efficiency. Continue to resonate strongly. We've seen a sharp rise in demand within our on-site and in-warehouse safety segment we're delivering real impact. To give you a sense of the traction, one of our largest new deals this quarter came from a major engagement with a global industrial manufacturer. A multibillion-dollar enterprise recognized as one of the world's leading producers of heavy machinery and power systems serving construction, mining and energy markets worldwide. They're deploying Unity to modernize asset visibility, optimize equipment utilization, and reinforce compliance standards across their international operations. We also notably secured a major North American logistics and fleet management company, one of the world's largest providers of third-party logistics and supply chain services, operating thousands of vehicles in hundreds of distribution facilities across the region. They've selected Unity to enhance operator safety, strengthen compliance, and deliver deeper operational visibility across their nationwide logistics network. Both are multiyear strategic programs with significant expansion runway, indicators of the scale of opportunity ahead and the value our platform is delivering. Next slide. Looking forward, we're seeing strong progress in our strategic partner channels, another key pillar of our growth plan. Global channel bookings increased meaningfully in Q2 from Q1. Particularly with partners like AT&T and TELUS. Where momentum in the North America channel continues to grow at 32% sequential increase in quarterly pipeline build. More generally, our global cross-sell pipeline activity grew substantially. Notably, we are seeing solid traction with AI video, upselling into our base and that's showing up with a healthy 23% expansion in the video pipeline this quarter. These are encouraging proof points evidence that our commercial engine is working as designed and that we're building a flywheel capable of sustaining double-digit growth into FY '27. With that, I'll hand it over to David to walk through the financials. Thanks, Jeff. Before running through our regular financial reviews, I'll begin with the headline. Service revenue, excluding legacy Fleet Complete book of business, grew 12% organically year over year. David Wilson: Even as we've continued deliberately exiting noncore revenue streams in the quarters following our combination with MiX, in April 2024. High margin recurring SaaS revenue is the cornerstone of our future. And that progress is clearly visible in our sales mix. With service revenue now representing 80% of total revenue up from 74% last year. Next slide. Now on to our regular financial review. Starting with a quick recap of the key pro forma adjustments as well as a change in our prior methodology for calculating adjusted EBITDA. One-time expenses. This quarter expenses include $2,100,000 in one-time charges for restructuring, integrations, transaction costs. Excluded from adjusted EBITDA and EPS for ongoing run rates. Amortization impact, Results include $5,800,000 in noncash amortization related to the MiX and Fleet Complete acquisitions, impacting services gross margins by over 5%. Change the calculation of adjusted EBITDA. Following consultation with the SEC, including a detailed review of question 100.04, of the compliance and disclosure interpretations on non-GAAP financial measures, we concluded our presentation of adjusted EBITDA will no longer include an EBITDA adjustment for recognition of pre 10/01/2024 contract assets fleet complete. These amounts reflect certain in-vehicle devices delivered by Fleet Complete prior to the acquisition but invoiced and collected thereafter. This treatment was applicable for a finite transition period and reflects cash received for hardware that will never be recognized as revenue by PowerFleet. The adjustment was intended to align reporting results more with operating cash flows and the change has no impact on underlying economics or cash generation. Now on to Q2. Which was a banner period delivering record top and bottom line performance. Total revenue increased 45% year over year, $111,700,000 including strong organic growth of 9% overall and 12% in strategically important services. Turning to adjusted EBITDA. Which rose more than 70 percent $24,800,000 Alongside this strong performance, we also invoiced $1,300,000 in Fleet Complete IVD recoveries which historically were included in adjusted EBITDA, and will continue to flow through operating cash as collected. These results validate the strategic rationale for our M&A program, and highlight the powerful market opportunities emerging through our Unity product strategy. Next slide. Turning to margins. We continue to deliver strong year over year improvement. A stronger mix and 77% service gross margins drove a 400 basis point increase in EBITDA gross margins to 68%. Product margins also improved by 640 basis points sequentially, to 31.5%, supported by a rebound in higher margin on-site demand following Q1 tariff headwinds. On operating expenses, we are driving G&A efficiencies, investing in go-to-market and maintaining gross R&D at 8% of revenue. G&A declined to 25% of revenue three points lower than last year. Reflecting synergy capture operating leverage. We expect G&A as a percent of revenue to continue stepping down by roughly one point per quarter in the second half. Sales and marketing represented 18% of revenue, as we continue