TomTom N.V.

Yes. Thank you.

Good afternoon, everyone, and welcome to our conference call. In today's call, we will discuss the Q1 2026 operational highlights and financial results with Harold Goddijn and Taco Titulaer.

Harold will begin with an update on strategic developments. Taco will then provide further insight 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, Harold, let me, for the last time, hand it over to you.

Yes. Thank you.

Thank you very much, Claudia, and good afternoon, everyone. Thank you for joining us.

I will start with a brief update on our strategic and operational progress, and then I'll hand over to Taco for the financials. The first quarter of 2026 execution was solid.

Profitability continued to improve. Our core Location Technology business, Automotive and Enterprise, both made good progress, while revenue trends reflect the transition we expected this year.

In Automotive, we see carmakers accelerating their software strategies and taking more control of the in-vehicle stack. And at the same time, the industry continues to move towards higher levels of automation.

Our Lane Model Maps are becoming an important differentiator. We're building on that, working closely with OEMs to support advanced driver assistance and autonomous driving.

In Enterprise, we extended both our customer base and our use cases. We strengthened our position in traffic and traffic analytics through new partnerships, including AECOM, Kapsch TrafficCom and LOCUS.

These partnerships extend our real-time traffic data into infrastructure planning, traffic management, location intelligence. They also underline the value customers place on quality and depth of our data and on TomTom as a trusted partner.

Overall, we are confident in our progress. The steps we are taking, advancing our maps platform and building strategic partnerships position us well for 2026 and beyond.

Before I hand over, a few words on the leadership transition we announced in March. Following a structured succession process, Mike Schoofs has been appointed CEO in today's general meeting.

Mike has been with TomTom for over 20 years and built our global commercial organization. He knows the company, he knows our customers, and he knows the market inside out.

I'm confident he will lead the next phase of our strategy with clarity and momentum. As a co-founder, it's very satisfying to see TomTom move in this next chapter with strong leadership in place.

And with that, I'll hand over to Taco for the financials.

Thank you, Harold. Let me discuss the financials and after that, we can take your questions.

In the first quarter of 2026, group revenue was EUR 129 million, an 8% decrease from last year's EUR 140 million. The decline was in line with the expectations and guidance we provided with our Q4 results.

Let me briefly break down our top line performance. Automotive IFRS revenue came in at EUR 76 million for the quarter.

That's a 5% decrease compared with the same quarter last year. Automotive operational revenue was EUR 70 million, which is 16% lower year-on-year.

The decrease in revenue related from the gradual discontinuation of certain customer programs, along with the effect of a stronger euro relative to the U.S. dollar.

Enterprise revenue was EUR 38 million, down 8% year-on-year. Adjusted for currency fluctuations, Enterprise revenue showed a slight increase year-on-year.

Taken together, our Location Technology segment generated EUR 114 million in revenue, which is 6% lower than Q1 last year. On a constant currency basis, Location Technology revenue increased marginally.

The Consumer segment, as expected, declined versus prior year. Consumer revenue was EUR 15 million, down 21% year-on-year.

Q1 2025 was EUR 19 million, reflecting the development of the portable navigation device market. Consumer now represents a smaller part of our total revenue.

Gross margin improved to 90% this quarter, up from 88% in Q1 last year. The 2 percentage point increase was driven by a higher proportion of high-margin Location Technology revenue in our revenue mix.

Operating expenses were EUR 103 million, a reduction of EUR 15 million compared with the same quarter last year. The decrease is mainly the result of the organizational realignment we carried out last year, which lowered our cost base, combined with the higher capitalization of our investment in Lane Model Maps.

As a result of higher gross margin and lower cost, our operating result was EUR 14 million for the quarter, a sharp improvement from EUR 6 million in Q1 last year. Our operating margin was 11%, up from 4% in the same quarter last year.

Finally, free cash flow for the quarter improved to a positive inflow of EUR 1 million when excluding restructuring payments compared to a EUR 3 million outflow in Q1 2025. We continued our share buyback program during the quarter.

By the end of Q1, we have completed EUR 11 million of the EUR 15 million announced in December last year. We ended Q1 [indiscernible] of EUR 248 million with no debt on the balance sheet.

This cash position provides us sufficient stability and flexibility. Our first quarter performance confirms that we are on track for 2026.

The revenue decline we saw in Q1, as mentioned before, was anticipated, and we managed to improve our profitability despite the lower revenue. Looking ahead, we are reiterating our full year 2026 outlook.

We expect group revenue of EUR 495 million to EUR 555 million in 2026, with Location Technology revenue of EUR 435 million to EUR 485 million and an operating margin around 3% for the full year. As we indicated previously, some transitional headwinds, like the phaseout of certain customer programs, will weigh on this year's top line, but this impact is temporary.

