TomTom Lowers Expectations, Citing Automotive Headwinds
July 15 (Reuters) – TomTom (TOM2.AS), the digital mapping specialist, announced on Monday that it would be suspending its 2025 revenue target and reducing its expectations for the current year. This decision follows a decrease in demand within its automotive location technology sector.
The Amsterdam-based company stated it would not achieve its 600 million euro ($654 million) target for 2025 location technology revenue. Furthermore, the company anticipates sales for 2024 to fall at the lower end of the originally projected range of 570 million to 610 million euros.
“A combination of downward revisions for near-term car production volumes and delays in new model introductions has resulted in a generally less predictable market environment,” said Chief Executive Harold Goddijn, as stated in the earnings statement.
TomTom’s shares experienced an 8.1% drop, reaching 5.12 euros by 0813 GMT.
In May, new car sales in Europe experienced a 3% year-on-year decline. “There’s nothing fundamentally going wrong here, but there are some headwinds in automotive that’s affecting our revenue, in the short term,” Taco Titulaer, finance chief, told Reuters.
Sales within the automotive location technology sector decreased by approximately 4% to 87.3 million euros during the second quarter. This figure accounts for more than half of TomTom’s total revenue, which reached 152.2 million euros.
Titulaer also noted that the group’s sales were impacted by the TomTom Orbis, its new mapping platform, which took longer than expected to become operational. TomTom plans to provide updated targets for the upcoming year when it releases its full-year 2024 results.
For the second quarter, the company reported a loss before interest and tax of 5.2 million euros, a widening from the 3.6 million euro loss recorded a year earlier. The consensus from analyst forecasts compiled by the company had predicted a loss of 4 million euros.
Additionally, TomTom is expanding its collaboration with Microsoft (MSFT.O), which includes the adoption of TomTom Orbis across its products under a new contract lasting until the end of this decade, according to Titulaer.
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