Name: INSEEGO CORP. Q1 2025 Earnings Call
Start: 2025-05-08T21:01:00.000Z

Executive Summary

Q1 2025 revenue of $31.7M came in within guidance but modestly below S&P Global consensus ($32.1M*), while non‑GAAP profitability was strong: Adjusted EBITDA $3.7M (11.6% margin) and GAAP gross margin 47.3% (non‑GAAP 47.5%) on a richer Services mix . Versus estimates, revenue was a slight miss, but “Primary EPS” (S&P Global) was a clear beat (0.028 vs -0.063*) (S&P Global).
Management guided Q2 2025 total revenue to $37–$40M and Adjusted EBITDA to $2.5–$3.5M, with non‑GAAP gross margin expected in the “high-30s” given higher product mix; guidance excludes potential tariff impacts .
Mix and execution drove the upside in profitability despite softer hardware volumes; Services & Other grew 49% YoY to $12.0M, and mobile revenue rose 17% YoY even as some carrier promotions slipped later in the quarter .
Balance sheet de‑risking continued: Inseego repaid the remaining ~$15M of its 2025 convert on May 1, leaving ~$41M of 9% senior secured notes due 2029 outstanding—a key catalyst for equity holders by removing the convert overhang .

What Went Well and What Went Wrong

What Went Well
- Services mix and margins: GAAP gross margin reached 47.3% (non‑GAAP 47.5%), helped by higher Services & Other revenue ($12.0M, +49% YoY) and favorable mix; Adjusted EBITDA was $3.7M (11.6%), the ninth consecutive positive quarter .
- Strategic product/tech progress: “We were the first OEM in the world to make a 5G Advanced 3GPP Release 18 data call with the new Qualcomm Dragonwing…platform,” positioning Inseego for future FWA/enterprise opportunities .
- Capital structure: “We…fully repay[ed] the remaining $15 million…on our convertible debt on May 1st,” leaving only the 2029 senior secured notes (~$41M) and supporting shareholder value .
What Went Wrong
- Top‑line softness: Revenue declined 16% YoY to $31.7M, down sequentially from Q4, as delayed carrier mobile promotions and temporarily lower FWA orders during a product transition impacted volumes .
- Product drag: Product revenue fell to $19.7M vs $35.9M in Q4, with FWA particularly soft ($1.9M in Q1 vs $10.4M in Q4) during customer inventory management ahead of next‑gen devices .
- Customer concentration/large deal timing: Management acknowledged the base “isn’t where it needs to be” and that Q2 growth magnitude hinges on timing of a “large channel deal” .

Financial Results

Key P&L and profitability (Continuing Operations unless noted)

Metric	Q3 2024	Q4 2024	Q1 2025
Total Revenues ($M)	$54.0	$48.1	$31.7
Gross Margin % (non‑GAAP)	34.8%	37.4%	47.5%
Operating Income (Loss) ($M)	$1.0	$1.8	$(0.4)
Adjusted EBITDA ($M)	$6.7	$5.4	$3.7
Adjusted EBITDA Margin %	12.5%	11.2%	11.6%
Net Income (Loss) from Continuing Ops ($M)	$7.5	$(16.5)	$(1.2)
EPS (Continuing Ops, Basic)	$0.54	$(1.23)	$(0.14)

Segment and mix (Continuing Operations)

Revenue ($M)	Q3 2024	Q4 2024	Q1 2025
Mobile solutions	$32.3	$25.5	$17.8
Fixed wireless access solutions	$9.7	$10.4	$1.9
Product (total)	$42.0	$35.9	$19.7
Services & Other	$12.0	$12.2	$12.0

Q1 2025 vs S&P Global consensus

Metric	Consensus (S&P Global)*	Actual
Revenue ($M)	$32.06*	$31.67
Primary EPS	$(0.063)*	$0.028*

Values retrieved from S&P Global.

