For the quarter ended Dec. 31, 2025, total revenue rose 7% year-over-year to $113.5 million, a record for the company, driven by an expansion in services and recurring revenue. Services revenue, which now comprises roughly 80% of total sales, grew 11% from the prior year period to about $91.1 million.
Adjusted EBITDA climbed 26% to $25.7 million, with margins expanding to roughly 23% from about 19% in the prior year quarter, reflecting operating leverage and ongoing cost synergy efforts. The company recorded an operating profit of $6.3 million, compared with an operating loss in the year-ago period, and narrowed its net loss to about $3.4 million from $14.3 million a year earlier.
Powerfleet management reiterated targets for a Q4 exit run rate north of 10% total revenue growth with recurring revenue also above 10%, underlining its transition toward a SaaS-and-services model. Adjusted EBITDA leverage is expected to improve further into fiscal year-end.
Context: Year-Over-Year Growth and Full-Year Outlook
The year-over-year revenue comparison reflects stronger underlying organic performance when adjusted for approximately $2 million of accelerated product revenue recognized in the prior period that did not recur. Normalized total revenue growth is cited at roughly 9% year-over-year.
Powerfleet updated its fiscal 2026 guidance, narrowing its expected revenue range to $440 million–$445 million, slightly above prior guidance. The company also confirmed expectations for adjusted EBITDA growth of around 45% year-over-year, moderating from a previously broader range.
Business Development & Contract Wins
A key highlight from the quarter was securing what the company described as a “landmark” South African public-sector contract to deliver AI video and fleet visibility services to government fleets managing over 100,000 vehicles over a multi-year term. Powerfleet said this deal is expected to generate material recurring SaaS and services revenue as deployments scale.
Broader Market and Sector Conditions
Powerfleet operates in the AIoT SaaS sector, which has seen mixed performance amid broader macroeconomic pressures on technology and software stocks. Rising interest rates and renewed caution among enterprise IT spenders have weighed on parts of the software universe, particularly smaller cap and SaaS names with extended cash-flow horizons.
Competitive & Operating Factors
Powerfleet’s financials show continued strength in recurring revenue, a key metric for investors in SaaS-oriented companies, and improving profitability metrics as services scale. Investors, however, will be watching the company’s ability to sustain growth in a competitive AI-enabled asset management market and amid software sector valuation pressure.