INSG earnings call analysis

NASDAQ:INSG Q1 2026 Earnings Call Transcript Generated on 6/6/2026 Juho Sarvikas | President and Chief Executive Officer: Lance, that's an excellent question. One of the key things that we've discussed with Justin Holtzart from the beginning was to align on the market opportunity. And as a part of that, the notion of this strategic go-to-market collaboration continuing with Nokia even beyond we close the transaction. We will train, we will have a joint account management, pipeline management process. We will incentivize the Nokia global sales team to continue to hunt for us. So on the go-to-market side, that is a very valuable asset for us. It's also good to note that here in the U.S., we already have the sales structure in place to capitalize on the opportunities.

Lance | Analyst

Thank you. And maybe just one, switching gears for a second, just on the regulatory kind of Washington policy. And I've seen some headlines over the past couple of months, but honestly, I haven't been polling them as closely as I could or probably should. But are you getting any sort of a tailwind in terms of what the FCC has been sort of doing in terms of thinking about what can or cannot go into the supply chain these days?

Juho Sarvikas | President and Chief Executive Officer

Yeah, so the FCC ruling is on residential routers, where the primary intended use case is for residential deployment. Our solutions for the FWA and Hotspot, for that matter, are intended primarily for enterprise use. They have manageability, security, all of that enterprise features. Like you know, our mobile products also cross-sell into the consumer segment. So as this situation progresses, I do see this as a potential upside driver for us, given that we will be able to cater for both segments with a product that, again, primarily intended for enterprise use as opposed to residential. The other thing I would note here is that The criteria here is produced in U.S., and produced means designed, developed, and manufactured. We are unique in that we design and develop here in U.S. And then when it comes to manufacturing, we have optionality for that as well. So I do believe that our unique position as an American company with design development here in San Diego is gives us a great opportunity to capitalize on what's next on that front.

Lance | Analyst

Great.

Thanks for taking the questions. Operator | Conference Operator

Thanks, Lance. The next question will come from Scott Sierra with Roth Capital.

Please go ahead. Scott Sierra | Analyst, Roth Capital

Hey, good afternoon. Thanks for taking my questions. I got on the call a little bit late, so I apologize. I'm going to stay away from supply chain issues because I'm sure they've got addressed and I can take that offline. But Juho, maybe looking at the second half of this year, we kind of backed some revenue more into the second half, so it's a really back-end loaded year. I'm wondering if you could kind of give us, what's your level of confidence in terms of the number of operators and or products and programs that you expect to be launching up? Do you feel pretty comfortable about how the operator cadence of launches is going to perform in the mid to second half of this year?

Juho Sarvikas | President and Chief Executive Officer

Hey, Scott, thanks for joining us. Really, really appreciate your time. To your point, if you look at the revenue engines that we have going in the second half, we're in a really unique position with those three new hotspots launching and ramping by the end of the first half. In addition, on the call today, we announced that we have secured a new value tier win in a hotspot with a large tier one carrier. So there's more work to be done, more business to be expanded to, but the mobile portfolio going into the second half is is in excellent shape, despite some of the time delays that we've experienced on the first hub that's reflecting the Q1 performance and Q2 guide. Meanwhile, on FWA, very, very encouraged by the performance and the partnership with our new large tier one FWA customer, while we continue to realign the go-to-market and sales strategy with our existing large one. So those are huge for us. In addition, I see great opportunity in the MSO space. We've done a lot of work both on product and cloud side to become the perfect solution and ideal part for the large MSOs when it comes to failover, day one, and other use cases. So I view all of that as very encouraging, and as we have all of these student deaths firing in the second half, we see visibility of that 190 million that we set as a target for the year.

Scott Sierra | Analyst, Roth Capital

very helpful, and Juho, maybe just to follow up on that, you know, MSO customers is that likely in the second half of this year, and maybe I'm wondering if you could just comment on the competitive landscape. There are a lot of dynamics going on out there, you know, as obviously related to FCC regulation and security issues, but the breadth of the product portfolio that you now have, and as you start to move from the high tier into the mid tier and low tier, you know, are Are competitors starting to dwindle and go away and just kind of opening up share gains for you within the existing operator base?

Juho Sarvikas | President and Chief Executive Officer

Thanks. I'll take those one by one. On the MSO engagement pipeline, very strong. The job we'll have to do now is the final conversion. But again, we have good readiness pipeline and visibility into that opportunity space. The FCC ruling, which was at this point specific to residential routers, in the following Q&A was also identified to cover hotspots as a category. So there is a couple of things that we have going for our favor. First of all, intended primary use case is the enterprise. We have manageability and security and all of those features that are covered. And secondly, if you look at the degree to which you produce meaning design, develop, and manufacture in the U.S., were in a unique position as a company to do all of that here in the U.S. So whatever happens there next and how that situation develops, I would expect will only be favorable for us as carriers transition their portfolios and new products go into FCC filings. If you look at the volume of opportunities in the marketplace, we've done a great job in consolidating the MiFi or mobile market already now with that mid-high tier portfolio that we're in the middle of launching across all three carriers. Like, you know, we've positioned now for higher volume capture, where we used to be significantly higher priced than part of the market. Now we can drive volume share gains there, which in itself is great. And I do believe that this value-tier wind that we now have security mobile further takes oxygen out from the marketplace in our favor. So we're committed in driving increasing gains in that segment.

Scott Sierra | Analyst, Roth Capital

Gotcha. Very helpful. And if I could, just two quick ones on Nokia. I imagine you've probably had some inbounds and engagements with customers on both sides of the acquisition. I'm wondering what the operator response is now with you guys taking over with there being a long-term roadmap and direction for the company in terms of solidifying those existing relationships. And then the cross-sell opportunities for you to bring in you know, higher-end mobile hotspots and otherwise into that carrier customer base. And on the gross margin front, I know it's early, but I'm kind of wondering if you've been able to get a quick peek at, you know, what's in the box in the BOM breakdown and have a roadmap to be able to enhance the gross margin profile, you know, once you guys get closer to closed date and integration.

Thanks. Juho Sarvikas | President and Chief Executive Officer

Thanks, Scott. We've, as a part of the due diligence process, met with the top customers, top five, think about it like that. Since then, we've had meetings with our new global customers across existing ones and the ones that are targeted for further expansion with the Nokia FWA business. And the feedback has been single-handedly positive. We're a trusted, known technology leader in the landscape. While we've been operating almost exclusively in North America so far, the reputation, commitment, and dedicated focus in this mobile or wireless broadband space is something that's very much acknowledged. Also, the strategic partnership that we'll carry forward with Nokia is something that's a big confidence builder, of course. for our customer base, but I feel that we're in a great position to continue to be, and quite frankly, expand the customer footprint for the business that we're acquiring as a trusted partner of choice. The other thing that I've been very encouraged with is that in these discussions, of course, we've also socialized our Inseco portfolio, be that our enterprise FWA or mobile, and we've already uncovered cooperation opportunities with these new new international customers where they have a business need that we can feed. And if you translate that then into the cloud and the ARR side, I think it's a great value proposition to have now your entire fleet, whether it's residential, enterprise, or mobile, managed by a single platform. So all of that feels very good. In the meanwhile, as we've engaged with our existing large customer base, be it Tier 1, MSO community and beyond here in North America, the fact that we're becoming overnight the largest global wireless broadband provider gives us the scale and the capability to compete also very aggressively here in residential and other opportunities. So everything that we've seen, the discussions that we've had, makes me believe that we're in a great position to be the new home for the business, grow it, and really take it to a place where we have one team, one technology and product platform that we now take to this expanded global set of customers across enterprise consumer, mobile, and fixed.

Chief Financial Officer | CFO

And then, Scott, to your good question on gross margin, we said a little bit earlier, it's interesting, the margin right now overall in a small number of customers but large players, It doesn't really exist in nature in that it's, you know, in the kind of mid-teens, if you will. But that exists from a very, very large single customer that is, you know, the definition of a high-velocity model where, you know, you have tremendous market share and tremendous volumes, you know, in the millions of units. And so the technology and the engineering quality that Nokia has in their business is so compelling, they have been able to add additional customers at much higher margins, you know, with two handles on in the 20s. And so as we see that trajectory of the ability to build off of a foundation of a very strong high-velocity model that has very efficient supply chain, very efficient operations, and then go add higher margin business to that, That becomes a really compelling story for us, and it's kind of what we've been able to do domestically, organically, and that we look to do there on a global basis.

Juho Sarvikas | President and Chief Executive Officer

I think the big thing for me here is that if you look at the product portfolio and the market opportunity, they're completely complementary. Meanwhile, on the engineering and product side, You have two companies that are now making their own connectivity modules, own software platforms, their own device roadmaps. And now we have the ability to create one platform on all levels and also drive significant synergies even on the device roadmap side and then have one team execute behind that. That's one of the key things here, which we believe will make us very successful with the acquisitions.

Scott Sierra | Analyst, Roth Capital

Great. Thanks so much, and congrats on the deal again.

Juho Sarvikas | President and Chief Executive Officer

Appreciate it, Scott. Thank you. Thanks, Scott.

