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TomTom NV reported its third-quarter results for 2025, revealing a slight decline in group revenue to €137 million from €141 million year-over-year. Despite this, the company experienced a significant operational increase in its automotive sector, driving positive investor sentiment. TomTom’s stock price saw a modest increase of 1.02% in recent trading. With a market capitalization of €818 million, InvestingPro analysis suggests the stock is currently undervalued, trading near €6.61. The company maintains a solid Altman Z-Score of 3.84, indicating strong financial stability.
Key Takeaways
- Group revenue decreased slightly to €137 million.
- Automotive revenue rose by 22% operationally.
- Gross margin improved to 89%.
- Free cash flow reached €70 million, excluding restructuring charges.
Company Performance
TomTom’s overall performance in Q3 2025 showed mixed results. While the company saw a decline in group revenue, its automotive segment posted a notable operational increase of 22%, signaling strong adoption rates for its navigation products. The enterprise segment is growing gradually, with stable demand from government and intelligence sectors. The company also expanded its partnership with Hyundai, enhancing its position in the automotive market. According to InvestingPro data, TomTom maintains an impressive gross profit margin of 87.37% and a healthy current ratio of 1.64, demonstrating operational efficiency and strong liquidity position.
Financial Highlights
- Revenue: €137 million (down from €141 million YoY)
- Location Technology Revenue: €180 million
- Automotive Revenue: €85 million (22% operational increase)
- Enterprise Revenue: €39 million
- Gross Margin: 89% (up from 87% last year)
- Free Cash Flow: €70 million
Outlook & Guidance
TomTom has increased its full-year group revenue expectations, forecasting revenue at the upper end of its previous guidance. The company anticipates significant revenue from high-definition maps in the second half of 2027 and 2028. Free cash flow is expected to represent 5% of group revenue, with continued focus on growing the enterprise segment.
Executive Commentary
CEO Harold Goddijn emphasized the role of maps in enhancing safety and driving behavior, stating, "The map becomes a safety device as much as an active input into self-driving behavior." He also highlighted TomTom’s ability to construct maps at scale and quality, adding, "We can now construct those maps at scale, at quality, and add detail for the whole road network."
Risks and Challenges
- Currency Movements: Fluctuations could impact profitability.
- Competition: Increasing competition in the navigation and mapping sectors.
- Market Dynamics: The dynamic nature of the automotive market presents both opportunities and challenges.
- Economic Conditions: Broader economic pressures could affect customer spending.
TomTom’s Q3 2025 performance showcases its resilience in the automotive sector, despite a slight dip in overall revenue. The company’s strategic initiatives and partnerships appear to position it for future growth, particularly in the realm of self-driving technology and enterprise solutions. InvestingPro subscribers can access detailed analysis of TomTom’s growth prospects, including comprehensive financial health scores and expert insights. The Pro Research Report, available for over 1,400 stocks including TomTom, provides deep-dive analysis and actionable intelligence for informed investment decisions.
Full transcript - TomTom NV (TOM2) Q3 2025:
Mel, Conference Call Operator, TomTom: Welcome to TomTom’s third quarter 2025 results conference call. At this time, all participants are in a listen-only mode. We will be facilitating a question and answer session towards the end of today’s prepared remarks. At that time, if you would like to ask a question, you may do so by pressing 11 on your telephone keypad, where you will hear an automated message advising your hand is raised. If you are calling in via Microsoft Teams, please ensure you press 11 from the keypad where the call is made and not from your Teams screen in order to enter the queue. Please note that this conference is being recorded. I will now turn the call over to your host for today’s conference, Claudia Janssen, Group Controller, Head of Investor Relations. You may begin.
Claudia Janssen, Group Controller, Head of Investor Relations, TomTom: Thank you, Mel, and good afternoon, everyone, and welcome to our conference call. In today’s call, we will discuss the third quarter 2025 operational highlights and financial results with CEO Harold Goddijn and CFO Taco Titulaer. Harold will begin with an update on strategic developments. Taco will then provide an overview of financial performance and outlook. After their prepared remarks, we will open the line for your questions. As always, please note that safe harbor applies, and with that, Harold, let me pass it over to you.
