KORE(US:KORE)2026-03-30 22:34Revenue Performance - Total revenue for the year ended December 31, 2025, was $285.9 million, a slight decrease of $142, or less than 1%, compared to $286.1 million in 2024[197]. - Revenue from IoT Connectivity services decreased by approximately $2.9 million, or 1%, to $224.0 million in 2025, primarily due to transitioning operations in Connectivity Enablement-as-a-Service (CEaaS)[199]. - Revenue from IoT Solutions increased by approximately $2.7 million, or 5%, to $62.0 million in 2025, driven by additional volume from key customers[200]. - Total revenue from IoT Connectivity was $224.0 million in 2025, slightly down from $226.9 million in 2024, with a gross margin of 39.5%[228]. - IoT Solutions revenue increased to $61.9 million in 2025 from $59.2 million in 2024, with a gross margin improvement to 32.1%[229]. Cost and Expenses - Cost of revenue for the year ended December 31, 2025, was $128.0 million, an increase of $1.9 million, or 1%, compared to $126.2 million in 2024[202]. - Selling, general, and administrative (SG&A) expenses decreased by approximately $24.5 million, or 17%, to $115.5 million in 2025, primarily due to restructuring events and reduced compensation-related expenses[205]. - Other (income) expense, net decreased by $6.0 million to $(4.2) million in 2025, representing a year-over-year decrease of 324%[209]. - Integration-related restructuring costs for 2025 were primarily related to severance and office lease terminations, totaling $19.8 million[219]. Profitability and Cash Flow - EBITDA for 2025 was $43.1 million, compared to $(44.4) million in 2024, indicating a significant improvement[219]. - Adjusted EBITDA increased to $63.3 million in 2025 from $53.1 million in 2024, reflecting a positive trend in operational performance[219]. - Free cash flow improved to $8.9 million in 2025 from $(3.5) million in 2024, indicating better liquidity[222]. - Non-GAAP Profit for 2025 was $159.3 million, down from $161.1 million in 2024, with a Non-GAAP Margin of 55.7%[228]. Tax and Goodwill - The company recorded an income tax recovery of $3.6 million for the year ended December 31, 2025, due to the impact of the One Big Beautiful Bill Act (OBBBA)[187]. - Income tax benefit decreased by approximately $4.4 million to $(1.6) million in 2025, with an effective tax rate decrease of 2% to 2.4%[214]. - Goodwill impairment was $0 for the year ended December 31, 2025, compared to $65.9 million in 2024, marking a year-over-year decrease of 100%[207]. - The company completed its annual goodwill impairment test on October 1, 2025, and determined there was no goodwill impairment[274]. Debt and Liquidity - Total long-term debt as of December 31, 2025, was approximately $295.2 million, slightly down from $295.7 million in 2024[244]. - Cash on hand as of December 31, 2025, was approximately $26.7 million, with an additional $25.0 million available on the Revolving Credit Facility[242]. - The accrued and unpaid dividends on Series A-1 Preferred Stock as of December 31, 2025, amounted to $47.9 million, compared to $23.8 million in 2024, showing an increase of approximately 101.68%[260]. - The Total Net Leverage Ratio is set to decrease to 5.25:1.00 for periods ended December 31, 2025, and thereafter, down from 6.25:1.00 for earlier periods[249]. - The Company was in compliance with all financial covenants as of December 31, 2025, for both the Credit Facilities and Backstop Notes[250][255]. Operational Metrics - Total Number of Connections increased to 20.9 million as of December 31, 2025, up from 19.7 million in 2024, representing a growth of approximately 6.09%[233]. - Average Connections Count for the year ended December 31, 2025, was 20.3 million, compared to 18.7 million in 2024, indicating a year-over-year increase of about 8.55%[233]. - Estimated Annual Recurring Revenue (eARR) from the sales funnel was approximately $87 million as of December 31, 2025[235]. - Average Revenue per User (ARPU) decreased to $0.93 for the three months ended December 31, 2025, down from $0.97 in 2024, reflecting a decline of about 4.12%[239]. Mergers and Acquisitions - The company entered into a merger agreement on February 26, 2026, with KONA Parent, with each share of common stock to be converted into cash of $9.25 per share[188]. - The closing of the merger transaction is expected during the second or third quarter of 2026, subject to various approvals[193]. Cash Flow Activities - Cash provided by operating activities for the year ended December 31, 2025, increased to $18,487,000 from $9,123,000 in 2024, primarily due to a lower net loss and changes in non-cash adjustments[263][264]. - Cash used in investing activities decreased to $9,590,000 in 2025 from $12,672,000 in 2024, mainly due to lower additions to intangible assets[263][265]. - Cash used in financing activities decreased to $2,068,000 in 2025 from $3,782,000 in 2024, primarily due to reduced share repurchases and lower payments of employee tax withholding related to equity awards[263][266]. Other Considerations - The Company deferred payment of preferred dividends on Series A-1 preferred stock in both 2025 and 2024, as permitted under the terms of the shares[240]. - The company had a total of $71.1 million in purchase commitments payable that were not recorded as liabilities on the consolidated balance sheet as of December 31, 2025[267]. - The company’s revenue is primarily derived from IoT Connectivity and IoT Solutions, recognized under ASC 606[284][285]. - The company had significant judgments and estimates regarding income taxes, which could materially impact financial statements[279][280].