管理層發言
Ladies and gentlemen, thank you for standing by. My name is Kenny Green, and I'm part of the Investor Relations team at Ituran. I would like to welcome all of you to Ituran's results Zoom webinar, and I would like to thank Ituran's management for hosting this conference call. Operator instructions: Please note that lines will be placed on mute to prevent background noise. 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. 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 question-and-answer session. You should have all received by now the company's press release. If not, please view it on the company's website. I would 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. And now Eyal, would you like to begin, please?
Thank you, Kenny. I'd like to welcome all of you to our second quarter 2026 results call, and thank you for joining us today. We are very pleased to report an excellent second quarter for Ituran with record revenue and profitability with strong growth across every line of our income statement. For the quarter, overall revenue grew 21% year-over-year to a record of $104.8 million. Our recurring subscription revenue grew by 25% to $80 million, making up 76% of our total revenues. Beyond that, we grew all of our profit metrics—operating income, EBITDA and net income—all ahead of revenue, allowing the operating leverage built into our business model to shine through. During the quarter, we added 41,000 net new subscribers, bringing our total subscriber base to 2,711,000 at the end of June 2026. This is in line with our expected run rate and shows continued healthy organic growth across our core markets. Our long-term success in growing our global subscriber base constantly is due to our ongoing efforts in offering new products and value-added services to our customer base, while at the same time tapping into new market segments and new regions. Our OEM relationships remain a key growth driver. During the second quarter, we continued to ramp our existing OEM program across South America, including Connect Fiat, our new program with Stellantis launched earlier this year exclusive to the Fiat Strada. We remain in active discussions with additional OEMs that you do not see on this list, while at the same time looking to expand our existing relationships with Nissan, Renault, General Motors, Yamaha, BMW and others. Growing our OEM roster has been and continues to be the main vector for Ituran's long-term growth. Beyond our core subscriber-based telematics business, we continue to advance the growth initiatives I have discussed on previous calls, which we believe can become meaningful long-term contributors to Ituran. These include IturanMob, our car rental solution, which we recently launched in the U.S. market; Credit Carbon, our platform that lets drivers of electric and zero-emission vehicles generate and sell verified carbon savings, connecting them with the companies that need to offset emissions and leveraging our big data capabilities, all of which significantly grow our addressable markets. On the big data side, following the initial agreement we announced last quarter, we're continuing in advanced discussions with a number of potential customers, and we are active on a number of pilot projects. We would hope to be able to announce a further big data agreement with one of these in the near term. Our big data capabilities have significant long-term potential to support governments, transport authorities, commercial centers, OEMs and other customers, enabling them to make better decisions based on vast amounts of transportation data while creating revenue opportunities that can grow beyond our traditional subscription model. Ituran continues to be a strongly cash-generating business, and we generated our highest ever cash flow from operations during the quarter, amounting to $32.2 million, reflecting our continuing strong profitability, ongoing and significant positive cash flow and strong balance sheet. The Board of Directors declared a dividend of $10 million for the quarter, which represents $0.50 per share, in line with our standard dividend policy. In addition, $3 million in shares were purchased under our buyback program, which is another return of capital to shareholders to enhance value. We see our ongoing dividends and buyback program as a reward to our shareholders for their loyalty and long-term support of our company. In summary, we are very pleased with our performance in the second quarter, with record revenue and record profitability and continued healthy subscriber additions. At the same time, we continue to look for new revenues to drive further growth across all of our regions. Our expanding OEM programs, our growth engines and opportunities to monetize our big data assets are all examples of this. We remain confident in our ability to deliver continued growth and profitability through 2026 and in our long-term strategy to transform Ituran into a significantly larger company. And with that, I hand over to Eli. Eli, please go ahead.
Thanks, Eyal. I will provide a short summary of the financial results. You can find the more detailed results in the press release that we issued earlier today. Second quarter revenues were a record $104.8 million, a 21% increase compared with revenues of $86.8 million in the second quarter of last year. Revenues from subscription fees in the quarter were $79.8 million, an increase of 25% year-over-year and represented 76% of total revenues. Product revenues in the quarter were $25 million, an increase of 8% year-over-year. The subscriber base expanded to 2,711,000 by the end of the second quarter, an increase of 41,000 from the end of the previous quarter. The geographic breakdown of revenues in the second quarter was as follows: Israel, 56%; Brazil, 22%; Rest of World, 22%. EBITDA for the quarter was $28.5 million or 27.2% of revenues, an increase of 24% compared with EBITDA of $22.9 million or 26.4% of revenues in the second quarter of last year. Finance expenses in the second quarter were $1.3 million, in line with finance expenses of $1.3 million in the second quarter of last year. The expense this quarter was mainly due to the strengthening of the Israeli shekel against the U.S. dollar, which lowered the value of U.S. dollar-linked deposits held in Israel, resulting in a finance expense on those deposits. Net income for the second quarter was $17.3 million or 16.5% of revenues or diluted earnings per share of $0.88, an increase of 29% compared with $13.5 million or 15.5% of revenues or diluted earnings per share of $0.68 in the second quarter of last year. Cash flow from operations for the second quarter of 2026 was $32.2 million. As of June 30, 2026, the company had net cash, including marketable securities, of $103.7 million, which includes no debt. This is compared with net cash, including marketable securities, of $107.6 million as of year-end 2025. The Board of Directors declared a dividend of $10 million for the quarter or $0.50 per share. The current dividend takes into account the company's continuing strong profitability, ongoing positive cash flow and a strong balance sheet. During the quarter, $3 million in shares were purchased under the buyback program. The total remaining authorization is about $10 million. Share buybacks will be funded by available cash and will be made in line with SEC Rule 10b-18. And with that, I'd like to open the call for a question-and-answer session. Operator?
