Ituran Location and Control Q3 2025 Earnings Call Transcript

Quartr
Provided by Quartr
November 18, 2025

Key Takeaways

  • Positive Sentiment: Ituran reported Q3 revenue of $92.3 million (up 11% YoY) and grew its subscriber base to 2.588 million with 40,000 adds in the quarter, remaining on track for 220–240k net new subscribers in 2025.
  • Positive Sentiment: The company is expanding its addressable market with product launches — Ituran Mob (launched in Brazil, now entering the U.S. targeting small/medium rental fleets) and a motorcycle telematics OEM deal with BMW Motorrad in Brazil.
  • Positive Sentiment: Strong cash profile — Q3 operating cash flow of $21.3 million, net cash including marketable securities of $93.1 million, plus a quarterly dividend of $10 million and ongoing share buybacks.
  • Negative Sentiment: EBITDA rose to $24.6 million but margin compressed to 26.7% from 27.9% YoY, and management said most OPEX growth this quarter was driven by FX effects, which could pressure margins near-term.
  • Neutral Sentiment: Geographic exposure is concentrated in Israel (55% of revenues) and Latin America (23%); India remains a long‑term, low‑margin opportunity and broader international expansion is expected to be pursued mainly via M&A.
AI Generated. May Contain Errors.
Earnings Conference Call
Ituran Location and Control Q3 2025
00:00 / 00:00

Transcript Sections

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Kenny Green
Head of Investor Relations at Ituran

Ladies and gentlemen, thank you for standing by. My name is Kenny Green, I am part of the Investor Relations team at Ituran. I would like to welcome all of you to Ituran's Result Zoom webinar, and I would like to thank Ituran's management for hosting this call. All participants other than the presenters are currently muted, and following the formal presentation, I'll provide some instructions for participating in the live Q&A session. I would like to remind everyone that this conference call is being recorded, and the recording will be available from the link in the earnings press release and on Ituran's website from tomorrow. With me today on the call are Mr. Eyal Sheratzky CEO, Mr. Udi Mizrahi, Deputy CEO and VP Finance, and Mr. Eli Kamer, CFO of Ituran.

Kenny Green
Head of Investor Relations at Ituran

Eyal will begin with a summary of the quarter's results, followed by Eli with a summary of the financials. We'll then open the call for the Q&A session. You should have all by now received the company's press release. If not, please view it on the company's website. I'd like to remind everyone that the Safe Harbor statement in today's press release also covers the contents of this conference call and the associated presentation. Eyal, would you like to begin, please?

Eyal Sheratzky
CEO at Ituran

Thank you, Kenny. I'd like to welcome all of you to our Third Quarter 2025 Results Call, and thank you for joining us today. We are very happy with the results of the third quarter, which were strong across all key parameters. In particular, we are very pleased with the revenue growth. We continue to grow, driven by our long-term efforts and success in bringing existing as well as new customer value-adding telematics and connected car product and services. In addition, we are also constantly bringing additional OEM partners to our growing roster, an example of which was Stellantis last quarter, and we are in active discussions with others. Our results show an ongoing expansion across our target geographies in our large subscriber base of over 2.5 million subscribers. In the third quarter, we added 40,000 net subscribers.

Eyal Sheratzky
CEO at Ituran

We are on track to add between 220,000 and 240,000 net new subscribers in 2025, which will represent a very strong year of subscriber growth. We had a good third quarter, and I want to summarize some of our activities, which contribute to our growth and success. We continue to see solid demand for our location-based products and telematics services in all our regions, as well as traction from our new initiative and services. In Israel, the high car theft rate in Israel continued to provide strong demand for our services in the country, and we are reaching additional new subscribers from parts of the market that were previously untapped by us, such as lower-priced new vehicles or the second-hand car market. Our usage-based insurance business in Israel is also seeing good traction and bringing continued strong subscriber growth. In Latin America, we continue to expand our reach.

