Q1 2024 revenue of $45.0 million
Q1 2024 GAAP Net Loss of $4.5 million and
positive Adjusted EBITDA of $3.8 million
Fifth consecutive quarter of positive Adjusted
EBITDA
Inseego Corp. (Nasdaq: INSG) (the “Company”), a technology
leader in 5G mobile and fixed wireless solutions for mobile network
operators, Fortune 500 enterprises and SMBs, today reported its
results for the first quarter ended March 31, 2024. The Company
reported first quarter revenue of $45.0 million, GAAP operating
loss of $1.7 million, GAAP net loss of $4.5 million, GAAP net loss
of $(0.44) per share, and Adjusted EBITDA of positive $3.8 million.
Unrestricted cash and cash equivalents at March 31, 2024 were $12.3
million.
“The Company had a solid quarter with good demand across our
product lines and I am pleased that we delivered Q1 2024 results
that exceeded guidance for both revenue and Adjusted EBITDA. In my
first quarter in the Executive Chairman role, I continue to be
excited about the possibilities ahead, including our recently
launched channel program,” said Phil Brace, Executive Chairman of
Inseego. “On the capital structure front, we remain actively
engaged with the holders of our convertible notes on a potential
refinancing or restructuring and we are confident in our ability to
secure a successful outcome for all stakeholders."
Steven Gatoff, Chief Financial Officer of Inseego, also
commented: "In addition to the strong results for Q1 2024, we had
several positive developments subsequent to quarter end, including
an extension with a key customer that will result in increased
revenues and profitability going forward and that came with a
significant prepayment that was received in April. That successful
renewal, in combination with our improving operations and free cash
flow, enabled us to voluntarily pay-off and terminate our ABL
facility in April and fund our working capital needs going forward.
Given these positive developments, our guidance for the second
quarter is significantly ahead of Q1 2024 results.”
Q1 2024 Financial
Highlights
- Revenue for Q1 2024 was $45.0 million
- Adjusted EBITDA for Q1 2024 was $3.8 million
- GAAP gross margin for Q1 2024 was 38.6%. Non-GAAP gross margin
for Q1 2024 increased year-over-year from 36.2% to 38.7% as the
revenue mix continues to shift to higher-margin products and
services.
- Cash increased by $4.8 million in Q1 2024 to $12.3 million as
of March 31, 2024.
Q2 2024 Guidance
- Total revenue in the range of $52.0 million to $56.0
million.
- Adjusted EBITDA in the range of $6.5 million to $7.5
million.
Conference Call Information
Inseego will host a conference call and live webcast today at
5:00 p.m. ET. A Q&A session will be held live directly after
the prepared remarks. To access the conference call:
- Online, visit
https://investor.inseego.com/events-presentations
- Phone-only participants can pre-register by navigating to
https://dpregister.com/sreg/10188146/fc36665768
- Those without internet access or unable to pre-register may
dial in by calling:
- In the United States, call 1-844-282-4463
- International parties can access the call at
1-412-317-5613
An audio replay of the conference call will be available one
hour after the call through May 23, 2024. To hear the replay,
parties in the United States may call 1-877-344-7529 and enter
access code 6407332 followed by the # key. International parties
may call 1-412-317-0088. In addition, the Inseego Corp. press
release will be accessible from the Company's website before the
conference call begins.
About Inseego Corp.
Inseego Corp. (Nasdaq: INSG) is the industry leader in 5G
Enterprise cloud WAN solutions, with millions of end customers and
thousands of enterprise and SMB customers on its 4G, 5G, and cloud
platforms. Inseego’s 5G Edge Cloud combines the industry’s best 5G
technology, rich cloud networking features, and intelligent edge
applications. Inseego powers new business experiences by connecting
distributed sites and workforces, securing enterprise data, and
improving business outcomes with intelligent operational
visibility---all over a 5G network. For more information on
Inseego, visit www.inseego.com #Putting5GtoWork
©2024. Inseego Corp. All rights reserved. The Inseego name and
logo are registered trademarks of Inseego Corp. Other company,
product, or service names mentioned herein are the trademarks of
their respective owners.
