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, showing a slight decline [5][22] - Adjusted EBITDA margin improved by 60 basis points to 20%, and cash flow from operations increased to $2.9 million, up $1 million from the same period last year [6][26] - Free cash flow for the first quarter was $600,000, marking the second consecutive quarter of positive free cash flow [6][27] - The net loss for the first quarter was $14.9 million, an improvement from $17.6 million in the prior year [26] 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 [22] - IoT Solutions revenue increased approximately 1% year over year to $18.2 million, accounting for 25% of total revenue [22] - Non-GAAP IoT Connectivity margin decreased by 200 basis points to 58.8%, while IoT Solutions margin increased by 370 basis points to 39.9% [23] 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 [23] - Average revenue per user (ARPU) decreased to $0.91 from CAD 1.05 in Q1 2024, attributed to a mix of lower ARPU use cases [23][46] 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 [14][20] - The strategic roadmap includes growing the existing customer base, prioritizing new business in key verticals, and leveraging AI tools for digital marketing growth [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the financial results in Q2, driven by strong connectivity revenue and no impact from tariff policies thus far [6][29] - 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 [29][30] Other Important Information - The company has shifted to using estimated annual recurring revenue (eARR) to better illustrate its recurring revenue business model [8][9] - The total connectivity pipeline includes nearly $52 million in eARR from new opportunities and nearly $30 million from existing customers [10] Q&A Session Summary Question: Can you provide historical numbers for eARR and insights on current sales cycles? - Management indicated that historical comparisons for eARR are not available but will follow up on this. Sales cycles have not elongated and may have even compressed due to tariff uncertainties [34][36][38] Question: What is the normalized OpEx number going forward? - The normalized operating expenses are expected to be around $25 million, excluding integration costs [40][42] Question: Will ARPU continue to be pressured by new business? - ARPU is expected to remain around $0.91, but could decrease if more lower ARPU use cases are added. The previous year had a spike in usage that inflated ARPU [44][46] Question: What is the demand environment in healthcare? - The healthcare sector is experiencing growth, with connected health being a significant area of focus for the company [59][61] Question: How did the Winnebago deal come about? - The Winnebago deal was competitive, with a sales cycle of around nine months, and includes a minimum revenue commitment [56][58][66] Question: What is the balance of demand from new versus existing customers? - Approximately 70-75% of demand is expected to come from new logos, with the remainder from existing customers expanding their deployments [67][70]

F i r s t Q u a r t e r 2 0 2 5 E a r n i n g s P r e s e n t a t i o n May 15, 2025 Di scl aime rs Use of Projections This presentation also contains certain financial forecasts of KORE. KORE's independent auditors have not studied, reviewed, compiled or performed any procedures with respect to the projections for the purpose of their inclusion in this presentation, and accordingly, neither of them has expressed an opinion or provided any other form of assurance with respect thereto for the purpose of this ...

Revenue Performance - Revenue for Q4 2024 was $73.3 million, a 1.1% increase from $72.5 million in Q4 2023, driven by a $1.1 million growth in IoT Connectivity revenue[5] - Full year revenue totaled $286.1 million, up $9.5 million or 3.4% from $276.6 million in 2023, with IoT Connectivity revenue increasing by $24.5 million to $226.9 million[9] - KORE's total revenue for the year ended December 31, 2024, was $146,076,000, down from $167,042,000 in 2023[38] - The company expects revenue for 2025 to be in the range of $288 million to $298 million[14] Financial Loss and Improvement - Net loss for Q4 2024 improved to $25.4 million, a reduction of 24.6% compared to $33.7 million in Q4 2023[9] - KORE Group Holdings reported a net loss of $25,448,000 for Q4 2024, an improvement from a net loss of $33,692,000 in Q4 2023[38] - The company incurred a goodwill impairment loss of $65,861,000 for the year ended December 31, 2024[38] Cash Flow and EBITDA - Adjusted EBITDA for Q4 2024 was $14.0 million, a slight increase of 1.1% from $13.8 million in Q4 2023[9] - Adjusted EBITDA for Q4 2024 was $13,976,000, slightly up from $13,824,000 in Q4 2023[38] - Free Cash Flow for Q4 2024 was $1.6 million, a significant improvement from a negative $15.5 million in Q4 2023[9] - Free cash flow for Q4 2024 was $1,562,000, compared to a negative free cash flow of $15,546,000 in Q4 2023[39] - Total cash provided by operating activities for Q4 2024 was $2,840,000, a significant recovery from a cash used of $10,912,000 in Q4 2023[39] Operational Metrics - The total number of IoT Connections increased by 1.2 million to 19.7 million by the end of 2024[4] - The Dollar-Based Net Expansion Rate (DBNER) for the twelve months ending December 31, 2024, was 95%, down from 96% in the previous year[11] - KORE's average revenue per user (ARPU) is a key metric for assessing revenue generation per connection, calculated on a quarterly basis[33][34] Restructuring and Future Outlook - KORE completed its restructuring plan, resulting in over $20 million in annual run-rate savings[5] - Notable new business wins in Q4 included closed-won Total Contract Value (TCV) of $29.3 million, with $9.4 million related to Connectivity[13] - The company anticipates future revenue growth and operational efficiency improvements as part of its restructuring plan[35] - KORE's integration-related restructuring costs for the year were $19,159,000, compared to $16,532,000 in 2023[38] - The company reported a change in fair value of warrant liability of $2,309,000 for Q4 2024[38]

Part I [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents KORE Group Holdings, Inc.'s unaudited Q1 2025 financial statements, highlighting a $14.9 million net loss and significant liabilities [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to $445.1 million, liabilities increased to $560.0 million, and stockholders' deficit widened to $114.9 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$445,134** | **$455,833** | | Total Current Assets | $80,534 | $79,963 | | Goodwill | $228,844 | $228,844 | | Intangible assets, net | $115,057 | $125,057 | | **Total Liabilities** | **$560,033** | **$555,433** | | Long-term debt and other borrowings, net | $295,528 | $295,661 | | Mandatorily redeemable preferred stock due to affiliate, net | $143,058 | $142,776 | | Accrued interest due to affiliate | $29,460 | $23,798 | | **Total Stockholders' Deficit** | **($114,899)** | **($99,600)** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q1 2025 revenue decreased 5% to $72.1 million, operating loss narrowed, and net loss improved to $14.9 million Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $72,142 | $75,975 | | Operating Loss | ($2,456) | ($7,381) | | Net Loss | ($14,908) | ($17,587) | | Loss Per Share (Basic and Diluted) | $(0.77) | $(0.93) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 net cash from operations increased to $2.9 million, investing activities decreased, and cash ended at $20.0 million Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,874 | $1,904 | | Net cash used in investing activities | ($2,277) | ($4,685) | | Net cash used in financing activities | ($512) | ($1,180) | | Net (de)crease in cash and restricted cash | $249 | ($4,115) | | Cash and restricted cash, end of period | $19,950 | $23,322 | [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, declining IoT Connectivity revenue, contingent tax liability, liquidity concerns, and a reduced Google Cloud Platform commitment Disaggregated Revenue by Service Line (in thousands) | Service Line | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | IoT Connectivity | $52,797 | $56,661 | | IoT Solutions | $2,634 | $2,979 | | **Total Services** | **$55,431** | **$59,640** | - As of March 31, 2025, the company had approximately **$37.7 million** of remaining performance obligations, with about **70%** expected to be recognized in 2025[28](index=28&type=chunk) - The company has identified a probable liability for sales and telecommunications taxes, with an estimated range of loss between **$4.2 million** and **$23.4 million**. A contingent loss of **$4.2 million** has been recorded[66](index=66&type=chunk) - The company faces liquidity challenges due to recurring operating losses. It plans to continue deferring preferred dividend payments to preserve cash, with approximately **$29.5 million** in accrued interest due to an affiliate as of March 31, 2025[78](index=78&type=chunk)[80](index=80&type=chunk) - Subsequent to the quarter end, on April 1, 2025, the company amended its Google Cloud Platform (GCP) commitment, reducing the total amount from **$22.0 million** to **$10.9 million**. This incurred a **$1.2 million** fee payable by May 1, 2025[72](index=72&type=chunk)[85](index=85&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 5% revenue decline, reduced SG&A, flat Adjusted EBITDA, ongoing liquidity challenges, and key operational metrics [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Q1 2025 total revenue decreased 5% to $72.1 million, driven by a 7% decline in Services revenue, with SG&A expenses falling 22% Revenue by Type - Q1 2025 vs Q1 2024 (in thousands) | Revenue Type | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Services | $55,431 | $59,640 | $(4,209) | (7)% | | Products | $16,711 | $16,335 | $376 | 2% | | **Total Revenue** | **$72,142** | **$75,975** | **$(3,833)** | **(5)%** | - SG&A expenses decreased by approximately **$7.7 million (22%)** year-over-year, primarily due to reduced salaries and office-related expenses following restructuring events in 2024[107](index=107&type=chunk)[108](index=108&type=chunk) [Non-GAAP