Company Performance - KORE Group Holdings, Inc. reported a quarterly loss of $0.5 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.47, and an improvement from a loss of $0.99 per share a year ago, indicating a year-over-year improvement [1] - Cerberus Telecom Acquisition posted revenues of $71.25 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.35% and showing an increase from year-ago revenues of $67.87 million [2] - Cerberus Telecom Acquisition has surpassed consensus revenue estimates three times over the last four quarters [2] Stock Performance - Cerberus Telecom Acquisition shares have declined approximately 26.1% since the beginning of the year, contrasting with the S&P 500's gain of 10% [3] - The current consensus EPS estimate for Cerberus Telecom Acquisition is -$0.33 on $75.1 million in revenues for the coming quarter and -$1.76 on $293.55 million in revenues for the current fiscal year [7] Industry Outlook - The Zacks Industry Rank for Internet - Software is currently in the top 30% of over 250 Zacks industries, suggesting that companies in the top 50% of Zacks-ranked industries outperform those in the bottom 50% by more than 2 to 1 [8] - VNET Group, another company in the same industry, is expected to report quarterly earnings of $0.02 per share, reflecting a year-over-year change of -66.7%, with revenues expected to be $321.33 million, up 17.1% from the year-ago quarter [9][10]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 grew to $71.3 million, an increase of $3.4 million or approximately 5% year over year [6][22] - Adjusted EBITDA rose by $5.3 million to reach $16.7 million, representing a 46% increase compared to the prior year [6][25] - Free cash flow was positive at $1.6 million, marking the third consecutive quarter of positive cash flow [7][26] Business Line Data and Key Metrics Changes - IoT connectivity revenue increased by 1% to $56.1 million due to a growing number of connections [22] - IoT solutions revenue surged by 25% to $15.2 million, driven by strong sales of connectivity-enabling hardware and services [22] - Total connections reached 20.1 million, an increase of 1.5 million year over year [23] Market Data and Key Metrics Changes - The total pipeline of opportunities grew to $84.6 million, indicating strong future growth potential [15] - The company converted $10.2 million of that pipeline into closed one estimated annual recurring revenue (EARR) [15] Company Strategy and Development Direction - The company is focused on a five-pillar value creation plan aimed at building a world-class company [8][12] - Emphasis on product innovation, particularly with super SIM offerings and AI initiatives to enhance customer experience and operational efficiency [10][12] - The company aims to achieve a connection milestone of over 21 million by the end of 2025 [43] Management's Comments on Operating Environment and Future Outlook - The macroeconomic landscape is complex, with global economic uncertainty and new tariffs impacting some customers, but the company's business model remains resilient [30] - The IoT market is expected to grow significantly, with independent analysts forecasting CAGRs ranging from 9% to over 10.5% [30] - The company reiterates its 2025 guidance, expecting revenue between $288 million and $298 million and adjusted EBITDA between $62 million and $67 million [32] Other Important Information - The company has made strategic investments in its workforce to build a culture of excellence and innovation [12][31] - Cash and restricted cash as of June 30, 2025, was $21.3 million, down from $22.6 million a year prior [27] Q&A Session Summary Question: Are clients potentially pushing back projects into 2026 due to tariffs? - Management indicated that demand from customers remains strong, with no projects currently being canceled or delayed [36][39] Question: What critical milestones are being worked on in 2025 for stronger growth into 2026? - Key priorities include pipeline growth, increasing closed one EARR, and completing significant tech-related projects in the second half of the year [41][43]

