It has been a brutal session for one ASX tech stock on Friday.
At the time of writing, this technology company's shares are down a whopping 39% to $1.57.
Which ASX tech stock is crashing?
The stock that is being sold off this morning is Eroad Ltd (ASX: ERD).
It is a hardware-enabled SaaS company delivering safety, compliance, sustainability and efficiency solutions for complex vehicles fleets.
In a surprise move, the ASX tech stock has announced that it will refocus its growth strategy on Australia and New Zealand (ANZ), stepping back from its previously ambitious North American expansion plans.
According to the release, management advised that the decision follows slower-than-expected growth in the United States, where market conditions are elongating enterprise sales cycles.
In addition, the company believes that prioritising a significant ANZ opportunity in electronic road user charging (eRUC) will deliver better results. The eRUC is a system for distance and weight-based road funding that is expected to roll out across 4.6 million vehicles in New Zealand in the years ahead. It will replace fuel excise duties.
Guidance downgrade
Due to its weaker than expected performance in the United States, the ASX tech stock has downgraded its guidance for FY 2026.
It now expects revenue of NZ$197 million to NZ$203 million, compared to guidance of NZ$205 million+. In addition, its annualised recurring revenue (ARR) is forecast to be NZ $175 million to NZ$183 million instead of NZ$188 million+.
Also downgraded was its guidance for its free cash flow margin. This is now expected in the range of 5% to 8% instead of 8% to 10%.
It will also record an impairment to carrying value of intangible assets relating to the North American region of up to NZ$150 million.
Despite the above, the ASX tech stock's CEO, Mark Heine, remains positive. He said:
I am incredibly excited by the opportunities ahead at EROAD, as we focus on what matters most to our customers and our growth. Building on EROAD's legacy and credibility in eRUC is particularly energising. As the world continues to trend towards more fuel-efficient vehicles, the need to fund global infrastructure sustainably and more equitably creates significant opportunity for EROAD. We see the 4.6m vehicles in New Zealand as the perfect place to start.
