Eroad shares plunge as co-CEO resigns and company pivots from the US

Friday, 17 October 2025

Eroad shares have crashed by a third after ringing the changes with the sudden departure of co-chief executive David Kenneson, the loss of a major client in the United States, a new chairperson and a profit downgrade.

Fellow co-chief executive Mark Heine said the company would shift its focus to New Zealand and Australia to take advantage of both countries planning to move to road user charges for most vehicles and dropping the petrol excise tax.

Eroad was founded on road user charging and is the market leader in New Zealand’s electronic road user charges (eRUC) system.

With governments in both countries moving toward usage-based and time-of-use charging, Eroad was well positioned to lead the market and would move quickly to take advantage of the opportunity, Heine said.

In New Zealand 4.6 million vehicles would be moved to eRUC, a distance and weight-based system to replace fuel excise duties, he said.

Eroad currently collects about $1 billion in RUC from commercial vehicle operators each year.

“As the world continues to trend towards more fuel-efficient vehicles, the need to fund global infrastructure sustainably and more equitably creates significant opportunity for Eroad. We see the 4.6 million vehicles in New Zealand as the perfect place to start,” Heine said.

North America remained an important market but growth in the region had not delivered as expected. However, the company would continue to explore further growth opportunities in cold-chain, he said.

“What we look at doing for North America is not investing more until we see the economy bounce back a bit.”

The focus in North America was on revenue retention at a time that freight volumes were down about 12%, he said.

Changes to governance and management

With Kenneson’s departure at the end of the month, Heine would become sole chief executive. 'Together, we've achieved significant milestones, positioning Eroad for continued growth and success,“ Kenneson said.

The company also announced changes to its board and senior management, with John Scott appointed as executive chairperson for no more than nine months after which he would revert to non-executive chairperson.

Scott was appointed to the board in February as an independent director for his deep technology experience and to capitalise on the opportunities in the rapidly evolving telematics sector globally.

He has held senior executive and chief executive roles in several New Zealand technology companies, most recently as chief executive of Invenco.

“Since joining the board I’ve seen first-hand the scope of opportunities that Eroad is focused on,” he said. “Eroad is a company solving real problems for some of the largest and most complex fleets. The potential to take that further is enormous.”

Former chairperson Susan Paterson, who was in the seat since 2023, steps back as a director.

Guidance update

The North American telematics market remained challenging due to a combination of competitive dynamics and economic conditions, the company said.

But the company was committed to maintaining and growing its existing customer base and continuing to win new customers “where returns on investment are appropriate”.

The shift of focus to eRUC opportunity in Australia and New Zealand, combined with a large legacy North American transport customer not renewing its contract in February 2026, was expected to lead to a slower growth this year.

In downgraded guidance for the 2026 financial year, Eroad expected revenue of $197m to $203m, down from more than $205m.

Annualised recurring revenue of $175m to $183m was down from previous guidance of a$188m.

As a result of the challenging US market and the strategic change in focus, Eroad expected to record an impairment to carrying value of intangible assets relating to North America of up to $150m.

Mo Singh, portfolio manager at Craig Investment Partners, said the downgrade was not huge.

The loss of Old Dominion — its biggest customer — to a key competitor, along with 10,000-plus driver monitoring units, helped drag down the share price, Singh said.

“When you lose one of your biggest customers to a competitor that's got to shake confidence - in the growth trajectory, in the story and and the product offering.

“So, it's natural that you see these big swings and share prices for these growth businesses.”

Old Dominion had come with the acquisition of competitor Cortex.