TomTom Suspends 2025 Revenue Target Amid Weak Demand for New Cars
Amsterdam-based digital mapping specialist TomTom has suspended its revenue target for 2025 and trimmed its expectations for this year due to weak demand for new cars affecting its automotive location technology business. The company’s shares plummeted 8.1% to 5.12 euros by 0813 GMT.
TomTom’s revenue target for 2025 location technology revenue has been scrapped, and 2024 sales are expected to be at the lower end of its previously indicated range of 570 million to 610 million euros. The company’s automotive location technology business saw a 4% decline in sales to 87.3 million euros in the second quarter, accounting for more than half of TomTom’s total revenue of 152.2 million euros.
Chief Executive Harold Goddijn attributed the decline to a combination of downward revisions for near-term car production volumes and delays in new model introductions, resulting in a less predictable market environment. European new car sales were down 3% year on year in May.
Finance Chief Taco Titulaer emphasized that there is nothing fundamentally wrong with the company, but there are short-term headwinds in the automotive industry affecting revenue. The company’s new mapping platform, TomTom Orbis, is also taking longer than expected to come online, impacting group sales.
TomTom will provide new targets for next year when it reports 2024 full-year results. For the second quarter, the company posted a 5.2 million euro loss before interest and tax, widening from a loss of 3.6 million euros a year earlier. The consensus from analyst forecasts compiled by the company was a loss of 4 million euros.
In a positive development, TomTom is deepening and extending its collaboration with Microsoft, including the adoption of TomTom Orbis across its products, with a new contract running until the end of this decade.
