Powerfleet, Inc.AIOT

Powerfleet, Inc. Leases Disclosure

10-KFiled Jun 26, 20252 min read
LEASES
The Company determines whether an arrangement is a lease at inception. The Company has operating leases for office space, office equipment and vehicles. The Company’s leases have remaining lease terms ranging from approximately 1 to 10 years.

Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. The operating lease ROU asset also includes any lease payments made in advance of lease commencement and
excludes lease incentives. The lease terms used in the calculations of the operating ROU assets and operating lease liabilities include options to extend or terminate the lease when the Company is reasonably certain that it will exercise those options. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The Company has lease agreements with lease and non-lease components, which are generally not accounted for separately.

Where lease terms are 12 months or less, and meet the criteria for short-term lease classification, no ROU asset and no lease liability are recognized. Lease costs associated with the short-term leases are included in selling, general and administrative expenses on the Company’s Consolidated Statement of Operations.


The components of lease cost are as follows (in thousands):

Year Ended
December 31,		Three Months Ended
March 31,		Year Ended March 31,
2022202320242025
Short-term lease cost$443 $453 $57 $840 

Supplemental cash flow information and non-cash activity related to the Company’s operating leases are as follows (in thousands):

Year Ended
December 31,		Three Months Ended
March 31,		Year Ended March 31,
2022202320242025
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations$1,450 $1,198 $2,018 $3,714 
Reduction of right-of-use assets due to MiX Combination (1)
$— $— $— $(946)
(1) Subsequent to the MiX Combination, certain leases were terminated or modified due to the consolidation of leased space.

Weighted-average remaining lease term and discount rate for our operating leases are as follows:

March 31,
2024		March 31,
2025
Weighted-average remaining lease term - operating leases (in years) (1)
3.564.30
Weighted-average discount rate6.1 %7.8 %
(1) Including expected renewals where appropriate.
Scheduled maturities of operating lease liabilities outstanding as of March 31, 2025 are as follows (in thousands):

Year ending March 31,
2026$5,513 
20273,462 
20282,319 
20291,622 
2030907 
Thereafter1,865 
Total lease payments15,688 
Less: Imputed interest(2,421)
Present value of lease payments$13,267 

Historical Timeline

Fiscal YearFiled
2025Jun 26, 2025Showing above
2023May 9, 2024
2022Mar 31, 2023
2021Mar 16, 2022
2020Mar 22, 2021
2019Apr 8, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

Income TaxesRevenueEarnings Per SharePP&EGoodwill & IntangiblesSegmentsDebtCommitmentsStock CompensationNew Standards