MiX Telematics Limited

MiX reported third-quarter fiscal 2024 revenue of $39.1 million, up 5.8% on a constant-currency basis. Subscription revenue increased 6.4% in constant currency to $33.7 million, or 86.1% of total revenue, while hardware and other revenue was $5.4 million. Gross margin was 60.1%, down 430 basis points from 64.4% a year ago, and subscription revenue margin was 64.5% versus 69.6% a year ago. Adjusted EBITDA rose 13% to $9.5 million from $8.4 million, with adjusted EBITDA margin at 24.4% versus 21.2% last year. Free cash flow was negative $4 million after $5.7 million of capital expenditures, including $4.2 million on in-vehicle devices, and the company ended with $25.4 million in cash and cash equivalents. For the rest of fiscal 2024, management still expects constant-currency organic subscription revenue and ARR growth in the mid-single digits, with full-year adjusted EBITDA margin approaching the mid-20s.

Stefan Joselowitz said the company made significant progress toward the Powerfleet merger, including major regulatory approvals and a shareholder vote set for February 28, with closing expected in early April. He emphasized that the business remained operationally focused despite transaction work, calling the quarter a strong operational performance with record net subscriber additions. His tone was upbeat about cross-sell, AI-enabled cameras, Africa growth, and the broader strategic upside of the combined company and NASDAQ listing.

Paul Dell walked through the quarter’s financials, highlighting $39.1 million in revenue, $33.7 million of subscription revenue, $9.5 million of adjusted EBITDA, and 24.4% adjusted EBITDA margin. He pointed to margin pressure from lower subscription margins and accelerated depreciation on in-vehicle devices after an energy customer non-renewal, but said subscription margin should normalize in coming quarters. He also noted negative free cash flow of $4 million, $25.4 million of cash on hand, a higher accounts receivable balance due to delayed collections in South Africa and from large energy customers, and said the company expects significant free cash generation as fiscal 2024 closes.

Analysts focused on Africa growth, the construction vertical, subscriber quality, and merger-related customer reaction. Management said Africa strength is being driven by more active social media campaigns, online lead generation, and light-fleet demand, while the construction solution already has a viable beachhead and is still being developed. On the subscriber mix question, Dell said growth skewed toward asset tracking and light fleet customers, which have lower ARPU, and Joselowitz said customers generally view the merger positively and that combined offerings are already helping in some bids.