aiot-20250930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

—————————

FORM 10-Q

—————————

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number: 001-39080

POWERFLEET, INC.

(Exact name of registrant as specified in its charter)

Delaware

83-4366463

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

123 Tice Boulevard

Woodcliff Lake,

New Jersey

07677

(Address of principal executive offices)

(Zip Code)

(201)

996-9000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

AIOT

The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, $0.01 par value per share, outstanding as of the close of business on November 6, 2025 was 133,824,621.

INDEX

POWERFLEET, INC. AND SUBSIDIARIES


						Page

Part I - FINANCIAL INFORMATION						3
Item 1. Financial Statements (Unaudited)						3
Condensed Consolidated Balance Sheets as of March 31, 2025 and September 30, 2025						3
Condensed Consolidated Statements of Operations - for the three and six months ended September 30, 2024 and 2025						5
Condensed Consolidated Statements of Comprehensive (Loss) Income - for the three and six months ended September 30, 2024 and 2025						6
Condensed Consolidated Statement of Changes in Stockholders’ Equity - for the periods April 1, 2024 through September 30, 2024 and April 1, 2025 through September 30, 2025						7
Condensed Consolidated Statements of Cash Flows - for the six months ended September 30, 2024 and 2025						9
Notes to Condensed Consolidated Financial Statements						11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						36
Item 3. Quantitative and Qualitative Disclosures About Market Risk						46
Item 4. Controls and Procedures						48
Part II - OTHER INFORMATION						50
Item 1. Legal Proceedings						50
Item 1A. Risk Factors						51
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						52
Item 5. Other Information						52
Item 6. Exhibits						52
Signatures						53

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

POWERFLEET, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)



	March 31, 2025		September 30, 2025

ASSETS
Current assets:
Cash and cash equivalents	$	44,392	$	27,898
Restricted cash	4,396		4,583
Accounts receivables, net of allowance for credit losses of $4,057 and $9,490 as of March 31, 2025 and September 30, 2025, respectively	78,623		85,032
Inventory, net	18,350		22,466

Prepaid expenses and other current assets	23,319		27,858
Total current assets	169,080		167,837

Fixed assets, net	58,011		63,277
Goodwill	383,146		401,216
Intangible assets, net	258,582		262,765
Right-of-use asset	12,339		12,079
Severance payable fund	3,796		4,330
Deferred tax asset	3,934		3,962
Other assets	21,183		21,427

Total assets	$	910,071	$	936,893

LIABILITIES
Current liabilities:
Short-term bank debt and current maturities of long-term debt	$	41,632	$	43,206
Accounts payable	41,599		49,768
Accrued expenses and other current liabilities	45,327		41,419
Deferred revenue - current	17,375		17,199
Lease liability - current	5,076		4,756
Total current liabilities	151,009		156,348
Long-term debt - less current maturities	232,160		231,906
Deferred revenue - less current portion	5,197		4,899
Lease liability - less current portion	8,191		8,363
Accrued severance payable	6,039		5,584
Deferred tax liability	57,712		58,680

Other long-term liabilities	3,021		2,134



Total liabilities	463,329		467,914
Commitments and Contingencies (Note 23)




STOCKHOLDERS’ EQUITY
Preferred stock; authorized 50,000 shares, $0.01 par value	—		—
Common stock; authorized 175,000 shares, $0.01 par value; 135,379 and 135,870 shares issued at March 31, 2025 and September 30, 2025, respectively; shares outstanding, 133,316 and 133,806 at March 31, 2025 and September 30, 2025, respectively	1,343		1,343
Additional paid-in capital	671,400		675,847


Accumulated deficit	(205,783)		(220,305)
Accumulated other comprehensive (loss) income	(8,850)		23,462
Treasury stock; 2,063 and 2,063 common shares at cost at March 31, 2025 and September 30, 2025, respectively	(11,518)		(11,518)

Total Powerfleet, Inc. stockholders’ equity	446,592		468,829
Non-controlling interest	150		150
Total equity	446,742		468,979

Total liabilities and stockholders’ equity	$	910,071	$	936,893

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)


	Three Months Ended September 30,				Six Months Ended September 30,
	2024		2025		2024		2025
Revenues:
Products	$	20,293	$	22,370	$	39,031	$	40,027
Services	56,725		89,309		113,417		175,773
Total revenues	77,018		111,679		152,448		215,800

Cost of revenues:
Cost of products	13,929		15,318		26,680		28,546
Cost of services	21,746		33,772		44,777		68,184
Total cost of revenues	35,675		49,090		71,457		96,730

Gross profit	41,343		62,589		80,991		119,070


Operating expenses:
Selling, general and administrative expenses	37,335		54,151		92,117		107,814

Research and development expenses	3,435		4,194		6,536		9,051
Total operating expenses	40,770		58,345		98,653		116,865

Profit (loss) from operations	573		4,244		(17,662)		2,205


Interest income	168		262		472		458
Interest expense, net	(4,042)		(6,977)		(6,733)		(13,763)

Other income (expense), net	1,674		(546)		1,050		(1,789)

Net loss before income taxes	(1,627)		(3,017)		(22,873)		(12,889)

Income tax expense	(256)		(1,271)		(1,309)		(1,633)

Net loss before non-controlling interest	(1,883)		(4,288)		(24,182)		(14,522)
Non-controlling interest	(5)		—		(18)		—

Net loss	(1,888)		(4,288)		(24,200)		(14,522)


Preferred stock dividend	—		—		(25)		—

Net loss attributable to common stockholders	$	(1,888)	$	(4,288)	$	(24,225)	$	(14,522)


Net loss per share attributable to common stockholders - basic and diluted	$	(0.02)	$	(0.03)	$	(0.23)	$	(0.11)







Weighted average common shares outstanding - basic and diluted	107,532		133,676		107,335		133,510

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive (Loss) Income

(In thousands)

(Unaudited)


	Three Months Ended September 30,				Six Months Ended September 30,
	2024		2025		2024		2025
Net loss attributable to common stockholders	$	(1,888)	$	(4,288)	$	(24,225)	$	(14,522)

Foreign currency translation adjustment	(797)		9,793		(379)		32,312

Total other comprehensive (loss) income	(797)		9,793		(379)		32,312

Comprehensive (loss) income	$	(2,685)	$	5,505	$	(24,604)	$	17,790

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Changes in Stockholders’ Equity

(In thousands)

(Unaudited)



	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive (Loss) Income		Treasury Stock		Non-Controlling Interest		Total Stockholders’ Equity
	Number of Shares	Amount






























Balance as of April 1, 2025	135,379	$	1,343	$	671,400	$	(205,783)	$	(8,850)	$	(11,518)	$	150	$	446,742
Net loss attributable to common stockholders	—	—		—		(10,234)		—		—		—		(10,234)
Foreign currency translation adjustment	—	—		—		—		22,519		—		—		22,519
Stock-based compensation	—	—		1,853		—		—		—		—		1,853
Issue of stock appreciation rights	127	—		—		—		—		—		—		—
Balance as of June 30, 2025	135,506	$	1,343	$	673,253	$	(216,017)	$	13,669	$	(11,518)	$	150	$	460,880
Net loss attributable to common stockholders	—	—		—		(4,288)		—		—		—		(4,288)

Foreign currency translation adjustment	—	—		—		—		9,793		—		—		9,793








Stock-based compensation	—	—		2,594		—		—		—		—		2,594
Issue of stock appreciation rights and restricted share awards	364	—		—		—		—		—		—		—
Balance as of September 30, 2025	135,870	$	1,343	$	675,847	$	(220,305)	$	23,462	$	(11,518)	$	150	$	468,979



	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income/(Loss)		Treasury Stock		Non-Controlling Interest		Total Stockholders’ Equity
	Number of Shares	Amount
Balance as of April 1, 2024	38,709	$	387	$	202,607	$	(154,796)	$	(985)	$	(8,682)	$	105	$	38,636



Net loss attributable to common stockholders	—	—		(25)		(22,312)		—		—		—		(22,337)
Net income attributable to non-controlling interest	—	—		—		—		—		—		13		13
Foreign currency translation adjustment	—	—		—		—		418		—		8		426




Issuance of restricted shares	54	1		(1)		—		—		—		—		—
Shares issued for transaction bonus	174	1		888		—		—		—		—		889
Shares issued in connection with MiX Combination	70,704	707		361,298		—		—		—		—		362,005
Acquired through MiX Combination	—	—		7,818		—		—		—		5		7,823

Shares withheld pursuant to vesting of restricted stock	—	—		—		—		—		(2,836)		—		(2,836)


Stock-based compensation	—	—		5,929		—		—		—		—		5,929
Balance as of June 30, 2024	109,641	$	1,096	$	578,514	$	(177,108)	$	(567)	$	(11,518)	$	131	$	390,548


Net loss attributable to common stockholders	—	—		—		(1,888)		—		—		—		(1,888)
Net income attributable to non-controlling interest	—	—		—		—		—		—		5		5
Foreign currency translation adjustment	—	—		—		—		(797)		—		20		(777)


Proceeds from private placement, net of costs to issue common stock	—	—		61,851		—		—		—		—		61,851



Exercise of stock options	243	—		—		—		—		—		—		—
Stock-based compensation	—	—		1,371		—		—		—		—		1,371
Balance as of September 30, 2024	109,884	$	1,096	$	641,736	$	(178,996)	$	(1,364)	$	(11,518)	$	156	$	451,110

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Six Months Ended September 30,
	2024		2025
Cash flows from operating activities
Net loss	$	(24,200)	$	(14,522)
Adjustments to reconcile net loss to cash (used in) provided by operating activities:


Non-controlling interest	18		—

Inventory reserve	904		1,182
Stock-based compensation expense	7,300		4,447
Depreciation and amortization	19,399		31,824
Right-of-use assets, non-cash lease expense	1,515		627
Derivative mark-to-market adjustment	(2,197)		(786)
Bad debts expense	4,369		4,378
Deferred income taxes	(283)		(1,864)
Shares issued for transaction bonuses	889		—
Lease termination and modification losses	184		91
Other non-cash items	1,522		1,564
Changes in operating assets and liabilities:
Accounts receivables	(12,553)		(7,562)
Inventories	955		(4,763)
Prepaid expenses and other current assets	(3,009)		(984)
Deferred costs	(3,619)		(4,718)
Deferred revenue	(99)		(612)
Accounts payable, accrued expenses and other current liabilities	(71)		2,524
Lease liabilities	(1,856)		(964)
Accrued severance payable, net	40		381



Net cash (used in) provided by operating activities	(10,792)		10,243

Cash flows from investing activities
Acquisition, net of cash assumed	27,531		45
Proceeds from sale of fixed assets	217		18
Capitalized software development costs	(4,676)		(11,491)
Capital expenditures	(10,454)		(12,452)
Repayment of loan advanced to external parties	294		—




Net cash provided by (used in) investing activities	12,912		(23,880)

Cash flows from financing activities

Repayment of long-term debt	(978)		(2,710)
Short-term bank debt, net	9,955		(617)
Purchase of treasury stock upon vesting of restricted stock	(2,836)		—

Payment of preferred stock dividend and redemption of preferred stock	(90,298)		—
Proceeds from private placement, net	61,851		—



Cash paid on dividends to affiliates	(6)		—



Net cash used in financing activities	(22,312)		(3,327)

Effect of foreign exchange rate changes on cash and cash equivalents	(436)		657
Net decrease in cash and cash equivalents, and restricted cash	(20,628)		(16,307)
Cash and cash equivalents, and restricted cash at beginning of the period	109,664		48,788

Cash and cash equivalents, and restricted cash at end of the period	$	89,036	$	32,481

Reconciliation of cash and cash equivalents, and restricted cash, at beginning of the period
Cash and cash equivalents	24,354		44,392
Restricted cash	85,310		4,396
Cash and cash equivalents, and restricted cash, at beginning of the period	$	109,664	$	48,788

Reconciliation of cash and cash equivalents, and restricted cash, at end of the period
Cash and cash equivalents	25,962		27,898
Restricted cash	63,074		4,583
Cash and cash equivalents, and restricted cash, at end of the period	$	89,036	$	32,481

Supplemental disclosure of cash flow information:
Cash paid for:
Taxes	$	774	$	2,914
Interest	$	6,262	$	12,192

Noncash investing and financing activities:
Common stock issued for transaction bonus	$	9	$	—
Shares issued in connection with MiX Combination	$	362,005	$	—

See accompanying notes to condensed consolidated financial statements.

POWERFLEET, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

September 30, 2025

In thousands (except per share data)

(Unaudited)

NOTE 1 - DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION

Description of the Company

Powerfleet, Inc. (the “Company” or “Powerfleet”) is a global provider of Artificial Intelligence-of-Things (“AIoT”) solutions providing valuable business intelligence for managing high-value enterprise assets that improve operational efficiencies. The Company has a primary listing on the Nasdaq Global Market and a secondary listing on the Main Board of the Johannesburg Stock Exchange.

On April 2, 2024 (the “Implementation Date”), the Company consummated the transactions contemplated by the Implementation Agreement, dated as of October 10, 2023 (the “Implementation Agreement”), that the Company entered into with Main Street 2000 Proprietary Limited, a private company incorporated in the Republic of South Africa and a wholly owned subsidiary of the Company (“Powerfleet Sub”), and MiX Telematics Limited, formerly a public company incorporated under the laws of the Republic of South Africa (“MiX Telematics”), pursuant to which MiX Telematics became an indirect, wholly owned subsidiary of the Company (the “MiX Combination”). The consolidated financial statements as of and for the three and six months ended September 30, 2025 include the financial results of MiX Telematics and its subsidiaries.

On October 1, 2024 (the “FC Closing Date”), the Company consummated the transactions contemplated by the Share Purchase Agreement, dated as of September 18, 2024 (the “Purchase Agreement”), by and among Golden Eagle Topco, LP (“Golden Eagle LP”), the persons that are party to the Purchase Agreement under the heading “Other Sellers” (the “Other Sellers” and, together with Golden Eagle LP, the “Sellers”), the Company and Powerfleet Canada Holdings Inc., a wholly owned subsidiary of the Company (the “Canadian SPV” and, together with the Company, the “Purchasers”), pursuant to which the Purchasers acquired all of the direct and indirect common shares in the capital of Golden Eagle Canada Holdings, Inc. (“Canada Holdco”) and Complete Innovations Holdings Inc. (“CIH”), and all of the issued and outstanding shares of common stock of Golden Eagle Holdings, Inc. (together with Canada Holdco and CIH, “Fleet Complete”). As a result, Fleet Complete became an indirect, wholly owned subsidiary of the Company (the “FC Acquisition”). The consolidated financial statements as of and for the three and six months ended September 30, 2025 include the financial results of Fleet Complete and its subsidiaries. See Note 3 for additional information.