Therefore, we're continuing to invest in our Lane Model Maps, which are critical for a higher level of automated driving. As a result, free cash flow for 2026 is expected to be negative.

As new automotive programs ramp up and newer products gain traction, we expect higher revenues combined with our ongoing cost discipline to drive a further step-up in operating margin in the long term. And with that, we are ready to take your questions.

Operator, please start the Q&A.

Yes. Thanks, Harold, for all the conversations over the years.

I would take the opportunity to also look a little bit beyond for the long term on the question. I think when I started to cover TomTom, like more than a decade ago, one of the big promises was always autonomous driving, driving the long term.

I think if you're looking at the market today because of all the developments in AI, both on the side of producing the map, but also on using it and now maybe autonomous driving being much nearer than it has ever been. How do you see that next phase?

Is that do you really see that we are now at the start of that next phase and we are going to see major differences for how the map is going to be used and the opportunities in the map and how important it is for autonomous driving? Just giving a little bit your long-term view on how this developed over the years and what's coming in the next few years.

Yes, Marc, thank you. Yes.

So you're right, the self-driving technology has been a big promise for a very long time. And it has always until recently, I would say, failed to live up to the expectations.

What we now witness is a new approach to self-driving technology, more based on AI and self-learning, which is much more promising. And at least in the laboratory, we can see sophisticated levels of self-driving technology being deployed in real cars.

So I think from a technology perspective, we are closer to solving the problem than ever before. What remains are the economics and also the regulatory framework, which will follow the technology.

But I think from a technology perspective, we are motoring now literally. And we see that also in the demand for our products.

Carmakers are now asking for higher levels of accuracy, more dynamic data, lane level information to enable self-driving technology and to provide a powerful additional data set next to the Edge processing that's placed in the car based on sensor information. We have seen that coming back also in the orders and the -- so first of all, the interest in our products and the way we produce our products.

But we've also seen it coming back in the order book. We had a big win last year with Volkswagen, as you know, which was a significant contract.

And that is a product and a contract clearly aimed at higher levels of automation. To what level exactly, remains to be seen.

But what we do see is higher degree of automation than we have seen before. And also that technology will enter into the mainstream sooner or later.

And we've seen comparable questions and demands from other OEMs. Some of those demands have translated into contracts, but there's also a healthy pipeline in '26, '27 to go further than that.

Last thing, I think, is another trend that we're witnessing, is that carmakers want to have -- seem to prefer a unified map offering that is both suitable for navigation and display and map rendering and at the same time, can power the robot of the self-driving system. And the reason for that is that the self-driving system is also looking for a way to communicate with the driver what's happening.

And when you do that on the same data set, it's technically an easier problem to solve. So we see a preference developing for united -- unified map that does both the traditional navigation and route planning, traffic information as well as being the sensor for the robot, for the self-driving part of the vehicle.

Okay. That is clear.

Maybe as a follow-up, I think also there, the debate has been the same for a long period of time, which is, is a map layer needed for this autonomous driving, yes or no? And I think there is still a debate, at least reading through all kinds of articles on that one.

I guess there's still the redundancy element of the map. Anything which you can add in the most recent conversations with your clients why a map would be required for functioning autonomous driving in the right way?

Yes. So it's a bit of a marketing story as well, I think, from vendors who are offering self-driving technology that is "mapless."

We don't know of those systems that are mapless. They don't -- they do not exist other than in the laboratory and are not battle-hardened.

The -- I think one of -- the way to think about it is that it makes self-driving technology easier when you do have a map and more reliable and redundant. And the big challenge for software developers is not to fix the first 95% of accuracy.

That is kind of a solved problem. The real problem is to solve for the last 5%.

That is the hardest bit. And solving that last 5% is a whole lot easier if you have a reliable map underpinning your system than doing it without a map.

And we see that also translated in our own interactions with customers, both OEMs, but also providers of self-driving systems that we are closely aligned with and talking to, to see how we can collectively come up with a system that is robust, reliable, but also, I have to say, affordable. One of the reasons that the old HD Map never took off is cost.

And cost was a problem because we were driving those roads ourselves with mapping vans. And that's, A, expensive; and B, does not provide for regular updates and a too long cycle time.

With the new technology, the new approach, we have solved for both those problems, cost as well as cycle time and freshness. So I think the market opportunity is wide open.

And I think that battle will play over the next 2, 3 years, I think, for presence in that self-driving ecosystem.

Great. And then final question from my side is, leveraging that one also in the enterprise segment, because I can imagine that the point you just mentioned, cost, freshness, cycle time, eventually also very important beyond automotive.

I think at the Capital Markets Day, this point was quite promising, then it leveled off a bit. But maybe now with the progress we've made over the last 2 years, is it time that this one also can see some reignited growth?

