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Investing.com -- TomTom (AS:TOM2) shares traded higher Tuesday after the company raised its full-year revenue and cash flow outlook, despite posting lower revenue and a wider loss in the second quarter.
The company updated its full-year 2025 guidance, now expecting group revenue between €535 million and €565 million, compared with the previous range of €505 million to €565 million.
Location Technology revenue is projected at €465 million to €490 million. Free cash flow is forecast at around 5% of group revenue, excluding restructuring-related payments.
Revenue for the three months ended June 30 fell 4% year-on-year to €146.2 million, down from €152.2 million in the same period last year.
Location Technology revenue dropped 2% to €126.2 million, while Consumer revenue declined 15% to €20 million.
Within Location Technology, Automotive revenue was €86.4 million, down 1% from a year earlier.
Operational revenue for Automotive, which adjusts for deferred revenue movements, declined 13% to €77.3 million, driven by lower vehicle volumes and the wind-down of certain car lines.
Enterprise revenue decreased 4% to €39.9 million, affected by foreign exchange impacts and the absence of a prior-year contract with the Australian government.
TomTom reported a net loss of €23.6 million, compared with a €2.3 million loss in the second quarter of 2024.
Operating loss widened to €19.8 million from €5.2 million. Operating expenses rose 17% to €148.1 million, primarily due to a €25 million restructuring charge.
Excluding this charge, expenses declined slightly, helped by cost capitalization and lower amortization.
Gross profit rose 6% to €128.3 million, and gross margin increased to 88% from 80%, reflecting the absence of certain non-recurring costs recorded a year earlier.
Free cash flow turned positive at €13.9 million, up from a €4.7 million outflow in the same quarter last year, largely due to improved working capital. Net cash stood at €266.5 million, compared with €264.0 million at the end of 2024.
As part of a strategy shift toward modular, product-focused offerings, TomTom announced the elimination of about 300 roles.
The company expects annualized cost savings of €35 million from the restructuring, which was announced at the end of June.
In the quarter, TomTom launched its Model Context Protocol Server and announced a partnership with electric vehicle maker smart.
The company also reported new commercial deals in the enterprise segment, including IFS and NextBillion.ai.
EBIT for Location Technology improved to €11.7 million from a loss of €12.6 million, supported by a higher gross margin and the capitalization of 3D map development costs. Consumer EBIT declined to €3.9 million from €5.5 million.
Deferred revenue at the end of June totaled €421.3 million, down from €434.4 million at the end of March and €432.5 million at year-end.