TomTom, the Dutch navigation company, surpassed the expectations of analysts with a rise in fourth-quarter core earnings and hence issued their first series of forecasts like a much-focused supplier of digital maps to the automakers as well as software companies.
Their earnings before interest, taxes, depreciation, and amortisation (EBITDA) has risen to a whopping EUR 43.6 million ($49.65 million) which was 38 million in the previous year. The company announced this, and they agreed to sell their Telematics fleet management unit to Bridgestone for a whopping EUR 910 million in January.
This added another EUR 36 million to the predictions. The revenue slipped from EUR 218.2 million to EUR 217.8 million.
After the sale that was expected in the second quarter of 2019, EUR 750 million cash was returned to the shareholders. TomTom aid that they would be more reliant regarding their performance as a supplier of map services to car-makers and software companies.
They forecasted the revenue of 2019 as EUR 675 million which would be gained from continuing operations, but this led to a decline of revenue in comparison to 2018 since their legacy business of personal navigation devices has been expected to decline from now.
The company said that they have been expecting a rise in their revenues from digital maps business (to EUR 430 million) which was previously EUR 372 million in 2018 since the revenue of carmakers has been rising too.
TomTom is the third player in the automotive mapping business, and it is a competition to Google Maps and HERE, which are maps company that are owned by prominent German car makers.
TomTom has been selling mapping services to software makers and it has been the largest provider of digital maps to Apple, even though Apple has plans to roll out their own map services in the US in 2019 using an in-house system.
This week TomTom announced that they have expanded a previous deal that was locked with Microsoft and supply maps to Microsoft products, and these services will rely heavily on the Microsoft cloud hosting. No details regarding the financial were disclosed.
TomTom said that their fourth-quarter enterprise revenue combining all their software customers had increased to 2 percent (i.e. EUR 33.2 million).
TomTom said- “Automotive revenue has risen to 35 percent (EUR 73.4 million).”