Operator | Conference Operator

This will conclude our question and answer session as well as conference call. Thank you all for attending today's presentation. You may now disconnect. jsPDF 3.0.3 D:20260606090154-00'00'

NASDAQ:INSG Q4 2025 Earnings Call Transcript Generated on 6/6/2026 Operator | Conference Moderator: Hello, and welcome to Insego Corp's fourth quarter 2025 financial results conference call. Please note that today's event is being recorded. All participants today will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity for Q&A. To ask a question, please press star, then one on your telephone keypad. To withdraw your question, please press star, then two. On the call today are Juho Sarvikas, Chief Executive Officer, and Stephen Gadoff, Chief Financial Officer. During this call, certain non-GAAP financial measures will be discussed. A reconciliation to the most directly comparable GAAP financial measures is included in the earnings release, which is available on the Investors section of the company's website. An audio replay of this call will also be archived there. Please also be advised that today's discussion will contain forward-looking statements. These forward-looking statements are not historical facts, but rather are based on the company's current expectations and beliefs. For discussion on factors that could cause actual results to differ materially from the expectations, please refer to the risk factors described in the company's Form 10-K, 10-Q, and other SEC filings, which are available on the company's website. Please also refer to the cautionary note regarding forward-looking statements section contained in today's press release. With that, I'd like to turn the call over to Juho Sarvikas, Chief Executive Officer.

Please go ahead. Juho Sarvikas | Chief Executive Officer

Good afternoon, everyone, and thank you for joining us today. Q4 2025 was another strong quarter for Insego. We generated revenue of $48.4 million and adjusted EBITDA of $6 million. both about our guidance and marking our third consecutive quarter of sequential growth in each metric. These results kept a year of steady, disciplined execution. We exited 2025 with a meaningfully higher quality and more diversified revenue base, driven by broader product breadth and increased customer diversity. Shortly after year end, we further strengthened our operating momentum by improving our capital structure by retiring all preferred stock. We accomplished this at a meaningful discount, enhancing the company's long-term flexibility and are pleased to welcome Mubadala Capital as a significant common stockholder. Stephen will walk through the financials and outlook in more detail later in the call. I'd like to step back and discuss how our performance in 2025 And our trajectory going into 2026 demonstrates that the strategy I outlined when I stepped into the CEO role a year ago is working. To frame that discussion, let me briefly revisit our strategy. We are building an enterprise wireless broadband platform that combines cellular-first connectivity with intelligence, manageability, and scalability at the wireless edge. That strategy has remained consistent throughout 2025 and is grounded on five clear strategic priorities. First, scaling carrier revenue to a broader enterprise-focused fixed wireless access and mobile portfolio. Second, accelerating Inseco's evolution into a solutions company by creating a platform that includes industry-leading wireless hardware, network and device management, and subscriber lifecycle management third expanding and diversifying our roads to market and customer base fourth maintaining financial discipline and strengthening our capital structure and fifth building a world-class management team and board of directors to drive long-term growth and scale our fourth quarter results and 2025 full year progress are consistent proof points of execution against the strategic priorities. With that context, I want to do three things on today's call. First, I'll walk through how we executed in the fourth quarter. Second, discuss what we delivered across the full year in 2025. And third, share how that execution positions in CIGO for its next phase of expansion as we move into 2026. With that, Let me now turn to my first topic, how we executed in Q4. Starting with our core business of cloud-managed FWA and mobile solutions, we continued to see strong performance from our FX4100 FWA product with T-Mobile during the quarter, reflecting ongoing enterprise demand and solid sell-through. During Q4, we significantly expanded our Tier 1 carrier footprint for fixed wireless access, As we shared on our last call, we meaningfully broadened our reach and customer diversification by securing an FX4200 FWA award with AT&T. Equally importantly, we just announced this Tuesday that we also signed Verizon for the FX4200. Both AT&T and Verizon have placed initial stocking orders And we expect commercial sales to begin ramping up in earnest in the first half of 2026 as these programs come online. With the addition of Verizon, all three U.S. Tier 1 carriers have now chosen Insego to support their enterprise FWA offerings. This marks an important inflection point for our business. As carriers increasingly position FWA as a primary connectivity solution for businesses, alignment across all three Tier 1 carriers validates our strategy, reinforces our position as a partner of choice as enterprise adoption accelerates, and establishes a clear foundation for meaningful growth in 2026. Turning to mobile. Our hotspot portfolio delivered its strongest quarter of 2025, with revenue increasing 27% sequentially to $20.4 million. Mobile represents roughly 40% of Tolo Company's revenue in Q4, underscoring the increasingly diversified mix of our platforms across mobile, FWA, and software and services. Growth was driven by higher carrier stock volumes and solid channel activity as enterprises expand their use of mobile connectivity. With all three carriers committed to Inseego as a key part of their mobile portfolio, we see mobile as a durable and important pillar of our enterprise wireless platform. Continuing with our fourth quarter execution, we've made strong progress in evolving into a solutions company and advancing our platform strategy. In Q3, we shared that we had delivered a major release of InSigo Connect, our network orchestration SaaS offering, expanding its functionality and usability. In Q4, we began to see an impact from that investment. For the first time, InSigo Connect is being taken to market alongside our FWA solutions by all three Tier 1 US carriers, each through their own commercial models and routes to market. This represents an important milestone. The combined offering of the FX-4200, FX-4100, and In-SQL Connect reflects a clear shift from device-led selling to solution-led selling and establishes Connect as a foundational element of our enterprise wireless edge platform. As we continue to expand this solution-based approach, is an important source of differentiation for Insigo. We also continue to invest in our subscriber lifecycle management platform, Insigo Subscribe, building out the leadership team and platform capabilities. Subscribe is a strategic investment area and an important component of our long-term software and solutions growth strategy. Turning to revenue diversity with our fourth quarter execution, we broadened our revenue base to initial FX4200 orders from both AT&T and Verizon and delivered a strong quarter in our channel business. Importantly, channel growth was driven by traction across multiple areas rather than a single large transaction, reflecting healthier and more diversified demand. I'd like to take a step back now and review what we delivered over the full year of 2025. At the start of last year, when I arrived at the company, we set out clear execution-focused objectives. Execute and scale our FWA and MiFi business, strengthen our two-pronged go-to-market strategy, and increase our investment in software. And throughout the year, we've not only stayed tightly aligned with these priorities, we've delivered against them. We've meaningfully expanded our enterprise wireless broadband footprint by doing exactly what we said we would do. I reset the product strategy when I joined a year ago, and those products are now launching. Not only that, but I also focused on diversification of our customer base. So those new products are now launching across the broadest customer base the company has ever had. It took a year, but we got there. Throughout 2025, we continued elevating software and platform integration as core elements of our value proposition. Inseego Connect increasingly became positioned as the management, intelligence, and control layer of the wireless edge. We made progress towards more integrated hardware and software solutions and took steps towards greater differentiation at the platform level. This laid out the groundwork for deeper software attach and solution-led selling as our portfolio and routes to market continue to expand. To highlight the scale of this growth, we entered 2025 with three products offered through two carriers. And entering 2026, we are now in the middle of expanding to six products across all three carriers. In parallel, we've broadened our go-to-market approach in 2025. Along with the expanding and diversifying carrier base, we laid the groundwork for VARs, MSPs, SSPs, and MSOs and built the product, commercial, and operational capability required to support broader enterprise engagement. All of this execution was delivered with continued financial discipline. We maintained strong double-digit adjusted EBITDA margins through a transition year, manage costs carefully while funding growth investments, and strengthen our capital structure. This demonstrates our ability to invest in growth while maintaining profitability and operating rigor. And finally, 2025 was a year of further strengthening the organization. We significantly upleveled the management team and board of directors, added operating depth across product, technology, sales, operations, and supply chain, from the sea level down and build the infrastructure required to support the next phase of growth. That brings us to 2026. 2025 was a year of building the foundation for long-term growth through disciplined execution of our revised strategy that required significant product investment. In 2026, we're continuing to make product investments in the first half of the year to drive growth. This also includes increased spend in go-to-market capabilities to ensure the success of new products and platforms we're bringing to market. This is a deliberate need to scale the business. Looking ahead to 2026, the market backdrop continues to strengthen and expand our opportunity. Enterprises are increasingly prioritizing resilience, always on connectivity, with fixed wireless access emerging as a primary connectivity solution. That shift is reinforced by carrier commitments, as all major US carriers, continue scaling enterprise FWA programs. Industry forecasts reflect this momentum, with API research protecting North America enterprise FWA service revenue to grow at a 37% compound annual rate through 2030, expanding from roughly $2 billion to more than $11 billion. We see similar momentum in federal, state, and local government, where cellular is supporting distributed operations public safety, and mission-critical connectivity, and where security concerns have made US designs an important consideration. At the same time, AI-driven workloads and accelerating mobile data traffic are increasing network complexity and raising the importance of performance, visibility, and centralized management. As enterprises and governments expand their use of cellular, managing cost, usage, and performance becomes as critical as connectivity. Taken together, these dynamics, including the growing convergence of cellular and satellite and continued advances in cloud technologies, are elevating the importance of wireless edge and driving demand for integrated platforms that combine connectivity with management and control. This environment aligns directly with Inseco's platform strategy and positions us for our next phase of growth in 2026. Against this backdrop, our core priorities remain consistent. What changes in 2026 is the scale and intensity of execution. Compared to 2025, this is a much more front-loaded year, with a higher concentration of carrier launches and product introductions in the first half, specifically in Q1. With that in mind, we're entering 2026 focused on five key areas. First, we will continue to scale enterprise wireless broadband across FWA and mobile. With all three US Tier 1 carriers now aligned with Inseego, 2026 begins with multiple carrier launches in Q1 and ramps as operations get underway. That requires increased investment early in the year, but the result is a higher carrier-driven revenue run rate, broader channel participation, and continued expansion opportunities as we move into the second half. Second, we will accelerate portfolio expansion. In the first half alone, we expect to introduce four new products. This includes the rollout of three new MiFi products across all major carriers, the introduction of a new entry-tier enterprise FWA offering, and expansion into additional verticals. This represents the most comprehensive enterprise wireless portfolio in the company's history with all products managed through a common software interface rather than a standalone hardware. Third, we will deepen the software and platform layer. In Seagull Connect continues to evolve as the management and intelligence layer of the wireless edge. And in 2026, we will expand its role as our installed base grows rapidly. This allows us to introduce additional services, increase software attach, and offer more value to customers and partners through a single integrated management experience. Fourth, we will broaden routes to market. The investments we've made in products and platforms are already opening doors with new VARs, MSPs, MVNOs, and service providers. We are encouraged by early momentum, including progress with MSOs, and we expect partner-led activity to increase meaningfully as new products come to market. More of our growth going forward will be informed by this new expanding partner ecosystem. Fifth, we will advance our subscriber lifecycle management capabilities within Seago Subscribe. Finally, we will continue to execute with discipline as we accelerate investment to support carrier ramps, product launches, and go-to-market expansion We remain focused on balancing growth with profitability and long-term margin expansion. Before I get to Q1, I want to briefly address the current memory market dynamic. Overall, as you've all seen, there's a lot of discussion on price increases and supply shortages, as the suppliers have pivoted towards AI and data center. We have done a good job in securing supply, and I do not see any meaningful impact on our deployments. When it comes to pricing, we've acted early and we have been able to lock in modest price increases for products in the first part of the year. In addition to this, we're working with our large customers on price increases and cost sharing. Let's now talk about Q1. Overall, I'm bullish on 2026. We have more products going through more customers than this company has ever had. Q1 is a transition quarter and there are several moving parts as we introduce a new mobile product generation and work with new large customers to develop joint go-to market for FWA. While we still expect Q1 to grow year over year, there are three reasons for lower sequential Q1 revenue. First, we have had engineering delays in delivering our new mobile products that have pushed revenue to Q2. One of our large Tier 1 FWA carrier customers has higher than initially expected inventory that they're selling out in Q1. And third, that same Tier 1 carrier recently changed their go-to-market strategy to address a broader set of customers, but causing a short-term disruption on selling logistics. In summary, 2025 was about implementing the strategy I laid out when I joined a year ago and building the foundation for growth. Now, 2026 is about execution and scale. We're launching more products, ramping more Tier 1 carrier programs, expanding our software platform, and broadening our partner ecosystem across MSOs, VARs, and MSPs. This is positioning us to drive significant growth as the year progresses and scale in CGO at the enterprise wireless edge. We are energized by the trajectory of the business that we see exiting Q1 and confident in delivering the year. With that, I'll turn over to Stephen to walk through the financial results and our outlook in more detail.