Cautionary Note Regarding Forward-Looking Statements
Some of the information presented in this news release may
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. In this context,
forward-looking statements often address expected future business
and financial performance and often contain words such as “may,”
“estimate,” “anticipate,” “believe,” “expect,” “intend,” “plan,”
“project,” “will” and similar words and phrases indicating future
results. The information presented in this news release related to
our future business outlook, the future demand for our products,
and other statements that are not purely historical facts are
forward-looking. These forward-looking statements are based on
management’s current expectations, assumptions, estimates, and
projections. They are subject to significant risks and
uncertainties that could cause results to differ materially from
those anticipated in such forward-looking statements. We,
therefore, cannot guarantee future results, performance, or
achievements. Actual results could differ materially from our
expectations.
Factors that could cause actual results to differ materially
from the Company’s expectations include: (1) the Company’s ability
to make payments on or to refinance its indebtedness; (2) the
Company’s dependence on a small number of customers for a
substantial portion of our revenues; (3) the future demand for
wireless broadband access to data and asset management software and
services and our ability to accurately forecast; (4) the growth of
wireless wide-area networking and asset management software and
services; (5) customer and end-user acceptance of the Company’s
current product and service offerings and market demand for the
Company’s anticipated new product and service offerings; (6) our
ability to develop sales channels and to onboard channel partners;
(7) increased competition and pricing pressure from participants in
the markets in which the Company is engaged; (8) dependence on
third-party manufacturers and key component suppliers worldwide;
(9) the impact of fluctuations of foreign currency exchange rates;
(10) the impact of supply chain challenges on our ability to source
components and manufacture our products; (11) unexpected
liabilities or expenses; (12) the Company’s ability to introduce
new products and services in a timely manner, including the ability
to develop and launch 5G products at the speed and functionality
required by our customers; (13) litigation, regulatory and IP
developments related to our products or components of our products;
(14) the Company’s ability to raise additional financing when the
Company requires capital for operations or to satisfy corporate
obligations; (15) the Company’s plans and expectations relating to
acquisitions, divestitures, strategic relationships, international
expansion, software and hardware developments, personnel matters,
and cost containment initiatives, including restructuring
activities and the timing of their implementations; (16) the global
semiconductor shortage and any related price increases or supply
chain disruptions, (17) the potential impact of COVID-19 or other
global public health emergencies on the business, (18) the impact
of high rates of inflation and rising interest rates, and (19) the
impact of geopolitical instability on our business.
These factors, as well as other factors set forth as risk
factors or otherwise described in the reports filed by the Company
with the SEC (available at www.sec.gov), could cause results to
differ materially from those expressed in the Company’s
forward-looking statements. The Company assumes no obligation to
update publicly any forward-looking statements, even if new
information becomes available or other events occur in the future,
except as otherwise required under applicable law and our ongoing
reporting obligations under the Securities Exchange Act of 1934, as
amended.
Non-GAAP Financial Measures
Inseego Corp. has provided financial information in this press
release that has not been prepared in accordance with GAAP.
Adjusted EBITDA and non-GAAP operating costs and expenses, for
example, exclude preferred stock dividends, share-based
compensation expense, amortization of intangible assets purchased
through acquisitions, amortization of discount and issuance costs
related to our 2025 Notes and revolving credit facility, fair value
adjustments on derivative instruments, and other non-recurring
expenses. Adjusted EBITDA excludes interest, taxes, depreciation,
amortization, impairment of capitalized software, impairment of
long-lived assets, certain other non-recurring expenses and foreign
exchange gains and losses.
Adjusted EBITDA, non-GAAP cost of revenues, and non-GAAP
operating costs and expenses are supplemental measures of our
performance that are not required by, or presented in accordance
with, GAAP. These non-GAAP financial measures have limitations as
an analytical tool. They are not intended to be used in isolation
or as a substitute for cost of revenues, operating expenses, net
loss, net loss per share or any other performance measure
determined in accordance with GAAP. We present these non-GAAP
financial measures because we consider them to be an important
supplemental performance measure.
