Powerfleet, Inc. (NASDAQ:AIOT) shares climbed 7.5% in premarket trading on Monday after the AIoT software-as-a-service provider issued fiscal 2027 guidance that comfortably exceeded Wall Street expectations, offsetting a weaker-than-expected earnings performance in its latest quarter.
Investors focused on the company’s robust growth outlook and improving profitability metrics as management outlined expectations for another year of expansion.
Earnings Fall Short While Revenue Beats Forecasts
For the fourth quarter, Powerfleet reported an adjusted loss per share of $0.02, missing analyst expectations of break-even earnings.
Revenue reached $114.5 million, surpassing the consensus estimate of $113.0 million and increasing 11% from $103.6 million in the same quarter a year earlier.
Services revenue, which accounts for more than 81% of total sales, rose 14% year-over-year to $92.9 million, highlighting continued demand for the company’s recurring software and services offerings.
Fiscal 2027 Forecast Exceeds Expectations
The company’s guidance for fiscal 2027 was the primary driver behind the positive market reaction.
Powerfleet expects revenue of between $485 million and $490 million, significantly ahead of analyst forecasts of $442.3 million. The midpoint of the range implies annual growth of approximately 10%.
Management also projected adjusted EBITDA of $122 million to $125 million for fiscal 2027, representing growth of around 27% at the midpoint.
Free cash flow is forecast to reach between $30 million and $35 million during the year.
CEO Highlights Transformational Year
“Fiscal 2026 was a defining year for the business,” said CEO Steve Towe. “We delivered on our objectives to accelerate growth, compound profitability, and establish a consistent, growing cash flow profile—driving 14% growth in high margin services revenue in the fourth quarter of fiscal 2026, increasing adjusted EBITDA by 42% in the same period, and generating positive free cash flow in the second half of the year.”
Management said the company’s focus on higher-margin recurring revenue streams continues to support both earnings growth and cash generation.
Profitability Improves Sharply
Adjusted EBITDA for the fourth quarter increased 42% to $26.4 million, compared with $18.7 million in the prior-year period.
Adjusted EBITDA margin expanded to 23.1% from 18.0% a year earlier, reflecting operating leverage and an increasing contribution from software and services revenue.
The company’s improving profitability profile was a key highlight despite the earnings-per-share miss.
Major South African Contract Adds Long-Term Visibility
During the period, Powerfleet secured a significant agreement with South Africa’s National Treasury.
The contract is expected to generate between $100 million and $120 million in total value over a five-year period, providing additional revenue visibility and supporting the company’s long-term growth strategy.
Management believes the agreement represents an important milestone as Powerfleet continues to expand its global footprint and strengthen its position in the connected asset and AIoT market.