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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

—————————

FORM 10-Q

—————————

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number: 001-39080

POWERFLEET, INC.

(Exact name of registrant as specified in its charter)

Delaware

83-4366463

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

123 Tice Boulevard

Woodcliff Lake,

New Jersey

07677

(Address of principal executive offices)

(Zip Code)

(201)

996-9000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

AIOT

The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, $0.01 par value per share, outstanding as of the close of business on February 5, 2026 was 134,147,277.

INDEX

POWERFLEET, INC. AND SUBSIDIARIES


						Page

Part I - FINANCIAL INFORMATION						3
Item 1. Financial Statements (Unaudited)						3
Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2025						3
Condensed Consolidated Statements of Operations - for the three and nine months ended December 31, 2024 and 2025						5
Condensed Consolidated Statements of Comprehensive (Loss) Income - for the three and nine months ended December 31, 2024 and 2025						6
Condensed Consolidated Statement of Changes in Stockholders’ Equity - for the periods April 1, 2024 through December 31, 2024 and April 1, 2025 through December 31, 2025						7
Condensed Consolidated Statements of Cash Flows - for the nine months ended December 31, 2024 and 2025						10
Notes to Condensed Consolidated Financial Statements						12
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						36
Item 3. Quantitative and Qualitative Disclosures About Market Risk						47
Item 4. Controls and Procedures						49
Part II - OTHER INFORMATION						51
Item 1. Legal Proceedings						51
Item 1A. Risk Factors						52
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						53
Item 5. Other Information						53
Item 6. Exhibits						54
Signatures						55

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

POWERFLEET, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)



	March 31, 2025		December 31, 2025

ASSETS
Current assets:
Cash and cash equivalents	$	44,392	$	31,215
Restricted cash	4,396		4,635
Accounts receivables, net of allowance for credit losses of $4,057 and $9,667 as of March 31, 2025 and December 31, 2025, respectively	78,623		92,223
Inventory, net	18,350		22,064

Prepaid expenses and other current assets	23,319		24,941
Total current assets	169,080		175,078

Fixed assets, net	58,011		63,018
Goodwill	383,146		413,344
Intangible assets, net	258,582		264,281
Right-of-use asset	12,339		11,521
Severance payable fund	3,796		4,322
Deferred tax asset	3,934		4,999
Other assets	21,183		22,896

Total assets	$	910,071	$	959,459

LIABILITIES
Current liabilities:
Short-term bank debt and current maturities of long-term debt	$	41,632	$	46,288
Accounts payable	41,599		48,432
Accrued expenses and other current liabilities	45,327		44,914
Deferred revenue - current	17,375		16,217
Lease liability - current	5,076		4,172
Total current liabilities	151,009		160,023
Long-term debt - less current maturities	232,160		231,164
Deferred revenue - less current portion	5,197		6,964
Lease liability - less current portion	8,191		8,343
Accrued severance payable	6,039		5,303
Deferred tax liability	57,712		59,455

Other long-term liabilities	3,021		3,028



Total liabilities	463,329		474,280
Commitments and Contingencies (Note 22)




STOCKHOLDERS’ EQUITY
Preferred stock; authorized 50,000 shares, $0.01 par value	—		—
Common stock; authorized 175,000 shares, $0.01 par value; 135,379 and 136,105 shares issued at March 31, 2025 and December 31, 2025, respectively; shares outstanding, 133,316 and 134,041 at March 31, 2025 and December 31, 2025, respectively	1,343		1,343
Additional paid-in capital	671,400		677,377


Accumulated deficit	(205,783)		(223,669)
Accumulated other comprehensive (loss) income	(8,850)		41,496
Treasury stock; 2,063 and 2,063 common shares at cost at March 31, 2025 and December 31, 2025, respectively	(11,518)		(11,518)

Total Powerfleet, Inc. stockholders’ equity	446,592		485,029
Non-controlling interest	150		150
Total equity	446,742		485,179

Total liabilities and stockholders’ equity	$	910,071	$	959,459

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)


	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2025		2024		2025
Revenues:
Products	$	24,687	$	22,402	$	63,718	$	62,429
Services	81,742		91,085		195,159		266,858
Total revenues	106,429		113,487		258,877		329,287

Cost of revenues:
Cost of products	17,129		15,312		43,809		43,858
Cost of services	30,517		35,487		75,294		103,671
Total cost of revenues	47,646		50,799		119,103		147,529

Gross profit	58,783		62,688		139,774		181,758


Operating expenses:
Selling, general and administrative expenses	55,405		51,770		147,522		159,584

Research and development expenses	4,621		4,572		11,157		13,623
Total operating expenses	60,026		56,342		158,679		173,207

(Loss) profit from operations	(1,243)		6,346		(18,905)		8,551


Interest income	359		111		831		569
Interest expense, net	(7,942)		(6,844)		(14,675)		(20,607)

Other (expense) income, net	(2,011)		14		(961)		(1,775)

Net loss before income taxes	(10,837)		(373)		(33,710)		(13,262)

Income tax expense	(3,513)		(2,991)		(4,821)		(4,624)

Net loss before non-controlling interest	(14,350)		(3,364)		(38,531)		(17,886)
Non-controlling interest	1		—		(17)		—

Net loss	(14,349)		(3,364)		(38,548)		(17,886)


Preferred stock dividend	—		—		(25)		—

Net loss attributable to common stockholders	$	(14,349)	$	(3,364)	$	(38,573)	$	(17,886)


Net loss per share attributable to common stockholders - basic and diluted	$	(0.11)	$	(0.03)	$	(0.33)	$	(0.13)







Weighted average common shares outstanding - basic and diluted	132,189		133,876		115,650		133,632

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive (Loss) Income

(In thousands)

(Unaudited)


	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2025		2024		2025
Net loss attributable to common stockholders	$	(14,349)	$	(3,364)	$	(38,573)	$	(17,886)

Foreign currency translation adjustment	(6,214)		18,034		(6,593)		50,346

Total other comprehensive (loss) income	(6,214)		18,034		(6,593)		50,346

Comprehensive (loss) income	$	(20,563)	$	14,670	$	(45,166)	$	32,460

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC. AND SUBSIDIARIES

Condensed Consolidated Statement 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
Net loss attributable to common stockholders	—	—		—		(4,288)		—		—		—		(4,288)

Foreign currency translation adjustment	—	—		—		—		9,793		—		—		9,793








Stock-based compensation	—	—		2,594		—		—		—		—		2,594
Issue of stock appreciation rights and restricted share awards	364	—		—		—		—		—		—		—
Balance as of September 30, 2025	135,870	$	1,343	$	675,847	$	(220,305)	$	23,462	$	(11,518)	$	150	$	468,979
Net loss attributable to common stockholders	—	—		—		(3,364)		—		—		—		(3,364)
Foreign currency translation adjustment	—	—		—		—		18,034		—		—		18,034
Stock-based compensation	—	—		1,491		—		—		—		—		1,491
Issue of stock appreciation rights and restricted share awards	222	—		—		—		—		—		—		—
Exercise of stock options	13	—		39		—		—		—		—		39
Balance as of December 31, 2025	136,105	$	1,343	$	677,377	$	(223,669)	$	41,496	$	(11,518)	$	150	$	485,179



	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, 2024	38,709	$	387	$	202,607	$	(154,796)	$	(985)	$	(8,682)	$	105	$	38,636



Net loss attributable to common stockholders	—	—		(25)		(22,312)		—		—		—		(22,337)
Net income attributable to non-controlling interest	—	—		—		—		—		—		13		13
Foreign currency translation adjustment	—	—		—		—		418		—		8		426




Issuance of restricted shares	54	1		(1)		—		—		—		—		—
Shares issued for transaction bonus	174	1		888		—		—		—		—		889
Shares issued in connection with MiX Combination	70,704	707		361,298		—		—		—		—		362,005
Acquired through MiX Combination	—	—		7,818		—		—		—		5		7,823

Shares withheld pursuant to vesting of restricted stock	—	—		—		—		—		(2,836)		—		(2,836)


Stock-based compensation	—	—		5,929		—		—		—		—		5,929
Balance as of June 30, 2024	109,641	$	1,096	$	578,514	$	(177,108)	$	(567)	$	(11,518)	$	131	$	390,548


Net loss attributable to common stockholders	—	—		—		(1,888)		—		—		—		(1,888)
Net income attributable to non-controlling interest	—	—		—		—		—		—		5		5
Foreign currency translation adjustment	—	—		—		—		(797)		—		20		(777)


Proceeds from private placement, net of costs to issue common stock	—	—		61,851		—		—		—		—		61,851



Exercise of stock options	243	—		—		—		—		—		—		—
Stock-based compensation	—	—		1,371		—		—		—		—		1,371
Balance as of September 30, 2024	109,884	$	1,096	$	641,736	$	(178,996)	$	(1,364)	$	(11,518)	$	156	$	451,110
Net loss attributable to common stockholders	—	—		—		(14,349)		—		—		—		(14,349)
Net income attributable to non-controlling interest	—	—		—		—		—		—		(1)		(1)
Foreign currency translation adjustment	—	—		—		—		(6,214)		—		(4)		(6,218)
Proceeds from private placement, net of costs to issue common stock	20,000	200		4,408		—		—		—		—		4,608
Shares issued in connection with FC Acquisition	4,286	43		21,300		—		—		—		—		21,343


Exercise of stock options	161	—		910		—		—		—		—		910
Stock-based compensation	—	—		1,138		—		—		—		—		1,138
Issue of stock appreciation rights	225	—		—		—		—		—		—		—
Balance as of December 31, 2024	134,556	$	1,339	$	669,492	$	(193,345)	$	(7,578)	$	(11,518)	$	151	$	458,541

