PART I - FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) KORE reported a $133.4 million net loss for the nine months ended September 30, 2023, primarily due to a $78.3 million goodwill impairment, impacting assets and operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to $586.2 million as of September 30, 2023, primarily due to reduced goodwill, while stockholders' equity sharply declined to $71.1 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $19,767 | $34,645 | | Goodwill | $294,600 | $369,706 | | Total assets | $586,176 | $688,736 | | **Liabilities & Equity** | | | | Total current liabilities | $62,838 | $48,808 | | Long-term debt and other borrowings, net | $412,633 | $413,910 | | Total liabilities | $515,070 | $508,064 | | Total stockholders' equity | $71,106 | $180,672 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q3 2023 revenue slightly increased to $68.6 million, but a $78.3 million goodwill impairment led to a $95.4 million net loss, widening the nine-month net loss to $133.4 million Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $68,633 | $66,137 | $204,144 | $206,036 | | Operating loss | $(87,853) | $(7,996) | $(106,104) | $(21,050) | | Goodwill impairment | $78,255 | $— | $78,255 | $— | | Net loss | $(95,361) | $(14,277) | $(133,350) | $(36,639) | | Basic and diluted EPS | $(1.10) | $(0.19) | $(1.65) | $(0.49) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly decreased to $4.5 million for the nine months ended September 30, 2023, leading to a $14.9 million reduction in cash and restricted cash Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $4,493 | $20,527 | | Net cash used in investing activities | $(15,596) | $(57,974) | | Net cash used in financing activities | $(3,759) | $(3,599) | | Change in cash and restricted cash | $(14,944) | $(43,060) | [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Key notes include the June 2023 Twilio IoT acquisition, a $78.3 million goodwill impairment in Q3 2023, and a major post-quarter refinancing with a new $185 million term loan and $150 million preferred stock investment Disaggregated Revenue (in thousands) | Revenue Type | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | IoT Connectivity | $54,217 | $42,949 | $145,161 | $129,816 | | Hardware Sales | $9,541 | $16,266 | $42,484 | $56,747 | | Total | $68,633 | $66,137 | $204,144 | $206,036 | - On June 1, 2023, the company acquired certain assets of Twilio Inc.'s IoT Business, funded by issuing **10,000,000 shares** of KORE common stock valued at **$14.7 million**[36](index=36&type=chunk)[37](index=37&type=chunk)[40](index=40&type=chunk) - In Q3 2023, the company recorded a goodwill impairment loss of approximately **$78.3 million**, triggered by a sustained decline in its share price indicating the carrying value exceeded fair value[81](index=81&type=chunk)[83](index=83&type=chunk) - Subsequent to the quarter end, on November 9, 2023, the company executed a major refinancing, replacing its existing credit facility with a new **$185.0 million** term loan and a **$25.0 million** revolving facility, and agreeing to issue **$150.0 million** of Series A-1 Preferred Stock and warrants[84](index=84&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 2023 revenue growth driven by the Twilio IoT acquisition, a 96% DBNER, and a post-quarter refinancing that significantly altered the capital structure [Key Metrics](index=25&type=section&id=Key%20Metrics) Total connections grew to 18.9 million, boosted by the Twilio IoT acquisition, while DBNER decreased to 96%, and sales funnel TCV significantly increased to $740.0 million Total Number of Connections | Metric | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Number of Connections at Period End | 18.9 million | 15.0 million | - The increase in connections includes approximately **3.1 million** added from the acquisition of Twilio's IoT Business[124](index=124&type=chunk) - DBNER was **96%** for the twelve months ended September 30, 2023, compared to **100%** for the prior year period, mainly due to a revenue decline from the largest customer after its LTE transition project concluded[130](index=130&type=chunk) - The sales funnel TCV grew to approximately **$740.0 million** as of September 30, 2023, from **$434.0 million** at the end of 2022[133](index=133&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q3 2023 total revenue increased 4% to $68.6 million, driven by Services revenue growth offsetting Product declines, with total gross margin improving to 55% and SG&A expenses rising 13% Revenue by Type (in thousands) | Revenue Type | Q3 2023 | Q3 2022 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Services | $57,046 | $46,448 | $10,598 | 23% | | Products | $11,587 | $19,689 | $(8,102) | (41)% | | **Total Revenue** | **$68,633** | **$66,137** | **$2,496** | **4%** | Gross Margin Rate | Category | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Services | 60% | 64% | 63% | 64% | | Products | 29% | 24% | 27% | 23% | | **Total gross margin** | **55%** | **52%** | **54%** | **51%** | - SG&A