Ituran Location and Control Ltd.

Ladies and gentlemen, thank you for standing by. My name is Kenny Green, I am part of the Investor Relations team at Eteron. I would like to welcome all of you to Eteron's Results Zoom webinar and I would like to thank Eteron's management for hosting this call. All participants other than the presenters are currently muted and following the formal presentation I'll provide some instructions for participating in the live Q&A session. I would like to remind everyone that this conference call is being recorded and the recording will be available from the link in the earnings press release and on Ituron's website from tomorrow. With me today on the call are Mr. Eyal Sharatsky, CEO, Mr. Udi Mizrahi, Deputy CEO and VP Finance, and Mr. Eli Kammer, CFO of Ituron. Eyal will begin with a summary of the quarter's results, followed by Eli with a summary of the financials. We will then open the call for the question and answer session. You should have all by now received the company's press release. If not, please view it on the company's website. I'd like to remind everyone that the safe harbour statement in today's press release also covers the contents of this conference call and the associated presentation. And now, Eyal, would you like to begin, please?

Thank you, Kenny. I'd like to welcome all of you to our third quarter 2025 results call, and thank you for joining us today. We are very happy with the results of the third quarter, which was strong across all key parameters. In particular, we are very pleased with the revenue growth. And we continue to grow, driven by our long-term efforts and success in bringing existing as well as new customers value-adding telematics and connected car products and services. In addition, we are also constantly bringing additional OEM partners to our growing roster, an example of which was Stellantis last quarter, and we are in active discussions with others. Our results show an ongoing expansion across our target geographies in our large subscriber base of over 2.5 million subscribers. In the third quarter, we added 40,000 net subscribers. We are on track to add between 220 and 240,000 net new subscribers in 2025, which will represent a very strong year of subscriber growth. We had a good third quarter, and I want to summarize some of our activities which contribute to our growth and success. We continue to see solid demand for our location-based products and telematics services in all our regions, as well as traction from our new initiative and services. In Israel, the high car theft rate in Israel continues to provide strong demand for our services in the country, and we are reaching additional new subscribers from parts of the market that were previously untapped by us, such as lower-priced new vehicles or the second-hand car market. Our usage-based insurance business in Israel is also seeing good traction and bringing continued strong subscriber growth. In Latin America, we continue to expand our reach. Our new product targeting the motorcycle market is gaining strong traction across South America, especially on the back of our partnership with BMW Motorrad in Brazil. Motorcycles are significant market opportunity. being the top mode of transportation in many parts of the world. It significantly increased our total addressable market. With Brazil as our starting point, we plan to scale into other high-growth motorcycle markets through partnerships with local OEMs as well as sales to the aftermarket. Our e2Run Mob smart mobility platform is a unique technology and solution enabling remote vehicle access, real-time telematics, and efficient fleet management for shared mobility and rental fleet applications. e2Run Mob was launched first in Brazil and has been gaining solid traction here, where it is being adopted by a growing number of fleet operators and rental companies. Based on the strong market interest and success we've seen in Brazil, we are now introducing it to the United States market. We recently established Operation 421 Mob in the United States. We have identified a strong need in the US for our solution, particularly among the thousands of small to medium car rental companies, which include hundreds of thousands of cars. These companies could benefit from this type of technological solution, making the rental process more user-friendly and efficient. This creates a new long-term avenue of growth alongside our core telematics and subscriber-based businesses. Ituran generated a high level of cash in the quarter, amounting to $21.3 million in operating cash flow during the quarter. Due to our continued profitability and strong cash generation, we declared a dividend of $10 million to shareholders for the quarter. I remind you that at the end of last year, we increased our dividend policy by 25%, from issuing $8 million per quarter to $10 million per quarter. This represents 50 cents per share. Our dividend yield on an analyzed basis represents a return of around 5%, which is a very solid return from a strong and stable company. During the quarter, we purchased $1.5 million in shares under our buyback program. As of the end of the quarter, we had around $5.2 million still available under this program. We see our ongoing dividend and buyback as a reward to our shareholders for their loyalty and long-term support of our company. And in summary, we remain very pleased with e2run's performance in the third quarter, and more generally, e2run's long-term and ongoing performance. At the same time, we look for more avenues to bring further growth to our business across all our regions, and the recent launch of e2run Mob is an example for this. We constantly aim to bring new products and services to both existing customers and new customers, as well as partnership with new OEMs, new financing companies, and other leading companies. 2025 marks 20 years as a public company and 30 years as a company. We look forward to opening the Nasdaq market on Tuesday next week, November 25th, and we thank both the Nasdaq as well as our shareholders for the long-term support of our business. And with that, I hand over to Eli. Eli, please go ahead.

Thanks, Eyal. I will provide a short summary of the financial results. You can find the more detailed result that we issued in the press release earlier today. Third quarter revenues were $92.3 million, an 11% increase compared with $83.5 million in Q3 of last year. Subscription fees were $67.6 million up 13% year-over-year and representing 73% of total revenues. Product revenues were $24.7 million up 4% year-over-year. Our subscriber base reached 2,588,000 at quarter end and increased of 40,000 in the quarter. Year over year, the subscriber base grew by 219,000. The geographic breakdown of revenues in the third quarter was as follows. 55%, Brazil 23%, rest of world 22%. EBITDA was $24.6 million, 26.7% of revenues, up 6% year over year, compared with EBITDA of $23.3 million, 27.9% of revenues in the third quarter of last year. Net income for the third quarter was $14.6 million or diluted EPS of $0.74, an increase of 7% compared to $13.7 million or diluted EPS of $0.69 in the third quarter of last year. Cash flow from operations for the third quarter of 2025 was $21.3 million. As of September 30, 2025, the company had net cash including marketable securities of $93.1 million. This is compared with net cash including marketable securities of $77.3 million as of year-end 2024. The Board of Directors declared a dividend of $10 million for the quarter. The current dividend takes into account the company's continuing strong profitability, ongoing positive cash flow, and strong balance sheet. During the quarter, we purchased $1.5 million in shares under our buyback program. As of the end of the quarter, we had around $5.2 million available under this program. And with that, I'd like to open the call for the question and answer session. Operator?