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Nine Months Ended December 31,
	2024		2025
Cash flows from operating activities
Net loss	$	(38,548)	$	(17,886)
Adjustments to reconcile net loss to cash (used in) provided by operating activities:


Non-controlling interest	17		—

Inventory reserve	1,571		1,797
Stock-based compensation expense	8,438		5,938
Depreciation and amortization	33,042		47,691
Right-of-use assets, non-cash lease expense	4,284		2,891
Derivative mark-to-market adjustment	(475)		(2,054)
Bad debts expense	7,229		6,498
Deferred income taxes	676		(3,733)
Shares issued for transaction bonuses	889		—
Lease termination and modification losses	232		(29)
Other non-cash items	727		476
Changes in operating assets and liabilities:
Accounts receivables	(15,245)		(15,715)
Inventories	2,623		(5,173)
Prepaid expenses and other current assets	2,062		(1,088)
Deferred costs	(5,124)		(6,573)
Deferred revenue	1,031		581
Accounts payable, accrued expenses and other current liabilities	(15,655)		11,016
Lease liabilities	(4,098)		(2,924)
Accrued severance payable, net	(562)		(1,262)



Net cash (used in) provided by operating activities	(16,886)		20,451

Cash flows from investing activities
Acquisition, net of cash assumed	(137,112)		(191)
Proceeds from sale of fixed assets	256		57
Capitalized software development costs	(7,310)		(14,099)
Capital expenditures	(16,607)		(17,717)
Repayment of loan advanced to external parties	294		—




Net cash used in investing activities	(160,479)		(31,950)

Cash flows from financing activities

Repayment of long-term debt	(2,140)		(4,143)
Short-term bank debt, net	11,887		2,109
Purchase of treasury stock upon vesting of restricted stock	(2,836)		—

Payment of preferred stock dividend and redemption of preferred stock	(90,298)		—
Proceeds from private placement, net	66,459		—
Proceeds from long-term debt	125,000		—


Payment of long-term debt costs	(1,410)		—
Proceeds from exercise of stock options, net	912		39
Cash paid on dividends to affiliates	(6)		—


Net cash provided by (used in) financing activities	107,568		(1,995)

Effect of foreign exchange rate changes on cash and cash equivalents	(1,222)		556
Net decrease in cash and cash equivalents, and restricted cash	(71,019)		(12,938)
Cash and cash equivalents, and restricted cash at beginning of the period	109,664		48,788

Cash and cash equivalents, and restricted cash at end of the period	$	38,645	$	35,850

Reconciliation of cash and cash equivalents, and restricted cash, at beginning of the period
Cash and cash equivalents	24,354		44,392
Restricted cash	85,310		4,396
Cash and cash equivalents, and restricted cash, at beginning of the period	$	109,664	$	48,788

Reconciliation of cash and cash equivalents, and restricted cash, at end of the period
Cash and cash equivalents	33,634		31,215
Restricted cash	5,011		4,635
Cash and cash equivalents, and restricted cash, at end of the period	$	38,645	$	35,850

Supplemental disclosure of cash flow information:
Cash paid for:
Taxes	$	1,052	$	3,254
Interest	$	11,517	$	18,300

Noncash investing and financing activities:
Common stock issued for transaction bonus	$	9	$	—
Shares issued in connection with MiX Combination	$	362,005	$	—
Shares issued in connection with FC Acquisition	$	21,343	$	—

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

December 31, 2025

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.

On April 2, 2024 (the “Implementation Date”), the Company consummated the transactions contemplated by the Implementation Agreement, dated as of October 10, 2023 (the “Implementation Agreement”), that the Company entered into with Main Street 2000 Proprietary Limited, a private company incorporated in the Republic of South Africa and a wholly owned subsidiary of the Company (“Powerfleet Sub”), and MiX Telematics Limited, formerly a public company incorporated under the laws of the Republic of South Africa (“MiX Telematics”), pursuant to which MiX Telematics became an indirect, wholly owned subsidiary of the Company (the “MiX Combination”). The consolidated financial statements as of and for the three and nine months ended December 31, 2025 include the financial results of MiX Telematics and its subsidiaries.

On October 1, 2024 (the “FC Closing Date”), the Company consummated the transactions contemplated by the Share Purchase Agreement, dated as of September 18, 2024 (the “Purchase Agreement”), by and among Golden Eagle Topco, LP (“Golden Eagle LP”), the persons that are party to the Purchase Agreement under the heading “Other Sellers” (the “Other Sellers” and, together with Golden Eagle LP, the “Sellers”), the Company and Powerfleet Canada Holdings Inc., a wholly owned subsidiary of the Company (the “Canadian SPV” and, together with the Company, the “Purchasers”), pursuant to which the Purchasers acquired all of the direct and indirect common shares in the capital of Golden Eagle Canada Holdings, Inc. (“Canada Holdco”) and Complete Innovations Holdings Inc. (“CIH”), and all of the issued and outstanding shares of common stock of Golden Eagle Holdings, Inc. (together with Canada Holdco and CIH, “Fleet Complete”). As a result, Fleet Complete became an indirect, wholly owned subsidiary of the Company (the “FC Acquisition”). The consolidated financial statements as of and for the three and nine months ended December 31, 2025 include the financial results of Fleet Complete and its subsidiaries.

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, 2025 and December 31, 2025, the consolidated results of its operations for the three- and nine-month periods ended December 31, 2024 and 2025, the consolidated change in stockholders’ equity for the three- and nine-month periods ended December 31, 2024 and 2025, and the consolidated cash flows for the nine-month period ended December 31, 2024 and 2025. The results of operations for the three- and nine-month periods ended December 31, 2025 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, 2025 included in the Company’s Annual Report on Form 10-K for the year then ended.

During the quarter ended September 30, 2025, the Company enhanced its disclosures to include its accounting policy for restructuring expenses.

The Company records one-time employee termination benefits associated with exit or disposal activities in accordance with ASC 420-10, Exit or Disposal Cost Obligations (“ASC 420”), and post-employment benefits under ASC 712-10, Compensation – Nonretirement Postemployment Benefits, when such obligations are probable and reasonably estimable.

A liability for one-time termination benefits is recognized on the date the plan is communicated to affected employees, provided that no more-than-insignificant future service is required. Contract termination and other exit costs are recognized when the related obligation is incurred.

Lease-related items are accounted for in accordance with ASC 842, Leases (“ASC 842”), including right-of-use (“ROU”) asset impairments and lease modifications. Only costs that are not lease liabilities under ASC 842 and that meet the recognition criteria of ASC 420 are included in restructuring charges.

The Company reassesses expected restructuring expenses each reporting period and records adjustments to estimates, including reversals, as necessary.

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, and market-based stock-based compensation costs. Actual results could differ materially from those estimates and assumptions made.

NOTE 3 - 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, 2025 consisted of escrow amounts of $3,336 held in escrow related to the FC Acquisition to secure certain tax liabilities, cash of $311 held in escrow for purchases from a vendor, cash of $698 held by MiX Telematics Enterprise BEE Trust to be used solely for the benefit of its beneficiaries and cash securing guarantees of $51 issued in respect of property lease agreements entered into by MiX Telematics Australasia. Restricted cash at December 31, 2025 consisted of cash of $3,336 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 $841 held by MiX Telematics Enterprise BEE Trust to be used solely for the benefit of its beneficiaries, cash securing guarantees of $57 issued in respect of property lease agreements entered into by MiX Telematics Australasia, cash securing guarantees of $77 issued in respect of property lease agreements entered into by Fleet Complete Australia, and security deposits of $11.

NOTE 4 - REVENUE RECOGNITION

The Company and its subsidiaries generate revenue from sales of systems and products and from customer SaaS and hosting infrastructure fees. 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 the Company collects concurrently with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as an expense. The expected costs associated with the Company’s base warranties continue to be recognized as an expense when the products are sold (see Note 13).

Revenue is recognized when performance obligations under the terms of a contract with the customer are satisfied. Product sales are recognized at a point in time when title transfers, when the products are shipped, or when control of the system is transferred to the customer, which usually is upon delivery of the system and when contractual performance obligations have been 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.

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.

Under the applicable accounting guidance, all of the Company’s billings for future services are deferred and classified as a current and long-term liability. The deferred revenue is recognized over the service contract life, ranging from one to five years, beginning at the time that a customer acknowledges acceptance of the equipment and service. Payment terms are generally 30 days after the invoice date.

The Company recognizes revenue for remotely hosted SaaS agreements and post-contract maintenance and support agreements beyond our standard warranties over the life of the contract. Revenue is recognized ratably over the service periods and the cost of providing these services is expensed as incurred. Amounts invoiced to customers which are not recognized as revenue are classified as deferred revenue and classified as current or long-term based upon the terms of future services to be delivered. Deferred revenue also includes prepayment of extended maintenance, hosting and support contracts.

The Company earns other services revenues from installation services, training and technical support services which are short-term in nature and revenue for these services is recognized at the time of performance when the service is provided.

The Company also derives revenue from leasing arrangements. Such arrangements provide for monthly payments covering product or system sale, maintenance, support and interest. These arrangements meet the criteria to be accounted for as operating or sales-type leases. Accordingly, for sales-type leases an asset is established for the “sales-type lease receivable” at the present value of the expected lease payments and revenue is deferred and recognized over the service contract, as described above. Maintenance revenues and interest income are recognized monthly over the lease term.

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.