Financial Measures](index=28&type=section&id=Non-GAAP%20Financial%20Measures) Q1 2025 Adjusted EBITDA was $14.5 million, Free Cash Flow improved to $0.6 million, and Non-GAAP Gross Margin slightly decreased Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(14,908) | $(17,587) | | EBITDA | $12,945 | $8,239 | | **Adjusted EBITDA** | **$14,455** | **$14,757** | Free Cash Flow (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,874 | $1,904 | | Purchases of property and equipment | $(126) | $(877) | | Additions to intangible assets | $(2,151) | $(3,808) | | **Free cash flow** | **$597** | **$(2,781)** | [Key Operational Metrics](index=31&type=section&id=Key%20Operational%20Metrics) Total connections grew to 19.8 million, DBNER improved to 99%, ARPU decreased, and eARR was introduced with a $52 million sales funnel Key Operational Metrics Comparison | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Number of Connections (period end) | 19.8 million | N/A | | Average Connections Count (for the period) | 19.7 million | 18.1 million | | DBNER (TTM) | 99% | 94% | | ARPU (for the quarter) | $0.91 | $1.05 | - The company adopted Estimated Annual Recurring Revenue (eARR) as a new key metric in 2025 and discontinued Total Contract Value (TCV). As of March 31, 2025, the sales funnel had an eARR of over **$52 million**[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is constrained, relying on deferred preferred dividend payments, with $19.7 million cash and a reduced GCP commitment - The company acknowledges it cannot meet short-term liquidity needs solely through operational cash flow and relies on its ability to defer preferred dividend payments to an affiliate (Searchlight) to maintain liquidity[142](index=142&type=chunk) - As of March 31, 2025, the company had **$19.7 million** in cash and **$25.0 million** available on its revolving credit facility[164](index=164&type=chunk) - The company owed approximately **$29.5 million** in accrued preferred dividends to Searchlight as of March 31, 2025, and plans to continue this arrearage to preserve cash[162](index=162&type=chunk) - On April 1, 2025, the company amended its Google Cloud Platform (GCP) commitment, reducing it from **$22.0 million** to **$10.9 million**, incurring a **$1.2 million** fee[163](index=163&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, KORE is not required to provide market risk disclosures - As a smaller reporting company, KORE is not required to provide information for this item[167](index=167&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective due to previously identified material weaknesses - The CEO and CFO concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to material weaknesses in internal control over financial reporting previously identified in the Annual Report on Form 10-K[168](index=168&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control[170](index=170&type=chunk) Part II [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary course legal proceedings, none expected to be material to its financial condition - As of the filing date, there are no pending legal proceedings that are expected to be material to the company[172](index=172&type=chunk) [Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K - No material changes have been made to the risk factors disclosed in the Annual Report on Form 10-K[173](index=173&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, 14,049 common shares were repurchased from employees to cover tax withholding on vested RSUs - In Q1 2025, **14,049** shares of common stock were surrendered by employees to pay for tax withholding on vested RSUs. These repurchases were not part of a publicly announced program[174](index=174&type=chunk) [Defaults Upon Senior Securities](index=40&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company is in arrears on Series A-1 preferred stock dividend payments, totaling $32.4 million as of May 15, 2025 - The company is in arrears on its Series A-1 preferred stock dividends, with the unpaid amount totaling **$32.4 million** as of May 15, 2025[176](index=176&type=chunk) [Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[177](index=177&type=chunk) [Other Information](index=40&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during Q1 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the first quarter of 2025[178](index=178&type=chunk) [Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data