Eyal Sheratzky
CEO at Ituran

Our new product targeting the motorcycle market is gaining strong traction across South America, especially on the back of our partnership with BMW Motorrad in Brazil. Motorcycles are a significant market opportunity, being the top mode of transportation in many parts of the world. It significantly increased our total addressable market. With Brazil as our starting point, we plan to scale into other high-growth motorcycle markets through partnerships with local OEMs, as well as sales to the aftermarket. Our IturanMob, smart mobility platform, is a unique technology and solution enabling remote vehicle access, real-time telematics, and efficient fleet management for shared mobility and rental fleet applications. IturanMob was launched first in Brazil and has been gaining solid traction here, where it is being adopted by a growing number of fleet operators and rental companies.

Eyal Sheratzky
CEO at Ituran

Based on the strong market interest and success we've seen in Brazil, we are now introducing it to the United States market. We recently established operation for IturanMob in the United States. We have identified a strong need in the U.S. for our solution, particularly among the thousands of small to medium car rental companies, which include hundreds of thousands of cars. These companies could benefit from this type of technological solution, making the rental process more user-friendly and efficient. This creates a new long-term avenue of growth alongside our core telematics and subscriber-based businesses. Ituran generated a high level of cash in the quarter, amounting to $21.3 million in operating cash flow during the quarter. Due to our continued profitability and strong cash generation, we declared a dividend of $10 million to shareholders for the quarter.

Eyal Sheratzky
CEO at Ituran

I remind you that at the end of last year, we increased our dividend policy by 25%, from issuing $8 million per quarter to $10 million per quarter. This represents $0.50 per share. Our dividend yield, on an annualized basis, represents a return of around 5%, which is a very solid return from a strong and stable company. During the quarter, we purchased $1.5 million in shares under our buyback program. As of the end of the quarter, we had around $5.2 million still available under this program. We see our ongoing dividend and buyback as a reward to our shareholders for their loyalty and long-term support of our company. In summary, we remain very pleased with Ituran's performance in the third quarter and, more generally, Ituran's long-term and ongoing performance.

Eyal Sheratzky
CEO at Ituran

At the same time, we look for more avenues to bring further growth to our business across all our regions, and the recent launch of IturanMob is an example for this. We constantly aim to bring new products and services to both existing customers and new customers, as well as partnerships with new OEMs, new financing companies, and other leading companies. 2025 marks 20 years as a public company and 30 years as a company. We look forward to opening the Nasdaq market on Tuesday next week, November 25th, and we thank both the Nasdaq as well as our shareholders for the long-term support of our business. With that, I hand over to Eli. Eli, please go ahead.

Eli Kamer
CFO at Ituran

Thanks, Eyal. I will provide a short summary of the financial results. You can find the more detailed result that we issued in the press release earlier today. Third quarter revenues were $92.3 million, an 11% increase compared with $83.5 million in Q3 of last year. Subscription fees were $67.6 million, up 13% year-over-year, and representing 73% of total revenues. Product revenues were $24.7 million, up 4% year-over-year. Our subscriber base reached 2,588,000 at quarter end, an increase of 40,000 in the quarter. Year-over-year, the subscriber base grew by 219,000. The geographic breakdown of revenues in the third quarter was as follows: Israel 55%, Brazil 23%, rest of world 22%. EBITDA was $24.6 million, 26.7% of revenues, up 6% year-over-year, compared with EBITDA of $23.3 million, 27.9% of revenues in the third quarter of last year.

Eli Kamer
CFO at Ituran

Net income for the third quarter was $14.6 million, or diluted earnings per share of $0.74, an increase of 7% compared to $13.7 million, or diluted earnings per share of $0.69 in the third quarter of last year. Cash flow from operations for the third quarter of 2025 was $21.3 million. As of September 30, 2025, the company had net cash, including marketable securities, of $93.1 million. This is compared with net cash, including marketable securities, of $77.3 million as of year-end 2024. The Board of Directors declared a dividend of $10 million for the quarter. The current dividend takes into account the company's continuing strong profitability, ongoing positive cash flow, and strong balance sheet. During the quarter, we purchased $1.5 million in shares under our buyback program. As of the end of the quarter, we had around $5.2 million available under this program.

Eli Kamer
CFO at Ituran

With that, I'd like to open the call for the Q&A session. Operator.

Operator

Thank you. At this time, we'll begin the Q&A session. If you have a question, please raise your hand via the Zoom platform. I will introduce you and ask you to unmute, after which you may ask your question. We'll take a few moments to poll for your questions.

