Inseego Corp. Q2 FY2025 earnings call

• Q2 was a pivotal quarter with sequential growth in revenue and adjusted EBITDA, driven by strong FWA demand, favorable product mix, and disciplined expense management. - Key operational highlights include the market introduction of the next-generation 5G advance Inseego Wavemaker FX4100 FWA solution with strong early demand, renewal of stocked MiFi products with large Tier 1 carriers and addition of a new Tier 1 carrier, and the launch of the X700 WiFi mesh node. - Growth strategy vectors: Scaling the core by renewing mobile relationships and winning new customers, and evolving to a solutions company by investing in software APIs and platform intelligence, with Inseego Connect as a key platform. - Secured a multimillion-dollar enterprise FWA deal through the Inseego IGNITE channel partner program and welcomed new executives for supply chain and business development.

In Q2 2025, total revenue was $40.2 million. Mobile revenue was lower year-over-year due to 2024 promotional activity and timing of new launches. FWA revenue surpassed mobile hotspot revenue for the first time, driven by the successful launch of the Inseego Wavemaker FX4100 FWA solution and the introduction of the X700 WiFi mesh node. Services revenue remained consistent at $12 million for the quarter. Non-GAAP gross margin was 41.2% in Q2. Adjusted EBITDA was $4.7 million, up 29% sequentially and at an 11.7% margin.

• For Q3 2025, total revenue is expected to be in the range of $40 million to $43 million, and adjusted EBITDA in the range of $4 million to $5 million. - Expect sequential revenue growth for each of the next two quarters as the business evolves along strategic lines.

• A $10 million-plus educational mobile deal contingent upon congressional E-Rate funding for hotspots was removed from the forecast as the hotspots inclusion in the E-Rate program is in limbo in the House with no established path forward.

Q: Could you talk a little bit more about the multimillion-dollar enterprise agreement with the industrial S&P 500 company and why you won there?

A: It was through the Inseego IGNITE channel partner program, and the value proposition was unique in combining hardware and software, with the partner keen on managed ability and visibility to the entire fleet.

Q: How much of the Q3 revenue and EBITDA was associated with the deal pulled out of the forecast due to congressional lag?

A: Our guidance has no assumptions of that deal coming back, so it is not included in the forecast.

Q: Can you provide details on the mechanics of the enterprise win, revenue recognition, and tracking new potential customer wins in the enterprise segment?

A: The specific deal mentioned was from Q2, and we are working on the pipeline for Q3 and beyond.

Q: Looking at accounts receivables up a lot, can we expect improvement on the cash flow front?

A: Our goal is to drive cash, balancing investment in product and building inventory to supply demand, with an uptick in AR due to the strong uptake of the new FX product.

Q: Are there potential catalysts for the FX4100 launch, and where do you see FWA in terms of proportional to mobile over time?

A: Catalysts include the unique combination of performance, ease of deployment, and enterprise-grade feature set. We are bullish on FWA's trajectory, expecting it to continue as a positive dynamic in revenue mix, with FWA being only the start of the journey in the enterprise end market.

Q: Is there a path to directly monetizing the software and services feature set to expand services revenue?

A: Yes, the software functionality like Inseego Connect and subscribe BSS TAM-like functionality are areas we look to continue growing and investing in to yield higher revenue.