Executive Summary

Q1 2021 revenue grew 22.3% year over year to $2.39M, with gross margin at 38.1% versus 39.1% in Q1 2020; the quarter printed a diluted EPS of $(0.01) as operating loss widened to $(0.23)M .
Segment mix was balanced: Hosted Services $1.23M and Mobile Services $1.17M, both up year over year; Hosted margin 37.2% and Mobile margin 39.0% .
Management expects program-driven revenue uplift: EBB reimbursement revenues to rise ~70% during the program and overall Lifeline/EBB revenue to increase ~105% month-over-month, with CPUC Lifeline approval expanding addressable market in California by ~2M eligible households (potential catalysts) .
No formal Q1 earnings call transcript or consensus estimates were available; treat estimate comparisons as N/A. S&P Global consensus for KTEL Q1 2021 was unavailable.

What Went Well and What Went Wrong

What Went Well

Revenue growth and resilient margin: Revenues increased to $2.39M (+22.3% YoY), with gross profit up to $0.91M and gross margin at 38.1% .
Hosted Services momentum: Hosted revenue rose 31.9% YoY; management continues mix-shift to higher-margin CPaaS offerings (“we enjoyed strong growth in our CPaaS hosted services business…”) .
Regulatory tailwinds: “Infiniti Mobile…approved as a provider…in the FCC’s Emergency Broadband Benefit (EBB) program,” positioning for enhanced LTE data solutions to families in need .

What Went Wrong

Profitability: Operating loss widened to $(230,480) and the quarter reported a net loss of $(232,722) vs net income of $100,833 in Q1 2020; diluted EPS was $(0.01) vs $0.00 .
Customer concentration: A single customer accounted for 34.7% of Q1 revenue, up from 28.4% in Q1 2020—heightening revenue concentration risk .
Cash from operations: Operating cash flow was $(114,538) vs $395,085 in Q1 2020, reflecting working capital and lease-related movements despite revenue growth .

Financial Results

Core P&L vs Prior Periods and Estimates

Metric	Q1 2020 (oldest)	Q3 2020	Q1 2021 (newest)
Revenue ($USD)	$1,957,355	$2,527,281	$2,392,838
Gross Profit ($USD)	$765,178	$901,800	$911,161
Gross Margin (%)	39.1%	34.4%	38.1%
Operating Income (Loss) ($USD)	$(189,991)	$(56,423)	$(230,480)
Diluted EPS ($USD)	$0.00	$0.00	$(0.01)

Notes: Prior quarter (Q4 2020) detail not reported in filings; consensus estimates not available. S&P Global consensus for KTEL Q1 2021 was unavailable.

Segment Breakdown

Segment	Q1 2020 Revenue ($USD)	Q1 2020 Gross Margin ($USD)	Q1 2020 Gross Margin (%)	Q1 2021 Revenue ($USD)	Q1 2021 Gross Margin ($USD)	Q1 2021 Gross Margin (%)
Hosted Services	$929,437	$347,051	37.3%	$1,225,866	$455,936	37.2%
Mobile Services	$1,027,918	$418,127	40.7%	$1,166,972	$455,225	39.0%
Total	$1,957,355	$765,178	39.1%	$2,392,838	$911,161	38.1%

KPIs

KPI	Q4 2020 / As of Dec 31, 2020	Q1 2021
Cash and Equivalents ($USD)	$715,195	$569,336
Operating Cash Flow ($USD)	—	$(114,538)
Current Ratio	0.94	0.92
Major Customer % of Revenue	28.4% (Q1 2020)	34.7%
AR Concentration (Top Two)	$194,509 (52.4%), $52,843 (14.2%)	$198,884 (40.78%), $107,918 (22.13%)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EBB Reimbursement Revenues	During EBB program	None disclosed	“Reimbursement revenues…increase by approximately 70% over current month-over-month revenues”	Raised
Lifeline/EBB Overall Revenues	Beginning May 12, 2021	None disclosed	“Overall Lifeline/EBB revenue increase of approximately 105%…month over month”	Raised
California Lifeline Authorization	Ongoing (approved June 8, 2021)	Not authorized	CPUC unanimously approved Lifeline; expands addressable market by ~2M households	Raised market opportunity
Liquidity (EIDL)	2021	$150,000 outstanding	Requested increase to $500,000 EIDL (decision pending)	Potential liquidity increase

No formal margin, OpEx, OI&E, tax rate, segment-specific financial guidance or dividends were issued for Q1 2021 in filings.