Stephen Gadoff | Chief Financial Officer

Thank you. Hi, everyone. Thank you for joining us.

Stephen Gadoff | Chief Financial Officer

I'd like to cover three topics today. First, I'll take you through some details on the Q4 and full year 2025 financial results. Second, I'll provide an update on a material improvement in our capital structure that is adding to stockholder value. And third, I'll share some color on the financial profile of the business and provide guidance for Q1 and look at the full year 2026. As we always do, we'll wrap up the call by opening up to your questions. In 2025, we delivered three consecutive quarters of sequential revenue growth, culminating in a strong Q4 that exceeded guidance, and paired with strong growth margins and disciplined spending, resulted in solid profitability in the form of adjusted EBITDA that was the second highest on an apples-to-apples basis in more than a decade. On the top line, total revenue per Q4 was $48.4 million, driven by higher mobile volumes, increased channel activity, continued strength in FWA, and the consistent contribution from our Insego Connect and Insego-subscribed SaaS offerings. As expected, mobile revenue was strong in Q4 2025 and was driven by a more broad carrier adoption and ordering cadence. While FWA revenue declined sequentially from the record Q3 2025, which benefited from new product rollouts at a carrier customer that we discussed last call, FWA revenue in Q4 was up 50% year over year, and was driven by the diversification of our carrier customer base and solid channel activity. Software services revenue was $12 million in Q4, consistent and again providing a stable high margin contribution to results. For the full year 2025, total revenue was $166.2 million, reflecting sequential quarterly momentum throughout the year. Moving through the P&L, Non-GAAP gross margin in Q4 2025 was 43%, up 75 basis points sequentially, and driven by sales of some high margin mobile products and the continued contribution from our high margin SaaS services. For the full year 2025, non-GAAP gross margin was also 43%, reflecting an overall strong FWA business and our software services contribution, and also the highest level gross margin has been on an apples-to-apples basis in more than a decade. Non-GAAP operating expenses for Q4 were $17 million, or 35% of revenue, reflecting the targeted investments in sales and marketing and R&D to support Tier 1 execution and new product launches that we talked about last quarter. As we also talked about, and we'll review in a few minutes, we're continuing to make those investments in Q1 2026 to drive both revenue growth and scale as we move through 2026. For 2025, non-GAAP operating expenses were $59.4 million, or 35.7% total revenue. Adjusted EBITDA Q4 2025 came in at $6 million, a 12.4% margin, among the highest dollars and margin percentage also in more than a decade. About a million dollars plus of benefit was from the timing of R&D spend that pushed out of Q4 into Q1 2026 that I'll get to in a moment. For the full year of 2025, adjusted EBITDA came in at $20.1 million, representing a 12.1% margin. We see this as an important overall proof point in our ability to invest in growth in the short term while maintaining profitability over the long term. Turning to the balance sheet, we ended Q4 with $24.9 million in cash, a very manageable debt balance of $41 million, or approximately two times LTM adjusted EBITDA. The strong cash finish to the year was a function of a combination of favorable outcomes on customer payments, inventory dynamics, and strong working capital management by the team. Overall, the balance sheet strength underpins how we run the business, and leads directly to my second topic, our capital structure. Last month, on January 14th, we retired 100% of our outstanding preferred stock. It had a liquidation preference of $42 million as of December 31st, 2025, and we exchanged it for $26 million of aggregate consideration, representing a 38% discount that immediately accrued to common stockholders. Total consideration consisted of $10 million in cash, $8 million in additional senior secured notes, and approximately 767,000 shares of common stock. The cash is paid in three equal installments. One-third, or $3.3 million, was paid at closing. One-third will be paid six months following closing, and the remaining one-third will be paid 12 months after closing. This transaction represents another purposeful initiative to simplify and strengthen our capital structure. By retiring the preferred at a meaningful discount to its liquidation preference, we reduced long-term obligations, improved balance sheet quality, and immediately enhanced common stockholder value. The preferred stock was held by an affiliate who will bottle the capital, and so as a result of the exchange, they now hold the position in our common stock. We're pleased to have them in the value creation going forward as a long-term common shareholder. With that context on our capital structure, let's now turn to our thoughts on the business and financial guidance for Q1 and the full year of 2026. As we discussed on the last call, we started investing meaningfully going into Q4 2025 in new product development and go-to-market capabilities to drive revenue growth in 2026. We're committed to and expect to deliver that revenue growth outcome. We also talked on the last call how 2026 would be front-loaded with spend in the first few months impacting profitability to similarly support carrier ramps, multiple product launches, and overall portfolio expansion. Importantly, with a now expanded carrier customer base, that spend positions us to scale the business, drive operating leverage, and deliver profitability improvement in the second half of the year. To add more color on the revenue profile, as we've seen historically, Q1 has been a baseline quarter for the year from a revenue perspective, where Q1 has been down from Q4 for three of the last four years. We see this dynamic for Q1 in 2026, albeit for three specific factors. The second half of 2025 benefited nicely and particularly from a strong ramp of our new FX4100 FWA product with a Tier 1 carrier and from elevated mobile volumes driven by carrier promotions. Second, we have a Tier 1 FWA customer who went through a sizable company reorg and business realignment, as you all mentioned, that impacted Q1 volumes and timing. And third, Our new MiFi portfolio is set to launch late in Q1 2026, delayed from our initial target date, but that's setting up to drive a meaningful contribution beginning in Q2. And so while Q1 2026 revenue is lighter than desired on new product rollouts and transitions, we remain very positive on the outlook for both mobile and FWA in 2026 as we execute with our Tier 1 carriers and continue expanding our routes to market through SSPs and VARs. Looking at non-GAAP gross margin, we expect Q1 to reflect a lower mobile revenue margin, partially offset by a return to solid gross margin contribution on FWA and consistent software services. Total non-GAAP operating expense dollars are expected to increase modestly, sequentially in Q1 2026 on the P&L, and more so in total dollar spend. Q1 due to two drivers. First, as I mentioned, R&D spend originally planned for Q4 2025 shifted out to Q1 2026 on adjustments in product delivery timing. That shift out in spend resulted in more than $1 million of higher adjusted EBITDA in Q4 2025 and a corresponding higher spend level therefore now in Q1 2026. This funding of new product build-outs will also be seen in higher levels of capitalized R&D in the quarter, as we've discussed. The second dynamic driving higher current spend in Q1 is the investments in sales and marketing that we've been talking about as part of the 2026 growth driver investment. Pulling this all together, we're providing the following guidance for Q1 2026. Total revenue in a range of $33 million to $36 million, and adjusted EBITDA in a range of $1 million to $2 million. Overall, looking back at 2025, we see a similar dynamic for 2026 of growth and profitability coming off of Q1, growing in Q2, growing in Q3, and growing in Q4. With the important difference that there's now a foundation of a more diversified customer base and product portfolio, along with a right-sized balance sheet that provides important flexibility. And so on that strong foundation, we're also providing guidance for the full year of 2026 for total revenue of approximately $190 million. With that, we appreciate your time and support and are glad to open the call for questions. Operator?