Financial Performance - Revenue increased by $34 million, a 5% increase, reaching $713 million in Q2 2025 compared to $679 million in Q2 2024[20] - Net loss decreased significantly by $667 million, reaching $169 million in Q2 2025 compared to $836 million in Q2 2024[20] - Adjusted EBITDA increased by $53 million, reaching $167 million in Q2 2025 compared to $114 million in Q2 2024[20] - Cash from Operations increased slightly by $01 million to $41 million in Q2 2025[23] - Free Cash Flow increased by $17 million to $16 million in Q2 2025[23] Business Growth - Total connections increased by 8% to 201 million[29] - Total Pipeline for Estimated Annual Recurring Revenue (eARR) increased to $846 million[34] - eARR- Closed Won for the quarter increased to $102 million[34] Financial Metrics - IoT Connectivity revenue increased by $03 million[29] - For the six months ended June 30, DBNER increased by 700 basis points to 99%[40] 2025 Guidance - The company maintained its 2025 revenue guidance of $288 million to $298 million[45] - The company maintained its 2025 Adjusted EBITDA guidance of $62 million to $67 million[45] - The company maintained its 2025 Free Cash Flow guidance of $10 million to $14 million[45]

KORE Second Quarter 2025 Results [Second Quarter 2025 Company Highlights](index=1&type=section&id=Second%20Quarter%202025%20Company%20Highlights) KORE achieved strong Q2 2025 growth: revenue up 5% to **$71.3 million**, Adjusted EBITDA up 46% to **$16.7 million**, and positive Free Cash Flow - CEO Ron Totton highlighted that investments in profitable growth are paying off, with over **1.5 million new connections** added in the last year, strong new business signings, and healthy growth from existing customers[4](index=4&type=chunk) Q2 2025 Key Financial & Operational Metrics (YoY) | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Revenue | $71.3M | +5% | | Total Connections | 20.1M | +8% | | Net Loss | $16.9M | 80% improvement | | Adjusted EBITDA | $16.7M | +46% | | Cash from Operations | $4.1M | +$0.1M | | Free Cash Flow | $1.6M | +$1.7M | Revenue Breakdown by Segment (Q2 2025 vs Q2 2024) | Segment | Q2 2025 Revenue | % of Total | Q2 2024 Revenue | % of Total | | :--- | :--- | :--- | :--- | :--- | | IoT Connectivity | $56.1M | 79% | $55.8M | 82% | | IoT Solutions | $15.2M | 21% | $12.1M | 18% | [2025 Financial Outlook](index=2&type=section&id=2025%20Financial%20Outlook) The company reiterated its full-year 2025 financial guidance for revenue (**$288-298 million**) and Adjusted EBITDA (**$62-67 million**) Full Year 2025 Financial Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $288 million to $298 million | | Adjusted EBITDA | $62 million to $67 million | | Free Cash Flow | $10 million to $14 million | [Financial Reconciliations](index=6&type=section&id=Financial%20Reconciliations) This section provides detailed reconciliations of GAAP to non-GAAP measures, including Net Loss to Adjusted EBITDA and Free Cash Flow [Reconciliation of Net Loss to Adjusted EBITDA](index=6&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Adjusted%20EBITDA) Q2 2025 Net Loss of **$16.9 million** reconciled to Adjusted EBITDA of **$16.7 million**, adjusted for D&A, interest, and restructuring Net Loss to Adjusted EBITDA Reconciliation (Q2 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net loss | $(16,878) | | Depreciation and amortization | $13,576 | | Interest expense, net | $13,073 | | Integration-related restructuring costs | $7,522 | | Foreign currency (gain) | $(3,524) | | **Adjusted EBITDA** | **$16,707** | [Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow](index=7&type=section&id=Reconciliation%20of%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Free%20Cash%20Flow) Q2 2025 Net Cash from Operating Activities of **$4.1 million** yielded Free Cash Flow of **$1.6 million** after capital expenditures Free Cash Flow Reconciliation (Q2 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net cash provided by operating activities | $4,101 | | Purchases of property and equipment | $(1,283) | | Additions to intangible assets | $(1,482) | | Proceeds from sale of assets | $250 | | **Free cash flow** | **$1,586** | [Reconciliation of Gross Margin to Non-GAAP