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KORE Group Holdings, Inc. (KORE)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $68.7M, roughly flat YoY (-0.3%) and down QoQ from $71.3M, while Adjusted EBITDA rose 12% YoY to $14.5M and net loss improved 35% YoY to $(12.7)M .
  • Versus S&P Global consensus, KORE missed on revenue (actual $68.7M vs $72.7M*) but delivered a narrower GAAP EPS loss than expected (actual $(0.4585)* vs $(0.565)); Street EBITDA (GAAP) estimate $16.85M exceeded actual EBITDA of $9.79M, though company-reported Adjusted EBITDA was $14.53M .
  • Connectivity revenue posted a second straight quarter of sequential growth (+1.7% QoQ in Q3 after +3.2% in Q2), supported by 20.5M total connections (+9% YoY) and stable ARPU at $0.94 .
  • KORE suspended FY25 guidance due to a strategic review after receiving a non‑binding proposal from Searchlight and Abry to acquire the remaining shares for $5.00 per share; a Special Committee is evaluating alternatives, and there is no assurance of a transaction .

What Went Well and What Went Wrong

What Went Well

  • Sequential momentum in IoT Connectivity: connectivity revenue grew 1.7% QoQ (second consecutive quarter), indicating transformation progress and improving demand visibility .
  • KPI strength: total connections reached 20.5M (+9% YoY), supporting recurring revenue durability; ARPU held flat QoQ at $0.94 .
  • Profitability and cash discipline: Adjusted EBITDA increased 12% YoY to $14.5M; net loss improved to $(12.7)M; cash from operations was $1.1M and free cash flow improved $1.1M YoY to $(1.1)M .
  • Management quote: “We have delivered our second quarter of sequential growth in Connectivity Revenue and are seeing strong Connectivity demand from our customers” — Ron Totton, President & CEO .

What Went Wrong

  • Top-line softness vs estimates: revenue of $68.7M missed S&P Global consensus of $72.7M*, with Solutions revenue down slightly YoY due to timing of orders .
  • EBITDA vs Street: GAAP EBITDA of ~$9.8M trailed the S&P Global consensus of $16.85M* (Street may differ in treatment vs company’s Adjusted EBITDA of $14.53M) .
  • Margin mix: overall non‑GAAP gross margin fell to 55.2% (‑147 bps YoY) with Solutions non‑GAAP margin down to 34.3% (from 37.0%) and Connectivity non‑GAAP margin down to 59.6% (from 60.9%), reflecting revenue mix and Solutions timing .
  • Guidance withdrawn: FY25 outlook suspended due to strategic review, increasing near-term uncertainty for models .

Financial Results

Headline P&L and Margins (YoY and QoQ)

MetricQ3 2024Q2 2025Q3 2025
Revenue ($M)$68.9 $71.3 $68.7
Net Income (Loss) ($M)$(19.4) $(16.9) $(12.7)
EBITDA ($M, GAAP)$7.45 $11.26 $9.79
Adjusted EBITDA ($M)$12.99 $16.71 $14.53
Overall Non‑GAAP Gross Margin %56.7% 56.9% 55.2%

Segment Revenue and Segment Non‑GAAP Margin

MetricQ3 2024Q2 2025Q3 2025
IoT Connectivity Revenue ($M)$56.7 $56.1 $56.7
IoT Connectivity Non‑GAAP Margin %60.9% 60.0% 59.6%
IoT Solutions Revenue ($M)$12.2 $15.2 $11.9
IoT Solutions Non‑GAAP Margin %37.0% 45.3% 34.3%

KPIs

KPIQ1 2025Q2 2025Q3 2025
Period-End Total Connections (M)19.8 20.1 20.5
ARPU ($/month)$0.91 $0.94 $0.94
Closed‑Won EARR ($M)>$6.0 $10.2 $11.3

Actuals vs S&P Global Consensus – Q3 2025

MetricActualConsensusSurprise ($)Surprise (%)
Revenue ($M)$68.7 $72.7*$(4.0)−5.5%
Primary EPS (GAAP)$(0.4585)*$(0.565)*+$0.1065n/a
EBITDA ($M, GAAP)$9.79 $16.85*$(7.06)−41.9%

Values with asterisks (*) were retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious Guidance (as of Q2 2025)Current Guidance (Q3 2025)Change
RevenueFY 2025$288M–$298M Suspended Suspended
Adjusted EBITDAFY 2025$62M–$67M Suspended Suspended
Free Cash FlowFY 2025$10M–$14M Suspended Suspended