expenses increased by **$3.9 million (13%)** in Q3 2023 compared to Q3 2022, primarily driven by increased headcount-related costs from the Twilio IoT acquisition[150](index=150&type=chunk)[151](index=151&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA for Q3 2023 decreased to $14.2 million, with the nine-month period showing $41.7 million, reflecting adjustments for goodwill impairment and other non-cash items Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(95,361) | $(14,277) | $(133,350) | $(36,639) | | EBITDA | $(73,382) | $5,812 | $(62,996) | $19,819 | | Goodwill impairment | $78,255 | $— | $78,255 | $— | | **Adjusted EBITDA** | **$14,159** | **$15,112** | **$41,726** | **$47,178** | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) Total debt stood at $416.9 million as of September 30, 2023, with cash decreasing, followed by a major post-quarter refinancing on November 9, 2023, significantly altering the capital structure - As of September 30, 2023, the company's financing arrangements included a Senior Secured UBS Term Loan with a drawn amount of **$298.0 million** and Backstop Notes of **$117.8 million**[162](index=162&type=chunk) - On June 1, 2023, the company issued **10,000,000 shares** of common stock to Twilio, Inc. as purchase consideration for its IoT Business[177](index=177&type=chunk) - Net cash provided by operating activities for the nine months ended September 30, 2023, was **$4.5 million**, a significant decrease from **$20.5 million** in the same period of 2022, partly due to a **$9.1 million** increase in interest expense[179](index=179&type=chunk)[181](index=181&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) KORE, as a smaller reporting company, is exempt from providing quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide the information for this item[186](index=186&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of September 30, 2023, due to previously reported material weaknesses in internal control over financial reporting - The company's CEO and CFO concluded that disclosure controls and procedures were not effective as of September 30, 2023, due to previously reported material weaknesses in internal control over financial reporting[187](index=187&type=chunk) - There were no changes in the company's internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, its internal control[188](index=188&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is not a party to any material legal proceedings beyond routine litigation incidental to its business - As of the reporting date, the company is not involved in any material legal proceedings outside the ordinary course of business[191](index=191&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) Key risk factors include potential stock dilution from new financing, future goodwill impairment charges, interest rate risk on variable debt, and the risk of NYSE delisting due to minimum share price non-compliance - Future issuances of common stock, including from the new Series A-1 Preferred Stock financing and outstanding warrants, could cause market value to decline and result in dilution[193](index=193&type=chunk)[195](index=195&type=chunk) - The company may incur significant impairment charges for goodwill and/or long-lived assets in the future if macroeconomic or market conditions deteriorate, which would adversely affect operating results[196](index=196&type=chunk) - The company is subject to interest rate risk from its variable rate indebtedness, which could significantly increase debt service obligations[197](index=197&type=chunk) - The company is not in compliance with NYSE's minimum average share price requirement as of August 30, 2023, and its common stock may be delisted if compliance is not regained[198](index=198&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities, use of proceeds from registered securities, or issuer purchases of equity securities were reported during Q3 2023 - There were no unregistered sales of equity securities during the quarter ended September 30, 2023[200](index=200&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q3 2023 - During the quarter ended September 30, 2023, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement[205](index=205&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files

... .. . . 。 。 。 . . . Because of these limitations, EBITDA, Adjusted EBITDA and Adjusted EBITDA margin should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA, Adjusted EBITDA and Adjusted EBITDA margin on a supplemental basis. You should review the reconciliation of net loss to EBITDA, Adjusted EBITDA and Adjusted EBITDA margin below and not rely on an ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-40856 KORE Group Holdings, Inc. (Exact Name of Registrant as Specified in its Charter) __________________________ Delaw ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________ FORM 10-Q __________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-40856 KORE Group Holdings, Inc. (Exact Name of Regist ...

