by Tamim - 19 Jun 2025 | Stock Insight

Cash Is King Again

Perhaps the most important takeaway from the FY25 result is this: EROAD is now generating real, repeatable free cash flow. Gross FCF improved tenfold year-on-year, and once adjusted for the 4G/5G hardware upgrade cycle (known internally as Project Sunrise), the business is delivering an 8-10% FCF yield.

Source: EROAD FY25 Results

This puts the EROAD in rare company for a small-cap technology stock: profitable, growing, and cash-generative.

Moreover, capital expenditure, once a source of concern, is no longer a drag. FY25 capex fell to $13.4m (from $32.2m), with a sustainable range of $14 to 18m flagged going forward. This drop is attributed to more efficient hardware, better billing cycles, and a growing mix of software-based upsells.

In a post-ZIRP world where investors care deeply about capital allocation, EROAD is finally speaking the right language.

Strategy and Execution in Sync

Beyond the numbers, it’s clear that management has found its rhythm.

• High asset retention across all regions: 92.5% group-wide.
• Enterprise segment now 54% of ARR with a 7% YoY increase in enterprise customers.
• ARR tailwinds include: a $1.1m cross-regional expansion from a major NZ client into Australia, $7.2m in NZ upsells, and $4.9m in new US enterprise deals.

Last

$1.37

Change

-0.050(3.52%)

Mkt cap !

$256.7M

Avg daily traded (3-month): $16,277 (low liquidity)

Disc: Not held..... Well done to the holders here.