Hello, and welcome to Inseego Corp.'s Second Quarter 2025 Financial Results Conference Call. Please note that today's event is being recorded. On the call today are Juho Sarvikas, Chief Executive Officer; and Steven Gatoff, Chief Financial Officer. During this call, certain non-GAAP financial measures will be discussed. A reconciliation to the most directly comparable GAAP financial measures is included in the earnings release, which is available on the Investors section of the company's website. An audio replay of this call will also be archived there. Please also be advised that today's discussion will contain forward-looking statements. These forward-looking statements are not historical facts, but rather are based on the company's current expectations and beliefs. For a discussion on factors that could cause actual results to differ materially from the expectations, please refer to the risk factors described in the company's Form 10-K, 10-Q and other SEC filings, which are available on the company's website. Please also refer to the cautionary note regarding forward-looking statements section contained in today's press release. With that, I'd like to turn the call over to Juho Sarvikas, Chief Executive Officer. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining us today. My first full quarter here at Inseego has been both productive and strategically significant as we transform the company to lead in the next generation of enterprise connectivity through cloud-managed, high-performance wireless solutions. There are a lot of exciting elements to this, and on today's call, I'd like to focus on the two most important ones. First, I'll share my perspective on the key highlights in the business for Q2 and the momentum that we're seeing with our products and customer uptake. And second, I'll update you on our execution of the two key strategic growth vectors that I outlined at the beginning of the year around scaling the core and evolving to a solutions company. With that, let's start with the first topic, Q2 results and highlights. Q2 was a pivotal quarter for Inseego as we built meaningful momentum with our products and customer traction, and as a result, we see the company now being well-positioned to drive long-term sustainable growth. Financially, we delivered sequential growth in Q2 in both revenue and adjusted EBITDA, exceeding guidance through a combination of strong FWA demand, a favorable product mix, and disciplined expense management. Steven will walk through the details shortly. Operationally, this was a significant quarter in two fronts. First was the market introduction of our next-generation 5G advance in Inseego Wavemaker FX4100 FWA solution. It leverages our new Edge Router OS and significantly upgrades Inseego Connect SaaS feature set, and the mid-Q2 launch has greatly exceeded our expectations with strong early demand. I'll go into detail in a bit. The second big item for the quarter was that we successfully renewed our stocked MiFi products with our two large Tier 1 carrier customers while at the same time we also added a new Tier 1 carrier to stock both our mobile and FWA products starting later this year. These wins not only diversify our customer base but also underscore the market appeal of our combined mobile and fixed wireless broadband portfolio, purpose-built for enterprise-grade connectivity. Together, these accomplishments marked a quarter where our strategic plan began to translate into tangible commercial wins, strengthening our Tier 1 relationships and validating the growth opportunity ahead. Let me now turn to my second topic and talk about the solid progress we've made this past quarter on our growth strategy that is anchored by two vectors: one, scaling the core or execution across our mobile and FWA business; and two, evolving to a solutions company by investing in our software APIs and platform intelligence to transition Inseego into a solution-oriented provider enabling greater value creation and sustainable growth. Let's begin with our first growth vector, scaling our mobile and FWA business. And I'll start with mobile broadband, a category Inseego pioneered in 2009 with the launch of the iconic MiFi brand, a trademark that we broadly own. Since the beginning of the year, we've redefined our mobile product strategy and repositioned our MiFi portfolio to capture greater share with the same enterprise-grade Edge Router OS and Inseego Connect enhancements as the FWA category that uniquely differentiates us and requires little marginal investment. This is a major benefit of now having a platform strategy across our products that all benefit from the same software efforts. This new approach directly enabled us to renew our stock positions with our two large existing U.S. carriers, providing stability, growth, and visibility going forward. In addition, as I mentioned a moment ago, in Q2, we won a new major Tier 1 carrier customer with our next-generation mobile solution. This marks an important new carrier relationship for Inseego and diversifies our customer base. When I joined the company, we aligned on a common goal, to win and consolidate the MiFi market, and the team is executing on it. These renewals and new customer wins reinforce our leadership in mobile broadband, driving scale and operational leverage across our entire portfolio. Let's now look at the FWA aspect of driving scale. As you might remember, in Q1, our FWA revenue declined from a customer transitioning to the latest FWA generation. The new FX4100 launched midway through Q2, and demand has exceeded the expectations we set with our partner, T-Mobile, materially outpacing adoption of our prior two generations. This strong adoption reflects two dynamics: one, the expanding TAM in the enterprise FWA market; and two, our capturing of