Economic Environment and Market Conditions - The company emphasizes that fluctuations in quarterly operating results may be pronounced in the current economic environment, advising against reliance on quarter-to-quarter comparisons for future performance [99]. - Revenue, results of operations, and cash flows are highly dependent on overall demand for the company's platforms and solutions, which may be negatively impacted by macroeconomic conditions such as inflation and rising interest rates [100]. - The company is focusing on the growth of the 5G market, which may take longer to materialize than expected, potentially delaying commercial milestones and affecting financial performance [104]. - The deployment of 5G technology is subject to risks such as equipment availability and regulatory delays, which could affect network performance and customer retention [126]. - The ongoing military conflict between Russia and Ukraine may trigger additional economic sanctions, potentially impacting supply chains and financial conditions [156]. Financial Performance and Results - For the year ended December 31, 2022, total revenue increased to $268.4 million, up 8.1% from $248.4 million in 2021 [321]. - The company reported a net loss of $106.2 million for 2022, compared to a net loss of $24.8 million in 2021, reflecting a significant increase in losses [323]. - Operating expenses rose to $224.8 million in 2022, up from $142.6 million in 2021, primarily due to a goodwill impairment of $58.1 million [321]. - Cash and cash equivalents decreased to $34.6 million as of December 31, 2022, down from $86.0 million in 2021 [316]. - The company’s accumulated deficit increased to $248.2 million in 2022 from $142.3 million in 2021, highlighting ongoing financial challenges [319]. - The company incurred net losses of $106.2 million in 2022 and has an accumulated deficit of $248.2 million as of December 31, 2022 [189]. Risks and Challenges - The company is facing challenges in supporting low latency and high throughput IoT use cases, which are critical for revenue growth and profitability [107]. - There are risks associated with the introduction of new products, including potential supply chain disruptions and competition from new entrants in the market [101]. - Cybersecurity threats pose a significant risk, with potential breaches affecting the integrity and availability of the company's systems and customer data [114]. - The company may face litigation that could adversely affect its financial condition and operations, including costs related to intellectual property disputes [120]. - The company faces risks related to rapid technological changes and must adapt to evolving industry standards to remain competitive [124]. - The company faces risks related to compliance with evolving privacy laws, which could require substantial costs to ensure compliance [165]. - Changes in U.S. and foreign tax rules may result in adverse tax consequences, affecting the company's financial condition [167]. - The company faces risks related to increased borrowing costs and liquidity problems if cash flows are insufficient to meet debt service obligations [176]. Customer and Revenue Concentration - The largest customer accounted for approximately 11% of total revenue for the year ended December 31, 2022, while the next largest customer contributed about 8% [121]. - Revenue from connectivity services built on cellular networks provided by the top three carrier relationships accounted for approximately 40% of the business for the year ended December 31, 2022 [154]. - The company actively seeks to sell additional solutions to existing customers, but a significant increase in churn rate could adversely affect revenue growth [127]. Investment and Growth Strategies - Significant investments are being made in 4G and 5G technologies, with the company aiming to develop leading and cost-effective products in these areas [106]. - Investment in new business strategies and acquisitions may lead to operational difficulties and financial risks, impacting overall business performance [132]. - The company made payments for acquisitions totaling $46,002,000 in 2022, indicating ongoing investment in growth through M&A [328]. Operational and Compliance Issues - The company has identified material weaknesses in its internal controls over financial reporting, which could impair its ability to produce accurate financial statements [181]. - The company is subject to examination by tax authorities, which could result in material differences from historical tax provisions and adversely affect financial statements [173]. - The company relies on a limited number of suppliers for critical components, and any disruption in the supply chain could adversely affect revenue and results of operations [155]. - The company is dependent on telecommunications carriers for IoT Connectivity Services, and disruptions in these relationships could significantly impact business [153]. Accounting and Financial Reporting - The company adopted new accounting standards for leases and cash conversion features effective January 1, 2022, which may impact future financial reporting [310][311]. - The Company recognizes revenue primarily from IoT Connectivity and IoT Solutions, with monthly recurring charges and usage charges forming the bulk of its revenue stream [345]. - The Company recognizes stock-based compensation as an expense over the requisite service period using the straight-line attribution method [374]. - The cumulative after-tax effect of adopting ASC 842 resulted in operating lease right-of-use assets of $9.278 million and total operating lease liabilities of $9.604 million as of January 1, 2022 [393].

