Inseego (NasdaqGS:INSG) Q4 2025 Earnings call February 19, 2026 05:00 PM ET Company ParticipantsJuho Sarvikas - CEOSteven Gatoff - CFOConference Call ParticipantsChristian Schwab - AnalystLance Vitanza - AnalystScott Searle - AnalystTyler Burmeister - AnalystOperatorHello, and welcome to Inseego Corp.'s fourth quarter 2025 financial results conference call. Please note that today's event is being recorded. All participants today will be in a listen-only mode. Should you need assistance, please signal a conf ...

Financial Data and Key Metrics Changes - In Q4 2025, the company generated revenue of $48.4 million and Adjusted EBITDA of $6 million, both exceeding guidance and marking the third consecutive quarter of sequential growth in each metric [3][24] - For the full year 2025, total revenue was $166.2 million, reflecting sequential quarterly momentum throughout the year [24][25] - Non-GAAP gross margin in Q4 2025 was 43%, up 75 basis points sequentially, and for the full year, it was also 43%, the highest level in over a decade [25][26] - Adjusted EBITDA for the full year 2025 was $20.1 million, representing a 12.1% margin [26] Business Line Data and Key Metrics Changes - Mobile revenue in Q4 2025 increased 27% sequentially to $20.4 million, representing approximately 40% of total company revenue [8][24] - Fixed Wireless Access (FWA) revenue was up 50% year-over-year in Q4, driven by a diversified carrier customer base and solid channel activity [24] - Software services revenue was $12 million in Q4, providing a stable, high-margin contribution [24] Market Data and Key Metrics Changes - The company expanded its Tier 1 carrier footprint for FWA, securing awards with AT&T and Verizon, marking a significant inflection point for the business [7][8] - Industry forecasts project North America Enterprise FWA service revenue to grow at a 37% compound annual rate through 2030, expanding from roughly $2 billion to more than $11 billion [15][16] Company Strategy and Development Direction - The company is focused on building an enterprise wireless broadband platform that combines cellular-first connectivity with intelligence, manageability, and scalability [4] - Five strategic priorities include scaling carrier revenue, evolving into a solutions company, expanding customer base, maintaining financial discipline, and building a world-class management team [5][19] - The company plans to introduce four new products in the first half of 2026, including new MiFi products and an entry-tier enterprise FWA offering [17][18] Management's Comments on Operating Environment and Future Outlook - The management expressed optimism for 2026, highlighting a strong market backdrop with increasing enterprise demand for resilience and always-on connectivity [15][16] - The company anticipates a front-loaded year in 2026 with multiple carrier launches and product introductions in Q1 [19][22] - Management acknowledged challenges in Q1 due to engineering delays and inventory adjustments but remains confident in the overall growth trajectory [21][30] Other Important Information - The company retired all preferred stock at a significant discount, enhancing long-term flexibility and stockholder value [3][28][29] - The management team has been strengthened, adding depth across various operational areas to support future growth [14] Q&A Session Summary Question: Can you elaborate on the memory market dynamics and its impact? - Management indicated they have secured supply and do not foresee significant impacts on deployments, having locked in modest price increases for products [20][38] Question: What is the visibility on the 2026 guidance and expected EBITDA margins? - Management expects Q2 to ramp significantly, with EBITDA margins improving in the second half of the year [39][40] Question: How does the competitive landscape look for mobile hotspots in 2026? - Management is optimistic about consolidating market share with all three major carriers launching new mobile products [41][43] Question: Will the FWA side of the business contribute more to growth in 2026? - Both mobile and FWA are expected to grow, with FWA likely having a larger contribution due to portfolio expansion [49][51] Question: What are the expectations for MSO and distribution channel contributions? - Management anticipates meaningful contributions from MSOs and VARs as discussions progress throughout the year [53][54] Question: Is there potential for software revenue growth with new customers? - Management sees opportunities for expanding software services, particularly in government sectors [61][62] Question: How will having Verizon back in the fold affect visibility? - Management believes having all three carriers will provide reasonable expectations for growth, though initial growth rates may vary [70][72] Question: Can the company sustain double-digit revenue growth in the coming years? - Management is confident in sustaining double-digit growth, especially as new products and carrier partnerships ramp up [76][79]

