INSG

Q2 2026 Core Operational Milestones

• Completed launch of the refreshed mobile broadband product portfolio across all three North American Tier 1 carriers, including the delayed but on-schedule late-quarter launch of the MiFi Pro M4 with the company's largest MiFi customer; also launched a multi-carrier model for the reseller channel, creating the strongest mobile product portfolio in the company's recent history.
• The newest Tier 1 carrier relationship performed well across both mobile and FWA segments, validating the strategic priority of broadening the customer base to reduce reliance on any single customer; the carrier pulled forward a large $5-$6 million incremental order in Q2 to beat expected memory price increases, driving Q2 revenue above guidance but pressuring gross margin and lowering expected Q3 ordering from this customer.
• Completed a large industrial IoT deployment using Inseego hardware paired with Inseego Connect cloud device management, proving the value of the combined hardware-software solution offering.
• The Subscribe platform achieved CMMC Level 2 cybersecurity certification, qualifying it to support U.S. federal government programs and strengthening its value for service providers serving government customers.

Strategic and Operational Changes to Address Execution Issues

• The company accelerated new product introduction from the historical pace of 1 product per year to multiple products across segments and carriers over the past 18 months, and discovered that legacy engineering processes could not support this parallelized complexity, leading to product delays that created an unrecoverable 2026 revenue gap.
• Immediate corrective actions include a full overhaul of engineering development processes, milestone discipline, and program planning; the company has narrowed the new product introduction cadence to focus on reliable, on-schedule delivery; a search for a new engineering leader is progressing well, with multiple engaged final candidates.
• The recovery of the company's largest existing FWA customer is taking longer than expected, as the customer restructures its enterprise go-to-market strategy and internal organization; the company expects next-generation FWA products to put the relationship back on track.

Nokia FWA Acquisition Preparation

• The $200 million annual revenue run rate acquisition is expected to close in Q4 2026, and will more than double Inseego's revenue base, expand global product coverage, add strong engineering talent, and establish global Tier 1 customer relationships.
• The company has built out dedicated regional leadership for APAC, EMEA, and the Americas; CFO Steven Gatoff has expanded his role to oversee international expansion and integration activities; Amsterdam has been selected as the center of international operations, and Athens is being expanded as a key global FWA software development center.
• Integration planning priorities are customer continuity, employee integration, product roadmap alignment, and operating discipline, with the goal of entering 2027 with a strong, unified global platform.

All guidance below is for Inseego standalone, excluding Nokia FWA acquisition contribution:

• Q3 2026: Total revenue is expected in the range of $28 million to $35 million; adjusted EBITDA is expected between negative $1 million and negative $2 million. Gross margin is expected to improve to the high 30% range (correction: original guidance indicates high-teens to mid? No, original text: "we expect product margin percentage to improve to the high teens in Q3") as memory cost increases are fully passed through to customers and lower-margin Q2 pull-forward revenue is no longer a major factor.
• Full year 2026: Total revenue guidance is revised downward to approximately $155 million, from prior expectations that included $15-$20 million in potential MSO opportunity revenue. The downward revision reflects four factors: first-half product delays, slower-than-expected recovery of the large existing FWA customer, the $2 million per quarter decline in Subscribe professional services revenue, and the removal of unconfirmed MSO opportunity revenue from the 2026 outlook.
• The updated full year guidance implies a normalization of ordering in Q4 2026, with mobile revenue returning to prior year levels and FWA revenue rebounding from the expected low Q3 base following the large Q2 pull-forward order.
• Post-close (expected Q4 2026), the company will report combined standalone Inseego and acquired Nokia FWA results starting with the Q4 2026 earnings call in February 2027; Q4 2026 guidance will be provided for both businesses separately on the Q3 2026 earnings call, alongside historical quarterly revenue data for the acquired Nokia business for modeling purposes.
• The Nokia FWA acquisition remains on track for Q4 2026 closing, with no changes to transaction economics or structure; the $200 million annual revenue run rate expectation for the acquired business remains unchanged.

