Inseego (US:INSG)2026-02-20 01:07Financial Performance - Total revenues for the year ended December 31, 2025 were $166.2 million, a decrease of $25.1 million, or 13.1%, compared to 2024 [217]. - Mobile solutions revenues decreased by $31.0 million, or 31.3%, primarily due to decreased sales with a carrier partner [217]. - Fixed wireless access solutions revenues increased by $2.1 million, or 4.4%, due to increased sales of current generation products [218]. - Gross profit for 2025 was $71.0 million, with a gross margin of 42.7%, compared to $68.8 million and 36.0% in 2024 [222]. - Total cost of revenues for 2025 was $95.2 million, or 57.3% of revenues, down from $122.4 million, or 64.0% in 2024 [219]. - Research and development expenses for 2025 were $19.8 million, or 11.9% of revenues, compared to $20.6 million, or 10.8% in 2024 [224]. - Sales and marketing expenses increased to $17.4 million, or 10.5% of revenues, from $16.0 million, or 8.3% in 2024 [225]. - General and administrative expenses rose to $20.8 million, or 12.5% of revenues, compared to $17.2 million, or 9.0% in 2024 [226]. - The company's net cash provided by operating activities for the year ended December 31, 2025 was $7.2 million, a decrease from $33.5 million in 2024 [243]. - The company reported a net cash outflow of $8.6 million in investing activities for the year ended December 31, 2025, primarily related to software development [247]. - The company incurred a net loss from continuing operations of $14.4 million in 2024, which was offset by non-cash charges [246]. - The company has a history of operating and net losses, impacting its ability to maintain profitable operations [241]. Liquidity and Capital Resources - As of December 31, 2025, the company had cash and cash equivalents totaling $24.9 million and positive working capital of $15.6 million [235]. - The company entered into a $15.0 million secured asset-backed revolving credit facility on August 5, 2025, maturing on August 5, 2028 [236]. - As of December 31, 2025, the company had $14.5 million available to borrow under the Working Capital Facility, with no outstanding borrowings [238]. - The company had a principal balance of $40.9 million in outstanding borrowings under the 2029 Senior Secured Notes as of December 31, 2025 [256]. - Future payments under non-cancellable purchase obligations as of December 31, 2025 were approximately $101.2 million [244]. - The company repaid the remaining $14.9 million principal balance of the 2025 Convertible Notes during the year ended December 31, 2025 [249]. Business Operations and Strategy - The company repurchased 25,000 shares of Preferred Stock with a liquidation value of $42 million for approximately $26 million, representing a 38% discount [194]. - The company exchanged $146.9 million of outstanding principal of the 2025 Convertible Notes for $33.8 million in cash and 2.9 million shares of common stock, significantly improving liquidity [196]. - The company divested its Telematics Business for approximately $52 million in cash, focusing on its core 5G wireless solutions business [198]. - The company’s mobile broadband devices, sold under the MiFi brand, are actively used by millions of end users, indicating strong market penetration [201]. - The company’s fixed wireless access solutions are deployed by enterprise and SMB customers, enhancing its market presence in corporate managed wireless solutions [202]. - A substantial majority of software services revenue comes from the SaaS CSP wireless subscriber lifecycle management solution, indicating a strong recurring revenue stream [203]. Market and Economic Factors - The company’s future revenues may be influenced by the availability of materials and components used in hardware products, highlighting supply chain risks [204]. - The company’s operating results are affected by macroeconomic factors, including inflation and consumer spending confidence, which could impact revenue and profit margins [212]. - The company faces competition in the area of 5G technology and must adapt to changes in technologies to maintain market relevance [213]. - A worldwide shortage of memory chips could impact operations if adequate supply cannot be secured, potentially affecting product pricing and margins [214]. - For the fiscal year ended December 31, 2025, sales denominated in foreign currencies were approximately 0.9% of total revenue [260]. - A hypothetical 10% change in foreign currencies would have increased or decreased the company's revenue by approximately $0.1 million [260].