Inseego (US:INSG)2023-03-01 23:33Financial Data and Key Metrics Changes - Q4 revenue was $52.9 million, down 27% from the prior year, primarily due to lower sales of legacy hotspot products [36] - Non-GAAP net loss for Q4 was $11.8 million or $0.11 per share, consistent with the prior quarter and a loss of $0.08 per share in the year-ago quarter [38] - Consolidated gross margin improved to 30.3%, up 390 basis points from Q3 and 490 basis points from Q4 last year [61] Business Line Data and Key Metrics Changes - The FWA business now accounts for 30% of total revenue, growing 122% year-over-year [36][26] - Enterprise SaaS solutions revenue was $6.6 million, relatively flat both sequentially and year-over-year [22] - The hotspot business represented approximately 6% of overall revenue, down from 38% a year ago [72] Market Data and Key Metrics Changes - The company has exited several international markets where 5G service offerings have not developed quickly enough, such as Japan [14][7] - The enterprise FWA market is gradually evolving, with significant interest from large enterprise customers [13][19] Company Strategy and Development Direction - The company is focused on transforming into an enterprise fixed wireless access company, with a strong emphasis on cost reduction and efficiency [26][28] - Management is prioritizing high-margin enterprise opportunities and reducing reliance on lower-margin hotspot products [29][31] - The company expects to reach cash flow positive by Q2 2023, driven by growth in high-margin enterprise business and cost actions [30][40] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that the enterprise FWA market is still in its early stages but is seeing positive signs of growth and customer adoption [71][59] - The company anticipates seasonal trends in revenue, with a slight decline expected from Q4 to Q1 before ramping up in the latter half of the year [41][42] - Management remains cautious about the pace of transition from 4G to 5G products among carrier partners [66] Other Important Information - The company has eliminated approximately $32 million in annualized cash spend from its cost structure as it enters 2023 [15] - Cash, cash equivalents, and restricted cash at the end of Q4 were $7.1 million, impacted by year-end payroll and one-time expenses [64] Q&A Session Summary Question: What is the visibility on carriers becoming more aggressive in pushing 5G fixed wireless access? - Management noted that there has been progress in coverage from all three carriers, and large enterprise customers are expanding their pilot programs [45] Question: What does normalized OpEx look like going forward? - Management indicated that Q4 OpEx was below $22 million and expects it to be around $17 million by Q2, with significant cost reductions implemented [48][73] Question: Can you provide commentary on backlog and order trends? - Management stated that the health of the pipeline for FWA business is strong, with variability in the business due to the transition from 4G to 5G [52] Question: What is the expected growth for the FWA business in the next 12 to 18 months? - Management anticipates that FWA could represent 60% to 70% of revenue in the next 12 to 18 months, with growth across various verticals [91]