On the screen now is our safe harbor statement. I'll give you a moment to read it. As always, during the discussion, we may discuss forward-looking statements, and these reflect our views and expectations, but actual results may differ due to a range of risks and uncertainties. I'll give you a moment to read the statement before we start on the agenda. Good morning again. I'm Greg Ballard, I'm the CEO of AoFrio, and joining me today is our Board Chair, John Scott, and our CFO, Howard Milliner, is also on the call. For our agenda today, I will take you through a look at our FY 2025 results, and I'll give you an update on our progress on our strategy through FY 2025.
I'll then hand over to John Scott, who will give an update on the discussion around the status of our funding, our growth plan, and share commentary on our outlook. At the end of the presentation, we will have time for question and answers. If you would like to ask a question, please click on the Q&A button on the bottom right-hand side of your screen and type in your questions. You can do that at any time, and we'll get to those questions at the end of the presentation. For our FY 2025, AoFrio delivered revenue of NZD 83.2 million. That's up 4.4% on last year, and a new record for the company.
This was slightly below our updated guidance due to reduced motor demand in Q4, following the introduction of the U.S. import tariffs. What was really pleasing was our IoT business performed strongly, with revenue up 8.9% to NZD 47.1 million, with a gross margin of 42.5%. Our Motors revenue remained steady at NZD 36.1 million, with a gross margin of 17.7%. Overall, our gross margin increased to 31.7% compared with last year, reflecting the favorable shift in mix towards our IoT products. EBITDA improved NZD 1 million to NZD 3.5 million, in line with guidance. Throughout the year, we continued to reinvest our operating cash flows in new product development, which enabled us to launch several new products during the year.
Now, one of the areas that we are most proud is around our customer focus. We remain the only provider in the cold drink equipment market, with in-field teams helping our customers unlock value from their IoT investment. Our Net Promoter Score increasing to 62 reflects this commitment. We also saw a lift in our staff engagement, which is essential in a competitive talent market and is critical to ensure our teams are engaged and equipped to deliver for our customers. These results overall give us confidence heading into FY 2026, where we see significant opportunities for growth as adoption of our new SCS 800 cellular controller and our AoFrio iQ SaaS platform increases.
Last year, we began reporting our SaaS metrics for the first time, and these continue to give us clearer view of the value we're building across our platform. Starting with the Rule of 40, this declined compared to FY 2024, primarily due to the lower growth rate. Over time, we expect this to improve as the percentage of our recurring revenue increases, and we expect the all segment number to move towards 20 over the next few years. Our recurring revenue, which represents the proportion of our revenue generated from our software and data services, increased to 3.8% of our total revenue. Importantly, we now have NZD 17.8 million of software revenue sitting on our balance sheet as deferred revenue to be recognized in future periods, up from NZD 16.5 million last year.
App utilization, which measures how often customers interact with our software, increased by 25% year-over-year. This is a strong indicator of our product market fit and the growing reliance customers have on our platform. We also saw an increase of 23% in terms of the number of devices connected to the AoFrio Cloud. This is a critical metric for us. The more devices connected, the richer the data set we have, that we can use to generate insights and automate actions, and ultimately deliver more values to customers. Overall, a really pleasing set of results for the year. Just moving on to a bit of commentary about our regional performance.
Our North America, our region, which is our largest region, grew 8.2% year-on-year, supported by our first shipments of IoT solutions into the U.S. and a strong demand for our new motor applications. South America returned to a more typical trajectory for IoT after an unusually strong demand in the prior year. Overall revenue declined, reflecting that softer CDE demand across the region. EMEA, which today is primarily a Motors-driven business, declined due to aggressive competition from around pricing. We are already seeing this trend reverse in FY 2026 as we win back share. In APAC, we delivered strong growth. Our investment in regional sales capacity and capability is paying off, with contributions from the sales of new motor applications, our first food retail solution, and encouraging momentum from our CDE IoT solution.
Now I'll just take a few minutes to talk through our strategy execution for FY 2025. As we have consistently talked over the last few lots of these sessions, we have three core strategies: protect and grow our core markets, diversify into adjacent segments, and transform our foundations. Firstly, protect and grow the core. In FY 2025, we launched two major innovations, the SCS 800 controller and our AoFrio iQ, with early adopter customers. The SCS 800 is a new cellular connected controller designed specifically to help us enter the US and European markets for our CDE IoT solution. Together, these market represents a new build opportunity, 700,000 units per year at more than double the revenue per unit compared with our existing Bluetooth products.
The controller enables two-way communication with our cloud platform without the need of field visits. This substantially increases the value we can deliver. For example, we can remotely access coolers, adjust control settings, and perform diagnostics without anyone needing to attend the cooler. The SCS 800 is progressing through customer testing and certification, and we expect to see sales in FY 2026. Alongside this, we released our first version of our AoFrio iQ, our modernized SaaS platform. Our AoFrio iQ is where customers interact with their fleet, access insights, and manage machine learning-driven actions. We have a strong pipeline of customers waiting for the general re-release, which we expect to start from around April. We also expanded our Motors portfolio by launching new fan packs and new solutions to support new applications.
Moving on to diversify our market segments. Alongside strengthening our core market, we continue to make progress on our diversification segments, particularly into food retail. In FY 2025, we supported two early adopted food retail customers, as well as two additional pilot customers, while completing the first general release of our food retail software. We also see continued opportunity in the fresh and frozen food segment. This, we used to call this the ice cream segment, where customer pain points around asset visibility, uptime, and energy efficiency are very similar to those in the cold drink equipment. We have two customers already in this segment, and they are progressing well. Our progress this year gives us confidence that these adjacent markets can become a meaningful contributor to the recurring revenue over time.