Company Overview - KORE is building the world's first pure-play IoT enabler[18] - KORE has over 3,600 customers and 153 million connections[11, 60] - KORE's revenue visibility through 2022 is approximately 95%[11] Financial Performance - KORE's 2021 revenue was $248 million[152] - Q3 2022 revenue was $666 million, a decrease of 2% compared to September 30, 2021[72, 152] - KORE expects to exceed its $457 million revenue forecast for 2021-22 by $56 million+[61] - Adjusted EBITDA for the nine months ended September 30 was $471 million in 2022 and $470 million in 2021[5] Revenue Streams - IoT Connectivity accounted for 65% of revenue in both Q3 2022 and the nine months ended September 30, 2022[24, 72] - IoT Solutions accounted for 35% of revenue in Q3 2022 and the nine months ended September 30, 2022[24, 72] Market Positioning - KORE is positioned for growth in the IoT market, with a focus on industries representing over 80% of IoT spending[14, 63] - KORE's five focus industry sectors are growing fast[50]

Financial Data and Key Metrics Changes - Fourth quarter revenue was $62.4 million, a decline of 3% year-over-year, primarily due to significant revenue from the LTE transition project in the previous year and the impact of 2G/3G sunsets in the U.S. [5][10][12] - Adjusted EBITDA for the fourth quarter was $15.7 million, an increase of approximately 20% compared to the same period last year, with an adjusted EBITDA margin of 25.1% [9][101]. - Full year 2022 net loss was $105.4 million, which includes a goodwill impairment charge of $56.9 million [10][119]. Business Line Data and Key Metrics Changes - IoT connectivity revenue for the full year increased 4% to $175.9 million, while IoT solutions revenue increased 16.5% to $92.5 million [12][103]. - In the fourth quarter, IoT solutions revenue declined 11% year-over-year to $18.7 million, largely due to the previous year's LTE transition project revenue [103]. - Dollar-based net expansion rate (DBNER) for the 12 months ended December 31, 2022, was 92%, down from 122% in the prior year [8]. Market Data and Key Metrics Changes - The company noted that approximately 60% of total revenue is derived from connected health, which is the largest industry vertical [15]. - The company expects to expand its presence in other targeted industry verticals to increase total addressable market (TAM) and drive further growth [15]. Company Strategy and Development Direction - The acquisition of Twilio's IoT business is expected to enhance KORE's eSIM leadership position and expand its deploy, manage, and scale value proposition [97][112]. - The company aims to be one of the few large IoT hyperscalers following market consolidation, leveraging Twilio's capabilities to optimize customer acquisition costs [112][114]. - KORE is focusing on building preconfigured solutions and expanding its offerings in analytics and massive IoT edge computing [86][112]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the revenue and adjusted EBITDA guidance for 2023, projecting revenue in the range of $300 million to $310 million despite headwinds from 2G/3G sunsets and the LTE transition project [116]. - The company anticipates that the worst is behind them and expects organic growth in the mid to high single digits for 2023 [48][116]. - Management acknowledged the impact of macroeconomic conditions on sales cycles, noting a shift towards cost optimization and efficiency-oriented opportunities [18]. Other Important Information - The company reported a significant increase in operating expenses due to a non-cash goodwill impairment charge and other operational costs associated with being a public company [10][104]. - Cash and cash equivalents at the end of Q4 2022 were $35 million, down from $86.3 million at the end of Q4 2021, primarily due to slower collections [105]. Q&A Session Summary Question: Could you give some color on the sales cycle? - Management noted a shift in customer focus from top-line growth to cost optimization and efficiency due to macroeconomic concerns, but expressed confidence in their business model's resilience [18]. Question: How could the supply chain loosening help gross margin and revenue growth this year? - Management indicated that while there are signs of supply chain improvement, challenges remain, and they expect gradual recovery over the next 12 to 18 months [19]. Question: Are there metrics to discuss regarding gross margins and customer installations within the Twilio base? - Management highlighted the strategic fit of the Twilio acquisition and its potential to enhance KORE's offerings, but refrained from disclosing specific metrics until the deal closes [22]. Question: What is the outlook for 2023 revenue guidance? - Management provided guidance of $300 million to $310 million for 2023, factoring in the expected contributions from the Twilio acquisition [116]. Question: How do you feel about the overall trajectory in the pace of IoT deployment? - Management expressed optimism about normalized growth rates and the potential for market share gains, despite the challenges faced [52].

