Inseego (US:INSG)2019-11-07 08:12Financial Data and Key Metrics Changes - Inseego recorded the highest revenue quarter in recent history at $62.7 million, representing a 24% year-over-year increase and a 12% sequential increase [8][24] - Non-GAAP net loss was $3.1 million, with a non-GAAP loss per share of $0.04 and positive adjusted EBITDA of $4.4 million [30] - Total non-GAAP gross margin was 30.8%, up 1.1 points sequentially [27] Business Line Data and Key Metrics Changes - IoT and mobile solutions revenue was $45.9 million, up almost 33% year-over-year and 15% sequentially, driven by the strength of the 4G LTE portfolio and initial sales of 5G devices [24] - Enterprise SaaS solutions revenue was $16.8 million, up 5% year-over-year and 5.5% sequentially, reflecting positive actions taken in South Africa and Australia [24][20] Market Data and Key Metrics Changes - The company is seeing strong demand for its 4G products, with successful launches such as the FirstNet-certified USB800 modem with AT&T [10] - In the enterprise SaaS segment, Australian bookings were up 45% year-to-date and South African bookings were up 54% [20] Company Strategy and Development Direction - The company is focused on leveraging its first-mover advantage in 5G technology, with expectations of significant revenue and cash flow generation starting in mid-2020 [8][12] - Inseego aims to strengthen its balance sheet through non-dilutive options and is evaluating the optimal path forward [9][25] - The company is expanding its industrial IoT portfolio and has established strategic partnerships in the SD WAN market [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in 5G prospects and anticipates 20% to 25% revenue growth in 2020 [12][32] - The management team acknowledged a recent disappointment due to a promotional change by Verizon affecting the 4G hotspot sales, but remains optimistic about overall demand [10][32] Other Important Information - The company is investing in R&D, sales, and marketing to support its growth strategy, with a focus on hiring to meet 2020 goals [22][29] - A new cloud platform called Pegasus is set to launch in Q4 to enhance customer retention and accelerate sales [20][28] Q&A Session Summary Question: R&D level in Q4 and 2020 - Management expects R&D expenses to remain high through Q4, with most hiring concluding by the end of the quarter [37][38] Question: 2020 growth cadence - The company anticipates significant growth in the second half of 2020 driven by next-generation chipsets and increased 5G deployments [39][42] Question: Q4 gross margin expectations - Management expects gross margins to continue to rise sequentially in Q4 [43][44] Question: EBITDA guidance for Q4 - Non-GAAP operating expenses are expected to increase modestly in Q4, with gross margins continuing to improve [47][49] Question: 5G revenue contribution - The $10 million in 5G revenue is expected to come from 10 customers across nine countries, indicating a diversified revenue source [66] Question: Industrial IoT gateway business - The company is targeting various vertical markets, including connected transportation and infrastructure, and is seeing growth in SD WAN and FirstNet [75][76]