PowerFleet, Inc.

Greetings. Welcome to the Power Fleet's first quarter 2027 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, David Wilson, CFO at PowerFleet. You may begin.

Thanks, Alfreda. Good morning, everyone. This presentation contains forward-looking statements within the meaning of federal securities laws. Forward-looking statements include statements with respect to PowerFleet's beliefs, plans, goals, objectives, expectations, anticipations, assumptions, estimates, intentions, and future performance, and may involve known and unknown risks, uncertainties, and other factors which may be beyond PowerFleet's control, which may cause its actual results, performance, or achievements to be materially different from future results. Performance or achievements expressed or implied by such forward-looking statements. All statements, other than statements of historical facts, are statements that could be forward-looking statements. For example, forward-looking statements include statements regarding prospects and additional customers, potential contract values, market forecasts, projections of earnings, revenue synergies, accretion, or other financial information, emerging new products and plans, strategies and objectives of management for future operations, including growing revenue, controlling operating costs, increasing production volumes, and expanding business with core customers. The risks and uncertainties referred to above are not limited to risks detailed from time to time in PowerSleet's filings with the Securities and Exchange Commission, including PowerSleet's annual report on Form 10-K for the year ended March 31, 2026, and subsequent 10-Q filings. These risks could also cause results to differ materially from those expressed in any forward-looking statements made by on behalf of PowerFleet. Unless otherwise required by applicable law, PowerFleet assumes no obligation to update the information contained in its presentation and expressly disclaims any obligation to do so, whether as a result of new information, future events, or otherwise. I now hand the call over to Steve.

Steve? Good morning, everyone, and thank you for joining us. The momentum we've been building over the last several quarters has accelerated. Our pipeline is strong and customer demand has exceeded our expectations. Next slide, please. Let me start with the breadth and scale of new business. In Q1, we were selected as vendor of choice by a European headquartered construction leader operating across 26 countries to significantly expand its deployment with us into AI premium video, both on the road and in the yard. A multi-million dollar ARR deal and a strong proof point of the land and expand model we've built. Our on-site business continues to gain traction with strong cross-sell expansion quarter over quarter as we drive adoption across our existing customer base. Predominantly in North America, we secured a $2 million expansion with a Fortune 500 manufacturing leader, a $1.3 million deployment with a national transportation and logistics enterprise, and a $1 million win with a national automotive technology leader. Twelve Fortune 500 companies expanded their onsite footprint this quarter, and 10 global Fortune 500 customers broadened their AI video adoption. AI video bookings increased 20% sequentially. Sixteen diverse industries delivered enterprise wins above $100,000 in total contract value this quarter. On to the next slide, please. The major South African contract has seen material acceleration since the last time we spoke, a testament to the strength of our solution capabilities and strong execution of our sales efforts. We came into this contract expecting $20 to $30 million in ARR to ramp over an 18 to 24-month period. We now have in excess of $27 million in ARR required for near-term activation with more pipeline building. On a five-year basis, That puts the potential total contract value above the top end of our original expectations. To put this in context, at this point in the year, we'd originally anticipated 10,000 assets to be set for installation. As of today, we have over 70,000 vehicle installations to deploy in the near term, and we expect this to increase to between 80,000 to 90,000 assets over the next couple of quarters. That represents roughly seven to nine times the deployment volume we originally expected to be addressing at this stage of the program. It's a substantial and exciting undertaking that requires focus to ensure smooth execution. This velocity presents choices. We therefore have taken the decision to forego a portion of the current and projected revenue base, predominantly in South Africa, that we have deemed to be non-strategic. It frees more capacity to deploy 90,000 vehicles at the pace this contract demands. It de-risks delivery on our largest and most important customer relationships in the region, and it removes the operational complexity that would otherwise compete with this rollout for our team's focus. This targeted reprioritization from lines of business that are consuming operational capacity, working capital, and management attention maximizes our ability to deliver well. Sharp execution on the first 90,000 vehicles increases our odds of winning more of the 150,000 total addressable fleet and gives us room to sell incremental services to this new base. Turning to Q1, the underlying performance was solid and bookings were strong. Normalizing for the South Africa actions I just described, we delivered double-digit ARR growth. In addition, we expanded gross margin and adjusted EBITDA year over year. The reported numbers this quarter reflect two discrete items. Neither changes our underlying trajectory. Firstly, South African revenue was approximately $1.6 million lower as the company began the reprioritization I've just described. Secondly, late in the quarter, we experienced a production constraint affecting a single product line related to a compatibility issue with a new component. This delayed approximately $3.2 million of product revenue in the quarter. We've identified the issue and the solution, and production is being restored. Importantly, the underlying customer demand and orders remain intact, and this issue does not impact the deployment of our major South African contract. Given the timing of the recovery, the company anticipates that some associated Q2 revenue may shift into Q3, With the full amount expected to be fully captured within the fiscal year. David will shortly update you in detail on the in-year guidance amendment. Our revised guidance reflects a single item. Our deliberate decision to forego some non-strategic revenue ahead of the ARR ramp from the substantially larger new contract. Our updated guidance reflects that timing gap. We believe this decision strengthens the quality, scale, and long-term economics of the revenue base we are building. We also expect the revenue CAGR from fiscal 2026 to fiscal 2028 to remain consistent with our prior expectations, with stronger growth in fiscal 2028 fueled by the ramp of the South African project. We anticipate annualized Q4 27 revenue of approximately $495 million, With adjusted EBITDA margins of approximately 27%. Overall, our land and expand strategy is compounding, bigger deals, broader adoption, and deeper wallet share with the customers we already have. Our response to the acceleration in South Africa demonstrates the operating discipline we're bringing to the business, prioritizing resources towards the opportunities with the greatest strategic and economic return. Our optimization programs are running to schedule, With our focus remaining on cash flow and deleveraging. As we continue to compound the business, investing in talent is also a key component for future success. Next slide, please. We continue to strengthen our executive team, and I'd like to share two important additions. Firstly, I'm delighted to announce that Paul Walty joins PowerFleet this week as our president and CFO. Paul brings 25 years' experience in finance and technology, including as both CFO and CEO of 2U and CFO of Newstar. Paul has acted as a strategic advisor to the business over the last few months, and I'm delighted that he's able to hit the ground running to help spearhead our future growth. As President and CFO, Paul will combine financial leadership with a broader mandate around operating execution, capital allocation, and the enablement of the next phase of profitable growth. I want to sincerely thank David Wilson for his significant contribution and partnership through a period of extensive transformation for the company. David will serve in a consultancy role for the next few months to support Paul with a smooth transition. Secondly, I'm excited to announce that Vishal Vallabha has joined PowerFleet as Chief AI Officer. Vish has also been acting as a strategic advisor to the business in recent months on AI transformation. Vish brings over 20 years of experience as a senior technology and AI executive. He's held CTO and chief data and AI officer roles at large global businesses, including Freeman Company, Lumen Technologies, and he has significant domain expertise from his time as CTO of TomTom Telematics. He's led enterprise AI, cloud, and platform modernization programs tied directly to commercial growth and margin expansion. Most recently, as founding partner and CTO of NextGen AI, he's led AI-enabled transformation engagements for major clients, including Microsoft and Bain Capital. This is going to be central to how we scale our AI-first platform strategy. So as we execute on the plan, we're delighted to be able to attract this caliber of talent. Both Paul and Vish have already added significant value to the business, having worked closely with the team as trusted advisors over the last few months, and we're thrilled to now have them on board. With that, I'll turn it over to David.