I think the product challenges on the enterprise side are slightly different. There is some overlap, but the challenges are not the same.

The Lane Model Maps is -- the development of that is predominantly driven by the requirements of carmakers and systems providers of automated driving systems. But I do expect overlap in the Enterprise world.

And I think given its sufficient time, it will be harder to start distinguishing between what we call SD Map or -- and a lane-level map. So those worlds will come together.

There will be some overlap, but growth in the Enterprise sector will come from mostly initially from other initiatives that we are deploying. And I think we're getting on track also a little bit better on the Enterprise side, in filling that pipeline better than we have been able to do in 2025.

So I think the initial signs on the Enter sides are encouraging.

Okay. Great.

Thanks for all the conversations over the years.

Thank you. Thank you for covering us.

It was a pleasure.

Yes, Harold, just maybe one clarification. You just mentioned that the old HD Maps never took off because of cost.

Does that mean you've changed the pricing on the lane-level maps?

No, we have not necessarily changed the pricing. But the -- I think everybody understood that scaling that Edge-level HD Map, as we did it 10 years ago, was just too expensive and prohibitive.

We have seen traction on the HD Map, and we still have customers driving with that HD Map. But everybody understands that if you want to improve the freshness and more importantly, if you want to improve the coverage, and when I say coverage, it's basically beyond motorways, there you end up in an unprofitable business case very, very quickly.

So it's not the unit price so much that I'm talking about, but it's more the capabilities of the product. Carmakers as well as systems providers are looking for coverage and accuracy on all roads, not just motorways.

And motorways is only, what is it, 5% of the total road network, is motorways. The rest is all secondary and tertiary and local roads.

And so if you want to do an accurate product on all roads, including freshness, then the old technology could never deliver that.

Okay. And then maybe if I look at the forecast for 2026, it's quite a large range for revenue overall.

It's a span of EUR 60 million. And then for the Location Technology component, it's a span of EUR 50 million.

What's the thought process behind that range? Is it just that there's so much uncertainty at the moment about car production levels?

Yes. It's a bit of that, of course.

Currency plays a role as well. So for all the 3 revenue-generating units, there is a bell curve of expectations.

We do think that the middle of both revenue ranges is the best guidance that we can give.

Okay. Okay.

And then on the change in management, I mean, there's clearly considerable continuity because Mike has been with TomTom for a long time and Harold, you're moving up to the Supervisory Board. But any new CEO is going to want to make adjustments or emphasize different areas or components.

Do you -- what changes do you see happening under Mike going forward?

Well, that's for Mike to talk through, and I'm sure he will do that in -- when it's his turn in 3 months from now and start to give you some of his ideas. What I want to say is this, I think we have [indiscernible].

We've gone through a major product transition over the last years that has led to a competitive product. Based on the product, there is market share to be gained.

And I think we're well positioned. That needs to land, and there's all sort of things that can go wrong, obviously.

But net-net, I think that is a -- that gives focus and clarity of what we need to do at least in the next 12 to 24 months. And I think that's good.

But of course, the world is changing rapidly. It's not only what we see geopolitically in terms of tariffs and in terms of energy and whatnot, but it's also the impact of AI potentially going forward that will have a significant effect on how we do things, how customers are consuming upward.

I think the -- our anchor product, the map, is safe, and we will use AI to optimize processes and make it cheaper to maintain it. But that anchor product is good.

And AI will have -- and the way we deploy AI going forward will -- and how the world evolves around AI, will affect the company like any other company in the world. So those are the -- I think, for the moment, the 2 big axes where we need to follow progress going forward.

And then maybe on a smaller note. On enterprise, it's -- if you adjust for currency, it's growing, but it's not having the easiest time.

And if we look back to you joining with OSM, the idea was that you get more detailed maps and that may open up more market opportunities or expand the potential market for your maps, maybe social, travel and food delivery. How is that going?

I mean, are you making some progress, but the clients are quite small in those areas that you're getting through? And how do you see that progressing?

Well, yes, I think it's a good question, Andrew. I think -- and then 2025 was slightly disappointing in terms of order intake and traction around -- always in the Enterprise market.

But I think we have turned the corner, and we see some early green shoots. I think that central promise of having a better map that's easier to maintain is valid also for the Enterprise world.

And we are now pitching for contracts and opportunities that we could not win based on the old technology. So the addressable market is -- and I mean, there's tons of examples of that.

So it's slightly disappointing that it's taken longer. But I think the central idea of having a better map, more detail, more freshness, more efficient to maintain is still valid.

And I hope that we will see that also being translated into Enterprise growth in 2026 and beyond.

This is Wim from ABN ODDO. Apologies for the noise, but I'm in the train.

So I hope you can hear me. First, on the rollout of the lane-level maps, you started off just in Germany.