Operator | Conference Moderator

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. And the first question will come from Scott Zero with Roth Capital.

Please go ahead. Scott Zero | Analyst, Roth Capital

Hey, good afternoon. Thanks for taking the questions. Nice job on the fourth quarter and really nice to see the diversified customer base and product portfolio building over the course of 26. Maybe just to start, Stephen, I want to dive in quickly on the memory front. I know you had some comments in terms of your opening monologue, but it sounds like you guys are managing that pretty well. I'm wondering if you could detail that a little bit more in the first half of this year. It sounds like it's going to be a shared burden with your M&O customers going forward. And then as it relates to the 2026 guidance, certainly implies things ramping up over the course of the year, as you articulated. You know, it averages out to like $50 million a quarter, so that's a pretty big step up. I'm wondering, given the expected timelines and product introductions, what the comfort level and visibility that you have to that? And a lot of moving parts from an OPEX standpoint, gross margin standpoint. Steve, I'm wondering if you could give us a little bit of guidance about how we should be thinking about adjusted gross margin's excuse me, adjusted EBITDA margins in the second half of the year.

Stephen Gadoff | Chief Financial Officer

Yeah, sure. In a sentence or less. And we'll tag team, Juho and I, on a good chunk of this, certainly on the memory part that Juho was talking about. And the short answer on the first part, Scott, is that on memory, we're pretty well locked in for Q1, certainly, and really most of the first half of the year. And we'll get to that once you want to hit him now.

Juho Sarvikas | Chief Executive Officer

Maybe the big thing, Scott, on the memory, and thanks for the great question, really, is that we have so much new, exciting products and customers ramping in the first half. And I wanted to make sure that we have sufficient buffer to also capture upside, channel fill, all of that good stuff. So from a memory standpoint of view, as we were doing that, we realized that somewhere around six months ago, that the memory market is going to get tight. So we took the appropriate action. So I feel good about the first half inventory situation as well as the pricing environment.

Stephen Gadoff | Chief Financial Officer

Awesome. And then good question, Scott, quite a few of them, on the dynamic guidance. But the crux of what you're saying in our view is that, yes, things ramp quite quickly so that you know, the Q2, we gave guidance, obviously, for the year, but the math, if you just sit there pretty back of the envelope, you would see the Q2 ramps to, you know, the high fours, and then you would expect Q3 and four to have a five-hand a lot. Like, yeah, that's the math that gets you to 190. And so we get that. And so, you know, in our view, you're thinking about it, right? And a similar dynamic, which is consistent with what we've talked about, probably for the last quarter and a half, which is EBITDA is the lightest in Q1 and then starts to grow and scale as we go into Q2 and then certainly in Q3 and Q4, where we said the average for the year doesn't really exist in nature. The first half of the year is at a lower rate, and then the second half of the year is at a much higher rate, and we're exiting the year at a nice dollar amount of EBITDA and margin percentage. Let me pause there. Does that hit up what you were asking about?

Scott Zero | Analyst, Roth Capital

That's perfect. And if I could just quickly tack on, you know, there's been a lot of dynamic changes within the industry, I think, from a competitive standpoint. I'm wondering if you could give us some thoughts in terms of, you know, how you see your share shifting over the course of 2026. A lot of moving currents, I think, competitively in the mobile hotspot market. But then also, If you could provide a little bit of color in terms of some of the new product portfolio, is that mostly going to be MiFi or there's some other products that we should be expecting to see in new categories potentially taking us in international markets in the second half of the year?

Thanks. Juho Sarvikas | Chief Executive Officer

Got excellent, excellent questions. I'll start with the mobile part. What I'm super excited is that we'll have now all three large carriers launching products Our new mobile generation, like we discussed in the prepared remarks, we were hoping to see that earlier in Q1, but it will now take place towards the latter part of Q1. But the thing with mobile is that it's a predictable run rate business. Think of it like a light switch. Once you launch the product, you get the share in the category. All three of them are also positioned in a higher volume segment than where you've seen us historically. So I feel really good about the MiFi volume. I think I've been fairly open about it. Look, I think in mobile or in hotspots, our job really is to go and consolidate the market. And these three across all three is a huge, huge milestone. I also see opportunity towards the latter part of the year or going forward in expanding a hotspot. There's also a value segment, and I also believe there's a great opportunity in the premium segment. So mobile, we innovate the category. We're a huge fans of, and we look forward to continuing investing and growing in that. I believe your second question was then on the portfolio. So I already described the mobile part of the story. Like you know, in FWA today, we have, if you think good, better, best. We have the better with the FX4100 that we launched about nine, ten months ago. We recently introduced 4200, which is the best. And now what we're going to roll out during first half is an entry-level, yes, enterprise-grade, same manageability, everything you know us for, but a lower-tier router. So we'll complete this good, better, best for SMB enterprise, call it carpeted environments. And then, of course, there's a lot of other attractive verticals. So that would be my summary on the immediate portfolio expansion.

Scott Zero | Analyst, Roth Capital

Very good. I'll get back in the queue.

Thanks so much. Stephen Gadoff | Chief Financial Officer

Thanks so much.

Operator | Conference Moderator

The next question will come from Tyler Burmeister with Lake Street.

Please go ahead. Tyler Burmeister | Analyst, Lake Street

Hi, guys. Thanks for letting me ask a question here. So as we think about the 2026 guide across your mobile and your FWA businesses, you know, the FWA side of business continues to gain momentum and you kind of highlight the mobile side of business as being stable. Just wondering if the, you know, new customer ramping this year and mobile coming off a softer 25 and different dynamics, do we still expect the fixed wireless access side to be a relatively larger contribution of growth this year?

Stephen Gadoff | Chief Financial Officer

Awesome. Thanks, Todd. We'll tag team it as usual. So we expect mobile and FWA both to grow on a revenue basis in 2026 for albeit different reasons, right? Fixed pie, if you will, on mobile, growing pie on FWA. So you all should share all the thoughts on that. And on both the revenue and customer base. So just to make sure you said flat, but it's a growth driver, both of them.

Juho Sarvikas | Chief Executive Officer

The one thing I would add here or highlight is that, like I mentioned when I was answering Scott's earlier question, there's plenty of room to grow in mobile, and we're going to go as fast as we can, and that pony will do extremely well. At the same time, FWA, on the back of the portfolio expansion, the customer expansion, is going to be also a great story in 2026. So if you look at 2026, We'll see which one of these two categories ends up running faster. But if you take the long-term view, the FWA TAM supports mobile. Also, now with these product introductions, our share in mobile will significantly grow. So if you take a longer-term view, the mix will be in favor of FWA.

Stephen Gadoff | Chief Financial Officer

That's great.

Tyler Burmeister | Analyst, Lake Street

And then, you know, we talked maybe a little bit less about the MSO and the distribution channel opportunities on this call. So I was just wondering, you know, as we look out this year, you know, could we possibly hear some announcements or start seeing maybe some more meaningful contributions from those customer groups this year? Is that maybe a little bit farther out opportunity for you guys?

Juho Sarvikas | Chief Executive Officer

Thanks, Tata. I think that's a fantastic question. And I'm sure you're asking because I've been mentioning it in my remarks, and I've been talking about it a little bit already. Look, to me, the MSOs, whether it's cable or fiber, many of these guys actually have cellular assets as well, right? They're kind of like a carrier. So, like, I would even put them in the same bucket as the three large carriers. And there's brilliant FWA use cases with the MSOs. starting with failover, day one, all of that. And we've done massive investment in both products, where the FX4200 is actually the ideal, I'll call it router platform for that use case, but also in our cloud with deep understanding of those use cases. So MSO is definitely something where I expect that we'll have great discussions as the year progresses. The bar and the managed service provider, let's call this the channel, this is a different type of an animal. Now you have fairly fragmented set of partners. By the way, I did mention, or I should mention, that the three large value-added resellers, CDW, Insight, and I can't believe I'm blanking on the third one now, are all going to launch – we've already introduced programs. They're all stocking the FX-4200 as of late last year. That is going to be a steady run. It's a little bit like the FWA. So these large guys, whether they are the carriers or the MSOs, they will drive big immediate volume uplifts. The VARs and the MSPs in the long term become significant growth drivers for us, but will be a slower burn. The third large value that we sell, of course, is SHI. Did I answer your question?

