TomTom NV Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Marc Hesselink - ING - Analyst : Yes, thank you. First question, maybe a bit a high level question. If you see that there's, I mean, there's a lot of things going on in the automotive industry, also big changes like towards software defined vehicles, just trying to understand how this is going to change your business, how it's going to change your go to market, the relationship that you that you have with the automotive clients. I think a lot's going to change maybe if you also can explain a bit what do you think and what kind of timelines that the industry will really be changing from what it used to be?

Question: Marc Hesselink - ING - Analyst : And how will it change your business model? For a long time you also had the stories about, moving away from, yeah, let's call it the license kind of fee that you get up front towards more subscription model. Are those things being discussed?

Question: Marc Hesselink - ING - Analyst : Okay, great. And then probably a bit linked to it as well, but the second question is, and you mentioned in the press release a good commercial product development direction, over the quarter. Does that mean that that this trend is accelerating a bit or the success that you've seen you launched the platform a bit more than a year ago and gradually you've seen increasing traction, but you see that accelerating a bit now. And so therefore what is then expected towards the rest of the year and into the next year? How will this build up?

Question: Marc Hesselink - ING - Analyst : Okay, great. The last question, is on, so your operational auto revenue was up 5% year over year. Could you maybe share what is the -- in the mix of your clients, what was the production volume change, year over year, as in how much extra growth did you have above the production levels?

Question: Marc Hesselink - ING - Analyst : Okay, great. So that went up, but like let's say a high single digit percentage, next to the [NRI] that you just mentioned.

Question: Wim Gille - ABN AMRO - ODDO BHF - Analyst : A very good, morning. I hope you can hear me. I've got a few questions. First is on, the HD/3D maps. You're doing quite a bit of investments and you are now capitalizing those investments. If we look in the [IFRS], there's basically two conditions that need to be met. A, needs to be new technology, but also be, there needs to be good visibility on sales. If I let's say, remember, well, from the past, the proportion of SD map in your mix is extremely high and the proportion of HD maps is extremely low. So can you give us a bit more feeling on what is the visibility that you have on revenues in HD maps, and yeah, when should we see that filter through in the modeling? And then in relation to that, can you give us a bit more granularity and feeling on market shares. And so looking at HD maps, you have about a third of the market and your competitors are predominantly here in a little bit Google. How's the competitive fields in high definition? And how is your market's position in this particular field and also what's the price differential per car looking at HD? Those would be my first questions. Thanks.

Question: Wim Gille - ABN AMRO - ODDO BHF - Analyst : And as a bit of a follow up on the market share discussion. In the past you mentioned the number that you are in active dialogue on HD mapping, and I understand that this new technology, you're a bit of a, you know mixture between HD mapping and 3D mapping, regardless how many of the OEMs are you discussing in this new technology and are you piloting this new technology? Is that a similar number as the roughly six, seven of the top 10 OEMs that you had in the past [in '18, I think].

Question: Wim Gille - ABN AMRO - ODDO BHF - Analyst : Very good. And then, the other question that I have is on the enterprise segment. Obviously the momentum is quite good, with revenues up 18%. To understand the weakness of the dollar in recent days is not going to help, in that sense, but they give us a bit more feeling and granularity on where you are in, let's say the process of, pushing Orbis Maps and selling the new maps in the new client base. So past quarters you were mainly converting obviously the clients into paid clients for TomTom. So what types of clients are you currently in discussions with? Is that still mainly or are you also targeting your technology and Google Maps doing this? And can you also give us a bit more insights in let's say the types of clients and the larger clients that we have discussed in the past? So in the past couple of quarters you're basically winning a lot of smaller clients and smaller deals, but how are let's say the larger deals in the sales are progressing at this point in time? And is there a possibility that we see some action on that front in 2025, 2026?

Question: Tim Ehlers - Kepler Cheuvreux - Analyst : Thanks for taking my question. I hope you can hear me. There's a weird beep in the background. But let me just start. So my first question would be about automotive. I think the results were clearly better than people were anticipating, especially given the current atmosphere in the automotive space and the uncertainties, given the tariffs. So have you spoken to key customers and what's the message there? So could there be a potential negative effect coming in the second quarter when automotive volumes are down further due to all this chaos and nobody really knows what's happening. Can you maybe give some color there, what you're currently hearing in the industry?

Question: Tim Ehlers - Kepler Cheuvreux - Analyst : Great. So -- but there's nothing you have felt from that in the first quarter.

Question: Tim Ehlers - Kepler Cheuvreux - Analyst : Great. That's very helpful. And then, the second question would be about the gross margin. So you already made quite a step forward with the 88%. How shall we look at that developing further? So if we look at enterprise and automotive gaining more share of the total revenue, so a positive mix effect. I mean, you already said that, you could go to the 90%. Could that happen earlier than later?

Question: Tim Ehlers - Kepler Cheuvreux - Analyst : Okay. Great. And then one last one, about the R&D capitalization, so the amount you capitalize in Q1, should we consider that the run rates going forward, at least for this year, so something around [7.5 million per quarter]?

Question: Tim Ehlers - Kepler Cheuvreux - Analyst : Okay, great, that's it. Thank you very much.

Question: Andrew Hayman - Independent Minds - Analyst : Yeah, just on enterprise, the comparison basically gets tougher in the second quarter, but, when we look at Q1, is that a base off of which, you think you can build on, going forward? Then second on the auto side I was curious, you've been, I mean, it's clearly a difficult environment, but you're quite clear that with the 3D maps you've had an enthusiastic response from the market. Have you actually been signing contracts this quarter or is it more that you're seeing the interest come through? And then finally on the senior executive team at TomTom, in a lot of ways it's very stable at TomTom with the four founders (inaudible) and then the finance team has been consistent. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 15, 2025 / 12:00PM, TOM2.AS - Q1 2025 TomTom NV Earnings Call But if I look at the product side, there's been considerable change from when I look back at the Investor Day in 2022. If I look at let's say eight of the people that presented therefore have moved on, and that includes the CTO, the Chief Product Officer, and the VP Product Manager, is that something that concerns you?