to invest in enablement and capacity to support momentum. R&D remained steady at 8% of revenue, or 4% net of capitalized software, as we advance innovation in AI, safety and compliance. Overall, we're very pleased with our continued P&L progression. Expanding margins, disciplined reinvestment and strong execution across the organization. Next slide, please. Closing on leverage. Where previously reported leverage ratios have been amended to exclude the previously discussed fleet complete EBITDA add back. We exited Q2 with a net debt to EBITDA ratio of 2.9 times, an improvement of half a turn from 3.4 times at the end of FY twenty five. Looking ahead, we now expect to close the year at approximately two and a quarter times compared to our prior guidance of below 2.25 times. Net debt at quarter end was $243,000,000 compared to adjusted net debt of $229,000,000 at the end of fiscal twenty five. This represents a $14,000,000 increase or $6,000,000 better than initial guidance of a $20,000,000 increase in the first half. For the year, we are maintaining expectations to exit the year with net debt of approximately $220,000,000 representing a reduction of $20,000,000 in the second half. Finally, and as discussed in last week's eight ks, we extended the maturity date of our initial term loan a with RMB by one year to 03/31/2028. With that, I'll hand over to Melissa to walk through our adjusted EBITDA optimization progress. Melissa? Melissa Ingram: Thanks, David. I want to pause to recognize what we've achieved as a company. After eighteen months of complex work, the integration is complete, with more than $30,000,000 in annualized synergies realized, and that's a real milestone worth noting. To have maintained the level of top line performance we have, while executing a multi-business integration is no small task. Now with integration behind us, we will move decisively into the next phase, optimization and efficiency. We'll evolve our organizational model to ensure we're structured for long-term efficiency with clear accountability across functions and regions. And we'll continue to optimize our resource mix ensuring the right capabilities are in the right places, balancing internal expertise with flexible external partnerships to stay agile. For embedding automation and AI more deeply, simplify how we work and enhance our customer experience. Across support, service, and operations, advancing further the tools that reduce manual effort, improve response time, and free our people to focus on higher value activities. We will refine how we serve subscale segments, to improve strategic fit and margin contribution, ensuring every part of the business is aligned to sustainable, profitable growth. In parallel, we'll centralize core operating functions further strengthening our organizational centers of gravity and embedding best practices globally. Another area of focus is vendor and partner consolidation. We've made real progress here. Capturing economies of scale and ensuring we're working with strategic partners who can grow with us. On the technology front, we'll complete our core systems rollout and streamline our technical architecture and hosting to enhance speed, reliability, and cost efficiency. All of these initiatives share one goal, to further expand adjusted EBITDA margins and create capacity for reinvestment in sustainable growth. Next slide, please. Looking ahead, I'm very excited about our upcoming AIoT innovation showcase later this week. It's a great opportunity to highlight why PowerFleet is being recognized as a leader in our space. We'll be exploring three lenses, One, the product and solution innovation behind Unity, Two, the customer outcomes we're enabling. The measurable impact on safety, performance, and transformation, and three, the people driving it all. Highly integrated front foot team delivering at scale. It's a chance for investors and partners to see the strength and momentum of the PowerFleet platform up close. Back to you, Steve. Steve Towe: Finally, I'm also pleased to share that PowerFleet has received another covered industry recognition. We've been awarded the Frost and Sullivan's 2025 North America Product Leadership Award. For context, Frost and Sullivan is a highly respected global research and consulting firm, and this award is their highest recognition. Based on rigorous independent evaluation of innovation, market impact, and customer satisfaction. It's an objective endorsement of the differentiation we built through Unity and the consistency of our customer experience. We're honored to receive it and proud of the team whose work made it possible. Before we open for questions, I want to close by reflecting a little further on what this set of results signals to investors for the future. It marks a fundamental shift. The moment where the power of the combinations we have undertaken, the dramatic eighteen-month integration we undertook, and the operational discipline we've bravely driven into the organization is clearly visible in our results. This quarter gives clear evidence that our unique solution strategy and market thesis is resonating strongly, delivering growth that's sustainable, margins that are expanding, and execution that's consistent across the board. My thanks to all our employees, our customers, and our investors for their continued partnership and confidence. Operator, let's open the line for questions. Operator: Certainly. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your hands before pressing the star keys. One moment, while we poll for questions. Your first question for today is from Scott Searle with ROTH Capital. Scott Searle: Hey. Good morning. Thanks for taking the questions, and congrats on the quarter. Great job in seeing the organic SaaS growth break through that 10% barrier to 12%. Hey, maybe to dive in on that front, Steve and Dave, looking at the guidance for this year, I'm wondering if you could provide a little bit of color about how you're thinking about services and organic SaaS growth into the third and fourth quarter of this year. Also as part of that, it sounds like Fleet Complete has got some revenue recognition transition issues going on. So how you're thinking about that, particularly as we start to go '27? And I think Jeff indicated sustainable double-digit growth as we get into fiscal twenty seven. I'm wondering if you could give us early thoughts on that front. And then I had a follow-up. David Wilson: So, Scott, let me just start with the guidance. So we were pretty clear from the get-go that we expect to be growing Sort of 10% organically for Q4. So no change in terms of expectations there. Obviously, we've done a nice job. Increasing the midpoint of the range over time. So you can see that coming through, but again, things have gone well. Things are going well. We're building up momentum. But, you know, this is not a steady state business. So the trajectory is very clear up into the right, but, you know, it's not as if it's just a smooth road all the way. But, we feel good about where we are. Obviously, it's very clear in the numbers in terms of what we're posting. And, again, you'll see that 10% organic growth in Q4 as expected. Scott Searle: Dave, maybe just a follow-up Yeah. Oh, sorry. My apologies. Yeah. David Wilson: No. Got you. Scott Searle: No. Just gonna say on the outlook then in terms of how you're thinking about Fleet Complete kind of being blended into that organic number, and early thoughts on '27, particularly given the build of the opportunity pipeline, it sounds like across the board, you know, both from a carrier partner standpoint, AI video standpoint, and warehouse Seems like everything is on the upswing. Steve Towe: Yeah. No. It's it's yeah. But I'll take that one, David. So look, Scott. I think, you know, we are ahead of schedule. Which is great. Momentum is building. If you look at our internal dashboard from our growth perspective, you know, we're we're ahead of where we wanted to be. And now it's about, you know, that consistency, that rhythm, and driving opportunity that's ahead of us. We've got absolute stellar momentum. We've brought Jeff in and team to help, you know, with that execution. And so, you know, the flywheel will continue to turn. So, you know, we're very optimistic about what we've put out in terms of 2027 previously. You'll hear at the end of the week some more granularity around that. But in general, you know, from a from a market perspective, from a solution set resonating perspective, from an ARPU expansion perspective, from a wallet share perspective, then, you know, we're in a very, very good spot. I think you can hear the pride that the team has in terms of the numbers. In terms of Fleet Complete, there's there's no kind of revenue recognition challenges. I'll ask David to kind of walk through his note on Fleet Complete again. But, you know, Fleet Complete has brought those channels, with us. You know, the likes of AT&T and Telus. So, you know, we then don't you know, as of we get into 2027, now don't think about, you know, fleet complete all of the parts of the business. It's it's all one, and the message remains the same. So strong, durable, profitable, double-digit, both SaaS growth and top line growth in gen. David Wilson: Yeah. Scott, in terms of the fleet complete, that's an EBITDA adjustment. So this is basically invoicing that happens, cash that's collected post the close of pre-complete transaction. It's not stuff we recognize historically as revenue. We will never recognize it as revenue. But it does generate significant cash. So the thought was to include that as part of the EBITDA adjustments, just to mirror operating cash flow. Obviously, it's it's a huge economic positive. But that was the EBITDA adjustment for fleet complete which based on consultation with the SEC, we will no longer be included. Scott Searle: Great. And as a quick follow-up, just I'm wondering if you could provide some more high-level thoughts in terms of North America. Obviously, it's a pretty dynamic environment from a supply chain perspective. I'm wondering how you're seeing sales cycles the ability to close deals. It certainly seems like the pipeline is building on that front. And Dave also just kind of in this current environment, how you guys are thinking about hedging policy for some of the international markets? Thanks. Steve Towe: So I'll take the first one. So look, I mean, as Jeff alluded to, he's walked in to a double-digit growth rate, for North America. We believe, you know, everything being equal now that, you know, customers are buying again. So where we saw kind of some of that product softness with the tariff decisions, you know, the strong rebound both in the top line growth, but also in the margin as well. You know, it's testament to the work that we've done. And, you know, what we are seeing is a strong demand and need