Thank you. Good afternoon, everyone, and welcome to our conference call.

In today's call, we will discuss the fourth quarter and full-year 2025 operational highlights and financial results with CEO Harold Goddijn and CFO Taco Titulaer. Harold will begin with an update on strategic developments.

Taco will then provide further insights into our financial results, our automotive backlog, and our outlook. After the prepared remarks, we will open the line for your questions.

As always, please note that safe harbor applies. With that, Harold, let me hand it over to you.

Thank you very much, Claudia, and good morning, good afternoon, everybody. 2025 was an important year for TomTom as our product strategy clearly matured and we gained commercial traction.

We introduced several new products, with our lane model maps standing out as a major milestone. Orbis lane model maps provide lane-level intelligence including geometry and lane markings, but at a true urban scale.

By leveraging our AI-powered map factory, we can now produce lane-accurate maps with exceptional efficiency and freshness. This has been proven to be a differentiating capability.

A strong validation is that we secured a record amount of new business, and that includes a collaboration with CARIAD, where TomTom Orbis lane model maps were selected as a core component of the automated driving system supporting the Volkswagen Group brands. In Enterprise, Orbis Maps broadened and diversified our customer base.

In the beginning of 2025, we announced a new cooperation with Esri, through which we provide maps and traffic data to support businesses and governments with location intelligence, addressing various use cases from maintaining critical infrastructure to analyzing traffic flows. More recently, we deepened our global partnership with Uber, expanding our collaboration to enhance on-demand travel experiences worldwide.

Looking ahead to 2026, I'm confident that continued advancements in our product portfolio will further strengthen our commercial traction across both our Automotive and Enterprise business, supporting top-line growth over time. We will continue to expand and enhance our product offering, and we will make it easier for developers and for businesses to access our data, which will support future growth.

We see meaningful commercial opportunities emerging in automated driving and infotainment, as well as in high-potential verticals such as insurtech and state and local government. Thank you very much.

This is my part of the presentation. I'm handing over to Taco.

Thank you, Harold. I will cover our financial performance, the key trends we're seeing, an update on our automotive backlog, and our outlook, after which we'll take your questions.

Automotive IFRS revenue for the fourth quarter amounted to €77 million, down 3% year-on-year. Automotive operational revenue was 12% lower compared to Q4 last year.

The Enterprise business delivered €39 million, a 10% decline versus the same quarter last year. Approximately half of this decline is explained by the weaker US dollar versus the euro year-on-year, as around three quarters of our Enterprise revenue are US dollar-denominated.

The remainder of the decline reflects a continued phase-out of a large customer, partly offset by a broadening of our customer base over the course of the year. Gross margin was 89% in the fourth quarter, a 2% percentage-point improvement compared with Q4 2024, mainly driven by a lower proportion of hardware in our revenue mix.

Operating expenses were €110 million, a reduction of €21 million compared with the same period last year, reflecting the combined effect of capitalizing development costs associated with our lane model maps and disciplined cost management. For the full year 2025, we recorded group revenue of €555 million, 3% lower than in 2024.

Automotive IFRS revenue was €323 million, down 2% from last year due to lower car volumes at some customers and the phase-out of certain car lines, partly balanced by new model starting productions. Operational revenue in Automotive dropped 1%, staying largely stable versus 2024.

Our Enterprise revenue for the year was €159 million, 2% lower year-on-year. For the full year, the picture is similar as in the quarter, normalized for the currency fluctuations.

Enterprise revenue showed a marginal increase compared with last year. For the full year, gross margin was 88%, an improvement compared with 2024.

This continued shift away from consumer hardware structurally strengthens our gross margin, from 85% in 2024 to 88% in 2025, and we expect it to move north of 90% in 2026. Operating expenses decreased to €489 million, a 90%—€19 million reduction, same as for the Q4 trend.

This reduction was due to capitalization of our map investment, lower amortization charges, and reduced personnel costs from the second half of 2025, partly offset by the reorganization charges booked in Q2 2025. Looking ahead, the quarterly opex run rate entering in 2026 will likely be a few million euros higher than what we saw in Q4.

For the year as a whole, we expect the total operating expenses to remain below 2025 in 2026. Free cash flow, excluding the costs for the reorganization we announced halfway in the year, €19 million, this was an inflow of €32 million compared with a €4 million outflow last year.

Having covered our results, let's move on the automotive backlog. Our automotive backlog at the end of the year reached €2.4 billion, a net increase of €300 million compared with the end of 2024.

Our automotive backlog represents the expected IFRS revenue from all awarded deals. Accordingly, the backlog decreases as revenue is recognized and it increases when new deals are won.

Its value can also fluctuate when customers revise their vehicle production forecasts and with forex revaluations. The increase in backlog this year was driven by a record level of new deals.

