Friday 29th January 2021
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Transport technology services company EROAD today released its quarterly update for the three months ended 31 December 2020. Key points include:
• EROAD grew by 1,284 contracted units reflecting growth in New Zealand and Australia
• EROAD faced challenging conditions in North America
• EROAD remains confident in its guidance provided at the HY results release
Growth continued in New Zealand and Australia
EROAD grew by 1,284 units for the three months ended 31 December, ending the quarter at 123,477 reflecting growth in New Zealand and Australia. While North America is experiencing higher than usual numbers of units being returned, overall EROAD continues to see an Asset Retention Rate of approximately 95% for the group.
In New Zealand, EROAD’s growth was 1,071 units for the quarter. During the quarter, EROAD also secured a large Enterprise account of approximately 800 units. As units will start to be installed in the final quarter of FY21, this figure has not been included in the figure for Q3. In addition to growth in contracted units in New Zealand, sales of EROAD’s add-on SaaS products grew significantly in the quarter. EROAD sold an additional 2,602 ‘EROAD Day Logbook’ subscriptions in the three-month period, including 255 subscriptions to customers who do not currently have EROAD hardware installed. EROAD also more than doubled the number of active ‘EROAD Where’ tags from 2,640 to 5,660 units and almost doubled the number of customers using this product from 95 to 185 customers in the quarter.
Growth in Australia continued in the small and medium customer segment through predominantly new customers across a range of industries. While, growth in this quarter more than doubled from the previous quarter, EROAD remains focussed on securing large enterprise opportunities within its pipeline. One opportunity in particular, progressed further during the quarter and is targeted to be contracted in Q4.
H2 FY21 Guidance
Despite continued and more challenging conditions in North America, EROAD remains confident in the H2 FY21 and FY22 guidance provided on 26 November 2020 in the half year results release. For the second half of the financial year, EROAD continues to anticipate a small increase in revenue compared to the first half. EBITDA is anticipated to be similar to the first half’s figure (adjusted for one-off items) reflecting the acceleration of product development and increased sales and marketing costs associated with the launches of key products.
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