AoFrio hits record revenue as EBITDA jumps 40 percent

AoFrio reported record annual revenue of $83.2 million for the year ended 31 December 2025, as the New Zealand refrigeration technology group lifted earnings and expanded its connected device base.

EBITDA rose 40% to $3.5 million from $2.5 million a year earlier. Gross margin improved to 31.7% from 29.1%. Connected devices increased 22% year on year to 3.2 million.

Chair John Scott attributed the late-year result to changing trade conditions. He said US tariff headwinds softened motor demand in Q4-25, leaving revenue below guidance at $83.2 million.

Segment split

IoT revenue rose 9% to $47.1 million. The Motors business generated $36.1 million, unchanged from the prior year.

The group invoiced $4.8 million of recurring revenue for cloud and software services during the year and recognised $3.2 million as revenue.

Regional performance was mixed. Asia-Pacific revenue rose 24%, driven by motor orders. AoFrio also secured its first Food Retail customer in the region as it expanded beyond cold drink equipment.

North American revenue grew 8%, supported by ongoing motor supply to water heater manufacturers. South American revenue fell 12% as the cold drink equipment market normalised after a period of stronger demand.

Revenue in Europe, the Middle East and Africa dropped 9%, reflecting aggressive competitor pricing and weaker motor demand.

Cash and debt

Cash at 31 December 2025 was $1.3 million. Net debt increased to $8.2 million as working capital tightened.

Customer payment terms lengthened and shipping times extended during the year. Trade receivables increased slightly, while inventory fell by $2.0 million.

Management flagged new trade-financing arrangements with customers during 2026, which it expects to improve cash flow.

Product roll-out

During the year, AoFrio launched a new SaaS platform, AoFrio iQ, with 10 pilot customers in the cold drink equipment sector. It also introduced a new cellular controller, SCS 800, aimed at cellular IoT markets in the US and Europe.

Chief executive Greg Balla said the product programme marked a shift in the company's offer to customers. "This has been an active and pivotal year for AoFrio. Our team successfully launched strategic new SaaS and IoT solutions to accelerate our vision of connecting our customers' entire cooler fleets," he said.

AoFrio said SCS 800 entered certification and early customer testing during the year. Balla said the controller and the iQ platform align with customer requirements and the company's geographic focus.

"In FY25, we released our SCS 800 cellular connected controller for certification and early customer testing. This solution, together with AoFrio iQ, our modernised SaaS platform, meets major brand requirements for always-on connectivity, real-time insight, and remote fleet management. This is extending the value we can deliver, as well as our serviceable market, especially in the US and Europe," said Balla.

Alongside its software and connectivity work, the group took steps to protect margins in its hardware lines, including pricing changes, targeted cost reductions, and expansion into new applications for motors and fans.

Food Retail was a second growth theme. Customers are trialling the SaaS product in supermarket and convenience store settings, and AoFrio has taken its first order in the segment.

"While our development focus has been centred around our core Cold Drinks Equipment business, early adopter customers are currently trialling our SaaS solution in supermarket and convenience store settings, and we've taken our first customer order in this segment," said Balla.

Operations and ESG

AoFrio reported operational changes aimed at scaling the organisation, including increased AI adoption and the embedding of Lean and Agile practices into development workflows.

Employee engagement scored 72%, above the average for New Zealand, and the group reported a Net Promoter Score of +62.

On sustainability, AoFrio maintained EcoVadis certification and introduced a Sustainable Supplier Policy. Balla said sustainability is both a stakeholder issue and a customer priority. "Minimising our carbon footprint is vital not only for the welfare of our stakeholders but also for achieving genuine success in our business endeavours, as sustainability is an area of great importance to our customers," he said.

Growth options

AoFrio outlined two future growth paths. One relies on operating cash flows and targets 10% compound annual revenue growth. The other assumes additional capital and targets 25% compound annual revenue growth.

Under the higher-growth scenario, the company targets revenue of $300 million by FY30 and EBITDA of $50 million. AoFrio said some shareholders have indicated support for the approach, while the board continues to explore capital options.

FY26 outlook

AoFrio expects revenue and EBITDA to improve in FY26 compared with FY25, while warning of continued trade and currency volatility.

SCS 800 is in final testing and certification ahead of a planned commercial release in May. AoFrio said customer feedback suggests adoption in Latin America could be faster than previously expected.

The iQ platform remains in trials with early adopters, with commercial availability of the base solution expected in the third quarter of 2026. AoFrio also launched new sizes for fan packs near the end of the financial year.

Risks for 2026 include the ongoing impact of US tariffs on motor volumes, with a major customer indicating it plans to onshore supply that currently uses AoFrio's Vietnam-supplied ECR 2 motors. AoFrio also expects a stronger New Zealand dollar against the US dollar to reduce reported revenue and profit; its FY26 expectations assume a 0.606 NZD/USD exchange rate.

Scott said the company would avoid narrow guidance given market conditions. "Given the impacts of trade and currency volatility, providing a guidance range is challenging. However, we are expecting an improvement in revenue and EBITDA in FY26 over FY25 and we will update our outlook as the year progresses," he said.