Our book-to-bill ratio was well above 2 last year, partly offset by negative impact from forex revaluations, which has a more pronounced than usual effect on the backlog valuation. A large portion of the automotive revenue we expect to report in 2026 and 2027 is already covered by the backlog generated from prior years' order intake.

The majority of the value from 2025 order intake is expected to start being recognized from 2028 onwards. From product perspective, we see automotive RFQs increasingly gravitating towards lane model maps, the maps that enable autonomous driving functionality and support a growing range of advanced safety features.

The products accounted for approximately half of last year's order intake, and we expect this share to continue to grow. OEMs are clearly increasing their product and engineering focus in this area, as lane model maps enable both improved vehicle performance and meaningful differentiation.

Our strong positioning in this area reflects a decade of sustained investment in these capabilities, and we are now seeing those investments translate into tangible commercial results. An additional benefit is that securing lane model maps deals opens the door to road model map awards for the navigation use cases, supporting further market share gains.

Now let's move to the 2026 outlook. Looking ahead to 2026, our revenue will reflect a transition of some customers.

However, this impact is temporary. 2026 group revenue is projected to be between €495 and €555 million, with Location Technology contributing €435 to €485 million.

We expect our operating result to improve year-on-year, while free cash flow is expected to turn temporarily negative due to the sustained investment in our lane model maps. Operating margin is expected to be around 3% of group revenue.

A return to top-line growth is foreseen in 2027. Higher revenues combined with disciplined cost control are set to drive a further step-up in operating margin as well.

To conclude, let me summarize our prepared remarks. We closed 2025 with strong strategic momentum, marked by a record automotive order intake and an expansion into automated driving.

Despite modest top-line declines driven by market conditions and customer transitions, EBIT and cash generation improved meaningfully. With an expanded €2.4 billion automotive backlog, new product launches, and strengthening commercial partnerships, TomTom enters 2026 well-positioned for a return to growth in 2027.

With that, we're ready to take your questions. Please, operator, please start the Q&A session.

Yes, thanks. I have a couple of questions on the lane model.

I think this the new product versus the HD maps that you previously had, but I think under the hood a lot changed, as in the way you built your process, you built your map, how you can integrate it with the client. Just if you can explain how this product currently looks like and also yeah, how are your clients going to integrate it?

If you can also talk about yeah, what is your competitive position there? If this now something that is really unique for TomTom, that none of the competition has something like this?

If you then compare it, there's always sometimes still the debate between for this kind of functionality do you need a map, yes or no? What's the status there, also with things like the redundancy of the safety features?

Marc, thank you. The lane model is fundamentally different from a road model map because it is a representation of the actual road and all the lines on that road and the dividers and whatnot.

You get a replica encoded of what the road surface looks like. The problem with building that map is that it's always been very expensive and didn't scale very well.

With new advances in technology and new data that are becoming available, we can now produce those maps to a high degree of automation. Not completely automated, but a high degree of automation is possible now.

That means that it's becoming economically viable to do this on all roads, not just the motorways. It also means that you have a process for upgrading and change detection, you can build maps that are fresher.

All those capabilities are critical for self-driving and automated driving. We see that those maps are used in those systems as not only as back-up, but also as a sensor.

The challenge for self-driving technologies is to reduce the number of interventions of the driver of the vehicle, and maps data play a very critical role in reaching that objective.

Yes, and the competition at this stage?

We don't have full visibility, but we believe that the method that we are deploying is novel, differentiating, leads to better results, scales better than what our competitors are capable of producing.

If we look at the client side, you obviously have a big success with CARIAD. What about the discussions with other OEMs?

Is this something that you talk—sorry. Please.

Go on, Marc.

I said and I wanted to add too do you speak to many other clients, including also the Chinese OEMs?

The interest is coming from broad range of car brands. Car makers want this.

They can see the value of having that data set available for the self-driving function, and that is broadly shared amongst all our customers and also potentially new customers. We see a profound deep interest in understanding what's going on and how this technology can help them to make those cars and bring the level of automation to the next level.

Next to that, we also see interest from software developers who are developing the self-driving software stack. There are a number of independent software developers who are doing this, mostly based in China, and they also show strong interest in understanding what this technology can bring and how it can help them to mature their own technology stack.

Clear. Thank you.

If there's no further questions, let me give the opportunity to some of the analysts if they want to take the questions. If not, No, if there's no additional questions, I want to thank you all for joining us today, and operator, you may now close the call.

There is a

Oh, sorry. Andrew, sorry.

Just popped up.

Yes, go on.

Yes, could you maybe give some guidance to how negative you think the free cash flow will be in 2026?

Thank you, Andrew. Two things I want to say about that.

The second thing is to answer your question, but the first thing is that we introduced new guidance metrics in 2020. We gave guidance on the top line and the bottom line.

