Ituran (ITRN) Q2 2026 Earnings Call: Record Revenue and 25% Subscription Growth

Key Takeaways

• Ituran reported record Q2 2026 revenue of $104.8 million, up 21% year over year, as recurring subscription revenue increased 25% to $79.8 million.
• The subscriber base reached 2,711,000 at June 30, 2026, following 41,000 net additions during the quarter.
• EBITDA rose 24% to $28.5 million, while the EBITDA margin expanded to 27.2% from 26.4%. Net income increased 29% to $17.3 million, or $0.88 per diluted share.
• Operating cash flow reached a quarterly record of $32.2 million. Ituran ended the period with $103.7 million in net cash and marketable securities and no debt.
• OEM programs remained a key growth driver, including the ramp-up of Connect Fiat with Stellantis and motorcycle programs with Yamaha and BMW in Brazil.
• Management remains confident in continued growth and profitability through 2026, while noting that IturanMob’s U.S. expansion is not expected to contribute a substantial amount in either 2026 or 2027.

Key Financial Data

Revenue by geography was 56% from Israel, 22% from Brazil and 22% from the rest of the world.

Business and Operating Performance

Recurring subscriptions remained Ituran’s primary revenue source, accounting for 76% of total revenue. Management said the 41,000 quarterly net subscriber additions were consistent with its expected run rate and reflected organic growth across core markets.

OEM relationships continued to support subscriber growth. Ituran is ramping existing programs across South America, including Connect Fiat, launched with Stellantis for the Fiat Strada. The company is also seeking to expand relationships with Nissan, Renault, General Motors, Yamaha and BMW while discussing potential programs with additional manufacturers.

In Brazil, management said the Yamaha and BMW motorcycle programs are ramping strongly and have started contributing to subscriber growth. The company is pursuing additional motorcycle OEM relationships but did not announce a new agreement.

Ituran’s big data initiative remains initially focused on Israel, where approximately 1 million of the country’s 3 million vehicles are Ituran subscribers. A previously announced project with Israel’s Ministry of Transportation concluded at the end of Q1 and generated several million Israeli shekels. It used historical vehicle data to analyze truck accident locations and potential sites for rest areas.

Management said discussions and pilot projects with other potential big data customers are continuing, including government bodies, transportation authorities, municipalities, OEMs and commercial customers. The company hopes to announce another agreement in the near term, although no timing or value was committed.

IturanMob, the company’s car rental solution, is gaining pilots and prospective customers in the U.S., while expanding into additional cities. However, monetization remains limited and the company is maintaining a restrained sales and installation pace until it gains further confidence in the model.

Management Outlook

Management expressed confidence in delivering continued growth and profitability through 2026. It identified OEM expansion, new products, value-added services and big data monetization as long-term growth opportunities.

The company plans to establish a more substantial big data market in Israel before expanding the offering into Brazil and Mexico. Management said the accuracy and potential use cases in those countries will depend on the geographic coverage and relative scale of Ituran’s subscriber base.

IturanMob was characterized as a mid-term initiative. Management does not expect it to contribute a substantial amount in 2026 or 2027.

Risks and Watchpoints

• U.S. IturanMob revenue remains at an early and immaterial level despite increasing market interest and pilot activity.
• Ituran’s big data coverage is strongest in Israel. Its subscriber base represents a smaller percentage of total vehicles in Brazil, potentially limiting data breadth and accuracy outside core coverage areas.
• Usage-based insurance continues to grow in Israel, but management highlighted its low ARPU and limited expansion outside Israel and Argentina.
• Management described insurance companies as slow-moving adopters of new data-driven pricing methods.
• The strengthening Israeli shekel reduced the value of U.S. dollar-linked deposits held in Israel, contributing to $1.3 million of finance expense in the quarter.

Analyst Q&A Highlights

Big data commercialization: Management said the Ministry of Transportation project was completed in Q1 and generated several million Israeli shekels. Ituran is now pursuing larger opportunities involving transportation agencies, government bodies and municipalities.

International big data expansion: Israel remains the starting market because Ituran-equipped vehicles represent roughly one-third of the country’s vehicle base. Brazil and Mexico are the next intended markets, but offerings will need to focus on use cases where Ituran’s data coverage is sufficiently accurate.

U.S. car rental solution: IturanMob is seeing more pilots, customers and geographic coverage, but customer monetization remains low. The company plans to limit spending on business development and sales until the model is further validated.

Motorcycles and UBI: Yamaha and BMW motorcycle programs are beginning to support Brazilian subscriber growth. Usage-based insurance is expanding more slowly, with low ARPU and limited geographic reach.

Insurance applications for big data: Ituran is discussing broader data applications with Israeli insurers, including pricing based on where and how customers drive. Management views insurers, vehicle dealers and importers as potential next-stage customers after public-sector transportation deals.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Kenny Green

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] 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?

Eyal Sheratzky

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 grow 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 is 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 continue to be the main vector for Ituran 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 decision based on vast amount of transportation data while creating revenue opportunities that can grow beyond our traditional subscription model.

Turan 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 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.

Eli Kamer

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?

Eyal Sheratzky

Okay. We'll now open the call for question and after the session we will get back.

Kenny Green

On behalf of the management of Ituran, I would like to thank...

