Locate Technologies turns profitable as enterprise software accelerates

Locate2u growth pushes Locate Technologies into quarterly profit

Locate Technologies Limited (NZX:LOC) has crossed an important threshold, reporting its first quarterly net profit since listing as its software business accelerates. Net profit after tax was NZ$62,000 in Q1 FY27, compared with a NZ$578,000 loss a year earlier, while group revenue rose 36% to NZ$2.22 million.

The main engine was Locate2u, whose revenue reached a record NZ$1.50 million, up 72% year on year and accounting for 67% of group revenue. Recurring software revenue increased 39%, while setup and implementation revenue also rose as enterprise onboarding gathered pace. The company said its work with FedEx Australia continues, alongside onboarding a number of other enterprise customers.

That enterprise push is not entirely new: the company’s earlier three-year FedEx agreement involved a phased rollout of Locate2u for delivery management and driver onboarding. The current update does not disclose the number of new customers, contract values or expected revenue from the onboarding pipeline.

Cash generation improves as costs stay contained

Reported EBITDA was NZ$521,000, swinging from a NZ$209,000 loss in Q1 FY26, and was positive in each month of the quarter. Normalised EBITDA was NZ$603,000 after adding back NZ$38,000 of non-cash employee share-plan expense and NZ$45,000 of one-off items. These figures are non-GAAP measures, while the quarterly financial information remains unaudited management information.

Operating cash flow was NZ$828,000, a NZ$1.17 million improvement on the prior-year quarter. After NZ$237,000 of product-development and equipment investment, the group generated NZ$592,000 before financing activities. Cash at bank rose from NZ$1.16 million at 30 June to NZ$1.73 million at 30 September, despite total wages falling 14% year on year as revenue increased.

November refinancing remains the key balance-sheet test

The stronger quarter does not remove the company’s most immediate financing issue. Its PURE debt facility must be refinanced before 7 November 2026, and Locate Technologies said it has received multiple proposals and is progressing the process. The facility remains classified as a current liability until a longer-term refinancing is completed.

That deadline was a central issue in the company’s FY26 reporting, when the PURE facility’s maturity and refinancing uncertainty were identified alongside a widened annual loss. Q1’s improved cash generation may strengthen the operating picture, but the announcement does not provide the proposed refinancing terms, interest rate or maturity.

Zoom2u declines while Bitcoin remains outside quarterly profit

The group’s transition towards software is still incomplete. Zoom2u revenue fell 6% year on year to NZ$720,000, with management seeking to return the courier marketplace to growth after launching a new website and preparing a platform relaunch. The company also held 12.3 Bitcoin, worth approximately NZ$1.81 million at quarter end, but recognised no Bitcoin revaluation in Q1 because such revaluations are recorded at the half-year and full-year reporting dates.

The next hard evidence will come from the refinancing process, enterprise deployments and Zoom2u’s relaunch. The 31 December half-year reporting date will also introduce the next scheduled Bitcoin valuation into the reported result, potentially adding another variable to a business whose operating performance is becoming easier to read but whose capital structure remains unsettled.