Name: KORE Group Holdings, Inc. Q2 2025 Earnings Call
Start: 2025-08-14T21:00:00.000Z

Executive Summary

KORE delivered Q2 2025 revenue of $71.3M, up 5% YoY; Total connections reached 20.1M (+8% YoY), Adjusted EBITDA rose 46% YoY to $16.7M, and Free Cash Flow was positive at $1.6M for the third consecutive quarter .
Against Wall Street consensus, revenue modestly beat (+$1.0M, ~1.4%) and EPS beat by ~$0.03; management reiterated FY25 guidance (revenue $288–$298M, adjusted EBITDA $62–$67M, FCF $10–$14M) . Estimates from S&P Global: Revenue consensus $70.3M; EPS consensus -$0.61 (actual -$0.58)*.
Mix effects weighed on ARPU ($0.94 vs $1.00 YoY) and IoT Connectivity non-GAAP margin eased slightly (60.0% vs 60.9% YoY), while IoT Solutions non-GAAP margin expanded meaningfully (45.3% vs 38.5% YoY) .
Strategic momentum: pipeline grew to $84.6M eARR with $10.2M closed-won eARR in the quarter; management highlighted AI deployments and SGP.32 readiness, plus Connected Health wins and multi-carrier SuperSIM traction .
Stock reaction catalysts: reiterated FY guidance with sustained positive FCF, accelerating IoT Solutions margin, and pipeline conversion; limited direct tariff impact, but management flagged customer uncertainty as a watch item .

What Went Well and What Went Wrong

“Three straight quarters of positive cash flow” with Q2 Free Cash Flow of $1.6M; cash provided by operations rose to $4.1M .
Connections crossed 20.1M (+8% YoY), underpinning recurring IoT connectivity revenue; revenue up 5% YoY to $71.3M .
IoT Solutions non-GAAP margin expanded to 45.3% (from 38.5% YoY) on higher-margin sales; Adjusted EBITDA up 46% YoY to $16.7M .
Management: “We are delivering consistent revenue growth, improvements in profitability, and generating sustainable free cash flow,” and rolling out “eight distinct AI initiatives” and an “AI powered live assistant” to enhance experience and efficiency .

ARPU declined to $0.94 from $1.00 YoY due to lower-ARPU use case additions; DBNER improved to 99% but remains influenced by prior Solutions weakness .
GAAP gross margin softened to 35.1% from 37.5% YoY; IoT Connectivity non-GAAP margin slipped to 60.0% from 60.9% YoY due to revenue mix .
Net loss was $16.9M (improved from $83.6M YoY on prior goodwill impairment), but EBIT remained negative; management cited FX gains and restructuring savings supporting Adjusted EBITDA improvement .

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$67.9	$72.1	$71.3
Net Loss ($USD Millions)	$(83.6)	$(14.9)	$(16.9)
Adjusted EBITDA ($USD Millions)	$11.4	$14.5	$16.7
Cash from Operations ($USD Millions)	$4.0	$2.9	$4.1
Free Cash Flow ($USD Millions)	$(0.1)	$0.6	$1.6
GAAP Gross Margin (%)	37.5%	36.0%	35.1%
Diluted EPS - Continuing Ops ($)	-$4.37*	-$0.77*	-$0.86*
Notes: Values with asterisk (*) retrieved from S&P Global.

Segment revenue

Segment Revenue ($USD Millions)	Q2 2024	Q1 2025	Q2 2025
IoT Connectivity	$55.8	$53.9	$56.1
IoT Solutions	$12.1	$18.2	$15.2
Total Revenue	$67.9	$72.1	$71.3

KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
Period-End Total Connections (Millions)	18.6	19.8	20.1
Average Connections (Millions)	18.5	19.7	20.1
ARPU ($/month)	$1.00	$0.91	$0.94
DBNER (%)	92%	99%	99%

Versus estimates (S&P Global – Q2 2025)

Metric	Consensus	Actual
Revenue ($USD Millions)	70.3	71.3
Primary EPS ($)	-0.61	-0.58*
# of Estimates (EPS/Revenue)	2 / 2	—
Notes: Values without citation retrieved from S&P Global.