Margin](index=8&type=section&id=Reconciliation%20of%20Gross%20Margin%20to%20Non-GAAP%20Margin) Q2 2025 overall GAAP Gross Margin was **35.1%**, with Non-GAAP Margin at **56.9%** after adjustments, varying by segment Margin Reconciliation by Segment (Q2 2025) | Segment | GAAP Gross Margin % | Non-GAAP Margin % | | :--- | :--- | :--- | | IoT Connectivity | 35.4% | 60.0% | | IoT Solutions | 34.1% | 45.3% | | **Overall** | **35.1%** | **56.9%** | [Definitions and Disclosures](index=3&type=section&id=Definitions%20and%20Disclosures) This section defines non-GAAP financial measures, key operational metrics, and includes a cautionary note on forward-looking statements - Adjusted EBITDA is defined as EBITDA adjusted for items management views as distorting operating results, such as stock-based compensation, integration costs, and foreign currency gains/losses[13](index=13&type=chunk) - Free Cash Flow is defined as net cash from operating activities minus cash used for investing activities, primarily capital expenditures, and is used as a measure of liquidity[16](index=16&type=chunk) - "Total Connections" represents all IoT Connectivity services connections, including eSIMs, and is a principal measure used by management to assess business growth[20](index=20&type=chunk)[21](index=21&type=chunk) - The report contains a safe harbor statement cautioning that forward-looking statements are subject to risks and uncertainties and should not be unduly relied upon[22](index=22&type=chunk)

Part I - Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited H1 2025 financial statements show slightly lower revenue, a reduced net loss, and positive operating cash flow amidst an increased stockholders' deficit [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects a decrease in total assets and an increase in total liabilities, leading to a larger stockholders' deficit Balance Sheet Summary (in thousands) | Balance Sheet Items | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $79,223 | $79,963 | | **Total Assets** | $432,936 | $455,833 | | **Total Current Liabilities** | $71,624 | $66,090 | | **Total Liabilities** | $566,430 | $555,433 | | **Total Stockholders' Deficit** | $(133,494) | $(99,600) | - Total assets decreased from **$455.8 million** at year-end 2024 to **$432.9 million** as of June 30, 2025, primarily due to a decrease in intangible assets. Total liabilities increased, driven by higher accrued interest due to an affiliate[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Net loss significantly reduced in H1 2025 due to the absence of a prior year goodwill impairment charge Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $71,250 | $67,868 | $143,392 | $143,843 | | **Operating Loss** | $(5,224) | $(76,700) | $(7,680) | $(84,081) | | **Net Loss** | $(16,878) | $(83,633) | $(31,786) | $(101,220) | | **Loss Per Share (Basic & Diluted)** | $(0.86) | $(4.37) | $(1.63) | $(5.31) | - The significant reduction in net loss for both the three and six-month periods ended June 30, 2025, compared to 2024, is primarily due to the absence of a **$65.9 million** goodwill impairment charge that was recorded in Q2 2024[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statement indicates positive net cash from operating activities and an overall net increase in cash for H1 2025 Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,975 | $5,890 | | Net cash used in investing activities | $(4,792) | $(8,784) | | Net cash used in financing activities | $(1,075) | $(1,739) | | **Net increase/(decrease) in cash** | **$1,558** | **$(4,878)** | [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail revenue disaggregation, a significant contingent tax liability, and liquidity concerns addressed by deferring preferred dividends Disaggregated Revenue by Category (in thousands) | Revenue Category | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | IoT Connectivity | $53,609 | $54,579 | $106,406 | $111,240 | | IoT Solutions | $2,739 | $2,739 | $5,373 | $5,718 | | Hardware | $14,902 | $10,550 | $31,613 | $26,885 | - As of June 30, 2025, the company has approximately **$36.2 million** in remaining performance obligations, with **58%** expected to be recognized in 