greater market share with our new enterprise-grade solution. The FX4100's rapid success reflects a unique combination of performance, ease of deployment, and enterprise-grade feature set, at an excellent go-to-market execution together with our partner that differentiates Inseego and positions us as the partner of choice for carriers and enterprise customers. Building on this success, we also entered a new broad category in Q2 with the introduction of our X700 WiFi mesh node. When paired with the new FX4100, the X700 creates a single unified network with support up to three mesh nodes per router. This eliminates the need for traditional switches and multiple access points, giving enterprises and branch locations a cost-efficient plug-and-play solution that simplifies deployment, reduces hardware complexity, and delivers reliable wall-to-wall coverage. Together, the FX4100 and X700 Mesh node solution redefine enterprise connectivity, offering the same plug-and-play simplicity and performance advantage that make FWA a compelling replacement for wired broadband. Our unique approach and success in enterprise FWA has opened new opportunities with the broader customer base. I'm happy to share that we've won a new stocked FWA product with a new Tier 1 carrier customer. This landmark win validates our strategy and strengthens our position as carriers increasingly look for a high-performance enterprise-ready FWA solution. We are now hard at work in scaling the traction in enterprise FWA across the broader carrier base while accelerating engagement with MSOs, MSPs, VARs, and strategic partners. The FX4100 strong early adoption, combined with the X700 mesh launch and new Tier 1 win positions FWA as a key growth driver for Inseego in the second half of '25 and beyond. With the carrier momentum accelerating, we also secured notable wins with enterprise customers and channel partners, demonstrating the scalability of our combined hardware and software solutions. We closed a multimillion-dollar enterprise agreement with an industrial S&P 500 company, facilitated through one of our Inseego IGNITE channel partners for a deployment that combines our high-performance hardware with Inseego Connect software, reinforcing our value as a trusted enterprise connectivity partner. We also expanded our outdoor FWA presence through a strategic agreement supporting rural connectivity for one of the nation's leading poultry producers. Powered by Inseego Connect, this deployment delivers centralized device management and enterprise-grade connectivity across distributed farming locations. With that, I'll turn to the second part of our growth strategy, transforming Inseego into a solution-driven company through software, APIs, and platform intelligence. By deepening the software and services layer around our hardware, we're creating recurring value for our customers and a stronger competitive mode for the long term. Inseego Connect, our cloud-based device management platform is at the center of this strategy. Our immediate priority has been seamless API integration into the carriers, MSOs, and MSPs existing business systems to expand our addressable market. With the critical APIs now released, we've also significantly expanded the Inseego Connect feature set based on the valuable feedback from our customers and partners. When paired with our new Edge Router OS, these enhanced capabilities are elevating Inseego from a hardware provider to a high-value connectivity solutions partner, driving recurring revenue opportunities, deeper customer engagement, and a strong position in enterprise networking. Along these lines, let me also spend a moment on Inseego Subscribe, our enterprise and government subscriber management SaaS platform. As I mentioned on the last earnings call, I am particularly excited about the future for this offering, and we're now investing in expanded functionality, market reach, and scalability. I've been pleased with the reception from the market, and I look forward to updating you as we close out the year and head into 2026. As we entered the back half of 2025, our focus remains on bringing new products to market and expanding our customer base, building a sustainable path to long-term growth. Importantly, I am focused on exiting the year with a strong run rate business to support this sustainable growth. We expect sequential revenue growth for each of the next two quarters as we move forward. Steven will share more details on this in his remarks. One bittersweet data point to share with you that we see as a strong endorsement of our market presence and ability to garner large deals with new customers is a $10 million-plus educational mobile deal that we were awarded for the second half of 2025, but that was contingent upon congressional E-Rate funding for hotspots. However, hotspots inclusion in the E-Rate program continues to sit in limbo in the House with no established path forward. Based on this, we have removed the deal from our forecast. At the end of the day, it all comes down to great people executing well. And on that front, I'm really pleased to share the announcement you probably saw earlier in the week. We recently welcomed two accomplished leaders to the Inseego executive team. Lawrence Hau joined as Chief Supply Chain Officer, bringing over 20 years of experience in global procurement and operational excellence to enhance supply chain resilience and cost structure. Zack Kowalski joined as Senior Vice President of Business Development, leading our expansion into indirect channels, including wires, MSPs, and strategic partners. These additions reinforce our focus on operational discipline and scalable go-to-market execution, consistent with our goal of exiting the year on a strong run-rate basis. And with that, I'll turn the call over to Steven.