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY 2025	$288–$298	$288–$298	Maintained
Adjusted EBITDA ($USD Millions)	FY 2025	$62–$67	$62–$67	Maintained
Free Cash Flow ($USD Millions)	FY 2025	$10–$14	$10–$14	Maintained

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
AI/technology initiatives	ServiceNow Now Assist, GitHub Code Assist, MS Copilot; SGP.32 readiness	“Eight distinct AI initiatives,” “Corey” AI live assistant; continued SGP.32 readiness	Improving adoption
Supply chain/tariffs/macro	Cautious stance; recurring connectivity provides insulation	Limited direct impact; some customers face tariffs; KORE helps source alternatives	Cautious but resilient
Product performance	Solutions margin >40% target in 2025	Solutions non-GAAP margin 45.3%; Connectivity non-GAAP margin 60.0%	Mixed: Solutions up, Connectivity slight down
Pipeline & eARR	Transition from TCV to eARR; $6M closed-won in Q1	Pipeline $84.6M eARR; $10.2M closed-won eARR	Strengthening
Connected Health	Expanding wins and deployments	New RPM win; strong vertical growth	Strengthening
ARPU	Low-ARPU adds impacting trend	ARPU $0.94 vs $1.00 YoY; mix impact	Stabilizing near ~$0.90–$1.00

“We are delivering consistent revenue growth, improvements in profitability, and generating sustainable free cash flow.”
“We’re deploying eight distinct AI initiatives… and introduced ‘Corey,’ an AI powered live assistant to provide instant customer support.”
“Total revenue… $71.3M… Adjusted EBITDA… $16.7M…. sustained cash generation strengthens our balance sheet… third consecutive quarter of positive free cash flow.”
“Pipeline of opportunities grew to $84.6M… converted $10.2M into closed-won eARR… balanced wins—new logos and expansion with existing customers.”
“We reiterate our 2025 guidance… revenue $288–$298M, adjusted EBITDA $62–$67M, free cash flow $10–$14M.”

Tariffs: Demand remains intact; customers seek KORE’s sourcing/solutions expertise; no cancellations; larger global customers may face delays but trend not evident yet .
2025 milestones: Focus on pipeline growth and closed-won eARR; target >21M connections by year-end; complete three significant tech/infrastructure projects in H2 .
Mix & ARPU: Management expects balanced pipeline across ARPU tiers; lower-ARPU expansions remain profitable; high-ARPU examples like Winnebago highlighted in Q1 .

Q2 2025 revenue beat consensus by ~$1.0M; EPS modest beat versus S&P Global consensus. With guidance reiterated and positive FCF, near-term estimate revisions likely focus on margin mix (Solutions strength vs Connectivity margin normalization) and sustained FCF trajectory . S&P Global values used for estimates; EPS actual from S&P Global differs from GAAP diluted EPS. Notes: All estimate values retrieved from S&P Global.

Positive FCF is becoming durable; three consecutive quarters and full-year FCF guidance maintained—a key credit profile and equity narrative support .
Revenue and EPS beat consensus; pipeline conversion (closed-won eARR $10.2M) enhances forward visibility for recurring connectivity .
Margin dynamics: IoT Solutions non-GAAP margin strength (45.3%) offsets slight connectivity margin compression; watch mix impact on ARPU and gross margin .
Guidance intact amid macro/tariff uncertainty; KORE’s recurring model and solutioning capability help mitigate customer supply chain pressures .
Strategic product edge: SGP.32 readiness, multi-carrier SuperSIM, Connected Health traction, and AI-driven operations/customer support underpin competitive differentiation .
Near-term trading: Reiterate guidance plus FCF momentum are supportive; any signs of accelerating connections or additional high-ARPU wins could be upside catalysts .
Medium-term thesis: Scaling connections beyond 21M, improving Solutions margin mix, and disciplined OpEx/FX management should drive adjusted EBITDA growth and deleveraging capacity .