2025[30](index=30&type=chunk) - The company recorded a contingent liability for potential sales and telecommunications taxes, with an estimated range of loss between **$4.4 million** and **$24.1 million** as of June 30, 2025. The company has recorded the low end of the range, **$4.4 million**, as a liability[72](index=72&type=chunk) - The company has identified negative financial trends, including recurring operating losses, and plans to enhance liquidity by continuing the arrearage of preferred dividends, which amounted to approximately **$35.4 million** as of June 30, 2025[84](index=84&type=chunk)[86](index=86&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2025 revenue growth, flat H1 revenue, improved Adjusted EBITDA, and ongoing liquidity management via dividend deferrals [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q2 2025 revenue increased 5% driven by product sales, while H1 revenue remained flat, and SG&A expenses decreased due to restructuring Revenue by Type - Q2 YoY Comparison (in thousands) | Revenue Type | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Services | $56,348 | $57,318 | $(970) | (2)% | | Products | $14,902 | $10,550 | $4,352 | 41% | | **Total Revenue** | **$71,250** | **$67,868** | **$3,382** | **5%** | Revenue by Type - H1 YoY Comparison (in thousands) | Revenue Type | H1 2025 | H1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Services | $111,779 | $116,958 | $(5,179) | (4)% | | Products | $31,613 | $26,885 | $4,728 | 18% | | **Total Revenue** | **$143,392** | **$143,843** | **$(451)** | **—%** | - Selling, general, and administrative (SG&A) expenses decreased by **$11.6 million** (**17%**) for the six months ended June 30, 2025, compared to the prior year, primarily due to reduced salaries and compensation-related expenses from restructuring events in 2024[117](index=117&type=chunk)[119](index=119&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA and free cash flow improved significantly in H1 2025, while non-GAAP gross margin remained stable Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(16,878) | $(83,633) | $(31,786) | $(101,220) | | EBITDA | $11,257 | $(58,214) | $24,202 | $(49,975) | | **Adjusted EBITDA** | **$16,707** | **$11,420** | **$31,162** | **$26,177** | Free Cash Flow (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,975 | $5,890 | | **Free cash flow** | **$2,183** | **$(2,894)** | [Key Operational Metrics](index=38&type=section&id=Key%20Operational%20Metrics) Key operational metrics show increased connections and improved DBNER, but a decline in Average Revenue Per User Key Metrics Summary | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Number of Connections | 20.1 million | 18.5 million (Average) | | DBNER (TTM) | 99% | 92% | | ARPU (Q2) | $0.94 | $1.00 | - Beginning in fiscal year 2025, the company adopted Estimated Annual Recurring Revenue (eARR) as a key performance metric and discontinued the use of Total Contract Value (TCV). As of June 30, 2025, the sales funnel had an eARR of approximately **$85 million**[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) The company manages liquidity by deferring preferred dividends and amending commitments, maintaining a cash balance and credit facility availability - The company's ability to meet short-term liquidity needs is dependent on its ability to defer payment of preferred dividends due to Searchlight. The ability to meet longer-term liquidity needs is uncertain[164](index=164&type=chunk) - As of June 30, 2025, the company had **$21.0 million** in cash and full availability of its **$25.0 million** revolving credit facility[190](index=190&type=chunk) - The company amended its Google Cloud Platform (GCP) commitment on April 1, 2025, reducing the total commitment from **$22.0 million** to **$10.9 million**, incurring a one-time fee of **$1.2 million**[189](index=189&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is a smaller reporting company and is therefore not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is therefore not required to provide quantitative and qualitative disclosures about market risk[193](index=193&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025. This