Management suspended guidance due to a Special Committee review following a non‑binding $5.00/share proposal from Searchlight and Abry .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/technology initiativesLaunched/expanded AI tools across ops; SuperSIM, eSIM/SGP.32, platform enhancements; internal AI programs; introduced “Kory” AI assistant in Q1 ; eight AI initiatives in Q2 .Launched KORE One unified platform; limited release of automated switching for resilience; “Kory” driving >50% reduction in support tickets .Improving adoption and productization .
Supply chain/tariffs/macroMinimal direct tariff impact; some customer challenges, but demand steady; no notable delays (Q1/Q2) .No new issues highlighted; demand steady per connectivity growth .Stable to improving .
Sales pipeline & EARRQ1: total pipeline ~$82M eARR (new ~$52M, existing ~$30M); >$6M closed‑won . Q2: pipeline $84.6M; $10.2M closed‑won .Pipeline $80.3M; $11.3M closed‑won; balance of new logos and expansion .Healthy and converting .
Connected HealthStrengthening vertical; margin/mix improving in 2025; multiple customer wins (Q1/Q2) .New global healthcare initiative win; emphasizes compliance and single-vendor solution .Positive momentum .
Guidance/strategic reviewQ1/Q2 reiterated FY25 guidance .Guidance suspended due to special committee review of $5.00/share non‑binding offer .Uncertain near-term outlook .

Management Commentary

  • CEO (Totton): “We delivered our second quarter of sequential growth in Connectivity Revenue and are seeing strong Connectivity demand… We fully expect this trend to continue for the rest of 2025 and into 2026.”
  • CEO (Totton) on commercial momentum and product: launched KORE One, limited release of automated switching for resilience; “Kory” AI assistant reduced support tickets >50% and improved customer eScore .
  • CFO (Bellomo): Q3 revenue ~$68.7M flat YoY; sequential connectivity growth +1.7%; OpEx $42.2M, down $1.7M YoY from restructuring; ARPU $0.94 vs $1.01 YoY; Adjusted EBITDA $14.5M (+12% YoY); free cash flow improved $1.1M YoY to $(1.1)M .
  • CEO on strategic review: company suspending guidance while Special Committee evaluates potential transaction and alternatives .

Q&A Highlights

  • The published Q3 2025 transcript did not include a Q&A session; management communicated key points in prepared remarks, including the guidance suspension due to the ongoing strategic review .

Estimates Context

  • S&P Global consensus expected $72.7M revenue and $(0.565) EPS for Q3; KORE delivered $68.7M and $(0.4585), respectively, implying a top‑line miss but EPS beat (narrower loss) as reported by S&P Global* .
  • S&P Global’s EBITDA (GAAP) consensus of $16.85M exceeded actual GAAP EBITDA of ~$9.8M; note the company highlights Adjusted EBITDA of $14.5M, which excludes items like integration costs and FX, and is the primary profitability metric cited by management .
  • Potential model impacts: modest downward revisions to revenue given the miss; EBITDA adjustments may depend on whether analysts track GAAP EBITDA vs company Adjusted EBITDA; connectivity trends and stable ARPU could support out‑quarter estimates if Solutions timing normalizes .

Values with asterisks (*) were retrieved from S&P Global.

Key Takeaways for Investors

  • Narrative pivot: sequential connectivity growth, improving Adjusted EBITDA, and growing connections underpin a recurring revenue base despite a near‑term revenue miss vs consensus .
  • Mix/timing mattered: Solutions revenue timing and mix weighed on margins; stable ARPU and pipeline conversion suggest fundamentals remain intact .
  • Valuation catalyst: Special Committee review of a non‑binding $5.00/share offer introduces an event‑driven path and increases near‑term uncertainty; guidance suspended pending outcomes .
  • Watch EBITDA definitions: Street’s EBITDA expectations (GAAP) were above actual GAAP EBITDA; company emphasizes Adjusted EBITDA (non‑GAAP) that improved YoY—be precise when benchmarking .
  • KPIs trending well: total connections +9% YoY to 20.5M; closed‑won EARR up to $11.3M in Q3; pipeline $80.3M—supportive of sustained connectivity revenue growth into 2026 per management .
  • Cash discipline: operating cash positive; free cash flow improved YoY; continued OpEx control from restructuring helps resiliency .
  • Near-term focus: track Solutions order timing, non‑GAAP margin trajectory, pipeline conversion, and any updates from the Special Committee for potential transaction clarity .

Appendix: Additional Details and Non‑GAAP Notes

  • Non‑GAAP gross margin reconciliation provided; overall non‑GAAP margin 55.2% vs 56.7% YoY; Connectivity 59.6% (vs 60.9% YoY), Solutions 34.3% (vs 37.0% YoY) .
  • Adjusted EBITDA excludes items including stock‑based compensation, integration costs, FX, warrant fair‑value changes, among others; see reconciliation tables .
  • Free cash flow reconciliation: Q3 operating cash flow $1.06M, capex/internally developed intangibles $(2.19)M, FCF $(1.13)M .

Citations:

  • Q3 2025 press release and reconciliations:
  • Q3 2025 8‑K 2.02 and guidance suspension:
  • Q3 2025 call transcript:
  • Strategic review non‑binding $5.00/share letter:
  • Q2 2025 press release and call:
  • Q1 2025 press release and call:

Values with asterisks (*) were retrieved from S&P Global.