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KORE Group Holdings, Inc. (KORE)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $72.142M, down 5% YoY on tough comps from prior-year one-time usage, but ahead of S&P Global consensus ($69.8M) — a modest revenue beat; EPS was -$0.69, slightly below consensus; adjusted EBITDA was $14.5M with margin ~20% . Revenue estimate beat and EPS miss based on S&P Global data: Revenue $69.8M*, EPS -$0.60* (actual EPS -$0.689*), EBITDA consensus $13.9M* [Values retrieved from S&P Global].
  • Operating cash flow rose to $2.874M (+51% YoY), and free cash flow was positive for the second straight quarter ($0.597M), driven by restructuring and OpEx control (OpEx down 15% YoY to $41.6M) .
  • IoT Solutions non-GAAP margin expanded to 39.9% (+370 bps YoY) while IoT Connectivity non-GAAP margin was 58.8% (-200 bps YoY on comp effects); overall non-GAAP margin was 54.0% vs 55.0% in Q1 2024 .
  • 2025 guidance maintained: Revenue $288–$298M, Adjusted EBITDA $62–$67M, FCF $10–$14M; management highlighted improving pipeline, indirect channel expansion, and AI-enabled go-to-market while acknowledging tariff-related uncertainty in customer timing .

What Went Well and What Went Wrong

What Went Well

  • Consecutive positive free cash flow with $0.6M in Q1; operating cash flow up 51% YoY to $2.9M, underscoring improving cash generation post-restructuring .
  • IoT Solutions non-GAAP margin rose to 39.9% (+370 bps YoY) amid portfolio rationalization and exit of low-margin hardware; GAAP solutions margin also improved to 33.0% .
  • Pipeline strength and new logo wins (e.g., Winnebago Connect) with closed-won eARR over $6M in the quarter; “our top priority is growth” and “we are encouraged by indirect channel opportunities” (Ron Totton) .

What Went Wrong

  • Total revenue declined 5% YoY to $72.142M, primarily due to tough comps from Q1 2024 one-time usage spikes and migration away from low-ARPU CaaS; IoT Connectivity revenue down ~7% YoY .
  • ARPU fell to $0.91 vs $1.05 in Q1 2024, reflecting the mix-shift to lower-ARPU use cases and absence of prior-year usage spike; management expects ARPU to hover near current levels with potential pressure if lower-ARPU cohorts expand .
  • Non-GAAP overall margin declined to 54.0% (vs 55.0% prior), and IoT Connectivity non-GAAP margin tightened (-200 bps YoY) due to comp effects; adjusted EBITDA was roughly flat YoY ($14.5M vs $14.8M) .

Financial Results

Actuals vs Prior Periods and Estimates

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$68.920 $73.300 $72.142
Primary EPS ($USD)-$0.719*-$1.0846*-$0.6894*
Revenue Consensus Mean ($USD Millions)$67.946*$70.300*$69.800*
Primary EPS Consensus Mean ($USD)-$1.1274*-$0.4900*-$0.6000*

Notes: Asterisks (*) indicate Values retrieved from S&P Global.

Key estimate comparisons for Q1 2025:

  • Revenue: $72.142M vs $69.8M consensus — bold beat (+$2.34M).
  • EPS: -$0.689 vs -$0.600 consensus — bold miss (by ~$0.089).
    [Values retrieved from S&P Global]

Segment Revenue and Margin

SegmentQ3 2024 Revenue ($M)Q4 2024 Revenue ($M)Q1 2025 Revenue ($M)
IoT Connectivity$56.721 $56.5 $53.917
IoT Solutions$12.199 $16.8 $18.225
Segment Margin (%)Q3 2024Q4 2024Q1 2025
IoT Connectivity Non-GAAP Margin %60.9% 59.3% 58.8%
IoT Solutions Non-GAAP Margin %37.0% 48.1% 39.9%
Overall Non-GAAP Margin %56.7% 56.8% 54.0%
Overall Gross Margin % (GAAP)——36.0%

KPIs

KPIQ3 2024Q4 2024Q1 2025
Period-End Total Connections18.8M 19.7M 19.8M
ARPU ($/month)$1.01 $0.97 $0.91
DBNER (%)95% 95% 99%
Cash from Operations ($M)—$2.840 $2.874
Free Cash Flow ($M)—$1.562 $0.597
Operating Expense ($M)—$54.4 $41.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)FY 2025$288–$298 $288–$298 Maintained
Adjusted EBITDA ($M)FY 2025$62–$67 $62–$67 Maintained
Free Cash Flow ($M)FY 2025$10–$14 $10–$14 Maintained

Management reiterated guidance, noting conservative assumptions given tariff-related timing risk and the deliberate exit of low-margin products .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
AI initiatives (internal & product)Initial AI tool deployment (ServiceNow Now Assist, GitHub Code Assist; product focus on eSIM/SGP.32) Continued AI usage; positioning for SGP.32 deployments Expanded use of Agentic AI for digital marketing; accelerating R&D with AI tools Increasing adoption and integration
Tariffs/macroMacro cautious but demand healthy Tariff uncertainty could affect timing; recurring connectivity provides insulation No impact observed so far; some sales cycle compression amid uncertainty Watchful but currently benign
Product/segment strategyDeemphasize low-margin hardware; Solutions fuels Connectivity Focus on profitable growth; connectivity-led model Indirect channel expansion; balanced ARPU mix; exit low-ARPU CaaS Margin-focused mix optimization
ARPU dynamicsARPU $1.01; mix benefits (higher data) ARPU $0.97; large low-ARPU cohorts added late in Q4 ARPU $0.91; tough comp vs prior-year usage spike; potential slight pressure Down on mix; stabilizing near current levels
Connected HealthSector strength; RPM wins pipeline momentum and resilience Growing demand; tariffs not affecting health use cases Strengthening vertical