Additional KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
Cash & Equivalents ($M)	$12.0	$39.6	$35.1

Notes:

Management reported GAAP gross margin of 47.3% in Q1 (non‑GAAP 47.5%) .
Adjusted EBITDA excludes interest, taxes, D&A, impairments, restructuring and other items as detailed in non‑GAAP reconciliations .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance/Result	Change
Total Revenue	Q2 2025	N/A	$37M–$40M	New
Adjusted EBITDA	Q2 2025	N/A	$2.5M–$3.5M	New
Gross Margin % (non‑GAAP)	Q2 2025	N/A	“High 30s%” (mix-driven)	New (qualitative)
Services & Other Revenue	Q2 2025	N/A	“Consistent with Q1 on a dollar basis”	New (qualitative)
Tariff Impact	Q2 2025	N/A	Excluded from guidance	New
Total Revenue	Q1 2025	$30M–$33M	$31.7M (actual)	Met midpoint
Adjusted EBITDA	Q1 2025	$2.0M–$3.0M	$3.7M (actual)	Above

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
FWA trajectory	Wins/awards; large ISP FWA order	Continued product momentum (award letter for next‑gen indoor FWA)	Q1 softness from customer inventory transition; expect meaningful FWA rebound in Q2	Near‑term dip, improving in Q2
MiFi/mobile promotions	Stronger sequential MiFi demand at carriers	Record MiFi X PRO sales at a major carrier	Promotions started later than anticipated; mobile revenue +16% YoY	Normalizing
Software/SaaS (Connect, Subscribe)	–	Services growth; profitability expansion	APIs for Inseego Connect in partner testing; Subscribe expansion; Services +~50% YoY	Expanding
Channel strategy	Launch of Ignite, early revenue	–	Large channel deal expected to close within Q2; building 2‑tier distribution	Building pipeline
Supply chain/tariffs	–	–	Mfg in Taiwan/Vietnam to mitigate U.S.-China tariff risk; HTS code currently exempt	Watchlist
Capital structure	Convertible restructuring; planned deleveraging	Telematics sale completed; debt down materially	Remaining ~$15M convert repaid May 1; only ~$41M 2029 notes outstanding	Improved

Management Commentary

Strategy and positioning: “I’m positioning Inseego to power the next generation of enterprise connectivity through software‑defined, high‑performance wireless networking solutions…anchored in wireless broadband, combining our MiFi and FWA hardware with cloud‑managed software solutions” — Juho Sarvikas, CEO .
Technology proof point: “We were the first OEM in the world to make a 5G Advanced 3GPP Release 18 data call with the new Qualcomm Dragonwing…platform” — CEO . (See MWC press release on next‑gen portfolio/AI features) .
Profitability drivers and mix: “Q1 2025 non‑GAAP gross margin…increased to a record 47.5%…driven by…margin expansion in product and services and…greater services revenue” — Steven Gatoff, CFO .
Outlook cadence: “We expect to deliver sequential quarterly revenue growth beginning with Q2 2025…[with] gross margin…in the high 30s% area in Q2…mix‑dependent” — CFO .

Q&A Highlights

Macro/pipeline risk: Management is “not seeing” pipeline slippage into 2026 among large North American carriers .
T‑Mobile Partner Plus: Enables T‑Mobile subsidy to Inseego’s channel portfolio to create product pull; core FWA growth continues with a large North American carrier .
Free cash flow: Targeting positive FCF for 2025; H1 weighed by product investments and bonus payouts; H2 expected to outweigh H1 .
Channel deal timing: High confidence a large channel opportunity closes “within the quarter,” with continued investments in two‑tier distribution .
Margin model and OpEx: Longer‑term gross margin model “in the high 30s%,” mix‑dependent; OpEx to tick up modestly with new product investments and go‑to‑market hires .

Estimates Context

Q1 2025 vs S&P Global consensus: Revenue $32.06M* (consensus) vs $31.67M (actual); “Primary EPS” -$0.063* (consensus) vs $0.028* (actual) — a notable EPS beat despite a slight revenue miss (S&P Global).
Implications: Given margin outperformance and services momentum, Street EPS models may drift higher, while revenue models likely focus on the Q2 re‑acceleration and the timing of the flagged large channel deal (S&P Global).