EROAD Limited Analysis

Overview

EROAD has created an electronic solution to manage and pay Road User Charges (RUC), support regulatory compliance and provide value-added commercial services to the heavy vehicle industry. In 2009, EROAD implemented the world's first network-wide GPS/cellular-based road user charging system, which modernised the existing paper-based RUC regime in New Zealand.

The EROAD system consists of a secure electronic distance recorder (Ehubo), combined with a bank-grade payment gateway and services portal. We undertake design and manufacture of our Ehubos, as well as software development, from our headquarters in Auckland.

EROAD's successful New Zealand reference site provided it with the opportunity to enter the international market. In 2014 we commercially launched in Oregon, becoming the first approved electronic Weight-Mile Tax (WMT) service provider in North America. We also entered the Australian market with a commercial services offering. For more information please visit www.eroad.com.

Performance

The following information was extracted from EROAD Limited half year results, released on 25 November 2024:

All numbers are stated in New Zealand dollars (NZ$) and relate to the six months ended 30 September 2024 (H1 FY25), unless stated otherwise. Comparisons relate to the six months ended 30 September 2023 (H1 FY24).

Financial Highlights

• Positive Free Cash Flow (to the firm) of $0.1m in H1 FY25 compared to negative free cash flow (to the firm) $0.2m in H1 FY24. The company is now consistently free cash flow positive. This is the result of growth in units, price increases and cost control. When normalised for the temporary impact of the 4G upgrade program, free cash flow (to the firm) was $6.2m in H1 FY25 compared to $2.8m in H1 FY24.
• Revenue increased to $95.9m for H1 FY25 from $88.9m in H1 FY24. This represents a 8% increase against the prior comparable period. Growth in revenue was delivered across all markets.
• Annualised Recurring Revenue increased by $8.8m (+5%) to $177.9m in H1 FY25 from $169.1m in H1 FY24, reflecting growth across all markets. On a constant currency basis, ARR increased $13.0m (+8%).
• EBIT of $2.4m in H1 FY25 compared to $0.1m in H1 FY242. Normalised3 EBIT increased to $4.7m in H1 FY25 up from $1.6m in H1 FY242. Normalised for 4G hardware upgrade costs of $2.3m and $1.5m in H1 FY25 and H1 FY24, respectively