We use these non-GAAP financial measures to make operational
decisions, evaluate our performance, prepare forecasts and
determine compensation. Further, management and investors benefit
from referring to these non-GAAP financial measures in assessing
our performance when planning, forecasting and analyzing future
periods. Share-based compensation expenses are expected to vary
depending on the number of new incentive award grants issued to
both current and new employees, the number of such grants forfeited
by former employees, and changes in our stock price, stock market
volatility, expected option term and risk-free interest rates, all
of which are difficult to estimate. In calculating non-GAAP
financial measures, we exclude certain non-cash and one-time items
to facilitate comparability of our operating performance on a
period-to-period basis because such expenses are not, in our view,
related to our ongoing operational performance. We use this view of
our operating performance to compare it with the business plan and
individual operating budgets and in the allocation of
resources.
We believe that these non-GAAP financial measures are helpful to
investors in providing greater transparency to the information used
by management in its operational decision-making. The Company
believes that using these non-GAAP financial measures also
facilitates comparing our underlying operating performance with
other companies in our industry, which use similar non-GAAP
financial measures to supplement their GAAP results.
In the future, we expect to continue to incur expenses similar
to the non-GAAP adjustments described above, and the exclusion of
these items in the presentation of our non-GAAP financial measures
should not be construed as an inference that these costs are
unusual, infrequent, or non-recurring. Investors and potential
investors are cautioned that material limitations are associated
with using non-GAAP financial measures as an analytical tool. The
limitations of relying on non-GAAP financial measures include, but
are not limited to, the fact that other companies, including other
companies in our industry, may calculate non-GAAP financial
measures differently than we do, limiting their usefulness as a
comparative tool.
Investors and potential investors are encouraged to review the
reconciliation of our non-GAAP financial measures in this press
release with our GAAP financial results.
INSEEGO
CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data)
(Unaudited)
Three
Months Ended
March
31,
2024
2023
Revenues:
Mobile solutions
$
15,270
$
23,040
Fixed wireless access solutions
14,182
11,870
Product revenues
29,452
34,910
Services and other
15,557
15,884
Total revenues
45,009
50,794
Cost of revenues:
Product
22,713
27,967
Services and other
4,904
4,640
Total cost of revenues
27,617
32,607
Gross profit
17,392
18,187
Operating costs and expenses:
Research and development
5,043
3,775
Sales and marketing
4,995
6,466
General and administrative
4,983
5,724
Depreciation and amortization
3,635
5,309
Impairment of capitalized software
420
504
Total operating costs and expenses
19,076
21,778
Operating loss
(1,684
)
(3,591
)
Other (expense) income:
Interest expense, net
(2,174
)
(1,997
)
Other (expense) income, net
(360
)
795
Loss before income taxes
(4,218
)
(4,793
)
Income tax provision
237
311
Net loss
(4,455
)
(5,104
)
Series E preferred stock dividends
(790
)
(723
)
Net loss attributable to common
stockholders
$
(5,245
)
$
(5,827
)
Per share data:
Net loss per common share:
Basic and diluted (*)
$
(0.44
)
$
(0.54
)
Weighted-average shares used in
computation of net loss per common share:
Basic and diluted (*)
11,879,719
10,860,189
(*)
Adjusted retroactively for reverse stock
split that occurred on January 24, 2024
INSEEGO CORP. CONSOLIDATED
BALANCE SHEETS (In thousands) (Unaudited)
March 31, 2024
December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents
$
12,297
$
7,519
Accounts receivable, net
23,476
22,616
Inventories
20,797
22,880
Prepaid expenses and other
6,526
5,211
Total current assets
63,096
58,226