Stephen Gadoff | Chief Financial Officer

Yeah, that's great. I appreciate the call. That's all from me. Thanks, guys. Thank you. Thanks, man.

Operator | Conference Moderator

The next question will come from Christian Schwab with Craig Hallam Capital Group.

Please go ahead. Christian Schwab | Analyst, Craig-Hallam Capital Group

Good quarter, and congrats on all the deals. As we look at the software business, you have one customer who's a material percentage of that software and services revenue. Is there an opportunity with the other two customers to deploy a similar program as your historical leading customer?

Juho Sarvikas | Chief Executive Officer

Hey, Christian, thanks for joining us. I'll actually answer both aspects of the software business. Let me start with the Inseego Connect, which is our device management platform, orchestration platform. One of the really important things that we've implemented now, especially with the 4200, but much broader, is that since we've made that investment over 2025 in creating a world-class device management platform with great differentiation capability, our go-to-market motion has really changed on the routers. It really is a solution-first sale, attach rate, but also the value capture is growing. The install base, of course, takes time to grow. But again, here, if you take a multi-year view, Inseco Connect is a really important part of our story. It also provides other service opportunities for us where we can expand, as you might imagine. If you look at the subscriber lifecycle management platform, Yes, for sure. We've done significant investment here as well, and we're looking at from a business development standpoint of view, expansion opportunities. It really does have a unique feature set, especially if you go into the Fed and government space, where you have a lot of compliance, a lot of complexity in terms of how you manage those customers, and there are significant benefits for carriers, broadly speaking, to leverage that platform.

Unknown | Participant

Great.

Christian Schwab | Analyst, Craig-Hallam Capital Group

I guess my second question, with the broadening base out of all three carriers, there seems to be a greater industry focus on enterprise class fixed wireless access versus just residential. From a bigger picture standpoint, do you believe You know, any of this has to do with, you know, industry 4.0 initiatives or greater acceleration finally of private 5G networks by the carriers and their thoughts?

Juho Sarvikas | Chief Executive Officer

So there was an immediate gold rush in FWA when 5G emerged to consumer. The problem with consumer is the ARPU and the consumption profiles. very, very data-demanding, massive consumption profile, and you're competing against cable and other value props for the consumer. Enterprise, on the other hand, has a very rich ARPA profile, and if you think about it, the usage profile is completely the opposite of the consumer, because you'll be working during the day, you maybe should not be streaming Netflix at the office. So just like from the basic dynamics standpoint of use, very favorable performance, from a carrier P&L standpoint of view, there has been a significant constraint on the industry, and it really has been spectrum. So CPAN, when the auction happened, launched a massive wave of FWA expansion. There was a recent acquisition that one of the carriers made that you're very much familiar with, and all of a sudden FWA, and especially the business or enterprise segment, became top of mind because now you have the capacity, to go there and it has the highest ARPU. So one of the really foundational things that we believe in is that cellular will take over the world in two ways. One, 5G performance is now broadband-like as opposed to 4G. 6G is yet again another 10 times faster. So you could make the case where now cellular should become the primary and there even shouldn't be a discussion around it. It will also release massive amounts of spectrum, massive amounts of capacity where you can utilize the higher on auction spectrum assets that are still out there, yet to be deployed. And then look from an enterprise and customer standpoint of view. Super easy to deploy, single management interface. You don't need to worry which of your location gets Fiber or cable or how do you patch all of that together. So I think there's a lot of benefits that will continue to accelerate enterprise FWA. And that was one of the data points I was sharing is this high 30s CAGR on service provider revenue increase in the enterprise FWA.

Unknown | Participant

Great. No other questions.

Thank you. Stephen Gadoff | Chief Financial Officer

Thanks so much. Thanks, Christian.

Operator | Conference Moderator

The next question will come from Lance Vitonza with Cowan.

Please go ahead. Lance Vitonza | Analyst, Cowan

Thanks, guys. Appreciate you taking the questions here. I've got a couple, if I could. The first is, it's good to have Verizon back in the fold. That said, I do wonder what this means, if anything, for the variability of results going forward. I'm just wondering, beyond the initial rollout, just looking ahead here, do you expect this to – Will your visibility be better or worse off for having Verizon back in the mix relative to working with AT&T and T-Mobile?

Juho Sarvikas | Chief Executive Officer

That's an FWA question, I take it, Lance? Yes. So the way to look at it is that, kind of go back to my previous answer, there's a strong economic incentive. All three players have made the statement that through investing in FWA for enterprise, where we got with our existing large customer, it took a couple of broad generation, and it took some time to develop the co-selling motion and to be able to drive that kind of volume uplift. So at this early stage, I can't really tell you how fast each of these opportunities will grow, but I think we have very reasonable expectations reasonable expectations that informed the guide for 2026 that Steven was sharing.

Lance Vitonza | Analyst, Cowan

Okay, great. And then, and so just to sort of go back to Scott's question about the full year EBITDA outlook, if I'm doing the math right, I think you put up about a 12.1% EBITDA margin for 2025. Should we be thinking about 2026 as kind of being, you know, around the same zip code, or could there be upside or potential downside maybe for investment spend and so forth? How should we think about that relative to margin profile year over year?

Stephen Gadoff | Chief Financial Officer

Good question. Similar outcome lasts insofar as the answer for the year doesn't really exist in nature because we would expect to exit 2026 at those levels you're saying, at the higher levels, kind of where we are now-ish. But the first part of the year is going to be a bit lower. So the average for the year is, you know, somewhere in between that's not really existing. So if it's, you know, you can see the math for Q1, right? So if the first half of the year is single digits and the second half of the year is getting into a decent double digit, you know, you'll do the math on the average, but the short answer is the race that we're at, we would expect to be seeing in the second half, and I'd name the year for sure.

Lance Vitonza | Analyst, Cowan

Correct. Understood. And maybe just one last one for me, and just sort of thinking, you know, a little bit longer term. Is double-digit revenue growth, you know, sort of sustainable over the next few years, do we think? Or should we be sort of thinking... I'm not expecting guidance here. I'm not expecting the 27 will necessarily look as robust as 2026, but will we continue to see robust growth, do you imagine, or does 2026 sort of bring us back to kind of more of a new plateau level, would you expect?

Stephen Gadoff | Chief Financial Officer

Of total revenue growth? You're saying, hey, can you grow total revenue in double digits? Correct. Yes. Yeah, we can. I think we said that at the end of last year as we're setting up for this year. And candidly, the growth profile for 2026 is a nice double digit with a pretty low, weak lane, we might say internally, Q1. And so if we're pulling that off in a year where we're ramping a whole bunch of new products and transitioning, we're going from a company that was one product, one customer to many products, all three carriers, and we're doing that all this quarter. So, like, that's a big deal. And once that gets up and running, like, that's a really nice model. So, a little probably long-winded, but the short answer is yes, we do believe that's a double-digit growth for the next several years.

Lance Vitonza | Analyst, Cowan

No, that actually isn't too much. That's perfect. I really appreciate the call. Thank you all so much.

Stephen Gadoff | Chief Financial Officer

Appreciate it, Lance. Thank you. Thanks, Lance.

Operator | Conference Moderator

This concludes our question and answer session. I would like to turn the call back over to management for any closing remarks.

Juho Sarvikas | Chief Executive Officer

Thank you for the great questions and for joining us today. Stephen and I will be at the ROS Conference next month and we hope to see many of you there. I also wanted to thank our awesome employees for their hard work and dedication and our shareholders for your continued support and confidence in our vision. We're excited to have you with us on this journey. Thank you again for your time, and we look forward to catching up soon.

Operator | Conference Moderator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. jsPDF 3.0.3 D:20260606090155-00'00'

NASDAQ:INSG Q3 2025 Earnings Call Transcript Generated on 6/6/2026 Operator | Conference Operator: Hello, and welcome to Insego Corp's third quarter 2025 financial results conference call. Please note that today's event is being recorded. All participants today will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity for Q&A. To ask a question, please press star, then one on your telephone keypad. To withdraw your question, please press star, then two. On the call today are Juho Sarvikas, Chief Executive Officer, and Steven Gaitoff, Chief Financial Officer. During this call, certain non-GAAP financial measures will be discussed. A reconciliation to the most directly comparable GAAP financial measures is included in the earnings release, which is available on the Investors section of the company's website. An audio replay of this call will also be archived there. Please also be advised that today's discussion will contain forward-looking statements. These forward-looking statements are not historical facts, but rather are based on the company's current expectations and beliefs. For discussion on factors that could cause actual results to differ materially from the expectations, please refer to the risk factors described in the company's Form 10-K, 10-Q, and other SEC filings, which are available on the company's website. Please also refer to the cautionary note regarding forward-looking statements section contained in today's press release. With that, I'd like to turn the call over to Juho Sarvikas, Chief Executive Officer.

