Inseego Corp. Stock

Hello, and welcome to Inseego Corp.'s Second Quarter 2026 Financial Results Conference Call. Please note that today's event is being recorded. [Operator Instructions] 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 Investor Relations 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.

Good afternoon, everyone, and thank you for joining us today. Q2 revenue was $44 million, above the high end of our guidance range. We delivered 28% sequential growth and 9% year-over-year growth, driven by strong product revenue. Our top line results benefited from late quarter orders from select carrier customers tied to expected memory cost increases going in the second half of the year. These orders supported our customers and contributed to revenue outperformance in the quarter, but they also weighed on gross margin and are expected to result in lower ordering levels from those customers in Q3.

Over the last 18 months, we have moved much faster than this business has historically operated. Inseego typically introduced roughly one new product annually. Since I joined the company, we have significantly accelerated that pace, launching multiple new products and variants across mobile and FWA while also broadening the customer base. We now have six products across three Tier 1 carriers for the first time in the company's history. That was the right strategic direction, and it helped us win important new customer opportunities, including our newest Tier 1 carrier.

But as we accelerated the pace of product development, we discovered that our engineering processes could not support the rate of new product introduction. As a result, we experienced product delays, which created a revenue gap that we will not fully recover in 2026. It is disappointing, particularly against the customer wins we brought in. As I mentioned on the last call, we've taken immediate actions, and amongst them, the search for a new engineering leader, which is going well.

We have several candidates deeply engaged, and I look forward to updating you as we move through the process. Our newest Tier 1 carrier relationship is performing well across mobile and FWA. However, instead of driving the incremental growth that we expected this year, that performance is filling the gap created by product delays and weakness with our largest FWA customer. In FWA, the recovery of our largest customer is taking longer than expected. The customer is still working through changes to its enterprise go-to-market strategy and internal organization.

And while I expect our next-generation product to get us back on track, we are factoring in a slower recovery in our updated outlook. As such, we're updating our full year 2026 outlook to reflect a lower second half revenue expectation. It is important to note that the revenue opportunities we have won remain intact. Our focus is getting the business to a more appropriate product delivery cadence and quality to generate more consistent revenue and deliver profitability. With that context, on today's call, I'd like to add my perspective on our Q2 operational progress, the operating dynamic behind our updated outlook and our progress preparing for the Nokia FWA integration. Starting with Q2, a key milestone was completing the launch of our refreshed mobile product family across all three North America Tier 1 carrier customers. The MiFi PRO M4 is now launched across all three carriers, including the delayed but on target late quarter launch with our largest MiFi customer.

We also made a multi-carrier model available to the value-added reseller channel. This gives us a stronger mobile portfolio than the company has had in years and positions us across three largest carrier customers and the reseller channel. These launches took longer than planned, but they are now completed and in market. Our newest Tier 1 carrier relationship performed well in both mobile and FWA. That remains an important proof point for the strategy of broadening our customer base and reducing reliance on any one customer.

And so when we started talking with this customer about a large Q2 purchase ahead of anticipated price increases later in the year, we worked to deliver that increased volume in the quarter. In channel, we supported a large industrial deployment using our IoT products with Inseego Connect. That is a good proof point for the value of pairing our hardware with cloud-based device management, and we continue to see Inseego Connect as an important part of our broader solution set. Overall, during Q2, we completed the key mobile portfolio launches, grew revenue and executed with our newest Tier 1 carrier. But the quarter also made it clear where we need to do better. Broad execution and delivery needs to be reliable, and we need to execute on our new broader customer base and product portfolio more consistently. That brings me to our updated 2026 outlook. We now expect full year revenue of approximately $155 million. Our updated outlook reflects a lower second half revenue expectation, particularly in Q3.

There are four drivers to this updated outlook, the first half mobile delay, the slower recovery of our existing large FWA customer, Inseego Subscribe and the MSOs unpredictable sales cycle. Let me start with Subscribe since it's reflected in the updated outlook and remains a strategically important platform for us. Over the past year, we have continued to develop Subscribe from a customer-specific services arrangement into a carrier-grade subscriber life cycle management platform.

The platform is designed to help service providers sell, onboard, manage and support complex enterprise and government wireless services more efficiently and at scale. During the quarter, Subscribe achieved CMMC Level 2 certification, an important cybersecurity milestone for supporting U.S. federal government programs. This strengthens the platform's ability to support communication service providers serving government customers. As our Tier 1 carrier customer on the platform has evolved its internal IT and system capabilities, the Subscribe pricing is stepping down the professional services component.

As a result, beginning in Q3, we expect software services and other revenue to decline by approximately $2 million per quarter. Subscribe remains a high-margin contributor and a strategically valuable platform. We continue to advance the road map, new customer business development activities and believe Subscribe can play a broader role over time. In terms of the MSO opportunity, customer engagement remains active, and we continue to see opportunity in this market.

However, the customer conversion is taking longer than expected. Given that we have removed MSO revenue from our 2026 outlook and we will treat it as upside until customer conversation (sic) [ conversion ] is proven. Let me now turn to the acquisition of Nokia's FWA business, which we announced on April 30. This will mark an important step in our evolution into a global wireless broadband platform. The acquired business will more than double our revenue base, expand our product coverage and deepen our strategic collaboration with Nokia.

Strategically, the acquired business is highly synergistic and a natural extension of what we do. The business will add strong engineering capability, established global Tier 1 customer relationships and one of the strongest FWA portfolios in the market, including indoor, outdoor and millimeter-wave products. Combining their portfolio with Inseego's North America carrier relationships, mobile and FWA product portfolio and cloud software capability gives us a much broader platform for growth.

With an anticipated close in Q4 2026, we are taking concrete steps to build the operating foundation for a larger global Inseego. First, we have strengthened our international regional leadership. Pranav Shroff has joined Inseego to lead APAC sales, Ossi Korpela joined to lead EMEA sales, and Steve Harmon has expanded his role to lead the Americas, including Latin America. This gives us dedicated leadership across major regions where we see opportunity for the combined portfolio.

Second, Steven has expanded his role to lead our international expansion, where he will oversee the global operating structure, support integration activities and work closely with regional sales leadership to execute business primarily across EMEA and APAC. Third, we are establishing the engineering and operational footprint needed to support customers globally. We have selected Amsterdam as our center of international operations, extending the reach of our San Diego-based global headquarters.

We are also continuing to build Athens as a key software development center for our global FWA portfolio. These are targeted actions to support integration readiness and customer continuity with an overriding benefit of bringing on a talented and effective engineering team. With these actions, integration planning is well underway. Our priorities are customer continuity, employee integration, road map alignment and operating discipline. The opportunity is significant, and our focus is on building the right foundation so we can integrate the business thoughtfully, support customers and enter 2027 with a strong global platform.

In summary, we have streamlined our portfolio to support reliable execution, and we are taking the required actions to improve the leadership and quality of our execution. We are very clear on our focus areas as we move through the second half of the year, converting our current product portfolio into more consistent revenue, improving profitability, strengthening engineering and product delivery and aligning costs with the revised revenue profile.

That focus is also critical as we prepare for the anticipated close and integration of Nokia FWA acquisition. Nokia's FWA business gives us the opportunity to become a much larger global wireless broadband platform. But our immediate priority is clear: execute against the revised outlook, rebuild consistency in the core business and enter Q4 with stronger execution. With that, I'd like to hand off to Steven.

Thanks, Juho. Hi, everyone. I'd like to follow on Juho's discussion and cover three topics today. First, I'll take you through more details on our Q2 2026 financial results. Second, I'll talk through the financial profile of the business and provide our guidance for Q3 and our updated view for full year 2026 revenue. And third, I'll share some color on the FWA acquisition work that we're doing.

To be clear, the discussion of our financial results for Q2 2026 and our outlook and guidance for Q3 and the full year 2026 today are for Inseego stand-alone only and do not include any contribution from the Nokia FWA business. We are on track for a targeted close in Q4 2026, and we expect to provide certain combined company and pro forma financial information then. As we always do, we'll wrap up by opening the call for your questions.

Starting with Q2 2026 financial results. Total revenue was $44 million, above the high end of our guidance range, up 28% sequentially and up 9% year-over-year. The sequential improvement was driven primarily by FWA and particularly from some strong operational deliveries late in the quarter. Product revenue was $31.7 million or 72% of total revenue and increased 12% year-over-year. Mobile Solutions revenue was $17.3 million and was the key driver, up 26% year-over-year on good traction with our newer Tier 1 carrier customer and strong channel activity with the refreshed MiFi portfolio.

FWA revenue was $14.4 million for Q2, also with solid contribution from our newest Tier 1 carrier that had a large purchase in the quarter. As Juho mentioned, this strength was unfortunately partially offset by lackluster performance at another existing large FWA carrier customer. Services and other revenue came in at $12.3 million or 28% of total revenue and up 2% year-over-year. Let's talk a bit about the Q2 ordering activity tied to memory pricing and availability.

As Juho mentioned, we worked with our relatively new Tier 1 carrier customer on an upsized order in Q2 to get ahead of anticipated increases in memory prices and market supply constraints in the second half of the year. That supported us closing higher-than-anticipated revenue in Q2, and it also is expected to impact the current Q3 ordering cadence. In the context of typical quarterly levels, we see something on the order of $5 million to $6 million of incremental revenue that was realized in Q2.

Normally, this would not have a meaningful impact quarter-to-quarter, but in the context of the product delays we talked about, that incremental revenue has a larger impact. Similarly, while we were pleased to support our new carrier customer with a larger order, gross margin percentage saw an impact from this deal with Q2 2026 non-GAAP gross margin coming in at 34%. The impact to gross margin was a function that while the ASP was set on this deal, we needed to allocate higher cost memory units from follow-on purchases in order to fulfill the larger quantity order.

The larger deal generated incremental revenue but pressured Q2 gross margin percentage. The positive on this is that we expect product margin percentage to improve to the high teens in Q3 as we've been successful going forward with this relatively new dynamic of passing along essentially all of the memory price increases to customers this quarter.

Moving down the P&L. Q2 non-GAAP operating expenses were $16.9 million or 38% of revenue, flat sequentially to Q1. So pulling this all together, Q2 2026 adjusted EBITDA came in at $0.5 million or a margin of 1%, in line with our guidance, but impacted by the lower margin revenue as we discussed. Closing out Q2 with the balance sheet. We ended June with cash of approximately $2 million. This reflected the timing of significant product delays that close -- product deals that closed late in the quarter.

While you see this in the meaningful increase in accounts receivable at quarter end, we have been collecting material amounts of that cash here in Q3. We also had a balance of $10 million on our revolver at the end of June, and that too has already been paid down meaningfully from the cash collections. With that, let's now turn to the dynamics here in the current quarter and provide our Q3 guidance and updated outlook for full year 2026 revenue.

Echoing Juho's earlier comments -- the timing of the new product revenue drivers has shifted out. The refreshed mobile portfolio is now in market, but the first half delays created a revenue gap we will not fully realize this year. Our existing large FWA customer has a path to recovery, including the next-generation product launch, but is admittedly taking longer than expected. And as Juho also mentioned, while the MSO market remains a compelling TAM expansion opportunity, it is taking longer to convert into signed contracts. And so we've adjusted our expectations to remove that from our 2026 forecast.

Pulling this together, for Q3 2026, we expect total revenue in a range of $28 million to $35 million and adjusted EBITDA in a range of negative $1 million to negative $2 million. From a margin and profitability standpoint, we expect gross margin to modestly improve in Q3, as I mentioned, as lower-margin products are expected to decline and memory cost price pass-throughs take effect. We are focused on operating spend discipline and are actively aligning our spend with the revised revenue profile.

Stepping back to look at the full year, we see 2026 revenue in the area of $155 million. This updated outlook is for Inseego only and reflects the dynamics we've been discussing. The first half product delays, the slower recovery at the existing large FWA customer, monetization of the MSO opportunity and marginally lower Subscribe revenue.

We continue to focus on delivering a more diverse product set to a more diverse customer base, both of which are a new dynamic in the company's history. We've had execution issues that are having an impact in the near term, but we're adjusting those and believe the trajectory is upward as we move through this quarter and get execution back to where it needs to be to get those pieces to contribute more consistently, all the while maintaining the operating discipline and focus on improving profitability over time.

Finally, I'd like to share an update on the Nokia FWA acquisition, as Juho discussed. It's a complementary business and adds a compelling scale and quality of engineering to Inseego. We continue to expect the transaction to close in Q4 2026, subject to customary closing conditions. As a reminder, we are acquiring a business with an annual revenue run rate of approximately $200 million, which more than doubles our revenue base and makes Inseego a global provider in our core wireless broadband, all with the backing and go-to-market coordination with Nokia.

Once the transaction closes, our reported results will naturally include the acquired FWA business from the closing date forward. We wanted to give you a sense of how we're thinking about both reporting and guiding outlook for the company from that point forward, so everyone can align models and expectations. On our Q3 2026 financial results earnings call that we expect to have in a few months, November, assuming the transaction closes as expected, we plan to provide Q4 2026 revenue guidance for both the Inseego business and for the acquired Nokia FWA business.

We intend to provide that for that quarter in order to give you a clear starting point and relative performance of the businesses. We also plan to provide a historical view of quarterly revenue for the acquired FWA business, so you have the context to build the combined revenue base into your models. Beginning with our Q4 2026 financial results earnings call expected in February 2027, we intend to guide and report as a single combined company and will include certain prior period financials and pro forma revenue comparisons so you have an apples-to-apples basis for gauging outlook and performance.

Our objective is to give you the information and transparency to understand the transition, the business performance and the model of the business all while us managing and reporting the company the way we intend to run it as one integrated segment and set of products. With that, we appreciate your time and support and are glad to open the call for questions. Operator?

[Operator Instructions]

The first question will come from Tyler Burmeister with Lake Street Capital Markets.

So just looking for some more details on this guidance. Maybe first, how much MSO revenue was previously assumed in your full year outlook?

Tyler, orders of magnitude, the MSO was a large opportunity that we had talked about. And so if you thought about in kind of the $15 million to $20 million ZIP code, it was a considerable -- it wasn't in the numbers and it's still a considerable opportunity.

Okay. Okay. And then I just want to make sure I understand the Subscribe software dynamic that's going on your customer is evolving away from your offering. I think you said it's going to decline $2 million a quarter, so decline $2 million a quarter towards 0 over the next, call it, 6 quarters. Is that the correct way to think about that?

Yes. So the customer has further developed their in-house systems and IT capabilities and with that require less complex professional services from Inseego. So we have adjusted the pricing to reflect that reality.

But just to be clear, it's not going to decline $2 million and stay at that level. It's going to continue to decline $2 million each quarter going forward. Is that right?

No. The revenue is going to go down starting this quarter, $2 million and then stay at that level. So if it was approximately, let's say, $11 million, we expect it to go down to $9 million and then stay at $9 million a quarter.

Okay. And then your full year guidance still implies a decent snapback in Q4. I guess, what gives you confidence that we're going to see that snapback in Q4 sequentially? And maybe what's the greatest risk to that number?

Great question, Tyler. So I think the big thing going into Q4 is a normalized ordering cadence, and that applies to both the MiFi mobile as well as the FWA range. The big thing there really is the recovery of our existing largest Tier 1 FWA customer. Like we mentioned in our prepared notes, we're introducing a new generation of that FWA product, which will be part of the solution in getting the run rate levels where we should be at.