Property, plant and equipment, net
2,287
2,758
Rental assets, net
4,916
5,083
Intangible assets, net
24,281
27,140
Goodwill
21,922
21,922
Operating lease right-of-use assets
5,182
5,412
Other assets
384
1,256
Total assets
$
122,068
$
121,797
LIABILITIES AND STOCKHOLDERS’
DEFICIT
Current liabilities:
Accounts payable
$
24,013
$
24,795
Accrued expenses and other current
liabilities
30,805
27,022
Revolving credit facility
4,677
4,094
Total current liabilities
59,495
55,911
Long-term liabilities:
2025 Notes, net
160,284
159,912
Operating lease liabilities
4,771
5,039
Deferred tax liabilities, net
675
680
Other long-term liabilities
2,432
2,360
Total liabilities
227,657
223,902
Commitments and contingencies
Stockholders’ deficit:
Preferred stock
—
—
Common stock
12
12
Additional paid-in capital
811,637
810,138
Accumulated other comprehensive loss
(5,065
)
(5,327
)
Accumulated deficit
(912,173
)
(906,928
)
Total stockholders’ deficit
(105,589
)
(102,105
)
Total liabilities and stockholders’
deficit
$
122,068
$
121,797
INSEEGO CORP. CONSOLIDATED
STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Three Months Ended
March 31,
2024
2023
Cash flows from operating activities:
Net loss
$
(4,455
)
$
(5,104
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
4,375
5,430
Provision for expected credit losses
(32
)
41
Impairment of capitalized software
420
504
Provision for excess and obsolete
inventory
108
217
Share-based compensation expense
717
1,800
Amortization of debt discount and debt
issuance costs
489
489
Deferred income taxes
(5
)
101
Non-cash operating lease expense
405
592
Changes in assets and liabilities:
Accounts receivable
(828
)
(1,997
)
Inventories
1,279
3,097
Prepaid expenses and other assets
(785
)
(1,940
)
Accounts payable
(718
)
5,544
Accrued expenses and other liabilities
3,999
(490
)
Operating lease liabilities
(423
)
(625
)
Net cash provided by operating
activities
4,546
7,659
Cash flows from investing activities:
Purchases of property, plant and
equipment
—
(61
)
Additions to capitalized software
development costs and purchases of intangible assets
(577
)
(2,443
)
Net cash used in investing activities
(577
)
(2,504
)
Cash flows from financing activities:
Principal payments under finance lease
obligations
—
(199
)
Proceeds from a public offering, net of
issuance costs
—
529
Principal payments on financed assets
—
(360
)
Net borrowings (repayments) on revolving
credit facility
583
(3,385
)
Proceeds from ESPP
—
75
Net cash provided by (used in) financing
activities
583
(3,340
)
Effect of exchange rates on cash
226
(272
)
Net increase in cash and cash
equivalents
4,778
1,543
Cash and cash equivalents, beginning of
period
7,519
7,143
Cash and cash equivalents, end of
period
$
12,297
$
8,686
INSEEGO CORP. Reconciliation
of GAAP Gross Margin and Operating Costs and Expenses to Non-GAAP
Gross Margin and Operating Costs and Expenses Three Months
Ended March 31, 2024 (In thousands) (Unaudited)
GAAP
Share-based compensation
expense
Impairment of Capitalized
Software
Purchased intangibles
amortization
Non-GAAP
Revenues
$
45,009
$
45,009
Cost of revenues
27,617
$
31
$
—
$
—
27,586
Gross Margin
$
17,392
$
17,423
Gross Margin %
38.6
%
38.7
%
Total operating costs and expenses
$
19,076
$
686
$
420
$
423
$
17,547
See “Non-GAAP Financial Measures” for
information regarding our use of Non-GAAP financial measures.
INSEEGO CORP. Reconciliation
of GAAP Net Loss to Adjusted EBITDA (In thousands)
(Unaudited)
Three Months Ended March 31,
2024
Net loss
$
(4,455
)
Income tax provision (benefit)
237
Interest expense, net
2,174
Other income (expense), net
360
Depreciation and amortization
4,375
Share-based compensation expense
717
Impairment of capitalized software
420
Adjusted EBITDA
$
3,828
See “Non-GAAP Financial Measures” for
information regarding our use of Non-GAAP financial measures.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240509607891/en/
Investor Relations Contact: IR@inseego.com
Inseego (NASDAQ:INSG)
Historical Stock Chart
From Jan 2025 to Feb 2025
Inseego (NASDAQ:INSG)
Historical Stock Chart
From Feb 2024 to Feb 2025