The Company recognizes an asset for the incremental costs of obtaining the contract arising from the sales commissions to distributors and employees because the Company expects to recover those costs through future fees from the customers. The Company amortizes the asset over one to five years because the asset relates to the services transferred to the customer during the contract term of one to five years.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice for services performed.

The following table presents the Company’s revenues disaggregated by revenue source for the three and nine months ended December 31, 2024 and 2025 (in thousands):


	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2025		2024		2025
Products	$	24,687	$	22,402	$	63,718	$	62,429
Services	81,742		91,085		195,159		266,858
	$	106,429	$	113,487	$	258,877	$	329,287

The balances of contract assets and contract liabilities from contracts with customers are as follows as of March 31, 2025 and December 31, 2025 (in thousands):


	March 31, 2025		December 31, 2025
Contract Assets:
Deferred contract cost (1)	$	11,894	$	12,101
Deferred costs - current	$	2	$	173

Contract Liabilities:
Deferred revenue – services (2)	$	21,466	$	21,827
Deferred revenue – products (2)	1,106		1,354
	22,572		23,181
Less: Deferred revenue – current	(17,375)		(16,217)
Deferred revenue – long term	$	5,197	$	6,964

(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 three-month periods ended December 31, 2024 and 2025, the Company recognized revenue of $5,605 and $5,200, respectively, which was included in the deferred revenue balance at the beginning of each reporting period. For the nine-month periods ended December 31, 2024 and 2025, the Company recognized revenue of $9,863 and $15,763, respectively, which was included in the deferred revenue balance at the beginning of each reporting period. The Company expects to recognize as revenue through year 2029, when it transfers those goods and services and, therefore, satisfies its performance obligation to the customers.

NOTE 5 - ALLOWANCE FOR CREDIT LOSSES

The Company’s receivables were evaluated to determine an appropriate allowance for credit losses. For trade receivables, 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 receivables 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 December 31, 2024 and 2025 is as follows (in thousands):


	Nine Months Ended December 31,
	2024		2025
Allowance for credit losses, March 31	$	3,197	$	4,057



Current period provision for expected credit losses	7,229		10,717
Write-offs charged against the allowance	(4,880)		(6,288)


Foreign currency translation	(63)		1,181
Allowance for credit losses, December 31	$	5,483	$	9,667

NOTE 6 - PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other current assets comprise the following (in thousands):


	March 31, 2025		December 31, 2025
Sales-type lease receivables, current	$	1,062	$	900
Prepaid expenses	9,038		9,830
Contract assets	5,088		5,461
Tax receivables	553		621
VAT receivable	1,901		1,023
Sundry debtors	5,424		6,007
Other current assets	253		1,099

	$	23,319	$	24,941

NOTE 7 - 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 “moving average” cost method or the first-in first-out (FIFO) method.

Inventories consist of the following (in thousands):


	March 31, 2025		December 31, 2025
Components	$	11,859	$	7,804

Finished goods, net	6,491		14,260
	$	18,350	$	22,064

NOTE 8 - FIXED ASSETS

Fixed assets are stated at cost, less accumulated depreciation and amortization, and are summarized as follows (in thousands):


	March 31, 2025		December 31, 2025
Installed and uninstalled products	$	61,564	$	75,758
Computer software	11,523		13,581
Computer and electronic equipment	6,294		8,514
Furniture and fixtures	3,054		4,078
Leasehold improvements	1,459		1,295
Plant and equipment	276		361

Assets in progress	7		141
	84,177		103,728
Accumulated depreciation	(26,166)		(40,710)
	$	58,011	$	63,018

Depreciation expense for the three- and nine-month periods ended December 31, 2024 was $4,586 and $14,653, respectively, and for the three- and nine-month periods ended December 31, 2025 was $6,133 and $18,582, respectively.

NOTE 9 - INTANGIBLE ASSETS AND GOODWILL

The Company capitalizes 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 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 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, 2025 and December 31, 2025 (in thousands):


December 31, 2025	Useful Lives (In Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Definite-lived:
Customer relationships	9 - 13	$	216,141	$	(36,562)	$	179,579
Trademark and tradename	3 - 15	23,720		(7,692)		16,028
Patents	7 - 11	2,128		(829)		1,299
Technology	5 - 7	88,500		(37,112)		51,388
Software to be sold or leased	3 - 7	20,716		(4,894)		15,822
		351,205		(87,089)		264,116

Indefinite-lived:
Customer list		104		—		104
Trademark and tradename		61		—		61
		165		—		165

Total		$	351,370	$	(87,089)	$	264,281


March 31, 2025	Useful Lives (In Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Definite-lived:
Customer relationships	9 - 13	$	200,868	$	(21,994)	$	178,874
Trademark and tradename	3 - 15	21,557		(5,805)		15,752
Patents	7 - 11	628		(553)		75
Technology	5 - 7	74,050		(21,705)		52,345
Software to be sold or leased	3 - 7	13,490		(2,119)		11,371
		310,593		(52,176)		258,417

Indefinite-lived:
Customer list		104		—		104
Trademark and tradename		61		—		61
		165		—		165

Total		$	310,758	$	(52,176)	$	258,582

The weighted-average amortization periods for customer relationships, trademarks and tradenames, patents, technology, and capitalized software to be sold or leased for December 31, 2025 were 11.0, 10.1, 6.3, 3.7, and 3.6 years, respectively, and for March 31, 2025 were 11.7, 10.8, 7.0, 4.4, and 4.3 years, respectively.

Amortization expense for the three- and nine-month periods ended December 31, 2024 was $8,966 and $18,389, respectively, and for the three- and nine-month periods ended December 31, 2025 was $9,735 and $29,110, respectively.

Estimated future amortization expense for each of the five succeeding fiscal years for these intangible assets is as follows:


2026 (remaining)	$	15,055
2027	44,239
2028	38,905
2029	35,346
2030	22,973
Thereafter	107,598
	$	264,116

Reconciliation of Total Goodwill

The following table is a reconciliation of the carrying amount of goodwill as of March 31, 2025 and December 31, 2025 (in thousands):


	March 31, 2025		December 31, 2025
Goodwill
Opening balance	$	83,487	$	383,146
Businesses acquired
MiX Combination	216,799		—
FC Acquisition	82,245		—
Powerfleet Africa Sky	—		552
Foreign currency translation difference	615		29,646
Closing balance	$	383,146	$	413,344

For the nine-month period ended December 31, 2025, the Company did not identify any indicators of impairment.

NOTE 10 - STOCK-BASED COMPENSATION

[A] Stock Options:

During the three- and nine-month periods ended December 31, 2025, 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 nine-month period ended December 31, 2025:


	Options (in thousands)	Weighted- Average Exercise Price ($)	Weighted Average Contractual Remaining Term (years)	Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2025	5,200	13.85	—	—
Granted	—	—	—	—
Exercised	—	—	—	—

Forfeited	(40)	3.13	—	—
Outstanding as of December 31, 2025	5,160	13.94	6.19	$	2,279


Vested as of December 31, 2025	—	—	—	$	—

During the three- and nine-month periods ended December 31, 2025, the Company did not 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 nine-month period ended December 31, 2025:


	Options (in thousands)	Weighted- Average Exercise Price ($)	Weighted Average Contractual Remaining Term (years)	Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2025	1,890	4.51	—	—
Granted	—	—	—	—
Exercised	(13)	3.13	—	—

Forfeited	(16)	5.92	—	—
Outstanding as of December 31, 2025	1,861	4.50	6.04	$	1,811


Vested as of December 31, 2025	1,711	4.52	5.83	$	1,660

The Company recorded stock-based compensation expense of $479 and $2,884 for the three- and nine-month periods ended December 31, 2024, respectively, and $288 and $1,142 for the three- and nine-month periods ended December 31, 2025, respectively, in connection with awards made under the stock option plans, including market-based and time-based options. The decrease in the recognized expense is because the prior year included acceleration of vesting of unvested restricted stock and stock option awards with time-based vesting conditions that were outstanding under the Powerfleet equity plans (including any inducement awards with time-based vesting) in connection with the closing of the MiX Combination.

The fair value of options vested during the nine-month periods ended December 31, 2024 and 2025 was $1,652 and $298, respectively.

As of December 31, 2025, there was $383 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 0.59 years.

As of December 31, 2025, there was $1,268 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 1.32 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:

The Company grants restricted stock to employees, whereby the employees are contractually restricted from transferring the shares until they are vested. The stock is 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 nine-month period ended December 31, 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 nine-month period ended December 31, 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.

A summary of all unvested restricted stock for the nine-month period ended December 31, 2025 is as follows:


	Time-Based Restricted Shares		Market-Based Restricted Shares		Performance-Based Restricted Shares
	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, 2025	732	5.58	938	5.35	—	—
Granted	384	4.75	—	—	1,475	4.75
Vested/Exercised	(380)	5.33	—	—	—	—
Forfeited or expired	(59)	4.75	—	—	(118)	4.75
Unvested, December 31, 2025	677	5.32	938	5.35	1,357	4.75

The Company recorded stock-based compensation expenses of $74 and $3,240 for the three- and nine-month periods ended December 31, 2024, respectively, and $805 and $3,394 for the three- and nine-month periods ended December 31, 2025, respectively, in connection with restricted stock grants. As of December 31, 2025, there was $6,540 of total unrecognized compensation cost related to unvested shares.