Harold Goddijn, CEO, TomTom: Thank you very much, Claudia, and good afternoon, everyone. Appreciate you joining us today. I’ll give you a short strategic and operational update for the third quarter, and then I hand over to Taco for the financials. This quarter we launched our next-generation automotive navigation application, which is a ready-to-use but also configurable and integrated solution for OEMs that enables quick deployment of high-quality navigation systems. The product sets a new benchmark for user experience, quality, and flexibility in the industry, and we see the product generating strong interest. The release is an important milestone in our quest to deliver a standardized product portfolio. The automotive market remains dynamic, and we are encouraged by several promising developments. We announced the expansion of our partnership with Hyundai, and we secured a multi-year agreement to provide real-time traffic and speed camera services for vehicles across Europe.
There are also promising discussions around automated driving use cases, and our continued investment in mapping and next-generation solutions positions us well to support our partners as the industry evolves. We are encouraged by the progress we’re making, and we remain confident in our long-term prospect within the automotive sector. Enterprise is progressing, though adoption is building more gradually, with U.S. dollar currency movements adding some pressure. We continue adding new customers and broadening the customer base. We will make it easier for developers and for businesses to access our data, and this will be a key driver of future growth. Taco will now walk you through the financials, so with that, I hand it over to you, Taco. Thank you.
Taco Titulaer, CFO, TomTom: Thank you, Harold. Before discussing our outlook, I’ll walk you through our financial results and highlight a few key developments. After my prepared remarks, we will open the line for your questions. Group revenue for the third quarter was €137 million from €141 million in the same period last year and location technology revenue totaled €180 million. Let me briefly touch on performance business by business, starting with automotive. Automotive operational revenue saw a strong year on year increase of 22% to €85 million. This increase can be attributed to the ramp up of new vehicle lines we supply, a recovery in automotive production volumes, especially within the U.S., and certain royalty reports related to previous periods which amounted to roughly €5 million. Automotive IFRS revenue came in at €80 million, a 2% increase compared with the same period last year.
The difference between the operational reported trend is partly due to royalty reports from prior periods that will be recognized later. Like mentioned in previous quarter already, on a year to year basis, the trends of automotive IFRS and operational revenue are much more aligned. IFRS revenue typically shows a more stable pattern, while operational revenues can be influenced by periodic swings that are neutralized when looking at longer periods of time. Enterprise revenue was €39 million. Adjusted for constant currency, we maintained stable revenue quarter on quarter. We realized a strong gross margin of 89%, up from 87% last year. The year on year increase in gross margin primarily reflects a greater share of high margin content and software revenue within our overall revenue mix. Our operating expenses were €140 million, reflecting a marked year on year decrease.
This decrease was mainly driven by strong cost discipline, the capitalization of our mapping development cost, and lower amortization charges. Free cash flow was an inflow of €70 million in the quarter compared with €50 million last year. For completeness, the €70 million is excluding €14 million restructuring charges paid during the quarter. We expect the majority of the remaining €11 million we provided for will be paid out in the next two quarters. Our net cash position at the quarter end was €267 million, equal to the end of last quarter and up from €264 million at the end of 2024. Having covered our results, let me touch on our outlook. Revenue performance this year so far was solid. Accordingly, we are increasing our expectations. We now forecast that both full year group revenue and location technology revenue will approach the upper end of our previously communicated guidance range.
Free cash flow is expected at around 5% of group revenue. Our business fundamentals are strong. We are beginning to see how the stronger emphasis on our product led approach is positioning us well for long term growth. With that, we’re now ready to take your questions. Mel, please start the Q and A session.
Mel, Conference Call Operator, TomTom: Thank you. We will now begin the question and answer session. If you have a question, please press star 11 on your telephone keypad, where you will hear an automated message advising your hand is raised. If you are calling in via Microsoft Teams, please ensure you press star 11 through the keypad where the call is made and not from your Teams screen in order to enter the queue. Our first question comes from the line of Marc Hesselink from ING. Please go ahead. Your line is open.