Basis of Preparation

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated on consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the consolidated financial position of the Company as of March 31, 2025 and September 30, 2025, the consolidated results of its operations for the three- and six-month periods ended September 30, 2024 and 2025, the consolidated change in stockholders’ equity for the three- and six-month periods ended September 30, 2024 and 2025, and the consolidated cash flows for the six-month period ended September 30, 2024 and 2025. The results of operations for the three- and six-month periods ended September 30, 2025 are not necessarily indicative of the operating results for the full year. These financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures for the fiscal year ended March 31, 2025 included in the Company’s Annual Report on Form 10-K for the year then ended.

For the quarter ended September 30, 2025, the Company enhanced its disclosures to include its accounting policy for restructuring expenses.

The Company records one-time employee termination benefits associated with exit or disposal activities in accordance with ASC 420-10, Exit or Disposal Cost Obligations (“ASC 420”), and post-employment benefits under ASC 712-10, Compensation – Nonretirement Postemployment Benefits, when such obligations are probable and reasonably estimable.

A liability for one-time termination benefits is recognized on the date the plan is communicated to affected employees, provided that no more-than-insignificant future service is required. Contract termination and other exit costs are recognized when the related obligation is incurred.

Lease-related items are accounted for in accordance with ASC 842, Leases (“ASC 842”), including right-of-use (“ROU”) asset impairments and lease modifications. Only costs that are not lease liabilities under ASC 842 and that meet the recognition criteria of ASC 420 are included in restructuring charges.

The Company reassesses expected restructuring expenses each reporting period and records adjustments to estimates, including reversals, as necessary.

NOTE 2 - USE OF ESTIMATES

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such management estimates include, but are not limited to, assumptions used in business combinations, allowance for credit losses, income taxes, realization of deferred tax assets, accounting for uncertain tax positions, the impairment of intangible assets, including goodwill and long-lived assets, capitalized software development costs, standalone selling prices (“SSP”), valuation of the derivative asset, and market-based stock-based compensation costs. Actual results could differ materially from those estimates and assumptions made.

NOTE 3 - ACQUISITION

FC Acquisition

On October 1, 2024, the Company consummated the FC Acquisition, pursuant to which Fleet Complete became an indirect, wholly owned subsidiary of the Company in exchange for payment by the Purchasers of an aggregate purchase price of $190,000, subject to certain customary working capital and other adjustments as described in the Purchase Agreement (as adjusted, the “Purchase Price”).

The FC Acquisition met the criteria for a business combination to be accounted for using the acquisition method under ASC 805, Business Combinations, with the Company identified as the legal and the accounting acquirer.

The estimated fair value of the consideration transferred for the FC Acquisition was $189,950 as of the FC Closing Date, which consisted of the following:


(in thousands, except for share price)	October 1, 2024
Shares of Powerfleet common stock issued	4,286
Powerfleet stock price*	4.98
Fair value of Powerfleet common stock transferred	$	21,343
Cash consideration to former shareholders	16,225
Repayment of Fleet Complete’s existing debt	152,382
Total fair value of consideration	$	189,950

* Powerfleet’s closing share price on October 1, 2024.

$60,000 of the cash portion of the Purchase Price was funded by the Private Placement, as described below, and $125,000 of the cash portion of the Purchase Price was funded with a senior secured term loan facility provided by FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”), as described in Note 13 below.

Concurrently with the closing of the FC Acquisition, on October 1, 2024, the Company consummated a private placement contemplated by the Subscription Agreement, dated as of September 18, 2024, by and among the Company and various accredited investors party thereto (the “Investors”), pursuant to which the Investors purchased from the Company, and the Company issued to such Investors, an aggregate of 20,000 shares of the Company’s common stock at a price per share of $3.50 for aggregate gross proceeds of $70,000 (the “Private Placement”). $60,000 of such gross proceeds funded a portion of the Purchase Price with the remaining $10,000 in proceeds expected to be used by the Company for working capital and general corporate purposes. Timing of the receipt of proceeds, gross of issuance costs, was $62,000, by September 30, 2024, with the remaining $8,000, net of costs, received on October 1, 2024.

Allocation of Purchase Price

The purchase price was allocated to the assets and liabilities assumed based on the estimated fair values at the date of acquisition. The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill. Goodwill is primarily attributed to the assembled workforce, expected synergies from future expected economic benefits, including enhanced revenue growth from expanded products and capabilities, as well as substantial cost savings from duplicative overheads, streamlined operations and enhanced efficiency. Goodwill is not deductible for tax purposes.

The allocation of purchase price was as follows (in thousands):


	October 1, 2024
Assets acquired:
Cash and cash equivalents	$	3,964
Accounts receivable, net	19,990
Inventory, net	6,598

Prepaid expenses and other current assets	9,144
Fixed assets, net	3,693
Intangible assets, net	101,261
Identifiable intangible assets acquired	99,000
Computer software	2,261
Right-of-use asset	2,823
Deferred tax assets	—
Other assets	4,555
Total assets acquired	$	152,028

Liabilities assumed:
Accounts payable and accrued expenses	$	30,857
Deferred revenue - current	3,088
Lease liability - current	2,965
Deferred revenue - less current portion	1,118
Lease liability - less current portion	75
Accrued severance payable	216
Other long-term liabilities	405
Deferred tax liabilities	5,599
Total liabilities assumed	$	44,323

Total identifiable net assets acquired	$	107,705
Goodwill	82,245
Purchase price consideration	$	189,950

The above fair values of assets acquired and liabilities assumed, including identifiable assets acquired, have been determined using the income and cost approach, and are partially based on inputs that are unobservable. The Company used discounted cash flow analyses to assess certain components of its purchase price allocation. The fair value of the customer relationships was determined using the multi-period excess earnings method. The fair value of the tradename and developed technology was determined using an income approach based on the relief from royalty method.

For the fair value estimates, the Company used (i) forecasted future cash flows, (ii) historical and projected financial information, (iii) synergies including cost savings, (iv) revenue growth rates, (v) customer attrition rates, (vi) royalty rates, and (vii) discount rates, as relevant, that market participants would consider when estimating fair values.

The initial accounting for the business combination was completed as September 30, 2025. The fair values of the identifiable assets acquired and liabilities assumed are final and, therefore, adjustments to them, and the resulting goodwill, will not occur in the future.

Acquired Identifiable Intangible Assets

The following table sets forth the fair values of the components of the identifiable intangible assets acquired and their estimated useful lives:


(in thousands)	Fair value		Weighted average useful lives
Trade name	$	4,000	4.5	years
Developed technology	25,000		5.5	years
Customer relationships	70,000		9.5	years
	$	99,000

Acquisition-Related Expenses

The Company expensed a total of $17 of acquisition-related costs in the consolidated statements of operations related to the FC Acquisition for the three-month period ended September 30, 2025.

The Company expensed a total of $1,147 of acquisition-related costs in the consolidated statements of operations related to the FC Acquisition for the six-month period ended September 30, 2025.

Unaudited Pro Forma Financial Information

If the business acquired in the FC Acquisition was acquired on April 1, 2024, it would have contributed revenue of $29,988 and a net loss of $10,081, of which $3,021 related to the amortization of acquired identifiable intangible assets, for the three-month period ended September 30, 2024.

If the business acquired in the FC Acquisition was acquired on April 1, 2024, it would have contributed revenue of $60,638 and a net loss of $15,335, of which $6,401 related to the amortization of acquired identifiable intangible assets, for the six-month period ended September 30, 2024.

NOTE 4 - CASH AND CASH EQUIVALENTS

The Company considers all highly liquid debt instruments with an original maturity of three months or less when purchased to be cash equivalents unless they are legally or contractually restricted. The Company’s cash and cash equivalent balances exceed Federal Deposit Insurance Corporation and other local jurisdictional limits. Restricted cash at March 31, 2025 consisted of escrow amounts of $3,336 held in escrow related to the FC Acquisition to secure certain tax liabilities, cash of $311 held in escrow for purchases from a vendor, cash of $698 held by MiX Telematics Enterprise BEE Trust to be used solely for the benefit of its beneficiaries and cash securing guarantees of $51 issued in respect of property lease agreements entered into by MiX Telematics Australasia. Restricted cash at September 30, 2025 consisted of cash of $3,336 held in escrow related to the FC Acquisition to secure certain tax liabilities, cash of $312 held in escrow for purchases from a vendor, cash of $792 held by MiX Telematics Enterprise BEE Trust to be used solely for the benefit of its beneficiaries, cash securing guarantees of $56 issued in

respect of property lease agreements entered into by MiX Telematics Australasia, cash securing guarantees of $76 issued in respect of property lease agreements entered into by Fleet Complete Australia, and security deposits of $11.

NOTE 5 - REVENUE RECOGNITION

The Company and its subsidiaries generate revenue from sales of systems and products and from customer SaaS and hosting infrastructure fees. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Sales, value add, and other taxes the Company collects concurrently with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as an expense. The expected costs associated with the Company’s base warranties continue to be recognized as an expense when the products are sold (see Note 14).

Revenue is recognized when performance obligations under the terms of a contract with the customer are satisfied. Product sales are recognized at a point in time when title transfers, when the products are shipped, or when control of the system is transferred to the customer, which usually is upon delivery of the system and when contractual performance obligations have been satisfied. The Company utilizes significant judgment to determine whether control of the hardware has transferred to the customer (i.e. distinct to the customer separate from SaaS services provided). For products which are not distinct to the customer separate from the SaaS services provided, the Company considers both hardware and SaaS services a bundled performance obligation.

When another party is involved in providing products or services to the end customer, the Company evaluates the nature of its promise to determine whether it is acting as an agent or principal in the sales transaction. The Company considers itself acting as a principal if it controls the specified products or services before they are transferred to the end customers, otherwise the Company is acting as an agent. The Company determines control as the ability to direct the use of, and obtain substantially all of the remaining benefits from, the products or services. Control includes the ability to prevent others from directing the use of, and obtaining the benefits from, the products or services. Revenue is recognized based on the gross amount of consideration to which the Company expects to be entitled to in exchange for the specified products or services when acting as a principal and is recognized based on any fee or commission to which it expects to be entitled to in exchange for arranging for the specified products or services to be provided by the other party.

Under the applicable accounting guidance, all of the Company’s billings for future services are deferred and classified as a current and long-term liability. The deferred revenue is recognized over the service contract life, ranging from one to five years, beginning at the time that a customer acknowledges acceptance of the equipment and service. Payment terms are generally 30 days after the invoice date.

The Company recognizes revenue for remotely hosted SaaS agreements and post-contract maintenance and support agreements beyond our standard warranties over the life of the contract. Revenue is recognized ratably over the service periods and the cost of providing these services is expensed as incurred. Amounts invoiced to customers which are not recognized as revenue are classified as deferred revenue and classified as current or long-term based upon the terms of future services to be delivered. Deferred revenue also includes prepayment of extended maintenance, hosting and support contracts.

The Company earns other services revenues from installation services, training and technical support services which are short-term in nature and revenue for these services is recognized at the time of performance when the service is provided.

The Company also derives revenue from leasing arrangements. Such arrangements provide for monthly payments covering product or system sale, maintenance, support and interest. These arrangements meet the criteria to be accounted for as operating or sales-type leases. Accordingly, for sales-type leases an asset is established for the “sales-type lease receivable” at the present value of the expected lease payments and revenue is deferred and recognized over the service contract, as described above. Maintenance revenues and interest income are recognized monthly over the lease term.

The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative SSP. Judgment is required to determine the SSP for each distinct performance obligation. The Company generally determines standalone selling prices based on observable prices charged to customers. Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of its transactions, the customer demographic, price lists, its go-to-market strategy and historical and current sales and contract prices. As the Company’s go-to-market strategies evolve, it may modify its pricing practices in the future, which could result in changes to SSP.

In certain cases, the Company is able to establish SSP based on observable prices of products or services sold separately in comparable circumstances to similar customers. The Company uses a single amount to estimate SSP when it has observable prices. If SSP is not directly observable, for example when pricing is highly variable, the Company uses a range of SSP. The Company determines the SSP range using information that may include pricing practices or other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size.

The Company recognizes an asset for the incremental costs of obtaining the contract arising from the sales commissions to distributors and employees because the Company expects to recover those costs through future fees from the customers. The Company amortizes the asset over one to five years because the asset relates to the services transferred to the customer during the contract term of one to five years.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice for services performed.

The following table presents the Company’s revenues disaggregated by revenue source for the three and six months ended September 30, 2024 and 2025 (in thousands):


	Three Months Ended September 30,				Six Months Ended September 30,
	2024		2025		2024		2025
Products	$	20,293	$	22,370	$	39,031	$	40,027
Services	56,725		89,309		113,417		175,773
	$	77,018	$	111,679	$	152,448	$	215,800

The balances of contract assets and contract liabilities from contracts with customers are as follows as of March 31, 2025 and September 30, 2025 (in thousands):


	March 31, 2025		September 30, 2025
Contract Assets:
Deferred contract cost (1)	$	11,894	$	11,379
Deferred costs - current	$	2	$	432

Contract Liabilities:
Deferred revenue – services (2)	$	21,466	$	20,764
Deferred revenue – products (2)	1,106		1,334
	22,572		22,098
Less: Deferred revenue – current	(17,375)		(17,199)
Deferred revenue – long term	$	5,197	$	4,899

(1) Deferred contract costs are included in Other assets on the condensed consolidated balance sheet.

(2) The Company records deferred revenues when cash payments are received or due in advance of the Company’s performance.

For the three-month periods ended September 30, 2024 and 2025, the Company recognized revenue of $2,499 and $5,095, respectively, which was included in the deferred revenue balance at the beginning of each reporting period. For the six-month periods ended September 30, 2024 and 2025, the Company recognized revenue of $5,468 and $10,563, respectively, which was included in the deferred revenue balance at the beginning of each reporting period. The Company expects to recognize as revenue through year 2029, when it transfers those goods and services and, therefore, satisfies its performance obligation to the customers.

NOTE 6 - ALLOWANCE FOR CREDIT LOSSES

The Company’s receivables were evaluated to determine an appropriate allowance for credit losses. For trade receivables, the Company’s historical collections were analyzed by the number of days past due to determine the uncollectible rate in each range of days past due and considerations of any changes expected in the future. The estimate of the allowance for credit losses is charged to the allowance for credit losses based on the age of receivables multiplied by the historical uncollectible rate for the range of days past due or earlier if the account is deemed uncollectible for other reasons. Recoveries of amounts previously charged as uncollectible are credited to the allowance for credit losses.