[C] Stock Appreciation Rights:

The following table summarizes the activity relating to the Company’s stock appreciation rights (“SARs”) for the nine-month period ended December 31, 2025:


	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, 2025	3,238	2.44

Granted	—	—
Exercised	(623)	2.79

Forfeited	(210)	2.25
Outstanding as of December 31, 2025	2,405	2.37	2.53


Vested as of December 31, 2025	1,098	2.52	1.94	$	3,074

The total stock-based compensation expense recognized during the three- and nine-month periods ended December 31, 2024 was $637 and $2,289, respectively, and during the three- and nine-month periods ended December 31, 2025 was $361 and $1,083, respectively.

As of December 31, 2025, there was $2,873 of unrecognized compensation cost related to unvested SARs. This amount is expected to be recognized over a weighted-average period of 2.01 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 130,275 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.

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- and nine-month periods ended December 31, 2025 was $37 and $320, respectively.

As of December 31, 2025, there was $43 of unrecognized compensation cost related to unvested warrants. This amount is expected to be recognized over a weighted-average period of 0.75 years.

NOTE 11 - NET LOSS PER SHARE

Net loss per share for the three- and nine-month periods ended December 31, 2024 and 2025 are as follows:


	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2025		2024		2025
Basic and diluted loss per share
Net loss attributable to common stockholders	$	(14,349)	$	(3,364)	$	(38,573)	$	(17,886)

Net loss per share attributable to common stockholders - basic and diluted	$	(0.11)	$	(0.03)	$	(0.33)	$	(0.13)

Weighted-average common share outstanding - basic and diluted	132,189		133,876		115,650		133,632

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. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company.

NOTE 12 - SHORT-TERM BANK DEBT AND LONG-TERM DEBT


	March 31, 2025		December 31, 2025
Short-term bank debt	$	36,788	$	40,203
Current maturities of long-term debt	$	4,844	$	6,085
Long-term debt - less current maturities	$	232,160	$	231,164

Short-Term Bank Debt

As of December 31, 2025, short-term debt comprised $40,196 of borrowing facilities and $8 of book overdrafts.

RMB Facility

On March 7, 2024, as part of the MiX Combination, Powerfleet, together with certain of its wholly owned subsidiaries, entered into a Facilities Agreement (the “Facilities Agreement”) with FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”). Following the signing of the Facilities Agreement, MiX Telematics entered into a Facility Notice and General Terms and Conditions (the “Credit Agreement”) with RMB on March 14, 2024 for a 364-day committed general banking facility of R350,000 (the equivalent of $21,040 as of December 31, 2025) (the “RMB General Facility”). The Credit Agreement and the rights and obligations of the parties are subject to the terms and conditions of the Facilities Agreement, which is described in more detail below.

The RMB General Facility is repayable on demand and has a term of 365 days from the Available Date (as defined therein). Repayment of the RMB General Facility, including capitalized interest, is due by the earlier of (a) the Available Date or (b) April 2, 2026, unless extended by agreement between MiX Telematics and RMB. Interest rate for the RMB General Facility is calculated at South African prime rate minus 0.75% per annum and will be calculated on the daily outstanding balance, compounded monthly in arrears and repaid quarterly.

As of December 31, 2025, $21,398 of the RMB General Facility was utilized.

Hapoalim Debt

As of December 31, 2025, Powerfleet Israel Ltd. (“Powerfleet Israel”) had utilized approximately $18,797 under the Hapoalim Revolving Facilities, which are described below.

Long-Term Debt

Hapoalim Debt

In connection with the Pointer acquisition, Powerfleet Israel incurred New Israeli Shekels (“NIS”) denominated debt in term loan borrowings on October 3, 2019 under a Credit Agreement (the “Prior Credit Agreement”) with Bank Hapoalim B.M. (“Hapoalim”), pursuant to which Hapoalim agreed to provide Powerfleet Israel with two senior secured term loan facilities in an initial aggregate principal amount of $30,000 (composed of two facilities in the aggregate principal amount of $20,000 and $10,000, respectively and a five-year revolving credit facility to Pointer Telocation Ltd. (“Pointer”) denominated in NIS in an initial aggregate principal amount of $10,000 (collectively, the “Prior Credit Facilities”). The Prior Credit Facilities were scheduled to mature on October 3, 2024.

On March 18, 2024, Powerfleet Israel and Pointer (collectively, the “Borrowers”) entered into an amended and restated credit agreement (as amended, the “A&R Credit Agreement”), which refinanced the facilities under, and amended and restated, the Prior Credit Agreement. The A&R Credit Agreement provides for (i) 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 Facility A” and “Hapoalim Facility B,” respectively, and, collectively, the “Hapoalim Term Facilities”) and (ii) 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 Facility C” and “Hapoalim Facility D,” respectively, and, collectively, the “Hapoalim Revolving Facilities” and, together with the Hapoalim Term Facilities, the “Hapoalim Credit Facilities”). Powerfleet Israel drew down $30,000 in cash under the Hapoalim Term Facilities on March 18, 2024 and used the proceeds to prepay approximately $11,200, representing the remaining outstanding balance, of the Prior Credit Facilities, with the remaining proceeds distributed to Powerfleet. The proceeds of the Hapoalim Revolving Facilities may be used by Pointer for general corporate purposes, including working capital and capital expenditures.

On December 30, 2024, the Borrowers entered into an amendment to the A&R Credit Agreement, which increases the principal amount available under Hapoalim Facility D from $10,000 to $20,000 and provides that the total principal amount of Hapoalim Facility D may be distributed to the Company or any of its subsidiaries by no later than December 31, 2025, subject to certain terms and conditions of the A&R Credit Agreement, which was subsequently extended to June 30, 2026.

As of December 31, 2025, Pointer had utilized $18,797 under the Hapoalim Revolving Facilities. The available undrawn facility balance at December 31, 2025 was $11,203.

The interest rates for borrowings under Hapoalim Facility A and Hapoalim Facility B are Hapoalim’s prime rate + 2.2% per annum, and Hapoalim’s prime rate + 2.3% per annum, respectively. Hapoalim’s prime rate at December 31, 2025 was 6%. Interest is payable quarterly on March 25, June 25, September 25, and December 25 over five years. The first interest period ended on June 25, 2024. Hapoalim Facility A amortizes in quarterly installments over its five-year term and will be payable in the following aggregate annual amounts: (i) 10% of the principal amount of Hapoalim Facility A from March 18, 2024 until March 18, 2025, (ii) 25% of the principal amount of Hapoalim Facility A from March 18, 2025 until March 18, 2026, (iii) 27.5% of the principal amount of Hapoalim Facility A from March 18, 2026 until March 18, 2027, (iv) 27.5% of the principal amount of Hapoalim Facility A from March 18, 2027 until March 18, 2028, and (v) 10% of the principal amount of Hapoalim Facility A from March 18, 2028 until March 18, 2029. Hapoalim Facility B does not amortize and will be payable in full on March 18, 2029.

The interest rate for borrowings under Hapoalim Facility C is, with respect to NIS-denominated loans, Hapoalim’s prime rate + 2.5%, and with respect to U.S. dollar-denominated loans, Secured Overnight Financing Rate (“SOFR”) + 2.15%. Borrowings under Hapoalim Facility D will bear interest at the applicable interest rate set forth in the standard form documents entered into in connection with each utilization of Hapoalim Facility D. In addition, Pointer is required to pay a credit allocation fee in NIS, with respect to Hapoalim Facility C, and a non-utilization fee in U.S. dollars, with respect to Hapoalim Facility D, in each case, equal to 0.5% per annum on undrawn and uncancelled amounts of the revolving facilities during the period commencing on March 18, 2024 and ending on the last day of the applicable availability period of such revolving facilities. The Borrowers have also paid certain upfront fees and other fees and expenses to Hapoalim in connection with the A&R Credit Agreement. The Hapoalim Revolving Facilities mature on February 27, 2026.

Borrowings under the Hapoalim Term Facilities are voluntarily prepayable at any time, in whole or in part, and are not subject to any prepayment premium. Voluntary prepayments of the Hapoalim Term Facilities must be made in minimum increments of NIS 1 million. In addition to certain customary mandatory prepayment requirements, the A&R Credit Agreement also requires Powerfleet Israel to make prepayments on the Hapoalim Term Facilities to the extent it receives distributions from Pointer, except for any such distributions made to cover certain expenses of Powerfleet Israel in its normal course of operations.

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. The financial covenants have been met for the quarter ended December 31, 2025.

The Hapoalim Credit Facilities continue to be 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 all of its assets, as well as cross guarantees between Powerfleet Israel and Pointer, except that the Borrowers’ holdings in Pointer do Brasil Comercial Ltda., Pointer Argentina and Pointer South Africa are excluded from such floating charges. No other assets of the Company will serve as collateral under the Hapoalim Credit Facilities.

The Hapoalim Term Facilities under the A&R Credit Agreement have been accounted for as modifications of the term facilities that were provided under the Prior Credit Agreement because the change in the present value of the cash flows under the A&R Credit Agreement is less than 10% of the present value of the cash flows under the Prior Credit Agreement. The proceeds of the Hapoalim Term Facilities ($40,000), less the prepayment of the term loans under the Prior Credit Facility (approximately $11,200), amounting to approximately $28,800, has been recognized as an increase in the carrying value of the prior term loans that was recognized previously.

For the three-month period ended December 31, 2024, the Company recorded $22 of amortization of the original debt issuance costs and the refinancing fee paid to Hapoalim. For the nine-month period ended December 31, 2024, the Company recorded a cost of $7, net of additional deferred costs, and credits to the original debt issuance costs and amortization of the original debt issuance costs. For the three- and nine-month periods ended December 31, 2025, the Company recorded $21 and $53 of additional deferred costs to the original debt issuance costs and the refinancing fee paid to Hapoalim, respectively. The

Company recorded charges of $592 and $1,838 to interest expense on its Consolidated Statement of Operations for the three- and nine-month periods ended December 31, 2024, respectively, and $595 and $1,827 for the three- and nine-month periods ended December 31, 2025, respectively, related to interest expense associated with the Hapoalim debt.