Operator

Our first question will be from Chris Reimer of Barclays. Chris, you may go ahead and ask your question.

Chris Reimer
Chris Reimer
Analyst at Barclays

Hi, thanks for taking my question, and congratulations on the strong results. I was wondering if you could give a little more color on the launch in the U.S. What's the target market? Do you have any idea of how big it is, and when might you expect it to bear fruit?

Eyal Sheratzky
CEO at Ituran

Okay, absolutely. Thank you. Before we decide to go from Brazil directly to the U.S. market, which is, I think, the most luxury market for this kind of solutions, we did a survey, and we got information that in the United States, there are tens of thousands of rental companies. It's true that about five of them are representing more than 60% of the market, and these are the big names. At the first and the beginning, we are not aiming them as our segment. The other represent hundreds of thousands of rental cars. We are talking about small and medium rental companies from one family that holds 10 or 15 cars that they are rented, or some mid-companies with 100, 200, 300 cars. All of them are local. All of them are, or most of them are not nationwide.

Eyal Sheratzky
CEO at Ituran

They have a very strong demand for a solution that, first of all, will allow them to save their cost. I will explain. In order today, for a business that has 20-30 cars to meet the customers, they have to go and meet each customer, give him the key of the car, then bring it back. It requires drivers. It requires service. In the worst case, they have to open an office, put a desk, put the people, put software, etc. When you have 20-30 cars, it is a dramatically high expense, and it is dramatically lowering the chance to make money from your rental company. What we provide is that you do not have to do almost anything except having the cars.

Eyal Sheratzky
CEO at Ituran

Because everything done on the streets, everything done that you have a dashboard as a rental company owner, small rental company owner, and you can know every minute what is with the cars, who is driving the car, how much money this car will provide you. That is done by having a smart key in the car, having the system that we developed through IturanMob, our small subsidiary for this technology and innovation. In Brazil, by the way, we do it for almost three years. It is a very successful solution. Add to this that even in Israel, the largest leasing and rental company in Israel, Shlomo lease car, changed a technology that they found in the world because we did not have it in the past to our technology. It threw to the garbage about 2,000 hardwares that they paid and installed in his rental cars.

Eyal Sheratzky
CEO at Ituran

We are the partners, and our units and services are also in Israel. I'm talking about the U.S. because Israel, by definition, is a small market. It's maybe attractive, but it's not having a major influence on our future results. The U.S. market, and it's important to mention, we are, I think, the first. I mean, we heard or we know about companies that tried. They have a very not the same technology. Let's be, I don't want to be arrogant. When they tried, the technology didn't work. They tried to do it in one small city. There are not really big technology or communication players that develop or represent it to the U.S. market. We are in the beginning of this industry, I would say, in the States. There are companies dealing with remote rentals, but not the renting the car itself.

Eyal Sheratzky
CEO at Ituran

There are companies that provide services to rental companies, like integrators, software companies. That's good. This is, by the way, it's an advantage for us because we can partner with them. Before we do it, we have a solution which we can go independently by ourselves. We already have pilots in the area of Orlando and New York with some small rental companies that are very satisfied. The response that we get is very, very good. I'm saying it's not something that will happen tomorrow. We are opening a new, I think, a new niche, a new segment, a new market. It's also required adaptations. I think that, let's say, the dream here is huge.

Chris Reimer
Chris Reimer
Analyst at Barclays

Got it. Got it. Thanks. That's really great color. Maybe just touching on OpEx, what was driving the increase in operating expenses this quarter, and how should we be looking at margin expansion into next year?

Eli Kamer
CFO at Ituran

If we are talking about the increase in the OpEx, the big majority of it is coming from the FX effect. That, of course, increased the absolute numbers of the OpEx. If we are talking about the margins, again, I do not see any reason that as long as we continue to increase our subscriber base, and this is exactly according to the guideline, and I am assuming next year the same, that the margins will increase as well.

Chris Reimer
Chris Reimer
Analyst at Barclays

Got it. Thank you. Maybe if I could just one more. How do you feel the subscriber momentum is performing versus your original guidance for the year? Can you give any color on where you're seeing the most traction?

