Published by Global Banking and Finance Review
Posted on February 4, 2025
By Hugo Lhomedet and Mathias de Rozario
(Reuters) -Digital mapping specialist TomTom posted a 2% drop in its annual revenue on Tuesday, slightly above estimates, and forecast lower 2025 earnings on a continued slowdown in the automotive market, sending its shares down 12.4% in early trade.
The Amsterdam-based company posted a revenue of 574.4 million euros ($591.17 million) for the year ended Dec. 31, marginally above the 573 million euros expected in a company-provided consensus.
The company, which makes 57% of its sales from automotive location technology applications, has been impacted by a slowdown in the global automotive market. New car sales in Europe grew 0.9%, compared with a 13.9% jump in 2023.
Speaking on the sector headwinds, CEO Harold Goddijn said "there are a lot of moving parts... more so than I've ever seen before in my career."
TomTom suspended its 2025 location technology revenue outlook in July 2024 and now says it has limited visibility for 2025.
The company, which counts Volkswagen, Toyota and Stellantis among its customers, expects 2025 revenue between 505 million euros and 565 million euros.
It sees location technology revenue of 440 million-490 million euros, and free cash flow at break-even.
ING analyst Marc Hesselink sees the guidance as "disappointing", adding it provides significant room for error.
The location data pioneer, which started by providing a navigational tool for turn-by-turn directions, has gone through major restructuring and is now developing self-driving maps that integrate consumer data and driver assistance systems.
Goddijn says the transition to their new platform TomTom Orbis was "painful" but underlines an endorsement from large companies such as Microsoft.
Their historical consumer business now accounts for 14.8% of the group's revenue, after falling 10% in 2024.
"It is still a bit of life... still profitable", said Goddijn, adding it is still their fastest route to volume, feedback, testing and user concepts.
($1 = 0.9716 euros)
(Reporting by Hugo Lhomedet and Mathias de Rozario; Editing by Rashmi Aich)
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