MiX Telematics Reports Preliminary Unaudited Fourth Quarter and Full Fiscal Year 2022 U.S. GAAP Financial Results and Changes to the Board of Directors

Highlights:

Fourth Quarter Fiscal Year 2022:

• Total revenues of $36.1 million
• Subscription revenues of $31.3 million
• Annual recurring revenue (“ARR”) of $127.1 million up 2.8% sequentially, on a constant currency basis
• Net subscriber additions of 24,700, bringing the total base to 815,200 subscribers
• Net income of $3.5 million
• Adjusted EBITDA of $8.2 million, at a 22.8% margin
• Cash and cash equivalents of $33.7 million at quarter end

Fiscal Year 2022:

• Subscription revenues of $123.6 million
• ARR of $127.1 million up 9.1%, on a constant currency basis
• Net income of $8.9 million
• Adjusted EBITDA of $31.6 million, at a 22.0% margin

MiX Telematics Limited (“MiX Telematics”) (NYSE: MIXT, JSE: MIX), a leading global Software-as-a-Service (“SaaS”) provider of connected fleet management solutions, today announced preliminary unaudited financial results, in accordance with accounting principles generally accepted in the United States (“GAAP”), for the fourth quarter and full fiscal year 2022, which ended March 31, 2022. MiX Telematics also announced today that John Granara, its Chief Financial Officer, has notified the Company of his intent to pursue another career opportunity and will be leaving at the end of June 2022. The Board has appointed Paul Dell, currently Chief Accounting Officer, as Chief Financial Officer beginning June 24, 2022. Mr. Granara will remain employed with the Company in an advisory capacity for a period following his resignation as Chief Financial Officer to ensure an effective transition of his duties.

“MiX closed fiscal year 2022 with a solid finish to a successful year for the Company. We executed on each of our key initiatives for fiscal year 2022, most notably returning the business to sustainable growth and delivering on our profitability targets,” said Stefan Joselowitz, Chief Executive Officer of MiX Telematics.

Joselowitz continued, “We are encouraged by conversations with customers, which reflect the growing strategic importance of a comprehensive telematics solution to run their businesses more efficiently and safely. We believe MiX is well positioned to capitalize on this trend and make additional progress towards our long-term financial targets.”

Financial Results for the Three Months Ended March 31, 2022

Subscription Revenues: Subscription revenues were $31.3 million, an increase of 1.6% compared to $30.8 million for the fourth quarter of fiscal year 2021. Subscription revenues represented 86.6% of total revenues during the fourth quarter of fiscal year 2022. Subscription revenues increased by 2.5% on a constant currency basis, year over year. During the fourth quarter of fiscal year 2022, the Company’s subscriber base grew by a net 24,700 subscribers.

The majority of our revenues and subscription revenues are derived from currencies other than the U.S. Dollar. Accordingly, the strengthening of the U.S. Dollar against these currencies (in particular against the South African Rand) following recent currency volatility, has negatively impacted our revenue and subscription revenues reported in U.S. Dollars. Compared to the fourth quarter of fiscal year 2021, the South African Rand weakened by 2% against the U.S. Dollar. The Rand/U.S. Dollar exchange rate averaged R15.25 in the fourth quarter of fiscal year 2022 compared to an average of R14.96 during the fourth quarter of fiscal year 2021. The impact of translating foreign currencies to U.S. Dollars at the average exchange rates during the fourth quarter of fiscal year 2022 led to a 0.9% decrease in reported U.S. Dollar subscription revenues.

Total Revenues: Total revenues were $36.1 million, an increase of 5.1% compared to $34.3 million for the fourth quarter of fiscal year 2021. Total revenues increased by 6.3% on a constant currency basis, year over year. Hardware and other revenues were $4.8 million, an increase of 35.7%, compared to $3.6 million for the fourth quarter of fiscal year 2021.

The impact of translating foreign currencies to U.S. Dollars at the average exchange rates during the fourth quarter of fiscal year 2022 led to a 1.2% decrease in reported U.S. Dollar revenues.