Thanks, Juho. Hi, everyone. Thank you for joining us. I'd like to cover three topics today. First, I'll take you through the Q2 2025 financial results. Second, I'll provide a brief update on the further strengthening of our capital structure around the convert paydown and our new working capital facility. And third, I'll share some color on the financial profile of the business and provide guidance for Q3 2025 as we head into the second half of the year. As we always do, we'll, of course, wrap up by opening the call to your questions. Let's start with the Q2 financial results. We delivered sequential growth in both revenue and adjusted EBITDA in Q2 2025, and that performance was paired with strong gross margins and disciplined spend to continue meaningful operating leverage and the favorable results. On the top line, total revenue for Q2 was $40.2 million and was driven by better-than-expected FWA volumes, a large channel deal, and continued execution in our services offerings. For only the second time in the company's history, Q2 2025 marked a notable dynamic where FWA revenue surpassed mobile hotspot revenue. We see this as an indicator of the execution of our growth strategy and the ongoing shift in our product mix with the tangible data point around the successful ramp of our new FX4100 product that Juho talked about. As expected, mobile revenue came in lower year-over-year on the record promotional activity in 2024 and the timing of new program launches that are expected to occur later in 2025. Our strong services revenue remained consistent at $12 million for the quarter, providing stable, high-margin contribution to results. Non-GAAP gross margin was a solid 41.2% in Q2, reflecting a favorable product mix and the strong FWA results. Looking at non-GAAP operating expenses, Q2 2025 was another quarter of disciplined execution. We managed the business to lower dollar spend year-over-year on both a P&L and cash spend basis. Pulling this all together, Q2 2025 adjusted EBITDA came in at $4.7 million, up 29% sequentially and at an 11.7% margin, our second highest in a decade. Finishing the section with the balance sheet. We ended Q2 with $13.2 million in cash and healthy working capital and leverage metrics. This provides us with flexibility as we execute our growth initiatives in the back half of the year and is a good segue to my second discussion topic, our meaningfully improved capital structure. Our healthy cash position of $13 million at June 30 reflects the payoff of the $15 million remaining balance on the convertible notes that matured on May 1. Over the past year, we've materially reduced the company's total debt. And with this payoff, our total debt now stands at $41 million or a very manageable 2x LTM adjusted EBITDA. To provide additional operational flexibility and liquidity, earlier this week, we set up a $15 million working capital facility with BMO Bank. The terms are attractive, and we don't currently need or plan to draw on the facility. Altogether, these actions further strengthen our balance sheet, provide additional flexibility to invest in product when and where needed to drive growth, and support the value of the common stockholders. With that, let's finish with the third topic today, the financial profile that we're seeing in the business and guidance for Q3 2025. As Juho talked through, 2025 is a foundational year as we invest in and scale new products and our software platforms and bring on new carrier and MSO relationships. We're starting to see the business evolve along the strategic lines that Juho set out. And for Q3 and from those initiatives, we expect to see continued sequential revenue growth. In terms of revenue, FWA is showing nice momentum as we continue through Q3, supported by the ramp of our new FX4100 product. Mobile revenue is also expected to show sequential growth in Q3, with volumes picking up at our carrier customers. And our attractive services revenue should remain consistent at roughly $12 million. Non-GAAP gross margins are expected to remain fairly consistent on a percentage basis in Q3 and total operating expense is expected to increase on a dollar basis as we invest in sales and marketing to drive growth. Importantly, we're also investing in the new products we talked about and that is expected to drive increases in capitalized spend in the second half of 2025. And finally, on OpEx, we're driving more company-wide efficiencies and expect improvement in G&A on a percentage of revenue basis going forward. And so pulling this all together, we're providing the following guidance for Q3 2025: total revenue in a range of $40 million to $43 million and adjusted EBITDA in a range of $4 million to $5 million. With that, we appreciate your time and support and are glad to open the call for questions.

