Release Date: February 19, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Inseego Corp (NASDAQ:INSG) achieved a 34% year-over-year revenue growth in Q4 2024, marking the third consecutive quarter of positive GAAP operating income.
• The company successfully recapitalized by optimizing working capital, restructuring the balance sheet, and reducing debt, ending 2024 with $56 million in total debt and a healthy cash position of $40 million.
• Inseego Corp (NASDAQ:INSG) has a strong engineering team and prototyping facility in San Diego, enabling them to be first to market with the latest technology.
• The company is focusing on expanding its product portfolio and go-to-market strategy to capture opportunities in the growing wireless broadband market.
• Inseego Corp (NASDAQ:INSG) is investing in software and services, including the Inseego Connect platform, to establish leadership in ease of deployment and remote management, aiming to add recurring revenue and improve gross margins.

Negative Points

• Inseego Corp (NASDAQ:INSG) expects a sequential decline in Q1 2025 revenue due to higher than anticipated customer inventory at year-end and product transitions.
• The company faces challenges with lower FWA purchases from a large carrier customer managing inventory levels, impacting Q1 2025.
• There is uncertainty regarding government funding for fixed wireless access, which could affect Inseego Corp (NASDAQ:INSG)'s market opportunities.
• The company is in the early stages of implementing new procurement and supply logistics processes, which may take time to yield cost benefits.
• Inseego Corp (NASDAQ:INSG) anticipates a slow start to 2025 on a revenue basis, with Q1 presenting challenges due to the end of a special national mobile hotspot program.

Q & A Highlights

• Warning! GuruFocus has detected 6 Warning Signs with INSG.

Q: Can you clarify the guidance regarding customer inventory and expected growth for 2025? A: (Stephen Gatov, CFO) Yes, we anticipate growing revenue for the full year 2025 compared to 2024. While Q1 presents a challenging start, we expect growth to begin in Q2, with significant traction in the latter half of the year due to various initiatives. (Yo Sarvikos, CEO) We see significant opportunities with existing partners and a broader customer base, which supports our positive outlook for the year.

Q: Where do you see growth coming from in the second half of the year? Are there new customers or products contributing to this? A: (Yo Sarvikos, CEO) We expect growth from product refreshes and expansion, particularly in Fixed Wireless Access (FWA) and Inseego Connect. We aim to grow from small and medium businesses to larger enterprises and industrial segments by the end of the year.

Q: How do you plan to leverage government funding and fixed wireless access opportunities? A: (Yo Sarvikos, CEO) We plan to expand our portfolio to include more tiered offerings in the market. We are closely monitoring government funding opportunities and expect to benefit from them alongside the ecosystem. We are also exploring residential use cases and potential partnerships with large wireless and wired players.

Q: Can you discuss the customer relationships you bring from Qualcomm and how quickly you can implement improvements? A: (Yo Sarvikos, CEO) We have engaged with major broadband players in North America and are working to convert these opportunities into a revenue roadmap. This engagement gives us confidence in our growth outlook for 2025.

Q: With the sale of the telematics business complete, is the current asset mix final, or should we expect further changes? A: (Yo Sarvikos, CEO) Our goal is to be the leading provider in mobile and fixed broadband. We will continue to invest in our hardware, software, and cloud assets. While we may consider inorganic opportunities, it will be through a careful and thoughtful process.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.