Gross Margin: Gross profit was $23.2 million, compared to $22.2 million for the fourth quarter of fiscal year 2021. Gross profit margin was 64.1%, compared to 64.5% for the fourth quarter of fiscal year 2021. The decline in the gross profit margin was due to the increase in hardware and other revenues which carry lower margins than subscription revenue. The subscription revenue margin during the fourth quarter of fiscal year 2022 was 69.7%.

Income From Operations: Income from operations was $3.8 million, compared to $5.9 million for the fourth quarter of fiscal year 2021. Operating income margin was 10.5%, compared to 17.2% for the fourth quarter of fiscal year 2021. Operating expenses of $19.4 million increased by $3.1 million, or 19.1%, compared to the fourth quarter of fiscal year 2021.

Net Income and Earnings Per Share: Net income was $3.5 million, compared to net income of $2.8 million in the fourth quarter of fiscal year 2021. During the fourth quarter of fiscal year 2022, net income included a net foreign exchange loss of $0.8 million before tax, as well as a $1.7 million deferred tax credit on a U.S. Dollar intercompany loan between MiX Telematics and MiX Telematics Investments Proprietary Limited (“MiX Investments”), a wholly-owned subsidiary of the Company. During the fourth quarter of fiscal year 2021, net income included a net foreign exchange loss of $0.7 million before tax and a $0.2 million deferred tax charge on a U.S. Dollar intercompany loan between MiX Telematics and MiX Investments.

Earnings per diluted ordinary share was 0.6 U.S. cents, compared to 0.5 U.S. cents in the fourth quarter of fiscal year 2021. For the fourth quarter of fiscal year 2022, the calculation was based on diluted weighted average ordinary shares in issue of 560.6 million compared to 565.0 million diluted weighted average ordinary shares in issue during the fourth quarter of fiscal year 2021. On a ratio of 25 ordinary shares to one American Depositary Share (“ADS”), earnings per diluted ADS were 16 U.S. cents compared to 12 U.S. cents in the fourth quarter of fiscal year 2021.

The Company’s effective tax rate was negative 23.1%, compared to 47.3% in the fourth quarter of fiscal year 2021. Ignoring the impact of net foreign exchange losses net of tax, the tax rate used in determining adjusted net income below was 36.9% compared to 41.4% in the fourth quarter of fiscal year 2021.

Adjusted EBITDA: Adjusted EBITDA, a non-GAAP measure, was $8.2 million, compared to $11.3 million for the fourth quarter of fiscal year 2021. Adjusted EBITDA margin, a non-GAAP measure, for the fourth quarter of fiscal year 2022 was 22.8%, compared to 32.9% for the fourth quarter of fiscal year 2021.

Adjusted Net Income and Adjusted Net Income Per Share: Adjusted net income was $2.3 million, compared to $3.5 million for the fourth quarter of fiscal year 2021. Adjusted net income per diluted ordinary share was 0.4 U.S. cents, compared to 0.6 U.S. cents in the fourth quarter of fiscal year 2021. At a ratio of 25 ordinary shares to one ADS, the adjusted net income per diluted ADS was 10 U.S. cents compared to 15 U.S. cents in the fourth quarter of fiscal year 2021.

Cash and Cash Equivalents and Cash Flow: At March 31, 2022, the Company had $33.7 million of cash and cash equivalents, compared to $45.5 million at March 31, 2021.

Net cash provided by operating activities for the fourth quarter of fiscal year 2022 was $4.7 million compared to $7.6 million for the fourth quarter of fiscal year 2021. The Company invested $7.3 million in capital expenditures (including investments in in-vehicle devices of $4.9 million), leading to negative free cash flow, a non-GAAP measure, of $2.5 million in the quarter. The Company generated free cash flow of $5.2 million for the fourth quarter of fiscal year 2021 when the Company invested $2.5 million in capital expenditures (including investments in in-vehicle devices of $1.3 million).

