Earnings call transcript: Ituran Q1 2026 beats forecasts, stock rises

Ituran Location and Control Ltd (ITRN) reported robust financial results for the first quarter of 2026, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.85, exceeding the forecast of $0.79, and reported revenue of $102.7 million, surpassing the expected $96.85 million. Following the announcement, Ituran’s stock rose 3.28% in pre-market trading, reaching $62.08.

Ituran demonstrated strong performance in Q1 2026, with total revenue increasing by 19% year-over-year. This growth was driven by a 21% increase in subscription revenue and a 12% rise in product revenue. The company’s profitability metrics also showed improvement, with EBITDA and net income both increasing by 15% compared to the same period last year.

Ituran’s EPS of $0.85 outperformed the forecast of $0.79, marking a 7.59% positive surprise. Revenue also exceeded expectations by 6%, coming in at $102.7 million against a forecast of $96.85 million. This performance reflects the company’s strong operational execution and market demand.

Following the earnings release, Ituran’s stock rose 3.28% in pre-market trading, reaching $62.08. This movement is notable given the stock’s previous close at $60.11 and its 52-week high of $62.82, with shares trading just 0.96% below that peak. The stock has delivered impressive returns with a 73% gain over the past year and a 54.6% surge in the last six months. The increase suggests positive investor sentiment driven by the company’s strong financial results, though InvestingPro analysis indicates the stock is currently overvalued relative to its Fair Value—placing it among companies on the Most Overvalued list.

Looking forward, Ituran projects continued growth with EPS forecasts for the upcoming quarters ranging from $0.83 to $0.87. Analysts have set price targets between $57 and $70, with a consensus recommendation leaning positive. Revenue projections for the upcoming quarters are also optimistic, indicating sustained demand and the potential for further financial milestones. The company maintains a solid financial foundation with a current ratio of 2.28 and minimal debt-to-equity of just 0.04, earning a "GREAT" overall financial health score from InvestingPro.

Ituran’s management highlighted the significance of surpassing $100 million in quarterly revenue for the first time. They attributed this achievement to strong subscription growth and operational efficiency. The company also noted favorable foreign exchange conditions, contributing approximately $1 million to the quarter’s results.

During the earnings call, analysts inquired about Ituran’s strategies for sustaining subscriber growth and managing currency risks. The company reaffirmed its commitment to expanding its subscriber base and leveraging its strong cash position to explore growth opportunities and mitigate risks. Notably, Ituran has maintained dividend payments for 21 consecutive years and currently offers an attractive 9.98% dividend yield. The company’s return on equity stands at 29%, reflecting efficient capital deployment. For investors seeking deeper insights, ITRN is one of 1,400+ US equities covered by comprehensive Pro Research Reports, which transform complex data into actionable intelligence through intuitive visuals and expert analysis.

Kenny Green, Investor Relations, Ituran: 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. All participants other than the presenters are currently muted. Following the formal presentation, I’ll provide some instructions for participating in the live question and answer 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.

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. Now, Eyal, would you like to begin, please?

Eyal Sheratzky, Chief Executive Officer, Ituran: Thank you, Kenny. I’d like to welcome all of you to our first quarter 2026 results call, and thank you for joining us today. We are very pleased to report a strong start to 2026, with our revenue crossing the $100 million milestone for the first time in our history. For the quarter, overall revenue grew 19% year-over-year to $102.7 million, a record, with subscription revenue growth of 21% to $75.4 million. Operating income, EBITDA, and net income all grew year-over-year by double digits, with EBITDA reaching $26.7 million. During the quarter, we added 40,000 net new subscribers, bringing our total subscriber base to 2,670,000 at the end of March 2026. This is in line with our expected run rate and shows continued healthy organic growth across our core markets.

While the pace can vary from quarter to quarter, for the full year of 2026, we continue to expect to add between 160,000 and 180,000 net subscribers during the year. Our long-term success in growing our global subscriber base constantly is due to our ongoing efforts in offering new product and services to our existing customers, while at the same time tapping into new market segments and new geographies. Our OEM relationships remain a key growth driver. During the first quarter, we further expanded our strategic partnership with Stellantis through the launch of Connect Fiat, exclusive to the Fiat Strada in South America. This is a fully integrated end-to-end solution from Ituran covering the embedded hardware, connected vehicle services, the technology backend, and the end-user mobile application.

This new program, with an initial three-year term and an option to extend by an additional two years, builds on the partnership we announced with Stellantis in early 2025 and reinforces our role as a complete connectivity partner for global OEMs in our region. Beyond Stellantis, we remain in active discussions with additional OEMs, and this, alongside our existing partnership with Nissan, Renault, General Motors, Yamaha, BMW, and others, gives us strong confidence in our long-term OEM growth trajectory. Beyond our core subscriber-based telematics business, we are advancing the several growth initiatives which I discussed last quarter in detail that we believe can become meaningful long-term contributors to Ituran. These include IturanMob, our car rental solution, Credit Carbon, and our big data capabilities, all which significantly grow our addressable market.

While these initiatives are still early in their commercial development, we are already involved in active discussions with potential customers and partners, and we are seeing interest across multiple markets and use cases. As an example of our big data capabilities, we recently signed an agreement with one of the entities of the Ministry of Transportation in Israel to provide transportation data, helping it better understand commuter patterns and support plans for the future. We expect more such projects in Israel to mature during the coming quarters. Together with our other interesting projects in the pipeline, this highlights the significant long-term potential of Ituran’s data capabilities to support governments, transport authorities, commercial centers, OEMs, and other customers while creating scalable revenue opportunities beyond our traditional subscription model.

Ituran continues to be a strongly cash-generating business, with cash flow from operations of $18.2 million in the first quarter. Reflecting our continuing strong profitability, ongoing positive cash flow, and strong balance sheet, the board of directors declared a dividend of $10 million for the quarter, which represent $0.50 per share, in line with our standard dividend policy. During the quarter, half a million dollars in shares were purchased under the buyback program. We see our ongoing dividend alongside our 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 strong start to 2026, with revenue crossing the $100 million milestone for the first time, double-digit growth in revenue, operating income, EBITDA, and net income, and continued healthy subscriber addition in line with our goal for the year.

At the same time, we continue to look for new avenues to drive further growth across all of our regions. The OEM expansion with Stellantis through Connect Fiat, the launch of IturanMob, our car rental solution in the U.S., and our partnership with GRIP, the development of Credit Carbon, and the monetization opportunities around our big data assets are all examples of this. We remain confident in our ability to deliver continued growth and profitability throughout 2026, and in our long-term strategy to transform Ituran into a significantly larger company. 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.

Eli Kamer, Chief Financial Officer, Ituran: First quarter revenues were a record $102.7 million, a 19% increase compared with revenues of $86.5 million in the first quarter of last year. Revenues from subscription fees in the quarter were $75.4 million, an increase of 21% yea