Yes. The numbers behind that, Tyler, to your point and Juho's color is we expect mobile to kind of come back to where it was last year, essentially. And then we expect FWA to rebound off of a low this quarter, Q3 from the larger deal that got done in Q2. So it's really not that Q4 is expected to go up to a huge number. It's really Q3 is much lower than we wanted. And so we are looking for some normalization, if you will, for what Q4 we believe should be.

Okay. Understood. And then maybe just pivoting a little bit here. On the Nokia acquisition, you guys hired the international team and started that headquarters like you talked about. I'm just wondering the strategy there. How much work can you really do before the deal is closed? Can you kind of start cross-selling opportunities, start those conversations with customers? Any color there would be great.

We've had the opportunity to meet the large -- our new largest customers that we'll have after the acquisition, already some of them in the due diligence space. And of course, they're very keen to hear from us together with Nokia on how do we secure business continuity, what does the new engagement look like and also learn about our expanded product portfolio where from what you know from our business today, the mobile part is net new discussion that we can have independently right now as Inseego as well as the enterprise FWA. So I think those discussions are very encouraging and super happy to have now the leadership -- two key leaders in the theater in anticipation of the close by the full team will then come over.

Yes. The work on that front, to Juho's good point, has been going really well from a front-end customer-facing go-to-market and as well on the back-end integration work with Nokia and team is going very well.

It's a good summary.

[Operator Instructions]

The next question will come from Lance Vitanza with TD Cowen.

Hello. Can you guys hear me?

Yes.

Sorry about that. Hey, I'm very sorry to keep you waiting. So a couple of questions. The first is you've been talking about the engineering execution issues for a couple of quarters now. Could you refresh my memory, help me better understand the nature of the bottleneck there? Is it primarily a product development issue? Is this certification testing, manufacturer transfer issue or something else? And I know you've been looking for some personnel changes for some time. Is there anything in particular that gives you confidence that this bottleneck will be resolved shortly rather than continuing to lead to further pressure on future guidance?

Lance, I think that's a fantastic question. So if you take a step back and look at Inseego over the past years, the company has typically introduced one product per year, typically for a single customer, which is a reflection on the intensity of new product launches and also the diversity or lack of thereof of the customer base. Over the past 18 months, we've been successful in expanding both the customer base as well as winning new opportunities in an expanded product portfolio. And I guess the big discovery here is that where we got most challenged were in the basics.

The development process that we used as a company was not capable of parallel processing the complexity introduced by a broader customer base and a broader set of products. The big work that we've done with the team, we've overhauled the development process, our milestone model, and very importantly, instilled a level of discipline where there are no shortcuts. Every milestone is adhered to detailed program planning, things that you would take for -- that are essential building blocks of reliable delivery from an engineering standpoint of view.

The other important thing to note is that, look, we've just introduced this new mobile range across all of the three carriers as well as channel. And we've launched the 4100, 4200 to the marketplace. Now what we're doing next is that we're narrowing down the new product introduction cadence and ensuring that with that focused road map, the team has full focus in executing on schedule with high quality. When it comes to the new engineering leader, [ search ], like I mentioned in our prepared remarks, very pleased with the pipeline, say, finalists that we have assembled. A lot of people excited about the opportunity to create something new, not only within Inseego, but also with the acquisition in mind, of course. So you should expect to hear back from us on this in the immediate term.

Great. And then can you help us understand -- and I know you've talked a couple of times you mentioned Q4 closings. So it sounds like the timing of Nokia is still very much on track. Is there any implications for either the economics of the transaction with Nokia, including the amount of equity or ownership Nokia ultimately receives or any expectations that the company's combined operating profile once the transaction closes, do you see the stuff that's happening in the back half of the year as putting pressure on those expectations?

Yes, great question. The short answer is no. There are -- there's no aspects of the deal qualitatively or quantitatively in the contract that give any reason for pause or would upset the apple cart to be candid. And so what it comes down to is like, okay, what does the business look like going forward? -- on both sides, right, for what our business looks like going forward as well as the acquired business. And as we said when we -- last quarter and when we announced the acquisition as well, there's just a tremendous opportunity for us to improve our engineering acumen and bench and to run it globally a lot more efficiently to bring the team together, right?

It's one engineering function, not a bolt-on as some people typically do. That's not what we're doing. And so when these come together, it really is hitting the ground running in a field and a product in a production capacity that we know this is what we do. And so everyone is pretty eager to get going on both sides to do it.

Great. And then just one last one for me. At announcement, and I think you reiterated this a minute ago, but the Nokia FWA business was described at operating a roughly $200 million revenue run rate base. I think that was based on the first quarter results. I might have that wrong. But in any case, as we move toward the anticipated 4Q close, can you provide any update on how that Nokia business has been performing relative to that baseline? And if the acquired business were to be tracking materially above or below that run rate by closing, are there any mechanisms in the transaction structure that would adjust the economics or otherwise protect Inseego shareholders?

Yes. That's a great question. Just to take that last bit first, there is no repricing of the transaction in either direction. And if you go back to the deal terms, the price of the equity that was used to issue the shares to Nokia was $10 and change. And so that's the price at which equity was issued and the deal was monetized. And so candidly, that's in the favor of the Inseego stockholders right now. If the stock price had doubled, it would be a different conversation. So right now, that's not an issue in my humble opinion.

You are correct in the -- what you said, Lance, about the run rate of the business when we discussed this at first, it was based on Q1. When we look forward to working with -- when we look ahead to the business, we don't own it yet. So it's not really our place to go disclose what it's doing right now in the current quarter. We have not been authorized to do that. But we're still comfortable with that $200 million bogey of an annual run rate, and we'll definitely be updating that between now and the next call is when the deal closes.

And so we'll be updating that, particularly given the time of year when we're all embarking on 2027 planning right now. And so we would expect to have a bit more color and insights for you. But that is still a valid number and something we are comfortable with.

[Operator Instructions]

The next question will come from Christian Schwab with Craig-Hallum Capital Group.

Just as far as the engineering effort and the capability of your company to introduce new products on a timely basis, which we kind of struggled with as we kind of took on a bunch of new initiatives. I'm kind of confused on how the combined company would look. So in the near term, we're struggling with developing and successfully attacking the MSO market as well as getting new products out in a timely fashion at the right cost. And then we're about to close and buy, for lack of a better word, Nokia's [ mess ], who's going to be running or how do you plan on implementing engineering of the combined company with a lot of products in many geographical locations?

Christian, great question. So maybe one thing to say before going into commentary on the business and the capabilities that we're acquiring from Nokia. So like you know, we experienced delays, particularly in the new mobile range that we introduced to market that greatly impacted the year. Those products are now out. That was the big, let's call it, chunk or body of work where we discovered that our processes did not scale and causing the delay. But the products are out. They're now ramped to velocity, and they're shipping.

They're the -- we, of course, lost revenue from the year. But on a go-forward basis, the opportunity is intact. And like I mentioned, if you look at the latter half of the year, we're essentially introducing one new product. So we've been very thoughtful about making sure that we have the right ability to focus our existing team while we're continuing to develop the processes and search for the right leader to finalize that transformation as it pertains to Inseego. As a part of the Nokia FWA acquisition, the carve-out includes their R&D function in its totality.

So if you look at what day 1 looks like from a Nokia engineering capability in the FWA business, it remains intact as it is. And this team has been executing reliably. So from a Nokia standpoint of view, there is no jeopardy in that. They also come, of course, with a set of leadership from Nokia side. And then if you look at what I intend to do from a global one engineering function standpoint of view like Steven was describing it, where we're going to onboard a new highly qualified leader to look at then what does the combined organization look like.

The important thing here, which is a key part of the deal, I'm sure you recall the EBITDA make-whole, which will enable us to fund the Nokia engineering to deliver on the committed Nokia road map. So I don't view this as a compounding issue. I view them as something that are separate in the short, midterm with the time to integrate and develop the right go-forward setup for the combined company.

Okay. Great. And then we talked about the Q2 preorder before ASP increases took place. But then when they gave you the order, you still had to go buy memory at cost -- so the gross margins were less than expected. And I want to make sure that, that's what you said, not what I heard. That's question one. Question two, the ASP increases are now out there, I guess, is my next question, meaning that all three large U.S. carriers in the United States know that on a go-forward basis in Q3, Q4, et cetera, it takes into account additional component costs. Is that right?

Yes, let's both tag team and hit those both up maybe the first one, Christian. The bottom line is, yes, you basically heard that and digested it as intended, which is, just to say all out again, is -- we had units and plans for a normalized buying amount of deal size in Q2 through conversations, the customer wanted to do a much larger order. And so given the memory pricing, and we had talked in previous quarters, too, how we felt good about supply and pricing. We had visibility to memory for the first half of the year and into Q3 now as well.

But when we went through the larger order, we had to basically go use, if you will, higher cost memory that we had purchased, but had planned on using it for Q3 deals at a higher price. And since the price on the deal is fixed, we use that higher price, not for the whole transaction, but for part of it. And so that pulled down the margin for that transaction. But as we said and as you just said well, is for Q3, we're engaged with all the customers, all the carriers about price increases. And candidly, it's a new muscle for us like it is for everyone else, right?

When we talked about this topic 6 months ago, it was just -- you and other guys were asking questions about where are you with raising prices to address the memory price increase, and we were all collectively just broaching that topic. No one really has gone first in the industry insofar as passing that along. And so it really wasn't a thing yet.

In our opinion, it just kind of became a thing this quarter that people started passing on prices. And you see that whether it's Apple or Qualcomm or pick a topic that's -- now it's pretty obvious and maybe 3 months ago when we did the transaction very early in the quarter right out of the gate. And so now when we're doing this, there's much more memory muscle and seeding of the market, and so we have better coverage.

Yes. And I think we mentioned in the previous call, coming into this year, we came in with healthy inventory levels. So Q3 was really when this transition happened for us, which perhaps a little bit later than some of the industry players who had not covered on key components like we had. So Q2 is a bit of a transition quarter, like Steven was saying, Q3 -- we've largely cascaded pricing out. Look, the way that this operates now is that the memory -- you will know the memory pricing upon delivery. And that's not us.

That's an industry-level phenomenon. And with that Q4, we will deal with as we approach the Q4 deliveries. And this is something where different -- well, some of our large customers have adopted a strategy where they buy now while they still have visibility. So that's really the rules of the engagement at this stage of the -- of what we see in the component market.

My last question on the software, well, your only customer for practical purposes, has chosen to go in-house and use a less complicated software. And so that's going to go from $11 million to $9 million, as you discussed. Is there an expiration date? Is that what it's going -- is that going to be readdressed in one year or two years, three years or five years? Or is it up for discussion on a continual basis? I guess that wasn't clear to me.

Sure. Just to correct, though, that's not quite the dynamic that you had said. That's not what's going on. It's not that they're going in-house on their own platform. Just to clarify, they subscribe to the platform, to the Subscribe platform, SaaS offering. And we also have an amount of professional services, call it, NRE, nonrecurring engineering that we provided them for a while with new leadership, with new investments with the team, et cetera, the complexity of what we needed to do on the pro services side has changed.

And so we've adjusted the pricing for that less complex work going forward. And so that -- they're still taking the service and the work. It's just the nature of it is less complex and less robust and therefore, priced a bit lower. We are working with them right now on the term of the long-term agreement. What does that look like, different terms. And so we're deeply engaged with them. They've been a good partner through this. And so it's kind of in the normal course of a transaction of a contract renewal cycle, and that's what we're going through right now.

Okay. Thanks for that clarity.

Yes.

So the term length is still yet to be determined, Steven? You're...

Yes, that's right.

Still negotiating that.

We've had terms with them anywhere from one to three years has been kind of the range. The last one was two, the one before that was three. We've done a quarter or two. So it's not -- we're not talking five and 10 years, and we're not talking about six months.

This concludes our question-and-answer session. I'd like to turn the call back over to you, Juho, for closing remarks.

Thank you for the thoughtful questions and for joining us today. I want to thank our employees for their continued hard work and shareholders for their ongoing support. Steven and I will be at the Lake Street Conference on September 10 in New York City, and we look forward to seeing some of you at that event. We appreciate your time today, and I look forward to updating you as we move forward.

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

Hello, and welcome to Inseego Corp.'s First Quarter 2026 Financial Results Conference Call.

[Operator Instructions] 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.

Good afternoon, everyone, and thank you for joining us today. This is a very exciting chapter for Inseego and an important step in the company's transformation to diversify revenue and at scale. Over the past year, we have been executing a strategy focused on increasing stockholder value by strengthening the foundation of the company, expanding our product portfolio and customer base, broadening our routes to market and solidifying our leading position as the partner of choice across mobile and enterprise FWA.

Last week, we accelerated that strategy in a very significant way with the announcement of a truly transformational acquisition for Inseego. It is the largest revenue deal in the company's history, and it's one that we structured very thoughtfully to meaningfully derisk the profile of the transaction.

We view it as a major milestone and important inflection point for the company for three reasons: First, it will more than double the revenues as of the company and take us from a North America-centric player to be the new global leader in wireless broadband in one decisive move as our end markets expand from North America to Asia Pacific and Europe, Middle East and Africa.

Second, it gives us one of the broadest portfolios in the industry across consumer and business markets, including FWA, mobile routers and IoT gateways that we can use to address the expanded TAM.

And third, it establishes a unique and strategic partnership with Nokia across go-to-market, AI, 6G and the future of the wireless edge.

Before I discuss the acquisition in more detail, I want to first cover our Q1 2026 results and provide color on our operational progress and some challenges in the quarter that we're managing through.

Q1 revenue grew 8% year-over-year to $34.3 million. Adjusted EBITDA was $1.8 million, and both revenue and adjusted EBITDA were within our guidance. We also delivered healthy gross margins at 48.9%. As we said on our Q4 call in February, 2026 is a year of investment in carrier ramps, product launches and portfolio expansion in the first half, followed by benefits of greater scale, improving operating leverage and stronger profitability as the year progresses.

Q1 played out largely as we expected and in line with what we discussed on our Q4 call. One challenge in Q1 was in FWA. Our large FWA customer overhauled its executive team and changed its approach to enterprise go-to-market, which created disruption for us in the quarter. We are working with them to realign the go-to-market and expect to see progress.

Meanwhile, we've secured a commitment for our next-generation FWA platform with that same customer, reinforcing both the strength of that relationship and our position at the leading edge of sever technology. In addition, our recently added Tier-1 customer is ramping very well in FWA. This goes to show the importance of executing on our strategy of diversifying our revenue base.

Mobile delivered $16.7 million of revenue. On last quarter's call, we said we had engineering delays in our new mobile hotspot product family, which consists of a model for each of our Tier-1 carriers that would impact Q1. While we have successfully launched two out of three models, the delay in the third is persisting into Q2, we anticipate to launch in late June.

I'm happy to share with you that we've executed on our strategy to broaden the mobile portfolio across multiple value tiers and secured a carrier commitment for a new low-tier MiFi product, which is an important step in expanding the portfolio and positioning the category for broader contribution over time.

I've made important changes to address the execution issues I mentioned. I've brought in a new Chief Product Officer and launched a search for Head of Engineering. It's important to note that as part of the Nokia FWA acquisition, I will be integrating people and best practices from Nokia, an industry leader in engineering technology, which will help us scale both our existing business and the newly acquired business.

