Inseego (US:INSG)2020-05-07 02:32Financial Data and Key Metrics Changes - Inseego reported Q1 revenue of $56.8 million, up 17% year-over-year and 9% sequentially from Q4 [22][8] - The company achieved positive operating cash flow in Q1, marking a significant milestone [30] - Non-GAAP net loss for Q1 was $5.7 million or $0.06 per share, an improvement from a loss of $8 million or $0.10 per share in the previous quarter [29] Business Line Data and Key Metrics Changes - IoT and mobile revenue reached $40.4 million, up 23% year-over-year and 14% sequentially, driven by increased demand for 4G and 5G products [22][24] - Enterprise SaaS Solutions revenue was $16.5 million, approximately 4% growth compared to the same period last year [23] - Gross margin for IoT and mobile business was 19.4%, up 4.4 points sequentially [24] Market Data and Key Metrics Changes - The demand for mobile hotspots surged due to the work-from-home trend, with significant increases noted in March [22][12] - The company is experiencing a rolling demand for its products, indicating sustained interest beyond initial spikes [48] Company Strategy and Development Direction - Inseego is focusing on expanding its relationships with U.S. government entities to enhance its position as a supplier for secure 5G networks [20] - The company plans to launch five mobile hotspot and three fixed wireless 5G products with six carriers globally in the second half of the year [17] - A strategic shift has been made to strengthen the supply chain by partnering with Foxconn for manufacturing and logistics [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the sustainability of demand, indicating that the current surge is likely to plateau at a higher level [48] - The company anticipates Q2 revenue in the range of $75 million to $85 million, reflecting continued strong demand [10][31] - Management highlighted the importance of remote work and telehealth trends as long-term drivers for their business [12][13] Other Important Information - The company has successfully converted $60 million of senior convertible notes into equity, significantly reducing debt and cash interest expenses [23] - Inseego's gross margins are expected to improve further as the product mix shifts towards higher-margin 5G products [25] Q&A Session Summary Question: Supply chain support for guidance - Management confirmed that there are no supply limitations currently, with Foxconn effectively managing production and procurement [39] Question: Demand sustainability - Management indicated that the demand surge is expected to continue throughout 2020, with orders rolling in consistently [48] Question: Gross margin expectations - Management expects gross margins to improve as new 5G products are launched, with a target of approaching 30% by year-end [71] Question: Strength in Ctrack business - Management attributed the growth in South Africa to turnaround efforts and improved product-market fit [50] Question: Free cash flow expectations - Management expects the cash on hand to last until the company reaches free cash flow positivity [88]