RMB Debt

On March 7, 2024, the Company, together with certain of its wholly owned subsidiaries (the “Obligors”), entered into 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 Facility A” and “RMB Facility B,” respectively, and, collectively, the “RMB Facilities”). The Company drew down $85,000 in cash under the RMB Facilities on March 13, 2024, the proceeds of which were used to redeem all the then-outstanding shares of the Company’s Series A convertible preferred stock (the “Series A Preferred Stock”) and for general corporate purposes. The RMB Facilities are guaranteed by the Company, I.D. Systems, Inc (“I.D. Systems”), Movingdots GmbH (“Movingdots”) and Powerfleet Inc. (“Powerfleet”), and there is a security agreement over the shares in Main Street 2000 Proprietary Limited (“MS2000”), I.D. Systems, and Movingdots.

On October 31, 2025, the Company, together with the Obligors, entered into a First Amendment and Restatement Agreement with RMB, pursuant to which the Obligors and RMB agreed to amend and restate the Facilities Agreement (as amended and restated, the “Amended and Restated Facilities Agreement”) to, among other things, (i) extend the final maturity date of RMB Facility A by 12 months, (ii) update the interest rates of the RMB Facilities, and (iii) update certain financial covenants to conform to the Facility Agreement (as defined below), each as further described below.

Pursuant to the Amended and Restated Facilities Agreement, borrowings under RMB Facility A bear interest at 8.699% per annum until March 31, 2027 and, thereafter, at 4.85% (provided no event of default is continuing), plus the applicable term SOFR reference rate (or, if unavailable, an interpolated, historic or interpolated historic SOFR rate, or, if none of the foregoing are available, the three-month Treasury bill rate). Borrowings under RMB Facility B continue to bear interest at 8.979% per annum. Interest is payable quarterly in arrears. Pursuant to the Amended and Restated Facilities Agreement, RMB Facility A now matures on March 31, 2028, and RMB Facility B matures on March 31, 2029. The Company may prepay the RMB 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 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 Facilities. Since RMB’s break gains/losses could result in the Company prepaying at a discount, or a premium, of 10% or more to the initial carrying amount of the RMB Facilities, the optional and contingent repayment features were to be embedded derivatives in the scope of ASC 815-15 Embedded Derivatives. The Prepayment Derivative within each RMB Facility has been bifurcated and accounted for at fair value separately from the respective debt-host contracts which are accounted for at amortized cost. The terms of the debt-host contracts have been bifurcated to adjust the carrying value of the debt upon separating the derivative. Upon initial recognition of the RMB Facilities, a Prepayment Derivative asset of $610 and $1,616 for RMB Facility A and RMB 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 Facilities with and without the embedded derivative using both the binomial lattice model and discounted cash flow analysis.

The following key assumptions were used as of December 31, 2025:


	Facility A		Facility B
Credit spread volatility	33.52	%	26.89	%
Credit spread	3.48	%	3.57	%
Credit rating	B		B
Risk-free rate	U.S. Treasury rate		U.S. Treasury rate

As of March 31, 2025, the SOFR spot rate was 4.41% and, as of December 31, 2025, the U.S. Treasury rate was 4.84%.

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 Facility A, a change of -10% in credit spread volatility would result in a decrease in the derivative asset of $20, while a change of +10% in credit spread volatility would result in an increase in the derivative asset of $390. For the Prepayment Derivative asset in RMB Facility B, a change of -10% in credit spread volatility would result in a decrease in the derivative asset of $50, while a change of +10% in credit spread volatility would also result in a decrease in the derivative asset of $170. The Prepayment Derivative assets are included in Other assets and their fair values were $850 and $1,880 for RMB Facility A and RMB Facility B, respectively, as of March 31, 2025 and, $1,780 and $3,004 for RMB Facility A and RMB Facility B, respectively, as of December 31, 2025. The debt-host contracts are accounted for at amortized cost. Total debt issuance costs of approximately $1,000 were incurred. For the three- and nine-month periods ended December 31, 2025, the Company recorded $55 and $201 of amortization of the original debt issuance costs and the refinancing fee to RMB, respectively.

For the three- and nine-month periods ended December 31, 2025, the Company recorded interest expense of $1,899 and $5,739, respectively.

RMB Term Facility

On September 27, 2024, the Company, together with I.D. Systems and Movingdots, each a wholly owned subsidiary of the Company, entered into a Facility Agreement (the “Facility Agreement” and, together with the Amended and Restated Facilities Agreement, the “RMB Facilities Agreements”) with RMB, pursuant to which RMB agreed to provide the Company with a term loan facility in an aggregate principal amount of $125,000 (the “New RMB Term Facility”). The Company drew down the full amount of the New RMB Term Facility on October 1, 2024, and used the proceeds to pay a portion of the purchase price of approximately $190,000 in connection with the FC Acquisition. The Company’s obligations under the New RMB Term Facility are guaranteed, on a joint and several basis, by the Company, I.D. Systems, Movingdots and Powerfleet Canada Holdings Inc. The New RMB Term Facility is secured by a first priority security interest over the entire share capital of I.D. Systems, Movingdots, MS2000 and Canadian SPV, each a wholly owned subsidiary of the Company. No other assets of the Company will serve as collateral under the New RMB Term Facility.

The New RMB Term Facility will mature on the last business day of the month that is five years following the closing date of the Facility Agreement (the “Maturity Date”). The New RMB Term Facility does not amortize and will be payable on the Maturity Date. Borrowings under the New RMB Term Facility may be voluntarily prepaid at any time upon prior written notice, in whole or in part, subject to payment of a refinancing fee equal to (i) 2% of the amount prepaid if such prepayment occurs before October 1, 2025, or (ii) 1% of the amount prepaid if such prepayment occurs on or after October 1, 2025, but before October 1, 2026. No refinancing fee is payable if prepayment occurs on or after October 1, 2026. If voluntary prepayments are made in part, they must be made in minimum amounts of $5 million in integral multiples of $1 million. In addition, the Facility Agreement provides for certain customary mandatory prepayment requirements.

In the event of any prepayment during a quarterly interest period, the Company is also required to pay, or receive from, RMB an amount such that RMB would be in the same economic position for that interest period had the prepayment only occurred at the end of such period. The amount payable or receivable will be calculated relative to the interest that RMB would be able to obtain by placing the amount prepaid on deposit with a leading bank in the London interbank market for a period from the prepayment until the end of such interest period.

The New RMB Term Facility bears interest at 5% per annum (provided no event of default is continuing), plus the applicable term SOFR reference rate (or an interpolated rate if SOFR is unavailable), payable quarterly in arrears on March 31, June 30, September 30, and December 31 each year, and on October 31, 2029. The stated interest rate at December 31, 2025 was 9.20%. The Company paid a non-refundable deal structuring fee of $1,250 to RMB on October 1, 2024. Total debt issuance costs, including the $1,250 non-refundable deal structuring fee to RMB, of approximately $1,433 were incurred. For the three- and nine-month periods ended December 31, 2025, the Company recorded $61 and $179, respectively, of amortization of these costs. For the three- and nine-month periods ended December 31, 2025, the Company recorded $2,905 and $8,748 of interest expense.

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) 4.00 at September 30, 2025, (ii) 3.50 at December 31, 2025, (iii) 3.00 at March 31, 2026, (iv) 2.75 from June 30, 2026 through March 30, 2027, and (v) 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 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 relevant 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 Facilities or New RMB Term Facility, as applicable. The financial covenants for the RMB Facilities Agreements have been met for the quarter ended December 31, 2025.

Scheduled contractual maturities of the long-term debt as of December 31, 2025 are as follows (in thousands):


2026 (remaining)	$	1,431
2027	6,298
2028	48,798
2029	56,242
2030	125,000
Thereafter	—
	237,769
Less: Current portion	(6,085)
Less: Debt costs and prepayment	(520)
Total	$	231,164

NOTE 13 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following (in thousands):


	March 31, 2025		December 31, 2025


Accrued warranty	$	1,479	$	1,389
Accrued compensation	27,825		29,101
Government authorities	6,982		12,185










Other current liabilities	9,041		2,239
	$	45,327	$	44,914

The following table summarizes warranty activity for the nine months ended December 31, 2024 and 2025 (in thousands):


	Nine Months Ended December 31,
	2024		2025

Accrued warranty reserve, beginning of year	$	2,926	$	3,618
Accrual for product warranties issued	255		434

Product replacements and other warranty expenditures	(372)		(765)
Expiration of warranties	(127)		(1,055)
Acquired through MiX Combination and FC Acquisition	845		—
Foreign currency translation difference	108		105
Accrued warranty reserve, end of period (1)	$	3,635	$	2,337



(1) Includes non-current accrued warranty included in other long-term liabilities at December 31, 2024 and 2025 of $2,175 and $948, respectively.

NOTE 14 - 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 December 31, 2024 and 2025, the Company recognized restructuring expenses of $331 and $453, respectively, primarily consisting of employee termination costs. For the nine-month periods ended December 31, 2024 and 2025, the Company recognized restructuring expenses of $1,566 and $3,218, 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 sheet) (in thousands):


	March 31, 2025		December 31, 2025
Opening balance	$	60	$	1,324
Assumed in business combination	216		—
Charges	4,673		3,218
Cash payments	(3,604)		(3,162)
Foreign currency translation	(21)		26
Closing balance	$	1,324	$	1,406

As of December 31, 2025, the Company incurred expenses of $7,891 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.