Yes, thanks for taking the question. I have three, please. First, on automotive.
Quite good momentum, especially.
If you take into account the weakness in auto end markets, I can understand that there’s a difference between auto end markets and the production levels, but it also seems that you’re gaining some share there. You also point out the automated driving opportunity.
Taco Titulaer, CFO, TomTom: Can you maybe point towards the building?
Blocks that we have discussed before, as in how much share gains part of the building blocks. How much is adoption rates because of maybe automated driving functions? Maybe if you can talk about these separate parts, please.
Yeah, I think it’s a bit of a mix to be honest. In the third quarter, we saw ramp ups of certain car lines that included existing customers, but also some new customers.
Harold Goddijn, CEO, TomTom: There were also some ramp downs of customer contracts.
Taco Titulaer, CFO, TomTom: I think the increase that you are experiencing is probably mostly attributed to the adoption rate. The overall car market is stable at best. Market shares we do gain here and there, but I don’t think that is reflected in Q3 results. The main driver for a little bit stronger performance than the car market overall is you need to look towards adoption rates for the.
Claudia Janssen, Group Controller, Head of Investor Relations, TomTom: Av.
Taco Titulaer, CFO, TomTom: You have the EV opportunity, and of course that is a further increase in adoption rates. You also have automated vehicles. I think that is not significant in.
Harold Goddijn, CEO, TomTom: Today’s P&L results, but it.
Taco Titulaer, CFO, TomTom: Is a huge part of the order intake, what we see coming in. Okay, so you’re already seeing those orders coming in.
I mean that’s possible.
Harold Goddijn, CEO, TomTom: Yeah, for sure.
Taco Titulaer, CFO, TomTom: That is probably two, three years out. That will contribute to RP now.
Harold Goddijn, CEO, TomTom: Okay.
Okay, clear. Thanks. Then Enterprise, I think you had very strong momentum last year. This year, if you try to, like for like, currency is still a bit, a bit slower. I would have expected with the initial ramp up with Orbis Maps that you would gradually see this picking up. Also, maybe what you said before, maybe some of the bigger clients which have longer lead times coming through, is that still what you expect? Why is it a bit slower than the initial expectations?
Yeah, it’s a bit slower, you’re right. It’s also a bit slower than I had hoped. There’s a lot going on. It’s not that there’s no activity. I think we will continue to grow the enterprise segment. We see in the mix two things. We see a decline of one larger customer. I think that’s well documented. That’s been filled in by a number of smaller customers, so the overall customer base is growing. There’s quite a lot in the pipeline and that will probably fall either end of this year or beginning of next year. If we want to enable the next generation of growth, also things need to happen on the product portfolio. The access to our products needs to be made easier. That’s all planned for the beginning of next year and we are confident that the enterprise segment will continue to grow in the mid term.
Thanks.
The final question I have is on the gross margin. I think it’s clearly a good mix effect, but also more, less customization structurally going forward. Is it fair to assume that eventually location technology.
Will be almost.
Like 100% gross margin business given that you’re going to sell the same product to all the clients? Or is that, or am I missing something there?
In some cases there are license costs, but they are not massive. That’s a small % of sales revenue. What you will see increasingly is the cost served when it’s concerned online solutions. There’s a cloud cost element coming in and that will grow over time, not massively, but it will grow. You’re right that it will start.
Taco Titulaer, CFO, TomTom: With the nine very soon, starting next year probably, it will continue to grow, but it will not reach the 100%.
Harold Goddijn, CEO, TomTom: Okay, very clear.
Thank you.
Mel, Conference Call Operator, TomTom: Thank you. We’ll now move on to our next question. Our next question comes from the line of Robert Fink from Kepler Cheuvreux. Please go ahead. Your line is open.