Management Commentary

  • “We have delivered 2 consecutive quarters of positive free cash flow, and our connections continue to grow as we approach 20 million total connections… showing the full benefit of our restructuring efforts… our top priority is growth” — Ron Totton, CEO .
  • “Adjusted EBITDA margin improved by 60 bps to 20%… encouraged by strong April driven by connectivity revenue with no impact of tariff policies” — CEO .
  • “Operating expenses in the first quarter were $41.6M, a decrease of $7.5M or 15.3% YoY… net loss was $14.9M vs $17.6M prior year… adjusted EBITDA was $14.5M” — CFO .
  • “We are maintaining our 2025 guidance… revenue $288–$298M, adjusted EBITDA $62–$67M, free cash flow $10–$14M” — CEO .

Q&A Highlights

  • ARPU trajectory and mix: Management expects ARPU around ~$0.91 with potential pressure if low-ARPU cohorts expand; noted higher ARPU in top-150 customers and balanced pipeline (e.g., Winnebago high-ARPU) .
  • OpEx normalization: Net OpEx run-rate ~$25M after capitalized software, with integration costs adjusted out; solutions margin target ~40% for 2025 .
  • Pipeline composition: Roughly 75% new logos vs 25% existing (to be validated), with growth from new divisions at existing customers .
  • Sales cycles and tariffs: No elongation observed; some compression amid tariff uncertainty; April results were strong .
  • Connected Health demand: Not impacted by Medicare/Medicaid funding dynamics; expected to be a larger share of revenue/margin .

Estimates Context

  • Revenue beat: Actual $72.142M vs $69.8M consensus — modest beat driven by connection growth and resilience in connectivity revenue despite comp headwinds; management cites one-time usage spike in Q1 2024 and exit of low-margin products as key YoY headwinds [Values retrieved from S&P Global].
  • EPS miss: Actual -$0.689 vs -$0.600 consensus — slightly below expectations, reflecting lower ARPU mix and revenue decline on comps; OpEx savings partially offset [Values retrieved from S&P Global].
  • Implications: Street may adjust near-term EPS/EBITDA models for ARPU mix and margin cadence, while maintaining FY revenue/FCF views given guidance reaffirmation and positive FCF trajectory .
    Notes: All estimate figures marked with * are Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: Revenue beat but EPS miss; focus on margin trajectory and ARPU mix; positive FCF is a key support for equity story and potential debt profile improvement — constructive for stock on cash-generation narrative, with caution on EPS prints .
  • Mix matters: Continued exit of low-margin hardware and low-ARPU CaaS supports Solutions margin expansion and overall profitability over time .
  • Pipeline quality: New logo momentum (Winnebago Connect) and indirect channel expansion are catalysts; watch eARR disclosures and conversion to revenue as a forward indicator .
  • Guidance credibility: Reaffirmed FY 2025 ranges despite macro/tariff uncertainty; April strength and recurring connectivity base provide insulation — monitor Q2 conversion and ARPU stabilization .
  • Vertical strength: Connected Health and high-value asset monitoring remain durable growth vectors with margin leverage; supportive of medium-term thesis .
  • Risk checks: Debt load and interest expense remain watch items; CFO transition announced post-quarter but continuity planned; assess impact on execution and capital allocation .
  • Medium-term: As connections approach/clear 20M, recurring base expands; incremental AI enablement (Agentic AI in marketing; SGP.32 productization) can drive GTM efficiency and product differentiation .
Document citations:
- Q1 2025 8-K and press release: **[1855457_0001855457-25-000044_ex991koreq125earningsrelea.htm:0]** **[1855457_0001855457-25-000044_ex991koreq125earningsrelea.htm:1]** **[1855457_0001855457-25-000044_ex991koreq125earningsrelea.htm:6]** **[1855457_20250515CL89101:0]** **[1855457_20250515CL89101:5]**
- Q1 2025 call transcript: **[1855457_KORE_3428677_1]** **[1855457_KORE_3428677_2]** **[1855457_KORE_3428677_4]** **[1855457_KORE_3428677_7]** **[1855457_KORE_3428677_8]** **[1855457_KORE_3428677_9]** **[1855457_KORE_3428677_10]** **[1855457_KORE_3428677_11]** **[1855457_KORE_3428677_6]**
- Q4 2024 8-K and call: **[1855457_0001855457-25-000021_ex991koreq424earningsrelea.htm:1]** **[1855457_0001855457-25-000021_ex991koreq424earningsrelea.htm:7]** **[1855457_KORE_3424514_4]** **[1855457_KORE_3424514_6]** **[1855457_KORE_3424514_7]**
- Q3 2024 8-K and call: **[1855457_0001855457-24-000080_ex991koreq324earningsrelea.htm:1]** **[1855457_0001855457-24-000080_ex991koreq324earningsrelea.htm:7]** **[1855457_KORE_3409554_4]** **[1855457_KORE_3409554_7]** **[1855457_KORE_3409554_9]**
- Winnebago collaboration press release: **[1855457_20250512CL85746:0]**
- CFO transition press release: **[1855457_20250602CL00274:0]**
- 20M connections press release: **[1855457_20250616CL10529:0]**

Estimates disclaimer:
- All figures marked with * are Values retrieved from S&P Global.