conclusion is due to the previously reported material weaknesses in internal control over financial reporting. The company is continuing its remediation efforts - The CEO and CFO concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses in internal control over financial reporting previously identified in the Annual Report on Form 10-K[196](index=196&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[198](index=198&type=chunk) Part II - Other Information [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that there are currently no pending legal proceedings that are expected to be material to its business - As of the filing date, the company is not involved in any legal proceedings that are expected to have a material impact[200](index=200&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes have been made to the risk factors disclosed in the company's Annual Report on Form 10-K[201](index=201&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the second quarter of 2025, **52,425 shares** of common stock were surrendered by employees to cover tax withholding obligations upon the vesting of Restricted Stock Units (RSUs). These transactions were not part of a publicly announced share repurchase program - In Q2 2025, the company repurchased **52,425 shares** of common stock from employees to satisfy tax withholding requirements on vested RSUs. These repurchases were made under the terms of the incentive plan, not a public buyback program[202](index=202&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company is in arrears on its Series A-1 preferred stock dividends. As of August 14, 2025, the total amount of unpaid dividends was **$38.4 million** - The company has an arrearage on its Series A-1 preferred stock dividends, with the unpaid amount totaling **$38.4 million** as of August 14, 2025[204](index=204&type=chunk)

Core Insights - KORE Group Holdings, Inc. reported growth in revenue, total connections, adjusted EBITDA, and free cash flow for the quarter ended June 30, 2025, indicating positive momentum in its value creation plan [3][5]. Financial Performance - Revenue for the second quarter of 2025 reached $71.3 million, an increase of $3.4 million or 5% compared to the same period last year [5]. - Adjusted EBITDA rose to $16.7 million, up $5.3 million or 46% year-over-year [5]. - The net loss decreased significantly to $16.9 million, improving by $66.8 million or 80% from the previous year [5]. - Free cash flow increased to $1.6 million, up $1.7 million from the same period last year [5]. Operational Metrics - Total connections at the end of the period reached 20.1 million, an increase of 8% from 18.6 million in the same period last year [5]. - The company added over 1.5 million new connections in the last year, reflecting healthy growth from existing customers and new business signed [3][5]. - For the six months ended June 30, 2025, total revenue was $143.4 million, slightly down from $143.8 million in the same period of 2024 [4]. Revenue Breakdown - IoT Connectivity revenue for the second quarter was $56.1 million, up from $55.8 million, while IoT Solutions revenue increased to $15.2 million from $12.1 million [4]. - For the six months ended June 30, 2025, IoT Connectivity revenue was $110.0 million, down from $113.7 million, and IoT Solutions revenue was $33.4 million, up from $30.2 million [4]. Future Outlook - The company reiterated its financial outlook for the twelve months ending December 31, 2025, projecting revenue in the range of $288 million to $298 million, adjusted EBITDA between $62 million and $67 million, and free cash flow between $10 million and $14 million [6].

Making IoT Connectivity Easier to Buy and Faster to Deploy ATLANTA, July 30, 2025 /PRNewswire/ -- KORE Group Holdings, Inc. (NYSE: KORE), the global pure-play Internet of Things ("IoT") hyperscaler, and provider of IoT Connectivity, Solutions and Analytics, has joined forces with TD SYNNEX, a leading global distributor and IT solutions aggregator, to simplify how businesses access and deploy IoT connectivity. Through this alliance, KORE's OmniSIM® US connectivity plans are now available via TD SYNNEX's broa ...