So can you give us a bit of clarity on where you are in the rollout in terms of number of countries? But also, are you still just on the motorways?

Or are you basically doing all the other roads as well throughout Germany as well as the other countries that you're rolling out? The second question would be on capitalized R&D.

That seems to suggest you're accelerating the investments that you're doing in the rollout. So can you give us a bit more clarity on that decision?

Is that based on the demand? Or are you basically just needing to invest more to get to the same results that you were looking for?

And what is the reception of clients since you introduced this concept earlier last year?

Yes, Wim. Yes, you're coming through loud and clear.

So no worries on that side. Yes.

So the Lane Model product, our goal is to build it completely automated. So expanding coverage is just a matter of compute and electricity, but no other practical limitations on coverage and speed of production.

That's where we want to end up. That's not where we are.

There is a certain level of fallout following those automated processes. And that means that manual labor and operator interaction, in some cases, is required to filter out inconsistencies to checks and so on and so forth.

So -- and we are in a position now where we are producing, but we are also making investments to reduce that fallout in order to prevent manual labor and improve the speed of the process and the associated coverage. The idea is that by the end of the year, we have a fully lane-level map, both for North America and for Europe.

We're producing it now for parts of Germany, whilst improving the processes, improving the factory in the pipelines, if you like. And the aim is to reduce the amount of manual labor we need to produce those maps close to zero.

It will probably never get to zero, but it needs to get close to zero because that gives us speed, flexibility and efficiency but also quality.

And what are clients saying about the products?

So people are excited that it's possible. We are producing a product that could not be produced before.

They're excited that it has been developed with a view to serve security and safety critical applications. So it's an industry strength product.

That's also how the quality systems are designed to make sure that we meet those standards. So yes, both carmakers and systems providers are excited that there is a product that can play an important role, and they're looking at progress with interest.

We will start doing test driving with integrated systems now or in the next couple of months or something like that where we get for the first time, real-time feedback on how the system, not the map, but the system with the map is behaving in practice and in real-life situations. So those are important milestones.

Yes. If I can add to that.

Then you also had a question about CapEx. So in the cash flow statement, you see that line investment in intangible assets, that's indeed higher than what it was last year same quarter.

I expect that to normalize between "below EUR 10 million" going forward. So it is more -- yes, I wouldn't call a one-off, but it's not a clear trend that it now will go up every quarter.

Very good. And if you are now participating in RFQs, specifically related to HD, I can suspect that most of the RFQs that you're participating in are now HD driven and no longer [indiscernible].

But how is your product [indiscernible] up against the competition? So are you still producing HD Maps in the old way?

And what does it do to your competitive pricing advantage? And which parties do you actually engage in these RFQs?

I can only assume that here -- is there -- and in some cases, Google. But do you also see newcomers joining in these RFQs?

Sorry, Wim, I tried to understand your question. It was not entirely clear, to be honest, the first part in particular.

Yes. So in terms of market position, I think we are currently leading in specs in ambition.

Of course, we need to deliver all that goodness as well. And our internal target is by the end of this year to have significant coverage on both continents.

And I think that will be a leading and it is a leading product both in terms of what it does and how it is produced, which is not a minor point actually. In this case, it really matters how you produce it because it tells you something about economics, quality, repeatability and so on and so forth.

And there is significant interest, I think, from industry players, in what's going on. And so we feel good about that.

I think Google obviously is an important competitor, but Google has a tendency to leverage consumer-grade products for the automotive world. And this is not typically an area where they're focusing on.

And are you encountering any new competition in RFQ processes?

No, no, we do not. It depends how you define competition, but I think there's no one else that I know of that has an integrated approach to both navigation, self-driving, ADAS, all on one product stack.

And with respect to enterprise, I do have a question on kind of the conversion and basically the acceleration that you are seeing at the moment. Can you give us a bit of feeling on kind of what types of, let's say, projects you are now converting or are close to converting?

Are these still the smaller projects? Are we also now looking at the bigger clients and the ones that can really move the needle?

Yes. Yes, I think I wouldn't say acceleration.

I think what I've said, I've used the word green shoots, some -- both contracts but also a pipeline that is building. A couple of areas where we see good traction, insurtech, defense.

There are significant opportunities opening up, intelligence, public usage of our data, both traffic planning, intelligence. Those are the sectors where we see the order book and the pipeline really filling up.

And some of those opportunities are significant as well, multiple millions per annum.

Thank you. And that leaves me with, yes, basically one last comment.

So I would like to thank you for, I think, close to 80 earnings calls that we did together. No doubts.

this sounds like an awful lot, Wim.

It is.

This sounds like an awful lot. But thank you very much.

It's been a privilege and a pleasure.

likewise. Thank you.

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