PowerFleet, Inc. reported significant financial developments for the three months ended June 30, 2024, following its acquisition of MiX Telematics on April 2, 2024. Total revenues surged to $75.4 million, marking a 135% increase from $32.1 million in the same period of 2023. This growth was driven primarily by service revenues, which rose by 170% to $56.7 million, largely due to MiX Telematics contributing $34.9 million. Product revenues also increased by 69% to $18.7 million, with the acquisition adding $8.8 million.

Despite the revenue growth, PowerFleet's net loss attributable to common stockholders widened to $22.3 million, or $(0.21) per share, compared to a loss of $6.2 million, or $(0.17) per share, in the prior year. The increase in net loss was attributed to a substantial rise in operating expenses, which escalated by 218.5% to $57.9 million, primarily due to costs associated with the MiX acquisition. Gross profit improved to $39.6 million, with a gross profit margin of 52.6%, up from 49.9% in the previous year.

The company’s total assets increased significantly from $308.7 million as of March 31, 2024, to $684.9 million by June 30, 2024, largely due to the addition of MiX Telematics' assets. Goodwill from the acquisition rose to $300.8 million, reflecting expected synergies and enhanced revenue growth. Total liabilities also increased from $179.8 million to $294.4 million during the same period.

PowerFleet's cash and cash equivalents stood at $30.2 million as of June 30, 2024, down from $24.4 million at the end of March. The company reported net cash used in operating activities of $7.6 million, compared to $0.5 million in the same period last year. In terms of financing, net cash used amounted to $89.5 million, primarily due to the redemption of Series A Preferred Stock for $90.3 million.

The company has acknowledged material weaknesses in its internal control over financial reporting, particularly in areas related to business acquisitions and goodwill valuation. A remediation plan is underway to address these deficiencies. Overall, while PowerFleet experienced substantial revenue growth, the financial impact of the MiX acquisition and increased operating costs contributed to a larger net loss for the quarter.