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

On today's call, we will discuss the operational highlights and financial results for the second quarter and first half of 2026, together with Mike Schoofs and Taco Titulaer. Mike will begin with an update on our strategic and operational developments, and Taco will then provide further insights into our financials.

After their prepared remarks, we will open the line for your questions. As always, please note that safe harbor applies.

With that, Mike, let me hand it over to you.

Thank you, Claudia. Good afternoon, everyone, and thank you for joining our call.

I'll begin with an update on our strategic and operational progress for the quarter before handing over later to Taco for the financials. During the quarter, we continued to make progress across both Automotive and Enterprise, strengthening our position as a provider of high-quality scalable location technology.

In Automotive, we see investments into automated driving, where we act as a critical safety component in a growing industry. We're engaging globally with key players in the ecosystem and with the OEMs, both.

Our location data and our dynamic services like traffic, speeds, and hazards play a key role to get to zero accidents together and less disengagements of the automated driving systems. Quality and freshness at scale for our data are clear differentiators in those conversations.

In Enterprise, we continue to broaden our customer base and expand the range of use cases we support. Growth across more customers with new logos is helping us to further diversify our revenue base and reducing customer concentration, which is quite important and a good trend.

We see the need for high-quality, continuously updated location data that can be seamlessly consumed by AI systems. To support this, as an example, we introduced the TomTom Agent Toolkit for Maps SDK, enabling developers to build AI-powered applications that interact more intelligently with maps and location data.

Also a sharp focus from us on growth industries like government and defense, the public sector, and geospatial analytics, of which insurtech is a big market, enables us to increase our opportunity pipeline in terms of new logos, but also the size of individual deals. Overall, the progress we are making reflects disciplined execution, continued product innovation, and strengthening commercial traction across our core markets.

Looking ahead, we remain focused on execution in 2026, while positioning the company for future growth. We see our customer programs expanding into 2027, especially in Automotive, notably through China overseas wins and a further rollout and expansion within the VW Group.

We see clear opportunities in location intelligence, which is predominantly Enterprise. Our data and dynamic services are the key components to increase adoption into workflows of our target industries.

Making our data AI consumable also unlocks new use cases and expands our addressable markets. We are confident that the steps we are taking today will support the return to revenue growth from 2027 onwards, and continued improvements in profitability over time.

With that, I'll hand over to Taco, who will take you through the financial results in more detail. Thank you.

Thank you, Mike. I'll cover our financial performance and our outlook, after which we'll take your questions.

In the second quarter of 2026, group revenue was €135 million, an 8% decrease from last year's €146 million. The decline was in line with expectations, and revenue remains on track for the full year.

Let me briefly break down our top-line performance. Start with Automotive revenue that came in at €81 million for the quarter, a 6% decrease year on year.

Automotive operational revenue was €76 million, down 2% year on year. Excluding currency effects, revenue was more or less stable, with higher production volumes at certain customers offsetting the ramp-down of some vehicle programs.

Enterprise revenue was €38 million, down 4% year on year. On a constant currency basis, revenue was stable year on year.

Taken together, our Location Technology segment generated €119 million, which is 5% lower than last year. Finally, the Consumer segment declined as expected.

Consumer revenue was €15 million, down 24% year on year, reflecting the continued contraction of the PND market, and also memory supply constraints. Gross margin improved to 90%, up from 88% last year.

This increase was driven by a higher proportion of high-margin Location Technology revenue in our mix. Operating expenses were €113 million, a reduction of €35 million compared with the same period last year.

Excluding restructuring charges in the prior year, underlying operating expenses decreased, mainly reflecting lower personnel costs following the organizational realignment and one-off items in prior years. As a result, our operating result was €9 million compared with a loss of €20 million in the same quarter last year.

Our operating margin was 6%, a sharp improvement year on year. Free cash flow for the quarter was an outflow of €8 million compared with an inflow of €14 million last year.

During the quarter, we completed our €15 million share buyback program. We ended the quarter with a net cash position of €234 million with no outstanding bank borrowings.