We recently welcomed Koroush Saraf as our new Chief Product Officer. Koroush brings more than 20 years of experience across networking, cybersecurity, hardware, software and edge infrastructure with expertise in AI, SD-WAN, cloud security and 5G. He held product leadership roles at ZPE Systems, Accredo, Palo Alto Networks and Fortinet, where he helped bring products to market across connectivity, networking and security. Koroush understands how to build and scale product platforms across hardware and software, and his background is closely aligned with our strategic priorities as we continue expanding the portfolio.

So, in summary, Q1 played out as we expected. As we move into Q2, we continue to build our FWA business. And in mobile, while we have launched a new product generation with two out of our three Tier-1 carriers, the additional delay with the third one will impact our Q2 outlook. As it won't launch until late June, it therefore, won't benefit most of the quarter.

Moving to the transformational announcement we made last week, the acquisition of Nokia's FWA business. What makes this transaction compelling is what it means for Inseego strategically for our market position, our global reach, our technology roadmap and our ability to lead the wireless broadband edge as AI, 5G evolution and eventually 6G expand the opportunity in front of us.

The simplest way to think about this transaction is that it's transformative for Inseego. We are acquiring Nokia's approximately $200 million revenue run rate FWA business. That more than doubles our revenue base, gives us immediate global scale in revenue and reach and positions Inseego as one of the leading global players in FWA with what we believe is the broadest platform in the industry across mobile, fixed, enterprise and consumer connectivity.

It also establishes a partnership with Nokia across technology, go-to-market collaboration and ownership alignment. From a scale, reach, financial and technology standpoint of view, this acquisition transforms Inseego and sets us on a greatly accelerated growth trajectory.

For Inseego, the strategic logic is very clear. This acquisition materially advances our product roadmap and gives us immediate global presence. It takes what has been a U.S.-centric business and makes Inseego instantly global. It also gives us a strong set of global Tier-1 customers and creates real opportunity to take Inseego products into Nokia's customer base and Nokia FWA products into Inseego's customer base.

It gives us a different level of scale from day one and positions us to compete across a much broader set of customer segments, geographies and use cases. This gives us a much stronger position in FWA market, which is growing rapidly and becoming more important globally.

The drivers are clear. Operators are increasingly using FWA to monetize 5G, expand broadband access and serve a broader range of consumer and enterprise use cases. At the same time, AI-driven workloads are increasing uplink demand, lowering latency tolerance and pushing more intelligence to the edge, while 5G evolution, millimeter wave and over time, 6G continue to expand what wireless broadband networks can support.

We believe this transaction gives us exactly the right platform to capitalize on those key trends. This is also a strong fit for both companies. Nokia is sharpening its focus on AI infrastructure and network leadership. Inseego is building a leadership position at the wireless broadband edge. Bringing these two together creates a very compelling combination and a strong fit strategically for both sides.

On a personal level, this transaction means a great deal to me as well. I spent nearly eight years at Nokia, so I know the teams, the products, the customers and the quality in which they operate the business. I also know the depth of technology and the relevance of this business in the broader wireless broadband ecosystem. This is a business we understand, a market we deeply believe in and an opportunity we are generally excited to bring into Inseego.

I also want to thank Nokia President and CEO, Justin Hotard, and his team for the partnership and the work they've done to get us to this point. We appreciate the relationship and are excited about what we will build together going forward. It has been one week since we announced the deal. And while there is obviously a lot of work ahead of us, the response we've seen from partners and customers has been overwhelmingly positive.

As I mentioned earlier, an important part of this acquisition for me is the ability to add strong Nokia expertise to our company. I'm driving to one global engineering team, one product team and one integrated supply chain. Signing the deal only got us to the starting line.

I'm laser-focused on making sure we execute along the way, starting with the overall integration of the business. We are approaching integration the right way with a clear focus on customer continuity, employee integration and building the right culture. We have a dedicated and experienced team leading this effort.

Importantly, the business and financial attractiveness of this deal is well aligned. In this regard, this is not a bolt-on. It's about bringing two complementary organizations together with a clear set of opportunities for scale, efficiency and cost synergies over time. The transaction structure is designed to give us the flexibility to integrate thoughtfully, continue investing in the roadmap and optimize the business as we execute.

Steven will walk through the structure in more detail. But from my perspective, that operating framework is an important part of what makes this transaction so compelling. At the same time, we remain fully focused on the existing business. We are driving that business forward while preparing to bring these two organizations together as one fully aligned team, serving a much larger global opportunity across mobile, enterprise and consumer wireless broadband.

With that, let me turn the call over to Steven to discuss the Q1 financials, Q2 outlook and the Nokia acquisition structure and economics in more detail.

Thank you, Juho. Hi, everyone. Thank you for joining us. I'd like to cover three topics today, as Juho said.

First, I'll take you through our Q1 2026 financial results.

Second, I'll share some color on the financial profile of the business and provide our guidance for Q2 2026.

And third, as Jo mentioned, I'll provide more details on the FWA acquisition structure and economics.

To be clear, though, the discussion of our financial results for Q1 2026 and our outlook and guidance for Q2 and the full year 2026 are for Inseego only and do not include any of the Nokia FWA business. The acquisition is anticipated to close in Q4 2026, and we will look to provide the relevant financial information in that time frame. As we always do, we'll wrap up today by opening the call to your questions.

Starting with our financial results. Q1 played out largely as expected, as Juho mentioned, and reflected the timing and transition dynamics that we discussed on the last call. We delivered year-over-year revenue growth, healthy gross margins and adjusted EBITDA within our guided range. And we did this while we continue to invest in the product, go-to-market and operating capabilities needed to support the larger organic growth opportunities ahead.

On the top line, total revenue for Q1 was $34.3 million, up 8% year-over-year and driven by higher FWA volumes relative to the prior year period, along with a consistent contribution from our software services offerings.

As expected, mobile was the larger dollar revenue contributor in the quarter at $16.7 million.

FWA revenue was $5.3 million for the quarter. And while that was a sequential decline from Q4 2025 that reflected the timing and customer-specific dynamics that we highlighted on the last call, FWA revenue was up meaningfully year-over-year, supported by higher carrier volumes and a broader customer footprint.

Software services revenue was $12.3 million, as mentioned, continuing to provide a stable high-margin contribution to results.

Moving down the P&L. Non-GAAP gross margin in Q1 was 48.9%, up about 640 basis points sequentially, primarily as a result of a higher proportion of software services revenue. Non-GAAP operating expenses for Q1 were essentially flat to Q4 2025 of $16.9 million. As we discussed previously, this reflects the planned investment in sales and marketing and R&D in the quarter. These are deliberate investments tied to carrier ramps, portfolio expansion and broader go-to-market readiness for the second half of 2026.

Adjusted EBITDA in Q1 2026 was $1.8 million or 5.1% of revenue, which was at the higher end of our guidance. That result reflects what we said on the last call, lower profitability in the first part of the year driven by front-end investment while preserving the setup for stronger scale and profitability in the second half of the year.

Turning to the balance sheet. We ended Q1 with a higher-than-anticipated cash balance of $19 million from a large customer clearing their quarter end AP balances. We drove healthy working capital through the quarter and finished Q1 with a manageable debt balance of approximately $49 million. That is $8 million higher than the year-end balance on our successful elimination of all of the $42 million in outstanding Preferred Stock that we executed in January at a meaningful 38% discount.

Let's now turn to Q2 2026 guidance. We continue to view 2026 as a growth year with front-loaded investment in the first half designed to position us for greater scale, stronger operating leverage and improved profitability in the second half of the year. That basic first half, second half dynamic remains unchanged and is playing out as communicated.

As we said on the Q4 2025 call in February, framing Q1, the first half of the year reflects several dynamics.

First, the second half of 2025 benefited from a strong FWA ramp with a Tier-1 customer and elevated mobile volumes tied to carrier promotions and ordering cadence.

Second, we are in the early stages of launching several new FWA programs with our Tier-1 carrier customers, and those revenue ramps build over time rather than all at once.

And third, our refreshed MiFi portfolio is setting up for contribution in late Q2 and beyond as we work through the delays that Juho talked to.

Against that backdrop, we remain positive on the outlook for both mobile and FWA in 2026 as we continue expanding our business with our Tier-1 carrier customers and broadening our routes to market.

Looking at Q2 2026, we expect revenue to increase about 12% sequentially from Q1, driven by improved contribution from growth in FWA among both our carrier and channel customers, offset somewhat by a lower mobile quarter on MiFi, as Juho discussed.

We expect software services revenue to remain consistent at approximately $12 million. From a profitability standpoint, we expect Q2 2026 adjusted EBITDA to be lower sequentially with the anticipated increased spend in sales and marketing and R&D before that spend lowers again and revenue ramps to drive higher profitability levels in the second half of 2026 as we highlighted.

Pulling this all together, we're providing the following guidance for Q2 2026.

Total revenue in a range of $36.5 million to $43.5 million and adjusted EBITDA in a range of $250,000 to $2 million. We see a higher range to the upside on revenue as we now have multiple new product launches and carrier initiatives in market, a new dynamic for Inseego and the specific timing of which can land on either side of quarter end.

Stepping back to the full year 2026, we continue to expect organic growth and see a path to deliver $190 million of revenue with the year building sequentially and profitability improving meaningfully in the back half as revenue scales.

With that, let's turn now to the FWA acquisition.

As we've said, we held the conference call last week on April 30 to walk through the transaction. So, I'll keep the focus today on the key structural and financial points. We encourage anyone who hasn't already to listen to the webcast and download the acquisition presentation that's on the Investor Relations section of our website at inseego.com.

Overall, this is an asset purchase structure with an aggregate consideration of $20 million that consists of $15 million in Inseego common stock and $5 million in warrants to be issued to Nokia.

We're very bullish on the deliberate transaction structure that we put together that meaningfully derisks the addition, of international scale and value creation for the company in a disciplined way and that aligns both parties around stockholder value creation. We would offer there are three aspects of the acquisition that we'd like to highlight.

First, the way we structure the transaction preserves balance sheet flexibility. We are materially increasing the scale of the business without using cash or incurring any debt and that matters.

Second, the transaction structure creates real alignment between Inseego and Nokia. Nokia is not simply divesting an asset and moving on. They're becoming a shareholder of Inseego and have aligned incentives around execution and long-term stockholder value creation.

And third, the transition support framework aspect of the transaction is important. We designed the structure to maintain the acquired FWA business at EBITDA breakeven for the first year following the close. This will be achieved through quarterly cash payments from Nokia that are equal to the negative EBITDA of the acquired business at first year.

That support gives us stability during the transition while preserving upside to realize the broader cost savings and operating synergy opportunities over time. As we discussed, the EBITDA make whole is capped at $38 million in aggregate, which we see as wholly adequate for that first year of operations.

There is also a longer-term alignment mechanism through profit sharing in years two and three following the close, where Nokia will be able to participate in positive EBITDA generated by the acquired business that is correlated with its performance. In this regard, we see an opportunity to leverage greater supply chain scale and purchasing power and to realize engineering efficiencies through product design and development model benefits in order to drive profitability over time.

We believe the structure creates an attractive and disciplined framework for Inseego shareholders and the scale is compelling with the acquired FW business, essentially doubling the size of Inseego and bringing approximately $200 million of revenue on a run rate basis from their Q1 2026 results.

When you combine that scale with the transition support, the equity alignment and the revenue and cost synergy opportunities, we believe the way we structure this acquisition meaningfully derisks the transaction financially, complementing the strategically compelling nature of the opportunity.

As noted earlier on the announcement call, we currently expect the acquisition to close in Q4 2026, subject to customary closing conditions, and we look forward to providing more financial details on the business as we move to the closing.

With that, we appreciate your time and support and are glad to open the call for questions. Operator?

[Operator Instructions] And the first question will come from Tyler Burmeister with Lake Street Capital Markets.

Steven, maybe first on the Nokia acquisition you guys announced last week. I'm wondering if you're able to at this point or if it's something we have to wait closer to closing, to provide a little more detail on exactly what that year two, year three profit sharing looks like, what some of the metrics are that you would hit for Nokia to participate in that?

Yes. We'll do both of those. We will provide more details in our filings, and we're happy to share that the basic structure of the profit share is based on the revenue performance of the acquired business. And the way it works is that Nokia will be able to participate somewhere between 0% and 50% of the EBITDA, positive EBITDA that's generated from the business based on where the revenue of that business comes in.

Great. Maybe pivoting to the core Inseego business here in the quarter. Gross margins, maybe as we look through the year, obviously, there's going to be some mix headwind as your product revenue ramps in Q2 and the second half of the year. Wondering if you could just maybe give some thoughts on gross margins for the remainder of this year.

Yes. We'll tag team on that as usual. And I think you just summarized it really well. That is exactly what's going on that in the reported quarter in Q1, the margin was quite high, mostly on mix, mostly on a higher proportion of software because of the lower print on mobile basically and certainly on FWA, which is generally a higher-margin business.

And then as we roll out though, more products, like I mentioned earlier, is this is really the first period in the company's history where we have multiple product launches across multiple carriers. And so, the good news is we're looking to grow revenue and compete well, and that does bring some gross margin pressure in so far as rate. So that is kind of the dynamic that you summarized quite well.

Yes. I think Steven also mentioned in his prepared remarks that it's a new dynamic for the company. So if you look at our revenue engines that we have now compared to a year ago when there were really three products across two carriers. Now we're ramping up three mobile products across all three carriers.

These mobile products are positioned now to capture a much larger share of the market at a lower price point with some pressure on the gross margin that you'll see reflected. Meanwhile, on FWA, we're very happy to see the ramp of our new Tier-1 carrier partner while we continue to work with the existing large partner to realign on the go-to-market side.

And then the big element in addition to that would be our targeted expansion to the MSO. So you get from those three revenue drivers to over six. And then, of course, with channel, we're now in the middle of the FX4200, our new product introduction to the market, and I expect to see a rebound effect there in Q2 and ongoing growth in addition to mobile, which has always been a strong driver in channel for us.

I appreciate all that color. Maybe last one, if I can sneak one more in. I was wondering on your software business, The Inseego Subscribe, which is the majority of that business with one carrier customer today, I was wondering how you might think about the opportunity to expand that with Nokia's international carrier customer base post the close? Do you think there could be a more or less likely opportunity for inroads with some of those customers there?

Yes. So absolutely, the global footprint opens up more market opportunity for Subscribe as well. Look, the big thing for me with Subscribe as we've done heavy investment on the platform over the past year plus. And on the back of that, expand our customer engagement with the immediate priority being the other large Tier-1 carriers here in the U.S. I'm extremely, extremely encouraged by how well the solution has been received. And again, as a recap, what Subscribe really is, is a full subscriber life cycle management business support solution, and it specializes in the most difficult part of the market, which would be our Fed/SLED segment.

And that specialty is something where we see the differentiation and the value of the platform continue to deliver. In addition, under Steven's leadership, we have hired two new senior leaders for the business, Head of Engineering and Head of Product. And I'm very happy with the traction that these two new leaders have been driving to the platform.

The next question will come from Lance Vitanza with TD Cowen.

Two questions, I guess. The first is on the Nokia deal, which looks like it's a lot of potential upside there. How should we think about the gross margin potential once you sort of get that business integrated? How should we, is that 10% gross margin? Is it 20% gross margin business? Just trying to think about what this thing could actually look like in a couple of years' time.

Yes. So let's tag team, of course. It's a good question, and we're working that through. And I think your good question has two aspects to it. Like what is it at closing and then what is it over time? And in our view, those are reasonably different, not amazingly. But to your point, a good portion of the customer base right now is a high velocity consumer-based, residential-based model.

