Auckland telematics firm ERoad has reported a full year net loss of 161.1 million dollars for the year to March 2026, swinging from a 1.4 million dollar profit a year earlier, after writing 134.7 million dollars off the carrying value of its troubled North American business.
The result, announced to the NZX and ASX on Monday morning, confirms what shareholders had been bracing for since the half year accounts in November flagged that the goodwill sitting on the United States balance sheet from the 2021 acquisition of Coretex was no longer worth what the books said.
Strip the impairment out and the underlying picture is one of a company barely treading water in cash terms while pivoting hard back to the markets it knows best.
Total revenue came in at 195.2 million dollars, up just 0.4 percent on the 194.4 million dollars booked in financial 2025. Annualised recurring revenue, the metric subscription software businesses are usually judged on, slipped to 174.3 million dollars from 175.1 million dollars a year earlier. Earnings before interest, tax, depreciation and amortisation fell to 53.5 million dollars from 62.1 million, and the free cash flow margin nearly halved to 7.4 percent from 12.1 percent.
The board has declined to pay a dividend, the second year running shareholders have walked away empty handed.
The standout positive is Australia, where revenue rose 40 percent and annualised recurring revenue jumped 73 percent as ERoad signed up larger fleets attracted to its road user charges, driver safety and electronic work diary tools. New Zealand, the company’s home market and the regulatory engine that originally built the business around RUC compliance for heavy trucks, was described as a stable earnings base with revenue holding steady.
North America is the problem. Revenue from the United States and Canada operations fell over the year, customer churn rose, and the company confirmed it had lost a major client during the second half. That single contract loss, combined with weaker macro conditions in American trucking and tougher local competition from much larger telematics rivals such as Samsara and Motive, was enough to force the impairment review that landed in November and has now been formalised at year end.
Executive chair John Scott, who has been running the company while the board searches for a permanent chief executive, said the result reflected legacy issues and challenges the new leadership team was now addressing head on.
“We have taken decisive action to reset the business and position it for sustainable growth over the medium to long term,” Scott said in the results statement.
He warned that shareholders should expect the next six months to remain difficult as the company works through the restructure, before any benefits start showing up in the numbers. A trading update has been promised for September.
The strategic shift is the most significant since ERoad listed on the NZX in 2014. Rather than running as a single global telematics company with a heavy investment programme aimed at cracking the much larger North American market, ERoad is moving to a regional model centred on Australia and New Zealand. North America will continue to operate but with a much smaller footprint, lower investment and a focus on retaining existing customers rather than chasing new ones.
Alongside the result, the company also released an updated notice of its annual shareholders meeting with changes to the board, and an updated proxy form for investors who plan to vote.
The Auckland based company, founded by Steven Newman in 2000, originally built its hardware and software platform to automate the collection of road user charges for diesel trucks operating in New Zealand. It expanded into Australia, then into the United States via the 2018 launch and the much larger 2021 takeover of Coretex, a deal that valued the Auckland headquartered competitor at 161 million dollars and was funded by a capital raise and debt.
That Coretex deal is now, almost to the dollar, what has been written off.
For investors, the result lands at the bottom end of expectations the market had been working with since November, when an interim impairment of 135 million dollars was first flagged. The company has retained Forsyth Barr and Macquarie as advisers in recent years as it has explored strategic options, and at various points has been linked with takeover interest, though no firm offer has emerged.
The headline net loss is one of the largest reported by an NZX listed technology company in the post Covid era and underscores how difficult it has been for New Zealand software firms to scale into the United States. Plexure, Pushpay, Volpara, Vista Group and Eroad have all at different times bet heavily on North American expansion only to retreat, restructure or be taken private when the cost of customer acquisition turned out to be far higher than the prospectus models suggested.
For ERoad specifically, the question now is whether the back to basics Australasian pivot can stabilise recurring revenue, restore margins and eventually justify a dividend again, or whether the next stage in the company’s life is as a takeover target trading on much reduced expectations.
The annual shareholders meeting, where chair Scott will face questions from investors in person, is scheduled for later in the winter. A trading update setting out the first quarter of the new financial year will follow in September.
What do you make of ERoad’s pull back from North America and the focus on Australia and New Zealand? Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
Leave a Reply