Core Insights - KORE Group Holdings, Inc. reported solid operational performance with growth in cash flow and free cash flow, achieving positive cash flow for the second consecutive quarter [3][8] - The company is nearing a significant milestone of 20 million total IoT connections, with strong demand expected to convert into increased connectivity revenue [3][8] - KORE expanded its indirect channel to focus on profitable growth, leveraging its brand for new opportunities [4] Financial Performance - Total revenue for the quarter ended March 31, 2025, was $72.142 million, a decrease of 5% from $75.975 million in the same period last year [6] - IoT Connectivity revenue was $53.917 million, down 7% from $57.884 million, while IoT Solutions revenue increased to $18.225 million, up 1% from $18.091 million [6] - Total connections increased to 19.8 million, an 8% rise from 18.3 million year-over-year [8] Cash Flow and Expenses - Cash provided by operations rose to $2.9 million, a 51% increase from the previous year, while free cash flow reached $0.6 million, up 121% [8] - Operating expenses decreased to $41.6 million, down 15% from $49.1 million, attributed to restructuring efforts [8] Margins and Key Metrics - IoT Solutions margin improved to 33.0%, up 210 basis points from the previous year, while non-GAAP margin rose to 39.9%, an increase of 370 basis points [8] - Average Revenue Per User (ARPU) decreased to $0.91 from $1.05, and the Dollar-Based Net Expansion Rate (DBNER) improved to 99% from 94% [6][8] 2025 Financial Outlook - The company expects total revenue for the year to be in the range of $288 million to $298 million, with adjusted EBITDA projected between $62 million and $67 million, and free cash flow anticipated to be between $10 million and $14 million [9]

Core Insights - KORE Group Holdings, Inc. will release its financial results for Q1 2025 on May 15, 2025, after U.S. market closing [1] - A live webcast will be held on the same day at 5:00 p.m. Eastern time to discuss the financial results [1] Company Overview - KORE is a leader in providing mission-critical IoT solutions and services, helping organizations improve operational and business results [2] - The company emphasizes simplifying the complexity of IoT through its deep knowledge, global reach, and purpose-built solutions [2]

Financial Data and Key Metrics Changes - The company reported a total revenue of CAD286 million for 2024, an increase of CAD9.5 million or 3% year over year [21] - Adjusted EBITDA for the year was CAD53.1 million, a decrease of CAD2.5 million compared to the prior year [29] - Free cash flow improved significantly to CAD1.6 million in Q4 2024, compared to a negative CAD15.5 million in the prior year [31] - The net loss for Q4 2024 was CAD25.4 million, an improvement from CAD33.6 million in the prior year [27] Business Line Data and Key Metrics Changes - IoT connectivity revenue for Q4 2024 was CAD56.5 million, up 2% year over year, representing 77% of total revenue [20] - IoT Solutions revenue declined 2% year over year to CAD16.8 million, accounting for 23% of fourth quarter revenue [20] - Non-GAAP IoT connectivity margin increased by 300 basis points year over year to 59.3% [21] - Non-GAAP IoT Solutions margin improved by 1,500 basis points year over year to 48.1% [21] Market Data and Key Metrics Changes - Total connections at the end of Q4 2024 were 19.7 million, an increase of 1.2 million year over year [6] - Average revenue per user (ARPU) for Q4 was $0.97, down from $0.99 in Q4 2023 [24] - The company closed $29 million in total contract value (TCV) in Q4 2024, with 68% related to IoT connectivity [10] Company Strategy and Development Direction - The company is focused on operational excellence and has launched several AI projects to drive efficiency and support profitable growth [7] - The strategic focus is on profitable growth and recurring connectivity revenue, which increased by CAD24.5 million or 12% year over year [6] - The company plans to shift from TCV to estimated annual recurring revenue (EARR) to better reflect its recurring revenue business model [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, expecting revenue growth driven by IoT connections and improvements in adjusted EBITDA and free cash flow [34] - The company is cautious about potential impacts from evolving tariff policies but believes its recurring revenue model provides insulation against external pressures [34] - The outlook for 2025 includes revenue guidance of CAD288 million to CAD298 million, reflecting a 2% year-over-year growth [35] Other Important Information - The company has seen significant activity in its IoT connectivity pipeline, particularly in connected health and logistics [14] - The IoT market is expected to grow rapidly, with the number of connected devices projected to surpass 96 billion by 2030 [16] - eSIM adoption is accelerating, with the market expected to grow from 368 million units in 2024 to 1.6 billion by 2030 [17] Q&A Session Summary Question: Drivers of connections and ARPU changes - Management noted that the increase in connections was primarily from low ARPU cases, which contributed to the decline in ARPU [40][41] Question: Market development and demand - Management indicated that while low ARPU use cases contributed to growth, there are also opportunities in higher-margin areas like connected health and retail [43] Question: Revenue guidance and pricing dynamics - Management explained that the conservative revenue guidance reflects a focus on profitable growth and the exit from unprofitable contracts [46] Question: Delay in 10-K filing - Management clarified that the delay was due to specific audit items and expects to be on time for future filings [53] Question: Balance sheet restructuring - Management is open to exploring options for balance sheet improvement but is focused on operational performance [56] Question: Guidance specifics for 2025 - Management indicated that IoT Solutions revenue is expected to remain flat, with a focus on improving gross margins [64] Question: AI and eSIM integration - Management highlighted ongoing discussions with customers about leveraging AI for better decision-making and the growing importance of eSIM technology [79]