The product is pretty diverse. It can go to business as well. But the margin profile of that business is more of a teens kind of gross margin than it is in the 20s right now, but we expect to be able to drive that in the future once we close.

There's not really a single gross margin percentage that will exist in nature in that business. If you look at the, like Steven was saying, the book of business that we're acquiring, you have anything from a very advanced millimeter wave deployment in Australia with a significantly higher gross margin contract to emerging markets and everything in between.

The other things that I'm very excited about and in all of the discussions with our existing customer base that has become apparent is that now on the back of this asset and with Inseego becoming #1 in wireless broadband globally, we're viewed as a great candidate to take that asset here in the U.S. to residential deployments with our existing large Tier-1 carriers.

So there's significant growth opportunity for us, both cross-selling our existing Inseego broadline to global markets, but then also taking this new Nokia FWA asset and competing here in residential or consumer domestically.

And just to sort of follow up on that, like the go-to-market and the distribution capabilities that Nokia can sort of bring to bear here, is there a way to sort of get that started before the closing or at least to sort of get it into position so that when the deal closes, you can kind of hit the ground running day one? Or how should we think about the ramp in terms of their ability to kind of add value from a distribution standpoint?

That's an excellent question. One of the key things that we've discussed with Justin Hotard from the beginning was to align on the market opportunity. As a part of that, the notion of this strategic go-to-market collaboration continuing with Nokia even beyond we close the transaction.

So we will train. We will have a joint account management, pipeline management process. We will incentivize the Nokia global sales team to continue to hunt for us. So on the go-to-market side, that is a very valuable asset for us. It's also good to note that here in the U.S., we already have the sales structure in place to capitalize on the opportunity.

And then maybe just one switching gears for a second, just on the regulatory kind of Washington policy. And I've seen some headlines over the past couple of months, but honestly, I haven't been following it as closely as I could or probably should. But are you getting any sort of a tailwind in terms of what the FCC has been sort of doing in terms of thinking about what can or cannot go into the supply chain these days?

Yes. So, the FCC ruling is on residential routers where the primary intended use case is for residential deployment. Our solutions for the FWA and a hotspot for that matter, are intended for, primarily for enterprise use. They have manageability, security, all of that enterprise feature set. Like you know, our mobile products also cross-sell into the consumer segment.

So as the situation progresses, I do see this as a potential upside driver for us given that we will be able to cater for both segments with a product that, again, primarily intended for enterprise use as opposed to residential.

The other thing I would note here is that the criteria here is produced in U.S. and produced means designed, developed and manufactured. We are unique in that we design and develop here in the U.S. And then when it comes to manufacturing, we have optionality for that as well. So I do believe that our unique position as an American company with design development here in San Diego gives us a great opportunity to capitalize on what's next on that front.

The next question will come from Scott Searle with ROTH Capital.

I got on the call a little bit late, so I apologize. I'm going to stay away from supply chain issues because I'm sure they've got addressed, and I can take that offline. But Juho, maybe looking at the second half of this year, we kind of back some revenue more into the second half. So it's a really back-end loaded year. I'm wondering if you could kind of give us what's your level of confidence in terms of the number of operators and/or products and programs that you expect to be launching up? Do you feel pretty comfortable about how the operator cadence of launches is going to perform in the mid to second half of this year?

Scott, thanks for joining us. Really appreciate your time. To your point, if you look at the revenue engines that we have going into the second half, we're in a really unique position with those three new hotspots launching and ramping by the end of the first half, in addition, on the call today, we announced that we have secured a new value tier win in a hotspot with a large Tier-1 carrier.

So there's more work to be done, more business to be expanded, but the mobile portfolio going into the second half is in excellent shape despite some of the time delays that we've experienced on the first half that's reflected in the Q1 performance and Q2 guide.

Meanwhile, on FWA, very, very encouraged by the performance and the partnership with our new large Tier-1 FWA customer, while we continue to realign the go-to-market and sales strategy with our existing large ones. So those are huge for us. In addition, I see great opportunity in the MSO space.

We've done a lot of work both on product and cloud side. to become the perfect solution and ideal partner for the large MSOs when it comes to failover day one and other use cases. So I view all of that as very encouraging. And as we have all of these expiring in the second half, we see visibility to that $190 million that we set as a target for the year.

Very helpful. And Juho, maybe just to follow up on that. MSO customers, is that likely in the second half of this year? And maybe I wonder if you could just comment on the competitive landscape. There are a lot of dynamics going on out there, obviously related to FCC regulation and security issues. But the breadth of the product portfolio that you now have and as you start to move from the high tier into the mid-tier and low tier, are competitors starting to dwindle and go away and just kind of opening up share gains for you within the existing operator base?

Thanks. I'll take those one by one. On the MSO engagement pipeline, very strong. The job left to do now is the final conversion. But again, we have good readiness pipeline and visibility into that opportunity space. The SEC ruling, which was, at this point, specific to residential routers in the following Q&A was also identified to cover hotspots as a category. So there's a couple of things that we have going for our favor.

First of all, intended primary use case is the enterprise. We have manageability and security and all of those features that cover. And secondly, if you look at the degree to which you produce in design, develop and manufacture in the U.S., we're in a unique position, as a company to do all of that here in the U.S.

So whatever happens there next and how that situation develops, I would expect will always be favorable for us as carriers transition their portfolios and new products go into SEC filings. If you look at the volume opportunities in the marketplace, we've done a great job in consolidating the MiFi mobile market, already now with that mid-tier portfolio that were mid-high tier portfolio that we're in the middle of launching across all three carriers.

Like you know, we've positioned now for higher volume capture where we used to be significantly higher priced than bulk of the market. Now we can drive volume share gains there, which in itself is great. And I do believe that this value tier win that we now have secured in mobile further takes oxygen out from the marketplace in our favor. So we're committed in driving increasing gains in that segment.

Got you. Very helpful. And if I could, just 2 quick ones on Nokia. I imagine you've probably had some inbounds and engagements with customers on both sides of the acquisition. I'm wondering what the operator response is now with you guys taking over with there being a long-term roadmap and direction for the company in terms of solidifying those existing relationships and then the cross-sell opportunities for you to bring in higher-end mobile hotspots and otherwise into that carrier customer base.

And on the gross margin front, I know it's early, but I'm kind of wondering if you've been able to get a quick peek at what's in the box and the BOM breakdown and have a roadmap to be able to enhance the gross margin profile once you guys get closer to close date and integration.

Thanks, Scott. We've, as a part of the due diligence process, met with the top customers, top five, think about like that. Since then, we've had meetings with the global, our new global customers across existing ones and the ones that are targeted for further expansion with the Nokia FWA business. And the feedback has been single-handedly positive. We're a trusted known technology leader in the landscape.

While we've been operating exclusively, almost exclusively in North America, so far, the reputation, commitment and dedicated focus in this mobile or wireless broadband space is something that's very much acknowledged. Also the strategic partnership that will carry forward with Nokia is something that's a big confidence builder, of course. for our customer base. But I feel like we're in a great position to continue to be and quite frankly, expand the customer footprint for the business that we're acquiring as a trusted partner of choice.

The other thing that I've been very, very encouraged with is that in these discussions, of course, we've also socialized our Inseego portfolio, be that our enterprise FWA or mobile, and we've already uncovered cooperation opportunities with these new international customers where they have a business need that we can feed. And if you translate that then into the cloud on the ARR side, I think it's a great value proposition to have your, now your entire fleet, whether it's residential, enterprise or mobile managed by a single platform. So all of that feels very good.

In the meanwhile, as we've engaged with our existing large customer base, the Tier-1 MSO community and beyond here in North America, the fact that we're becoming overnight the largest global wireless broadband provider gives us the scale and the capability to compete also very aggressively here in residential and other opportunities. So everything that we've seen in the discussions that we've had makes me believe that we have, we're in a great position to be the new home for the business, grow it and really take it to a place where we have one team, one technology and product platform that we now take this expanded global set of customers across enterprise, consumer, mobile and fixed.

And then, Scott, to your good question on gross margin. As we said a little bit earlier, it's interesting, the margin right now overall in a small number of customers, but large players. It doesn't really exist in nature in that it's in the kind of mid-teens, if you will. But that exists from a very, very large single customer that is the definition of a high-velocity model where you have tremendous market share and tremendous volumes in the millions of units.

And so the technology and the engineering quality that Nokia has executed in their business is so compelling, they have been able to add additional customers at much higher margins with two handles on in the 20s. And so as we see that trajectory of the ability to build off of a foundation of a very strong, high-velocity model that has very efficient supply chain, very efficient operations and then go add higher-margin business to that, that becomes a really compelling story for us, and it's kind of what we've been able to do domestically, organically and that we look to do there on a global basis.

I think the big thing for me here is that if you look at the product portfolio and the market opportunity, they're completely complementary. Meanwhile, on the engineering and product side, you have a few companies that are now making their own connectivity modules, own software platforms, their own device roadmaps. And now we have the ability to create one platform on all levels and also drive significant synergies even on the device roadmap side and then have one team execute behind that. That's one of the key things here, which we believe will make us very successful with the acquisition.

This will conclude our question-and-answer session as well as conference call. Thank you all for attending today's presentation. You may now disconnect.

Hello, and welcome to Inseego's conference call to discuss its announced acquisition of Nokia's Fixed Wireless Access business and strategic partnership. Please note that today's event is being recorded. [Operator Instructions]

Before we begin, please note that a slide presentation was posted this morning to the Investor Relations section of the company's website. Participants joining by phone are encouraged to download the presentation to follow along. Those listening via webcast may advance the slides using the controls within the webcast player.

On the call today are Juho Sarvikas, Chief Executive Officer; and Steven Gatoff, Chief Financial Officer.

Please 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, all of 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 and in the slide presentation.

With that, I'd like to turn the call over to Juho Sarvikas, Chief Executive Officer. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us today. Before we get started, we encourage anyone dialed into the conference call to download the slide presentation posted this morning to the Investor Relations section of our website so that you can follow along. For those listening by webcast, please advance the slides by using the toggle button on the webcast player.

As you saw in the press release, Inseego has entered into an agreement to acquire Nokia's global FWA business and establish a strategic partnership with Nokia on go-to-market and next-generation wireless innovation centered around AI and 6G. In addition to the equity-based consideration, Nokia will also make a direct equity investment in Inseego and I'm thrilled to welcome Nokia as a shareholder and a partner.

Turning to Slide 3. We will cover 4 areas today: first, an overview of the acquisition; second, the compelling overall FWA market opportunity; third, a snapshot of the FWA business that we're acquiring; and fourth, the transaction structure and economics.

Diving right into it on Slide 5. I want to start with the core transaction terms and the key value drivers behind the acquisition. The simplest way to think about this transaction is that it is transformative for Inseego. It gives us immediate global scale in revenue and reach, strengthens our product and market position and creates a strategic partnership that includes go-to-market and technology innovation. Specifically, we are acquiring Nokia's approximately $200 million run rate FWA business for $20 million in Inseego equity with Nokia also making an additional $10 million direct investment in Inseego to become an approximately 11% stockholder. There are 3 primary value drivers in this transaction.

First, the acquisition immediately expands our global reach, total addressable market and overall scale. It also effectively doubles our revenue base and positions Inseego as a global wireless broadband leader with strong anchor carrier customers, international reach and a portfolio spanning both enterprise and consumer markets.

Second, the transaction includes a compelling financial construct with profitability backstop. Nokia will provide engineering and development support for the first year, which gives us a clear investment path while maintaining a breakeven EBITDA floor for the acquired business. Steven will cover the structure and financial terms in more detail in a few minutes.

Third, we are establishing a unique technology and go-to-market partnership with Nokia. That partnership creates a framework for joint commercial activity, technology innovation across AI and 6G and aligned ownership to support long-term stockholder value creation.

Turning to Slide 6. At a high level, the strategic rationale is straightforward. This transaction expands Inseego from a U.S.-centric business into a scaled global platform with broader customer exposure, a more diversified revenue base and a stronger foundation for long-term value creation.

On the platform side, we are expanding our global footprint to additional Tier 1 carrier relationships and increasing our relevance across a wider set of use cases as operators continue to invest in 5G monetization. Importantly, the transaction expands our portfolio globally and brings capabilities and products that allow us to address the consumer market, positioning us to participate more fully in the wireless broadband ecosystem.

From a financial perspective, the structure is designed to support the transition while maintaining flexibility. It preserves balance sheet flexibility, aligns incentives between our 2 companies and creates a larger platform that we expect will unlock revenue, cost and operating synergies over time.

Turning to Slide 7. The Nokia FWA asset completes our portfolio, giving us a full range of products across both business and consumer connectivity that we can now take to global markets. FastMile is a key addition on the consumer FWA side with indoor gateways and outdoor receivers designed for in-home broadband deployments across both sub-6 and millimeter wave. What I like about the portfolio is how deployment ready it is, self-install where possible, technician install where needed with integrated WiFi and simple management. These products are already designed for how operators are rolling out FWA at scale.

The acquisition also expands our opportunity set by giving us a global customer base, which includes deeper engagement with our existing carrier customers plus access to new Tier 1 operators in markets where we do not have presence today. We now have a more complete portfolio to serve customers across more environments with solutions aligned with how the market is evolving.

Turning to Slide 8. We have developed a clear execution plan for how we intend to drive value from the acquired FWA business and the broader combination over time. On the revenue side, there are 3 primary levers. First, we will expand our FWA reach and unlock a broader global consumer TAM by driving cross-sell across the combined Inseego and Nokia customer base. Second, we can take Inseego product lines to new global customers, broadening penetration across consumer, enterprise and mobility segments. Third, we can expand SaaS solution attached across the acquired portfolio, creating a growth opportunity for Inseego's SaaS device and network management capabilities over time.

On the profitability side, there are also 3 clear levers to drive incremental value. First, I expect our greater scale to provide more supply chain leverage and purchasing and manufacturing efficiency. Second, we see engineering synergies through technology platform reuse across software, hardware modules and cloud as well as product design reuse. And third, the larger revenue base should improve fixed cost absorption and operating leverage across the combined platform. That's the value creation story, clear operating levers to drive both growth and profitability over time.

Turning to Slide 9. Nokia selected Inseego as its partner at the wireless edge and is becoming a meaningful shareholder, which aligns both companies around long-term value creation. Beyond ownership, we will work together on the technology road map, including AI-driven connectivity, 6G and next-generation wireless broadband. Commercially, it gives us a path to engage jointly with operators and customers and expands our reach into Nokia's broader customer and partner ecosystem. The value here is both immediate and long term, a stronger platform today and a relationship that can create additional technology and go-to-market opportunities over time.

Turning to Slide 11 and the market drivers. The demand profile for networks is changing. Broadband is no longer just about download speed. Operators and enterprises increasingly need more uplink capacity, lower latency and more intelligence closer to the edge. That is being driven by AI workloads, cloud applications, industrial connectivity and mobility use cases that require more distributed network architectures. FWA fits directly into that evolution. It gives operators a faster, more flexible way to add broadband capacity while 5G advanced millimeter wave and eventually 6G expands what wireless networks can support. The scale of the opportunity is significant, and these trends are driving demand towards high-performance wireless broadband, exactly where Inseego is focused.

Turning to Slide 12. The expected growth in 5G fixed wireless shipments reaching roughly 47 million units by 2029 reflects increasing operator adoption globally. What's driving this is straightforward. FWA is winning more and more as a primary connectivity option due to cost, time to market and performance. In addition, it is deployed as a complement to fiber and satellite. It's also important to note that millimeter wave is dramatically increasing the capacity of FWA deployments. The takeaway is that FWA is becoming a core tool for operators to both monetize 5G and expand broadband access.