The top line was the group revenue and the Location Technology revenue, and the bottom line we chose free cash flow, because free cash flow at that time was the best tracker of our profitability. That had to do with the difference between operating and reported revenue in Automotive and the big delta between amortization and capex that we saw in the opex line resulting from the acquisition of Tele Atlas.

Now both effects are kind of gone, you also saw last year that reported revenue and operational revenue in Automotive is at parity. They're kind of almost the same.

Also we don't have any amortization left that's related to the Tele Atlas acquisition. We want to normalize our guidance towards a revenue and an EBIT forecast.

That said, and then coming into your second or your primarily question, the fact that Automotive is declining next year temporarily and we sustain our investment at the same level as we had last year, we will see free cash flow being negative in this year. How large it will be, I don't know exactly, but I expect it will be above €10 million, but not much more than that.

Then if our revenue, our top line, is recovering in 2027, I expect that free cash flow will be positive again as of 2027 onwards, but an official guidance will follow in in 12 months from now about that. We continue to provide direction about free cash flow, but the primarily KPI for profitability will be EBIT.

Thank you. Then in terms of the bookings that came in, how much of that is new customers and how much is just more business from existing customers?

Then maybe just tied in with that, how does the funnel of business look for 2026? Is it a bit quieter after so much activity in 2025?

If you look at order intake, you can make a 2x2 matrix. In the horizontal you say existing customers and new customers.

On the vertical you say lane model or road model, where lane model is the ultimate in automated driving and safety use cases, and where road model is more for the driver itself to navigate from A to B. What I already mentioned in my prepared remarks is that what we've seen is that if you break down the order intake of last year, that roughly half of that order intake is related to lane model.

That percentage will only grow further. Also for 2026, we think that the proportion of lane model RFQs and potential wins will be tilted towards lane and not so much road.

Road models can be a tag-along deal. Increasingly, OEMs want to focus on securing the right quality and the right vendor of lane models.

Also that gives us opportunities to also secure extra deals in road modeling. CARIAD is an existing customer, of course, because we already do software with them.

In that sense, the majority of the order intake was with existing customers. I want to add to this is the first time that we deliver map data at scale to the VW Group.

That's different. Before it was navigation software and traffic, etc., but now it is also including map data.

Okay. How does the funnel of potential sales look for this year?

Because

it looks like it was just yeah.

There's a broad and deep book of opportunities out there, not dissimilar from 2025. The activity is really there from what we can see now.

What we also have seen in 2025 is that timing is very difficult to predict. Also because of ambiguity in product planning, in all sorts of market conditions.

I think the way we look at it now, there's substantial opportunity available again in 2026 for further building of the backlog, and there are also opportunities available to us for extending and growing market share. Market share.

Perfect. Thank you.

Yes, thanks. A follow-up, one on the Enterprise segment.

I think in previous calls we've discussed a lot about the momentum for the small clients being quite good, but then for the bigger longer sales cycles. Is that still ongoing?

Are you still talking to these bigger potential clients, and would you expect something yeah, beyond 2026 in the 2027 period? Is that likely?

We don't anticipate a big shift in market opportunities in 2026, no extraordinary, but we think that the momentum we have to an extent in the long tail of opportunities, that will continue throughout 2026. There's a lot to go after in also in the Enterprise sector.

The big clients, they sort of stick to their own products or

We have a good market share with the big tech companies already. They're not that many of them, but our market share there and representation with Big Tech is significant.

The growth and the expansion need to come from companies below that tier. There are a lot of them in the €10 million kind of category.

There are a lot of them in the between €1 and €10 million category that are available to us to win.

That's clear. Then the second follow-up was on you mention also for next year, 2027, to be cautious on the cost side.

I just want to understand that a bit, hey, because I think that you say, hey, you're moving towards the more automated process. It's now already almost fully automated.

Is that something that you can still take a bit of steps there to further automate it and at that stage decrease the cost a bit?

There's a number of things that we can achieve on the cost side. I think the most important one is that our product portfolio is maturing and coming together.

We're more product-driven than in the past, and that means that we can do things more effectively, better, at higher quality, and we can leverage that software much better than we've ever been able to do that in the past. We see also opportunities to further leverage the power of AI, especially in the engineering side.

We're making some meaningful progress in that area. The combination of a simpler product portfolio and higher quality that is reaching completeness now after a long period of transition, those are all indicators that we can do things more faster at higher quality, but also allows us also to keep a lid on the cost and don't let that grow.

There will be additional costs in maturing lane-level product, as Taco already indicated, but all in all, I think we are in a good position not to let the cost and the opex run away from us, but rather contain it and manage it carefully without that giving strong limitation on our ability to get things done.

Great. Thanks.

Okay. With that, I want to thank you all for joining us today, and operator, now you can really close the call.

Thank you.