Thank you very much. I have a question about the outlook. Encouraging that TomTom improves its outlook to the upper end of the previously tightened range. I’ll be interested to hear why you’ve decided to kind of maintain the upper range of your revenue outlook as you are approaching it, and why you have not decided to maybe increase the upper limit of the guided revenue rate for fiscal year 2025 maybe. Second question. Bigger picture question on self driving. How do you see your Automotive customers using TomTom’s HD maps for self driving type of applications? Of course we see the emergence of players like Waze which are pursuing more autonomous learning based type of approach. Maybe a different way of interacting with maps. Is that maybe transforming how these automotive autonomous players are interacting with your map technology?
Taco Titulaer, CFO, TomTom: Yeah.
Do you maybe see more of an emphasis on certain functionalities over others? How is that picture of automated driving and how that interacts with your technology? How is it evolving from your perspective?
Yeah, let me touch on your first question and then offer to Harold for your second question. Yeah, the guidance. If we look at the three revenue generating units, there will be some sequential improvements expected both from automotive and enterprise, although for both cases will be modest. The last one, consumer, will decline as it is doing for the last period. If you add it all up.
Harold Goddijn, CEO, TomTom: I think we are still within the provided range and that’s also how we guide it. Let me handle the self driving part of business. We see carmakers now fully preparing for next generation of level of self driving. We expect it to come to market in 2026, 2027, higher level of autonomy. The map plays in all the use cases that we know, provides two different functions. First, it’s providing an extra data source to the self driving robot. That means that you can achieve a higher degree of reliability, less interference of the driver. An important measure is human interference per km or per 1,000 km. With a map you can improve that number. Map becomes a safety device as much as an active input into the self driving behavior.
The second important part where the map is used is to explain to the driver what the robot is doing and why it’s doing it, what it is seeing around it, why it makes a certain decision. That is an important input for the driver to understand what’s happening. That provides comfort but also safety as well. It’s for those two functions that the map are used and we see interest for the users that map across the range, across the whole ecosystem. Both from the OEMs but also from the software makers, whether based in the U.S. or in Europe or in China, all builders of self driving software are looking to use a map in one way or another. With the notable exception, as you said, Waze, that’s the U.K. outfit. Everybody else seems to be relying on maps to give that extra level of security and safety.
And predictability.
Okay, thank you very much.
I think on top of that, we have quite an innovative approach to building those maps. We’re coming out of a period of HD thinking that didn’t quite work. It was too expensive, didn’t scale. With new technologies and new data available to us, we can now construct those maps at scale, at quality, and add detail for the whole road network. That’s a different way of looking at those maps as well. They become more economic to build and to maintain, and their application is over a much wider set of use cases. Technology is really progressing quickly here.
Thank you.
Thank you.
Maybe a different question on regions in general across the location technology segments. Of course, with Orbis Maps, you have kind of improved your offering globally, particularly in some emerging markets. I think many of your customers are global, but in some cases you only service them in certain regions like Europe or North America. Do you see some momentum in your conversations to service customers more globally? Is that something which is happening or is that still early stage?
I think the quality of our map is really starting to shine across three dimensions: coverage, detail, and freshness. We put a lot of effort into that, and now we also start to get feedback from the market that we have a superior maps product. We hear that from customers who are testing those maps and doing independent verification in order to make buying decisions for the future. I think that strategy is working, and we start to get some recognition for that as well. That gives us confidence for order intake and mid-term revenue growth in the automotive segment as well.
Perfect. Thank you.
Mel, Conference Call Operator, TomTom: Thank you. Once again, if you have a question, please press star 11 on your telephone keypad, where you will hear an automated message advising your hand is raised. If you are calling in via Microsoft Teams, please ensure you press star 11 from the keypad where the call is made and not from your Teams screen in order to enter the queue. We’ll now move on to our next question. Our next question comes from the line of Wim Gilles from ABN AMRO ODDO BHF. Please go ahead. Your line is open.
Good afternoon. Let me see what I have left. I think the first question would be.
Harold Goddijn, CEO, TomTom: On.