Financial Data and Key Metrics Changes - In Q4 2025, the company generated revenue of $48.4 million and adjusted EBITDA of $6 million, both exceeding guidance and marking the third consecutive quarter of sequential growth in each metric [3][24] - For the full year 2025, total revenue was $166.2 million, reflecting sequential quarterly momentum throughout the year [24][25] - Non-GAAP gross margin in Q4 2025 was 43%, up 75 basis points sequentially, and for the full year 2025, it was also 43%, the highest level in over a decade [25][26] Business Line Data and Key Metrics Changes - Mobile revenue in Q4 2025 increased 27% sequentially to $20.4 million, representing approximately 40% of total company revenue [8][24] - Fixed Wireless Access (FWA) revenue in Q4 was up 50% year-over-year, driven by a diversified carrier customer base and solid channel activity, despite a sequential decline from Q3 2025 [24][25] - Software services revenue was $12 million in Q4, providing a stable, high-margin contribution [24] Market Data and Key Metrics Changes - The company expanded its tier one carrier footprint for FWA by securing awards with AT&T and Verizon, marking a significant milestone as all three U.S. tier one carriers now support Inseego's enterprise FWA offerings [6][7] - Industry forecasts project North America Enterprise FWA service revenue to grow at a 37% compound annual rate through 2030, expanding from roughly $2 billion to more than $11 billion [15] Company Strategy and Development Direction - The company is focused on building an enterprise wireless broadband platform that combines cellular-first connectivity with intelligence, manageability, and scalability [4] - Five strategic priorities include scaling carrier revenue, evolving into a solutions company, expanding customer base, maintaining financial discipline, and building a world-class management team [4][5] - The company plans to introduce four new products in the first half of 2026, including new MiFi products and an entry-tier enterprise FWA offering [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, highlighting a stronger market backdrop and increased enterprise prioritization of resilience and connectivity [15][16] - The company anticipates a front-loaded year with multiple carrier launches and product introductions in Q1 2026 [17] - Management noted that Q1 2026 is expected to be a transition quarter with lower sequential revenue due to engineering delays and inventory adjustments from a tier-one carrier [20][21] Other Important Information - The company retired all preferred stock at a 38% discount, enhancing long-term flexibility and stockholder value [27][28][29] - The balance sheet ended Q4 with $24.9 million in cash and a manageable debt balance of $41 million, approximately 2x LTM adjusted EBITDA [27] Q&A Session Summary Question: Memory market dynamics and impact on operations - Management indicated they are well-prepared for the memory market dynamics and have secured supply for the first half of the year [39][40] Question: 2026 guidance and revenue ramp - Management confirmed expectations for significant revenue growth in 2026, with Q2 expected to ramp up following a lighter Q1 [41][42] Question: Competitive landscape and product portfolio - Management highlighted the importance of having all three major carriers launching new mobile products and discussed the expansion of the product portfolio to include entry-level enterprise-grade routers [43][46] Question: Contributions from MSOs and distribution channels - Management expressed optimism about discussions with MSOs and the potential for significant contributions from VARs and MSPs in the long term [55][56] Question: Software business and customer expansion - Management noted the potential for expanding software services with new customers and highlighted the unique features of their subscriber lifecycle management platform [61][62] Question: Industry focus on enterprise FWA - Management discussed the favorable dynamics for enterprise FWA driven by higher ARPU and the shift in carrier focus towards enterprise solutions [64][66] Question: Variability of results with Verizon's involvement - Management stated that while visibility may vary, they have reasonable expectations for growth with Verizon back in the mix [71][73] Question: Long-term revenue growth sustainability - Management affirmed confidence in sustaining double-digit revenue growth over the next several years, driven by new product introductions and a diversified customer base [79][80]