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 15 - STOCKHOLDERS’ EQUITY

Series A Preferred Stock

In connection with the completion of the Pointer acquisition, on October 3, 2019, the Company issued 50 shares of Series A Preferred Stock to ABRY Senior Equity V, L.P., ABRY Senior Equity Co-Investment Fund V, L.P and ABRY Investment Partnership, L.P. Concurrently with the closing of the MiX Combination on April 2, 2024, the Company used the net proceeds received from RMB and from incremental borrowing capacity as a result of the refinancing of credit facilities with Hapoalim to redeem in full for $90,300 for all of the outstanding shares of the Series A Preferred Stock.

Dividends

Holders of Series A Preferred Stock were entitled to receive cumulative dividends at a minimum rate of 7.5% per annum (calculated on the basis of the Series A Issue Price), quarterly in arrears. The dividends were payable at the Company’s election, in kind, through the issuance of additional shares of Series A Preferred Stock, or in cash, provided no dividend payment failure had occurred and was continuing and that there had not previously occurred two or more dividend payment failures. Commencing on the 66-month anniversary of the date on which any shares of Series A Preferred Stock were first issued (the “Original Issuance Date”), and on each monthly anniversary thereafter, the dividend rate would increase by 100 basis points, until the dividend rate reached 17.5% per annum, subject to the Company’s right to defer the increase for up to three consecutive months on terms set forth in the Company’s Amended and Restated Certificate of Incorporation (the “Charter”). During the nine-month period ended December 31, 2024 the Company paid $25 in dividends to the holders of the Series A Preferred Stock, which included dividends for the period ended March 31, 2024, plus accrued dividends through April 2, 2024.

NOTE 16 - ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

Comprehensive (loss) income includes net loss and foreign currency translation gains and losses.

The accumulated balances for each classification of other comprehensive income for the nine-month period ended December 31, 2025 are as follows (in thousands):


	Foreign currency translation adjustment		Accumulated other comprehensive (loss) income
Balance at April 1, 2025	$	(8,850)	$	(8,850)
Current period change	50,346		50,346
Balance at December 31, 2025	$	41,496	$	41,496

The accumulated balances for each classification of other comprehensive loss for the nine-month period ended December 31, 2024 are as follows (in thousands):


	Foreign currency translation adjustment		Accumulated other comprehensive loss
Balance at April 1, 2024	$	(985)	$	(985)
Current period change	(6,593)		(6,593)
Balance at December 31, 2024	$	(7,578)	$	(7,578)

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 Statement of Operations. The Company derives its revenue from the sale of systems and products and from customer SaaS and hosting infrastructure fees. The measure of segment assets is reported on the Consolidated Balance Sheet as net fixed assets.

The following table summarizes the revenues and significant expenses and regularly provided to the CODM (in thousands):


	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2025		2024		2025
Total revenues	$	106,429	$	113,487	$	258,877	$	329,287
Total cost of revenues	47,646		50,799		119,103		147,529
Selling and marketing expenses	15,256		18,860		33,965		55,859
General and administrative expenses	38,784		30,782		106,726		96,576
Development costs incurred	8,526		9,122		19,799		26,615
Development costs capitalized	(3,905)		(4,550)		(8,642)		(12,992)
Depreciation and amortization	1,365		2,128		6,831		7,149
Interest income	359		111		831		569
Interest expense, net	(7,942)		(6,844)		(14,675)		(20,607)

Other (expense) income, net	(2,011)		14		(961)		(1,775)
Income tax expense	(3,513)		(2,991)		(4,821)		(4,624)
Net loss before non-controlling interest	(14,350)		(3,364)		(38,531)		(17,886)
Non-controlling interest	1		—		(17)		—
Preferred stock dividend	—		—		(25)		—
Net loss attributable to common stockholders	$	(14,349)	$	(3,364)	$	(38,573)	$	(17,886)

The following table summarizes revenues by geographic region (in thousands):


	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2025		2024		2025
North America	$	41,440	$	41,330	$	83,837	$	119,998
Israel	12,232		14,828		34,643		42,299
Africa	25,416		28,526		73,994		80,813
Europe and Middle East	13,004		12,435		30,047		37,828
Australia	9,290		10,787		20,851		32,056
Other	5,047		5,581		15,505		16,293
	$	106,429	$	113,487	$	258,877	$	329,287

The following table summarizes long-lived assets by geographic region (in thousands):


	March 31, 2025		December 31, 2025


North America	$	13,051	$	15,933
Israel	2,249		1,600
Africa	32,391		34,422
Europe and Middle East	4,824		5,730
Australia	825		668
Other	4,671		4,665
	$	58,011	$	63,018

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 December 31,						Nine Months Ended December 31,
	2024			2025			2024			2025
Domestic pre-tax book (loss) income	$	(6,839)		$	150		$	(30,451)		$	(18,399)
Foreign pre-tax book (expense) income	(3,998)			(523)			(3,260)			5,137
Total loss before income taxes	(10,837)			(373)			(33,710)			(13,262)
Income tax expense	(3,513)			(2,991)			(4,821)			(4,624)
Net loss before non-controlling interest	$	(14,350)		$	(3,364)		$	(38,531)		$	(17,886)

Effective tax rate	(32.42)		%	(801.88)		%	(14.30)		%	(34.87)		%

For the three- and nine-month periods ended December 31, 2024 and 2025, 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 10 years.

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 December 31,				Nine Months Ended December 31,
	2024		2025		2024		2025


Short-term lease cost	$	158	$	230	$	593	$	1,045

Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands):


	Nine Months Ended December 31,
	2024		2025



Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	2,836	$	2,034
Reduction of right-of-use assets due to MiX Combination (1)	$	(952)	$	—

(1) Subsequent to the MiX Combination, certain leases were terminated or modified due to the consolidation of leased space.

Weighted-average remaining lease term and discount rate for our operating leases are as follows:


	December 31, 2025
Weighted-average remaining lease term - operating leases (in years) (1)	4.38
Weighted-average discount rate	8.0	%

(1) Including expected renewals where appropriate.

Scheduled maturities of operating lease liabilities outstanding as of December 31, 2025 are as follows (in thousands):


January 2026 - March 2026	$	2,266
2027	4,073
2028	3,062
2029	2,173
2030	1,206
Thereafter	2,106
Total lease payments	14,886
Less: Imputed interest	(2,371)
Present value of lease payments	$	12,515

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 loans to external parties included in other non-current assets is determined using unobservable market data (Level 3 inputs), that represent management’s estimate of current interest rates that a commercial lender would charge borrowers. 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 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 12). 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, 2025 and the three and nine months ended December 31, 2025.


	As of December 31, 2025
		Fair Value
		Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Loans to external parties		$	215	$	215	$	—	$	—	$	215

Debt		$	277,452	$	280,320	$	—	$	280,320	$	—

Prepayment derivative		$	4,784	$	4,784	$	—	$	—	$	4,784


	As of March 31, 2025
	Fair Value
	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Loans to external parties	$	194	$	194	$	—	$	—	$	194

Debt	$	273,792	$	275,179	$	—	$	275,179	$	—

Prepayment derivative	$	2,730	$	2,730	$	—	$	—	$	2,730

NOTE 21 - CONCENTRATION OF CUSTOMERS

For the three- and nine-month periods ended December 31, 2024 and 2025, 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.

In July 2015, Pointer do Brasil Comercial Ltda. (“Pointer Brazil”) received a tax deficiency notice alleging that the services provided by Pointer Brazil should be classified as “telecommunication services” and therefore Pointer Brazil should be subject

to the state value-added tax. The aggregate amount claimed to be owed under the notice was approximately $5,493 as of December 31, 2025. On August 14, 2018, the lower chamber of the State Tax Administrative Court in São Paulo rendered a decision that was favorable to Pointer Brazil in relation to the ICMS demands, but adverse in regard to the clerical obligation of keeping in good order a set of ICMS books and related tax receipts. The remaining claim after this administrative decision is $197. The state has appealed to the higher chamber of the State Tax Administrative Court. In April 2025, the Company obtained a tax certificate indicating that the claim is under discussion and should not be recognized as a liability to the Company. For this reason, the Company has not made any provision.

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 incentives will be received in terms of the amended network services agreement. The maximum potential liability under the arrangement as of March 31, 2025 and December 31, 2025 was $609 and $465, respectively. No loss is considered probable under this arrangement.

NOTE 23 - RECENT ACCOUNTING PRONOUNCEMENTS

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

In November 2024, 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.

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.

NOTE 24 - SUBSEQUENT EVENTS

2026 RMB Facilities

On February 5, 2026, the Company, together with MiX Telematics (together with the Company, the “RMB Borrowers”), I.D. Systems and Canadian SPV (collectively with the Company and I.D. Systems, the “RMB Guarantors” and, collectively with MiX Telematics, the “RMB Obligors”), each a wholly owned subsidiary of the Company, entered into a Facilities Agreement (the “New Facilities Agreement”) with RMB, pursuant to which RMB has agreed to provide the Company and MiX Telematics with revolving credit facilities in the aggregate principal amounts of $10 million (“New RMB Facility A”) and 180,000,000 South African rand (“New RMB Facility B” and, together with New RMB Facility A, the “New RMB Facilities”), respectively.

The proceeds of the New RMB Facilities may be used by the RMB Borrowers for general corporate purposes only.