An accounting one. You started to capitalize some of the R&D and intangibles earlier this year, which is essentially related to a change in your kind of map philosophy with HD maps becoming de facto standard and the standard definition map the derivative. The question here is, when will we actually see tangible increase in HD revenues in your financials, in your revenues, and is it also the moment when you will start to amortize on the capitalized R&D again? Is this something we need to build in for 2026 already, or is it more a 2027 story? The second question I would have is more of a commercial one on the enterprise side. Obviously, the dollar had quite a bit.
Of a negative impact.
In the line you’re close to being kind of neutral, flat, whatever. Still, not having any organic growth in the enterprise segment is quite disappointing. I would like to have a bit more feeling about the commercial momentum here. What’s the churn amongst clients, if that is an issue at all? Which type of new clients are you adding at the moment? Is it still mainly smaller OSM users, or are you already converting Google and HERE users? Where are we on that spectrum? What’s the momentum that you have with Orbis Maps in the government vertical, which is the transaction you had last year with the Australian government? When can we see kind of more conversions for basically larger customers that have been testing the product for a long time now?
Obviously, larger customers have way longer sales cycles, but are we getting any closer to announcing some bigger deals?
That’s it.
Taco Titulaer, CFO, TomTom: Let me take the first question, and then I’ll hand over to Harold Goddijn for your second question on capitalization.
Harold Goddijn, CEO, TomTom: On this.
Taco Titulaer, CFO, TomTom: New way of AV mapping automated driving that indeed started this year. I expect revenue to start coming in as of H2 2027. It’s still two years away. Significant revenue, that is 2028, but the amortization will start towards the end of 2027.
Harold Goddijn, CEO, TomTom: Okay Wim, your questions on the enterprise side. Chern, I think there is a well-documented case with a large customer that is building off the.
Taco Titulaer, CFO, TomTom: Partnership.
Harold Goddijn, CEO, TomTom: They have built their own map in the meantime. We’re filling that gap, but we’re not outgrowing it. The customer base is broadening. We have more customers with smaller customers, and net net, it’s flatlining. There is a lot of movement, though.
Taco Titulaer, CFO, TomTom: A lot of opportunity.
Harold Goddijn, CEO, TomTom: One sector that stands out is the government and intelligence sector. We have quite a bit of RFQs and RFIs outstanding there and we feel that we’re well placed to win at least a proportion of those opportunities, and there are also larger opportunities as well. The government and intelligence potential contracts are significant revenue opportunities. I’m not too worried. It is a bit disappointing that we haven’t been able to show growth in this quarter.
I feel that we.
We are strengthening our position, we are broadening our customer base, and we will continue to grow the segment over time.
What about the kind of current customers that you are onboarding? I assume, looking at the numbers, that we’re still talking about smaller OSM users?
It’s not only small OSM users, it’s real business and real customers in insurtech and logistics.
And.
Traffic is doing well. We have launched a number of new traffic products and traffic analytics products. We are market leader in that segment, and that seems to be accelerating. There’s quite a lot of good underlying developments going on, but it’s a little bit obscured by the decrease of revenue coming from, in particular, one customer.
That large customer that started building their own maps in 2012, I think it was 2015. How big is that customer still in your revenue base? Are we talking about a few percentage points? As you know, Wim, we don’t quantify.
Taco Titulaer, CFO, TomTom: That will remain to contribute to our revenue up until H2 2026.
All right, confirmed.
Mel, Conference Call Operator, TomTom: Thank you once again. If you have a question, please press 11 on your telephone keypad, where you will hear an automated message advising your hand is raised. If you are calling in via Microsoft Teams, please ensure you press star 11 from the keypad where the call is made and not from your Teams screen in order to enter the queue. We’ll now move on to our next question. Our next question comes from the line of Andrew Richard Hayman from Independent Minds. Please go ahead. Your line is open.
Andrew Richard Hayman, Analyst, Independent Minds: You’ve linked quite well with open-source maps for Orbis, but I was just wondering, do you see open-source vehicle routing software as becoming a viable competitor to you?
Harold Goddijn, CEO, TomTom: Your routing software?