Group 1 - KORE Group Holdings, Inc. will release its financial results for the second quarter of 2025 on August 14, 2025, after the U.S. market closes [1] - A live webcast will be hosted on the same day at 5:00 p.m. Eastern time to discuss the financial results, followed by a question-and-answer session [1][2] - KORE is recognized as a pioneer and leader in delivering mission-critical IoT solutions and services, aiming to simplify the complexity of IoT for organizations of all sizes [2] Group 2 - The company emphasizes its deep IoT knowledge, global reach, and purpose-built solutions that significantly impact customers' business outcomes [2] - Contact information for investor relations is provided, including the Vice President of IR and Corporate Development [3]

Core Insights - KORE Group Holdings, Inc. has been added to the Russell Microcap® Index, effective June 30, 2025, marking a significant milestone for the company [1][2] - The inclusion in the Russell Microcap® Index is seen as recognition of KORE's position in the IoT ecosystem and its commitment to executing a value creation plan focused on profitable growth and operational efficiency [2] - Russell indexes are widely utilized by investment managers and institutional investors, serving as benchmarks for approximately $10.6 trillion in assets as of June 2024 [3] Company Overview - KORE is a leader in providing mission-critical IoT solutions and services, aimed at simplifying the complexity of IoT for organizations of all sizes [4] - The company emphasizes its deep IoT knowledge, global reach, and purpose-built solutions to enhance customer business outcomes [4] Industry Context - FTSE Russell, the global index provider, calculates thousands of indexes that benchmark markets and asset classes in over 70 countries, covering 98% of the investable market globally [5] - Approximately $18.1 trillion is benchmarked to FTSE Russell indexes, indicating the significant role these indexes play in the investment landscape [5]

Financial Data and Key Metrics Changes - The company's first quarter revenue was $72 million, a decrease of $4 million year over year, with adjusted EBITDA of $14.5 million, reflecting a slight decline [5][20] - Adjusted EBITDA margin improved by 60 basis points to 20%, and free cash flow was positive at $600,000 for the first quarter, marking the second consecutive quarter of positive free cash flow [6][24] - Operating expenses decreased by $7.5 million or 15.3% compared to the same period last year, primarily due to reductions in headcount-related costs [24] Business Line Data and Key Metrics Changes - IoT Connectivity revenue decreased approximately 7% year over year to $53.9 million, representing 75% of total revenue, while IoT Solutions revenue increased by approximately 1% to $18.2 million, accounting for 25% of total revenue [20] - Non-GAAP IoT Connectivity margin was down 200 basis points year over year to 58.8%, while IoT Solutions margin increased by 370 basis points to 39.9% [21][22] Market Data and Key Metrics Changes - Total connections at the end of the first quarter reached 19.8 million, an increase of 1.5 million year over year, with average revenue per user (ARPU) decreasing to $0.91 from CAD1.05 in Q1 2024 [22] - The company reported a 99% dollar-based net retention rate (DBNER), up from 94% in the prior year, indicating stabilization in IoT Solutions revenue [23] Company Strategy and Development Direction - The company aims to be a trusted global leader in IoT connectivity solutions, focusing on customer intimacy, product innovation, profitable growth, operational excellence, and building a winning culture [13][18] - The strategic roadmap includes leveraging AI tools for digital marketing growth initiatives and expanding into high-margin segments and priority markets [9][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the sales cycle, noting that the uncertainty around tariffs has led to accelerated purchasing from customers [36] - The company maintains its guidance for 2025, expecting revenue between $288 million and $298 million, adjusted EBITDA between $62 million and $67 million, and free cash flow between $10 million and $14 million [27][28] Other Important Information - The company has shifted to using estimated annual recurring revenue (eARR) as a key performance metric to better illustrate its recurring revenue business model [8] - The company reported significant wins in various sectors, including cloud communication and healthcare, which are expected to contribute to future revenue growth [10][12] Q&A Session Summary Question: Inquiry about eARR historical numbers and sales cycles - Management indicated that they do not have historical eARR numbers for comparison but will follow up on that [34] - Sales cycles have not elongated; instead, there has been some compression due to tariff uncertainties [36] Question: Clarification on operating expenses and product gross margins - The normalized operating expense number for forecasting should be around $25 million, excluding one-time integration costs [42] - The target gross margin for solutions is expected to remain around 40% for the rest of the year [43] Question: Future ARPU trends and growth outlook for 2026 - ARPU is expected to remain around $0.91, but could decrease slightly if more lower ARPU use cases are added [46] - Management is optimistic about growth in 2026, with connections growing and the eARR business contributing positively [51] Question: Demand environment in healthcare and specifics about new versus existing customers - The healthcare sector is experiencing growth, and the company is seeing strong results in connected health [60] - Approximately 70-75% of demand is expected to come from new logos, with the remainder from existing customers expanding their deployments [66]