FY23 Results are out.

While it looks okay at a glance, I have a few issues with it.

• 6-9% revenue guidance for FY24 is too slow. Has been a distinct shift from the 10-30% growth talk from just a couple of years back
• Cashflow neutral in FY25 and then positive in FY26. That's pretty far off for a company that burned $11m in 2H ($36m for the year) with about $27m of combined debt and cash headroom.
• 3G is being shutdown in NZ and Aus, and the company needs to replace 80k units in a bit over a year (or revert to 2G). Awful headwind.

I'm glass half empty on this one.

I can't think of an example where a company's shares did well after management uttered the dreaded phrase "strategic review"

They also don't expect to be cash flow positive until FY26.

Thesis pretty much busted at this stage. Time to sell.

Eroad (ASX:ERD) is a kiwi technology company that provides compliance and telematics software to the road transport sector in Australia, NZ and the US.

There's a raft of products, but in general they connect GPS,  dashcam and other sensor data to proprietary cloud based software that helps manage truck fleets, improve driver compliance, safety and efficiency and a whole lot more. You can see the full raft of services on their website.

It listed on the NZX in 2014 and then on the ASX in September 2020.

Over 120,000 vehicles use it's software and it is looking to double this in the coming years.

It dominates the NZ market, and the size of the market is set to grow as transport fleets continue move away from inefficient paper based log-books and systems. But the real growth engine is the geographic expansion into the USA and more recently Australia.

eRoad already have some demonstrated traction in the US. Close to a third of all its units are in this market and the business is generating double digit revenue growth here.

Importantly, the business is now profitable and demonstrates high retention (95%) and steadily increasing ARPU as existing clients expand their use of eRoad products.

The business enjoys a 33% EBITDA margin, generates free cash flow and has been investing heavily into new products and offerings. It has around $12m in net cash.

There's a good indutsry tailwind, attractive economics, a strong competitive position and capable management. You'll get a good sense of things reading their investor presentation from their ASX listing last year.

I think there's a lot to like here.