Powerfleet Affirms Fiscal 2027 Guidance After Record Quarter

The Tip Desk · November 12, 2026 · 4 min read

Second-quarter revenue hit a record $115.7 million as the company kept full-year targets of $468 million to $473 million.

Powerfleet, Inc. (AIOT), the artificial intelligence of things software-as-a-service provider, reported record revenue of $115.7 million for the second fiscal quarter ended September 30, 2026, a 4% sequential increase from $110.8 million.

Year-over-year growth slowed to 4% from $111.7 million, after a 6.4% increase in the first quarter of fiscal 2027. The company said the results reflected disciplined execution against its plan, with sequential margin improvement and momentum in On-Site, AI Video, and IoT & Connected Services.

Services revenue rose 7% to $95.2 million, a slower rate than the 9.1% increase in the first quarter. Its mix of total revenue fell to 82% from 85%. Product revenue decreased 8% to $20.5 million.

Gross margin compressed to 53% from 56% a year earlier, after 55.2% in the first quarter. Profit from operations was $1.4 million, down from $4.2 million a year earlier. Operating expenses increased 4% to $60.5 million. Selling, general and administrative expense rose to $55.7 million, which the company said primarily reflected a planned investment in selling and marketing, partially offset by lower general and administrative expense and depreciation and amortization in operating expense. Research and development expense increased to $4.8 million.

Net loss attributable to common stockholders widened to $6.9 million, or $0.05 a share, from $4.3 million, or $0.03 a share, a year earlier. Adjusted EBITDA was essentially unchanged at $24.9 million versus $24.8 million a year earlier.

The company agreed in principle to a device financing facility with Rand Merchant Bank primarily to support deployment under its South African National Treasury contract. Under the proposed facility, RMB is expected to fund the upfront cost of devices and would be repaid from contracted customer payments over the life of the contract. The company keeps the customer relationship and continues to bill the service. The proposed facility remains subject to definitive documentation.

Chief Executive Steve Towe said the major South African contract was progressing ahead of original expectations. President and Chief Financial Officer Paul Lalljie said the device financing facility is designed to fund that growth opportunity as it scales.

Powerfleet launched Unity Foresight, an AI predictive analytics solution, and Unity Asset Intelligence, which the company said extends its platform beyond vehicles to pallets, containers, equipment, and other powered and non-powered assets.

As of September 30, 2026, cash and cash equivalents, including restricted cash, totalled $29.8 million. Total debt was $291.4 million and net debt $261.6 million. For the first six months of fiscal 2027, net cash provided by operating activities was $4.8 million, compared with $10.2 million in the prior-year period. Cash used in investing activities totalled $21.8 million, primarily reflecting capital expenditures of $12.6 million, driven largely by the upfront investment in devices to support the South African deployment ramp, and capitalized software development costs of $9.6 million. Cash provided by financing activities was $4.5 million. The device investment is expected to be largely funded on a go-forward basis through the new RMB facility.

Powerfleet is affirming fiscal 2027 revenue guidance of $468 million to $473 million, representing approximately 6% year-over-year growth at the midpoint, and adjusted EBITDA of $111 million to $114 million, approximately 24% at the midpoint. The company said the outlook reflects a decision to forgo certain near-term revenue opportunities as it redirects capital and operating resources. It also expects free cash flow of approximately $20 million, interest expense of $27 million, and taxes of $10 million.

The company expects revenue and profitability to strengthen in the second half of fiscal 2027, supported by continued services revenue growth, driven primarily by the anticipated contribution from the South African National Treasury deployment, momentum across its three strategic growth engines, and ongoing operational efficiencies. It continues to expect to exit fiscal 2027 at a fourth-quarter annualized revenue run rate of approximately $495 million, with an adjusted EBITDA margin of approximately 27%.