Please go ahead. Juho Sarvikas | Chief Executive Officer

Good afternoon, everyone, and thank you for joining us today. Q3 was another strong quarter for Insego. We generated revenue of $45.9 million and adjusted EBITDA of $5.8 million, both above guidance and marking our second consecutive quarter of sequential growth in both metrics. Operationally, we continued to execute on the growth strategy I laid out earlier this year. Our strategy focuses on scaling our core FWA and mobile solutions in the enterprise market, while also evolving into a solutions company that integrates hardware, network management, and software into a single platform, enabling enterprises, carriers, MSOs, MSPs, and VARs to build their wireless practice on Insego. Our progress in executing and advancing these strategic value creation goals this quarter is reflected on three key accomplishments. First, we extended our FWA leadership while continuing to drive mobile performance. On FWA, we did this by driving growth with the FX4100 and expanding our portfolio with the announcement of our premium FX4200, which extends our TAM. As we announced on our last call, we also added a third tier one US carrier across both FWA and mobile, starting to contribute revenue later in Q4. Second, we advanced the realization of our solution strategy with a major new release of Insigo Connect, expanding our software foundation for growth. And third, we further strengthened our leadership bench with the addition of seasoned C-level executives and two new operating experts on our board of directors, further enhancing our ability to scale and deliver sustainable, profitable growth. On today's call, I'll walk through these three key accomplishments, beginning with FWA. We continue to see strong demand for the FX4100 with T-Mobile, where deployments have scaled meaningfully across key verticals, including retail and utilities. These wins underscore the FX4100's ability to deliver enterprise-grade requirements across a broad spectrum of industries and company sizes. It's clear that our FWA solutions are gaining traction beyond early adopters and becoming a trusted primary option for mission-critical connectivity. In Q3, FWA customer demand exceeded our joint expectations with our partner T-Mobile. On the supply side, our team executed with precision, ensuring products reach customers quickly and reliably to capture a meaningful amount of upside. This was a direct contributor to our Q3 financial results. Overall, FWA shipment volumes were up more than 50% year-over-year, underscoring the strong and growing enterprise adoption of our FWA solutions and the effectiveness of our go-to-market execution with carriers. Along that line, carrier diversification has also been a key area of progress. As we highlighted on our last call, we secured a new tier one US carrier win during Q3, which will begin selling both our FWA products and soon to be announced new MiFi device. With this addition, Inseco is now aligned with three major US Tier 1 carriers, broadening our reach and supporting share gains in both FWA and mobile hotspots. Building on this momentum, last week we introduced the FX4200, the next phase of our FWA growth story, with shipments beginning in Q4. This premium-tier enterprise-grade product eliminates the traditional trade-off between capability and ease of use, delivering both advanced performance and simplicity. It creates a higher-value tier in our portfolio, broadens use cases, and expands our market opportunities while maintaining the reliability and security Insigo is known for. When paired with the X700 Mesh Access Point and our Insigo Connect SaaS platform, The FX 4200 becomes a complete enterprise solution, expanding our time, creating SaaS attached opportunities and supporting incremental reoccurring revenue growth. Importantly, the FX 4200 also enables us to move upmarket into larger enterprise and creates a new path to market via MSOs who can augment their existing networks with cellular capabilities. For enterprises, the need is clear. Reliable connectivity that is cost-effective and easy to deploy. For carriers, FWA creates new revenue streams and a faster return on network investment. What's been missing is the right solution, one that combines enterprise-grade features with ease of use and strong economics. That's where Inseego comes in. With our FX4200 platform and integrated solution stack, we're uniquely positioned to meet this need and create value for both carriers and enterprises. Together, these factors make FWA a compelling connectivity option, and e-sego is well-positioned to capitalize by expanding our product portfolio, adding new carriers, and deepening our engagement with MSOs, MSPs, and VARs. Moving to our mobile business. In Q3, mobile remained a solid revenue contributor, driven primarily by our largest Tier 1 carrier. We are also refreshing our MiFi product lineup and expect to be in market with all three carriers in Q1. Collectively, our FWA and mobile businesses are performing well. FWS gaining momentum with new products and customer wins, while mobile provides a steady revenue base that will expand as our new Tier 1 carrier ramps. Together, these businesses create a stronger and more diversified growth platform as we head into 2026. On our second topic, solutions. In Q3, we advanced one of the two key growth vectors of our strategy with a major new release of Insego Connect, our cloud-native SaaS platform for Insego FWA and mobile devices and network management. This release elevates Connect from a supporting tool to a core part of our enterprise offering, tightly integrated with the FX-4100 and the new FX-4200. With zero-touch provisioning, integrated security, and APIs for large-scale deployments, Inseego Connect enables carriers, MSOs, service providers, MSPs, and enterprises to deploy and manage 5G edge networks more efficiently. Importantly, it also creates SaaS-attached opportunities that expand our TAM and support reoccurring revenue growth. Also on the solution side, our wireless provider subscriber management platform, Inseego Subscribe, adds further value by enabling carriers and service providers to manage users of wireless networks across any device. from onboarding and authentication to entitlements, policy controls, and billing. In doing so, Subscribe simplifies operations, improves visibility into network usage, and creates new monetization opportunities through subscription-based services to lower service providers' customer acquisition cost and operation cost. This overall progress underscores how we're executing on our strategy to evolve into a solutions company. As we scale these solutions and broaden adoption, having the right leadership in place will be critical to sustain this momentum. Which brings me to our third topic, further strengthening our leadership team to support our next phase of growth. Along that line, we recently added a proven leader in marketing and a senior technology promotion on the leadership team. Donna Johnson joined as chief marketing officer, bringing more than 20 years of enterprise marketing and channel experience. She most recently served as CMO of Ericsson Enterprise Wireless Solution following its acquisition of Cradlepoint, where she was a founding leader who helped establish the company as a pioneer in enterprise wireless edge solutions. Vishal Dantiretti was promoted to Chief Technology Officer, reflecting his two decades of innovation at Inseego. Since joining in 2005, he has led product development from 2G through 5G advance, spearheading industry firsts and delivering award-winning hardware and cloud-managed solutions. In addition to these management team ads, I'm thrilled to welcome two accomplished operating executives to our board of directors. Nabil Bukhari, President, AI Platforms and CTO at Extreme Networks, has led the company's transformation into an AI and SaaS-driven networking leader. Nabil brings deep expertise in product innovation, subscription models, and scaling cloud platforms with a track record of turning advanced technologies into customer-ready solutions. And Stephen Bai, President and CEO of Ookla, who brings more than 30 years of leadership across carriers and broadband providers worldwide, including DISH, EcoStar, Sprint, Cox, AT&T, Telstra, and Optus. Stephen has been at the forefront of connectivity evolution from DISH's 5G build-out to the emerging frontiers of 6G and satellite services, with extensive operational and strategic expertise in scaling networks. Both Nabil and Stephen are recognized thought leaders whose operating experience in SaaS, AI, and carrier strategy will be invaluable as we expand our solutions portfolio and accelerate Inseego's transformation. With these leadership additions, combined with the execution we've delivered through 2025, we are well positioned to build on our momentum as we close the year and move into 2026. Since joining Isigo in January, I've been proud of what the team has accomplished. In less than a year, we've set out a compelling strategy, broadened our customer base, refreshed and expanded our solution portfolio, and strengthened our leadership bench, creating a scalable platform for sustainable growth. Looking ahead, our focus is clear. Drive sustainable growth, SaaS-enabled solutions, deeper customer partnerships, and disciplined execution. With that, I'll turn it over to Stephen to review our financial results and outlook in more detail.

Hope | Investor Relations

Over to you, Stephen. Thank you, Hope. Hi, everyone.