Eyal Sheratzky
CEO at Ituran

As I said in my speech, is that we provide kind of guidance of 220,000-240,000. According to the nine months and the current data that we have, is that we will meet this range, which is the highest, I think, ever in the 30 years of Ituran. The drivers are absolutely across all the regions. It's included also from the OEM. It's included the aftermarket that we do in Brazil, which is including the insurance companies. It's also including the financial solution that we provide to banks. Also, with a very major influence on the subscribers that we add during 2025 is Israel. This is thanks to the requirement by insurance companies. Relatively to the cost of rate is very high.

Eyal Sheratzky
CEO at Ituran

More and more new cars, but more important is second-hand cars that in the past did not require for the policy security system. Now they require. Ituran is the first choice in Israel by far of any other security solution. This allows us to grow in 2025 dramatically as well in Israel. I will add that the UBI also has some volatility. In 2023, we did a very high growth in subscribers. In 2024, we had to expand the customers that we are approaching. In 2025, we had another large insurance company that we developed for them a solution. They also, during the second quarter of 2025, start using our UBI solution in high numbers. Overall, this is the drivers.

Chris Reimer
Chris Reimer
Analyst at Barclays

Great. Great. Thanks. That's it for me, guys.

Eyal Sheratzky
CEO at Ituran

Thank you.

Operator

Thanks, Chris. Our next question is going to be from Allen Klee of Maxim Group. Allen, you may go ahead and ask.

Allen Klee
Allen Klee
Managing Director and Senior Research Analyst at Maxim Group

Yes. Hi. Can you hear me?

Eyal Sheratzky
CEO at Ituran

Yes.

Allen Klee
Allen Klee
Managing Director and Senior Research Analyst at Maxim Group

Yes. Oh, great. You talked about how motorcycles are important in South America and your partnership with BMW Motorrad. What are you, could you talk about kind of how you're looking at increasing the uptake in this market?

Eyal Sheratzky
CEO at Ituran

Yes. Brazil, and especially, but also the rest of Latin America, is a very motorcycles. I'm talking about mid-to-heavy engine motorcycles, which is quite an expensive vehicle, is very popular. The ratio between four-wheel drive and two-wheel drive, it's very different than, for example, in other countries in the Western world, many people using motorcycles. Ituran always has a solution, but our solution was a little bit, I would say, not reliable enough to provide insurance companies with a low premium to motorcycles. This is first. Second, even the motorcycles themselves were in a situation that they didn't want to add cost to the motorcycles. In the last two years, we developed, thanks to our innovative teams, a unit which is state-of-the-art for a security system and application for the driver on a motorbike.

Eyal Sheratzky
CEO at Ituran

What we did first, we used our OEM capabilities and teams, and we started negotiating. As you remember, maybe the first one was with Yamaha. Yamaha is our first customer for almost two years, 18 months. Now, as we publish, we signed an OEM deal with BMW Motorrad in Brazil. The idea is that this is an untapped market for telematics solutions. We are talking about the potential of millions of motorbikes that fit these needs and can pay it compared to the price of the motorbike. We started with an OEM. This allows us to create reliability. This allows us to partner with brands. The guys of motorbikes are like sports cars. If somebody is driving a BMW, you will be very loyal. The same Honda, Yamaha, etc., specifically in Brazil.

Eyal Sheratzky
CEO at Ituran

We knew that partnering with a big brand in the OEM will, again, provide reliability. Now what we see is attraction also from the aftermarket. Because if someone comes to a dealer of BMW to have some treatment to the motorbike or to buy something, now he's asking or he will see that there is a solution by Ituran. We really believe that we just started. I am expecting that it will bring us tens of thousands of new subscribers starting 2026. It will grow as we will expand the segment and our customer, whether it will be B2B with other motorbike manufacturers. There are other names that we are starting to talk with. I'm not saying whether it will finish with a deal or not, but we see attraction. A major portion of this market is the second market, the aftermarket.

Eyal Sheratzky
CEO at Ituran

This is something, again, that I believe can be very important with influence, again, on the results in two to three years from now.

Allen Klee
Allen Klee
Managing Director and Senior Research Analyst at Maxim Group

Thank you. I understand that Israel is an attractive market, but not that large. You have a large opportunity in Latin America and South America. How do you think about, first, the size of the opportunity in South America? Also, is it possible over the next couple of years that there could be other geographies that might make sense?

