EROAD grows despite difficult macro-economic conditions

3 MinutesBy NZ Trucking magazineNovember 27, 2020

Transportation technology services company EROAD has released its financial results for the first half of the 2021 financial year. 

Revenue increased period on period by 19% from $38.5 million to $45.8 million, reflecting both the growth in contracted units from 108,414 to 122,193 as well as an increase in average monthly revenue per unit (ARPU) from $57.60 to $58.80. Annualised monthly recurring revenue metric (AMRR) provides a forward view of revenue and increased from $84.0 million at 31 March 2020 to $84.8 million as at 30 September 2020, reflecting the growth in both new units and software as a service (SaaS) average revenue per unit, partly offset by foreign exchange translation impacts.

Operating expenditure increased from $27.5 million to $30.5 million period on period, reflecting increased research and development operating expenditure and further ongoing spend on initiatives to deliver longer-term improvements in operating leverage.

New Zealand was the least affected of EROAD‘s markets by Covid-19 restrictions, and growth rates in the markets returned to pre-Covid-19 levels relatively quickly once restrictions were lifted. New Zealand revenue increased by 13% period on period to $27.4 million, and EBITDA increased period on period by 14% to $18.5 million. The growth in units of 4,160 since 31 March 2020 was driven predominantly from new customers across a range of industries with medium sized fleets, as well as further extension into the fleets of several larger existing customers.

Growth in Australia was heavily affected by Covid-19 restrictions, particularly in Victoria. Only 253 units were added during the six-month period. Revenue for the Australian business was $0.5 million, compared with the first half of FY19 of $0.3 million. EBITDA was $(0.4) million, as EROAD continued to invest into this new market to support future growth.

Revenue for North America increased by $2.6 million to $13.9 million, and EBITDA increased period on period from $3.2 million to $5.9 million. North America‘s growth slowed, adding only 1,292 units during the period, reflecting the challenging market conditions. 

“In a period of extreme uncertainty and operating restrictions across our markets, the continued growth in contracted units, stable SaaS average revenue per unit and asset retention rate is reflective of EROAD‘s strong customer value proposition,” said CEO Steven Newman.