TomTom, a prominent digital mapping provider, has suspended its revenue target for 2025 and revised its expectations for this year, citing weak demand for new cars that has adversely affected its automotive location technology business.
The Amsterdam-based company announced that it will not meet its previously set goal of 600 million euros ($654 million) in location technology revenue by 2025. For 2024, TomTom expects sales to fall at the lower end of its previously indicated range of 570 million to 610 million euros.
“A combination of downward revisions for near-term car production volumes and delays in new model introductions has resulted in a generally less predictable market environment,” said TomTom Chief Executive Harold Goddijn in the earnings statement.
In the second quarter, sales in the automotive location technology business declined by 4 percent to 87.3 million euros. This sector represents more than half of TomTom’s total revenue, which stood at 152.2 million euros for the quarter. Additionally, the launch of TomTom’s new mapping platform, TomTom Orbis, has been slower than anticipated, further impacting sales.
TomTom reported a loss before interest and tax of 5.2 million euros for the second quarter, a notable increase from the 3.6 million euro loss recorded a year earlier. The company plans to provide new revenue targets next year when it reports its full-year results for 2024.
In a positive development, TomTom announced an extension of its collaboration with Microsoft. The partnership will now include the adoption of TomTom Orbis across Microsoft products, with a new contract extending until the end of this decade.
InfotechLead.com News Desk
