Ituran’s Earnings Call: Subscriber Growth & Record Revenue

Ituran Location And Control ((ITRN)) has held its Q1 earnings call. Read on for the main highlights of the call.

In the recent earnings call, Ituran Location and Control expressed a generally positive sentiment, celebrating significant achievements such as surpassing a major milestone in subscriber growth, securing a strategic OEM agreement, and achieving record financial performance. Despite these accomplishments, the company acknowledged challenges, including currency fluctuations and a lower average revenue per user (ARPU) from the new Stellantis agreement.

Subscriber Base Milestone

Ituran reached a significant milestone by surpassing 2.5 million subscribers, with a net addition of 99,000 new subscribers in the first quarter of 2025. This growth underscores the company’s successful strategies in expanding its subscriber base and enhancing its market position.

New OEM Agreement with Stellantis

The company signed a new telematics service agreement with Stellantis, the largest car manufacturer in Latin America. This partnership has been a substantial contributor to the recent surge in subscriber numbers, reflecting Ituran’s strategic focus on collaboration with leading automotive manufacturers.

Record Revenue and Profit Growth

Ituran reported record revenues of $86.5 million for the first quarter, marking a 2% increase year-over-year. In local currencies, this growth was even more pronounced at 7%. Additionally, EBITDA rose by 4% to $23.3 million, highlighting the company’s robust financial health and operational efficiency.

Strong Cash Flow and Dividend

The company generated an operating cash flow of $15.5 million in Q1 2025 and declared a $10 million dividend, representing a 6% annualized dividend yield. This reflects Ituran’s commitment to delivering value to its shareholders through consistent financial returns.

Impact of Currency Fluctuations

Currency fluctuations, particularly the strengthening of the U.S. dollar, had a deflating effect on Ituran’s financial results when translated into U.S. dollars. This challenge underscores the importance of managing currency risks in global operations.

Lower ARPU for New OEM Deal

The initial agreement with Stellantis resulted in a lower ARPU compared to Ituran’s average. This was attributed to the specific nature of the service agreement, which highlights the need for strategic pricing and service structuring in OEM partnerships.

Forward-Looking Guidance

Looking ahead, Ituran’s management provided optimistic guidance, projecting a significant increase in the subscriber base with expectations of adding 220,000-240,000 net new subscribers in 2025. Financially, the company anticipates continued growth, supported by record revenues and a strong focus on shareholder value creation through dividends.

In summary, Ituran Location and Control’s earnings call conveyed a positive outlook, with notable achievements in subscriber growth and financial performance. While challenges such as currency fluctuations and lower ARPU from new agreements were acknowledged, the company’s strategic initiatives and forward-looking guidance suggest a promising trajectory for continued success.