Turning to Slide 15. I'm excited about the depth of the portfolio that we're bringing in. What stands out is how complementary it is. It expands our capabilities across indoor, outdoor and millimeter wave and broadens the environments and use cases that we can address globally. It also brings a mature device software platform, which is critical for deployment, management and ongoing performance at scale.

Turning to Slide 16. This is a defining moment for Inseego. It is the largest transaction in our company's history, and we believe it materially expands our scale, our market opportunity and our long-term position in wireless broadband. Just as importantly, it validates the strength of our strategy, our technology and our team. Now our job is to execute well, support customers and drive long-term growth and shareholder value.

On a personal note, I spent a significant part of my career at Nokia. I know the quality of the technology, the strength of the customer relationships and most importantly, the caliber of the people behind the business. I'm very excited to welcome them to Inseego, and I want to thank Justin Hotard, Nokia's President and CEO, and his team for the ongoing commitment and partnership.

With that, I'll turn it over to Steven to walk through the transaction structure and financial details.

Thanks, Juho. Good morning, everyone. Jumping right in on Slide 18. There are 3 overarching dynamics in the acquisition: one, the overall transaction structure; two, the EBITDA make-whole that's in place as we invest in the business and integrate it over the first year; and three, our alignment on driving revenue and profitability of the business moving forward as both parties focus on long-term value creation.

On the transaction structure, this is an asset purchase with an aggregate consideration of $20 million. The consideration consists of $15 million in Inseego common stock to be issued to Nokia at closing along with warrants valued at $5 million. In addition, as Juho mentioned, Nokia will be making an additional direct investment of $10 million in Inseego for a combination of common stock and warrants, which will bring Nokia's total stockholdings to approximately 2.7 million shares or an ownership interest in the company of approximately 11%. The issued equity is subject to a lockup in which 50% of the shares and warrants are locked up for 1 year and the remaining 50% is locked up for 2 years.

The second important construct of the acquisition is that it is designed to support the transition of the business to ensure customer continuity and engineering investment with no adverse financial statement impact to Inseego. This includes a support agreement that provides Inseego with quarterly cash payments from Nokia to offset EBITDA losses of the acquired business so that we can drive the product road map and engineering investments of the business and run the business at an EBITDA neutral outcome. This EBITDA make-whole is capped at $38 million in aggregate for the first year following closing, which we see as wholly adequate to cover that 30 years' operations and investments.

The third dynamic in the transaction is the strong and important strategic alignment of Inseego and Nokia. In addition to the AI and 6G innovation and go-to-market work that the 2 companies are looking to do together, there is a profit sharing arrangement in place for year 2 and year 3 following the closing. This will align and provide Nokia with participation in the growth and value creation of the acquired business, where they will receive a portion of the positive EBITDA of the acquired business as a function of how it performs.

We believe these 3 elements of the transaction structure provide a compelling and disciplined framework for Inseego stockholders, one that supports the transition, preserves financial flexibility and creates an attractive risk-adjusted path to long-term value creation. As noted at the bottom of the slide, we currently expect the transaction to close in Q4 2026, subject to customary work and closing conditions.

Turning to Slide 19. We wanted to share some perspective on the financial profile of the soon-to-be combined business and why we think adding this FWA business to Inseego is compelling from both the scale and structure standpoint. Starting with scale, the Nokia FWA business is on approximately a $200 million revenue run rate based on their Q1 2026 results. On a combined aggregate basis, that brings Inseego to generate roughly $400 million in revenue annually. The product portfolio, customer base and geographical operations of the acquired business all drive the scale of the FWA business and the attractive nature of the acquisition.

In terms of the combined company profitability, the EBITDA breakeven backstop, that I mentioned on the previous slide, for the first year post close gives us stability during the transition while supporting the upside from the broader synergy opportunity thereafter.

Finally, on Slide 20, we wrap up with a few key takeaways. When you put this all together, we see a combination that materially increases Inseego's scale, meaningfully expands the TAM of our FWA business and does so in a way that is structured to be disciplined, supportive of customers and employees through the transition and is very attractive from a risk-reward standpoint. The acquisition creates a scaled global wireless broadband platform spanning both FWA and mobile. It broadens Inseego's product portfolio and engineering capabilities further across indoor and outdoor and adds millimeter wave solutions to the portfolio. As we talked about, Nokia is an amazing company, and the acquisition establishes a compelling and long-term strategic partnership with them on both go-to-market collaboration and joint technology innovation.

And finally, the acquisition is structured to support the business financially and create a clear opportunity to unlock revenue, cost and operating synergies over time as we move forward together. We see this as a highly complementary business that expands Inseego's scale, broadens our global reach and creates a disciplined framework for stockholder value creation. We look forward to providing more info as we move forward to close the transaction in the back part of the year.

And with that, we appreciate your time and support, and we'd, of course, be happy to open the call for questions. Operator?

And the first question will come from Scott Searle with ROTH Capital.

Congrats on the deal. It's incredibly transformative in terms of what you guys were able to pull off. Maybe quickly just to dive in a little more financial color in terms of the Nokia asset, can you give us an idea about if there are top 10% customers' geographic mix? I know it's international, so it broadens the footprint, but maybe a little bit more color on that front. And Steven, maybe as well a little bit in terms of how you're thinking about the gross margin profile? And then I had a couple of follow-ups.

Yes, sure. I think, Scott, we'll look to do more of the financial details as we close the transaction insofar as how that comes together, owning the asset now and just announcing the transaction. But we -- as Juho talked about, the customer base really is centered around Asia Pac and Middle East and Europe really are in that order insofar as customer concentration and presence of the business. The gross margin is -- the business has a nice consumer structure to it. And so that gross margin profile is more consistent than that -- with that than enterprise. We'll definitely be providing more info on the numbers as we get closer.

Yes. Maybe to add there that across EMEA and APAC, like Steven was saying, is a set of diversified anchor customers that will be a great platform for us to drive further global growth.

Fair enough. And maybe if I could, just to follow up on the cost side of the equation. It sounds like right now, currently, that business is negative EBITDA, but you've got that $38 million backstop in the first 12 months. Steven, I think you indicated that, that should be more than enough to get you to profitability on that business. I'm wondering if you could flesh that out a little bit as well as the comments around the profit share for year 2 and year 3, is -- are you referring that just from stock ownership in the company? Or is that more there is a split profit sharing ratio that we're going to see going forward on that business for the first couple of years?

Yes, awesome. So I'll do the last one first, very straightforward. The alignment around the business, the profit sharing in year 2 and year 3 is based on the revenue performance of the acquired business. So you buy a business with a belief, a forecast or view on what it's going to do. And as the business hits those numbers, Nokia is able to participate in the profitability that's generated. So that's very straightforward and aligned around hitting numbers and hitting growth numbers for year 2, year 3.

And then the first question on the make-whole was, yes, we structured that with Nokia as a very good partnership discussion with them around the investments that are going to be made, the spend in year 1, which is a big transition and engineering investment. And so to your point that you flagged, we feel really comfortable with managing the business within that cap so that we expect it to be EBITDA breakeven 0 for the first year.

So we have between now and close to work on the integration planning and then -- like Steven was saying, that gives us 1 year to materialize the revenue expansion as well as synergies for the business.

Got you. And just to clarify, it sounds like then as we get post year 1 that you're expecting this business then to be profitable if you're able to manage it with those integration, those investment issues in the first 12 months of operation. Is that correct?

That's exactly right.

I think the easiest way to look at that is that we'll come out of year 1 with one combined most comprehensive portfolio in the industry and one team executing on it with one technology asset.

Got you. And one last one, if I could, and then I'll get back in the queue. And this is probably not fair as probably any growth questions might be at this point in time, given the newness of the announcement. But looking at the core Inseego business today in terms of mobile hotspots, how big of an opportunity is that for cross-sell within that base? Have you started to explore some of that with your initial due diligence with some of the customers?

Thanks, Scott. Great question. And I think we've been -- we've had this discussion before as well, like the mobile or the hotspot market, very attractive also outside of North America, which is exclusively our focus today.

The other thing I would point out that if you look at this FWA, particularly the consumer segment, which operates under the exact same laws of Vuzix, Vuzix as mobile, where it's large carrier, large RFP based, we definitely will leverage this new global, let's call it, infrastructure to take our mobile portfolio to the global markets as well.

The next question will come from Christian Schwab with Craig-Hallum Capital Group.

I guess I'd like to echo Scott's comments. Congrats on the deal. The commentary regarding sharing and success in year 2 and year 3 with Nokia, I guess, it sounds like that's more revenue based. Is there any minimal profitability or EBITDA expectations in those payments to make sure that the profitability of the business is there despite revenue? I guess I wasn't clear what that meant.

Yes. The metric, the trigger is revenue performance of the business. And then based on that, it's driven off of profitability. So it's a percentage of EBITDA for that business, Christian. And so obviously, the incentive for us is to maximize profitability of the business. And so we're meaningfully focused on that and on growing revenue together, right? Without the revenue, you can't cut your way to growth. And so we're pretty well aligned with them on driving the revenue as a key metric for the business and then managing the cost structure so that it's profitable.

Okay. Great. And those exact details will be released at closing, I assume then?

Yes. We plan to file an 8-K today, and that will have the asset purchase agreement with terms in it. So this is all transparent and will be filed.

Perfect. We can stop talking about that then. I guess my last question, and thanks for all the detail in the presentation. Does this change, Steven, any of your previous investment plans to broaden your own portfolio beyond servicing enterprise-class customers and trying to go into the distribution channel and kind of expand your presence there? Will you be making any changes to your previous spending plans to expand that now that you will have a very broad-based distribution and consumer product portfolio in the not-too-distant future?

Christian, great question. Thank you. So obviously, we'll have a much broader now global set of opportunities competing for the same investment dollars. So I think that's kind of a fair statement to say and why you're asking the question.

The key thing to note about the U.S. market, a part of our success with the 3 large carriers here in enterprise FWA is the fact that they can draw a broader portfolio or draw value-added services from the channel. So we view that as a meaningful stand-alone investment itself for driving stand-alone top line growth from the channel, but it's also very critical and instrumental complementary as a differentiator for our carrier-focused enterprise FWA. Some of the global markets operate on different dynamics, but this is a success formula for us here in the U.S. that we will maintain.

The next question will come from Tyler Burmeister with Lake Street Capital Markets.

Congrats on the significant announcement here. Maybe first, obviously, early with the deal not expected to close until Q4, but wondering if you could give any color on your early thoughts of unlocking the revenue as well as cost synergies. If you don't want to quantify them at this point, maybe just what's some of the lowest hanging fruit to be addressed there?

Yes. We'll tag team on it as usual. Tyler, it's a good question. Yes, we're in the process of forming our integration plans and implementation plans on both sides. Obviously, there's some arm's length that needs to be maintained there until we actually close and own the asset. But as you would suspect and as Juho just said and mentioned earlier, there's a lot of synergy opportunity and how the business is run with a product management organization that's horizontal and global. So this is not a bolt-on of the business and similarly with engineering. Some of the G&A aspects of this are a bit greenfield insofar as how we approach the servicing and support of that business, but more so on the operating side.

I think the big thing for me, just from a technology platform standpoint of view. And when I say technology platform, I mean that in a broader sense, whether it's the connectivity module that today, both of us create independently or the device OS, which, again, we both create independently. Like you know, 5G advances in releases. As this next mode of generation comes about, we intend to pull the whole global portfolio across consumer and enterprise, mobile and fixed on a single technology platform. So that point in time is a very critical element for us and that's actually from a timing standpoint, we're going to work excellent.

The other thing is then the -- from a revenue synergy standpoint of view, cross-sell would be the first thing that comes to mind. So once the deal is closed, you will see us engage the North American market with the acquired assets from Nokia and vice versa with Inseego and the global markets.

Great. Great. Maybe just last one for me. As an asset purchase, what kind of headcount are you thinking about bringing over? And what kind of OpEx expenses are roughly attributed to this business?

Well, Tyler, I mean, the OpEx profile is kind of what you expect across R&D and sales and marketing and G&A that we're putting together. And so as I mentioned earlier, there's an existing business that's coming over on the engineering and product side and the G&A side will be more of a greenfield investment and synergy with the existing business. And we'll definitely be going into that as we move through and get to closing and have some time to work on the transition with the team. So we'll definitely provide more color on how that starts to come together.

The next question will come from Jonnathan Navarrete with TD Cowen.

What would you say are the key milestones over the first 12 months once the deal closes that would give confidence in the acquired business can sustain at least breakeven EBITDA once the support rolls off?

Jonnathan, I apologize. It could be us...

On the key milestones between now and integration accomplishing.

Yes. The -- I mean the integration begins now as an independent company, right? There are all sorts of requirements about not directing each other's business. So that's a regulatory construct. But as we plan ahead, Juho mentioned this, the most important dynamic is probably at least 3, right, on the customer go-to-market integration, there's some really compelling aspects of that.

And then the big synergy drivers, the big of how you run one global horizontal company come on engineering and dev and on product management. The G&A tends to be a little bit more business-centric, regional, geographically centric with operations overseas that are additive. But the big milestone is how we bring them together and then how we start seeing how the operations become more efficient over time on the engineering side and on the product management side over the first year.

The other thing I would add there, I think it's a great answer is scale in supply chain. So if you just look at the manufacturing value add, the volume of units that we'll be producing and what leverage that gives us is, quite frankly, huge and direct. We do command good volume, but we're operating in the enterprise and mobile segments only today.

The second part will be our relevance to the key component vendors in the industry. So we will be able to drive also procurement synergies. So that one integrated team, integrated process and purchasing power across the supply chain is very important.

Got it. And an expanded global footprint increases exposure to cross-border hardware supply chains. Do you expect any tariff or political challenges you'll have to maneuver given just how sensitive networking equipment is?

I'm sorry, we're going to have to ask again, repeat the question.

Sorry, Jon, our speaker is a little scratchy. It's tough to hear on and I apologize for that.

Just because how sensitive networking equipment is? Do you expect any tariff or political challenges once the asset is acquired in the fourth quarter?

Yes. If you look at the U.S. specific question, obviously, what would be the implications of this asset and bringing this asset to U.S., the category in itself is tariff exempt. So just like our product line today is the same will apply also on the new acquired lines of business. The other thing to note is that we have a very diversified set of countries of order chain. Like you know, many of our customers require TAA compliance. So we have good flexibility on that side.

Then if you look at the international market, I'm not sure if you're familiar, but Europe actually has very similar considerations on cybersecurity as you've seen emerge here in U.S. So that's something that could possibly be a tailwind, given that we're a Western player and the Europe market presents a great opportunity for the category.

The next question is a follow-up from Scott Searle of ROTH Capital.

Juho, I wanted to dive in a little bit in terms of 6G and AI development with Nokia. Does that mean they're going to have some committed resources on that front, either engineering, NRE or otherwise? Also on the SaaS front, given that they're more consumer-oriented, I'm wondering if you could flesh out maybe where you see some of those hidden opportunities. And I'm not sure if this is a fair question given that you're reporting first quarter earnings next week. But I'm just kind of wondering if you could give us a quick update in terms of what you're seeing in the memory market and how you guys are contemplating dealing with that.