An analysis of the allowance for credit losses for the periods ended September 30, 2024 and 2025 is as follows (in thousands):


	Six Months Ended September 30,
	2024		2025
Allowance for credit losses, March 31	$	3,197	$	4,057



Current period provision for expected credit losses	4,369		8,807
Write-offs charged against the allowance	(2,688)		(4,274)


Foreign currency translation	443		900
Allowance for credit losses, September 30	$	5,321	$	9,490

NOTE 7 - PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other current assets comprise the following (in thousands):


	March 31, 2025		September 30, 2025
Sales-type lease receivables, current	$	1,062	$	957
Prepaid expenses	9,038		9,536
Contract assets	5,088		6,229
Tax receivables	553		605
VAT receivable	1,901		1,853
Sundry debtors	5,424		8,365
Other current assets	253		314

	$	23,319	$	27,858

NOTE 8 - INVENTORY

Inventory, which primarily consists of finished goods and components used in the Company’s products, is stated at the lower of cost or net realizable value using the “moving average” cost method or the first-in first-out (FIFO) method.

Inventories consist of the following (in thousands):


	March 31, 2025		September 30, 2025
Components	$	11,859	$	8,654
Work in process	—		—
Finished goods, net	6,491		13,812
	$	18,350	$	22,466

NOTE 9 - FIXED ASSETS

Fixed assets are stated at cost, less accumulated depreciation and amortization, and are summarized as follows (in thousands):


	March 31, 2025		September 30, 2025
Installed and uninstalled products	$	61,564	$	72,963
Computer software	11,523		12,954
Computer and electronic equipment	6,294		6,537
Furniture and fixtures	3,054		3,955
Leasehold improvements	1,459		1,709
Plant and equipment	276		332

Assets in progress	7		21
	84,177		98,471
Accumulated depreciation	(26,166)		(35,194)
	$	58,011	$	63,277

Depreciation expense for the three- and six-month periods ended September 30, 2024 was $5,227 and $9,976, respectively, and for the three- and six-month periods ended September 30, 2025 was $6,277 and $12,449, respectively.

NOTE 10 - INTANGIBLE ASSETS AND GOODWILL

The Company capitalizes costs for software to be sold, marketed, or leased to customers. Costs incurred internally in researching and developing software products are charged to expense until technological feasibility has been established for the product. Once technological feasibility is established, software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. The amortization of these costs is included in cost of revenue over the estimated life of the products.

The following table summarizes identifiable intangible assets of the Company as of March 31, 2025 and September 30, 2025 (in thousands):


September 30, 2025	Useful Lives (In Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Definite-lived:
Customer relationships	9 - 13	$	210,200	$	(31,497)	$	178,703
Trademark and tradename	3 - 15	22,840		(7,044)		15,796
Patents	7 - 11	2,128		(681)		1,447
Technology	5 - 7	81,902		(29,767)		52,135
Software to be sold or leased	3 - 7	18,087		(3,568)		14,519
		335,157		(72,557)		262,600

Indefinite-lived:
Customer list		104		—		104
Trademark and tradename		61		—		61
		165		—		165

Total		$	335,322	$	(72,557)	$	262,765


March 31, 2025	Useful Lives (In Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Definite-lived:
Customer relationships	9 - 13	$	200,868	$	(21,994)	$	178,874
Trademark and tradename	3 - 15	21,557		(5,805)		15,752
Patents	7 - 11	628		(553)		75
Technology	5 - 7	74,050		(21,705)		52,345
Software to be sold or leased	3 - 7	13,490		(2,119)		11,371
		310,593		(52,176)		258,417

Indefinite-lived:
Customer list		104		—		104
Trademark and tradename		61		—		61
		165		—		165

Total		$	310,758	$	(52,176)	$	258,582

The weighted-average amortization periods for customer relationships, trademarks and tradenames, patents, technology, and capitalized software to be sold or leased for September 30, 2025 were 11.2, 10.3, 6.5, 3.9, and 3.8 years, respectively, and for March 31, 2025 were 11.7, 10.8, 7.0, 4.4, and 4.3 years, respectively.

Amortization expense for the three- and six-month periods ended September 30, 2024 was $3,837 and $9,423, respectively, and for the three- and six-month periods ended September 30, 2025 was $9,516 and $19,375, respectively.

Estimated future amortization expense for each of the five succeeding fiscal years for these intangible assets is as follows:


2026 (remaining)	$	25,436
2027	41,073
2028	35,995
2029	31,506
2030	23,597
Thereafter	104,993
	$	262,600

Reconciliation of Total Goodwill

The following table is a reconciliation of the carrying amount of goodwill as of March 31, 2025 and September 30, 2025 (in thousands):


	March 31, 2025		September 30, 2025
Goodwill
Opening balance	$	83,487	$	383,146
Businesses acquired
MiX Combination	216,799		—
FC Acquisition	82,245		—
Acquisition	—		552
Foreign currency translation difference	615		17,518
Closing balance	$	383,146	$	401,216

For the six-month period ended September 30, 2025, the Company did not identify any indicators of impairment.

NOTE 11 - STOCK-BASED COMPENSATION

[A] Stock Options:

During the three- and six-month periods ended September 30, 2025, the Company did not grant any market-based stock options.

The following table summarizes the activity relating to the Company’s market-based stock options for the six-month period ended September 30, 2025:


	Options (in thousands)	Weighted- Average Exercise Price ($)	Weighted Average Contractual Remaining Term (years)	Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2025	5,200	13.85	—	—
Granted	—	—	—	—
Exercised	—	—	—	—

Forfeited	(40)	3.13	—	—
Outstanding as of September 30, 2025	5,160	13.94	6.45	$	2,196


Vested as of September 30, 2025	—	—	—	$	—

During the three- and six-month periods ended September 30, 2025, the Company did not grant any options to purchase shares of common stock with time-based vesting conditions.

The following table summarizes the activity relating to the Company’s stock options, excluding the market-based stock options, for the six-month period ended September 30, 2025:


	Options (in thousands)	Weighted- Average Exercise Price ($)	Weighted Average Contractual Remaining Term (years)	Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2025	1,890	4.51	—	—
Granted	—	—	—	—
Exercised	—	—	—	—

Forfeited	(7)	5.98	—	—
Outstanding as of September 30, 2025	1,883	4.50	6.27	$	1,721


Vested as of September 30, 2025	1,695	4.52	6.00	$	1,546

The Company recorded stock-based compensation expense of $627 and $2,444 for the three- and six-month periods ended September 30, 2024, respectively, and $406 and $853 for the three- and six-month periods ended September 30, 2025, respectively, in connection with awards made under the stock option plans, including market-based and time-based options. The decrease in the recognized expense is because the prior year included acceleration of vesting of unvested restricted stock and stock option awards with time-based vesting conditions that were outstanding under the Powerfleet equity plans (including any inducement awards with time-based vesting) in connection with the closing of the MiX Combination.

The fair value of options vested during the six-month periods ended September 30, 2024 and 2025 was $1,552 and $199, respectively. There were no option exercises that occurred during the six-month periods ended September 30, 2024 and 2025.

As of September 30, 2025, there was $484 of total unrecognized compensation costs related to unvested options granted under the Company’s stock option plans excluding the market-based stock options that were granted to certain senior managers, including the Company’s executive officers. That cost is expected to be recognized over a weighted-average period of 0.72 years.

As of September 30, 2025, there was $1,461 of total unrecognized compensation costs related to unvested options granted under the Company’s stock option plans for the market-based stock options that were granted to certain senior managers, including the Company’s executive officers. That cost is expected to be recognized over a weighted-average period of 1.46 years.

The Company estimates forfeitures at the time of valuation and reduces expenses ratably over the vesting period. This estimate is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate.

[B] Restricted Stock Awards:

The Company grants restricted stock to employees, whereby the employees are contractually restricted from transferring the shares until they are vested. The stock is unvested at the time of grant, and, upon vesting, there are no legal restrictions on the stock. Some participants have the option to have their shares withheld for their taxes upon vesting. Shares withheld for taxes are treated as a purchase of treasury stock. The fair value of each share is based on the Company’s closing stock price on the date of the grant.

During the six-month period ended September 30, 2025, the Company granted 373 restricted shares of common stock to the Company’s senior management team, which vest in equal installments over a three-year period, provided that they remain employed by the Company on each scheduled vesting date. The Company also granted an additional 11 restricted shares of common stock to the Company’s senior management team, which vest in equal installments over a 12-month period, provided that they remain employed by the Company on each scheduled vesting date. The grant date for these awards was determined to be April 23, 2025.

During the six-month period ended September 30, 2025, the Company granted 1,475 restricted shares of common stock to the Company’s executive officers and senior management team, which vest in full if specified performance targets are achieved and provided that they remain employed by the Company on the scheduled vesting date. The grant date for these awards was determined to be April 23, 2025.

A summary of all unvested restricted stock for the six-month period ended September 30, 2025 is as follows:


	Time-Based Restricted Shares		Market-Based Restricted Shares			Performance-Based Restricted Shares
	Number of Unvested Shares (in thousands)	Weighted- Average Grant Date Fair Value ($)		Number of Unvested Shares (in thousands)	Weighted- Average Grant Date Fair Value ($)	Number of Unvested Shares (in thousands)	Weighted- Average Grant Date Fair Value ($)
Unvested, March 31, 2025	732	5.58		938	5.35	—	—
Granted	384	4.75		—	—	1,475	4.75
Vested/Exercised	(364)	5.35		—	—	—	—
Forfeited or expired	—	—		—	—	—	—
Unvested, September 30, 2025	752	5.26		938	5.35	1,475	4.75

The Company recorded stock-based compensation expenses of $125 and $3,220 for the three- and six-month periods ended September 30, 2024, respectively, and $1,769 and $2,589 for the three- and six-month periods ended September 30, 2025, respectively, in connection with restricted stock grants. As of September 30, 2025, there was $7,921 of total unrecognized compensation cost related to unvested shares.

[C] Stock Appreciation Rights:

The following table summarizes the activity relating to the Company’s stock appreciation rights (“SARs”) for the six-month period ended September 30, 2025:


	Number of SARs (in thousands)	Weighted- Average Exercise Price ($)	Weighted Average Contractual Remaining Term (years)	Aggregate Intrinsic Values (in thousands)
Outstanding as of April 1, 2025	3,238	2.44

Granted	—	—
Exercised	(490)	2.90

Forfeited	(210)	2.17
Outstanding as of September 30, 2025	2,538	2.37	2.78


Vested as of September 30, 2025	776	2.49	1.97	$	2,136

The total stock-based compensation expense recognized during the three- and six-month periods ended September 30, 2024 was $637 and $1,600, respectively, and during the three- and six-month periods ended September 30, 2025 was $361 and $722, respectively.

As of September 30, 2025, there was $3,234 of unrecognized compensation cost related to unvested SARs. This amount is expected to be recognized over a weighted-average period of 2.23 years.

[D] Warrants:

On April 21, 2025, the Company issued to Private Capital Management Holdings, L.P., an affiliate of Private Capital Management, LLC (“PCM”), a warrant to purchase 130,275 shares of common stock in lieu of granting certain equity

compensation to Andrew Martin, one of the Company’s directors and a partner and member of the investment research team at PCM. The warrants become exercisable in 10 equal installments on the last day of each quarter starting June 30, 2024.

The fair value of each warrant on grant date is estimated using the Black-Scholes option-pricing model reflecting the following assumptions:


Expected volatility	70.0		%
Expected life of warrants	5.2
Risk free interest rate	4.0		%

Dividend yield	—
Fair value of warrants granted during the quarter	$	2.79

The total stock-based compensation expense recognized during the three- and six-month periods ended September 30, 2025 was $58 and $283, respectively.

As of September 30, 2025, there was $80 of unrecognized compensation cost related to unvested warrants. This amount is expected to be recognized over a weighted-average period of 1.00 year.

NOTE 12 - NET LOSS PER SHARE

Net loss per share for the three- and six-month periods ended September 30, 2024 and 2025 are as follows:


	Three Months Ended September 30,				Six Months Ended September 30,
	2024		2025		2024		2025
Basic and diluted loss per share
Net loss attributable to common stockholders	$	(1,888)	$	(4,288)	$	(24,225)	$	(14,522)

Net loss per share attributable to common stockholders - basic and diluted	$	(0.02)	$	(0.03)	$	(0.23)	$	(0.11)

Weighted-average common share outstanding - basic and diluted	107,532		133,676		107,335		133,510

Basic loss per share is calculated by dividing net loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution assuming common shares were issued upon the exercise of outstanding options and the proceeds thereof were used to purchase outstanding common shares. Dilutive potential common shares include outstanding stock options, warrants and restricted stock and performance share awards. We include participating securities (unvested share-based payment awards and equivalents that contain non-forfeitable rights to dividends or dividend equivalents) in the computation of earnings per share pursuant to the two-class method. The Company’s participating securities consist solely of preferred stock, which have contractual participation rights equivalent to those of stockholders of unrestricted common stock. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company.

NOTE 13 - SHORT-TERM BANK DEBT AND LONG-TERM DEBT


	March 31, 2025		September 30, 2025
Short-term bank debt	$	36,788	$	37,477
Current maturities of long-term debt	$	4,844	$	5,729
Long-term debt - less current maturities	$	232,160	$	231,906

Short-Term Bank Debt

As of September 30, 2025, short-term debt comprised $37,461 of borrowing facilities and $16 of book overdrafts.

RMB Facility

On March 7, 2024, as part of the MiX Combination, Powerfleet, together with certain of its wholly owned subsidiaries, entered into a Facilities Agreement (the “Facilities Agreement”) with RMB. Following the signing of the Facilities Agreement, MiX Telematics entered into a Facility Notice and General Terms and Conditions (the “Credit Agreement”) with RMB on March 14, 2024 for a 364-day committed general banking facility of R350,000 (the equivalent of $20,249 as of September 30, 2025) (the “RMB General Facility”). The Credit Agreement and the rights and obligations of the parties are subject to the terms and conditions of the Facilities Agreement, which is described in more detail below.

The RMB General Facility is repayable on demand and has a term of 365 days from the Available Date (as defined therein). Repayment of the RMB General Facility, including capitalized interest, is due by the earlier of (a) the Available Date or (b) April 2, 2026, unless extended by agreement between MiX Telematics and RMB. Interest rate for the RMB General Facility is calculated at South African prime rate minus 0.75% per annum and will be calculated on the daily outstanding balance, compounded monthly in arrears and repaid quarterly.

As of September 30, 2025, $20,246 of the RMB General Facility was utilized.

Hapoalim Debt

As of September 30, 2025, Powerfleet Israel Ltd. (“Powerfleet Israel”) had utilized approximately $17,215 under the Hapoalim Revolving Facilities, which are described below.

Long-Term Debt

Hapoalim Debt

In connection with the Pointer acquisition, Powerfleet Israel incurred New Israeli Shekels (“NIS”) denominated debt in term loan borrowings on October 3, 2019 under a Credit Agreement (the “Prior Credit Agreement”) with Bank Hapoalim B.M. (“Hapoalim”), pursuant to which Hapoalim agreed to provide Powerfleet Israel with two senior secured term loan facilities in an initial aggregate principal amount of $30,000 (composed of two facilities in the aggregate principal amount of $20,000 and $10,000, respectively and a five-year revolving credit facility to Pointer Telocation Ltd. (“Pointer”) denominated in NIS in an initial aggregate principal amount of $10,000 (collectively, the “Prior Credit Facilities”). The Prior Credit Facilities were scheduled to mature on October 3, 2024.