And your first question today will come from Lance Vitanza with TD Cowen.

Thanks, guys. Can you hear me?

Yes.

Yes, congratulations on the quarter. I have a couple of questions. First, can you provide more details about the multimillion-dollar enterprise agreement with the industrial S&P 500 company? It seems to validate the channel partner model, but I'm curious about how this affects your relationship with the end user or client. Also, could you discuss the reasons behind your success there, such as price, quality, service, being made in America, the breadth of your portfolio, and how quickly you anticipate similar wins in the future?

Thank you for your question and for being with us today. Yes, you are correct; this is a multimillion-dollar FWA agreement with an industrial S&P 500 company. We discovered and closed the deal through our Inseego IGNITE channel partner program, which has extensive reach and connections. Our unique value proposition involved strong collaboration with our partner to ensure we provided adequate support and technical validation, focusing on both hardware and software aspects.

How much of the Q3 revenue and EBITDA was associated with the business you mentioned you pulled out of the forecast due to the congressional delay?

Thank you for your question. Our guidance and forecast do not include any assumptions about that deal returning, so we are not accounting for it in our projections.

My question was if that had been included, presumably the guidance would have been higher.

Yes, got you. So yes, the deal was north of $10 million. And so whether the deal closed in Q3 or Q4, both, but to the point for the back half of the year, there would have been $10 million-plus more revenue on the product side of the business.

What are the factors influencing the range of $40 million to $43 million? Is any part of that range related to potential macroeconomic factors, or does it assume a stable macro environment and depend solely on individual customer sales performance, or are there other elements involved?

Lance, this is an opportunity to complete my answer to your first question. You also asked about the role of the channel for us and what to expect from our go-to-market strategy. As I mentioned, our immediate priorities focus on scaling with major carriers and large MSOs, while they continue to invest in our SMB and channel programs. The variability in Q3, of course, hinges on how much business and opportunity we can close through the channel.

To build on your good point, Lance, the perspective for Q3 is really grounded in the fundamental operations of the business. There aren't any quick fixes or unrealistic expectations. We're noticing some modest growth in mobile, and as you've heard, we're seeing solid progress on the carrier side with the new FWA product. We have a clear outlook for this current quarter based on what we're observing in the carrier sector. We're being cautious and not overextending ourselves in that regard.

Great. It's a welcome change from before the current leadership team took over. So thank you for that.

Your next question today will come from Tore Svanberg with Stifel, Nicolaus.

This is Jeremy speaking on behalf of Tore. I want to extend our congratulations on the strong FDA results and the recent product launch. I have a follow-up regarding the enterprise win. Could you share some details about how it works? What kind of revenue recognition applies here? How long is the agreement typically? Also, are there any indicators we can monitor for potential new customers in this enterprise segment?

Thank you, Jeremy, for your question. The deal we discussed in our prepared remarks was specific to Q2, and we are actively developing our pipeline for Q3 and future periods.

Got it. Looking at the cash flows, it appears that accounts receivable has increased significantly. I understand this is likely due to channel fill from the new product launch. Can we anticipate any improvement in cash flow as the ramp continues and you enhance your collections? How should we view cash flows in this regard?