Okay. We'll now open the call for questions, and after the session we will get back.
On behalf of the management of Ituran, I would like to thank...
We'll poll for questions. Our first question will be from Derek Greenberg from Maxim.
分析師問答
I wanted to start just on the big data opportunity you're pursuing. I was wondering, first, if you could just talk about the engagement you already had with the Ministry of Transportation in Israel. I was wondering if that had concluded, any feedback you had received? And if that's concluded, where that might show up on the income statement?
This transaction concluded at the end of Q1, and it was not a very large deal, but still it was for a few million shekels. It was basically a need of a specific division in this ministry to look for places where trucks in Israel are involved in specific accidents in order to analyze where is the best place to open rest areas. In Israel, there are no rest areas for trucks like in the U.S. or in Europe, and this is the next phase they want to do in order to prevent accidents and fatigue of drivers, et cetera. Based on historical data—because we have different prices for real-time data, one-year-old data, etc.—in that case we used data from a few years ago, and the deal was for a few million shekels. This was the first need. As I said in my prepared remarks, we see more needs from public transportation agencies and governmental bodies, and we have ongoing discussions. We are optimistic that soon we will have more deals, which can be more valuable and larger deals in different aspects of public transportation, municipality needs, et cetera.
Okay. Great. And just on the pipeline, I was curious, do you think the majority of opportunities currently are predominantly in Israel? Or are you seeing opportunities internationally as well?
Currently, we started in Israel. The advantage we have to start in Israel is that the portion—or the ratio—between the total vehicles on roads and Ituran cars is very high. We have about 1 million subscribers among 3 million cars. So it means that we have a lot of data when we talk about roads, when we talk about cars, when we talk about preferences, et cetera. First, it's something with which we can create more confidence, and we can really start with specific agents such as governmental bodies. But our goal is after we create a substantial market in Israel, and after we have more experience and more commercial deals, to take it to our next geographies, which typically should be Brazil and Mexico. In those geographies, we will have to focus on our specific customers for whom our customer base in those countries will allow us to provide very accurate data. Just to remind you, if we have about 0.5 million subscribers in Brazil, it represents a much lower percentage of the total cars, and they drive in a larger number of places across Brazil. But still, we have a lot to contribute to customers, and we will do it; but we will start with Israel.
Okay. That makes a lot of sense. That was super helpful. I had one on just FX impacts in the quarter. I was wondering if there was anything noteworthy there. I know last quarter, I think there was like a $1 million benefit from FX. I was wondering if there was anything to call out on that front.
It's almost the same as last quarter, meaning almost an effect of $1 million on EBIT.
Okay. Got it. And then lastly, just on IturanMob in the U.S., I was wondering if you could just talk about how that's progressing so far, the discussions you're having and what you're seeing there?
So from the marketing side, the interest of the market is increasing and we see higher and higher traction. On the other hand, our part—to install, to market and to sell—we're still operating at a very low scale in order to build our own confidence before we start spending more budget on business development and sales. Compared to last quarter, we have more and more pilots and more and more customers. The numbers in terms of when we monetize it from customers to revenue are still very low. This is the reason why we are not yet providing specific data. We are in the beginning. The most important issue is the interest of the market—the car rental companies, et cetera. We are now expanding our capabilities in more and more cities. As I said at the beginning, this is a midterm project. It's not something that will contribute a substantial amount in 2026 and also in 2027. But once we see that it's ramping up with more material numbers, of course we will inform everyone.
Our next question is going to be from Sergey Glinyanov of Freedom Capital Markets.
So I'm just wondering how you're training on such products and markets like the motorcycle market and UBI—how is that trending for Ituran?
Regarding motorcycles, as you know, Sergey, and as we stated in the past, our main focus in the Brazilian market started with the OEM deals with Yamaha and then BMW. This is ramping up very impressively. We see that our customers, Yamaha and BMW, are very satisfied with the capabilities with no problems, et cetera. It is now starting to contribute to our growing subscriber base in Brazil. Our next phases will be to expand those relationships to other OEMs, and we have ongoing discussions. I don't have any new deal that I can report today, but I hope and believe that we will continue to push and we will get it, and then, of course, you will know. I really believe that this is starting to become a major portion of our subscriber growth in Brazil. Regarding UBI, we are still focusing on the Israeli market. We see growth, but it's still something where the ARPU is low. Second, it usually applies to a specific segment—often a second car at home or younger drivers—but it's still growing. It is not yet something that we have succeeded in expanding to other geographies, except Argentina, which is smaller in numbers as well.
Okay. Got it. And maybe you can share your thoughts on could you use your big data project to accumulate the data for using it in UBI segments as well?
The answer is absolutely yes. Currently, our UBI is based on personal data. Of course, we have discussions with insurance companies in Israel showing them that there is a lot of usage they can get, not only based on Ituran subscribers and needing to run hardware, but also from the big data that Ituran can provide. This can give them many benefits on how they can price new and existing insurance policies based on where drivers live, how they drive, where they drive, et cetera. They are looking at that. But like UBI itself, the insurance industry is a very traditional industry with very traditional ways of making decisions. It's changing, but slowly. We believe the next phase after closing deals with governmental authorities and public transportation authorities will be to work with our traditional channels, which are insurance companies and car dealers and importers. This is something that will be the next phase, and we are putting a lot of effort into that.
That looks like the end of the questions. So before I hand back to Eyal, I just want to let everybody know that this conference call will be available from tomorrow on Ituran's website on the Investor Relations side or alternatively, you can get it through the Zoom link. And with that, I'd like to hand back to Eyal for the closing statement. Eyal, please go ahead.
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 success over the coming years. If you are interested in meeting or speaking with us, please feel free to reach out to our Investor Relations team. And with that, we end our call. Have a good day. Thank you.