for efficiency. And for safety and compliance. So, you know, where customers are needing more optimization. They're needing to be more efficient to what they do, and they need stronger visibility because of these changing times. Our solutions are really resonating. So, you know, I think the, you know, the couple of large wins that Jeff alluded to too are, you know, strategic wins that because of power of the combination, we are now winning that business. At larger enterprise scale. So we feel really good about, the future there. David Wilson: And from a hedging strategy, Scott, from a from an FX standpoint. We do have a portion of our debt in both, shekel. Which has been traditionally a powerful cash generator for us. So we have just south of $30,000,000 of shekel denominated debt. And then for South Africa, we have roundabout $20,000,000 of feds are denominated revolver debt. So we do have the balance sheet sort of hedging from an FX standpoint. Operator: Your next question for today is from Anthony Stoss with Craig Hallum. Anthony Stoss: Good morning, Steve and crew, and my congrats on strong execution. A couple of questions. The up 67% in your warehouse solutions Steve, do you attribute that to or what do you attribute that to? Is it mainly one big customer? Is it across the board? And then also perhaps an update on all your channel partners, AT&T, Telus and the European giant where they stand training and launch wise. Thanks. Steve Towe: Yeah. So it's across the board. So I think we are doing a better job in terms of sales execution, number one. I think, you know, the combination of solutions now where customers can get true visibility of what's going on their sites or in their warehouse but also combine that with what's going on over the road, which is our unique proposition. That's a real game changer for our customers, and I think that's kind of resonating through. And then the evolution really of kind of, you know, more advanced, video technology to save lives in the warehouse. Again, I would, encourage everyone to tune in on Friday, you'll hear from our customers talking about what those solutions are doing for them and how it's changing the world. So, you know, that's, that's really, I think, positive trend generally. And that's that's you know, we've done a lot of that in The US, but we're now getting real traction in other markets as well and through those channel partners. So I think, you know, we talked about, you know, the pipeline growth in terms of the channel partners, you know, we talked about the bookings improvement globally. That's all from those partnerships that we've talked about. Whether that's AT&T, TELUS, MTN, And we're still gearing up with a couple of other partners that we talked about earlier in the year for 2027. So, you know, that just brings real strength and diversity to our, opportunity base. And, you know, we've got some exciting future conversations going on with those channel partners about how we get more integrated into their solution set, how they can take the best of Unity and offer broader new solutions and more innovation to their customers as well. And, again, you'll hear some of that, if you tune in on Friday. Anthony Stoss: Very good. Congrats again, guys. Thanks. Operator: Your next question for today is from Gary Prestopino with Barrington Research. Gary Prestopino: Hi. Good morning, everyone. Hey, Steve. In terms of, you know, great new business awards and all that, but could you maybe tell us how this is starting to shake out in terms of are the majority of the new business awards coming from Unity, or is it products with services attached? Steve Towe: So everything that we sell is within the Unity ecosystem and platform. So there isn't something that's kinda separate. I think the differentiators really are, you know, adding in the single pane of glass. So the ability for customers to look at, you know, more multiple different devices or sensors or data streams coming into the platform. Being integrate being able to integrate our data into their other third party Again, we've got some good visibility for investors and partners at the event, later this week, and you'll see some demos of that. But it's really, I think, about us expanding from being a point supplier to a mission critical partner. So know, people are looking for connected intelligence. You know? The days of telematics, and boxes and hardware, software is really moving now is to you can be a high grade partner in providing connected intelligence that allows us to make real time decisioning. You give us visibility. With your AI capabilities, you were you're able to shortcut where we need to go to make the changes that we need to. And that is done in a seamless integrated way. And I think all of that together is what is ultimately, you know, we're now being seen as a as a different level in terms of the opportunity we can provide to medium large customers. And I think know, that's where we've seen this real shift, I think, in both who we talk to in the organization, what people are willing pay for our solutions because of the level of benefit that we provide. And, ultimately, we're now seen as an integrated partner and because of the increased scale that we've got, the credibility of our offerings you know, have gone exponentially in terms of where we're now seeing with medium to large enterprises. So it's not one single thing, Gary. I think it's a it's a play out of