On March 18, 2024, Powerfleet Israel and Pointer (collectively, the “Borrowers”) entered into an amended and restated credit agreement (as amended, the “A&R Credit Agreement”), which refinanced the facilities under, and amended and restated, the Prior Credit Agreement. The A&R Credit Agreement provides for (i) two senior secured term loan facilities denominated in NIS to Powerfleet Israel in an aggregate principal amount of $30,000 (composed of two facilities in the aggregate principal amounts of $20,000 and $10,000, respectively) (“Hapoalim Facility A” and “Hapoalim Facility B,” respectively, and, collectively, the “Hapoalim Term Facilities”) and (ii) two revolving credit facilities to Pointer in an aggregate principal amount of $20,000 (composed of two revolvers in the aggregate principal amounts of $10,000 and $10,000, respectively) (“Hapoalim Facility C” and “Hapoalim Facility D,” respectively, and, collectively, the “Hapoalim Revolving Facilities” and, together with the Hapoalim Term Facilities, the “Hapoalim Credit Facilities”). Powerfleet Israel drew down $30,000 in cash under the Hapoalim Term Facilities on March 18, 2024 and used the proceeds to prepay approximately $11,200, representing the

remaining outstanding balance, of the Prior Credit Facilities, with the remaining proceeds distributed to Powerfleet. The proceeds of the Hapoalim Revolving Facilities may be used by Pointer for general corporate purposes, including working capital and capital expenditures.

On December 30, 2024, the Borrowers entered into an amendment to the A&R Credit Agreement, which increases the principal amount available under Hapoalim Facility D from $10,000 to $20,000 and provides that the total principal amount of Hapoalim Facility D may be distributed to the Company or any of its subsidiaries by no later than December 31, 2025, subject to certain terms and conditions of the A&R Credit Agreement.

As of September 30, 2025, Pointer had utilized $17,215 under the Hapoalim Revolving Facilities. The available undrawn facility balance at September 30, 2025 was $12,785.

The interest rates for borrowings under Hapoalim Facility A and Hapoalim Facility B are Hapoalim’s prime rate + 2.2% per annum, and Hapoalim’s prime rate + 2.3% per annum, respectively. Hapoalim’s prime rate at September 30, 2025 was 6%. Interest is payable quarterly on March 25, June 25, September 25, and December 25 over five years. The first interest period ended on June 25, 2024. Hapoalim Facility A amortizes in quarterly installments over its five-year term and will be payable in the following aggregate annual amounts: (i) 10% of the principal amount of Hapoalim Facility A from March 18, 2024 until March 18, 2025, (ii) 25% of the principal amount of Hapoalim Facility A from March 18, 2025 until March 18, 2026, (iii) 27.5% of the principal amount of Hapoalim Facility A from March 18, 2026 until March 18, 2027, (iv) 27.5% of the principal amount of Hapoalim Facility A from March 18, 2027 until March 18, 2028, and (v) 10% of the principal amount of Hapoalim Facility A from March 18, 2028 until March 18, 2029. Hapoalim Facility B does not amortize and will be payable in full on March 18, 2029.

The interest rate for borrowings under Hapoalim Facility C is, with respect to NIS-denominated loans, Hapoalim’s prime rate + 2.5%, and with respect to U.S. dollar-denominated loans, Secured Overnight Financing Rate (“SOFR”) + 2.15%. Borrowings under Hapoalim Facility D will bear interest at the applicable interest rate set forth in the standard form documents entered into in connection with each utilization of Hapoalim Facility D. In addition, Pointer is required to pay a credit allocation fee in NIS, with respect to Hapoalim Facility C, and a non-utilization fee in U.S. dollars, with respect to Hapoalim Facility D, in each case, equal to 0.5% per annum on undrawn and uncancelled amounts of the revolving facilities during the period commencing on March 18, 2024 and ending on the last day of the applicable availability period of such revolving facilities. The Borrowers have also paid certain upfront fees and other fees and expenses to Hapoalim in connection with the A&R Credit Agreement. The Hapoalim Revolving Facilities mature on February 27, 2026.

Borrowings under the Hapoalim Term Facilities are voluntarily prepayable at any time, in whole or in part, and are not subject to any prepayment premium. Voluntary prepayments of the Hapoalim Term Facilities must be made in minimum increments of NIS 1 million. In addition to certain customary mandatory prepayment requirements, the A&R Credit Agreement also requires Powerfleet Israel to make prepayments on the Hapoalim Term Facilities to the extent it receives distributions from Pointer, except for any such distributions made to cover certain expenses of Powerfleet Israel in its normal course of operations.

The A&R Credit Agreement contains certain customary affirmative and negative covenants, including financial covenants with respect to Pointer’s net debt levels which must be less than 100% of Working Capital as (defined in the A&R Credit Agreement), the ratio of each Borrower’s total debt to Pointer’s EBITDA must not exceed 4.75, Powerfleet Israel’s minimum equity which must not be less than $60,000, and the ratio of Powerfleet Israel’s equity to its total assets which must be greater than 35% and the ratio of Pointer’s net debt to EBITDA ratio must not exceed 2. The occurrence of any event of default under the A&R Credit Agreement may result in all outstanding indebtedness under the Hapoalim Credit Facilities becoming immediately due and payable. The financial covenants have been met for the quarter ended September 30, 2025.

The Hapoalim Credit Facilities continue to be secured by first ranking and exclusive fixed and floating charges, including by Powerfleet Israel over the entire share capital of Pointer and by Pointer over all of its assets, as well as cross guarantees between Powerfleet Israel and Pointer, except that the Borrowers’ holdings in Pointer do Brasil Comercial Ltda., Pointer Argentina and Pointer South Africa are excluded from such floating charges. No other assets of the Company will serve as collateral under the Hapoalim Credit Facilities.

The Hapoalim Term Facilities under the A&R Credit Agreement have been accounted for as modifications of the term facilities that were provided under the Prior Credit Agreement because the change in the present value of the cash flows under the A&R Credit Agreement is less than 10% of the present value of the cash flows under the Prior Credit Agreement. The proceeds of the Hapoalim Term Facilities ($40,000), less the prepayment of the term loans under the Prior Credit Facility (approximately

$11,200), amounting to approximately $28,800, has been recognized as an increase in the carrying value of the prior term loans that was recognized previously.

For the three-month period ended September 30, 2024, the Company recorded $15 of amortization of the original debt issuance costs and the refinancing fee paid to Hapoalim. For the six-month period ended September 30, 2024, the Company recorded a credit of $15 net of additional deferred costs to the original debt issuance costs and amortization of the original debt issuance costs. For the three- and six-month periods ended September 30, 2025, the Company recorded $15 and $30 of additional deferred costs to the original debt issuance costs and the refinancing fee paid to Hapoalim, respectively. The Company recorded charges of $591 and $1,246 to interest expense on its Consolidated Statement of Operations for the three- and six-month periods ended September 30, 2024, respectively, and $608 and $1,232 for the three- and six-month periods ended September 30, 2025, respectively, related to interest expense associated with the Hapoalim debt.

RMB Debt

On March 7, 2024, the Company, together with certain of its wholly owned subsidiaries, entered into the Facilities Agreement with RMB, pursuant to which RMB agreed to provide the Company with two term loan facilities in an aggregate principal amount of $85,000, composed of Facility A and Facility B, each with a principal amount of $42,500 (“RMB Facility A” and “RMB Facility B,” respectively, and, collectively, the “RMB Facilities”). The Company drew down $85,000 in cash under the RMB Facilities on March 13, 2024, the proceeds of which were used to redeem all the then-outstanding shares of the Company’s Series A convertible preferred stock (the “Series A Preferred Stock”) and for general corporate purposes. The RMB Facilities are guaranteed by the Company, I.D. Systems, Inc (“I.D. Systems”), Movingdots GmbH (“Movingdots”) and Powerfleet Inc. (“Powerfleet”), and there is a security agreement over the shares in Main Street 2000 Proprietary Limited (“MS2000”), I.D. Systems, and Movingdots.

On October 31, 2025, the Company, together with certain of its wholly owned subsidiaries (the “Obligors”), entered into a First Amendment and Restatement Agreement with RMB, pursuant to which the Obligors and RMB agreed to amend and restate the Facilities Agreement (as amended and restated, the “Amended and Restated Facilities Agreement”) to, among other things, (i) extend the final maturity date of RMB Facility A by 12 months, (ii) update the interest rates of the RMB Facilities, and (iii) update certain financial covenants to conform to the Facility Agreement (as defined below), each as further described below.

Pursuant to the Amended and Restated Facilities Agreement, borrowings under RMB Facility A bear interest at 8.699% per annum until March 31, 2027 and, thereafter, at 4.85% (provided no event of default is continuing), plus the applicable term SOFR reference rate (or, if unavailable, an interpolated, historic or interpolated historic SOFR rate, or, if none of the foregoing are available, the 3-month Treasury bill rate). Borrowings under RMB Facility B continue to bear interest at 8.979% per annum. Interest is payable quarterly in arrears. Pursuant to the Amended and Restated Facilities Agreement, RMB Facility A now matures on March 31, 2028, and RMB Facility B matures on March 31, 2029. The Company may prepay the RMB Facilities at any time, subject to a minimum reduction of $5,000 and multiples of $1,000. If the Company prepays any amount during the first or second annual period of the funding, a refinancing fee equal to 2% or 1%, respectively, of the prepayment will be payable. Also, the RMB Facilities are mandatorily prepayable upon the occurrence of uncertain future events, such as a change of control or a transfer of the business. In the event that either prepayment occurs, the respective prepayment amount will be adjusted for RMB’s break gains or losses, which relate mainly to the unwinding of interest rate derivatives (the “Prepayment Derivative”) which RMB entered into with third parties to fix the interest rates on the RMB Facilities. Since RMB’s break gains/losses could result in the Company prepaying at a discount, or a premium, of 10% or more to the initial carrying amount of the RMB Facilities, the optional and contingent repayment features were to be embedded derivatives in the scope of ASC 815-15 Embedded Derivatives. The Prepayment Derivative within each RMB Facility has been bifurcated and accounted for at fair value separately from the respective debt-host contracts which are accounted for at amortized cost. The terms of the debt-host contracts have been bifurcated to adjust the carrying value of the debt upon separating the derivative. Upon initial recognition of the RMB Facilities, a Prepayment Derivative asset of $610 and $1,616 for RMB Facility A and RMB Facility B, respectively, was recognized with a corresponding increase in the initial carrying amount of each debt-host contract. The fair value of the embedded derivative is estimated using a “with-and-without” approach as the difference between the value of the RMB Facilities with and without the embedded derivative using both the binomial lattice model and discounted cash flow analysis.

The following key assumptions were used in September 30, 2025:


	Facility A		Facility B
Credit spread volatility	39.73	%	25.51	%
Credit spread	3.64	%	3.64	%
Credit rating	B		B
Risk free rate	US Treasury rate		US Treasury rate

As of March 31, 2025, the SOFR spot rate was 4.41% and, as of September 30, 2025, the US Treasury rate was 4.73%.

The Prepayment Derivative is classified as a Level 3 in the fair value hierarchy due to the use of at least one significant unobservable input which is the credit spread volatility. At inception, the credit spread was an observable input based on the transaction price of the debt; however, in future periods, it will also be an unobservable input. For the Prepayment Derivative asset in RMB Facility A, a change of -10% in credit spread volatility would result in no change in the derivative asset, and a change of +10% in credit spread volatility would also result in no change in the derivative asset. For the Prepayment Derivative asset in RMB Facility B, a change of -10% in credit spread volatility would result in a decrease in the derivative asset of $20, while a change of +10% in credit spread volatility would result in an increase in the derivative asset of $10. The Prepayment Derivative assets are included in Other assets and their fair values were $850 and $1,880 for RMB Facility A and RMB Facility B, respectively, as of March 31, 2025 and, $864 and $2,652 for RMB Facility A and RMB Facility B, respectively, as of September 30, 2025. The debt-host contracts are accounted for at amortized cost. Total debt issuance costs of approximately $1,000 were incurred. For the three- and six-month periods ended September 30, 2025, the Company recorded $74 and $146 of amortization of the original debt issuance costs and the refinancing fee to RMB, respectively.

For the three- and six-month periods ended September 30, 2025, the Company recorded interest expense of $1,920 and $3,840, respectively.

RMB Term Facility

On September 27, 2024, the Company, together with I.D. Systems and Movingdots, each a wholly owned subsidiary of the Company, entered into a Facility Agreement (the “Facility Agreement” and, together with the Amended and Restated Facilities Agreement, the “RMB Facilities Agreements”) with RMB, pursuant to which RMB agreed to provide the Company with a term loan facility in an aggregate principal amount of $125,000 (the “New RMB Term Facility”). The Company drew down the full amount of the New RMB Term Facility on October 1, 2024, and used the proceeds to pay a portion of the Purchase Price in connection with the FC Acquisition. The Company’s obligations under the New RMB Term Facility are guaranteed, on a joint and several basis, by the Company, I.D. Systems, Movingdots and Powerfleet Canada Holdings Inc. The New RMB Term Facility is secured by a first priority security interest over the entire share capital of I.D. Systems, Movingdots, MS2000 and Canadian SPV, each a wholly owned subsidiary of the Company. No other assets of the Company will serve as collateral under the New RMB Term Facility.

The New RMB Term Facility will mature on the last business day of the month that is five years following the closing date of the Facility Agreement (the “Maturity Date”). The New RMB Term Facility does not amortize and will be payable on the Maturity Date. Borrowings under the New RMB Term Facility may be voluntarily prepaid at any time upon prior written notice, in whole or in part, subject to payment of a refinancing fee equal to (i) 2% of the amount prepaid if such prepayment occurs before October 1, 2025, or (ii) 1% of the amount prepaid if such prepayment occurs on or after October 1, 2025, but before October 1, 2026. No refinancing fee is payable if prepayment occurs on or after October 1, 2026. If voluntary prepayments are made in part, they must be made in minimum amounts of $5 million in integral multiples of $1 million. In addition, the Facility Agreement provides for certain customary mandatory prepayment requirements.

In the event of any prepayment during a quarterly interest period, the Company is also required to pay, or receive from, RMB an amount such that RMB would be in the same economic position for that interest period had the prepayment only occurred at the end of such period. The amount payable or receivable will be calculated relative to the interest that RMB would be able to obtain by placing the amount prepaid on deposit with a leading bank in the London interbank market for a period from the prepayment until the end of such interest period.