All figures below are for Inseego standalone, excluding the Nokia FWA acquisition:

1. Mobile Solutions: Q2 2026 revenue of $17.3 million, representing 39.3% of total Q2 revenue. Revenue grew 26% year-over-year, driven by strong traction with the company's newest Tier 1 carrier customer and strong channel activity for the refreshed MiFi product portfolio.
2. Fixed Wireless Access (FWA): Q2 2026 revenue of $14.4 million, representing 32.7% of total Q2 revenue. Solid contributions from the newest Tier 1 carrier's large Q2 purchase were partially offset by weak performance from the company's large existing FWA carrier customer.
3. Services and Other (including Subscribe software platform): Q2 2026 revenue of $12.3 million, representing 28% of total Q2 revenue. Revenue grew 2% year-over-year. Starting in Q3 2026, this segment will see a $2 million per quarter decline in professional services revenue related to the Subscribe platform, following a customer's internal IT capability expansion.

• Legacy engineering processes were unable to scale to support the company's accelerated new product introduction and broader customer base, leading to product delivery delays that have created a permanent revenue gap for full year 2026; ongoing execution risk remains until process overhauls and leadership changes are fully implemented.
• Slower-than-expected recovery of the company's largest existing FWA customer is weighing on near-term revenue, and the timeline for full recovery remains uncertain.
• The MSO market opportunity conversion is taking longer than expected, and all related 2026 revenue has been removed from guidance, with future revenue treated as potential upside only.
• The large Q2 2026 pull-forward order from the new Tier 1 carrier pressured Q2 gross margin and will reduce Q3 2026 ordering levels, contributing to lower expected Q3 revenue.
• Continuing memory price volatility creates pressure on gross margins, although the company has now been able to pass through nearly all memory cost increases to customers for Q3 and beyond.
• The acquisition integration carries execution risk as the company combines two separate engineering teams and expands to global operations, requiring successful combination of processes and leadership to deliver expected synergies.

Q: How much MSO revenue was previously included in full-year guidance, what is the trajectory of the Subscribe revenue decline, what drives confidence in a Q4 revenue snapback, and how much pre-close integration work can be done for the Nokia acquisition? / A: Previously, $15 to $20 million in MSO revenue was included in guidance. The Subscribe revenue decline is a one-time $2 million per quarter step-down starting in Q3 (from ~$11 million to ~$9 million per quarter), not a progressive quarterly decline. Confidence in Q4 normalization comes from a return to standard ordering cadence across mobile and FWA, plus the launch of next-generation products for the large existing FWA customer that are expected to drive a rebound. Pre-close, management has already held encouraging initial customer discussions for cross-selling Inseego's mobile products to Nokia FWA customers and has progressed on integration planning for go-to-market and back-end operations.

Q: What is the root cause of the ongoing engineering bottleneck, will the Nokia transaction change deal economics, and what is the latest on the Nokia business performance relative to its $200 million run rate? / A: The core issue is that legacy Inseego processes were built for one new product per year for a single customer, and could not handle parallel development across multiple products and multiple carriers. The company has overhauled processes, slowed the new product cadence to focus on reliability, and has a strong pipeline of candidates for a new engineering leader. There are no changes to the Nokia transaction's economic terms, including the fixed equity issuance price, which currently favors Inseego shareholders. The Nokia business is still expected to hit a $200 million annual run rate, and no adjustments to transaction pricing are allowed under the deal structure regardless of near-term performance.

Q: How will Inseego manage combined engineering for the Nokia acquisition when it is already facing internal engineering execution challenges, and can you confirm the dynamic of the Q2 memory cost impact on gross margin? / A: The delayed mobile products that exposed process gaps are now fully launched, and Inseego has narrowed its near-term new product pipeline to allow the team to mature processes while integration proceeds. The Nokia acquisition includes a full intact engineering team with existing product leadership, and the transaction's EBITDA guarantee will fund delivery of the committed Nokia roadmap. A new global engineering leader will oversee integration of the two teams into a single function. Management confirms that the incremental Q2 order required using higher-cost memory allocated for Q3 to fulfill the fixed-price Q2 order, which pulled down Q2 gross margin as expected. All major U.S. carriers have now been notified of Q3 and Q4 ASP increases that pass through current higher memory costs, aligning with broader industry pricing trends.

Q: Is the Subscribe customer moving fully in-house, and what is the timeline for the current contract? / A: The customer remains subscribed to the Subscribe SaaS platform; the change is only a reduction in the professional services/NRE work Inseego provides, as the customer has built internal capability to handle less complex work. The parties are currently in a normal contract renewal negotiation, with historical terms ranging from one to three years, and no final long-term term has been set yet.