Eyal Sheratzky
CEO at Ituran

First of all, we are not passing any opportunity. By talking about how we focus, the Latin America market, whether it's Central or South America, it's a huge market, which is, by the way, kind of an emerging market. There is still a growing segment that we couldn't penetrate, whether it's because of price, whether it's because of awareness. For us, the first online is to expand and continue expanding our business in Latin America because of the synergy that we can create, the relationship, the brand. We're still, I think, in the beginning of tapping this market. This is regarding how we focus, but in an opportunistic way. Of course, when we look at the rest of the world, we are more looking at doing it by M&A, by acquisition.

Eyal Sheratzky
CEO at Ituran

Because for us to start a new business from scratch, for example, in the U.K. or in Europe, it will require high resources because we have zero resources now there. Until the moment that we will turn it to major revenues and major profits, it will take a long time. At the size of Ituran, the way that we are looking at other geographies is by M&A. Of course, we are looking. It should be something that meets our DNA, meets our criteria. Our criteria is not a too small company. On the other end, a company that has assets that we can leverage, such as partners or customers, a system of employees, control centers, etc. To make the long story short, we still focus on Latin America and in the U.S., as I said.

Allen Klee
Allen Klee
Managing Director and Senior Research Analyst at Maxim Group

Okay. Thank you very much.

Eyal Sheratzky
CEO at Ituran

You're welcome.

Eli Kamer
CFO at Ituran

Thank you, Allen.

Operator

Our next question will be from Sergey Glinyanov from Freedom Capital Markets. Sergey, please go ahead.

Sergey Glinyanov
Senior Equity Research Analyst at Freedom Capital Markets

Good morning, Eyal, Udi, Eli. Can you hear me?

Udi Mizrahi
Deputy CEO and VP of Finance at Ituran

Yes.

Eli Kamer
CFO at Ituran

Yeah.

Eyal Sheratzky
CEO at Ituran

Yeah, yeah.

Sergey Glinyanov
Senior Equity Research Analyst at Freedom Capital Markets

Great. Great. First of all, my applause to Ituran and another successful quarter. You guys beat market expectations. It was not revenue in EPS. Now I am interested in revenue dynamics. It seems your ARPU is increasing. Is it basically a product and service mix or something more fundamental as a core?

Eli Kamer
CFO at Ituran

Hi, Sergey. ARPU is going up due to the fact of the FX. FX has been better in Q3 this year. Therefore, the ARPU went up as well.

Sergey Glinyanov
Senior Equity Research Analyst at Freedom Capital Markets

Okay. And some kind of follow-up about your IturanMob in North America. Do you have any expectations about revenue next year?

Eyal Sheratzky
CEO at Ituran

We never provide guidance about revenues. I must tell you that we do all we can to make more revenues than this year.

Sergey Glinyanov
Senior Equity Research Analyst at Freedom Capital Markets

Yeah. Sounds great.

Eli Kamer
CFO at Ituran

Thank you.

Eyal Sheratzky
CEO at Ituran

You're welcome.

Sergey Glinyanov
Senior Equity Research Analyst at Freedom Capital Markets

Thank you.

Operator

Thanks, Sergey. Our next question, hold on one sec. Our next question will be from Evan Tindell of Bireme Capital. Evan, you may ask your question.

Evan Tindell
Co-founder and Chief Investment Officer at Bireme Capital

Hi, guys. Thanks for taking my call. My question is, I've heard that some theft insurance providers in Israel are not requiring Teslas to have your system. I was just wondering, is that true? A follow-up to that is, over 10, over like five to 10, 15 years, something like that, do you guys worry that more manufacturers will be able to sort of figure out how to do the internal telematic systems and anti-theft systems well enough to disintermediate you guys? Thanks so much.

Eyal Sheratzky
CEO at Ituran

Okay. Just to explain how the process is specifically in Israel, because there is a regulation, in Israel, an insurance company cannot decide for their insurers or require in their policy a specific brand, a specific solution. What they allow to do is, for example, if they want to have a location unit with a real-time alert, with a 24/7 control center, that is what they put in the policy. Now, you as the insurer have to decide what company you choose. Never, never since the inception of Ituran, insurance companies did not say, "Install Ituran" or "Install other name." This is what is nice with Ituran. We are not the chosen of the insurance company. We are the chosen of a million subscribers in Israel. This is what the story is. How we do it is with our channels. The channels, in that case, are car dealers, car importers.