Then on to the outlook. We are on track for 2026.

The revenue development is progressing as expected, and we're delivering improvements in profitability driven by strong gross margins and disciplined cost control. Looking ahead, we are reiterating our full year 2026 outlook.

We expect group revenue of €495 million to €555 million, with Location Technology revenue of €435 million to €485 million, and an operating margin of around 3% for the full year. As already mentioned by Mike, we see a path towards revenue growth next year for total revenue excluding Consumer.

We also expect a further strengthening of both our gross and operating margins. With that, we are ready to take your questions.

Operator, please start the Q&A.

Thank you. Maybe just a broad question for Mike to start with, seeing as it's your first call.

There's clearly going to be considerable continuity at TomTom given your appointment and the length of time you've been with the company, but I could imagine that there's some adjustments that you want to make. Is there anything you could outline on shifts that you're looking to implement within the company?

Thank you, Andrew, for that question. As you say, we want to see continuity as well.

We have a strong foundation with a backlog and in both Automotive and Enterprise. What I already said in my opening, you see strong, let's say, growth segments in industry in both Automotive and in Location Intelligence, and we want to concentrate also on those growth markets.

If you look at automated driving, there's clearly investments happening from the industry and there's margin and value in those. For us, we see a clear product-market fit and we have an edge there.

We're investing, and we already have proof points with a strong deal with the VW Group. We want to double down there.

That's an important topic. In order to do that, you need to make choices and to say that you go after those markets.

The other part, and by the way, before I move to Location Intelligence and Enterprise, is also that you see a shift from purely navigation into automated driving, where it gets visualized into the infotainment system of a car. It's not just navigation anymore.

It all comes together, that technology, which is a very strong momentum where we want to play a key role. That's quite important for us to have the right positioning with our data and our services.

Outside of Automotive, that Location Intelligence part is also fast growing, but it's a vast landscape. Also there, you need to pick your battles.

What we can see is with the whole shift of AI-consumable data, the data is fuel and it's very strong. People look for fresh, wide coverage, qualitative data with rich in features and attributes, and we have that.

That's our fuel and our baseline. We're investing into making that AI consumable, which is accelerating the adoption in our existing segments, but also opening new use cases.

In order to grow there, you need to be more relevant in those industries with that interface you build on top of your data, which we're doing, and also moving higher up the stack in terms of location analytics, enabling decisions for your customers instead of just the pure raw data. There's a shift happening there, which we see in terms of how we invest in our product stack as well to accelerate in growth markets.

That's more the concentration where we see the landscape moving, where we see growth in the industry with high margin, strong value, and a competitive edge. We go more in those directions in terms of investment and concentrating go-to-market.

Okay. Interesting.

Then you did specifically mention VW. Obviously in the news at the moment, there's a lot of news about cuts that they're planning to make.

Are you seeing that impact you at all, or are you finding that actually the potential business there is just as interesting because levels of automation look like they'll be higher than maybe you once thought?

If you look at across the board in the in the car industry, there's a lot of turmoil in that industry, right? We we see a lot of things happening because there's big decisions on EV, software, AI, automated driving.

There's almost no exceptions there across the board globally, and VW is one of them, arguably a little bit closer to our doorstep in Europe, and maybe in a in in There's a lot of things going on, but what we see is that there is that requirement and that push across the globe to invest in automated driving capabilities of L2+. That's happening everywhere, right?

There's no slowing down there regardless of of reorgs on the on the in the automotive industry and and decisions they need to take. We see those programs have high intensity and and high pressure, and they need to be delivered for competitiveness as well, especially what you see coming overseas from China.

All that to say, I don't see an an impact. The The solutions need to be driven to the market to be competitive across the board.

Okay. Yep.

Sorry, were you going to add something?

Sorry. We are working very closely with our partners to bring those solutions to the market.

That's not changing. Okay.