Financial Data and Key Metrics Changes - The company reported total revenue for Q4 2024 of CAD 73.3 million, an increase of CAD 0.8 million or 1% year over year [20] - Adjusted EBITDA for Q4 was CAD 14 million, an increase of CAD 0.2 million or approximately 1.1% compared to the prior year [27] - Free cash flow for Q4 was positive CAD 1.6 million, a significant improvement from negative CAD 15.5 million in the prior year [30] - For the full year 2024, total revenue increased CAD 9.5 million or 3% to CAD 286.1 million [21] - The net loss for Q4 was CAD 25.4 million, an improvement from CAD 33.6 million in the prior year [26] Business Line Data and Key Metrics Changes - IoT connectivity revenue for Q4 was CAD 56.5 million, up 2% year over year, representing 77% of total revenue [20] - IoT Solutions revenue declined 2% year over year to CAD 16.8 million, accounting for 23% of total revenue [20] - For the full year, IoT connectivity revenue increased 12% to CAD 226.9 million, representing 79% of total revenue [21] - Non-GAAP IoT connectivity margin was up 300 basis points year over year to 59.3% [21] - Non-GAAP IoT Solutions margin increased 1,500 basis points year over year to 48.1% [21] Market Data and Key Metrics Changes - Total connections at the end of Q4 were 19.7 million, an increase of 1.2 million year over year [6] - Average revenue per user (ARPU) for Q4 was $0.97, down from $0.99 in Q4 2023 [23] - The company expects the IoT market to grow rapidly, with connected devices projected to surpass 96 billion by 2030, growing at a CAGR of over 20% [15] Company Strategy and Development Direction - The company is focused on operational excellence and has launched several AI projects to drive efficiency and support profitable growth [7] - The shift from total contract value (TCV) to estimated annual recurring revenue (EARR) is aimed at better illustrating the recurring revenue business model [11] - The company is committed to delivering innovative high-value solutions that drive growth and success for customers [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, expecting revenue growth driven by IoT connections and improvements in adjusted EBITDA and free cash flow [34] - The company is mindful of evolving tariff policies that could create uncertainty for customers, but believes its recurring revenue model provides insulation against these pressures [34] - Guidance for 2025 includes revenue in the range of CAD 288 million to CAD 298 million, reflecting a 2% year-over-year growth [35] Other Important Information - Operating expenses in Q4 increased by CAD 4.8 million or 9.7% year over year, primarily due to unrealized foreign exchange losses [25] - The company plans to continue focusing on profitable growth while rationalizing unprofitable contracts and product lines [47] Q&A Session Summary Question: What were the drivers of connections and ARPU? - Management noted that the increase in connections came from low ARPU cases, which were not present for the full quarter, leading to a decrease in ARPU [40][41] Question: Is the low ARPU indicative of market development? - Management indicated that while low ARPU cases contributed to growth, they are not the only source of demand, with growth also seen in connected health and retail sectors [44] Question: What is the guidance for 2025 regarding hardware? - Management stated that they do not expect significant growth or decline in IoT Solutions, and they are moving away from lower-margin hardware deals [63] Question: Are customers slowing down their deployments? - Management has not seen a slowdown in customer demand but is being cautious due to potential tariff impacts [71] Question: How does AI factor into product evolution? - Management highlighted active conversations with customers about using AI to leverage collected data for better decision-making and new revenue streams [80] Question: What are the debt coverage targets? - Management indicated there is no specific target for debt coverage but emphasized a focus on improving cash flows and potentially paying down debt as cash flow improves [83]