Yes, excellent. So I'll start with the partnership part of the question. So we will, of course, resource and partially acquire a global go-to-market team across sales, technical presales, customer engineering, operations, everything that you need to run the business globally. But I also acknowledge that there's a massive opportunity in partnering with Nokia on their very large global sales infrastructure or sales teams. And if you look at the end customer here, and one of the key considerations for Nokia right out of the gate was the customer continuity and the customer experience because we will be selling to the same customers that are the biggest and most important one for Nokia now as they focus on the infrastructure.

So what you should expect to see is a joint sales process, pipeline management, all of that. We're also looking at Inseego incentivizing the Nokia sales team to make sure that -- to incentivize and train to make sure that we have business continuity for the customers also in terms of how they're used to interacting with the broader end-to-end that Nokia offers. The latest advancements on the edge with 5G Advanced, 6G or millimeter wave right now, which has been a key focus area for the assets that we're acquiring, they pull network equipment. So there's also a natural benefit for both parties to showing up together. So that's how I -- that's how I look at the go-to-market.

When it comes to AI and 6G or pilots with key customers on prospect deployments for that matter, we're looking at co-locating Inseego resource together with Nokia so that we can work as one on these key initiatives and push the boundaries of wireless broadband at the edge. That's how I think about the partnership, the resource and the commitment and what we're looking at building together.

On the memory market side, I'll -- maybe we'll talk about that more next week, but everything that we've stated in terms of how we plan for this eventuality and prepare remains true. So I don't really have anything new to share on the memory side.

And Scott, I believe you also had a question on consumer. Would you mind repeating that?

Yes. Sorry, Juho, just in terms of expanding some of the SaaS opportunities within the Nokia base, given it's more consumer-centric, how do you see that unfolding?

Yes. So first of all, consumers also need manageability or if you're doing a large deployment for consumers, you need manageability. And there are carriers who have built their own. There are existing solutions out there. But what we can bring together is one unified pane of glass with the -- all of the investments that we put to API, et cetera. So I look forward to developing our portfolio towards a direction where in addition to the amazing capabilities and ease of use that we have for enterprise deployment, the same platform deployable also for consumers. So I think there's a lot to be said in terms of how we could do even more on the cloud and the ARR side with these new large customers and the existing ones for that matter.

This concludes our question-and-answer session. I'd like to turn the call back over to Juho for closing remarks.

Thank you for the thoughtful questions. Today marks a truly transformational step in Inseego's business and long-term trajectory, and we're excited about the opportunity ahead. We look forward to talking with you again next week on our Q1 earnings call on May 7.

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

Hello, and welcome to Inseego Corp.'s Fourth Quarter 2025 Financial Results Conference Call. Please note that today's event is being recorded. [Operator Instructions]

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.

Good afternoon, everyone, and thank you for joining us today. Q4 2025 was another strong quarter for Inseego. We generated revenue of $48.4 million and adjusted EBITDA of $6 million, both above our guidance and marking our third consecutive quarter of sequential growth in each metric. These results capped a year of steady, disciplined execution. We exited 2025 with a meaningfully higher quality and more diversified revenue base driven by broader product breadth and increased customer diversity.

Shortly after year-end, we further strengthened our operating momentum by improving our capital structure by retiring all preferred stock. We accomplished this at a meaningful discount, enhancing the company's long-term flexibility and are pleased to welcome Mubadala Capital as a significant common stockholder. Steven will walk through the financials and outlook in more detail later in the call. I'd like to step back and discuss how our performance in 2025 and our trajectory going into 2026 demonstrates that the strategy I outlined when I stepped into the CEO role a year ago is working.

To frame that discussion, let me briefly revisit our strategy. We are building an enterprise wireless broadband platform that combines cellular-first connectivity with intelligence, manageability and scalability at the wireless edge. That strategy has remained consistent throughout 2025 and is grounded on 5 clear strategic priorities. First, scaling carrier revenue to a broader enterprise-focused Fixed Wireless Access and mobile portfolio. Second, accelerating Inseego's evolution into a solutions company by creating a platform that includes industry-leading wireless hardware, network and device management and subscriber life cycle management.

Third, expanding and diversifying our routes to market and customer base. Fourth, maintaining financial discipline and strengthening our capital structure. And fifth, building a world-class management team and Board of Directors to drive long-term growth and scale. Our fourth quarter results and 2025 full year progress are consistent proof points of execution against these strategic priorities.

With that context, I want to do 3 things on today's call. First, I'll walk through how we executed in the fourth quarter. Second, discuss what we delivered across the full year in 2025. And third, share how that execution positions Inseego for its next phase of expansion as we move into 2026.

With that, let me now turn to my first topic, how we executed in Q4. Starting with our core business of cloud-managed FWA and mobile solutions. We continue to see strong performance from our FX4100 FWA product with T-Mobile during the quarter, reflecting ongoing enterprise demand and solid sell-through. During Q4, we significantly expanded our Tier 1 carrier footprint for Fixed Wireless Access. As we shared on our last call, we meaningfully broadened our reach and customer diversification by securing an FX4200 FWA award with AT&T. Equally importantly, we just announced this Tuesday that we also signed Verizon for the FX4200.

Both AT&T and Verizon have placed initial stocking orders, and we expect commercial sales to begin ramping up in earnest in the first half of 2026 as these programs come online. With the addition of Verizon, all 3 U.S. Tier 1 carriers have now chosen Inseego to support their enterprise FWA offerings. This marks an important inflection point for our business. As carriers increasingly position FWA as a primary connectivity solution for businesses, alignment across all 3 Tier 1 carriers validates our strategy, reinforces our position as a partner of choice as enterprise adoption accelerates and establishes a clear foundation for meaningful growth in 2026.

Turning to mobile. Our hotspot portfolio delivered its strongest quarter of 2025 with revenue increasing 27% sequentially to $20.4 million. Mobile represents roughly 40% of total company's revenue in Q4, underscoring the increasingly diversified mix of our platforms across mobile, FWA and software and services. Growth was driven by higher carrier stock volumes and solid channel activity as enterprises expand their use of mobile connectivity. With all 3 carriers committed to Inseego as a key part of their mobile portfolio, we see mobile as a durable and important pillar of our enterprise wireless platform. Continuing with our fourth quarter execution, we've made strong progress in evolving into a solutions company and advancing our platform strategy.

In Q3, we shared that we have delivered a major release of Inseego Connect, our network orchestration SaaS offering, expanding its functionality and usability. In Q4, we began to see an impact from that investment. For the first time, Inseego Connect is being taken to market alongside our FWA solutions by all 3 Tier 1 U.S. carriers, each through their own commercial models and routes to market. This represents an important milestone. The combined offering of the FX4200, FX4100 and Inseego Connect reflects a clear shift from device-led selling to solution-led selling and establishes Connect as a foundational element of our enterprise wireless edge platform.

As we continue to expand, this solution-based approach is an important source of differentiation for Inseego. We also continue to invest in our subscriber life cycle management platform, Inseego Subscribe, building out the leadership team and platform capabilities. Subscribe is a strategic investment area and an important component of our long-term software and solutions growth strategy.

Turning to revenue diversity. With our fourth quarter execution, we broadened our revenue base to initial FX4200 orders from both AT&T and Verizon and delivered a strong quarter in our channel business. Importantly, channel growth was driven by traction across multiple areas rather than a single large transaction, reflecting healthier and more diversified demand. I'd like to take a step back now and review what we delivered over the full year of 2025.

At the start of last year, when I arrived at the company, we set out clear execution-focused objectives, execute and scale our FWA and MiFi business, strengthen our two-pronged go-to-market strategy and increase our investment in software. And throughout the year, we've not only stayed tightly aligned with these priorities, we've delivered against them. We meaningfully expanded our enterprise wireless broadband footprint by doing exactly what we said we would do. I reset the product strategy when I joined a year ago, and those products are now launching. Not only that, but I also focused on diversification of our customer base. So those new products are now launching across the broadest customer base the company has ever had. It took a year, but we got there.

Throughout 2025, we continued elevating software and platform integration as core elements of our value proposition. Inseego Connect increasingly became positioned as the management, intelligence and control layer of the wireless edge. We made progress towards more integrated hardware and software solutions and took steps towards greater differentiation at the platform level. This laid out the groundwork for deeper software attach and solution-led selling as our portfolio and routes to market continue to expand.

To highlight the scale of this growth, we entered 2025 with 3 products offered to 2 carriers. And entering 2026, we are now in the middle of expanding to 6 products across all 3 carriers. In parallel, we've broadened our go-to-market approach in 2025. Along with the expanding and diversifying carrier base, we laid the groundwork for VARs, MSPs, SSPs and MSOs and built the product, commercial and operational capability required to support broader enterprise engagement. All of this execution was delivered with continued financial discipline. We maintained strong double-digit adjusted EBITDA margins through a transition year, managed costs carefully while funding growth investments and strengthened our capital structure. This demonstrates our ability to invest in growth while maintaining profitability and operating rigor.

And finally, 2025 was a year of further strengthening the organization. We significantly up-leveled the management team and Board of Directors, added operating depth across product, technology, sales, operations and supply chain from the C level down and built the infrastructure required to support the next phase of growth. That brings us to 2026. 2025 was a year of building the foundation for long-term growth through disciplined execution of our revised strategy that requires significant product investment. In 2026, we're continuing to make product investments in the first half of the year to drive growth. This also includes increased spend in go-to-market capabilities to ensure the success of new products and platforms we're bringing to market. This is a deliberate need to scale the business.

Looking ahead to 2026, the market backdrop continues to strengthen and expand our opportunity. Enterprises are increasingly prioritizing resilience, always on connectivity with Fixed Wireless Access emerging as a primary connectivity solution. That shift is reinforced by carrier commitments as all major U.S. carriers continue scaling enterprise FWA programs. Industry forecasts reflect this momentum with ABI Research projecting North America enterprise FWA service revenue to grow at a 37% compound annual rate through 2030, expanding from roughly $2 billion to more than $11 billion. We see similar momentum in federal, state and local government, where cellular is supporting distributed operations, public safety and mission-critical connectivity and where security concerns have made U.S. designs an important consideration.

At the same time, AI-driven workloads and accelerating mobile data traffic are increasing network complexity and raising the importance of performance, visibility and centralized management. As enterprises and governments expand their use of cellular, managing cost, usage and performance becomes as critical as connectivity. Taken together, these dynamics, including the growing convergence of cellular and satellite and continued advances in cloud technologies are elevating the importance of wireless edge and driving demand for integrated platforms that combine connectivity with management and control. This environment aligns directly with Inseego's platform strategy and positions us for our next phase of growth in 2026.

Against this backdrop, our core priorities remain consistent. What changes in 2026 is the scale and intensity of execution. Compared to 2025, this is a much more front-loaded year with a higher concentration of carrier launches and product introductions in the first half, specifically in Q1. With that in mind, we're entering 2026 focused on 5 key areas. First, we will continue to scale enterprise wireless broadband across FWA and mobile. With all 3 U.S. Tier 1 carriers now aligned with Inseego, 2026 begins with multiple carrier launches in Q1 and ramps as operations get underway. That requires increased investment early in the year, but the result is a higher carrier-driven revenue run rate, broader channel participation and continued expansion opportunities as we move into the second half.

Second, we will accelerate portfolio expansion. In the first half alone, we expect to introduce 4 new products. This includes the rollout of 3 new MiFi products across all major carriers, the introduction of a new entry tier enterprise FWA offering and expansion into additional verticals. This represents the most comprehensive enterprise wireless portfolio in the company's history with all products managed through a common software interface rather than a stand-alone hardware.

Third, we will deepen the software and platform layer. Inseego Connect continues to evolve as the management and intelligence layer of the wireless edge. And in 2026, we will expand its role as our installed base grows rapidly. This allows us to introduce additional services, increase software attach and offer more value to customers and partners through a single integrated management experience. Fourth, we will broaden routes to market. The investments we've made in products and platforms are already opening doors with new VARs, MSPs, MVNOs and service providers. We are encouraged by early momentum, including progress with MSOs, and we expect partner-led activity to increase meaningfully as new products come to market. More of our growth going forward will be informed by this new expanding partner ecosystem.

Fifth, we will advance our subscriber life cycle management capabilities within Inseego Subscribe. Finally, we will continue to execute with discipline. As we accelerate investment to support carrier ramps, product launches and go-to-market expansion, we remain focused on balancing growth with profitability and long-term margin expansion. Before I get to Q1, I want to briefly address the current memory market dynamic. Overall, as you've all seen, there's a lot of discussion on price increases and supply shortages as the suppliers have pivoted towards AI and data center. We have done a huge job in securing supply, and I do not see any meaningful impact on our deployments. When it comes to pricing, we've acted early, and we have been able to lock in modest price increases for products in the first part of the year. In addition to this, we're working with our large customers on price increases and cost sharing.

Let's now talk about Q1. Overall, I'm bullish on 2026. We have more products going to more customers than this company has ever had. Q1 is a transition quarter, and there are several moving parts as we introduce a new mobile product generation and work with new large customers to develop joint go-to-market for FWA. While we still expect Q1 to grow year-over-year, there are 3 reasons for lower sequential Q1 revenue. First, we have had engineering delays in delivering our new mobile products that have pushed revenue to Q2. Second, one of our large Tier 1 FWA carrier customers has higher than initially expected inventory that they're selling out in Q1. And third, that same Tier 1 carrier recently changed their go-to-market strategy to address a broader set of customers, but causing a short-term disruption on selling logistics.

In summary, 2025 was about implementing the strategy I laid out when I joined a year ago and building the foundation for growth. Now 2026 is about execution and scale. We're launching more products, ramping more Tier 1 carrier programs, expanding our software platform and broadening our partner ecosystem across MSOs, VARs and MSPs. This is positioning us to drive significant growth as the year progresses and scale Inseego at the enterprise wireless edge. We are energized by the trajectory of the business that we see exiting Q1 and confident in delivering the year.

With that, I'll turn over to Steven to walk through the financial results and our outlook in more detail.

Thank you, Juho. Hi, everyone. Thank you for joining us. I'd like to cover 3 topics today. First, I'll take you through some details on the Q4 and full year 2025 financial results. Second, I'll provide an update on a material improvement in our capital structure that is adding to stockholder value. And third, I'll share some color on the financial profile of the business and provide guidance for Q1 and look at the full year 2026. As we always do, we'll wrap up the call by opening up to your questions.

In 2025, we delivered 3 consecutive quarters of sequential revenue growth, culminating in a strong Q4 that exceeded guidance and paired with strong gross margins and disciplined spending resulted in solid profitability in the form of adjusted EBITDA that was the second highest on an apples-to-apples basis in more than a decade. On the top line, total revenue for Q4 was $48.4 million, driven by higher mobile volumes, increased channel activity, continued strength in FWA and a consistent contribution from our Inseego Connect and Inseego Subscribe SaaS offerings. As expected, mobile revenue was strong in Q4 2025 and was driven by a more broad carrier adoption and ordering cadence.

While FWA revenue declined sequentially from the record Q3 2025, which benefited from new product rollouts at a carrier customer that we discussed last call, FWA revenue in Q4 was up 50% year-over-year and was driven by the diversification of our carrier customer base and solid channel activity. Software services revenue was $12 million in Q4, consistent and again providing a stable high-margin contribution to results. For the full year 2025, total revenue was $166.2 million, reflecting sequential quarterly momentum throughout the year.