Steven Gaitoff | Chief Financial Officer

Thank you for joining us. I'd like to cover three topics today. First, I'll take you through our Q3 2025 financial results. Second, I'll provide a brief update on our capital structure. And third, I'll share some color on the financial profile of the business and provide guidance for Q4 2025. As we always do, we'll wrap up by opening the call to your questions. Let's start with Q3 results. We delivered our second consecutive quarter of sequential revenue growth, as you just heard Juho highlight. That performance was again paired with strong growth margins and with an efficient spend profile, we also delivered meaningful operating leverage and sequential growth in adjusted EBITDA and adjusted EBITDA margins. On the top line, total revenue for Q3 was $45.9 million and was driven by three dynamics. One, a particularly strong ramp in our FWA FX4100 product following its Q2 2025 launch, as you have talked about. Two, solid volumes of our MiFi M3100. And three, continued solid contribution from our software services offerings. It's notable to call out that FWA revenue was the second highest in company history and surpassed mobile hotspot revenue again this quarter, which is now the third time that's occurred. That crossover is a tangible data point of our strategy at work, scaling FWA over time, shifting the revenue mix, and positioning the company for durable growth. As we've communicated, mobile revenue came in lower year over year as expected, reflecting the record carrier promotion in 2024. As a bit of a preview to our guidance, we see mobile revenue growing sequentially in Q4 2025 from a more wholesome contribution from an expanded customer set and products as new programs launch and our product line refresh begins to hit the market. And our software services revenue which is comprised of our NSEGO Connect MDM cloud offerings for NSEGO devices and our NSEGO subscribed SaaS offering for mobile subscriber acquisition and management, came in at a consistent $12 million as expected and providing stable high margin revenue and profitability. Non-GAAP growth margin was 41.8% in Q3, reflecting a favorable product mix year over year, and particular strength in FWA. Non-GAAP operating expenses came in at $15.6 million, reflecting some non-recurring one-time items in G&A and an increase in D&A on our decided investments in new products that are coming to market. Pulling this all together, Q3 2025 adjusted EBITDA was $5.8 million, up sequentially and at a margin of 12.5%. the third highest in more than a decade. We ended Q3 with a solid $14.6 million in cash and healthy working capital and leverage metrics to provide that flexibility as we continue executing on our growth initiatives. We also closed the quarter with a very manageable total debt balance of $40.9 million, or approximately two times LTM adjusted EBITDA. That balance sheet strength is the foundation for how we run the business, and it leads directly to my second topic, our continued capital structure strengthening. Last month, we took the prudent step and filed a universal shelf, a move that we believe enhances our financial flexibility and ensures we remain well positioned to execute on our growth strategy. The shelf complements other actions we've taken to increase financial flexibility, including the $15 million revolving credit facility that we put in place in August. and of course, the reduction of more than $130 million in debt over the past year or so. Altogether, these actions strengthen our balance sheet, provide additional flexibility to invest when and where needed to drive growth, and support long-term shareholder value. With that context, our capital position, let me now turn to our guidance for Q4 2025. 2025 has been a foundational year as we invested in and scaled new products, advanced our software platforms, and won the third tier one carrier customer on both Mobile Hotspot and FWA. We're starting to see the business evolve along the strategic lines that you have set out, and for 2024, for Q4 2025 rather, reflecting those initiatives, we're looking to drive continued sequential revenue growth over Q3. That's particularly notable as our business has been somewhat seasonal with Q4 being marginally lower than Q3 for each of the previous three years. And we expect growth in Q4 2025 despite the fact that Q3 was just a record FWA quarter. Q4 2025 mobile revenue is showing particular strength and is expected to generate solid sequential growth in Q4 2025. We're seeing higher volumes at our carrier customers, a nice reflection of our expanded offerings across our customer base. On FWA, while we expect our offerings to deliver a strong quarter in Q4 2025, we also just saw a record quarter in FWA in Q3, and so we're not expecting that same elevated revenue levels in back-to-back quarters. And finally, software services revenue is expected to remain consistent at approximately $12 billion. In terms of margins, non-GAAP growth margin is expected to be modestly lower in Q4 2025 on a greater proportion of mobile hotspot revenue, more consistent with historical levels in the high 30s on a percentage basis. One aspect of COGS that we'll talk more about as we move into 2026 is the global dynamic of rising costs in the memory market that is impacting everyone. We don't see a material impact for Q4 2025, but with a large player shipping capacity to cater to AI, along with other buyers across the industry, we're seeing a tightening in the market. We're comfortable with the current dynamics and have fully factored that into our expectations for Q4 2025. We'll keep you posted as we move into 2026. Turning to non-GAAP operating expense, For total OpEx dollars in Q4 2025, we expect an increase in sales and marketing to drive growth and in R&D as we fund new products, as we've discussed. Our robust new product launch are also expected to drive higher levels of capitalized software development costs in Q4. Importantly, we're driving efficiencies across the company and expect G&A to improve as a percentage of revenue going forward. Pulling this all together, we're providing the following guidance for Q4 2025. Total revenue in a range of $45 million to $48 million and adjusted EBITDA in a range of $4 million to $5 million. With that, we appreciate your time and support. We're glad to open the call for questions. Operator?

Operator | Conference Operator

We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. And your first question today will come from Scott Cyril with Roth Capital.

Please go ahead. Scott Cyril | Analyst, Roth Capital

Hey, good afternoon. Thanks for taking the questions. Nice job on the quarter, guys. Hey, Stephen, maybe to start on subscribe and connect, as you started to make some changes in investment, I'm wondering if you could take us through how the monetization changes and how you go to market and access to the channel, how we should be thinking about how that ramps up in 26 and beyond.

Juho Sarvikas | Chief Executive Officer

Let's go. Maybe I'll start with the EZGo Connect part. Today, we have strong attach with our FWA together with the lead big carrier partner. What we've done and what's really important to understand with the FX4200 launch is that we've graduated in Zico Connect from what you could look at as a support tool to a core part of the enterprise platform. And we're driving usage to the cloud. The FX4200 will do a couple of things for us. It's going to expand our presence with the MSPs and MSOs, as well as provide expansion with the carrier channel. So what you can expect to see with the FX-4200 and with sequential launches is a richer value capture when it comes to what I would call device cloud.

Steven Gaitoff | Chief Financial Officer

And then, good question. On subscribe, the counterpart on the software services, it's in a piece of the business, Scott, that you know and as others know, we've begun to invest in. It's a really compelling part of the portfolio that complements what we do with our carrier customers and our MSOs and all of the strategic service providers that have similar wireless subscriber models. And so we continue to invest in that. We just onboarded and hired two executives in that business. And so they're getting up to speed right now. And so 2026 is what we look to be a growth year in that part of the business on the software side.

Scott Cyril | Analyst, Roth Capital

Thank you. Very helpful. And, you know, maybe looking out into the first quarter, I think you addressed it, sequential growth within the fourth quarter. There's typical little bit of seasonality within that. I think as carriers have historically kind of worked down their inventory levels. But given the new product launches that you're expecting, it sounds like across MiFi in addition to new carrier wins starting to ramp up, does the first quarter have different seasonality where we see sequential growth, you know, starting a little bit higher? Sure. in the first quarter as we start to progress into 26?

Steven Gaitoff | Chief Financial Officer

Yeah, that's a really good point. And also just to clarify a bit, part of the reason that Q4 is, quote, seasonal is just fewer selling days and weeks at the risk of stating the obvious. With the last two weeks of December and the Thanksgiving week, it's just three fewer weeks. And so there's a little bit of math, less so industry dynamics. Whereas what you said in our view, Scott, is that you do see some end-of-year buying and inventory management, so that sometimes January is a slower month. And so Q1, you know, it's been a little bit different year to year here. But, you know, we are focused on, you know, making the most as we go into the year.

Juho Sarvikas | Chief Executive Officer

And hey, Scott, on your note on this new carrier ramp and broad renewables, I believe we mentioned this in the prepared remarks, but when it comes to MiFi, the new carrier customer will start bearing revenue in Q1. In addition, we're renewing the existing two MiFi customers in Q1. What you should expect to see us do is to enter a higher velocity price point in the market, drive significant shares, share gain when it comes to volume share. And with that, continue to drive MiFi growth. Meanwhile, in FWA, the new carrier, we will start shipping a bit later in Q4. And then, of course, with that, we'll be in full motion with the new carrier and with the FX4200 come Q1.

Scott Cyril | Analyst, Roth Capital

Gotcha. And if I could, just one last one. Juho, I guess from a higher level conceptual view of the industry, there's been a lot of different dynamics going on, you know, starting with AT&T, you know, buying Echo Star Spectrum. So a couple things. I'm wondering, how are you seeing that kind of play out into 2026 in terms of investment growth in FWA in general? With the 4200 as well, you've put a stake in the ground with more processing power at the edge, and I'm wondering how that's driving not only adoption cycles from a carrier perspective, but also revenue-generating opportunities for Insigo with recurring and otherwise investments. And then maybe just some thoughts as well in terms of the competitive landscape. It seems like you guys continue to gain share. I'm just kind of curious as to your high-level thoughts in terms of what you're seeing on the competitive front.

Thanks. Juho Sarvikas | Chief Executive Officer

It's got an excellent set of questions. Let me start with the opportunity when it comes to wireless broadband. You're correct. Like if you look at the addressable market today, I would say that it's heavily constrained by available spectrum, right? Because the carrier needs to make sure that they take care of the high ARPU mobile customers. But what happened with the EchoStar transaction with AT&T is that AT&T's mid-band assets dramatically increased. And that's really the sweet spot for FWA deployment. You might have seen there was some new news from FCC this week. They're looking at releasing more upper C-band, I believe it was 150 megahertz. All of this creates significant opportunity for the carrier to drive more FWA deployment. Why I think that we're extremely well positioned to capture that opportunity is that we operate in the enterprise or in the business segment of the carrier portfolio and which obviously has a higher ARPU for the carrier than the consumer FWA. In addition, if you look at the business FWA or enterprise FWA, it consumes on average one-eighth of the network resource or bandwidth of a consumer household. So I think that trend is going to be extremely favorable for us, and we look forward to being the partner of choice for the carriers with our solution offer which is really designed to deliver enterprise-grade wireless broadband that's easy to use, easy to deploy, and fits well with the carrier go-to-market motion where we also have significant investment. The opportunity space is huge. As your point continues to expand, one of the key things here becoming spectrum availability There's competition in the marketplace, but my very simple view here is that I think we have a unique position. On the other end of the spectrum, you have consumer grade, you could call white label FWA, and then you have very heavy, complex, high cost of ownership solutions. We want to be that partner that's capable of driving mass scale deployment in strong alignment with the carrier, and also starting with the MSOs and the MSPs, like we mentioned, the preferred marks.

Moderator | Conference Moderator

Great. Thanks so much. I'll get back to you. Thanks, Scott.

Operator | Conference Operator

And your next question today will come from Christian Schwab with Craig Hallam Capital Group.