Earnings Call Themes & Trends

Company did not publish a Q1 2021 earnings call transcript; themes are drawn from MD&A and press releases.

Topic	Previous Mentions (Q3 2020)	Current Period (Q1 2021)	Trend
CPaaS/Hosted Services Mix Shift	Hosted margin 36.5%; diversification of service mix; hosted + Lifeline accounted for 89.3% of gross revenue	Hosted revenue +31.9% YoY; margins ~37%	Positive mix shift toward hosted services
Mobile Services Margin	Mobile gross margin 6.4% (pressure vs prior year)	Mobile gross margin 39.0%	Material improvement vs Q3 2020
Regulatory Programs (Lifeline/EBB)	Phasing out VETC; Lifeline ETC sizable component	EBB approval/application; expected +70% reimbursement and +105% Lifeline/EBB revenue; CPUC Lifeline in CA	Expanding program exposure and revenue tailwinds
Liquidity & Capital	Cash $588k; current ratio 0.89; reduced overall debt	Cash $569k; current ratio 0.92; EIDL increase request to $500k	Stable liquidity; pursuing low-cost capital
COVID-19 Impact	Operational risk disclosed; no material impact at time	Risk factor reiterated; operations monitored	Ongoing monitoring; manageable impact

Management Commentary

“We enjoyed strong growth in our CPaaS hosted services business, and emphasized its performance over retaining legacy mobile services revenues that contribute little to our bottom line.” — Sean McEwen, Chairman & CEO .
“Infiniti Mobile…approved as a provider of broadband services as part of the FCC’s new Emergency Broadband Benefit (EBB) program.” .
“By unanimous consent, we are now authorized to deliver expanded network choices from all three national cellular providers to eligible California families under the FCC and CPUC LifeLine Program…[This] expands our addressable market by nearly two million eligible households.” — Sean McEwen .

Q&A Highlights

The company did not host or publish a Q1 2021 earnings call transcript; no analyst Q&A or call-based clarifications are available in filings or company materials for the quarter.

Estimates Context

S&P Global consensus estimates for KTEL Q1 2021 were unavailable; as a result, comparisons to Wall Street EPS and revenue estimates are N/A for this quarter. Where estimates are unavailable, treat revisions as dependent on regulatory program uptake (EBB/Lifeline) and segment mix .

Key Takeaways for Investors

Revenue growth with balanced segment mix and improved Mobile margins, but profitability remains challenged; watch operating leverage as hosted scale continues .
Near-term catalysts from EBB reimbursement and CPUC Lifeline approval could drive sequential revenue inflection; monitor execution and churn in program lines .
Customer concentration risk is elevated (one customer ~35% of revenue); diversification progress should be tracked to reduce volatility .
Liquidity is adequate and could improve with EIDL expansion; watch cash conversion and lease/liability dynamics given negative operating cash flow in Q1 .
Absent formal guidance and Street coverage, the stock likely reacts to regulatory wins, segment margin trajectories, and program enrollments rather than to estimate beats/misses .
Medium-term thesis hinges on scaling CPaaS hosted services and monetizing Lifeline/EBB expansions while maintaining margin discipline and reducing concentration risk .
No Q1 call or consensus adds uncertainty; prioritize direct filings and program updates for position sizing and trading decisions.

KonaTel, Inc. (KTEL)·Q1 2021 Earnings Summary