the thesis and the strategy, which is resonating well. And what's really exciting is we're only scratching the surface at the moment. So if you think about the solutions coming together from the three companies, know, we're we're only kind of six months into that, and you're already seeing the track and the strength of the results and the durability is of those results coming through. So, again, you know, we've got a lot to do. There's a lot we can do better. We are still a work in progress. But, you know, ultimately, we're very, very confident about the future. Gary Prestopino: Yeah. I guess I guess what I was just trying to get at, Steve, is you know, your Unity is device agnostic. So I guess is the traction pretty good with entities that are not using your products? Steve Towe: It absolutely is. It absolutely is. So and as we said before, you know, a lot of customers have multisource for this stuff. And it's also it's not just kind of the sensors that you would all we would traditionally think about with PowerFleet. These are other IoT sensors that they have in their state. There are the data streams that they have in their state. So people now say, look. You know? And when we go and talk to CIOs and CTOs and they said, look. We've just got this data mess. Can you simplify this for me? Can you allow us to see the wood for the trees? And then once you're able to do that, you know, can you make sure that we it's usable, it's simple, we can action it? And that's where I think, you know, the power of Unity's unique capabilities really make swift business change. And you know, some sometimes, when we've deployed these solutions and our competitors deploy these solutions, it can take you a decent amount of time to actually start to get the value back. Whereas I think, you know, we are now ahead of break even, you know, within the first twelve months of deployment. We're making meaningful change. We're seeing it customers who we expected to kind of, you know, do second phase rollouts over maybe a twelve, eighteen month period, of shortcutting that to a six to twelve period now because they've they've got the rhythm and because we've been able to simplify, the spaghetti, mess they had in their organization. Gary Prestopino: And then just one last quick question. I mean, in feedback your customers, I think you had six modules for Unity. As you initially rolled out. Are you developing any further? And what with any feedback from your clients, what do you feel like you're missing in that Unity platform with the modules? If anything? Yeah. I see. Steve Towe: So it's more about enhancing the modules to the next level. So on it sounds like I'm plugging Friday. I'm not mean to. But, ultimately, you will see how the strength of our AI capabilities the data that we can pull, our real time interventions that we make with our customers, that you know, a topic of safety is a very broad topic, and you'll see just how we're really kinda doubling down on the granularity of what we're able to achieve that So I wouldn't say it's we're expanding kinda horizontally into more different sets of modularity, but the strength of those modules and I come back to this, you know, from the question we had earlier. To have true visibility of your safety environment across all your employees, whether that's on a site or whether it's over the road. Is transformational for customers in a number of in a number of ways. So you know, really doubling down on that, you know, the advancement of the data analytics we can provide, the speed and accuracy of those is where we're spending the majority of our time at the moment. Gary Prestopino: Thank you very much. Operator: Your next question is from Dylan Becker with William Blair. Gentlemen, appreciate it. Really job here. Maybe, Steve, starting with you, the 12% organic services, obviously, ahead of plan, and it is quite impressive. I wonder if given kind of the pipeline strength that you guys are seeing, that's it forwarding you the ability to kinda unlock some of that held back spend around go to market, and maybe if that kinda shifts how you think about the model going forward given the vast opportunity here. Kind of reinvesting maybe some of that incremental EBITDA growth? Or EBITDA upside that you would see traditionally back into go to market and product development initiatives to feel like, the market's really kinda resonating relative to the solutions you're able to provide at this point. Steve Towe: Yeah. So we talked about we held back on a $4,000,000 investment. As the tariff challenges here. We have pressed the button on that and that's that's in the sales channels and in kind of customer and account engagement, plus some more, resources into the channel opportunity. And over time, you know, we will we will be good stewards in terms of ensuring that we feel confident about the growth and we can we can stand behind any more investment. But we have the ability to flex the model, you know, dependent on that growth rate and on our confidence levels. And we will flex in the model through 2028 appropriately. Because as you say, you know, as this flywheel starts to turn, as we kind of open up more opportunities, and, you know, we just get more, I think, exposure into the global markets that we're now, you know, we're now attacking. Then, you know, we will we will, maintain flexibility and optionality to double down on go to market investment. Dylan Becker: Perfect. Okay. Thank you. Very helpful. And maybe following up again with you here, Steve, or maybe this is this is for Jeff as well too. Encouraging to see some of the new logo momentum in the business. But if I look at it too, low single digit millions for a Fortune 500 entity, Feels like you're kinda just scratching the surface relative to that opportunity. So if you could kinda help reconcile, obviously, getting more, shots on goal, getting a foot in the door, but maybe also how that kind of breeds conviction in the opportunity to significantly expand within several of those accounts, maybe better line of sight, now that you have built and established that relationship, kind of the opportunity, from a cross selling perspective as well too? Thank you. Jeff Lautenbach: Okay. If I didn't take that one, and I'll follow-up. Yep. So there is great opportunity with new logo moving forward. We as talked about, we made a pivot, right, from a selling perspective to on-site envision. And the sales organization that's resonating well with the opportunity. You heard about the pipeline increases. We can do so much better moving forward, and there's so much opportunity out there in these markets that are untapped for us. I feel like we're just getting our sea legs underneath us. Relative to the opportunity statement and enabling the field on the new value propositions as we move into these different market segments, but leveraging the installed base that we already have. So the customers are there for us to expand. And then from a new logo perspective, it's attacking the verticals too. And that opportunity is there as well. So I'm I'm really optimistic about the opportunity around new logo, especially as we continue to gain skills and progress skills in those areas. Steve Towe: Yeah. Thanks, Jeff. And just to respond around you know, we're scratching the surface on those accounts. You're absolutely right, Jen. There's a five, 10 x opportunity, in those accounts. Both nationally and internationally as well. So we're strengthening our global account model. And you will, hear again, hear from some of the customers that we alluded to earlier in the year about you know, some large scale deployments and how they're feeling about expansion opportunities with us as well. So, you know, what's exciting is it's multidimensional. It's you know, if you look around the modularity of the solution, to Gary's point, people can grow in the solution, whether that's you know, in terms of do more of the same with us on a global basis, expanding sites, expanding, you know, the volume of vehicles that they have with us, or growing different divisions or territories. So you know, we're we're really, I think, infused by the space we're creating for ourselves, particularly in that kind of large enterprise market. Dylan Becker: Very helpful. Thank you, guys. Operator: Your next question for today is from Alex Sklar with Raymond James. Great. Thank you. So Steve or David, I just wanted to follow-up on Dylan's question there on the enterprise momentum and just ask it a little bit differently. But if you go back one to two years in time, can you just help put some context behind how incremental these enterprise opportunities have become for PowerFleet in terms of pipeline mix today? And then with that and kind of overall brand awareness, how much more room do you have to go on the brand awareness marketing side? Thanks. Steve Towe: Yeah. So I think it's night and day. You know, our exposure our win rates, our abilities to be successful in those large enterprise arenas. You know, heritage power fleet of you know, eighteen twenty four months ago. He's he's unrecognizable from the opportunity and the credibility and the trust, frankly, in terms of, you know, being a mission critical provider and partner to those enterprise. Markets. I think, you know, we're building brand momentum, so we know, the innovation awards that we get, you know, we're getting, I think, recognized now as a very much a top tier provider, you know, one of the top three in the world. That's really leading in terms of, you know, its innovation and profitable So ensuring that we are, you know, being good stewards of company's capital and making sure that we, you know, are doing things responsibly. I think is a very good sign in these times is having a partner does that. And I think, you know, that's always been our mantra, and we continue to excel there. So, there's always more work to do. And, you know, there are market there are markets that we are attacking where, you know, we have less brand presence than others in the marketplace. But that offers great opportunity for us. So, but overall, I think, know, we are we're in a different paradigm and in a different sphere to where we were two years ago. And I think, you know, the upside opportunity there remains fairly immense. Alex Sklar: Okay. Great. And then, David, maybe one for you on the back to base motion. I know we're working through some final send system integration to get precise NRR, but can you help frame directionally what you're seeing from the installed base through maybe end of second quarter October? Where across kind of retention upsell cross sell? Have you seen the biggest level of improvement? Where are you still kind of pushing hardest to get to kind of some of the aspirational goals? Thanks. David Wilson: So, clearly, if you look at just the acceleration in growth, you know, a huge part of