Eyal Sheratzky

We'll poll for questions. Our first question will be from Derek Greenberg from Maxim.

Question-and-Answer Session

Derek Greenberg

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?

Eyal Sheratzky

This deal transaction was already concluded in the end in Q1, and it was not -- as we said, it was not a very large deal, but still, it was few millions of shekels and it was basically a need of a specific division in this ministry to look for places where trucks in Israel are making specific accidents in order to analyze where is the best place to open a rest areas. In Israel, there is no rest areas for trucks like in the States or in Europe. And this is the next phase they want to do in order to prevent accidents and fatigue of drivers, et cetera. And based on historical data, by the way, because we have different prices for range time data 1-year old data, et cetera.

And in that case, we saw data a few years ago for these millions of shekels, and this was the first need. And as I said in my speech, we see more needs of public transportation agents or governmental, which we have discussions. And as I said, we are optimistic that soon we will have -- we're expecting to have more deal or deals, which can be more valuable and more larger deals in different aspects of public transportation, municipality needs, et cetera.

Eli Kamer

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?

Eyal Sheratzky

Currently, we started in Israel. The advantage that we have to start in Israel is that in Israel, the portion of -- or the ratio between the total vehicles on roads with Ituran cars -- I mean, Ituran subscriber base is very high.

We have about 1 million subscribers, cars among 3 million. So it means that we have a lot of data when we talk about rows, when we talk about cars, we talk about preferences, et cetera. So it's -- first, it's something which we can create more confidence, and we can really start with a specific agents such as governmental, et cetera. But our goal is after we will create a substantial market in Israel, and we will have some experience of more and more commercial deals to take it out to our next geographies, which is typical should be Brazil and Mexico. But in that case, we will have to focus on our specific customers, which our customer base on those countries will allow us to provide a very accurate data. Just to remind you, if we have about 0.5 million subscribers in Brazil, it represent much lower percentage of the total cars, and they drive in a lower number of places in Brazil. But still, we have a lot to contribute to customers, and we will do it, but we start with Israel.

Derek Greenberg

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.

Eli Kamer

It's almost the same as the last quarter, meaning almost an effect of $1 million on the EBIT.

Derek Greenberg

Okay. Got it. And then lastly, just on [ Eternob ] 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?

Eli Kamer

So from the side of the marketing side, the interest of the market, we see higher and higher traction. On the other hand or the other part is our part to install, to marketing and sales. We're still going in a very low mode in order to get our own confidence before we start spending more money, more budget basically on business development and sales. But compared to last quarter, we have more and more pilots and more and more customers.

The numbers in terms of -- I mean, when we monetize it from customers to money, we are still in a very low numbers. So this is the reason why we are not yet provide specific data. We are in the beginning. But as I said, the most important issue is the interest of the market, of the car rentals company, et cetera. We spread now and we expand our capabilities in more and more cities. And as I said at the beginning, this is a midterm project. It's not something that will contribute substantial amount in 2026 and also in 2027. But once we will see that it's ramping up with a more material numbers, of course, we will inform everyone.

Eyal Sheratzky

Our next question is going to be from Sergey Glinyanov of Freedom Capital Markets.

Sergey Glinyanov

So I'm just wondering how today training on such products and markets like motorcycle market and UBI, how it's trading for Ituran?

Eyal Sheratzky

Regarding motorcycles, as you know, Sergey, and as we stated in the past, our main focus in the Brazilian market -- we started with the OEM deals with Yamaha and then [ BMW ]. And this is ramping up very impressive. We see that our customers, Yamaha and BMV are very satisfied with the capabilities with no problems, et cetera. And it's now started to contribute to our growing subscriber base in Brazil.

Our next phases will be or already exist is talking and try to expand those names to other names, and we have discussion. Again, I don't have any new deal that I can report, but I hope and believe that we will continue to push and we will get it. And then, of course, you will know. And this is regarding motorcycles. And I really believe that it's start and go and to be a major portion of our growth in subscribers in Brazil. Regarding UBI, we are still focusing in the Israeli market.

We see a growth, but it's still something that I have to remind you, the ARPU is low. And second is go to a specific usually segment of the second car at home or young people cars, but it's still growing, but it's not yet something that we succeed to expand it to other geographies, except Argentina, which is a smaller numbers as well.

Sergey Glinyanov

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?

Eyal Sheratzky

The answer is absolutely yes. Currently, we use the UBI based on personal data. And of course, we have discussions with insurance companies in Israel for showing them there is a lot of usage that they can do, not only based on Ituran subscriber and need to run hardware, but also about the big data that Ituran can provide.

And this is something that can give for them a lot of benefits of how they can pricing new and old insurers based on where they live, how they drive, where they drive, et cetera. And they are looking on that. But like it was with the UI, insurance industry is a very, very traditional industry, very traditional ways of taking decision. It's changing, but it's changing slow. But this is what we believe will be the next phase after we will continue to close deals with the governmental authorities and public transportation authorities.

And then we have 2, I would say, 2 customers, which is -- which are today traditionally our channels, which is insurance companies and car dealers and car importers to Israel. And this is something that will be the next phase, and we put a lot of efforts on that.

Eli Kamer

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 through the Zoom link. And with that, I'd like to hand back to Eyal for the closing statement. Eyal, please go ahead.

Eyal Sheratzky

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.