Eyal Sheratzky
CEO at Ituran

Just to remind you, in Israel, there are no manufacturers. In Israel, there are car importers which represent manufacturers. Ituran has a very strong partnership relationship along the years. This is the reason why 20 years ago, Ituran was declared as a monopoly in the telematics business in Israel. This is why I can say and publish that Ituran has something like 85%-90% market share. It's saying that 10% of the industry is by other companies. For us, it's good. We have competition, but we lead the competition very, very strongly. This is regarding this question. Regarding the second question, as we proved in the OEM business in Latin America, and General Motors is a very good example. Historically, we started by selling hardware and services. Ituran always was built on a recurring revenue.

Eyal Sheratzky
CEO at Ituran

Always, we were built as a service-oriented company. For us, the hardware in the car is a tool. It's a tool to bring customers. I would say our gold medal is to have a customer for many years paying every month. For that, we don't need the hardware. We need, yes, we need a car manufacturer or in Israel, a car dealer or a shop to say, "Okay, I'm selling a car with a telematics solution, but the company that can provide the services." For example, when we talk about SVR, this is the market that we are very active, Israel, Latin America, very hostile environments. No technology will recover the car. The recovery of the car is done by people sitting in a control center, providing information to enforcement people on the field. We have intelligence. We have drones. Those things are aside from the technology.

Eyal Sheratzky
CEO at Ituran

As long as we can sell, and specifically in the emerging market, our technology is the state of the art. The companies, for example, that sell cars in Israel, even the Chinese companies, they are not providing communication telematic solutions, for example, in Hebrew. They are not providing the data that's relevant. They will not immigrate it for those small markets. On the other hand, in Brazil and in Mexico, we are connecting to those manufacturers from the first level. I think that for us, it's more important to provide the service to have the recurring revenues. Today, 95% of our customers, which are car dealers, car manufacturers, and any other customers, still buy our hardware. There are a few percent who choose their own hardware. For us, it's okay. For us, it's okay.

Eyal Sheratzky
CEO at Ituran

It may grow, this percentage will grow, I agree with you, in the next decade. But still, it's not something that we see as aiming the business of Ituran.

Evan Tindell
Co-founder and Chief Investment Officer at Bireme Capital

Great. Thank you for that. One other question. Could you update us on your efforts in India?

Eyal Sheratzky
CEO at Ituran

I didn't talk about India today specifically because there were a few quarters that I mentioned this joint venture that we have in India. Since this growing market is very, very, very slow, I didn't find a reason to repeat things that I said in the past. For you, I can say we have a joint venture in India. We signed a large contract with Mercedes-Benz for commercial cars, but with low margins. The current problem in India is that the market is premature. The financial capabilities of businesses, as well as retail, are very low. We have to find very specific deals to make money. India is for the long term. India has a lot of potential, as we see it, for the future. We are the main telematics or one of the main telematics players that are on the ground.

Evan Tindell
Co-founder and Chief Investment Officer at Bireme Capital

Okay. Thank you.

Operator

Thanks, Evan. That will end our question and answer session. Eyal, if you would like to go make your concluding statement.

Eyal Sheratzky
CEO at Ituran

On behalf of the management of Ituran, I would like to thank you, our shareholders, for your continued interest and long-term support of our business. We look forward to continuing our accomplishments over the next decade. If you are interested in meeting or speaking with us, feel free to reach out to our investor relations team. We end our call. Thank you and have a good day.

Analysts
    • Kenny Green
      Head of Investor Relations at Ituran
    • Evan Tindell
      Co-founder and Chief Investment Officer at Bireme Capital
    • Eli Kamer
      CFO at Ituran
    • Sergey Glinyanov
      Senior Equity Research Analyst at Freedom Capital Markets
    • Allen Klee
      Managing Director and Senior Research Analyst at Maxim Group
    • Eyal Sheratzky
      CEO at Ituran
    • Chris Reimer
      Analyst at Barclays
    • Udi Mizrahi
      Deputy CEO and VP of Finance at Ituran
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