that is NRR in terms of selling more to our existing customers. And to everyone's point, that we're we're early there in terms of the potential, both in terms of the customer demand as well as solutions we're bringing to market. So it is moving positively. If you look back in the last couple of quarters, obviously, we were in terms of our prepared remarks that for mix, for example, this time last year, we were still actively shedding revenue. In terms of getting the right base and getting rid of distractions a product delivery standpoint and a market focus standpoint. And so that's working well. As you look at the sort of second half of this year, from a fleet complete standpoint, there was a similar exercise in terms of shedding some revenue as well. So what I would say is when you look at just the traditional power fleet business, excluding Fleet Complete, which is the 12% organic growth from an ARR standpoint, you know, a major part of that is positive net revenue retention. So everything you would expect to see happening in terms of firstly cleaning the book of business, Secondly, the complementary nature of our products. Thirdly, the sort of the pent up demand within customers. Is clearly coming through in terms of the growth that we're posting. What I would say is for the second half of this fiscal year, you can have a bit of a headwind in terms of the fleet complete because we did the same thing with Fleet Complete that happened with MiX. In terms of getting the right revenue base in place that's aligned with our future as opposed to holding things pulling on to things as sort of a distraction. And, create friction in terms of where we need to go. So very, very positive. And, things are playing out as expected. Alex Sklar: Okay. Great. Thank you both. Operator: Your next question for today is from Greg Gibas with Northland Securities. Greg Gibas: Great. Good morning, guys. Thanks for taking the questions, and congrats on results. Really nice to see that 23% increase in the cross sell pipeline. Wondering if you could maybe provide some color on where you're seeing success or solid traction with your cross sell efforts? Steve Towe: Yeah. So it's it's in warehouse to over the road and vice versa. So this you know, with the there is a lot of traction in video. And that is, you know, multiple different, videos solutions that are based around safety and compliance. But really kind of, you know, expanding our reach in terms of the breadth of the organizations, whether that's know, from insurance perspective or that's, as I said, compliance whether it's getting true safety visibility or just operational efficiency for the end to end supply chain. So it's really that kind of, you know, where we've where we've had strength in one either the over the road or the in warehouse section. It's really kind of transferring those, either way. And, because we have that uniqueness, because we're talking to right people in the organization who care about, the objectives of both of those you know, different parts of the business, that's resonating super strong. Greg Gibas: Great to hear. And if I could, can you maybe characterize the greater demand environment and I guess demand trends as it relates to what you're hearing on pauses on purchasing? Like would you say that headwind has fully subsided at this point? Steve Towe: I think, you know, people are still cautious. Right? I mean, the, there's still, you know, dynamics in the macroeconomic conditions that cause people to be very, I think, thinking through just how much capital they're gonna spend and when they're gonna spend it. But, obviously, we you if you look at the rebound we've had from a product perspective, then we are still seeing people making those decisions. And so that really positive. And on top of that, you know, we've been able to, you know, improve price and, improve margin as we go. So I think, you know, there's always a there's always a watchtower on these things and, you know, we continue to be cautious in our approach towards things. But we've seen, you know, I think there's a real shift and a and a need for change in organizations, transformation, efficiency optimization. And visibility. And, you know, it's it's kind of where do we sit in the food chain of decisions, in terms being kind of mission critical to businesses. I think that's only improving. Greg Gibas: Great. And I guess one last one if I could. As it relates to the accounting adjustment, you mentioned the 4,000,000 impact on, '25. How much are you guys taking out of '26 that was baked in? David Wilson: Yeah. The number for this quarter was about $1,300,000. So it's probably a percentage point just over of EBITDA margin. That would be the way to think about it, Greg. Greg Gibas: Okay. Got it. Thanks very much. Operator: We have reached the end of the question and answer and I will now turn the call over to Steve Towe for closing remarks. Steve Towe: Thanks, everyone, for joining us today and your continued support. Look forward to updating you on our progress next quarter. Have a great day, and we look forward to our innovation event on Friday. Thank you. Bye. Operator: This concludes today's conference. And you may disconnect your lines at this time. Thank you for your participation. Don’t miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this. On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. 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