Inseego’s Earnings Call: Record Margins Amid Challenges

Inseego ((INSG)) has held its Q1 earnings call. Read on for the main highlights of the call.

Inseego’s recent earnings call presented a mixed sentiment, highlighting both achievements and challenges. The company celebrated record gross margins and technological advancements, alongside a significant reduction in debt. However, it also faced a slow start to the year due to delayed promotions and a concentrated customer base, which posed notable challenges. While there are positive strides in technology and revenue growth, these are balanced by the hurdles in the revenue start and customer concentration.

Record Gross Margin Achievement

Inseego reported a record non-GAAP gross margin of 47.5% for Q1 2025. This achievement was driven by sequential margin expansion in both product and services, as well as a favorable revenue mix. The company’s focus on optimizing its product offerings has evidently paid off, marking a significant milestone in its financial performance.

Successful 5G Advanced Data Call

The company made headlines by becoming the first OEM to execute a 5G Advanced 3GPP Release 18 data call using the Qualcomm Dragonwing Gen 4 Elite FWA platform. This accomplishment underscores Inseego’s engineering prowess and its strong partnership with Qualcomm, positioning the company at the forefront of technological innovation in the 5G space.

Increase in Mobile Revenue

Despite a late start to a larger carrier customer’s promotion, Inseego saw its mobile revenue grow by more than 16% year-over-year. This growth indicates a robust demand for Inseego’s mobile solutions and highlights the company’s ability to capitalize on market opportunities even amidst timing challenges.

Significant Debt Reduction

Inseego achieved a meaningful reduction in its total debt by paying off $15 million on convertible notes, bringing its total debt down to $41 million. This strategic move strengthens the company’s financial position and reflects its commitment to improving its capital structure.

Growth in Services Revenue

The company experienced nearly a 50% year-over-year increase in services revenue, driven by the strength of the Inseego Subscribe SaaS platform. This growth underscores the success of Inseego’s strategic shift towards a solutions provider, leveraging its software and services to drive revenue.

Slow Start to the Year

Q1 2025 was marked by a slow start on a revenue basis, attributed to record levels in Q3 and Q4 2024, the conclusion of a special national mobile hotspot program, and temporarily lower FWA purchases. These factors collectively contributed to the sluggish start, although the company remains optimistic about future growth.

Delayed Carrier Promotions

Revenue was impacted by delayed carrier mobile broadband promotions and FWA orders. Despite these delays, Inseego maintained strong gross margins, showcasing its resilience and operational efficiency in navigating market challenges.

Concentration in Customer Base

Inseego acknowledged the concentration in its customer base for MiFi and FWA, highlighting the need for diversification. The company is actively working to expand its customer base to mitigate risks associated with customer concentration.

Forward-Looking Guidance

Looking ahead, Inseego provided guidance for Q2 2025, projecting total revenue between $37 million to $40 million and adjusted EBITDA ranging from $2.5 million to $3.5 million. The company anticipates a resumption of revenue growth, particularly driven by improved traction in Fixed Wireless Access (FWA) revenue. Inseego is focusing on expanding its customer base and diversifying its product portfolio, targeting large Tier 1 carriers and multiple system operators. The company is also enhancing its software and services roadmap to transform into a solutions provider, with a strong emphasis on its Inseego Connect and Inseego Subscribe platforms.

In conclusion, Inseego’s earnings call reflected a balanced narrative of achievements and challenges. The company celebrated record gross margins and technological milestones while addressing the hurdles of a slow revenue start and customer concentration. With strategic initiatives in place for revenue growth and diversification, Inseego is poised to navigate the complexities of the market and capitalize on emerging opportunities.