Net cash used in financing activities amounted to $0.4 million for the fourth quarter of fiscal year 2022, compared to $2.6 million used during the fourth quarter of fiscal year 2021. The cash used in financing activities during the fourth quarter of fiscal year 2022 mainly consisted of ordinary shares repurchased of $2.2 million and dividends paid of $1.4 million, offset by facilities utilized of $3.2 million. The cash used by financing activities during the fourth quarter of fiscal year 2021 consisted of dividends paid of $1.5 million and $1.2 million from a reduction in facilities utilized.

During the quarter, the South African Rand strengthened against the U.S. Dollar from R15.95 at December 31, 2021 to R14.49 at March 31, 2022 and as a result, cash increased by $1.0 million due to foreign exchange losses.

Financial Results for the Fiscal Year Ended March 31, 2022

Subscription Revenues: Subscription revenues were $123.6 million, an increase of 9.0% compared to $113.4 million for fiscal year 2021. Subscription revenues represented 86.2% of total revenues during fiscal year 2022. Subscription revenues increased by 2.8% on a constant currency basis. During fiscal year 2022, the Company’s subscriber base grew by a net 70,500 subscribers.

The majority of our revenues and subscription revenues are derived from currencies other than the U.S. Dollar. Accordingly, the weakening of the U.S. Dollar against these currencies (in particular against the South African Rand) following currency volatility, has positively impacted our revenue and subscription revenues reported in U.S. Dollars. Compared to fiscal year 2021, the South African Rand strengthened by 9% against the U.S. Dollar. The Rand/U.S. Dollar exchange rate averaged R14.86 during fiscal year 2022 compared to an average of R16.37 for fiscal year 2021. The impact of translating foreign currencies to U.S. Dollars at the average exchange rates during fiscal year 2022 led to a 6.2% increase in reported U.S. Dollar subscription revenues.

Total Revenues: Total revenues for fiscal year 2022 were $143.3 million, an increase of 12.9% compared to $126.9 million for fiscal year 2021. Total revenues increased by 6.9% on a constant currency basis. Hardware and other revenues were $19.7 million, an increase of 45.6%, compared to $13.5 million for fiscal year 2021.

The impact of translating foreign currencies to U.S. Dollars at the average exchange rates during fiscal year 2022 led to a 6.0% increase in reported U.S. Dollar revenues.

Gross Margin: Gross profit was $91.4 million, compared to $83.0 million for fiscal year 2021. Gross profit margin was 63.8%, compared to 65.4% for fiscal year 2021. The decline in the gross profit margin was due to the increase in hardware and other revenues which carry lower margins than subscription revenue. The subscription revenue margin during fiscal year 2022 was 70.3%.

Income From Operations: Income from operations was $14.4 million, compared to $18.2 million in fiscal year 2021. The operating income margin was 10.1%, compared to 14.3% in fiscal year 2021. Operating expenses of $77.0 million increased by $12.2 million, or 18.7%, compared to fiscal year 2021.

Net Income and Earnings Per Share: Net income for fiscal year 2022 was $8.9 million, compared to $14.6 million in fiscal year 2021. Net income included a net foreign exchange loss of $0.6 million before tax, as well as a $0.4 million deferred tax credit on a U.S. Dollar intercompany loan between MiX Telematics and MiX Investments, a wholly-owned subsidiary of the Company. During fiscal year 2021, net income included a net foreign exchange loss of $1.0 million and a $3.5 million deferred tax credit on a U.S. Dollar intercompany loan between MiX Telematics and MiX Investments.

Earnings per diluted ordinary share was 1.6 U.S. cents, compared to 2.6 U.S. cents in fiscal year 2021. For fiscal year 2022, the calculation was based on diluted weighted average ordinary shares in issue of 564.0 million compared to 560.6 million diluted weighted average ordinary shares in issue during fiscal year 2021. On a ratio of 25 ordinary shares to one ADS, earnings per diluted ADS was 40 U.S. cents compared to 65 U.S. cents in fiscal year 2021.

