Ituran Location & Control Ltd. Q1 FY2026 earnings call

• Core Business Performance

  • Achieved a strong start to 2026, with total revenue crossing the $100 million milestone for the first time in company history
  • Added 40 thousand net new subscribers in the quarter, bringing the total global subscriber base to 2.67 million (corrected to 2.17 million in financial summary), with consistent healthy organic growth across core markets aligned with expected run rates
  • Holds 90% market share in Israel, with continued aggressive growth among new car sales in the market
  • Delivered double-digit year-over-year growth in operating income, EBITDA, and net income, maintaining strong profitability and positive cash flow

• OEM Partnership Growth

  • Expanded the existing strategic partnership with Stellantis with the launch of Connect Fiat, an exclusive fully integrated end-to-end connected vehicle solution for the Fiat Strada in South America. The initial 3-year term includes an option for a 2-year extension
  • Maintains existing OEM partnerships with Nissan Renault, General Motors, Yamaha, BMW, and other global automakers, and remains in active discussions with additional OEMs to drive long-term growth

• New Growth Initiatives

  • Advancing early-stage new growth initiatives beyond the core telematics subscription business, including IturanMob (U.S. car rental solution), Credit Carbon, and big data services, which expand the company's total addressable market
  • Signed an agreement with an Israel Ministry of Transportation entity to provide transportation data to support commuter pattern analysis and infrastructure planning, with more projects expected to mature in coming quarters
  • Big data capabilities create scalable revenue opportunities for government transportation authorities, commercial centers, OEMs, and other B2B customers outside the traditional subscription model

• Capital Return to Shareholders

  • The Board of Directors declared a $10 million quarterly dividend ($0.50 per share), consistent with the company's standard dividend policy
  • Repurchased $0.5 million in shares under the existing buyback program, with approximately $13 million in remaining authorization

By product segment:

1. Subscription revenue: $75.4 million, up 21% year-over-year, accounting for 73% of total Q1 2026 revenue.
2. Product revenue: $27.3 million, up 12% year-over-year, accounting for the remaining 27% of total Q1 2026 revenue.

By geographic segment:

1. Israel: 57% of total Q1 2026 revenue
2. Brazil: 22% of total Q1 2026 revenue
3. Rest of world: 21% of total Q1 2026 revenue

Aggregate financials: Total Q1 2026 revenue was a record $102.7 million, up 19% year-over-year. EBITDA reached $26.7 million (26% of revenue), up 15% year-over-year. Net income was $16.8 million (16.3% of revenue), up 15% year-over-year, with diluted EPS of $0.85. Operating cash flow was $18.2 million, and the company held $108 million in net cash including marketable securities as of quarter end.

• For full year 2026, management maintained the prior guidance of adding between 160 thousand and 180 thousand net new subscribers, consistent with prior expectations
• Management confirmed confidence in continued full-year 2026 growth and profitability, and long-term growth from OEM partnerships and new business initiatives
• The company expects new big data projects in Israel to mature over the coming quarters, with meaningful revenue contribution from new initiatives expected over a 3-4 year long-term timeline
• Management expects to continue its historical trend of 1 to 2 new substantial OEM agreements per year, and is confident of delivering on this target

• Quarter-to-quarter volatility in subscriber growth and average revenue per user (ARPU) across geographic markets is normal, with growth pacing varying between periods
• Foreign exchange tailwinds positively impacted Q1 2026 growth by approximately $1 million in EBIT, which management notes they do not count on for future results; currency headwinds have been a consistent headwind for the company for nearly a decade prior to this quarter
• New growth initiatives (big data, IturanMob, Credit Carbon) are in early commercial stages, with no guarantee of material revenue or profit contribution in the near term

Q: Derek Greenberg of Maxim asked whether strong Q1 growth was driven by specific geographies or new products, or if growth was broad-based, and requested color on FX impact and FX-neutral growth. / A: Management stated growth was broadly consistent across geographies, with normal quarter-to-quarter volatility. Favorable currency movements in operating regions created a $1 million EBIT tailwind in Q1, the first FX tailwind the company has seen in almost a decade, but this tailwind is not counted on for future growth. There were no unusual lumpy revenue items in product revenue or unaccounted-for price increases impacting subscriber results, and the large subscriber base gives the business high visibility and stable, consistent growth.

Q: Greenberg asked for details on the sales cycle, pipeline and potential size of new big data engagements, following the Israeli transportation ministry contract. / A: Management confirmed big data is still in early stages, with the signed contract worth just a few hundred thousand dollars. Unlike core subscription revenue, big data deals are B2B, structured by data volume and scope, and may include multi-year annual payments rather than per-subscriber pricing. The initiative is a long-term growth engine for mature markets like Israel, but it is too early to provide specific financial projections for future contribution.

Q: Sergey Glinyanov of Freedom Capital Markets asked whether stable FX in Q1 means strong Q2 results can be expected. / A: Management declined to provide specific Q2 guidance, noting that Q1 FX trends can be extrapolated for modeling assumptions by analysts, but no explicit forward confirmation of Q2 performance was given.

Q: Glinyanov asked for updates on the pipeline of new substantial OEM agreements, and asked for targets and progress for IturanMob in the U.S. / A: Management confirmed it is in ongoing discussions for new OEM deals, and expects to continue its historical average of 1-2 new agreements per year, with public announcements when deals are completed. For IturanMob, the solution is still in very early stages in a new, underdeveloped market, but management is optimistic based on early industry feedback and aims to become the market leader in the U.S. over time, though it is too early to give specific subscriber, revenue, or market share targets.