Please go ahead. Christian Schwab | Analyst, Craig Hallam Capital Group

Thanks for taking my questions. Congrats on the great quarter. As you look to the new, you know, customer, ramping on both fixed wireless and mobile. Can you give us an idea of the range of potential outcomes over the calendar 26 from revenue from this customer?

Juho Sarvikas | Chief Executive Officer

So if you look at the new customer edition, the hotspot or MiFi market is roughly, this is not like exact accurate science, but you can think of it as one-third, one-third, one-third across the three carriers. And now what we've done is that we've unlocked the missing one-third. So we expect to see significant volume growth. There is ASP erosion in the category, but that will be offset by the increase in volume, and that gives us good confidence on the MiFi side. On FWA, we have this unique motion with one of the largest tier ones, T-Mobile, today that I was just describing. We're super excited to establish the same partnership on FWA, also with our new carrier customer.

Hope | Investor Relations

Great.

Thank you. Christian Schwab | Analyst, Craig Hallam Capital Group

My second question has to do with the software business. Given the broadening of this customer in particular, but also some of your other tier ones, I'm under the impression that a substantial portion of your software revenue comes from T-Mobile. Is there an opportunity at some point in calendar 26 that other tier one customers could adopt the same software platform to manage the network that T-Mobile uses?

Steven Gaitoff | Chief Financial Officer

Yeah, Kristen, it's a really good question, and it's spot on what we were just talking about a moment ago, which is We do share that view and see a lot of opportunity for subscribe, and SegoSubscribe is the wireless subscriber IoT device management agnostic across all devices and carriers platform, SaaS platform. You may have heard me mention we just onboarded and created new roles, new leadership roles that did not exist at the company. The board, the exec team are investing time, energy, people, and capital to build a platform because of what you said. We see a decided opportunity. Awesome that we have a large customer at Tier 1. Great. No reason in the world why we shouldn't have more.

Juho Sarvikas | Chief Executive Officer

And if you look at the Inseco Connect, which is the device-attached cloud, obviously the name of the game is install-based. So I'm very... very happy with the solution that we've built. And now it's a matter of scaling that in the marketplace with a strong FWA attached. So if you take a longer time horizon, a couple of years out, that's going to be a meaningful growth trajectory for us as well.

Christian Schwab | Analyst, Craig Hallam Capital Group

Great. And if I could just sneak in one last question regarding Scott's question on the market share gains in the competitive environment. Do you see an opportunity as you roll out new products targeted to the distribution channel and potentially less foreign competition?

Hope | Investor Relations

I'm sorry, can you repeat the last part?

Christian Schwab | Analyst, Craig Hallam Capital Group

I'm not sure if I heard you. Potentially, the competitive front and some competitors may not be able to sell here. Is that an opportunity for you or not really?

Juho Sarvikas | Chief Executive Officer

Yeah, yeah, definitely. So we're actually uniquely positioned in that we have our engineering team here in San Diego, critical IP created in San Diego. If you look at the latest movement and everything that's being discussed, should there emerge an environment where for national security or for other reasons, U.S. and North America would prefer a domestic supplier. It's a great, great opportunity for us.

Absolutely. Hope | Investor Relations

Great.

No other questions. Thank you. Moderator | Conference Moderator

Awesome.

Hope | Investor Relations

Thanks, Christian.

Operator | Conference Operator

And your next question today will come from Lance Betanza with Cowan. Please go ahead. Hi, guys.

Lance Betanza | Analyst, Cowen

Can you hear me okay?

Hope | Investor Relations

How are you?

Lance Betanza | Analyst, Cowen

Hey, great. Good, thanks. So let me start with just sort of to follow up on the Tier 1 carrier contract. You mentioned that the FWA shipments begin over the next month or so versus mobile shipments beginning early in 2026. And I'm wondering, are we supposed to read anything into that staggered timing? Is FWA definitively a bigger priority, either for you or with this customer or for the customer in general? And, you know, related to that, as you look out one to two years from now, when sort of the dust has sort of settled, so to speak, how should we think about the volume mix in terms of units between FWA and mobile with this new tier one customer?

Juho Sarvikas | Chief Executive Officer

Hey, Lance, great question. You might remember earlier in the year what I was saying is that the product development, and let's call it design win cycle, is 9 to 12 months. It's a simple matter of when we closed on the opportunity and how long it took to develop the solution, the right maturity that we're able to ship. So we're equally excited on both Hotspot and FWA. And then if you look from a mobile to FWA mix perspective, mobile, again, because it's a large market controlled by a couple of large carriers, you will see a significant uptake from a volume standpoint of view when we start shipping with the new customer. But the mobile is also a fairly confined space. So I don't necessarily expect to see significant market growth in mobile. Meanwhile, our thesis is that the FWA enterprise opportunity, be that carrier, MSO, or MSP, we're only at the early stages of that. And we expect to see market growth and, of course, share gains within that marketplace.

Lance Betanza | Analyst, Cowen

Thank you. That's helpful. And then one other question. There's been action at the FCC against, quote, untrustworthy gear coming from foreign adversaries. And I'm wondering if this is something you're following. It looks like the FCC voted last week to close loopholes, which could cause network operators to actually go ahead and replace components in their networks. you know, is this something that could favorably bear on results in 2026 for you? And are you contemplating any of that, or is this just, you know, beyond the scale?

Thanks. Juho Sarvikas | Chief Executive Officer

Lance, I think this is a really important opportunity space for EZGO, and again, as a North America's US OEM were uniquely positioned to capitalize on that. I think it's very good that the focus is, in addition to the infrastructure, the macro network, where actions have already been taken. To me, it makes a whole lot of sense that the focus is now moving into the CPE or the broadband devices, whether that's hotspot or FWA, and even looking at a level deeper where the IP is designed in U.S. as opposed to perhaps white labeling, Chinese design, Chinese software. So I see this as a significant upside opportunity for us as a company.

Hope | Investor Relations

Thanks very much. Thanks, Len. Your next question today will come from Nick Rubino with Stifel.

Operator | Conference Operator

Please go ahead. on behalf of Tori Swanberg, Stifel\ Hi, this is Cam Tierney on behalf of Tori Swanberg at Stifel. First of all, thanks for taking my questions and congrats on the quarter. I wanted to drill down a little bit into the Inseego Connect API that you guys rolled out, I believe it was last quarter. I'm curious what sort of early read-throughs you guys are seeing from that, any feedback from customers about how they're using it or whether that's driving service revenue attach rates.

Juho Sarvikas | Chief Executive Officer

Actually, Cam, that's a great question. Thanks for joining us. So we just had our channel advisory consult, when was it, two weeks ago. One of my biggest takeaways was that the APIs that we spent The bulk of this year in building was a fantastic investment. The feedback was overwhelmingly positive. Look, we want to be the best partner, whether you're an MSP, MSO, or a carrier. And there are instances where it makes sense to consume our In-Seco Connect device management to the service provider's single pane of glass, if you will, so that we can integrate our solution offer into as part of a total solution offer, and that's exactly what the APIs does. The APIs are very important as we extend to MSO cellular failover use cases, and it is a requirement when engaging with the MSP community. on behalf of Tori Swanberg, Stifel\ Okay, awesome. Thank you. Second question is, I just wanted to drill down a little bit more into the FWA sort of longer-term view. Obviously, the last couple of quarters, it's sort of exceeded the mobile business significantly. I'm curious if that's sort of more of a longer-term trend that you guys are seeing, and maybe could we expect that into 2026 and beyond, or is that sort of more short-term chop in the business?

Steven Gaitoff | Chief Financial Officer

Yeah, no, good question and very important clarification to get out there for sure for how you're thinking about it, which is FWA is an important growth driver now and going forward. So we don't see it as chopping. And if you go backwards in time, it probably was. It was more kind of one-off-y for various reasons. But the product portfolio, the technology, the customer breadth is much more diverse now and going forward. And so you're seeing a more steady growth cam going forward, and so we see that contributing to both dollars and growth rate going forward.

Juho Sarvikas | Chief Executive Officer

Yeah, maybe to double-click on that, the strong Q3 on FWA was driven by our large carrier customer. In Q4, we diversify both in terms of incremental revenue streams, both in terms of the new product and also in terms of new channels. So you should absolutely expect to see us further expand our portfolio as well as our market reach in terms of channels and market share as we go into 2026. on behalf of Tori Swanberg, Stifel\ Okay, awesome.

Thank you. Steven Gaitoff | Chief Financial Officer

Fair enough.

Thank you. Operator | Conference Operator

This concludes our question and answer session. I'd like to turn the call back over to Juho for any closing remarks.

Juho Sarvikas | Chief Executive Officer

Thank you for the insightful questions and for joining our call this afternoon. Stephen and I will be attending a few sell-side conferences this month. We will be at the Greg Hallum, Roth, and Needham conferences in New York in two weeks. We're particularly proud to be celebrating Inseco's 25th anniversary as a public company, hosting the closing bell on NASDAQ on Monday, December 8th. a meaningful milestone for our employees, shareholders, and the company as a whole.

Operator | Conference Operator

Thank you again for your time today, and we look forward to speaking with you soon. jsPDF 3.0.3 D:20260606090156-00'00'