The Company’s effective tax rate was 33.1%, compared to 15.3% for fiscal year 2021. Ignoring the impact of net foreign exchange losses net of tax, the tax rate used in determining adjusted net income below was 35.5% compared to 34.6% in fiscal year 2021.

Adjusted EBITDA: Adjusted EBITDA, a non-GAAP measure, was $31.6 million, compared to $37.2 million for fiscal year 2021. Adjusted EBITDA margin, a non-GAAP measure, for fiscal year 2022 was 22.0%, compared to 29.3% in fiscal year 2021.

Adjusted Net Income and Adjusted Net Income Per Share: Adjusted net income was $9.0 million, compared to $11.9 million in fiscal year 2021. Adjusted net income per diluted ordinary share was 1.6 U.S. cents, compared to 2.1 U.S. cents for fiscal year 2021. At a ratio of 25 ordinary shares to one ADS, the adjusted net income per diluted ADS was 40 U.S. cents compared to 53 U.S. cents in fiscal year 2021.

Cash and Cash Equivalents and Cash Flow: Net cash provided by operating activities for fiscal year 2022 was $19.4 million compared to $38.6 million for fiscal year 2021. The Company invested $26.2 million in capital expenditures (including investments in in-vehicle devices of $18.3 million), leading to negative free cash flow, a non-GAAP measure, of $6.8 million for the year. The Company generated free cash flow of $29.9 million in fiscal year 2021 when the Company invested $8.7 million in capital expenditures (including investments in in-vehicle devices of $4.2 million).

Net cash used in financing activities amounted to $5.1 million for fiscal year 2022, compared to $5.2 million used during fiscal year 2021. The cash used in financing activities during fiscal year 2022 mainly consisted of dividends paid of $5.9 million and ordinary shares repurchased of $3.0 million, offset by facilities utilized of $3.9 million. The cash utilized in financing activities during fiscal year 2021 consisted of dividends paid of $5.4 million and a repayment in short-term debt of $0.7 million, offset by proceeds of $0.9 million from the issue of ordinary shares in relation to the exercise of stock options.

During the year, the South African Rand strengthened against the U.S. Dollar from R14.92 at March 31, 2021 to R14.49 at March 31, 2022 and as a result, cash increased by $0.2 million due to foreign exchange losses.

Executive Leadership Transition

“On behalf of the Board and executive team, I would like to thank John for his contributions to MiX Telematics over the years. John helped lead MiX Telematics through challenging times and has helped position the business well to achieve our long-term financial targets. We wish him well in his future endeavors,” said Stefan Joselowitz, Chief Executive Officer.

Joselowitz added, “I am thrilled that Paul will become CFO. He has been a valued member of our leadership team with a deep understanding of our business and extensive financial leadership experience. I look forward to working closely together as we guide MiX Telematics in this next phase of growth.”

Mr. Granara said, “I am grateful for my time at MiX Telematics and proud of all that we have accomplished since I joined in 2019. While I look forward to pursuing a new opportunity that will allow me to be work closer to my family, I am confident that MiX Telematics has a bright future.”

Paul Dell is a chartered accountant and has served in various senior roles since joining the Company in July 2010. He currently serves as the Company’s Chief Accounting Officer and Chief Financial Officer of MiX Telematics North America Incorporated, a position he has held since July 2019. Mr. Dell served as the Company’s Interim Chief Financial Officer and as a member of the Board from February 2017 to July 2019 and was the Group Financial Controller from September 2012 to February 2017.

Preliminary Financial Information

The unaudited financial information set forth in this release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been finalized for the year-end audit, which could result in potential differences from this preliminary unaudited condensed financial information. Actual results could differ materially. The Company expects to finalize its financial results and file its Annual Report on Form 10-K no later than June 14, 2022.

Quarterly Dividend

The most recent dividend payment of 4 South African cents (0.3 U.S. cents) per ordinary share and 1 South African Rand (7 U.S. cents) per ADS was paid on March 10, 2022 to shareholders on record on February 25, 2022. A dividend of 4 South African cents per ordinary share and 1 South African Rand per ADS will be paid on June 30, 2022 to shareholders on record as of the close of business on June 17, 2022.

