KORE Group Holdings, Inc. Q2 FY2025 earnings call

Ronald Totton introduces new CFO Anthony Bellomo. Total revenue grew to $71.3 million, up $3.4 million y-o-y. Adjusted EBITDA rose by $5.3 million to $16.7 million. Positive free cash flow for third consecutive quarter at $1.6 million. Execution guided by 5-pillar value creation plan: profitable growth (3 straight quarters of positive cash flow, 20 million connections, improved IoT Solutions gross margin), product innovation (Super SIM offerings, SGP.32 readiness, wins in connected health), customer intimacy (KORE One platform, KOREY AI assistant), operational excellence (infrastructure/tech upgrades, 8 AI initiatives), and investing in people (values relaunch, learning/dev programs). Recent wins in various sectors demonstrating strategic expertise, technology, reliability, and managed services.

Total revenue for the second quarter increased $3.4 million or approximately 5% year-over-year to $71.3 million. IoT Connectivity revenue increased 1% to $56.1 million due to increased number of connections. IoT Solutions revenue increased 25% to $15.2 million, driven by strong sales of connectivity-enabling hardware and services. Non-GAAP gross margin in Q2 2025 was 56.9%. Non-GAAP IoT Connectivity gross margin was down slightly to 60% from 60.9% in the prior year due to revenue mix. Non-GAAP IoT Solutions gross margin was up 682 basis points year-over-year to 45.3%. Total connections at the end of the second quarter were 20.1 million, an increase of 1.5 million year-over-year. ARPU for the current quarter was $0.94 compared to $1 in Q2 2024. DBNER for the 12 months ended June 30, 2025, was 99% compared with 92% in the prior year.

Reiterates 2025 guidance: revenue $288M-$298M, adjusted EBITDA $62M-$67M (19% y-o-y midpoint growth), free cash flow $10M-$14M. Resilient business model with limited tariff impact, strong IoT market growth outlook, and strategic AI adoption.

Macroeconomic uncertainty, global economic conditions, supply chain constraints, and potential impact on customers' project timelines or cancellations (though KORE's impact is limited).

Q: How are you guys gauging the possibility of some of your clients potentially pushing back some of the projects they're working on with you guys into 2026?

A: Yes, the demand from customers isn't changing. We're not seeing any projects canceled. Orders of new connections are strong. Larger global customers are most impacted, but we haven't seen products canceled or project delays yet.

Q: Any particular milestones that you guys are working in the back half of 2025 that are most critical to set up a stronger growth trajectory into 2026?

A: Focus on pipeline growth, growth and closed won eARR. Want connections pushing up past $21 million before end of year. Concluding 3 fairly significant tech-related projects in second half.