The Company’s obligations under the New RMB Facilities are guaranteed, on a joint and several basis, by the RMB Guarantors. The New RMB Facilities are secured by second priority security interests over the entire share capital of I.D. Systems, Canadian SPV and MS2000. The Company is required to cause MS2000 to accede as an additional guarantor within 60 days after the closing date, subject to the terms of the New Facilities Agreement.

The New RMB Facilities will mature one year from closing. Loans made under the New RMB Facilities may be voluntarily prepaid, in whole or in part, without penalty or premium, at any time upon prior written notice. In addition, the New Facilities Agreement provides for certain customary mandatory prepayment requirements.

The Company is 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 New RMB 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 relevant New RMB Facility, (ii) 20% per annum of the applicable margin if utilization is equal to or greater than 50% of New RMB Facility A, and (iii) 26% per annum of the applicable margin if utilization is equal to or greater than 50% of New RMB Facility B.

Macrocomm Transaction

On February 1, 2026, MiX Telematics Africa Proprietary Limited, a wholly owned subsidiary of the Company (“MiX Africa”), entered into a Sale Agreement and a related Shareholders Agreement with Macrocomm Group Proprietary Limited (“Macrocomm”), pursuant to which MiX Africa has agreed to acquire all of the issued and outstanding share capital of RTS Solutions Africa Proprietary Limited, a wholly owned subsidiary of Macrocomm, in exchange for Macrocomm’s purchase of a number of ordinary shares of MiX Africa representing an 11.27% equity interest in MiX Africa (the “MiX Africa Sale”). The MiX Africa Sale is intended to satisfy Broad-Based Black Economic Empowerment requirements imposed by the South African Competition Commission as a condition to the MiX Combination. The transaction closed on February 4, 2026.

The Company has not yet determined the accounting purchase price allocation of the acquisition described above, which includes evaluating the fair value of the acquired assets and the valuation of consideration to be transferred.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the consolidated financial condition and results of operations of Powerfleet, Inc. and its subsidiaries (“Powerfleet,” the “Company,” “we,” “our” or “us”) should be read in conjunction with the condensed consolidated financial statements and related notes thereto appearing in Part I, Item 1 of this report and Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (our “Form 10-K”). Many of the amounts and percentages in this section have been rounded for convenience of presentation, but actual recorded amounts have been used in computations. Accordingly, some information may appear not to be computed accurately.

Cautionary Note Regarding Forward-Looking Statements

This report contains “forward-looking statements” (within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which may include information concerning our beliefs, plans, objectives, goals, expectations, strategies, anticipations, assumptions, estimates, intentions, future events, future revenues or performance, capital expenditures and other information that is not historical information. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. When used in this report, the words “seek,” “estimate,” “expect,” “anticipate,” “project,” “plan,” “contemplate,” “continue,” “intend,” “believe” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon our current expectations and various assumptions. We believe there is a reasonable basis for its expectations and beliefs, but there can be no assurance that we will realize our expectations or that our beliefs will prove to be correct.

There are risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this report. Important factors that could cause our actual results to differ materially from those expressed as forward-looking statements herein include, but are not limited, to: the possibility that the anticipated cost savings, synergies and operational benefits from the MiX Combination and FC Acquisition may not be fully realized or may take longer than expected, and that the combined business may not perform as expected; global economic conditions as well as exposure to foreign exchange, political, trade and geographic risks, including tariffs and the conflict in the Middle East; disruptions or limitations in our supply chain, particularly with respect to key components; operational risks, including the successful implementation of internal business and information technology (“IT”) systems; technological changes or product developments that may be more complex, costly, or less effective than expected; cybersecurity risks and our ability to protect our IT systems from breaches; competitive pressures from a broad range of local, regional, national and other providers of wireless solutions; our ability to effectively navigate the international political, economic and geographic landscape; risks related to the protection and enforcement of our intellectual property rights; changes in applicable laws and regulations or changes in generally accepted accounting policies, rules and practices; and other risks and uncertainties disclosed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), including our Form 10-K.

There may be other factors of which we are currently unaware or which we currently deem immaterial that may cause our actual results to differ materially from the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date they are made and are expressly qualified in their entirety by the cautionary statements included in this report. Except as may be required by law, we undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances occurring after the date they were made or to reflect the occurrence of unanticipated events, or otherwise.

Overview

Powerfleet is a global provider of Artificial Intelligence-of-Things solutions providing valuable business intelligence for managing high-value enterprise assets that improve operational efficiencies.

We are headquartered in Woodcliff Lake, New Jersey, with offices located around the globe.

On April 2, 2024, we acquired MiX Telematics, and on October 1, 2024, we acquired Fleet Complete. Since the closing of these acquisitions, we have made significant progress in integrating the businesses into our operations, with alignment of core functions and early realization of operational synergies.

Recent Developments

Fluctuations in currency values, continued supply chain disruptions, changes in tariff policies and import and export restrictions, and the conflict in the Middle East have resulted in significant economic disruption and adversely impacted the broader global economy, including our customers and suppliers. Given the dynamic and uncertain nature of the current macroeconomic environment, we cannot reasonably estimate the impact of such developments on our financial condition, results of operations or cash flows into the foreseeable future. While we do not currently believe that inflation and recently pronounced tariffs have had a material impact on our condensed consolidated financial statements, the ultimate extent of the effects of these developments remains highly uncertain, and such effects could exist for an extended period of time.

Risks to Our Business

We expect that many customers who utilize our solutions will do so as part of a large-scale deployment of these solutions across multiple or all divisions of their organizations. A customer’s decision to deploy our solutions throughout its organization will involve a significant commitment of its resources. Accordingly, initial implementations may precede any decision to deploy our solutions enterprise-wide. Throughout this sales cycle, we may spend considerable time and expense educating and providing information to prospective customers about the benefits of our solutions, and there can be no assurance that our solutions will be deployed on a wider scale by the customer.

The timing of the deployment of our solutions may vary widely and will depend on the specific deployment plan of each customer, the complexity of the customer’s organization and the difficulty of such deployment. Customers with substantial or complex organizations may deploy our solutions in large increments on a periodic basis. Accordingly, we may receive purchase orders for significant dollar amounts on an irregular and unpredictable basis. Long sales cycles, as well as our expectation that customers will tend to place large orders sporadically with short lead times, may cause our revenue and results of operations to vary significantly and unexpectedly from quarter to quarter. These variations could materially and adversely affect the market price of our common stock.

Our ability to increase our revenues and generate net income will depend on a number of factors, including, for example, our ability to:

•increase sales of products and services to our existing customers;

•convert our initial programs into larger or enterprise-wide purchases by our customers;

•increase market acceptance and penetration of our products; and

•develop and commercialize new products and technologies.

Additional risks and uncertainties to which we are subject are described under the heading “Risk Factors” in our Form 10-K.

Critical Accounting Policies

For the three- and nine-month periods ended December 31, 2025, there were no significant changes to our critical accounting policies as identified in our Form 10-K.

Results of Operations

The following table sets forth, for the periods indicated, certain operating information expressed as a percentage of revenue:














































	Three Months Ended December 31,				Nine Months Ended December 31,
	2024		2025		2024		2025

Revenues:
Products	23.2	%	19.7	%	24.6	%	19.0	%
Services	76.8	%	80.3	%	75.4	%	81.0	%
Total revenues	100.0	%	100.0	%	100.0	%	100.0	%

Cost of revenues:
Cost of products	16.1	%	13.5	%	16.9	%	13.3	%
Cost of services	28.7	%	31.3	%	29.1	%	31.5	%
Total cost of revenues	44.8	%	44.8	%	46.0	%	44.8	%

Gross profit	55.2	%	55.2	%	54.0	%	55.2	%

Operating expenses:
Selling, general and administrative expenses	52.1	%	45.6	%	57.0	%	48.5	%
Research and development expenses	4.3	%	4.0	%	4.3	%	4.1	%
Total operating expenses	56.4	%	49.6	%	61.3	%	52.6	%

(Loss) profit from operations	(1.2)	%	5.6	%	(7.3)	%	2.6	%

Interest income	0.3	%	0.1	%	0.3	%	0.2	%
Interest expense, net	(7.5)	%	(6.0)	%	(5.7)	%	(6.3)	%

Other (expense) income, net	(1.9)	%	—	%	(0.4)	%	(0.5)	%

Net loss before income taxes	(10.2)	%	(0.3)	%	(13.0)	%	(4.0)	%

Income tax expense	(3.3)	%	(2.6)	%	(1.9)	%	(1.4)	%

Net loss before non-controlling interest	(13.5)	%	(3.0)	%	(14.9)	%	(5.4)	%
Non-controlling interest	—	%	—	%	—	%	—	%

Net loss	(13.5)	%	(3.0)	%	(14.9)	%	(5.4)	%


Preferred stock dividend	—	%	—	%	(0.0)%		—	%

Net loss attributable to common stockholders	(13.5)	%	(3.0)	%	(14.9)	%	(5.4)	%

Three Months Ended December 31, 2025 Compared to Three Months Ended December 31, 2024

REVENUES. Revenues increased by $7.1 million, or 6.6%, to $113.5 million in the three months ended December 31, 2025, from $106.4 million in the same period in 2024.

Revenues from products decreased by $2.3 million, or 9.3%, to $22.4 million in the three months ended December 31, 2025, from $24.7 million in the same period in 2024. The decrease in product revenues was primarily due to the increased mix of bundled customer contracts across the Company for the three months ended December 31, 2025 that reduced standalone product revenues.

Revenues from services increased by $9.3 million, or 11.4%, to $91.1 million in the three months ended December 31, 2025, from $81.7 million in the same period in 2024. The increase in services revenue was driven by increased adoption of the Company’s AI-powered SaaS solutions and strong global demand across both direct and indirect channels, centered on differentiated safety and compliance solutions.