Andrew Richard Hayman, Analyst, Independent Minds: Yeah, open-source routing software. Is it making any headway whatsoever?
Harold Goddijn, CEO, TomTom: I mean, it’s often used as a starting point for companies who want to do their own routing algorithm. They start with an open-source program and then tune it to their needs. It is a factor in the market. None of those initiatives will have been able to match the reliability and efficiency of the real commercial route planners and routing algorithms from us or from Google or from Apple. That’s a different level of sophistication.
Andrew Richard Hayman, Analyst, Independent Minds: Thank you. Maybe just another question. When you were launching the new auto navigation app, I was looking at your promotional videos, and there was a big emphasis on how quick it could be rolled out. For example, from the drawing board to the dashboard in 12 weeks. How does that compare to your competitors? Is that one of the key selling points of it?
Harold Goddijn, CEO, TomTom: I think the key selling point is the UI and the overall user experience. That’s the key selling point. It’s a high quality program with good search and good EV routing, great map display. That’s a unique selling point. To also meet the requirements for cost effective integration, we build up in such a way that that’s possible and that’s not the main segment of the market. If you want, you can get it up and running in 12 weeks, and that tells you something about the quality and the completeness of that product. If you want to go beyond that, you also have a lot of possibilities to do that and tune it completely to your own requirements. The fact that it is a standard but also configurable application is in itself an important message for the market.
Certainly, if you look at the history of those programs, they have always been long and expensive and ultimately disappointing in what they offer the end user. With this, we give a clear signal to the market it’s possible to break that doom loop of high cost, long development cycles, mediocre products. Good.
Andrew Richard Hayman, Analyst, Independent Minds: Thank you very much.
Mel, Conference Call Operator, TomTom: Thank you. We’ll now move on to our next question. We have a follow-up question from the line of Wim Jill from ABN AMRO ODDO BHF. Please go ahead. Your line is open.
Yes, a follow-up question indeed related to automotive and some of the commercial momentum we see there. In the past, you always indicated that 2025 was quite an active year with regards to RFPs and what have you. There were a lot of contract renewals in the market. How are you feeling about that today?
I am acutely aware that you will.
Be giving the new order book numbers next quarter, but can you give us a bit of a sense on the direction here? How are you feeling about win rates, and how are you feeling about that big opportunity for RFPs in the market? Did they materialize, or are OEMs pushing them out to 2026?
Harold Goddijn, CEO, TomTom: Thanks. I think we’re well positioned. I think it is indeed going to be a big year. I think 2025, in terms of total opportunity, the year is not over and it’s easy for those things to slip over into January. The direction of travel is quite clear. Carmakers have postponed decisions for quite a while, feel they can no longer do that, need to act. Even in certain times we see that happening and as a result the quoting and the RFI, RFQ activity has gone up. I think in many cases we are very well positioned to get a big chunk of those available opportunities in our way.
Would you say, based on the numbers and the data that you and the win rates that you see today, that after this round your market share will go up or go down?
It’s a bit early and there’s always a delay effect, of course, of winning and losing and whatnot. It can take up to three, four years before you start seeing the actual market shares in the market changing. We’ll give you, I think, a better feel in February when we give an outlook and the order intake number for 2025 with a bit of a feel of how that will play out over the coming years.
Taco Titulaer, CFO, TomTom: It is to add to that, it’s a mix of renewals. In your question, you spoke about renewals, but it is a mix of renewals and new opportunities.
Harold Goddijn, CEO, TomTom: Yeah, this is both renewals and market share gains that we are after, obviously.
Claudia Janssen, Group Controller, Head of Investor Relations, TomTom: All right.
Thank you.
Mel, Conference Call Operator, TomTom: Okay.
Claudia Janssen, Group Controller, Head of Investor Relations, TomTom: As there seems to be no additional questions, I want to thank you all for joining us today. Operator, you may now close the call.
Mel, Conference Call Operator, TomTom: Thank you. This concludes today’s presentation. Thank you for participating. You may now disconnect.
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