iQSTEL Inc (IQST)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered $57.63M revenue (+12% YoY), gross profit of $1.93M (+40% YoY), and gross margin of 3.36% (+68 bps YoY); consolidated net loss was $1.16M as operating and financing costs rose with the QXTEL consolidation .
• Management reaffirmed FY-2025 revenue guidance of $340M and a year-end $400M run-rate, supported by accelerating monthly revenue ($23.7M in May alone) and the GlobeTopper fintech integration; they target >$3M adjusted EBITDA and seven‑digit net income for operating subsidiaries in 2025 .
• Non-GAAP Adjusted EBITDA was positive in the Telecom division ($593.6K), while consolidated Adjusted EBITDA was slightly negative as high-margin initiatives scale; management argues non-GAAP metrics better reflect core operating trends .
• Strategic catalysts: NASDAQ uplisting (May 14), GlobeTopper acquisition (effective July 1), and expanding AI/cybersecurity offerings; management highlights valuation upside versus peers as operations scale .

What Went Well and What Went Wrong

What Went Well

• Gross margin improved to 3.36% (+68 bps YoY) on subsidiary mix optimization and synergies; Smartbiz and Whisl gross margins expanded materially as low-margin routes were rationalized .
• Telecom division generated positive operating income and $593.6K Adjusted EBITDA, with QXTEL adding $829K of gross profit; management called Q1 “robust revenue generation” with “steady improvements toward profitability” .
• Pipeline and run-rate visibility strengthened: $101.5M preliminary revenue Jan–May and an expected trajectory to $33M monthly revenue by year-end; management reiterated $340M FY revenue and $400M run-rate targets .

What Went Wrong

• Consolidated net loss widened to $1.16M (vs. $0.81M loss in Q1 2024) as operating expenses (+$0.98M YoY) and interest expense ($0.53M) increased with platform consolidation and financing costs related to QXTEL .
• Working capital remained negative (-$4.24M), and the 10‑Q flagged substantial doubt about going concern absent additional funding, underscoring balance sheet constraints in the near term .
• Intercompany eliminations rose (-$13.41M in Q1), complicating top-line optics across subsidiaries and highlighting the need for clarity in revenue mix and reported contributions (e.g., QXTEL contribution metrics vs consolidated) .

Financial Results

Notes:

• Company communications referenced Q4 2024 revenue of $98.9M; earlier preliminary release cited $96M; management subsequently used $98.9M in Q1 materials .

Segment breakdown (selected subsidiaries; consolidated includes eliminations):

KPIs and non-GAAP:

Non-GAAP definition note: Adjusted EBITDA excludes interest, taxes, D&A, FX gains/losses, stock-based compensation, and other non-recurrent items; management presents non-GAAP to reflect core operating performance trends .

Guidance Changes

Earnings Call Themes & Trends

No earnings call transcript was available for Q1 2025; management commentary sourced from 8‑K and shareholder letters.

Management Commentary

• “We are very pleased with our Q1 performance. Our business platform continues to demonstrate robust revenue generation, along with steady improvements toward profitability.” — CEO Leandro Iglesias .
• “We are now entering the stage where adjusted EBITDA in the millions is beginning to take shape… the momentum we’re building will carry us to that goal.” — CEO Leandro Iglesias on mid‑year trajectory .
• “Year‑end run rate: $400 million, with 20% from tech services” — FY‑2025 operational objectives .

Q&A Highlights

• No earnings call transcript or Q&A was available for Q1 2025; management provided detailed shareholder letters and 8‑K press releases instead .

Estimates Context

• S&P Global consensus coverage for IQST Q1 2025 appears limited; no EPS or revenue estimate counts were available. Actuals recorded by S&P Global show revenue of $57.63M and consolidated EBITDA of ($0.46M) for Q1 2025, indicating insufficient consensus estimates for beat/miss analysis (values retrieved from S&P Global).*
  | Metric | Q1 2025 Consensus | Q1 2025 Actual | |--------|--------------------|----------------| | Revenue ($USD) | N/A* | $57,632,816* | | EBITDA ($USD) | N/A* | ($455,791)* | | EPS ($USD) | N/A* | ($0.44) |

Key Takeaways for Investors

• Trajectory intact: Q1 2025 met internal momentum objectives with double‑digit YoY revenue and gross margin expansion; management reaffirmed $340M FY revenue and $400M run-rate by YE, supported by strong May and fintech integration .
• Core engine profitable: Telecom division posted positive operating income and Adjusted EBITDA ($593.6K); near-term consolidated EBITDA softness reflects scaling investments and financing costs .
• Balance sheet watch: Negative working capital and a going concern note increase execution risk; financing and working capital actions are near-term priorities for derisking .
• Mix and synergies: Subsidiary portfolio rationalization improved margins in Smartbiz/Whisl; intercompany routing and unified switching platform should lift efficiency and margins over coming quarters .
• Catalysts: NASDAQ uplisting, GlobeTopper contribution (positive EBITDA), and scaling AI/cybersecurity services offer multi‑pronged re‑rating potential if run-rate hits $400M by YE .
• Estimate gap: Limited sell‑side coverage constrains traditional beat/miss narratives; focus on intra-quarter updates and run-rate progression to gauge trajectory (S&P Global shows insufficient consensus).*
• Trading lens: Near-term stock moves likely hinge on monthly revenue cadence, additional acquisition execution, and any funding updates; monitor intercompany eliminations and subsidiary-level margins to confirm quality of growth .