Revenue Performance - Total revenue for the year ended December 31, 2024, was $286.1 million, representing a 3% increase from $276.6 million in 2023[170] - Revenue from IoT Connectivity services increased by approximately $24.5 million, or 12%, to $226.9 million in 2024, driven by the acquisition of Twilio's IoT business[173] - Revenue from IoT Solutions decreased by approximately $15.0 million, or 20%, to $59.2 million in 2024, primarily due to reduced demand from major customers[174] - Services revenue increased by approximately $21.6 million, or 10%, to $234.2 million in 2024, largely attributed to new customer business and increased connectivity utilization[171] - Revenue from IoT Connectivity for 2024 was $226,853 thousand, up from $202,393 thousand in 2023, with a gross margin of 41.0%[199] - Revenue from IoT Solutions for 2024 was $59,234 thousand, down from $74,217 thousand in 2023, with a gross margin of 31.4%[199] Cost and Expenses - Cost of revenue decreased by 2% to $126.2 million in 2024, with a notable decrease in the cost of products by approximately $13.5 million, or 29%[176] - Selling, general, and administrative (SG&A) expenses increased by approximately $10.8 million, or 8%, to $140.0 million in 2024, driven by higher personnel-related costs[180] Profitability Metrics - Net loss for the year ended December 31, 2024, was $146,076 thousand, an improvement from a net loss of $167,042 thousand in 2023[190] - Adjusted EBITDA for 2024 was $53,138 thousand, slightly down from $55,550 thousand in 2023[190] - Non-GAAP Profit for 2024 was $161,089 thousand, representing a Non-GAAP Margin of 56.3%, compared to $148,150 thousand and 53.6% in 2023[199] Cash Flow and Liquidity - Free cash flow for 2024 was $(3,549) thousand, an improvement from $(26,649) thousand in 2023[193] - For the year ended December 31, 2024, net cash provided by operating activities was approximately $9.9 million, a significant improvement from a net cash used of $6.4 million in 2023[236] - Cash used in investing activities for 2024 was $13.5 million, compared to $20.2 million in 2023, primarily for investments in property, equipment, and internally developed software[238] - As of December 31, 2024, the company had approximately $19.4 million in cash on hand, reflecting its liquidity position[242] - The company plans to defer cash payments of dividends on the Series A-1 preferred stock to preserve cash for other purposes[240] Debt and Financing - Total long-term debt and other borrowings, net, was $295.661 million as of December 31, 2024, compared to $296.109 million as of December 31, 2023[219] - The Company has a senior secured term loan of $183.150 million and backstop notes of $120 million as of December 31, 2024[219] - The Credit Facilities have a maturity date of November 15, 2028, with principal payments of approximately $0.5 million due quarterly[221] - The Series A-1 preferred stock has a liquidation preference of $1,000 per share, with a total carrying amount of $142.776 million as of December 31, 2024[231] - The Company issued the Backstop Notes at a rate of 5.50% per annum, due September 30, 2028[226] - The Total Net Leverage Ratio must not exceed 5.75:1.00 for the quarterly periods ended September 30, 2024, and December 31, 2024[224] - The Company has identified sources of financing that are believed to be adequate for meeting both short-term and long-term liquidity needs[218] Operational Insights - The company anticipates stable revenue from Connectivity verticals, while IoT Managed Services may experience volatility due to macroeconomic conditions[166] - The company has contracted with a new third-party administrator for 2025, expected to reduce administration costs on a per-employee basis[184] - KORE's DBNER was 95% for the twelve months ended December 31, 2024, down from 96% for the same period in 2023, indicating slightly more revenue from new customer wins[212] - The sales funnel included over 1,062 opportunities with an estimated potential TCV of over $312 million as of December 31, 2024, compared to over 1,600 opportunities with a TCV of over $545 million as of December 31, 2023[214] - The company plans to focus on strategic acquisitions and operational improvements to enhance liquidity and growth[192] Accounting and Valuation - EBITDA and Adjusted EBITDA metrics are utilized to evaluate ongoing operations, with adjustments made for unusual and significant items[187][189] - The company expects quarter-to-quarter GAAP earnings volatility due to various accounting estimates and assumptions, which may impact reported earnings[244] - The company recorded a goodwill impairment loss of $65.9 million in the second quarter of 2024 and $78.3 million in the third quarter of 2023, indicating ongoing challenges in asset valuation[250] Connection Metrics - Total Number of Connections increased to 19.7 million as of December 31, 2024, up from 18.5 million in 2023[206] - Average Connections Count for 2024 was 18.7 million, compared to 17.3 million in 2023[206] - ARPU was $0.97 for the three months ended December 31, 2024, down from $0.99 for the same period in 2023[216] Purchase Commitments - The total purchase commitments payable as of December 31, 2024, amounted to $58.0 million, with a significant reduction in the Google Cloud Platform commitment from $22.0 million to $10.9 million, or approximately 50.5%[241]

F o u r t h Q u a r t e r 2 0 2 4 E a r n i n g s P r e s e n t a t i o n April 30, 2025 1 Disclaimers Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. KORE's actual results may differ from their expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements ...