MiX Telematics records best quarter since start of the pandemic

Fleet management and vehicle-tracking company MiX Telematics, which operates in about 120 countries, has recorded its best quarter since the start of the Covid-19 pandemic driven by enterprise clients and expects growth in subscribers from a number of newly signed deals. 

MiX is a software-as-a-service company, specialising in fleet management, vehicle tracking, and telematics. Listed on the New York Stock Exchange and JSE, it competes locally with the likes of Altron’s Netstar and Karooooo’s Cartrack. 

“MiX’s third-quarter performance reflected an improved demand environment, particularly for enterprise opportunities. We added 20,300 subscribers in the quarter, our best performance since the pandemic,” said CEO Stefan Joselowitz in a note to shareholders on Thursday.

Total revenues grew 6.2% to $36.2m (R553.74m) for the quarter to end-December, compared to $34.1m in the previous comparable period. Subscription revenue represented 83.7% of total revenue during the period, coming in at $30.3m, an increase of 4.3% compared to $29.1m for the previous third quarter. 

The majority of MiX revenues are derived from currencies other than the US dollar. The company says the weakening of the dollar against these currencies, particularly against the rand, positively affected earnings reported in the US currency. 

Total subscribers now stand at 790,500.

“Now that we have returned to sustainable revenue growth, we are increasingly optimistic about our ability, over the longer term, to deliver our stated growth and profitability targets,” said Joselowitz.

The company is basing much of its growth expectations on recently signed deals. “In this quarter, we’ve seen large deal activity,” Joselowitz told investors during an earnings call on Thursday.

“We signed a significant transaction with an emerging mobile fintech company that provides revenue-based vehicle financing to entrepreneurs across parts of Africa, Europe, and Asia.”

“Under this multiyear contract, they will deploy our premium solution, including MiX Vision artificial intelligence [AI] to more than 12,500 vehicles and will be purchasing the associated hardware upfront.”

The MiX boss said this is an example of the opportunity to be “the technology partner of choice to cutting-edge companies, introducing new and disruptive ways of doing business”.

MiX has signed another deal with an existing utility client to add MiX Vision — the company’s AI-based video telematics system — to its fleet of 11,000 vehicles.

Valued at R4.31bn, the company reported adjusted earnings before interest, tax, depreciation, and amortisation (ebitda) of $7.1m, at a 19.6% margin, with net income for the period at $600,000. It ended the quarter with cash and cash equivalents of $35.9m.

A dividend of 4c per share was declared for the quarter. 

A little traded stock, MiX’s share price rose 15% on Thursday to close at R8.24. 

Update: February 3 2022
This story has been updated with new information. 

gavazam@businesslive.co.za