The New RMB Term Facility bears interest at 5% per annum (provided no event of default is continuing), plus the applicable term SOFR reference rate (or an interpolated rate if SOFR is unavailable), payable quarterly in arrears on March 31, June 30,

September 30, and December 31 each year, and on October 31, 2029. The stated interest rate at September 30, 2025 was 9.20%. The Company paid a non-refundable deal structuring fee of $1,250 to RMB on October 1, 2024. Total debt issuance costs, including the $1,250 non-refundable deal structuring fee to RMB, of approximately $1,433 were incurred. For the three- and six-month periods ended September 30, 2025, the Company recorded $60 and $118, respectively, of amortization of these costs. For the three- and six-month periods ended September 30, 2025, the Company recorded $2,905 and $5,843 of interest expense.

The RMB Facilities Agreements contain certain customary affirmative and negative covenants, including financial covenants with respect to the ratio of the Company’s consolidated total net borrowings to consolidated EBITDA, which must be less than (i) 4.00 at September 30, 2025, (ii) 3.50 at December 31, 2025, (iii) 3.00 at March 31, 2026, (iv) 2.75 from June 30, 2026 through March 30, 2027, and (v) 2.50 thereafter, and the ratio of the Company’s consolidated EBITDA to consolidated total finance costs, which must exceed (i) 3.00 from September 30, 2025 through September 29, 2026 and (ii) 3.50 thereafter. The RMB Facilities Agreements also include representations, warranties, events of default and other provisions customary for financings of this type. The occurrence of any event of default under the RMB Facilities Agreements may result in all outstanding indebtedness under the RMB Facilities or New RMB Term Facility, as applicable, becoming immediately due and payable. The RMB Facilities Agreements include an equity cure provision, allowing the Company to remedy a breach of the above financial covenants by receiving a qualifying shareholder contribution (a “Cure Amount”) within 45 days of the relevant Measurement Date (as defined in each of the RMB Facilities Agreements). The Cure Amount may be applied as a notional reduction in net borrowings or finance costs solely for covenant compliance purposes. The use of this provision is limited to (i) no more than two consecutive Measurement Periods (as defined in each of the RMB Facilities Agreements) and (ii) a maximum of three times over the life of RMB Facilities Agreements, as applicable. All Cure Amounts must be applied toward mandatory prepayment of outstanding loans under the RMB Facilities or New RMB Term Facility, as applicable. The financial covenants for the RMB Facilities Agreements have been met for the quarter ended September 30, 2025.

Scheduled contractual maturities of the long-term debt as of September 30, 2025 are as follows (in thousands):


2026 (remaining)	$	2,762
2027	48,577
2028	6,077
2029	55,760
2030	125,000
Thereafter	—
	238,176
Less: Current portion	(5,729)
Less: Debt costs and prepayment	(541)
Total	$	231,906

NOTE 14 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following (in thousands):


	March 31, 2025		September 30, 2025


Accrued warranty	$	1,479	$	1,348
Accrued compensation	27,825		28,277
Government authorities	6,982		8,125










Other current liabilities	9,041		3,669
	$	45,327	$	41,419

The following table summarizes warranty activity for the six months ended September 30, 2024 and 2025 (in thousands):


	Six Months Ended September 30,
	2024		2025

Accrued warranty reserve, beginning of year	$	2,926	$	3,618
Accrual for product warranties issued	242		217

Product replacements and other warranty expenditures	(202)		(608)
Expiration of warranties (under (over) warranty accrual)	15		(788)
Acquired through MiX Combination	356		—
Foreign currency translation difference	33		79
Accrued warranty reserve, end of period (1)	$	3,370	$	2,518



(1) Includes non-current accrued warranty included in other long-term liabilities at September 30, 2024 and 2025 of $1,847 and $1,170, respectively.

NOTE 15 - RESTRUCTURING EXPENSES

The Company initiated restructuring actions in connection with the integration of MiX Telematics and Fleet Complete to streamline operations and capture operating synergies. These actions included workforce reductions and employee terminations related to consolidation of overlapping functions. The Company’s restructuring plans are generally country- or region-specific and are typically completed within a one-year period.

For the three-month periods ended September 30, 2024 and 2025, the Company recognized restructuring expenses of $492 and $770, respectively, primarily consisting of employee termination costs. For the six-month periods ended September 30, 2024 and 2025, the Company recognized restructuring expenses of $1,235 and $2,765, respectively, primarily consisting of employee termination costs. Restructuring expenses are recorded in selling, general and administrative expenses in the condensed consolidated statements of operations.

The following table summarizes the details of the Company’s restructuring liability (included in accrued expenses and other current liabilities on the condensed consolidated balance sheet) (in thousands):


	March 31, 2025	September 30, 2025
Opening balance	60	1,324
Assumed in business combination	216	—
Charges	4,673	2,765
Cash payments	(3,604)	(2,499)
Foreign currency translation	(21)	30
Closing balance	1,324	1,620

As of September 30, 2025, the Company incurred expenses of $7,438 in connection with restructuring activities and expects to incur additional charges, primarily for severance, with most related cash outflows expected within the next 12 months.

As the Company continues executing its adjusted EBITDA expansion strategy, it may identify further cost synergies, which may result in additional restructuring-related expenses.

In addition to these restructuring expenses, the Company recognized inventory write-downs related to hardware rationalization (included in cost of revenue) and retention, leadership transition, and other professional costs (included in selling, general and administrative expenses) associated with the restructuring activities. Lease-related impairments and modifications, if any, are accounted for under ASC 842 (included in other income/expenses).

NOTE 16 - STOCKHOLDERS’ EQUITY

Series A Preferred Stock

In connection with the completion of the Pointer acquisition, on October 3, 2019, the Company issued 50 shares of Series A Preferred Stock to ABRY Senior Equity V, L.P., ABRY Senior Equity Co-Investment Fund V, L.P and ABRY Investment Partnership, L.P. Concurrently with the closing of the MiX Combination on April 2, 2024, the Company used the net proceeds received from RMB and from incremental borrowing capacity as a result of the refinancing of credit facilities with Hapoalim to redeem in full for $90,300 for all of the outstanding shares of the Series A Preferred Stock.

Dividends

Holders of Series A Preferred Stock were entitled to receive cumulative dividends at a minimum rate of 7.5% per annum (calculated on the basis of the Series A Issue Price), quarterly in arrears. The dividends were payable at the Company’s election, in kind, through the issuance of additional shares of Series A Preferred Stock, or in cash, provided no dividend payment failure had occurred and was continuing and that there had not previously occurred two or more dividend payment failures. Commencing on the 66-month anniversary of the date on which any shares of Series A Preferred Stock were first issued (the “Original Issuance Date”), and on each monthly anniversary thereafter, the dividend rate would increase by 100 basis points, until the dividend rate reached 17.5% per annum, subject to the Company’s right to defer the increase for up to three consecutive months on terms set forth in the Company’s Amended and Restated Certificate of Incorporation (the “Charter”). During the six-month period ended September 30, 2024 the Company paid $25 in dividends to the holders of the Series A Preferred Stock, which included dividends for the period ended March 31, 2024, plus accrued dividends through April 2, 2024.

NOTE 17 - ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

Comprehensive (loss) income includes net loss and foreign currency translation gains and losses.

The accumulated balances for each classification of other comprehensive income for the six-month period ended September 30, 2025 are as follows (in thousands):


	Foreign currency translation adjustment		Accumulated other comprehensive (loss) income
Balance at April 1, 2025	$	(8,850)	$	(8,850)
Current period change	32,312		32,312
Balance at September 30, 2025	$	23,462	$	23,462

The accumulated balances for each classification of other comprehensive loss for the six-month period ended September 30, 2024 are as follows (in thousands):


	Foreign currency translation adjustment		Accumulated other comprehensive loss
Balance at April 1, 2024	$	(985)	$	(985)
Current period change	(379)		(379)
Balance at September 30, 2024	$	(1,364)	$	(1,364)

NOTE 18 - SEGMENT INFORMATION

The Company operates in one reportable segment, wireless AIoT asset management.

The Company has a single operating and reportable segment. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer, who reviews financial information presented on a consolidated basis. The CODM makes operating decisions, assesses financial performance, and allocates resources based on consolidated net loss attributable to common stockholders as reported on the Company’s Consolidated Statement of Operations. The Company derives its revenue from the sale of systems and products and from customer SaaS and hosting infrastructure fees. The measure of segment assets is reported on the Consolidated Balance Sheet as net fixed assets.

The following table summarizes the revenues and significant expenses and regularly provided to the CODM (in thousands):


	Three Months Ended September 30,				Six Months Ended September 30,
	2024		2025		2024		2025
Total revenues	$	77,018	$	111,679	$	152,448	$	215,800
Total cost of revenues	35,675		49,090		71,457		96,730
Selling and marketing expenses	9,397		19,402		18,709		36,999
General and administrative expenses	25,132		32,518		67,942		65,794
Development costs incurred	6,059		8,934		11,273		17,493
Development costs capitalized	(2,624)		(4,740)		(4,737)		(8,442)
Depreciation and amortization	2,806		2,231		5,466		5,021
Interest income	168		262		472		458
Interest expense, net	(4,042)		(6,977)		(6,733)		(13,763)

Other income (expense), net	1,674		(546)		1,050		(1,789)
Income tax expense	(256)		(1,271)		(1,309)		(1,633)
Net loss before non-controlling interest	(1,883)		(4,288)		(24,182)		(14,522)
Non-controlling interest	(5)		—		(18)		—
Preferred stock dividend	—		—		(25)		—
Net loss attributable to common stockholders	$	(1,888)	$	(4,288)	$	(24,225)	$	(14,522)

The following table summarizes revenues by geographic region (in thousands):


	Three Months Ended September 30,				Six Months Ended September 30,
	2024		2025		2024		2025
North America	$	21,255	$	41,243	$	42,396	$	78,668
Israel	11,751		14,566		22,411		27,471
Africa	24,178		26,832		48,578		52,287
Europe and Middle East	9,178		13,042		17,043		25,394
Australia	5,508		10,651		11,561		21,269
Other	5,148		5,345		10,459		10,711
	$	77,018	$	111,679	$	152,448	$	215,800

The following table summarizes long-lived assets by geographic region (in thousands):


	March 31, 2025		September 30, 2025


North America	$	13,051	$	15,470
Israel	2,249		1,715
Africa	32,391		34,247
Europe and Middle East	4,824		5,617
Australia	825		725
Other	4,671		5,503
	$	58,011	$	63,277

NOTE 19 - INCOME TAXES

The Company records its interim tax provision based upon a projection of the Company’s annual effective tax rate (“AETR”). This AETR is applied to the year-to-date consolidated pre-tax income to determine the estimated interim provision for income taxes before discrete items. The Company updates the AETR on a quarterly basis as the pre-tax income projections are revised and tax laws are enacted. The effective tax rate (“ETR”) each period is impacted by a number of factors, including the relative mix of domestic and foreign earnings and adjustments to recorded valuation allowances. The currently forecasted ETR may vary from the actual year-end due to the changes in these factors.


	Three Months Ended September 30,						Six Months Ended September 30,
	2024			2025			2024			2025
Domestic pre-tax book loss	$	(7,136)		$	(8,204)		$	(23,611)		$	(18,549)
Foreign pre-tax book (expense) income	5,509			5,187			738			5,660
Total loss before income taxes	(1,627)			(3,017)			(22,873)			(12,889)
Income tax expense	(256)			(1,271)			(1,309)			(1,633)
Net loss before non-controlling interest	$	(1,883)		$	(4,288)		$	(24,182)		$	(14,522)

Effective tax rate	(15.73)		%	(42.13)		%	(5.72)		%	(12.67)		%

For the three- and six-month periods ended September 30, 2024 and 2025, the effective tax rate differed from the statutory tax rates primarily due to the mix of domestic and foreign earnings amongst taxable jurisdictions, recorded valuation allowances to fully reserve against deferred tax assets in jurisdictions, and certain discrete items.

NOTE 20 - LEASES

The Company determines whether an arrangement is a lease at inception. The Company has operating leases for office space, office equipment and vehicles. The Company’s leases have remaining lease terms ranging from approximately 1 to 10 years.

ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. The operating lease ROU asset also includes any lease payments made in advance of lease commencement and excludes lease incentives. The lease terms used in the calculations of the operating ROU assets and operating lease liabilities include options to extend or terminate the lease when the Company is reasonably certain that it will exercise those options. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The Company has lease agreements with lease and non-lease components, which are generally not accounted for separately.

Where lease terms are 12 months or less, and meet the criteria for short-term lease classification, no ROU asset and no lease liability are recognized. Lease costs associated with the short-term leases are included in selling, general and administrative expenses on the Company’s condensed consolidated statements of operations.

The components of lease cost are as follows (in thousands):


	Three Months Ended September 30,				Six Months Ended September 30,
	2024		2025		2024		2025


Short-term lease cost	$	228	$	396	$	435	$	814

Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands):


	Six Months Ended September 30,
	2024		2025



Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	$	1,262	$	1,401
Reduction of right-of-use assets due to MiX Combination (1)	$	(933)	$	—

(1) Subsequent to the MiX Combination, certain leases were terminated or modified due to the consolidation of leased space.

Weighted-average remaining lease term and discount rate for our operating leases are as follows:


	September 30, 2025
Weighted-average remaining lease term - operating leases (in years) (1)	4.26
Weighted-average discount rate	7.9	%

(1) Including expected renewals where appropriate.

Scheduled maturities of operating lease liabilities outstanding as of September 30, 2025 are as follows (in thousands):


October 2025 - March 2026	$	3,611
2027	4,021
2028	2,842
2029	1,940
2030	1,063
Thereafter	2,007
Total lease payments	15,484
Less: Imputed interest	(2,365)
Present value of lease payments	$	13,119

NOTE 21 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of finance lease receivables approximates fair value due to the interest rate implicit in the instruments approximating current market rates. The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities and short-term bank debt approximates their fair values due to the short period to

maturity of these instruments. The fair value of the loans to external parties included in other non-current assets is determined using unobservable market data (Level 3 inputs), that represent management’s estimate of current interest rates that a commercial lender would charge borrowers. The fair value of the Company’s debt is based on observable relevant market information and future cash flows discounted at current rates, which are Level 2 measurements. The Prepayment Derivative within the RMB Facilities is classified as a Level 3 in the fair value hierarchy due to the use of at least one significant unobservable input which is the credit spread volatility (see Note 13). There were no transfers between Level 1 or Level 2, or transfers in or out of Level 3, of the fair value hierarchy during the year ended March 31, 2025 and the three and six months ended September 30, 2025.


	As of September 30, 2025
		Fair Value
		Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Loans to external parties		$	207	$	207	$	—	$	—	$	207

Debt		$	275,111	$	277,502	$	—	$	277,502	$	—

Prepayment derivative		$	3,516	$	3,516	$	—	$	—	$	3,516


	As of March 31, 2025
	Fair Value
	Carrying Amount		Total Fair Value		Level 1		Level 2		Level 3
Loans to external parties	$	194	$	194	$	—	$	—	$	194

Debt	$	273,792	$	275,179	$	—	$	275,179	$	—

Prepayment derivative	$	2,730	$	2,730	$	—	$	—	$	2,730

NOTE 22 - CONCENTRATION OF CUSTOMERS

For the three- and six-month periods ended September 30, 2024 and 2025, there were no customers that generated revenues greater than 10% of the Company’s consolidated total revenues or generated greater than 10% of the Company’s consolidated accounts receivable.