The details with respect to the dividends declared for holders of our ADSs are as follows:

Share Repurchases

In the fourth quarter of fiscal year 2022, the Company repurchased 4,452,294 ordinary shares on the open market at prevailing market prices, for a total consideration of $2.2 million. For the full fiscal year 2022, the Company repurchased 6,020,085 ordinary shares on the open market at prevailing market prices for a cumulative consideration of $3.0 million.

Conference Call Information

MiX Telematics management will host a conference call and audio webcast at 8:00 a.m. (Eastern Daylight Time) and 2:00 p.m. (South African Time) on Thursday, May 26, 2022 to discuss the Company’s financial results and current business outlook.

• The live webcast of the call will be available at the “Investor Information” page of the Company’s website, http://investor.mixtelematics.com.

• To access the call, dial 1-877-451-6152 (within the United States) or 0-800-983-831 (within South Africa) or 1-201-389-0879 (outside of the United States). The conference ID is 13729702.

• A replay of this conference call will be available for a limited time at 1-844-512-2921 (within the United States) or 1-412-317-6671 (within South Africa or outside of the United States). The replay conference ID is 13729702.

• A replay of the webcast will also be available for a limited time at http://investor.mixtelematics.com.

About MiX Telematics Limited

MiX Telematics is a leading global provider of connected fleet and mobile asset solutions delivered as SaaS to over 815,000 subscribers in over 120 countries. The Company’s products and services provide enterprise fleets, small fleets and consumers with solutions for efficiency, safety, compliance and security. MiX Telematics was founded in 1996 and has offices in South Africa, the United Kingdom, the United States, Uganda, Brazil, Australia, Romania and the United Arab Emirates as well as a network of more than 130 fleet partners worldwide. MiX Telematics shares are publicly traded on the Johannesburg Stock Exchange (JSE: MIX) and MiX Telematics American Depositary Shares are listed on the New York Stock Exchange (NYSE: MIXT). For more information, visit www.mixtelematics.com.

Forward-Looking Statements

This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, statements regarding our position to execute on our growth strategy, and our ability to expand our leadership position. These forward-looking statements include, but are not limited to, Company’s beliefs, plans, goals, objectives, expectations, assumptions, estimates, intentions, future performance, other statements that are not historical facts and statements identified by words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates” or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in, or suggested by, these forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved.

Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of known and unknown risks and uncertainties, some of which are beyond our control including, without limitation:

• the ongoing COVID-19 pandemic, the pandemic’s economic impact on the geographical locations of our regional service organizations and central service organization, the impact of the pandemic on our customers’ ability to meet their financial obligations, our ability to implement cost containment and business recovery strategies during the pandemic, local and foreign government regulations implemented to combat the pandemic and any future developments on the pandemic;

• our ability to attract, sell to and retain customers;

• our ability to improve our growth strategies successfully, including our ability to increase sales to existing customers;

• our ability to adapt to rapid technological change in our industry;

• competition from industry consolidation and new entrants into the industry;

• loss of key personnel or our failure to attract, train and retain other highly qualified personnel;

• our ability to integrate any businesses we acquire;

• the introduction of new solutions and international expansion;

• the impact of the global component shortage and supply chain disruptions;

• our dependence on key suppliers and vendors to manufacture our hardware;

• our dependence on our network of dealers and distributors to sell our solutions;

• businesses may not continue to adopt fleet management solutions;

• our future business and system development, results of operations and financial condition;

• expected changes in our profitability and certain cost or expense items as a percentage of our revenue;

• changes in the practices of insurance companies;

• the impact of laws and regulations relating to the Internet and data privacy;

• our ability to ensure compliance with export laws, customs and import regulations, economic sanctions and Export Administration Regulations;

• our ability to protect our intellectual property and proprietary technologies and address any infringement claims;

• our ability to defend ourselves from litigation or administrative proceedings relating to labor, regulatory, tax or similar issues;

• significant disruption in service on, or security breaches of, our websites or computer systems;

• our dependence on third-party technology;

• fluctuations in the value of the South African Rand;

• economic, social, political, labor and other conditions and developments in South Africa and globally;

• our ability to issue securities and access the capital markets in the future; and

• other risks set forth in our filings with the U.S. Securities Exchange Commission.

