Inseego (US:INSG)2025-11-07 01:24Revenue Performance - Revenues for Q3 2025 were $45.9 million, a decrease of 15.1% from $54.0 million in Q3 2024[131] - Revenues for the nine months ended September 30, 2025 were $117.8 million, down 17.7% from $143.2 million in the same period in 2024[148] - Mobile solutions revenues decreased by $25.9 million, or 35.3%, primarily due to decreased sales with a carrier partner[148] Cost and Expenses - Cost of revenues for Q3 2025 was $26.8 million, or 58.4% of revenues, down from 65.2% in Q3 2024[133] - Cost of revenues for the nine months ended September 30, 2025 was $67.2 million, or 57.1% of revenues, down from $92.3 million, or 64.5% of revenues in 2024[150] - Operating costs and expenses totaled $16.9 million, a decrease of 4.8% from $17.8 million in Q3 2024[136] - Research and development expenses were $4.9 million, representing 10.6% of revenues, down from 9.6% in Q3 2024[136] - Research and development expenses for the nine months ended September 30, 2025 were $14.2 million, or 12.1% of revenues, down from $15.0 million, or 10.5% in 2024[155] - Sales and marketing expenses for Q3 2025 were $4.2 million, or 9.1% of revenues, up from $4.1 million, or 7.6% of revenues in Q3 2024[137] - General and administrative expenses for Q3 2025 were $5.7 million, or 12.4% of revenues, compared to $4.8 million, or 8.9% of revenues in Q3 2024[138] Profitability - Gross profit for Q3 2025 was $19.1 million, with a gross margin of 41.6%, up from 34.8% in Q3 2024[136] - Gross profit for the nine months ended September 30, 2025 was $50.6 million, with a gross margin of 42.9%, compared to $50.9 million and 35.5% in 2024[153] - The Company recorded a net loss from continuing operations of $0.8 million for the nine months ended September 30, 2025[178] Cash Flow and Financing - The Company experienced negative cash outflows from operations of $4.8 million for the nine months ended September 30, 2025, primarily due to timing of cash receipts and annual bonus payouts[167] - For the nine months ended September 30, 2025, net cash used in operating activities was $4.8 million, compared to net cash provided of $47.7 million for the same period in 2024[177] - Net cash used in investing activities for the nine months ended September 30, 2025, was $5.7 million, primarily related to software development[180] - As of September 30, 2025, the Company had available cash and cash equivalents totaling $14.6 million and positive working capital of $13.1 million[167] - The Company entered into a $15.0 million secured asset-backed revolving credit facility with BMO Bank N.A., maturing on August 5, 2028, and was in compliance with all covenants as of September 30, 2025[168] - Outstanding borrowings under the 2029 Senior Secured Notes were $40.9 million as of September 30, 2025, maturing on May 1, 2029[172] Strategic Actions - The Company divested its Telematics Business for approximately $52 million in cash to focus on its core 5G wireless solutions[121][122] - The Company aims to streamline its focus on growth opportunities around its core product offerings following the divestiture[122] - A hypothetical 10% change in foreign currencies would have impacted revenue by less than $0.1 million for the nine months ended September 30, 2025[188] Other Financial Metrics - Interest expense for the nine months ended September 30, 2025 decreased by $6.8 million, or 70.6%, compared to the same period in 2024[159] - Income (loss) from discontinued operations for the nine months ended September 30, 2025 was $(0.4) million, compared to $3.0 million in 2024 due to the sale of the Telematics Business[164] - Preferred stock dividends for the nine months ended September 30, 2025 were $2.7 million, up from $2.4 million in 2024[165] - Future payments under non-cancellable purchase obligations of approximately $110.2 million as of September 30, 2025[176] - Interest on loans under the Working Capital Facility is based on the Term Secured Overnight Financing Rate plus a margin of 1.00-2.50%[170]