Just in terms of transforming our foundations, I thought today we'd talk a little bit about the progress we're making around AI implementation at AoFrio. We are now moving beyond experimentation into structured implementation across the organization. We have the right governance in place, we have built employee capability through our AI Academy and ambassadors, and we have released our new AI agents that are already improving productivity across teams. We have introduced Amazon Q Developer to accelerate coding and support our development teams. From a product perspective, we are also well-placed. Over the last 10 years, we have built the industry's largest cooler performance data set and are the only supplier in the market who can connect data insights and actions to controlled coolers.
Today, we have machine learning algorithms that can predict when a cooler will break down and why. We are continuing to develop our platform to take advantage of generative AI and natural language querying, and we think, you know, these things will continue to strategically position us well compared to competitors. I'm now going to hand over to John Scott, who's going to take us through the last few slides.
Morning, guys. Thanks, Greg. First thing, I've had playback on our Two Futures presentation. It's on our website if people wanna know more, essentially, late December last year, we introduced the option where we could accelerate further than what we're doing. We've had really positive feedback. We've had more than I actually expected from our shareholder base, I just want to reassure the shareholder base, like I said in the presentation, we won't do anything crazy. Anything that we do offer when we raise money, we will offer back to the shareholders, there'll be no one disadvantaged. Again, not saying we need the money, not saying we're gonna do it.
The reason that there's been a bit of a delay is we actually needed to get this result out and the guidance, so our share price was true and accurate, and we could have open discussions. We're there now, and again, we'll take it forward. You know, it's three months on from doing that, I feel like everything we did on this presentation still holds. Proud of the work, and I think, you know, normally three months later you'd like to change something, but I think everything there was good. The outlook for next year. What's a little bit different about this year? For the last three years, we've given numbers, we've been very tight. There is a lot going on this year.
If you jump to the bottom, our revenue guidance is actually we're just gonna beat last year across the board. Those numbers for this year, for 2025, very, very proud of them. The guys did just a great job for us. This year it's a little bit harder to pick. Even in that guidance that we'll beat last year's numbers, there's a lot going on. We recognize it's not our traditional number with a range and everything, but it's also an untraditional year into what we're going in. You can see that in the above. You know, we've got the U.S. tariff thing, we've got currency fluctuations, and on top of that, we've actually got a whole new range of products going into the market.
We, in previous years, it's hard to say that they were stable, but they were in comparison. We had existing lines with existing products, and actually a much more stable environment. This year with tariffing, especially if anyone can figure out what's going on there, they're, well, they're better than us, so it's a challenge. Again, on this page, I feel like we're gonna have a better year than last year, and what probably the shareholders want to know is that it's a very well-run company. Staff are engaged, you can see that. Our customers are happy, and I think we genuinely do a really good job. I'm really proud to be part of the team, and thanks very much.
We'll now address the questions in the Q&A. If, again, as I said, if you have a question, type it in, click the Q&A tab on the bottom and type in your question, and Howard will read out the questions, and we'll have a go at answering them.
There are two questions. First question is: Can you please provide estimated earnings per share for the two future proposed options? The slide back suggested what the earnings were for each of the two options. The unknown, I guess, is at what price would we be issuing the stock to generate NZD 15 million in cash, which was the assumption. If you assumed NZD 0.10 a share, that would be 150 million shares on top of the 450 odd million shares at issue now, which is 600 million. I think the earnings for scenario two was $50 million. I guess the answer is very substantial. Second question is: To what extent are you able to pass tariff costs on to U.S. customers rather than absorbing? I'll answer that question.
We don't really incur much in the way of tariff costs ourselves, 'cause typically we sell into the U.S., ex the factory in Vietnam, so the tariff costs are incurred by our customers and not by us. That doesn't mean to say that the customers don't approach us for assistance. To date, we haven't had to provide any assistance, although we suspect that that may well change going forward.
Yeah, I think it's, fair to say that our biggest customer, as we've noted, in the U.S., has, decided to, source their product from the U.S. rather than through us, and we're working through how we manage that, with them at the moment.
The next question is a longer question. How would you expect investors to support a further growth investment phase when it's very clear that the current growth efforts are failing? I guess that's a reference to 4% growth in 2025. It carries on, your net product item sales for both IoT and Motors Hub were down compared to the previous year. Despite large investments, there was negative growth in Europe and no IoT, and the Asian growth is indicated. Your North American Motors revenue is under pressure from the tariff regime. It's a long question, so maybe we'll break it up.
Well, let me have a go at that. Investors further support for our growth, like we were clear that we're not asking for money, so if they don't believe our story, that's fine. That's the first one. Yeah, there is a lot going on, and I feel like I'm not selling here. We're running the company. I think we're doing a really good job, and if they don't like the story, that's really on them. I'm, like, that question's a combination of statements and questions, so they want to contest that directly, but I don't know what else to do with the rest of that.
The third question: Why would you not push ahead with the growth strategy option 2?
Well, that's clear, because we need the funding, and like I said, we need to get this result out so we can discuss it. We obviously like it, and I think as per the December, it is our strong recommendation. That's what we do. We just need to do it in a responsible way and raise the money in a way that doesn't disadvantage our current shareholders. The second I think I can get a good deal for our shareholders, we will go.
Yeah.
If we can't, we won't.
How will investing more money in growth strategy drive much faster uptake than the organic growth we're seeing in 2025?
I'd just ask anyone to come take a look at that video. It's really clear. I think we think you guys have done a tremendous job of explaining that.
Gonna go through the questions. All right.
Yeah, I think we're finished up.
Yeah. All right, guys, I appreciate it. Everyone, have a nice day. Thank you for your ongoing support. Again, we're available anytime. If anyone wants to get a hold of me or Greg or Howard, I think everyone knows where to find us, and we'll talk to you later on. Thank you.