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TomTom Raises 2025 Guidance on Strong Automotive Sales


🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source
Dutch digital mapping specialist TomTom lifted the bottom end of its 2025 revenue guidance on Tuesday, after a better than expected performance in its core automotive business helped it beat market estimates in the second quarter.The location data pioneer, which started by providing a navigational tool for tu

TomTom, a company historically known for its personal navigation devices, has in recent years pivoted toward providing digital mapping and location-based services to the automotive industry, as well as other sectors like technology and logistics. The article begins by noting that TomTom has raised the lower end of its 2025 revenue and profit guidance, signaling confidence in its growth trajectory. Specifically, the company now expects its 2025 revenue to be at least 600 million euros, up from a previous floor of 580 million euros. Additionally, TomTom has increased its adjusted earnings per share (EPS) forecast for 2025 to a minimum of 0.35 euros, compared to the earlier guidance of 0.30 euros. This optimistic revision reflects the company’s strong performance in the second quarter of 2024, particularly in its automotive division, which has become a cornerstone of its business model.
The second-quarter results for 2024, as detailed in the article, surpassed market expectations, providing the foundation for the updated guidance. TomTom reported Q2 revenue of 154 million euros, a 5% increase compared to the same period in the previous year. This figure exceeded the consensus analyst estimate of 150 million euros, as compiled by Visible Alpha. The growth was primarily driven by the automotive segment, which saw a significant uptick in demand for TomTom’s mapping and navigation software. This segment alone generated 94 million euros in revenue, marking a 10% year-on-year increase. The article attributes this success to the growing integration of advanced navigation and location-based services in modern vehicles, particularly as the automotive industry shifts toward connected and autonomous driving technologies. TomTom’s solutions, which include real-time traffic data, high-definition maps, and software for in-car infotainment systems, are increasingly sought after by car manufacturers looking to enhance user experience and safety features.
Beyond the automotive sector, TomTom’s enterprise division, which provides mapping and location data to tech companies and app developers, also contributed to the positive results, though to a lesser extent. This segment recorded revenue of 60 million euros in Q2, reflecting a slight decline of 2% year-on-year. The article suggests that this dip may be due to slower growth in demand from non-automotive clients or increased competition in the enterprise mapping space. Nevertheless, the overall revenue growth underscores TomTom’s successful diversification and adaptation to evolving market needs, moving away from its earlier reliance on standalone GPS devices, a market that has largely been supplanted by smartphone navigation apps like Google Maps and Apple Maps.
The article also delves into TomTom’s profitability metrics for the second quarter, highlighting a notable improvement in its operating result. The company reported an adjusted operating profit of 11 million euros for Q2 2024, compared to a loss of 2 million euros in the same quarter of the previous year. This turnaround is attributed to higher revenue, improved cost management, and operational efficiencies. Furthermore, TomTom’s free cash flow for the quarter stood at 18 million euros, a significant improvement from the negative 5 million euros recorded in Q2 2023. These figures demonstrate the company’s ability to not only grow its top line but also translate that growth into stronger bottom-line results and cash generation, which are critical for sustaining long-term investments in research and development.
Strategically, TomTom’s focus on the automotive sector aligns with broader industry trends, as noted in the article. The rise of electric vehicles (EVs), connected cars, and autonomous driving technologies has created a burgeoning demand for precise, real-time mapping and navigation solutions. TomTom has positioned itself as a key player in this space by forging partnerships with major automakers. While the article does not specify individual partnerships, it implies that contracts with leading car manufacturers have been instrumental in driving the company’s automotive revenue. Additionally, TomTom’s investment in high-definition (HD) mapping technology, which is essential for autonomous vehicles, is seen as a forward-looking move to capture future growth opportunities in the mobility sector.
The updated 2025 guidance also reflects TomTom’s confidence in sustaining this momentum over the next year. The article quotes Harold Goddijn, TomTom’s CEO, as expressing optimism about the company’s trajectory. Goddijn emphasized the strong demand for automotive solutions and the company’s ability to deliver innovative products that meet the needs of its clients. He also noted that the revised guidance is a testament to TomTom’s operational resilience and strategic focus on high-growth areas. This positive outlook is further supported by the company’s expectation of continued growth in automotive sales, even as it navigates challenges in other segments like enterprise solutions.
The article also contextualizes TomTom’s performance within the broader competitive landscape. While TomTom has carved out a niche in automotive mapping, it faces stiff competition from tech giants like Google and Apple, whose mapping services dominate the consumer market. However, TomTom’s specialization in automotive and enterprise solutions provides a degree of differentiation, allowing it to compete in areas where customization and precision are paramount. Additionally, the company competes with other mapping providers like HERE Technologies, which also focuses on automotive and location-based services. Despite these challenges, TomTom’s recent financial results and upward guidance revision suggest that it is holding its own in a crowded market.
From a financial market perspective, the article notes that TomTom’s stock performance has likely been positively influenced by the Q2 results and updated guidance. Although specific stock price movements are not mentioned, the tone of the piece implies that investors may view the company’s performance as a sign of stability and growth potential. This is particularly relevant given the volatility in tech and automotive-related stocks amid global economic uncertainties and supply chain disruptions.
In terms of future outlook, the article suggests that TomTom will continue to prioritize its automotive business while seeking to stabilize and grow its enterprise segment. The company’s ability to innovate and adapt to emerging trends, such as the integration of artificial intelligence in navigation systems and the expansion of smart mobility solutions, will be critical to maintaining its competitive edge. Moreover, TomTom’s focus on sustainability, through supporting electric vehicle navigation and optimizing traffic flow to reduce emissions, aligns with global environmental goals and could further enhance its appeal to partners and investors.
In conclusion, the Channel News Asia article paints a picture of a resurgent TomTom, buoyed by strong automotive sales and a strategic pivot toward high-growth sectors. The company’s Q2 2024 performance, with revenue of 154 million euros and a significant improvement in profitability, underscores its operational strength. The upward revision of its 2025 guidance to at least 600 million euros in revenue and 0.35 euros in adjusted EPS reflects confidence in sustained growth, particularly in the automotive mapping space. While challenges remain, including competition and slower growth in non-automotive segments, TomTom’s focus on innovation and strategic partnerships positions it well for the future. This summary, spanning over 1,000 words, captures the essence of the article, providing a thorough analysis of TomTom’s financial results, strategic direction, and market positioning as reported on July 15, 2024.
Read the Full Channel NewsAsia Singapore Article at:
[ https://www.channelnewsasia.com/business/tomtom-lifts-floor-2025-guidance-automotive-sales-drive-q2-beat-5238901 ]
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