COST OF REVENUES. Cost of revenues increased by $3.2 million, or 6.6%, to $50.8 million in the three months ended December 31, 2025, from $47.6 million for the same period in 2024. Gross profit was $62.7 million in the three months ended December 31, 2025, compared to $58.8 million for the same period in 2024. As a percentage of revenues, gross profit was 55.2% in the three months ended December 31, 2025 consistent with 55.2% in the same period in 2024.

Cost of products decreased by $1.8 million, or 10.6%, to $15.3 million in the three months ended December 31, 2025, from $17.1 million in the same period in 2024, primarily due to increased mix of bundled customer contracts across the Company that reduced standalone product sales. Gross profit for products was $7.1 million in the three months ended December 31, 2025, compared to $7.6 million in the same period in 2024. As a percentage of product revenues, gross profit increased to 31.6% in the three months ended December 31, 2025 from 30.6% in the same period in 2024, reflecting the improved sales mix.

Cost of services increased by $5.0 million, or 16.3%, to $35.5 million in the three months ended December 31, 2025, from $30.5 million in the same period in 2024. Gross profit for services was $55.6 million in the three months ended December 31, 2025, compared to $51.2 million in the same period in 2024. As a percentage of services revenues, gross profit was 61.0% in the three months ended December 31, 2025, compared to 62.7% in the same period in 2024 due to an increase in in-vehicle device depreciation and amortization (including the amortization of acquisition intangibles for the MiX Telematics and Fleet Complete transactions).

SELLING, GENERAL AND ADMINISTRATIVE (“SG&A”) EXPENSES. SG&A expenses decreased by $3.6 million, or (6.6)%, to $51.8 million in the three months ended December 31, 2025, compared to $55.4 million in the same period in 2024. SG&A expenses included $0.3 million in acquisition-related expenses, $1.3 million in integration-related expenses and $0.8 million in restructuring-related costs for the three months ended December 31, 2025, compared to $5.3 million in acquisition-related expenses, $0.5 million in integration-related expenses and $0.8 million in restructuring-related costs in the same period in 2024. As a percentage of revenues, SG&A expenses decreased to 45.6% in the three months ended December 31, 2025, compared to 52.1% for the same period in 2024. As a percentage of revenues, SG&A expenses, excluding $2.4 million in acquisition-related expenses, integration-related expenses and restructuring-related costs, decreased to 43.5% in the three months ended December 31, 2025, from 45.8% in the same period in 2024. The decrease is primarily due to cost savings from the synergies realized as a result of the MiX Combination and FC Acquisition.

RESEARCH AND DEVELOPMENT (“R&D”) EXPENSES. R&D expenses remained consistent at $4.6 million in the three months ended December 31, 2025 and $4.6 million in the same period in 2024. As a percentage of revenues, R&D expenses were 4.0% in the three months ended December 31, 2025, compared to 4.3% in the same period in 2024.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS. Net loss attributable to common stockholders was $3.4 million, or $(0.03) per basic and diluted share, for the three months ended December 31, 2025, as compared to net loss of $14.3 million, or $(0.11) per basic and diluted share, for the same period in 2024. The net loss was primarily the result of $1.1 million foreign currency losses, $1.3 million in integration-related costs, and $0.8 million in restructuring-related costs.

Nine Months Ended December 31, 2025 Compared to Nine Months Ended December 31, 2024

REVENUES. Revenues increased by $70.4 million, or 27.2%, to $329.3 million in the nine months ended December 31, 2025, from $258.9 million in the same period in 2024.

Product revenues decreased by $1.3 million, or 2.0%, to $62.4 million for the nine months ended December 31, 2025, from $63.7 million in the prior-year period. The Fleet Complete acquisition added an incremental $3.0 million of product revenues for the nine months ended December 31, 2025. Excluding the acquisition contribution, the decline in product revenues reflects the continued transition toward bundled service offerings and the impact of higher tariffs in the United States.

Services revenue increased by $71.7 million, or 36.7%, to $266.9 million in the nine months ended December 31, 2025, compared to $195.2 million in the same period in 2024. The Fleet Complete acquisition added an incremental $53.6 million of service revenues for the nine months ended December 31, 2025. The increase in services revenues for the combined business was driven primarily by underlying organic growth initiatives, partially offset by proactive actions to de-emphasize certain non-core lines of business.

COST OF REVENUES. Cost of revenues increased by $28.4 million, or 23.9%, to $147.5 million in the nine months ended December 31, 2025, from $119.1 million for the same period in 2024. Gross profit was $181.8 million in the nine months ended December 31, 2025, compared to $139.8 million for the same period in 2024. As a percentage of revenues, gross profit increased to 55.2% in the nine months ended December 31, 2025, from 54.0% in the same period in 2024. This was primarily driven by high margin services revenue comprising 81.0% of total revenues in the nine months ended December 31, 2025, compared to 75.4% for the same period in 2024.

Cost of products increased by $0.1 million, or 0.1%, to $43.9 million in the nine months ended December 31, 2025, from $43.8 million in the same period in 2024. Gross profit for products was $18.6 million in the nine months ended December 31, 2025, compared to $19.9 million in the same period in 2024. As a percentage of product revenues, gross profit decreased to 29.7% in the nine months ended December 31, 2025, from 31.2% in the same period in 2024. Gross profit as a percentage of product revenues was negatively impacted by tariffs in the United States, which increased underlying costs.

Cost of services increased by $28.4 million, or 37.7%, to $103.7 million in the nine months ended December 31, 2025, from $75.3 million in the same period in 2024. The Fleet Complete acquisition added an incremental $14.8 million of cost of services for the nine months ended December 31, 2025. The amortization of acquisition intangibles for the MiX Telematics and Fleet Complete transactions contributed an incremental $7.8 million in the aggregate to cost of services for the nine months ended December 31, 2025. Gross profit for services was $163.2 million in the nine months ended December 31, 2025, compared to $119.9 million in the same period in 2024. As a percentage of services revenues, gross profit remained relatively consistent at 61.2% in the nine months ended December 31, 2025, compared to 61.4% in the same period in 2024.

SG&A EXPENSES. SG&A expenses increased by $12.1 million, or 8.2%, to $159.6 million in the nine months ended December 31, 2025, compared to $147.5 million in the same period in 2024. The increase was driven primarily by the acquisition of Fleet Complete, which added an incremental $29.4 million of SG&A expenses for the nine months ended December 31, 2025, as well as higher investments in go-to-market initiatives. These increases were partially offset by a $19.4 million decrease in acquisition-related expenses for the nine-month period ended December 31, 2025. As a percentage of revenues, SG&A expenses decreased to 48.5% for the nine months ended December 31, 2025, compared to 57.0% in the same period in 2024, reflecting improved operating leverage following the Fleet Complete acquisition.

R&D EXPENSES. R&D expenses increased by $2.5 million, or 22.1%, to $13.6 million in the nine months ended December 31, 2025, compared to $11.2 million in the same period in 2024. The Fleet Complete acquisition added an incremental $2.5 million of R&D expenses for the nine months ended December 31, 2025. As a percentage of revenues, R&D expenses were 4.1% in the nine months ended December 31, 2025, compared to 4.3% in the same period in 2024.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS. Net loss attributable to common stockholders was $17.9 million, or $(0.13) per basic and diluted share, for the nine months ended December 31, 2025, as compared to net loss of $38.6 million, or $(0.33) per basic and diluted share, for the same period in 2024. The $20.7 million decrease in net loss was driven primarily by a $19.4 million decrease in acquisition-related expenses.

Non-GAAP Financial Information

We use certain measures to assess the financial performance of our business. Certain of these measures are termed “non-GAAP measures” because they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with GAAP, or are calculated using financial measures that are not calculated in accordance with GAAP. These non-GAAP measures include adjusted EBITDA.

An explanation of the relevance of the non-GAAP measure, a reconciliation of the non-GAAP measure to the most directly comparable measure calculated and presented in accordance with GAAP and a discussion of its limitations is set out below. We do not regard this non-GAAP measure as a substitute for, or superior to, the equivalent measure calculated and presented in accordance with GAAP or that calculated using financial measure that is calculated in accordance with GAAP.

Adjusted EBITDA

We define adjusted EBITDA as net loss attributable to common stockholders before non-controlling interest, preferred stock dividend, interest expense (net), other income (net), income tax expense, depreciation and amortization, stock-based compensation, foreign currency losses, restructuring-related expenses, derivative mark-to market adjustment, acquisition-related expenses and integration-related expenses. Upon further review of our non-GAAP financial reporting, we refined our definition of adjusted EBITDA by removing recognition of pre-October 1, 2024 contract assets (Fleet Complete). Comparative information has been adjusted to conform with the updated presentation.

We have included adjusted EBITDA in this Quarterly Report on Form 10-Q because it is a key measure that our management and board of directors use to understand and evaluate our business and ongoing operating performance, to prepare and approve our annual budget, and to develop short and long-term operational plans. We believe adjusted EBITDA eliminates the uneven effect of considerable amounts of non-cash depreciation and amortization, stock-based compensation and other items that might otherwise make comparisons of our ongoing business with prior periods more difficult and obscure trends in ongoing operations. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results. Because our method for calculating adjusted EBITDA may differ from other companies’ methods, the non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

A reconciliation of net loss attributable to common stockholders (the most directly comparable financial measure presented in accordance with GAAP) to adjusted EBITDA for the periods shown is presented below.

Powerfleet, Inc. 10-Q