Financial Performance - Q3 2022 - Total revenue decreased by 2% to $66.6 million compared to $67.9 million in Q3 2021[16] - IoT Connectivity revenue increased by 4% to $43.4 million compared to $41.5 million in Q3 2021[16] - IoT Solutions revenue decreased by 12% to $23.3 million compared to $26.3 million in Q3 2021[16] - Gross margin increased by 500 bps to 53% compared to 48% in Q3 2021[16] - Net loss was $13.0 million, or $0.17 per share, compared to a net loss of $4.5 million, or $0.26 per share in Q3 2021[16] - Adjusted EBITDA decreased by 2% to $15.6 million compared to $15.9 million in Q3 2021[16] - Adjusted EBITDA margin was flat at 23.4% compared to Q3 2021[16] Financial Outlook - 2022 - The company increased its 2022 revenue outlook to $265-$267 million, despite a $5 million F/X headwind[16] - The company's two-year stack revenue for 2021-22 is forecast at $513-$515 million compared to the forecast of $457 million provided in the 'go public' model[16] - Adjusted EBITDA for 2022 is projected to be $63-$64 million, representing approximately a 24% margin[16] Business Highlights - KORE formed a strategic partnership with Ericsson to provide connectivity in the U S for over 8,500 Ericsson enterprise customers[14] - KORE launched KORE Connected Hub for Connected Health to streamline the integration of medical devices and sensors[14] - KORE was named a 2022 Competitive Strategy Leader by Frost & Sullivan[14]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________ FORM 10-Q __________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-40856 KORE Group Holdings, Inc. (Exact Name of Re ...

Financial Data and Key Metrics Changes - The second quarter revenue was $70.4 million, up 16% year-over-year from $60.7 million in Q2 2021 [11][38] - IoT solutions revenue increased by 47% year-over-year to $25.7 million [11][39] - The dollar-based net expansion rate (DBNER) for Q2 was 114%, up from 113% in the prior year [42] - Total gross margin was 52%, flat year-over-year, while IoT connectivity gross margin increased by six percentage points to 65% [40] - The net loss for Q2 was $11.1 million compared to $6.9 million in the same period last year [45] Business Line Data and Key Metrics Changes - IoT connectivity revenue increased by 3% year-over-year to $44.7 million despite revenue pressures from foreign exchange and LTE pricing transitions [39] - The fleet vertical currently accounts for approximately $50 million in annual revenue, with a target to grow to $75 million by 2025 and an internal stretch target of $150 million [35][36] Market Data and Key Metrics Changes - The fleet management market is projected to grow to $750 billion by 2030, with video analytics expected to grow at a CAGR of 17% over the next three years [27] - The usage-based insurance market surpassed $30 billion in 2020 and is projected to grow at a 20% CAGR through 2027 [28] Company Strategy and Development Direction - KORE aims to simplify IoT complexities through a one-stop shop approach, focusing on deploying, managing, and scaling IoT solutions [18][19] - The company is increasingly going to market by industry verticals, having launched Connected Health and Fleet as the first two of five target verticals [24][23] - KORE is investing in developing its partner ecosystem, having integrated with over 400 partners [36] Management's Comments on Operating Environment and Future Outlook - Management expects a sequential decline in revenue for Q3 and H2 2022 due to the completion of the LTE transition project with the largest customer [12][38] - Despite anticipated headwinds, the company expects to exceed its two-year public revenue forecast for 2021-2022 by over $50 million [13][50] - Management remains confident about future growth, particularly in IoT connectivity, as the company transitions away from 2G and 3G SIMs [86][88] Other Important Information - KORE generated $14.7 million from operations in Q2 2022, a significant improvement from a cash use of $2 million in the same period last year [46] - Cash and cash equivalents at the end of Q2 were $40.8 million, down from $86 million at the end of 2021, primarily due to financing the BMP and Simon acquisitions [47] Q&A Session Summary Question: Can you break down the revenue beat in terms of contributing factors? - Management indicated that the acquisition contributed mid-high 20s to revenue, with the rest attributed to organic execution, particularly in ARPU stability [61][62] Question: How does the geographic distribution of the 100 million telematics units align with KORE's market access? - Management confirmed that the 100 million telematics units are currently available, with about 15% pre-configured for connectivity, and noted that most accessible markets include North America and Europe [66][67] Question: What is the contribution of the fleet vertical as a percentage of revenue? - The fleet vertical contributes approximately $50 million, which is about 17-18% of total revenue [99] Question: How is inflation and higher gas prices impacting the fleet vertical? - Management noted an uptick in interest for fuel optimization solutions among fleet customers, indicating resilience in demand despite economic pressures [100][101] Question: What are the expectations for gross margins in the second half of the year? - Management expects gross margins for IoT connectivity to remain stable around 65%, while IoT solutions margins are anticipated to improve gradually [103][104]