NOTE 23 - COMMITMENTS AND CONTINGENCIES

From time to time, the Company is involved in various litigation matters involving claims incidental to its business and acquisitions, including employment matters, acquisition-related claims, patent infringement and contractual matters, among other issues. While the outcome of any such litigation matters cannot be predicted with certainty, management currently believes that the outcome of these proceedings, including the matters described below, either individually or in the aggregate, will not have a material adverse effect on its business, results of operations or financial condition. The Company records reserves related to legal matters when losses related to such litigation or contingencies are both probable and reasonably estimable.

In July 2015, Pointer do Brasil Comercial Ltda. (“Pointer Brazil”) received a tax deficiency notice alleging that the services provided by Pointer Brazil should be classified as “telecommunication services” and therefore Pointer Brazil should be subject to the state value-added tax. The aggregate amount claimed to be owed under the notice was approximately $5,493 as of September 30, 2025. On August 14, 2018, the lower chamber of the State Tax Administrative Court in São Paulo rendered a decision that was favorable to Pointer Brazil in relation to the ICMS demands, but adverse in regard to the clerical obligation of keeping in good order a set of ICMS books and related tax receipts. The remaining claim after this administrative decision is $197. The state has appealed to the higher chamber of the State Tax Administrative Court. In April 2025, the Company

obtained a tax certificate indicating that the claim is under discussion and should not be recognized as a liability to the Company. For this reason, the Company has not made any provision.

Mobile Telephone Networks Proprietary Limited (“MTN”), a network service provider of MiX Telematics Africa, a subsidiary of the Company, is entitled to claw back payments from MiX Telematics Africa in the event of early cancellation of the agreement or certain base connections not being maintained over the term of an amended network services agreement between the parties. No connection incentives will be received in terms of the amended network services agreement. The maximum potential liability under the arrangement as of March 31, 2025 and September 30, 2025 was $609 and $515, respectively. No loss is considered probable under this arrangement.

On August 30, 2024, Fleet Connect Solutions LLC (“Fleet Connect”) filed a complaint against the Company in the United States District Court for the Eastern District of Texas alleging infringement of a number of Fleet Connect’s patents. The Company filed an answer to Fleet Connect’s complaint on November 8, 2024, denying the claims together with counterclaims to invalidate Fleet Connect’s patents. Fleet Connect made a settlement demand of $3.45 million, and the parties involved in the complaint are in the process of finalizing the settlement. In addition, on February 11, 2025, Fleet Connect filed a second lawsuit against the Company in the United States District Court of the Eastern District of Texas. The Company then filed a similar motion under Section 101 challenging the validity of some of the patents involved in this lawsuit as well. The Company entered into an agreement with a third party that is negotiating a license from Fleet Connect on behalf of a number of other alleged infringers. Through such third party, a patent license with Fleet Connect was finalized. Fleet Connect has since dismissed both lawsuits, and the dismissals were effective as of October 11, 2025. As a result, both cases are now closed.

NOTE 24 - RECENT ACCOUNTING PRONOUNCEMENTS

In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company is evaluating the effect of adopting ASU 2023-09.

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ” (“ASU 2024-03”), which requires disclosure in a tabular format, on an annual and interim basis, purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion for each income statement line item that contains those expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the effect of adopting ASU 2024-3.

On September 18, 2025, the FASB released ASU 2025-06, which amends certain aspects of the accounting for, and disclosure of, software costs under ASC 350-40. The amendments also supersede the guidance on website development costs in ASC 350-50 and relocate that guidance, along with the recognition requirements for development costs specific to websites, to ASC 350-40. Although the ASU makes targeted improvements to ASC 350-40, it does not fully align the framework for accounting for internally developed software costs that are subject to ASC 350-40 with the framework applied to software to be sold or marketed externally that is subject to ASC 985-20. The FASB also chose not to amend the guidance on costs of software licenses that are within the scope of ASC 985-20. The amendments “are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.” Early adoption is permitted as of the beginning of an annual reporting period. The Company is evaluating the effect of adopting ASU 2025-06.

NOTE 25 - SUBSEQUENT EVENTS

RMB Debt

As described in Note 13 above, on October 31, 2025, the Company, together with the Obligors, entered into the First Amendment and Restatement Agreement with RMB, pursuant to which the Obligors and RMB agreed to amend and restate the Facilities Agreement to, among other things, (i) extend the final maturity date of RMB Facility A by 12 months to March 31, 2028, (ii) update the interest rates of the RMB Facilities, and (iii) update certain financial covenants to conform to the Facility Agreement.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the consolidated financial condition and results of operations of Powerfleet, Inc. and its subsidiaries (“Powerfleet,” the “Company,” “we,” “our” or “us”) should be read in conjunction with the condensed consolidated financial statements and related notes thereto appearing in Part I, Item 1 of this report and Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (our “Form 10-K”). Many of the amounts and percentages in this section have been rounded for convenience of presentation, but actual recorded amounts have been used in computations. Accordingly, some information may appear not to be computed accurately.

Cautionary Note Regarding Forward-Looking Statements

This report contains “forward-looking statements” (within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which may include information concerning our beliefs, plans, objectives, goals, expectations, strategies, anticipations, assumptions, estimates, intentions, future events, future revenues or performance, capital expenditures and other information that is not historical information. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. When used in this report, the words “seek,” “estimate,” “expect,” “anticipate,” “project,” “plan,” “contemplate,” “plan,” “continue,” “intend,” “believe” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon our current expectations and various assumptions. We believe there is a reasonable basis for its expectations and beliefs, but there can be no assurance that we will realize our expectations or that our beliefs will prove to be correct.

There are risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this report. Important factors that could cause our actual results to differ materially from those expressed as forward-looking statements herein include, but are not limited, to: the ability to realize all of the anticipated benefits of the MiX Combination and the FC Acquisition; and the potential challenges associated with the ongoing integration of the businesses; global economic conditions as well as exposure to political, trade and geographic risks, including tariffs and the conflict in the Middle East; disruptions or limitations in our supply chain, particularly with respect to key components; technological changes or product developments that may be more complex, costly, or less effective than expected; cybersecurity risks and our ability to protect our information technology systems from breaches; competitive pressures from a broad range of local, regional, national and other providers of wireless solutions; our ability to effectively navigate the international political, economic and geographic landscape; risks related to the protection and enforcement of our intellectual property rights; changes in applicable laws and regulations or changes in generally accepted accounting policies, rules and practices; and other risks and uncertainties disclosed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), including our Form 10-K.

There may be other factors of which we are currently unaware or which we currently deem immaterial that may cause our actual results to differ materially from the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date they are made and are expressly qualified in their entirety by the cautionary statements included in this report. Except as may be required by law, we undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances occurring after the date they were made or to reflect the occurrence of unanticipated events, or otherwise.

Overview

Powerfleet is a global provider of Internet-of-Things (“IoT”) solutions providing valuable business intelligence for managing high-value enterprise assets that improve operational efficiencies.

We are headquartered in Woodcliff Lake, New Jersey, with offices located around the globe.

On April 2, 2024, we acquired MiX Telematics, and on October 1, 2024, we acquired Fleet Complete. Since the closing of these acquisitions, we have made significant progress in integrating the businesses into our operations, with alignment of core functions and early realization of operational synergies.

Recent Developments

Fluctuations in currency values, continued supply chain disruptions, changes in tariff policies and import and export restrictions, and the conflict in the Middle East have resulted in significant economic disruption and adversely impacted the broader global economy, including our customers and suppliers. Given the dynamic and uncertain nature of the current macroeconomic environment, we cannot reasonably estimate the impact of such developments on our financial condition, results of operations or cash flows into the foreseeable future. While we do not currently believe that inflation and recently pronounced tariffs have had a material impact on our condensed consolidated financial statements, the ultimate extent of the effects of these developments remains highly uncertain, and such effects could exist for an extended period of time.

Risks to Our Business

We expect that many customers who utilize our solutions will do so as part of a large-scale deployment of these solutions across multiple or all divisions of their organizations. A customer’s decision to deploy our solutions throughout its organization will involve a significant commitment of its resources. Accordingly, initial implementations may precede any decision to deploy our solutions enterprise-wide. Throughout this sales cycle, we may spend considerable time and expense educating and providing information to prospective customers about the benefits of our solutions, and there can be no assurance that our solutions will be deployed on a wider scale by the customer.

The timing of the deployment of our solutions may vary widely and will depend on the specific deployment plan of each customer, the complexity of the customer’s organization and the difficulty of such deployment. Customers with substantial or complex organizations may deploy our solutions in large increments on a periodic basis. Accordingly, we may receive purchase orders for significant dollar amounts on an irregular and unpredictable basis. Long sales cycles, as well as our expectation that customers will tend to place large orders sporadically with short lead times, may cause our revenue and results of operations to vary significantly and unexpectedly from quarter to quarter. These variations could materially and adversely affect the market price of our common stock.

Our ability to increase our revenues and generate net income will depend on a number of factors, including, for example, our ability to:

•increase sales of products and services to our existing customers;

•convert our initial programs into larger or enterprise-wide purchases by our customers;

•increase market acceptance and penetration of our products; and

•develop and commercialize new products and technologies.

Additional risks and uncertainties to which we are subject are described under the heading “Risk Factors” in our Form 10-K.

Critical Accounting Policies

For the three- and six-month periods ended September 30, 2025, there were no significant changes to our critical accounting policies as identified in our Form 10-K.

Results of Operations

The following table sets forth, for the periods indicated, certain operating information expressed as a percentage of revenue:














































	Three Months Ended September 30,				Six Months Ended September 30,
	2024		2025		2024		2025

Revenues:
Products	26.3	%	20.0	%	25.6	%	18.5	%
Services	73.7	%	80.0	%	74.4	%	81.5	%
Total revenues	100.0	%	100.0	%	100.0	%	100.0	%

Cost of revenues:
Cost of products	18.1	%	13.7	%	17.5	%	13.2	%
Cost of services	28.2	%	30.2	%	29.4	%	31.6	%
Total cost of revenues	46.3	%	44.0	%	46.9	%	44.8	%

Gross profit	53.7	%	56.0	%	53.1	%	55.2	%

Operating expenses:
Selling, general and administrative expenses	48.5	%	48.5	%	60.4	%	50.0	%
Research and development expenses	4.5	%	3.8	%	4.3	%	4.2	%
Total operating expenses	52.9	%	52.2	%	64.7	%	54.2	%

Profit (loss) from operations	0.7	%	3.8	%	(11.6)	%	1.0	%

Interest income	0.2	%	0.2	%	0.3	%	0.2	%
Interest expense, net	(5.2)	%	(6.2)	%	(4.4)	%	(6.4)	%

Other income (expense), net	2.2	%	(0.5)	%	0.7	%	(0.8)	%

Net loss before income taxes	(2.1)	%	(2.7)	%	(15.0)	%	(6.0)	%

Income tax expense	(0.3)	%	(1.1)	%	(0.9)	%	(0.8)	%

Net loss before non-controlling interest	(2.4)	%	(3.8)	%	(15.9)	%	(6.7)	%
Non-controlling interest	—	%	—	%	—	%	—	%

Net loss	(2.5)	%	(3.8)	%	(15.9)	%	(6.7)	%


Preferred stock dividend	—	%	—	%	(0.0)%		—	%

Net loss attributable to common stockholders	(2.5)	%	(3.8)	%	(15.9)	%	(6.7)	%

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

REVENUES. Revenues increased by $34.7 million, or 45.0%, to $111.7 million in the three months ended September 30, 2025, from $77.0 million in the same period in 2024.

Revenues from products increased by $2.1 million, or 10.2%, to $22.4 million in the three months ended September 30, 2025, from $20.3 million in the same period in 2024. The increase in product revenues was primarily due to the Fleet Complete business acquired which contributed $2.1 million in product revenues for the three months ended September 30, 2025.

Revenues from services increased by $32.6 million, or 57.4%, to $89.3 million in the three months ended September 30, 2025, from $56.7 million in the same period in 2024. The increase in services revenues was principally due to the Fleet Complete business acquired which contributed $25.9 million in services revenues for the three months ended September 30, 2025, together with a $6.7 million increase in services revenues from existing business.

COST OF REVENUES. Cost of revenues increased by $13.4 million, or 37.6%, to $49.1 million in the three months ended September 30, 2025, from $35.7 million for the same period in 2024. The Fleet Complete business acquired contributed $11.5 million for the three months ended September 30, 2025. Gross profit was $62.6 million in the three months ended September 30, 2025, compared to $41.3 million for the same period in 2024. As a percentage of revenues, gross profit increased to 56.0% in the three months ended September 30, 2025 from 53.7% in the same period in 2024. This was primarily driven by high margin services revenue comprising 80.0% of total revenues in the three months ended September 30, 2025, compared to 73.7% for the same period in 2024.

Cost of products increased by $1.4 million, or 10.0%, to $15.3 million in the three months ended September 30, 2025, from $13.9 million in the same period in 2024. Gross profit for products was $7.1 million in the three months ended September 30, 2025, compared to $6.4 million in the same period in 2024. As a percentage of product revenues, gross profit increased to 31.5% in the three months ended September 30, 2025 from 31.4% in the same period in 2024.

Cost of services increased by $12.0 million, or 55.3%, to $33.8 million in the three months ended September 30, 2025, from $21.7 million in the same period in 2024. The acquisition of Fleet Complete and the amortization of acquisition intangibles for the MiX Telematics and Fleet Complete transactions contributed $6.7 million and $4.6 million, respectively, to cost of services for the three months ended September 30, 2025. Gross profit for services was $55.5 million in the three months ended September 30, 2025, compared to $35.0 million in the same period in 2024. As a percentage of services revenues, gross profit increased to 62.2% in the three months ended September 30, 2025, from 61.7% in the same period in 2024.

SELLING, GENERAL AND ADMINISTRATIVE (“SG&A”) EXPENSES. SG&A expenses increased by $16.8 million, or 45.0%, to $54.2 million in the three months ended September 30, 2025, compared to $37.3 million in the same period in 2024, principally due to the Fleet Complete business acquired which contributed $14.0 million for the three months ended September 30, 2025. SG&A expenses included $0.1 million in acquisition-related expenses, $0.9 million in integration-related expenses and $1.1 million in restructuring-related costs for the three months ended September 30, 2025, compared to $1.4 million in acquisition-related expenses, $1.4 million in integration-related expenses and $1.1 million in restructuring-related costs in the same period in 2024. As a percentage of revenues, SG&A expenses remained unchanged at 48.5% in the three months ended September 30, 2025, compared to the same period in 2024. As a percentage of revenues, SG&A expenses, excluding $2.1 million in acquisition-related expenses, integration-related expenses and restructuring-related costs, increased to 46.6% in the three months ended September 30, 2025, from 43.4% in the same period in 2024. The increase is primarily due to higher stock-based compensation.

RESEARCH AND DEVELOPMENT (“R&D”) EXPENSES. R&D expenses increased by $0.8 million, or 22.1%, to $4.2 million in the three months ended September 30, 2025, compared to $3.4 million in the same period in 2024, principally due to $1.1 million incurred by the Fleet Complete business post-transaction. As a percentage of revenues, R&D expenses decreased to 3.8% in the three months ended September 30, 2025, from 4.5% in the same period in 2024.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS. Net loss attributable to common stockholders was $4.3 million, or $(0.03) per basic and diluted share, for the three months ended September 30, 2025, as compared to net loss of $1.9 million, or $(0.02) per basic and diluted share, for the same period in 2024. The net loss was primarily the result of $1.5 million foreign currency losses, $0.9 million in integration-related costs, and $1.1 million in restructuring-related costs.

Six Months Ended September 30, 2025 Compared to Six Months Ended September 30, 2024

REVENUES. Revenues increased by $63.4 million, or 41.6%, to $215.8 million in the six months ended September 30, 2025, from $152.4 million in the same period in 2024.

Revenues from products increased by $1.0 million, or 2.6%, to $40.0 million in the six months ended September 30, 2025, from $39.0 million in the same period in 2024. The increase in product revenues was primarily due to the Fleet Complete business acquired which contributed $5.2 million in product revenues, partially offset by $4.2 million decline in the existing business for the six months ended September 30, 2025, which was adversely impacted by higher tariffs in the United States.

Revenues from services increased by $62.4 million, or 55.0%, to $175.8 million in the six months ended September 30, 2025, from $113.4 million in the same period in 2024. The increase in services revenues was principally due to underlying growth initiatives, offset in part by proactive measures to de-emphasize non-core lines of business, and the acquisition of Fleet Complete which contributed $52.1 million in services revenues.

COST OF REVENUES. Cost of revenues increased by $25.3 million, or 35.4%, to $96.7 million in the six months ended September 30, 2025, from $71.5 million for the same period in 2024. The Fleet Complete business acquired contributed $19.6 million to cost of revenues for the six months ended September 30, 2025. Gross profit was $119.1 million in the six months ended September 30, 2025, compared to $81.0 million for the same period in 2024. As a percentage of revenues, gross profit increased to 55.2% in the six months ended September 30, 2025, from 53.1% in the same period in 2024. This was primarily driven by high margin services revenue comprising 81.5% of total revenues in the six months ended September 30, 2025, compared to 74.4% for the same period in 2024.

Cost of products increased by $1.9 million, or 7.0%, to $28.5 million in the six months ended September 30, 2025, from $26.7 million in the same period in 2024. Gross profit for products was $11.5 million in the six months ended September 30, 2025, compared to $12.4 million in the same period in 2024. As a percentage of product revenues, gross profit decreased to 28.7% in the six months ended September 30, 2025, from 31.6% in the same period in 2024. Gross profit as a percentage of product revenues was negatively impacted by tariffs in the United States, which increased underlying costs and delayed demand of in-warehouse solutions in three months ended June 30, 2025.

Cost of services increased by $23.4 million, or 52.3%, to $68.2 million in the six months ended September 30, 2025, from $44.8 million in the same period in 2024. The acquisition of Fleet Complete and the amortization of acquisition intangibles for the MiX Telematics and Fleet Complete transactions contributed $13.3 million and $7.5 million, respectively, to cost of services for the six months ended September 30, 2025. Gross profit for services was $107.6 million in the six months ended September 30, 2025, compared to $68.6 million in the same period in 2024. As a percentage of services revenues, gross profit increased to 61.2% in the six months ended September 30, 2025, from 60.5% in the same period in 2024.

SG&A EXPENSES. SG&A expenses increased by $15.7 million, or 17.0%, to $107.8 million in the six months ended September 30, 2025, compared to $92.1 million in the same period in 2024, principally due to Fleet Complete business acquired which contributed $29.8 million and higher investments in go-to-market, offset in part by a decrease in acquisition-related expenses of $14.4 million, a decrease in accelerated stock-based compensation costs of $4.7 million and cost saving synergies realized for the six months ended September 30, 2025. As a percentage of revenues, SG&A expenses decreased to 50.0% in the six months ended September 30, 2025, from 60.4% in the same period in 2024.

R&D EXPENSES. R&D expenses increased by $2.5 million, or 38.5%, to $9.1 million in the six months ended September 30, 2025, compared to $6.5 million in the same period in 2024, principally due to $2.7 million incurred by Fleet Complete. As a percentage of revenues, R&D expenses decreased to 4.2% in the six months ended September 30, 2025, from 4.3% in the same period in 2024.

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS. Net loss attributable to common stockholders was $14.5 million, or $(0.11) per basic and diluted share, for the six months ended September 30, 2025, as compared to net loss of $24.2 million, or $(0.23) per basic and diluted share, for the same period in 2024. The net loss was primarily the result of $6.3 million in acquisition, integration and restructuring related expenses.

Non-GAAP Financial Information

We use certain measures to assess the financial performance of our business. Certain of these measures are termed “non-GAAP measures” because they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with GAAP, or are calculated using financial measures that are not calculated in accordance with GAAP. These non-GAAP measures include adjusted EBITDA.

An explanation of the relevance of the non-GAAP measure, a reconciliation of the non-GAAP measure to the most directly comparable measure calculated and presented in accordance with GAAP and a discussion of its limitations is set out below. We do not regard this non-GAAP measure as a substitute for, or superior to, the equivalent measure calculated and presented in accordance with GAAP or that calculated using financial measure that is calculated in accordance with GAAP.

Adjusted EBITDA

We define adjusted EBITDA as net loss attributable to common stockholders before non-controlling interest, preferred stock dividend, interest expense (net), other expense (net), income tax expense, depreciation and amortization, stock-based compensation, foreign currency losses, restructuring-related expenses, derivative mark-to market adjustment, acquisition-related expenses and integration-related expenses. Upon further review of our non-GAAP financial reporting, we refined our definition of adjusted EBITDA by removing recognition of pre-October 1, 2024 contract assets (Fleet Complete). Comparative information has been adjusted to conform with the updated presentation.

We have included adjusted EBITDA in this Quarterly Report on Form 10-Q because it is a key measure that our management and board of directors use to understand and evaluate our business and ongoing operating performance, to prepare and approve our annual budget, and to develop short and long-term operational plans. We believe adjusted EBITDA eliminates the uneven effect of considerable amounts of non-cash depreciation and amortization, stock-based compensation and other items that might otherwise make comparisons of our ongoing business with prior periods more difficult and obscure trends in ongoing operations. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results. Because our method for calculating adjusted EBITDA may differ from other companies’ methods, the non-GAAP measures may not be comparable to similarly titled measures reported by other companies.

A reconciliation of net loss attributable to common stockholders (the most directly comparable financial measure presented in accordance with GAAP) to adjusted EBITDA for the periods shown is presented below.


Reconciliation of Net Loss Attributable to Common Stockholders to Adjusted EBITDA

	Three Months Ended September 30,				Six Months Ended September 30,
	2024		2025 (1)		2024		2025 (1)
	(In thousands)

Net loss attributable to common stockholders	$	(1,888)	$	(4,288)	$	(24,225)	$	(14,522)
Non-controlling interest	5		—		18		—
Preferred stock dividend	—		—		25		—
Interest expense, net	3,345		6,715		6,261		13,305
Other income, net	—		(52)		—		(29)
Income tax expense	256		1,271		1,309		1,633
Depreciation and amortization	9,064		15,793		19,399		31,824
Stock-based compensation	1,371		2,594		7,300		4,447
Foreign currency losses	636		1,562		745		2,723
Restructuring-related expenses	1,069		1,137		2,267		3,579






Derivative mark-to-market adjustment	(2,197)		(890)		(2,197)		(786)
Acquisition-related expenses	1,406		57		15,571		1,187
Integration-related expenses	1,410		878		1,739		1,553

Adjusted EBITDA	$	14,477	$	24,777	$	28,212	$	44,914

(1) Following the closing of the FC Acquisition, we included an EBITDA adjustment related to the recognition of pre-October 1, 2024, contract assets. This adjustment represented recoveries, through customer billings, of the contract asset recognized at acquisition for hardware delivered by Fleet Complete prior to October 1, 2024. This adjustment was intended to give investors a clearer view of underlying operating performance and cash generation. The goal was to better align adjusted EBITDA with operating cash flows.  For the three and six months ended September 30, 2025, in addition to adjusted EBITDA of $24.8 million and $44.9 million, respectively, we invoiced recoveries of $1.3 million and $2.8 million, respectively. These amounts are included in cash flow from operating activities in the condensed consolidated statement of cash flows.

Our use of adjusted EBITDA has limitations as analytical tools and should not be considered as performance measures in isolation from, or as a substitute for, analysis of our results as reported under GAAP.

Some of these limitations are:

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

•adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

•adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;

•adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;

•other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure; and

•certain of the adjustments (such as restructuring-related expenses and integration-related expenses) made in calculating adjusted EBITDA are those that management believes are not representative of our underlying operations and, therefore, are subjective in nature. Restructuring-related expenses include inventory write-downs. retention, leadership transaction, and other professional costs associated with the restructuring activities.

Because of these limitations, adjusted EBITDA should be considered alongside other financial performance measures, including profit (loss) from operations, net loss attributable to common stockholders and our other results.

Liquidity and Capital Resources

Overview

On April 2, 2024, we completed the MiX Combination, pursuant to which MiX Telematics became our indirect, wholly owned subsidiary. Concurrently with the closing, we redeemed all outstanding shares of our Series A Preferred Stock for approximately $90.3 million using proceeds from the RMB Facilities and incremental borrowing capacity available under our refinanced Hapoalim credit facilities.

Since the closing of the MiX Combination, we have continued to optimize our capital structure through the refinancing of existing debt facilities, including the A&R Credit Agreement and RMB Facilities Agreements. These transactions have enhanced our liquidity and extended our debt maturities, while increasing our available revolving borrowing capacity to support working capital and growth initiatives.

Debt Facilities

Hapoalim Debt

On March 18, 2024, our wholly owned subsidiaries Powerfleet Israel and Pointer entered into the A&R Credit Agreement with Hapoalim, which refinanced the prior facilities under, and amended and restated, the Prior Credit Agreement. The A&R Credit Agreement provides an aggregate borrowing capacity of approximately $50 million, consisting of two NIS-denominated term loans totaling $30 million (Hapoalim Facility A and Hapoalim Facility B) and two revolving credit facilities totaling $20 million (Hapoalim Facility C and Hapoalim Facility D).

Powerfleet Israel drew $30 million in March 2024, using a portion to repay approximately $11.2 million under the prior term loans under the Prior Credit Agreement and distributing the remainder to us. In December 2024, the Borrowers entered into an amendment to the A&R Credit Agreement, increasing the principal amount available under Hapoalim Facility D from $10 million to $20 million, available through December 31, 2025. As of September 30, 2025, Powerfleet Israel had utilized approximately $17.2 million under the Hapoalim Revolving Facilities.

Borrowings are secured by first ranking and exclusive fixed and floating charges, including over the entire share capital of Pointer and over the assets of Pointer and excluding the Borrowers’ holdings in specified foreign subsidiaries. Interest rates for borrowings under Hapoalim Facility A and Hapoalim Facility B are Hapoalim’s prime rate + 2.2% per annum and Hapoalim’s prime rate + 2.3% (Hapoalim’s prime rate was 6% at September 30, 2025), respectively. The Hapoalim Term Facilities will mature on March 18, 2029, with Hapoalim Facility A amortizing quarterly and Hapoalim Facility B due at maturity.

Interest rates for borrowings under Hapoalim Facility C is, with respect to NIS-denominated loans, Hapoalim’s prime rate + 2.5% and, with respect to U.S. dollar-denominated loans, SOFR + 2.15%. Borrowings under Hapoalim Facility D bear interest at the applicable interest rate set forth in the standard form documents entered into in connection with each utilization of Hapoalim Facility D. In addition, Pointer is required to pay a credit allocation fee in NIS, in each case, equal to 0.5% per annum on undrawn and uncancelled amounts of the Hapoalim Revolving Facilities during the period commencing on March 18, 2024 and ending on the last day of the applicable availability period of the Hapoalim Revolving Facilities. The Hapoalim Revolving Facilities are available for successive one-month periods until and including February 27, 2026, unless the Borrowers deliver prior notice to Hapoalim of their request not to renew the Hapoalim Revolving Facilities.

RMB Debt

On March 7, 2024, we entered into the Facilities Agreement with RMB, pursuant to which RMB agreed to provided us with the RMB Facilities totaling $85 million, composed of RMB Facility A and RMB Facility B, each having a principal amount of $42.5 million. We drew $85 million in March 2024, which primarily funded our Series A Preferred Stock redemption. On October 31, 2025, we and RMB agreed to amend and restate the Facilities Agreement. Pursuant to the Amended and Restated Facilities Agreement, interest is payable quarterly, at a fixed annual rate of 8.699% until March 31, 2027 and, thereafter, 4.86% per annum plus the applicable term SOFR reference rate, with respect to RMB Facility A, and a fixed annual rate of 8.979%, with respect to RMB Facility B, with principal repayments for RMB Facility A and RMB Facility B due March 31, 2028 and March 31, 2029, respectively.

MiX Telematics also maintains the RMB General Facility, repayable on demand, with a 365-day term and an interest rate linked to the South African prime rate minus 0.75% per annum. Repayment of the RMB General Facility, including capitalized interest, is due by the earlier of (a) the Available Date (as defined therein) or (b) April 2, 2026, unless extended by agreement between MiX Telematics and RMB. As of September 30, 2025, $20.2 million of the RMB General Facility was utilized.

On September 27, 2024, we entered into the Facility Agreement with RMB, pursuant to which RMB agreed to provide us with the New RMB Term Facility totaling $125 million. We drew $125 million on October 1, 2024 to fund a portion of the Purchase Price for the FC Acquisition. Interest is payable quarterly at an interest rate of 5% per annum plus the applicable term SOFR reference rate and matures on October 31, 2029.

Liquidity Position

As of September 30, 2025, we had cash and cash equivalents (including restricted cash) of $32.5 million and working capital of $11.5 million, compared to cash and cash equivalents (including restricted cash) of $48.8 million and working capital of $18.1 million as of March 31, 2025. As of September 30, 2025, Pointer had utilized $17.2 million under the Hapoalim Revolving Facilities. The available undrawn facility balance at September 30, 2025 was $12.8 million. As of September 30, 2025, $20.2 million of the RMB General Facility was utilized.

We continue to monitor the effects of inflation, foreign currency volatility, and regional geopolitical instability, including the ongoing conflicts in the Middle East, on our supply chain and operating cash flows. There remains uncertainty surrounding the potential impact of such events on our results of operations and cash flows. Management is proactively managing liquidity through reductions in discretionary operating expenses and capital expenditures and increased utilization of available credit facilities to preserve cash.

Capital Requirements and Outlook

Our primary sources of liquidity are cash generated from operations, existing cash balances, and available borrowing capacity under our revolving facilities. Although we expect the MiX Combination and FC Acquisition to generate incremental cash flow benefits through operational synergies, we have not yet generated sufficient cash flow solely from operations to fund all our capital and financing needs.

Our future capital requirements will depend on several factors, including, but not limited to:

•the timing and success of new product launches;

•revenue growth and margin trends;

•integration costs and realized synergies from recent business combinations and acquisitions;

•the pace of discretionary spending and capital investments; and

•potential strategic acquisitions.

We believe that our current cash balances, expected cash flows from operations, and borrowing capacity under our existing credit facilities will be sufficient to meet our operating, debt service, and capital expenditure requirements for at least the next 12 months. We may, however, seek additional financing or capital market transactions to support long-term strategic initiatives or refinance existing debt.

Operating Activities

During the six months ended September 30, 2025, net cash provided by operating activities was $10.2 million, compared to net cash used in operating activities of $10.8 million for the same period in 2024. The net cash provided by operating activities for the six months ended September 30, 2025 primarily included $31.8 million for depreciation and amortization expense, $4.4 million for bad debts expense, $4.4 million of non-cash charges for stock-based compensation, $0.6 million for ROU asset amortization and $1.6 million for other non-cash items, partially offset by $0.8 million for derivative mark-to-market adjustment. Changes in operating assets and liabilities included:

•an increase in inventory, net of reserve of $4.8 million;

•an increase in accounts receivables of $7.6 million;

•a decrease in deferred costs of $4.7 million;

•a decrease in lease liabilities of $1.0 million;

•an increase in prepaid expenses and other assets of $1.0 million; and

•a decrease in deferred revenue of $0.6 million; partially offset by

•an increase in accounts payable of $2.5 million; and

•an increase in accrued severance payable of $0.4 million.

Cash flow from operating activities for the three and six months ended September 30, 2025 includes approximately $1,346 and $2,849, respectively ($0 and $0, respectively for the three and six months ended September 30, 2024), which represent recoveries, through customer billings, of the contract asset recognized at acquisition for hardware delivered by Fleet Complete prior to October 1, 2024. Under ASC 606, such hardware was identified as a separate performance obligation satisfied at the point of delivery, resulting in the recognition of a contract asset at the acquisition date for hardware delivered prior to the acquisition. This contract asset is being recovered post-acquisition through customer billings.

Investing Activities

Net cash used in investing activities for the six months ended September 30, 2025 was $23.9 million, compared to net cash provided by investing activities of $12.9 million for the same period in 2024. The net cash used by investing activities was primarily due to $12.5 million for the purchase of fixed assets and $11.5 million for capitalized software development costs. The net cash provided by investing activities of $12.9 million in the same period in 2024 was primarily due to $27.5 million in net cash assumed from the MiX Combination, partially offset by $10.5 million for the purchase of fixed assets and $4.7 million for capitalized software development costs.

Financing Activities

During the six months ended September 30, 2025, net cash used in financing activities was $3.3 million, compared to $22.3 million net cash used in financing activities for the same period in 2024. The cash used in financing activities was primarily due to the repayment of short-term bank debt of $0.6 million, and repayment of long-term debt of $2.7 million. The decrease in net cash used in financing activities during the six months ended September 30, 2024 was primarily due to the repayment of Series A Preferred Stock of $90.3 million following the MiX Combination, partially offset by $61.9 million received from our private placement, less costs, related to the FC Acquisition and $10.0 million received from short-term bank debt.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Impact of Recently Issued Accounting Pronouncements

The Company is subject to recently issued accounting standards, accounting guidance and disclosure requirements. For a description of these new accounting standards, see Note 24 to our consolidated financial statements contained in Item 1 of Part I of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks in connection with our business, which primarily relate to fluctuations in foreign exchange rates, interest rates and credit risk.

Foreign exchange and translation risk

We report our financial results in U.S. dollars. However, a significant portion of our revenues, assets, indebtedness and other liabilities, and costs are denominated in foreign currencies. Our condensed consolidated results of operations and cash flows are therefore subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign currency exchange rates. For further information regarding this risk and the related currencies affected, please refer to the risk: The international scope of our business exposes us to risks associated with foreign exchange rates, currency fluctuations and economic instability in certain emerging markets described under Part I, Item 1A. “Risk Factors” in our Form 10-K.

Currency fluctuations, especially with respect to the South African rand, Mexican peso, Brazilian real, and Canadian dollar, may materially impact our income and expenses due to the translation of our foreign subsidiaries’ financial statements into U.S. dollars. For example, the majority of subscription agreements and operating expenses of our subsidiary, MiX Telematics, are denominated in foreign currencies and therefore subject to such fluctuations.

To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments, although we may choose to do so in the future. As exchange rates are outside our control, there can be no assurance that future fluctuations will not adversely affect our results of operations and financial condition.

We undertook a sensitivity analysis related to a hypothetical 10% increase or decrease in the relative value of the U.S. dollar to other currencies during any of the periods presented. This analysis has been performed on the basis of the change occurring at the end of the reporting period and measures the potential impact to net loss attributable to common stockholders. This analysis is for illustrative purposes only as, in practice, exchange rates rarely change in isolation. Based on the analysis, we do not believe that a hypothetical 10% increase or decrease in the relative value of the U.S. dollar to other currencies during any of the periods presented would have had a material impact on our net loss attributable to common stockholders.

Interest rate risk

As a result of our normal borrowing activities, our operating results are exposed to fluctuations in interest rates, which we manage primarily through regular financing activities. We have short- and long-term borrowings in South Africa and Israel which bear interest at variable and fixed rates. Please refer to Note 13 to our condensed consolidated financial statements contained in Item 1 of Part I of this Quarterly Report on Form 10-Q, which sets out the terms of each of these loans. Interest rates in South Africa remained unchanged for the majority of the 2024 calendar year; however, the South African Reserve Bank announced a 25-basis point reduction in the South African repurchase rate in each of September 2024, November 2024, January 2025 and July 2025, with further reductions expected thereafter. Interest rates in Israel have remained stable at 6.0% which were last changed by the Bank of Israel in January 2024. The U.S. dollar denominated loans are based on the Standard Overnight Financing Rate (“SOFR”) for which the 90-day average rate as of September 30, 2025 was 4.35%, compared to 5.31% as of September 30, 2024, representing a decline of 0.96% in the rate period over period.

Therefore, ignoring the impact of changes to the margin on our borrowings and value of borrowings outstanding, we expect our cost of borrowing to decline moderately in the foreseeable future; however, we would expect a higher cost of borrowing if interest rates were to increase in the future. We periodically evaluate the cost and effectiveness of interest rate hedging strategies to manage this risk. We generally maintain surplus cash in cash equivalents.

The table below illustrates the effect on our estimated annual interest expense as a result of changes in the respective interest rates utilizing our outstanding borrowings as of September 30, 2025. The effect of a hypothetical 1% change (100 basis points) applicable to the relevant borrowings is shown below. The selected 1% hypothetical change does not reflect what could be considered the best- or worst-case scenarios and is disclosed for illustrative purposes only as the actual variations may be more or less and are based on factors outside of our control.


Facility	Annual estimated interest charge		Hypothetical Change in rates- Increase		Hypothetical Change in rates- (Decrease)		Estimated annual change due to increase in rates		Estimated annual change due to decrease in rates
Hapoalim Facilities- Variable	$	3,781	1%		(1%)		$	472	$	(472)
RMB Facilities- Variable	$	13,524	1%		(1%)		$	1,452	$	(1,452)
RMB Facilities- Fixed	$	7,513	$	—	$	—	$	—	$	—

Credit risk

Financial instruments that potentially subject us and our subsidiaries to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. Our cash and cash equivalents are invested primarily in deposits with major banks worldwide. Generally, these deposits may be redeemed upon demand and therefore bear low risk. Management believes that the financial institutions that hold our investments have a high credit rating. Trade receivables primarily arise from subscription-based contracts. We are exposed to credit risk in the event customers fail to meet their contractual payment obligations. We perform credit evaluations of new customers and monitor the financial health of existing customers on an ongoing basis. While most customers are billed monthly, we do not typically require collateral. Credit risk is mitigated through diversified customer exposure and proactive collection efforts.

As of September 30, 2025, trade receivables totaled $85.0 million, net of an allowance for credit losses of $9.5 million. Refer to Note 6 of the unaudited condensed consolidated financial statements for further information relating to the determination of the net allowance for credit losses. No single customer represented more than 10% of total trade receivables as of the reporting date. Management believes the current allowance for credit losses is adequate to cover expected losses and continues to monitor credit risk closely for any changes in customer liquidity trends.

Item 4. Controls and Procedures

a. Disclosure controls and procedures.

We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Due to the inherent limitations of controls systems, irrespective of how well controls are designed and operated, not all misstatements may be detected. These inherent limitations include, but are not limited to, faulty judgments in decision-making, breakdown in controls can occur because of a simple error or mistake and/or controls can be circumvented by the individual act of persons, by the collusion of two or more people, or by management override of control.

Management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

As disclosed in “Item 9A. Controls and Procedures” in Part II of our Form 10-K, management previously identified material weaknesses in our internal control over financial reporting. Specifically:

•At I.D. Systems, the configuration of an automated control within the ERP system created a segregation of duties issue related to the processing of journal entries and the review of balance sheet reconciliations; and

•At Pointer Mexico, the control deficiency related to the lack of workflow approval and sufficient documentation supporting the review of journal entries.

In addition, as disclosed in Note 3, “Acquisition,” in Part I, Item 1, “Financial Statements (Unaudited),” we completed the FC Acquisition on October 1, 2024. We excluded Fleet Complete’s disclosure controls and procedures that are subsumed by their internal control over financial reporting from the scope of management’s assessment of the effectiveness of our disclosure controls and procedures. This exclusion is in accordance with the guidance issued by the SEC that an assessment of a recently acquired business’s internal control over financial reporting may be omitted from management’s assessment of internal control over financial reporting for one year following the business combination and/or acquisition. As a result of our integration efforts, certain controls will be evaluated and may be changed. Fleet Complete’s total revenues constituted approximately 27% of our consolidated revenues for the six months ended September 30, 2025. Fleet Complete’s total assets constituted approximately 23% of our consolidated total assets as of September 30, 2025.

Despite the permitted exclusion of Fleet Complete from our assessment of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2025, we identified a material weakness in controls over the financial close and reporting process. Specifically, there were insufficient effective controls in place to ensure the completeness and accuracy of Fleet Complete’s financial reporting information that is consolidated into Powerfleet’s financial statements.

As of September 30, 2025, we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Due to the material weaknesses in internal control over financial reporting described above and previously disclosed in our Form 10-K, management concluded that our disclosure controls and procedures were not effective as of September 30, 2025. Notwithstanding the existence of these material weaknesses, management believes that the condensed consolidated financial statements in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 present, in all material aspects, our financial condition as reported, in conformity with U.S. GAAP.

Remediation

As described in “Item 9A. Controls and Procedures” in Part II of our Form 10-K, we started the implementation of the remediation plan to address the material weaknesses mentioned above. Management has completed, or is in the process of completing, the following remediation activities:

•As of April 1, 2025, redesigned and implemented automated controls within the ERP system used by I.D. Systems to prevent users from editing journal entries they did not create and to require a senior independent authorized individual to approve and post such journal entries.

•Initiated plans to decommission the ERP system currently used by I.D. Systems in the third quarter of fiscal 2026, replacing it with a standardized ERP platform designated for use across the Company.

•Designing and implementing workflow approval on critical transactions, such as manual journal entries for I.D. Systems.

•Implementing controls that require documentation of independent reviews of manual journal entries at Pointer Mexico.

•Designing and implementing controls over general information technology controls within the standardized ERP system related to user access and program change management over IT systems that support financial reporting processes at Fleet Complete.

•Designing and implementing internal control over financial reporting for processes specific to Fleet Complete.

Management will continue with the implementation of the remediation plan and will reassess and test the design and operating effectiveness of controls. The material weaknesses will not be considered remediated until applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are both designed and operating effectively.

b. Changes in internal control over financial reporting.

During the quarter ended June 30, 2024, we completed the MiX Combination and during the quarter ended December 31, 2024, we completed the FC Acquisition. As part of our integration activities, we are continuing the implementation of a single ERP and subscription billing system across all Powerfleet operations. Furthermore, as part of our integration activities, we expect additional changes to the internal control over financial reporting as we continue with our integration activities, which include the evaluation, rationalization and standardization of internal control over financial reporting. While we believe the controls in the post-integration environment, supported by a uniform ERP system, will enhance the internal control environment, there are inherent risks associated with the integration and implementation of a new ERP system. We will continue to evaluate the processes and controls related to the integration and system implementation, as well as the assessment of the design adequacy and operating effectiveness of internal control over financial reporting throughout this fiscal year.

Other than as described above under “Remediation,” the integration efforts and the implementation of the ERP system, there were no changes to our internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, during the three months ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Our business is subject to numerous risks, a number of which are described under Part I, Item 1A. “Risk Factors” in our Form 10-K. As of September 30, 2025, there have been no material changes to the risk factors previously disclosed.

These risks should be carefully considered together with the other information set forth in this report, which could materially affect our business, financial condition, and future results. The risks described under Part I, Item 1A. “Risk Factors” on our Form 10-K are not the only risks that we face. Risks and uncertainties not currently known to us, or that we currently deem to be immaterial, also may have a material adverse impact on our business, financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 5. Other Information

None.

Item 6. Exhibits

The following exhibits are filed with this Quarterly Report on Form 10-Q:

Exhibits:


Exhibit Number			Description









31.1			Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2			Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32			Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. § 1350 As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101			The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets as of March 31, 2025 and September 30, 2025; (ii) Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2024 and 2025; (iii) Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended September 30, 2024 and 2025; (iv) Condensed Consolidated Statement of Changes in Stockholders’ Equity for the periods April 1, 2024 through September 30, 2024 and April 1, 2025 through September 30, 2025 (v) Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2024 and 2025; and (vi) Notes to Condensed Consolidated Financial Statements.





104			The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, formatted in Inline XBRL (included as Exhibit 101).





*			Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


			POWERFLEET, INC.

Date: November 10, 2025			By: /s/ Steve Towe
			Steve Towe
			Chief Executive Officer
			(Principal Executive Officer)

Date: November 10, 2025			By: /s/ David Wilson
			David Wilson
			Chief Financial Officer
			(Principal Financial and Accounting Officer)