Moving through the P&L. Non-GAAP gross margin in Q4 2025 was 43%, up 75 basis points sequentially and driven by sales of some high-margin mobile products and the continued contribution from our high-margin SaaS services. For the full year 2025, non-GAAP gross margin was also 43%, reflecting an overall strong FWA business and our software services contribution and also the highest level of gross margin has been on an apples-to-apples basis in more than a decade. Non-GAAP operating expenses for Q4 were $17 million or 35% of revenue, reflecting the targeted investments in sales and marketing and R&D to support Tier 1 execution and new product launches that we talked about last quarter. As we also talked about and we'll review in a few minutes, we're continuing to make those investments in Q1 2026 to drive both revenue growth and scale as we move through 2026.

For 2025, non-GAAP operating expenses were $59.4 million or 35.7% of total revenue. Adjusted EBITDA in Q4 2025 came in at $6 million, a 12.4% margin, among the highest dollars and margin percentage also in more than a decade. About $1 million plus of benefit was from the timing of R&D spend that pushed out of Q4 into Q1 2026 that I'll get to in a moment. For the full year 2025, adjusted EBITDA came in at $20.1 million, representing a 12.1% margin. We see this as an important overall proof point in our ability to invest in growth in the short term while maintaining profitability over the long term.

Turning to the balance sheet. We ended Q4 with $24.9 million in cash, a very manageable debt balance of $41 million or approximately 2x LTM adjusted EBITDA. The strong cash finish to the year was a function of a combination of favorable outcomes on customer payments, inventory dynamics and strong working capital management by the team. Overall, the balance sheet strength underpins how we run the business and leads directly to my second topic, our capital structure. Last month, on January 14, we retired 100% of our outstanding preferred stock. It had a liquidation preference of $42 million as of December 31, 2025, and we exchanged it for $26 million of aggregate consideration, representing a 38% discount that immediately accrued to common stockholders.

Total consideration consisted of $10 million in cash, $8 million in additional senior secured notes and approximately 767,000 shares of common stock. The cash is paid in 3 equal installments, 1/3 or $3.3 million was paid at closing, 1/3 will be paid 6 months following closing and the remaining 1/3 will be paid 12 months after closing. This transaction represents another purposeful initiative to simplify and strengthen our capital structure. By retiring the preferred at a meaningful discount to its liquidation preference, we reduced long-term obligations, improved balance sheet quality and immediately enhanced common stockholder value. The preferred stock was held by an affiliate of Mubadala Capital. And so as a result of the exchange, they now hold the position in our common stock. We're pleased to have them in the value creation going forward as a long-term common shareholder.

With that context on our capital structure, let's now turn to our thoughts on the business and financial guidance for Q1 and the full year 2026. As we discussed on the last call, we started investing meaningfully going into Q4 2025 in new product development and go-to-market capabilities to drive revenue growth in 2026. We're committed to and expect to deliver that revenue growth outcome. We also talked on the last call how 2026 would be front-loaded with spend in the first few months impacting profitability to similarly support carrier ramps, multiple product launches and overall portfolio expansion. Importantly, with the now expanded carrier customer base, that spend positions us to scale the business, drive operating leverage and deliver profitability improvement in the second half of the year.

To add more color on the revenue profile, as we've seen historically, Q1 has been a baseline quarter for the year from a revenue perspective, where Q1 has been down from Q4 for 3 of the last 4 years. We see this dynamic for Q1 and 2026, albeit for 3 specific factors. First, the second half of 2025 benefited nicely and particularly from a strong ramp of our new FX4100 FWA product with a Tier 1 carrier and from elevated mobile volumes driven by carrier promotions. Second, we have a Tier 1 FWA customer who went through a sizable company reorg and business realignment, as Juho mentioned, that impacted Q1 volumes and timing. And third, our new MiFi portfolio is set to launch late in Q1 2026, delayed from our initial target date, but that's setting up to drive a meaningful contribution beginning in Q2.

And so while Q1 2026 revenue is lighter than desired on new product rollouts and transitions, we remain very positive on the outlook for both mobile and FWA in 2026 as we execute with our Tier 1 carriers and continue expanding our routes to market through SSPs and VARs. Looking at non-GAAP gross margin, we expect Q1 to reflect a lower mobile revenue margin, partially offset by a return to solid gross margin contribution on FWA and consistent software services.

Total non-GAAP operating expense dollars are expected to increase modestly sequentially in Q1 2026 on the P&L and more so in total dollar spend in Q1 due to 2 drivers. First, as I mentioned, R&D spend originally planned for Q4 2025 shifted out to Q1 2026 on adjustments in product delivery timing. That shift out in spend resulted in more than $1 million of higher adjusted EBITDA in Q4 2025 and a corresponding higher spend level, therefore, now in Q1 2026. This funding of new product build-outs will also be seen in higher levels of capitalized R&D in the quarter as we've discussed. The second dynamic driving higher current spend in Q1 is the investments in sales and marketing that we've been talking about as part of the 2026 growth driver investment.

Pulling this all together, we're providing the following guidance for Q1 2026. Total revenue in a range of $33 million to $36 million and adjusted EBITDA in a range of $1 million to $2 million. Overall, looking back at 2025, we see a similar dynamic for 2026 of growth and profitability coming off of Q1, growing in Q2, growing in Q3 and growing in Q4, with the important difference that there's now a foundation of a more diversified customer base and product portfolio, along with a rightsized balance sheet that provides important flexibility. And so on that strong foundation, we're also providing guidance for the full year 2026 for total revenue of approximately $190 million.

With that, we appreciate your time and support and are glad to open the call for questions. Operator?

[Operator Instructions] And the first question will come from Scott Searle with ROTH Capital.

Nice job on the fourth quarter and really nice to see the diversified customer base and product portfolio building over the course of '26. Maybe just to start, Steven, I wanted to dive in quickly on the memory front. I know you had some comments in terms of your opening monologue, but it sounds like you guys are managing that pretty well. I'm wondering if you could detail that a little bit more in the first half of this year. It sounds like it's going to be a shared burden with your MNO customers going forward.

And then as it relates to the 2026 guidance, certainly implies things ramping up over the course of the year, as you articulated, it averages out to like $50 million a quarter. So that's a pretty big step up. I'm wondering, given the expected time lines and product introductions, what the comfort level and visibility that you have to that? And a lot of moving parts from an OpEx standpoint and gross margin standpoint, Steven, I'm wondering if you could give us a little bit of guidance about how we should be thinking about adjusted gross margins -- excuse me, adjusted EBITDA margins in the second half of the year.

Yes, sure. In a sense -- I will tag team. Juho and I on a good chunk because certainly on the memory part that Juho was talking about. And the short answer on the first part, Scott, is that on memory, we're pretty well locked in for Q1 certainly and really most of the first half of the year, and we'll get to that if you want to...

Maybe the big thing, Scott, on the memory -- and thanks for the great question really is that we have so much new exciting products and customers ramping in first half. And I wanted to make sure that we have sufficient buffer to also capture upside, channel fill, all of that good stuff. So from a memory standpoint of view, as we were doing that, we realized somewhere around 6 months ago that the memory market is going to get tight. So we took the appropriate actions. So I feel good about the first half inventory situation as well as the pricing environment.

Awesome. And then good question, Scott, quite a few of them on the dynamic guidance. But the crux of what you're saying in our view is that, yes, things ramp quite quickly so that the Q2 -- we gave guidance, obviously, for the year, but the math, if you just sit there pretty back of the envelope, you would see that Q2 ramps to the high 4s, and then you would expect Q3 and 4 to have a 5 handle on it. Like yes, like that's how -- that's the math that gets you to $190 million. And so we get that. And so you -- in our view, you're thinking about it, right?

And a similar dynamic, which is consistent with what we've talked about probably for the last 1.5 quarters which is EBITDA is the lightest in Q1 and then starts to grow and scale as we go into Q2 and then certainly in Q3 and Q4, where we said the average for the year doesn't really exist in nature, right? The first half of the year is at a lower rate and then the second half of the year is at a much higher rate, and we're exiting the year at a nice dollar amount of EBITDA and margin percentage.

Let me pause there. Does that hit up what you were asking about?

That's perfect. And if I could just quickly tack on. Juho, there's been a lot of dynamic changes within the industry, I think, from a competitive standpoint. I'm wondering if you could give us some thoughts in terms of how you see your share shifting over the course of 2026. A lot of moving currents, I think, competitively in the mobile hotspot market.

But then also, if you can provide a little bit of color in terms of some of the new product portfolio. Is that mostly going to be MiFi? Are there some other products that we should be expecting to see in new categories potentially taking us in international markets in the second half of the year?

Scott, excellent questions. So I'll start with the mobile part. What I'm super excited is that we'll have now all 3 large carriers launching our new mobile generation. And like we discussed in the prepared remarks, we were hoping to see that earlier in Q1, but it will now take place towards the latter part of Q1. But the thing with mobile is that it's a predictable run rate business. Think of it like a light switch. Once you launch the product, you get the share in the category. All 3 of them are also positioned in a higher volume segment than where you've seen us historically. So I feel really good about the MiFi volume. And I think I've been fairly open about it.

Look, I think in mobile or in hotspot, our job really is to go and consolidate the market. And these 3 across all 3 is a huge, huge milestone. I also see opportunity towards the latter part of the year or going forward in expanding a hotspot. There's also a value segment. And I also believe there's a great opportunity in the premium segment. So mobile, we innovate the category. We're huge fans of, and we look forward to continuing investing and growing, growing in that.

I believe your second question was then on the portfolio. So I already described the mobile part of the story. Like you know, in FWA, today, we have, if you think good, better, best. We have the better with the FX4100 that we launched about 9, 10 months ago. We recently introduced FX4200, which is the best. And now what we're going to roll out during the first half is an entry-level, yet enterprise grade, same manageability, everything you know us for, but a lower tier router. So we'll complete this good, better, best for SMB, enterprise, call it, carpeted environments. And then, of course, there's a lot of other attractive verticals. So that would be my summary on the immediate portfolio expansion.

The next question will come from Tyler Burmeister with Lake Street.

So as we think about the 2026 guide across your mobile and your FWA businesses, the FWA side of the business continues to gain momentum and you kind of highlighted the mobile side of the business as being stable. Just wondering with the new customer ramping this year and mobile coming off a softer '25 and different dynamics, should we still expect the Fixed Wireless Access side to be a relatively larger contribution to growth this year?

Awesome. Thanks, Tyler. We'll tag team as usual. So we expect mobile and FWA both to grow on a revenue basis in 2026 for albeit different reasons, right? Fixed pie, if you will, on mobile, growing pie on FWA. So you all share all the thoughts on that. And on both the revenue and customer base. So short -- just to make sure you said flat, but it's a growth driver, both of them.

Yes. The one thing I would add here or highlight is that, like I mentioned when I was answering Scott's earlier question, there's plenty of room to grow in mobile, and we're going to go as fast as we can, and that pony will do extremely well. At the same time, FWA on the back of the portfolio expansion, the customer expansion is going to be also a great story in 2026. So if you look at 2026, we'll see which one of these 2 categories ends up running faster. But if you take the long-term view, the FWA TAM for mobile. Also, now with these product introductions, our share in mobile will significantly grow. So if you take a longer-term view, it will be in -- the mix will be in favor of FWA.

That's great. And then we talked maybe a little bit less about the MSO and the distribution channel opportunities on this call. So I was just wondering, as we look out this year, could we possibly hear some announcements or start seeing maybe some more meaningful contributions from those customer groups this year? Is that maybe a little bit further out opportunity for you guys?

Thanks, Tyler. I think that's a fantastic question. So -- and I'm sure you're asking because I've been mentioning in my remarks, and I have been talking about it a little bit already. Look, to me, the MSOs, whether it's cable or fiber, many of these guys actually have cellular assets as well, right? They're kind of like a carrier. So like I would even put them in the same bucket as the large -- 3 large carriers, and there's brilliant FWA use cases with the MSOs, starting with failover, day 1, all of that. And we've done massive investment in both products where the FX4200 is actually the ideal, I'll call it, router platform for that use case, but also in our cloud with deep understanding of those use cases.

So MSO is definitely something where I expect that we'll have great discussions as the year progresses. The VAR and the managed service provider, let's call this the channel, this is a different type of an animal. Now you have a fairly fragmented set of partners. By the way, I did mention or I should mention that the 3 large value-added resellers, CDW, Insight, and I can't believe I'm flagging on a third one now, are all going to launch -- we've already introduced programs. They're all stocking the FX4200 as of late last year. That is going to be a steady ramp.

It's a little bit like the FWA. So these large guys, whether they are the carriers or the MSOs, they will drive big immediate volume uplift. The VARs and the MSPs in the long term become significant growth driver for us, but will be a slower burn. The third large value reason, of course, is SHI. Did I answer your question?

Yes. That's great.

The next question will come from Christian Schwab with Craig-Hallum Capital Group.

Good quarter, and congrats on all the deals. As we look at the software business, you have one customer who's a material percentage of that software and services revenue. Is there an opportunity with the other 2 customers to deploy a similar program as your historical leading customer?

Christian, thanks for joining us. Actually, I'll answer both aspects of the software business. Let me start with the Inseego Connect, which is our device management platform, orchestration platform. One of the really important things that we've implemented now, especially with the FX4200, but much broader is that since we've made that investment over 2025, in creating a world-class device management platform with great differentiation capability. Our go-to-market motion has really changed on the routers. It really is a solution first sale attach rate, but also the value capture is growing. The installed base, of course, takes time to grow. But again, here, if you take a multiyear view, Inseego Connect is a really important part of our story. It also provides other service opportunities for us where we can expand, as you might imagine.

If you look at the subscriber life cycle management platform, yes, for sure. We've done significant investment here as well, and we're looking at from a business development standpoint of view, expansion opportunities. It really does have a unique feature set, especially if you go into the Fed and government space where you have a lot of compliance, a lot of complexity in terms of how you manage those customers, and there are significant benefits for carriers, broadly speaking, to leverage that platform.

Great. I guess my second question, with the broadening base out of all 3 carriers, there seems to be a greater industry focus on enterprise class Fixed Wireless Access versus just residential. From a bigger picture standpoint, do you believe any of this has to do with Industry 4.0 initiatives or greater acceleration finally of private 5G networks by the carriers and their thoughts?

So there was an immediate gold rush in FWA when 5G merged to consumer. The problem with consumer is the ARPU and the consumption profile. Very, very data demanding, massive consumption profile and you're competing against cable and other value props for the consumer. Enterprise, on the other hand, has a very rich ARPU profile. And if you think about it, the usage profile is completely the opposite of the consumer because you'll be working through the day, you maybe should not be streaming Netflix at the office.

So just like from the basic dynamic standpoint of view, very favorable from a carrier P&L standpoint of view. There has been a significant constraint on the industry, and it really has been spectrum. So C-band when the auction happened, launched a massive wave of FWA expansion. There was a recent acquisition that one of the carriers made that you're very much familiar with. And all of a sudden, FWA and especially the business or enterprise segment became top of mind because now you have the capacity to go there, and it has the highest ARPU.

So one of the really foundational things that we believe in is that cellular will take over the world in 2 ways. One, 5G performance is now broadband like as opposed to 4G. 6G is yet again another 10x faster. So you could make the case where now cellular should become the primary and there shouldn't be a discussion around it. It will also release massive amounts of spectrum, massive amounts of capacity when you can utilize higher on auction spectrum assets that are still out there yet to be deployed.

And then look from an enterprise end customer standpoint of view, super easy to deploy, single management interface. You don't need to worry which of your location to get fiber or cable or how do you patch all of that together. So I think there's a lot of benefits that will continue to accelerate enterprise FWA. And that was one of the data points I was sharing is this 30 -- high 30s CAGR on service provider revenue increase in the enterprise FWA.