Okay. Then

just specifically on this quarter, the free cash flow was quite soft, and you already said that for the year, free cash flow will be negative as you invest in lane-level maps. Any detail on that would be helpful.

What do you expect for the full year for free cash flow? Will there be some reversal from Q2?

Hi, Andrew. No,

I think for the full year, free cash flow will continue to be negative. I think that will gradually slow down, but you have seasonal patterns for working capital that we don't want to influence.

That said, we are on track to reverse that trend for next year, but for this year, the free cash flow will continue to be negative. Okay.

Then

one other number question. The operating expenses decreased €10 million year over year if you strip out the restructuring, but there's also mention of a one-off reversal of previously capitalized contract costs booked in Q2 '25.

Do you have any details on that, for example, of the size of it, and why was it reversed?

I need to look up what we exactly said last year and during the Q2 press release of 2025, but it was certain costs that we put on the balance sheet was reversed because a change of plan of the customers, and then we take those costs via the opex line. That's a one-off that occurred 12 months ago.

Okay.

Okay. Yep, I'll hand it over to somebody else.

Thank you very much.

Yes. Thank you.

I had a bit of connection issues in the beginning, sorry if I missed something before. The first thing I want to discuss is you're still saying, hey, next year, we should see a growth year backed by your current backlog.

How do you see that trajectory, eh? Is that something that we will see already in the second half of the year, some clear improvements in the trading conditions, and then accelerating pace over the course of '27, or, yeah, are there any really step changes going into that growth trajectory because of new models coming online, new contracts getting ready, that kind of stuff?

It is the latter. We expect revenue to start growing as of next year, not in the second half.

Okay.

That's clear. Then maybe zooming back a little bit on the operating expenses, eh?

I think you've highlighted that in the second half of the year, there will be a little bit less capitalization. In the first half of the year, clearly you're running ahead of your guidance.

If you get to the real guidance, means that you have close to zero margin in the second half of the year, operating margin. That seems also a bit harsh, eh, looking at all the trends.

Maybe all the moving parts into the second half relative to the first half to get to that 3% level?

I expect that operating margin will continue to be positive, although maybe not percentages that we saw in the previous quarter. Overall, indeed, we're very comfortable with the guidance of 3%, i.e., meaning that it might be a little bit higher than that.

That said, the 6% will not be repeated in the second half of the year, also due to less capitalization.

Okay. Thanks.

Finally, on EVs, the narrative is changing a bit. Maybe not yet really visible in the numbers yet, but if you have the discussion with your clients, do they expect to significantly see the proportion of EVs continue to rise into next year?

If that's the case, how positive would that be for you given the typically higher attachment rates to EVs?

I think we've seen in the industry over the past 24 months shifts in both directions, right? Shifting upwards in terms of EV adoption, then down.

Also the latest developments geopolitically has had an influence over EV adoption with fuel prices. It's hard to really define a forecast and a pattern to say this is going to continue.

We see the move into hybrid again, right? We see more different powertrains running in parallel, which complicates the landscape for carmakers.

I would say the most important development we're seeing is the acceleration in automated driving, which I said before. There's clear investment choices that carmakers need to make on top of everything else next to EV.

That's where the value lies and the growth lies as well in the industry, and where we want to play a key role, which we're already doing with the big deal and the win with VW, but also expanding that with the ecosystem players in automated driving and with the carmakers across the globe. That's the common denominator.

We're engaging quite deeply with our data and our dynamic services. That's where you see that we expect adoption to increase, and also value, and value add in terms of services and solutions in the car.

I may repeat myself now a bit, but you said you had connectivity problems. Combined also with what's happening from automated driving, and what happens in the, let's say, deeper in the vehicle being translated into the infotainment system, with visualization and rendering of those ADAS systems, there's a lot of push and added value towards the end-user experience of those technologies being adopted and coming together.

That's where I see the biggest movement in the industry right now.

Great. Thank you.

As there seem to be no additional questions, I want to thank you all for joining us today. Operator, you may now close the call.

Thank you.