Inseego (INSG) Q3 Earnings call transcript Nov 12, 2024

Inseego Corp., a leading innovator in mobile broadband and wireless connectivity solutions, has announced its third-quarter financial results for 2024, showcasing a significant financial turnaround and strategic moves that position the company for future growth.

Financial Highlights The company reported total revenue of $61.9 million for the quarter, marking a 27% increase compared to the same quarter last year. This overperformance was driven by strong carrier promotions for mobile products and good execution by the sales and operations team. The subscribe SaaS management platform also contributed to the growth with a significant increase in revenue and profit. Adjusted EBITDA for the total company came in at $9.3 million, exceeding expectations and achieving the highest adjusted EBITDA margin in years.

Strategic Moves and Financial Improvements Inseego made notable strides in reducing its debt and improving its capital structure. The company announced the closing of a debt restructuring transaction, reducing overall debt levels by more than $100 million. The debt reduction was achieved through the repurchase and conversion of convertible notes and the issuance of new senior secured notes. This strategic move positions Inseego well for the future, enabling the company to focus on its U.S. 5G wireless connectivity business and expand its product roadmap.

The company also divested its non-core international Telematics business for $52 million, enhancing its liquidity and enabling a sharper focus on its core business. This divestiture will be reported as discontinued operations in the company's financial statements.

Looking Ahead Inseego is bullish on its continued growth, expecting revenue and adjusted EBITDA to increase in the current quarter for its continuing operations. The company is investing in a strong product roadmap, diversifying its revenue base, and expanding its business with major U.S. carriers. Inseego's focus on diversification and multi-carrier products for the broader channel ecosystem is a strategic move to mitigate potential volatility and drive long-term growth.

CEO Search and Future Outlook Inseego's executive chairman, Philip Brace, provided updates on the company's CEO search, expressing optimism about the progress. The company is aiming to have a new CEO in place by the end of Q1 2025. With a solid capital structure, a new management team, and a strong product roadmap, Inseego is well-positioned for future growth and value creation.

In conclusion, Inseego Corp.'s strong financial performance and strategic moves in Q3 2024 are indicative of a company that is not only addressing its financial challenges but also positioning itself for future growth. With a focus on product diversification, operational efficiency, and a disciplined approach to capital, Inseego is poised to capitalize on the opportunities in the 5G wireless connectivity market.