AoFrio’s revenue fell 21.5% in 1H26, dragged down by a 50.5% plunge in motor sales due to US tariffs, while IoT revenue grew modestly. The company launched new cellular and software platforms, raised NZD 8.9 million, and is expanding into Food Retail, but full-year revenue growth now looks unlikely.
- 21.5% revenue decline to NZD 33.8 million
- Motors revenue halved, impacted by US tariffs
- IoT revenue up 6.8%, driven by new products
- NZD 8.9 million raised to fund growth plans
- Food Retail expansion underway with commercial rollout
Revenue Hit by US Tariffs and Customer Shifts
AoFrio Limited (NZX:AOF) reported a sharp 21.5% drop in revenue to NZD 33.8 million for the six months ending June 2026, with the motor segment bearing the brunt. Motors revenue plunged 50.5% to NZD 10.6 million as a major US customer shifted to local sourcing amid higher tariffs, and other clients opted for lower-cost, lower-specification motors. This decline more than accounted for the group’s total revenue fall.
While the motor business struggled, AoFrio’s Internet of Things (IoT) division showed resilience, posting a 6.8% increase in revenue to NZD 23.2 million. This growth was supported by a 4.9% rise in IoT device shipments and the commercial launch of new products.
New Cellular Controller and SaaS Platform Launches
Mid-2026 saw AoFrio release its SCS 800 cellular "Always On" controller and the AoFrio iQ SaaS platform, targeting the Cold Drink Equipment (CDE) market in North America and Europe. The company is running 33 global trials, including with major beverage bottlers in Europe and the US, and expects initial purchase orders in the second half of 2026 as new cooler builds commence.
The total addressable market for these products across the US and Europe is estimated at 700,000 units annually. Additionally, some Latin American customers are transitioning from Bluetooth to cellular technology, opening further growth avenues for 2027.
Capital Raise Fuels Growth and Diversification
AoFrio raised NZD 8.9 million through a share placement and a rights issue, part of a NZD 15 million target to fund its growth strategy. The capital will accelerate expansion in the Cold Drink Equipment segment and support the rollout of AoFrio iQ for Food Retail.
The Food Retail solution, launched commercially in 1H26, offers temperature monitoring, automated alerts, and digital compliance for supermarkets and convenience stores. After a successful proof-of-concept trial with a leading Latin American supermarket chain, AoFrio secured an order and plans a 70-store rollout in Q3 2026. The company is adding sales staff in late 2026 to boost customer acquisition in this new segment.
Financial Metrics and Outlook
Despite lower revenue, AoFrio’s EBITDA improved slightly to NZD 0.9 million, aided by a NZD 1.2 million Research & Development Tax Incentive claim. Gross margin rose to 34.9% from 29.6%, reflecting a shift towards higher-margin IoT products. Operating expenses remained stable.
The company’s SaaS segment reported a Rule of 40 score of 15.0, combining 3.6% revenue growth and 11.4% EBITDA margin, below the aspirational 40 target. Recurring revenue from IoT services accounted for 4.8% of total revenue, with a deferred revenue balance of NZD 18.6 million set to be recognised over future periods.
AoFrio expects full-year revenue improvement to be unlikely due to ongoing motor demand weakness and global trading uncertainties, including foreign exchange volatility. However, EBITDA is forecast to remain broadly flat compared to 2025. The company anticipates gross margin gains as the AoFrio iQ platform scales, targeting 70% software margins consistent with a SaaS business model.
Strategic Focus on AI and Sustainability
The company continues embedding AI across its products and operations, leveraging over a decade of cooler performance data to develop predictive maintenance features. AoFrio’s AI-driven insights platform aims to reduce service costs and improve fleet management efficiency.
On sustainability, AoFrio retained its EcoVadis "Committed Badge" and saw its energy-saving AoFrio INSIDE solution named a finalist in New Zealand’s Hi-Tech Awards for innovation in sustainability.
Bottom Line?
AoFrio’s near-term growth hinges on translating new IoT product trials into sales amid persistent motor market headwinds and global uncertainties.
Questions in the middle?
- How quickly will SCS 800 and AoFrio iQ convert trials into meaningful revenue?
- Can cost reductions and new motor designs offset tariff-driven volume losses?
- What impact will Food Retail expansion have on AoFrio’s revenue mix and margins?