Yes. So the short answer is our goal is consistently to drive cash for sure. And obviously, as a profitable business, that affords us that ability. What we're also balancing though is investing in product and building inventory to supply the demand that we're starting to see tick up a little by little. And so we would rather invest and build a little bit more, particularly as we're launching a pretty robust product portfolio in the second half of the year, more so candidly than the company has ever done in probably five or ten years. We're pushing out a whole bunch of new products in the second half. So it's going as you said into good investment. The one thing that you called out properly is that on the balance sheet, there's a little bit of an uptick in AR, which is for all the right reasons, which is there's really a big uptake at the end of the quarter in our new FX product or FWA product. And so we're thrilled with that. Everything else was kind of business as usual.

Great. That's very helpful. And maybe one final question on the new FX4100 launch. Are there any potential catalysts that we can look out for, maybe promotions? And maybe even looking out 12 to 18 months, where do you see FWA in terms of proportional to mobile? Do you expect this 50/50 to continue or maybe FWA to be a kind of more consistently exceeds mobile revenue over time?

Thanks, Jeremy. I'll address the first part. When considering the FX4100, our unique formula really starts with the solution side and includes performance and technology leadership. Alongside 5G advanced capabilities and device performance, the ease of deployment and enterprise-grade features create a distinctive combination. This solution empowers our partners significantly. Regarding your second point, while promotions play a role and we have a strong promotional framework, I'm very pleased with the effective go-to-market collaboration we've established with our partners in marketing, field sales, and overall enablement. Compared to the engagement and solution maturity of the previous generation product, the third generation FWA is certainly making a more substantial impact in the marketplace.

Yes, that's a good question about the revenue mix. Our strategy is starting to pay off as we are gaining more market share in the FWA sector, particularly on the mobile side. This is a promising market that we expect to see modest growth in each quarter. We are quite optimistic about the FWA trajectory, which we believe will continue positively affecting our revenue mix and reinforcing the role of FWA in our business model.

If you look at the overall macro picture, what I would say is that FWA is only the start of the journey, like the adaptation curve we're nowhere near the peak. And maybe even more importantly, if you look at FWA for the enterprise end market, that has not advanced as fast as the consumer side. And we're, of course, participating in enterprise. So I view the TAM growth as something that's highly appealing in addition to our ability to participate.

Great. One last question, I'm sorry. It sounds like your software and services feature set is really expanding and one of the key front points. Is there maybe a path to maybe directly monetizing that to see potential expansion in the services line of your revenues?

Yes. So it's a good question. And the short answer is yes. The software functionality, both MDM like Inseego Connect is really a growing investment and growing uptake from customers on the value prop with the product side of the business as well as subscribe BSS TAM-like functionality that we provide to carriers and the investments we're making there on everything from subscriber management, order management, contract management is something that we look to continue to grow and invest in and yield higher revenue as we move forward, for sure.

To focus on Device Cloud or Inseego Connect with MDM functionality, this year we have concentrated on expanding the total addressable market for our product business through partner integration using our API library. I am very pleased with how quickly the team has been able to implement this integration. The feedback from our partners currently engaged in the integration process has been outstanding. Once this work is completed, we will also be rolling out several new key features, and you can expect us to continue adding value-added features on the device cloud side. Consequently, we are aiming for a greater value capture as well.

This will conclude our question-and-answer session. I would like to turn the call back over to management for any closing remarks.

Thank you for the colorful questions. To close, Q2 was an important strategic quarter for Inseego. We launched the FX4100 to strong demand. We renewed our key MiFi relationships and we secured a major new Tier 1 carrier win across both mobile and FWA. These milestones are the data points that validate our strategy as we're building the foundation for sustainable growth and profitability. I want to acknowledge our exceptional engineering team alongside the broader Inseego organization whose dedication and teamwork continue to drive our success. Thank you for joining us today, and we look forward to updating you on our continued progress.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.