We assume no obligation to update any forward-looking statements contained in this press release and expressly disclaim any obligation to do so, whether as a result of new information, future events or otherwise, except as required by law.

Use of Non-GAAP Financial Measures

This press release and the accompanying tables include references to adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted net income per share, free cash flow and constant currency, which are non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses these measures, please see Annexure A titled “Non-GAAP Financial Measures and Key Business Metrics”. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP is provided in Annexure A.

Segment Information

Our operating segments are based on the geographical location of our Regional Sales Offices (“RSOs”) and also include our Central Services Organization (“CSO”). CSO is our central services organization that wholesales our products and services to our RSOs who, in turn, interface with our end-customers, distributors and dealers. CSO is also responsible for the development of our hardware and software platforms and provides common marketing, product management, technical and distribution support to each of our other operating segments.

Each RSO’s results reflect the external revenue earned, as well as its performance before the remaining CSO and corporate costs allocations. Segment performance is measured and evaluated by the chief operating decision maker (“CODM”) using Segment Adjusted EBITDA, which is a measure that uses income before income tax expense excluding net interest income/expense, net foreign exchange gains/losses, net loss/profit on sale of property, plant and equipment, depreciation, amortization, operating lease costs, stock-based compensation costs, restructuring costs, non-recurring legal costs, gains or losses on the disposal or impairments of long-lived assets and corporate and consolidation entries. Product development costs are capitalized and amortized and this amortization is excluded from Segment Adjusted EBITDA.

The segment information provided to the CODM is as follows (in thousands and unaudited):

The following table (unaudited and shown in thousands) reconciles total Segment Adjusted EBITDA to income before income tax expense for the periods shown:

Annexure A: Non-GAAP Financial Measures and Key Business Metrics

We use certain measures to assess the financial performance of the business. Certain of these measures are termed “non-GAAP measures” because they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with GAAP, or are calculated using financial measures that are not calculated in accordance with GAAP. These non-GAAP measures include adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted net income per share, free cash flow and constant currency information.

An explanation of the relevance of each of the non-GAAP measures, a reconciliation of the non-GAAP measures to the most directly comparable measures calculated and presented in accordance with GAAP and a discussion of their limitations is set out below. We do not regard these non-GAAP measures as a substitute for, or superior to, the equivalent measures calculated and presented in accordance with GAAP or those calculated using financial measures that are calculated in accordance with GAAP.

In addition to providing the non-GAAP financial measures mentioned above, we disclose Annual Recurring Revenue (“ARR”) to give investors supplementary indicators of the value of our current recurring revenue contracts. ARR represents the estimated annualized value of recurring revenue for subscription contracts that have commenced revenue recognition as of the measurement date.

Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and adjusted EBITDA margin are two of the profit measures reviewed by the CODM. We define adjusted EBITDA as income before income taxes, net interest income/expense, net foreign exchange gains/losses, depreciation of property, plant and equipment including capitalized customer in-vehicle devices, amortization of intangible assets including capitalized internal-use software development costs and intangible assets identified as part of a business combination, stock-based compensation costs, restructuring costs, non-recurring legal costs and profits/losses on the disposal or impairments of assets or subsidiaries. The adjusted EBITDA definition has been updated also to exclude non-recurring legal costs relating to a patent infringement matter that arose during fiscal year 2022. We define adjusted EBITDA margin as adjusted EBITDA divided by total revenue.

