TomTom lifts 2023 forecasts after new maps help beat Q2 expectations
By Augustin Turpin
(Reuters) -Digital mapping specialist TomTom on Monday raised its full-year revenue and free cash flow forecasts after the roll-out of its new maps was well received by the auto industry and generated better-than-expected quarterly results.
The Amsterdam-listed company’s shares jumped as much as 11.2% to a three-month high of 8.00 euros ($8.99) and were on track for their best day since July 2022.
TomTom has developed new maps and a platform that it says offers wider geographical coverage and faster updates, and which allows users to add and integrate its own data.
The Dutch company, which focuses on growth in next generation vehicles and counts Volkswagen and Stellantis among its customers, posted an operating loss before interest and tax of 3.6 million euros for the three-months ending June 30, beating estimates of a 7 million euros loss.
Revenue at its automotive unit grew 52% to 91 million euros, contributing 58% to group revenue of 157 million euros.
TomTom’s investments in maps and navigation technology for automated driving, which competes with Google Maps and German carmaker-owned map maker HERE, are bearing fruit, Chief Executive Harold Goddjin told Reuters.
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“We have shared sample data with a number of core customers who are keen to evaluate the product,” he said. Big tech and ride hailing delivery services were among those showing interest.
Although the roll-out of the maps platform has not yet been reflected in revenue, it has enabled TomTom to make efficiency gains through lower cost, said Goddjin.
To continuously improve products, the company was experimenting with artificial intelligence tools. “We are looking how we can use large language models in map making and increase productivity there,” he said.
TomTom now targets revenue of 570-600 million euros this year after previously forecasting 540-580 million. Free cash flow is now seen at 5% of revenue after an earlier prediction of 0-5%.
($1 = 0.8896 euros)
(Reporting by Augustin Turpin in Gdansk; Editing by Kirsti Knolle and Mike Harrison)
