Inseego (US:INSG)2020-03-12 03:20Financial Data and Key Metrics Changes - In 2019, consolidated revenue exceeded $219 million, an increase of 8.4% compared to 2018, despite foreign exchange headwinds and changes in subsidies [6][36] - Q4 revenue was $52.3 million, with IoT & Mobile Solutions generating over $154 million in total revenue, up 14% year-over-year [7][36] - The Enterprise SaaS business generated $65.3 million in Q4, a decrease of 3% from 2018, but showed a 3% increase on a constant currency basis [38] Business Line Data and Key Metrics Changes - The IoT & Mobile Solutions business saw a revenue increase of 14% year-over-year, while the Enterprise SaaS business had a slight decline of 3% [7][38] - Ctrack's unit bookings improved significantly across various regions, with South Africa up 39%, Australia and New Zealand up 60%, Germany up 63%, UK up 36%, and Benelux up 4% [18] Market Data and Key Metrics Changes - The fixed wireless access market is expected to grow significantly in the second half of 2020, with 60% of all 5G launches to date being for fixed wireless access [12] - The mobile broadband market for 5G hotspots is anticipated to grow due to increased demand from customers [13] Company Strategy and Development Direction - The company is focused on converting 5G product agreements into successful commercial launches and is engaged in 20 trials with mobile network operators worldwide [10][11] - Inseego aims to deepen relationships within the U.S. government to enhance visibility of its 5G technology and contribute to the national 5G strategy [26][28] Management's Comments on Operating Environment and Future Outlook - Management noted a gradual recovery of the supply chain in Asia from the coronavirus, with minimal disruptions experienced [52] - The company expects growth mainly in the second half of 2020 driven by recent 5G wins, reaffirming that the first half would be flat compared to Q4 [48] Other Important Information - A $25 million investment from Mubadala Capital was announced, strengthening the company's balance sheet and providing additional liquidity [8][35] - The company has taken actions to reduce debt and eliminate near-term debt maturities, which will improve cash flow [33][35] Q&A Session Summary Question: How quickly could you ramp up the product due to increased demand from work-from-home? - Management is assessing the situation in real-time with Foxconn to understand supply capabilities and timelines [59][60] Question: Can you discuss profitability targets with the increased investments for 5G? - The recent capital raise is expected to lead to cash flow positivity [61] Question: What is the outlook for gross margins? - Management expects continued upticks in gross margins, with a normalized starting point around 19% [70][72] Question: How many signed deals with operators at the end of the year? - The company signed 5G product agreements exceeding their target, but specific numbers were not disclosed [79] Question: Can you discuss the trials with mobile operators? - The trials include a mix of fixed wireless and mobile products, with 20 operators representing approximately 650 to 700 million subscribers [87][88] Question: How is the demand for teleworkers impacting product orders? - The current demand is primarily for 4G products, but there is potential for increased 5G orders later [104][105] Question: How is the launch of FirstNet going? - The launch is ramping up, with ongoing education efforts with carrier partners [118] Question: How does the company differentiate its products in the market? - The company emphasizes high performance, reliability, and secure connections as key differentiators [123][126]