We have included adjusted EBITDA and adjusted EBITDA margin in this press release because they are key measures that the Company’s management and Board of Directors use to understand and evaluate its core operating performance and trends; to prepare and approve its annual budget; and to develop short and long-term operational plans. In particular, the exclusion of certain expenses in calculating adjusted EBITDA and adjusted EBITDA margin can provide a useful measure for period-to-period comparisons of the Company’s core business. Accordingly, the Company believes that adjusted EBITDA and adjusted EBITDA margin provide useful information to investors and others in understanding and evaluating its operating results.

A reconciliation of net income (the most directly comparable financial measure presented in accordance with GAAP) to adjusted EBITDA for the periods shown is presented below (in thousands and unaudited):

Our use of adjusted EBITDA and adjusted EBITDA margin have limitations as analytical tools, and should not be considered as performance measures in isolation from, or as a substitute for, analysis of our results as reported under GAAP.

Some of these limitations are:

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;

• Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to the Company;

• other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure; and

• certain of the adjustments (such as restructuring costs, impairment of long-lived assets and others) made in calculating adjusted EBITDA are those that management believes are not representative of our underlying operations and, therefore, are subjective in nature.

Because of these limitations, adjusted EBITDA and adjusted EBITDA margin should be considered alongside other financial performance measures, including income from operations, net income and our other results.

Adjusted Net Income and Adjusted Net Income Per Share

Adjusted net income is defined as net income excluding net foreign exchange gains/losses net of tax.

We have included adjusted net income per share in this press release because it provides a useful measure for period-to-period comparisons of our core business by excluding net foreign exchange gains/losses net of tax and associated tax consequences from earnings. Accordingly, we believe that adjusted net income per share provides useful information to investors and others in understanding and evaluating our operating results.

The following tables (in thousands, except per share data, and unaudited) reconcile net income to adjusted net income and diluted net income per ordinary share or ADS to adjusted net income per ordinary share or ADS for the periods shown:

Free Cash Flow

Free cash flow is determined as net cash provided by operating activities less capital expenditure for investing activities. We believe that free cash flow provides useful information to investors and others in understanding and evaluating the Company’s cash flows as it provides detail of the amount of cash the Company generates or utilizes after accounting for all capital expenditures including investments in in-vehicle devices.

The following table (in thousands and unaudited) reconciles Net Cash Provided by Operating Activities to Free Cash Flow for the periods shown:

Constant Currency

Constant currency information has been presented to illustrate the impact of changes in currency rates on the Company’s results. The constant currency information has been determined by adjusting the current financial reporting period results to the prior period average exchange rates, determined as the average of the monthly exchange rates applicable to the period. The measurement has been performed for each of the Company’s currencies, including the South African Rand and British Pound. The constant currency growth percentage has been calculated by utilizing the constant currency results compared to the prior period results.

The constant currency information represents non-GAAP information. We believe this provides a useful basis to measure the performance of our business as it removes distortion from the effects of foreign currency movements during the period.

Due to the significant portion of our customers who are invoiced in non-U.S. Dollar denominated currencies, we also calculate our subscription revenue growth rate on a constant currency basis, thereby removing the effect of currency fluctuation on our results of operations.

The following tables (in thousands, except year over year change) provide the unaudited constant currency reconciliation to the most directly comparable GAAP measure for the periods shown:

Key Business Metrics

Annual Recurring Revenue

We believe that ARR is a key indicator of the trajectory of our business performance and serves as an indicator of future subscription revenue growth. We define ARR as the annualized value of subscription contracts that have commenced revenue recognition as of the measurement date. ARR is calculated by taking the subscription revenue for the last month of the period, multiplied by 12. It provides a 12 month forward view of revenue, assuming unit numbers, pricing and foreign exchange rates (the average monthly exchange rates applicable to the last month of the period) remain unchanged during the year. Constant currency ARR growth has been determined by adjusting the prior financial reporting period results to the last month of the current period average exchange rates, determined as the average monthly exchange rates applicable to the last month of the period.

ARR does not have a standardized meaning and is not necessarily comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and is not intended to be combined with or to replace it. ARR is not a forecast and the active contracts at the date used in calculating ARR may or may not be extended or renewed.

The following table (in thousands and unaudited) provides the constant currency ARR:

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