AMSTERDAM, Feb. 4 (GeokHub) — Dutch digital mapping company TomTom on Wednesday said revenue is expected to decline or remain flat in 2026 as older contracts expire faster than new agreements scale up, a transition that weighed heavily on investor sentiment and sent shares sharply lower.
The company forecast 2026 revenue between €495 million and €555 million, compared with €555 million in 2025, when sales slipped 3% and fell short of market expectations. The cautious outlook triggered a double-digit drop in TomTom’s shares during early trading in Amsterdam.
Contract Transition Creates Short-Term Pressure
Management said the revenue softness reflects a temporary imbalance as legacy contracts wind down while newer, longer-term agreements take time to contribute meaningfully to earnings.
“We are seeing a ramp-down of older contracts and a ramp-up of new ones, but that transition is uneven,” Chief Executive Officer Harold Goddijn said. “This leads to a modest decline in 2026 before growth resumes in 2027 and accelerates into 2028.”
Automotive Backlog Reaches Record High
Despite near-term pressure, TomTom reported strengthening fundamentals in its automotive segment, where most of the contract transition is occurring. The company’s order backlog climbed to a record €2.4 billion by the end of 2025, signaling longer-term revenue visibility.
Ahead of the 2026 Consumer Electronics Show in Las Vegas, TomTom also secured several strategic partnerships focused on artificial intelligence and advanced mobility solutions. These included an AI-powered voice interaction collaboration, an expanded relationship with a global ride-hailing platform, and a mapping agreement supporting next-generation driver-assistance systems at a major European automaker.
Margins Improve Despite Revenue Dip
TomTom expects revenue from its core Location Technology unit to range between €435 million and €485 million in 2026, down from €482 million last year. However, operating margins are projected to improve, rising from break-even levels to above 3%, reflecting cost controls and efficiency gains.
The company’s annual operating profit turned positive at €1.6 million, marking a return to profitability after years of restructuring, though slightly below analyst expectations.
