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Investing.com -- TomTom NV (AS:TOM2) on Tuesday reported third-quarter results that exceeded expectations, with the navigation technology company posting a profit of €9.1 million compared to consensus estimates of a €1 million loss.
The company achieved this despite a slight revenue decline as it benefited from improved margins and lower operating expenses.
Revenue for the quarter reached €136.9 million, marginally above the company-provided consensus of €136 million but down 3% from €141 million in the same period last year.
The company’s operating profit (EBIT) was €8.4 million, significantly outperforming the €2 million consensus estimate and marking a substantial improvement from the €4.1 million loss reported in Q3 2024.
TomTom’s Automotive operational revenue showed particularly strong performance, increasing 22% YoY to €85 million, partly driven by increased car production volumes and the ramp-up of new car lines. The company’s gross margin improved to 89% from 87% a year earlier, reflecting a more favorable product mix with higher-margin content and software revenue.
"Recent adjustments to our organizational structure have enhanced our focus and efficiency across the business," said Harold Goddijn, TomTom’s CEO. "By combining advanced technologies such as AI together with our modular product strategy, we are able to deliver greater value to our customers."
Free cash flow, excluding restructuring payments, was €16.6 million, significantly above the €2 million consensus estimate. The company ended the quarter with a net cash position of €267 million.
Looking ahead, TomTom now expects its full-year group revenue and Location Technology revenue to reach the upper end of its guided range, with free cash flow projected at around 5% of group revenue.
"This quarter, our Automotive operational revenue showed encouraging growth, partly driven by the ramp-up of new car lines we supply," said Taco Titulaer, TomTom’s CFO. "We delivered a positive operating result and solid free cash flow in a dynamic market environment."