The next question will come from Lance Vitanza with TD Cowen.

I've got a couple, if I could. The first is it's good to have Verizon back in the fold. That said, I do wonder what this means, if anything, for the variability of results going forward. I'm just wondering beyond the initial rollout, just looking ahead here, do you expect this to -- I mean will your visibility be better or worse off for having Verizon back in the mix relative to working with AT&T and T-Mobile?

That's an FWA question. I'll take it, Lance. So the way to look at it is that I kind of go back to my previous answer, there's a strong economic incentive. All 3 players have made the statement that they're investing in FWA for enterprise, where we got with our existing large customer, it took a couple of product generations, and it took some time to develop the co-selling motion and to be able to drive that kind of volume uplift. So at this early stage, I can't really tell you like how fast each of these opportunities will grow. But I think we have very reasonable expectations, reasonable expectations that inform the guide for 2026 that Steven was sharing.

Okay. Great. And then -- so just to sort of go back to Scott's question about the full year EBITDA outlook. If I'm doing the math right, I think you put up about a 12.1% EBITDA margin for 2025. Should we be thinking about 2026 as kind of being in and around the same ZIP code? Or could there be upside or potential downside maybe for investment spend and so forth? How should we think about that relative to margin profile year-over-year on the EBITDA line?

Good question. Similar outcome, Lance. And so far as the answer for the year doesn't really exist in nature because we would expect to exit 2026 at those levels you're saying, at the higher levels, kind of where we are now-ish. But the first part of the year is going to be a bit lower. So the average for the year is somewhere in between that's not really existing. So if it's -- you can see the math for Q1, right? So if the first half of the year is single digits and the second half of the year is getting into a decent double digit, you'll do the math on the average. But the short answer is the rates that we're at, we would expect to be seeing in the second half and exiting the year for sure.

Perfect. Understood. And maybe just one last one for me. And just sort of thinking a little bit longer term, is double-digit revenue growth sort of sustainable over the next few years, do we think? Or should we be sort of thinking I'm not expecting guidance here. I'm not expecting that '27 will necessarily look as robust as 2026. But will those years -- will we continue to see robust growth, do you imagine? Or does 2026 sort of bring us back to kind of more of a new plateau level would you expect?

Of total revenue growth? You're saying, hey, can you grow total revenue at double digits in the next couple of years?

Yes.

Yes, we can. I think we said that at the end of last year as we're setting up for this year. And candidly, the growth profile for 2026 is a nice double digit with a pretty low week lane we might say internally, Q1. And so if we're pulling that off in a year where we're ramping a whole bunch of new products and transitioning, right, we're going from a company that was one product, one customer to many products, all 3 carriers, and we're doing that all this quarter. So like that's a big deal. And once that gets up and running, like that's a really nice model. And so a little probably long-winded, but the short answer is yes, we do believe that's a double-digit growth for the next several years.

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

Thank you for the great questions and for joining us today. Steven and I will be at the ROTH Conference next month, and we hope to see many of you there. I also wanted to thank our awesome employees for their hard work and dedication and our shareholders for your continued support and confidence in our vision. We are excited to have you with us on this journey. Thank you again for your time, and we look forward to catching up soon.

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

Hello, and welcome to Inseego Corp.'s Third Quarter 2025 Financial Results Conference Call. Please note that today's event is being recorded [Operator Instructions] 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.

Good afternoon, everyone, and thank you for joining us today. Q3 was another strong quarter for Inseego. We generated revenue of $45.9 million and adjusted EBITDA of $5.8 million, both above guidance and marking our second consecutive quarter of sequential growth in both metrics. Operationally, we continue to execute on the growth strategy I laid out earlier this year.

Our strategy focuses on scaling our core FWA and mobile solutions in the enterprise market while also evolving into a solutions company that integrates hardware, network management and software into a single platform, enabling enterprises, carriers, MSOs, MSPs and VARs to build their wireless practice on Inseego. Our progress in executing and advancing these strategic value creation goals this quarter is reflected on 3 key accomplishments.

First, we extended our FWA leadership while continuing to drive mobile performance. On FWA, we did this by driving growth with the FX4100 and expanding our portfolio with the announcement of our premium FX4200, which extends our TAM. As we announced on our last call, we also added a third Tier 1 U.S. carrier across both FWA and mobile starting to contribute revenue later in Q4.

Second, we advanced the realization of our solution strategy with a major new release of Inseego Connect, expanding our software foundation for growth. And third, we further strengthened our leadership bench with the addition of seasoned C-level executives and 2 new operating experts on our Board of Directors, further enhancing our ability to scale and deliver sustainable, profitable growth.

On today's call, I'll walk through these 3 key accomplishments, beginning with FWA. We continue to see strong demand for the FX4100 with T-Mobile, where deployments have scaled meaningfully across key verticals, including retail and utilities. These wins underscore the FX4100's ability to deliver enterprise-grade requirements across a broad spectrum of industries and company sizes. It's clear that our FWA solutions are gaining traction beyond early adopters and becoming a trusted primary option for mission-critical connectivity. In Q3, FWA customer demand exceeded our joint expectations with our partner, T-Mobile. On the supply side, our team executed with precision, ensuring products reach customers quickly and reliably to capture a meaningful amount of upside. This was a direct contributor to our Q3 financial results.

Overall, FWA shipment volumes were up more than 50% year-over-year, underscoring the strong and growing enterprise adoption of our FWA solutions and the effectiveness of our go-to-market execution with carriers. Along that line, carrier diversification has also been a key area of progress. As we highlighted on our last call, we secured a new Tier 1 U.S. carrier win during Q3, which will begin selling both our FWA products and soon-to-be announced new WiFi device.

With this addition, Inseego is now aligned with 3 major U.S. Tier 1 carriers, broadening our reach and supporting share gains in both FWA and mobile hotspots. Building on this momentum, last week, we introduced the FX4200, the next phase of our FWA growth story, with shipments beginning in Q4. This premium tier enterprise-grade product eliminates the traditional trade-off between capability and ease of use, delivering both advanced performance and simplicity.

It creates a higher value tier in our portfolio, broadens use cases and expands our market opportunities while maintaining the reliability and security Inseego is known for. When paired with the X700 mesh access point and our Inseego Connect SaaS platform, the FX4200 becomes a complete enterprise solution, expanding our TAM, creating SaaS attach opportunities and supporting incremental reoccurring revenue growth.

Importantly, the FX4200 also enables us to move upmarket into larger enterprise and creates a new path to market via MSOs who can augment their existing networks with cellular capabilities. For enterprises, the need is clear, reliable connectivity that is cost effective and easy to deploy. For carriers, FWA creates new revenue streams and a faster return on network investment. What's been missing is the right solution, one that combines enterprise-grade features with ease of use and strong economics. That's where Inseego comes in.

With our FX4200 platform and integrated solution stack, we're uniquely positioned to meet this need and create value for both carriers and enterprises. Together, these factors make FWA a compelling connectivity option and Inseego is well positioned to capitalize by expanding our product portfolio, adding new carriers and deepening our engagement with MSOs, MSPs and VARs.

Moving to our mobile business. In Q3, mobile remained a solid revenue contributor, driven primarily by our largest Tier 1 carrier. We are also refreshing our MiFi product lineup and expect to be in market with all 3 carriers in Q1. Collectively, our FWA and mobile businesses are performing well. FWA is gaining momentum with new products and customer wins, while mobile provides a steady revenue base that will expand as our new Tier 1 carrier ramps. Together, these businesses create a stronger and more diversified growth platform as we head into 2026.

On our second topic, solutions. In Q3, we advanced one of the 2 key growth vectors of our strategy with a major new release of Inseego Connect, our cloud-native SaaS platform for Inseego FWA and mobile devices and network management. This release elevates Connect from a supporting tool to a core part of our enterprise offering tightly integrated with the FX4100 and the new FX4200. With zero touch provisioning, integrated security and APIs for large-scale deployments, Inseego Connect enables carriers, MSOs, service providers, MSPs and enterprises to deploy and manage 5G edge networks more efficiently.

Importantly, it also creates SaaS attach opportunities that expand our TAM and support reoccurring revenue growth. Also on the solutions side, our wireless provider subscriber management platform, Inseego Subscribe, add further value by enabling carriers and service providers to manage users of wireless networks across any device from onboarding and authentication to entitlements, policy controls and billing.

In doing so, Subscribe simplifies operations, improves visibility into network usage and creates new monetization opportunities through subscription-based services to lower service providers, customer acquisition cost and operation cost. This overall progress underscores how we're executing on our strategy to evolve into a solutions company. As we scale these solutions and broaden adoption, having the right leadership in place will be critical to sustain this momentum, which brings me to our third topic, further strengthening our leadership team to support our next phase of growth.

Along that line, we recently added a proven leader in marketing and a senior technology promotion on the leadership team. Donna Johnson joined as Chief Marketing Officer, bringing more than 20 years of enterprise marketing and channel experience. She most recently served as CMO of Ericsson Enterprise Wireless Solution following its acquisition of Cradlepoint, where she was a founding leader who helped establish the company as a pioneer in enterprise wireless edge solutions.

Vishal Donthireddy was promoted to Chief Technology Officer, reflecting his 2 decades of innovation at Inseego. Since joining in 2005, he has led product development from 2G through 5G advanced, spearheading industry firsts and delivering award-winning hardware and cloud-managed solutions. In addition to these management team adds, I'm thrilled to welcome 2 accomplished operating executives to our Board of Directors. Nabil Bukhari, President, AI Platforms and CTO at Extreme Networks has led the company's transformation into an AI and SaaS-driven networking leader.

Nabil brings deep expertise in product innovation, subscription models and scaling cloud platforms with a track record of turning advanced technologies into customer-ready solutions. And Stephen Bye, President and CEO of Ookla, who brings more than 30 years of leadership across carriers and broadband providers worldwide, including DISH, EchoStar, Sprint, Cox, AT&T, Telstra and Optus. Stephen has been at the forefront of connectivity evolution from DISH's 5G build-out to the emerging frontiers of 6G and satellite services with extensive operational and strategic expertise in scaling networks.

Both Nabil and Stephen are recognized thought leaders whose operating experience in SaaS, AI and carrier strategy will be invaluable as we expand our solutions portfolio and accelerate Inseego's transformation. With these leadership additions, combined with the execution we've delivered through 2025, we are well positioned to build on our momentum as we close the year and move into 2026. Since joining Inseego in January, I've been proud of what the team has accomplished.

In less than a year, we've set out a compelling strategy, broadened our customer base, refreshed and expanded our solution portfolio and strengthened our leadership bench, creating a scalable platform for sustainable growth. Looking ahead, our focus is clear: drive sustainable growth, SaaS-enabled solutions, deeper customer partnerships and disciplined execution. With that, I'll turn it over to Steven to review our financial results and outlook in more detail. Over to you, Steven.

Thanks, Juho. Hi, everyone. Thank you for joining us. I'd like to cover 3 topics today. First, I'll take you through our Q3 2025 financial results. Second, I'll provide a brief update on our capital structure. And third, I'll share some color on the financial profile of the business and provide guidance for Q4 2025. As we always do, we'll wrap up by opening the call to your questions.

Let's start with Q3 results. We delivered our second consecutive quarter of sequential revenue growth, as you just heard Juho highlight. That performance was again paired with strong gross margins and with an efficient spend profile, we also delivered meaningful operating leverage and sequential growth in adjusted EBITDA and adjusted EBITDA margin.

On the top line, total revenue for Q3 was $45.9 million and was driven by 3 dynamics: one, a particularly strong ramp in our FWA FX4100 product following its Q2 2025 launch, as Juho talked about; two, solid volumes of our MiFi M3100; and three, continued solid contribution from our software services offerings. It's notable to call out that FWA revenue was the second highest in company history and surpassed mobile hotspot revenue again this quarter, which is now the third time that's occurred.

That crossover is a tangible data point of our strategy at work, scaling FWA over time, shifting the revenue mix and positioning the company for durable growth. As we've communicated, mobile revenue came in lower year-over-year as expected, reflecting the record carrier promotion in 2024. As a bit of a preview to our guidance, we see mobile revenue growing sequentially in Q4 2025 from a more fulsome contribution from an expanded customer set and products as new programs launch and our product line refresh begins to hit the market.

And our software services revenue, which is comprised of our Inseego Connect MDM cloud offerings for Inseego devices and our Inseego Subscribe SaaS offering for mobile subscriber acquisition and management came in at a consistent $12 million as expected and providing stable high-margin revenue and profitability.

Non-GAAP gross margin was 41.8% in Q3, reflecting a favorable product mix year-over-year and particular strength in FWA. Non-GAAP operating expenses came in at $15.6 million, reflecting some nonrecurring onetime items in G&A and an increase in D&A on our decided investments in new products that are coming to market.

Pulling this all together, Q3 2025 adjusted EBITDA was $5.8 million, up sequentially and at a margin of 12.5%, the third highest in more than a decade. We ended Q3 with a solid $14.6 million in cash and healthy working capital and leverage metrics provide that flexibility as we continue executing on our growth initiatives. We also closed the quarter with a very manageable total debt balance of $40.9 million or approximately 2x LTM adjusted EBITDA.

That balance sheet strength is the foundation for how we run the business, and it leads directly to my second topic, our continued capital structure strengthening. Last month, we took the prudent step and filed a universal shelf, a move that we believe enhances our financial flexibility and ensures we remain well positioned to execute on our growth strategy. The shelf complements other actions we've taken to increase financial flexibility, including a $15 million revolving credit facility that we put in place in August and of course, the reduction of more than $130 million in debt over the past year or so.

Altogether, these actions strengthen our balance sheet, provide additional flexibility to invest when and where needed to drive growth and support long-term shareholder value. With that context on our capital position, let me now turn to our guidance for Q4 2025. 2025 has been a foundational year as we invested in and scaled new products, advanced our software platforms and won the third Tier 1 carrier customer on both mobile hotspot and FWA. We're starting to see the business evolve along the strategic lines that Juho set out and for 2024 -- for Q4 2025 rather, reflecting those initiatives, we're looking to drive continued sequential revenue growth over Q3.

That's particularly notable as our business has been somewhat seasonal with Q4 being marginally lower than Q3 for each of the previous 3 years. And we expect growth in Q4 2025 despite the fact that Q3 was just a record FWA quarter. Q4 2025 mobile revenue is showing particular strength and is expected to generate solid sequential growth in Q4 2025. We're seeing higher volumes at our carrier customers, a nice reflection of our expanded offerings across our customer base.

On FWA, while we expect our offerings to deliver a strong quarter in Q4 2025, we also just saw a record quarter in FWA in Q3, and so we're not expecting that same elevated revenue level in back-to-back quarters. And finally, software services revenue is expected to remain consistent at approximately $12 billion. In terms of margins, non-GAAP gross margin is expected to be modestly lower in Q4 2025 on a greater proportion of mobile hotspot revenue, more consistent with historical levels in the high 30s on a percentage basis.

One aspect of COGS that we'll talk more about as we move into 2026 is the global dynamic of rising costs in the memory market that is impacting everyone. We don't see a material impact for Q4 2025, but with the large players shifting capacity to cater to AI, along with other buyers across the industry, we're seeing a tightening in the market. We're comfortable with the current dynamics and have fully factored that into our expectations for Q4 2025. We'll keep you posted as we move into 2026.

Turning to non-GAAP operating expense. For total OpEx dollars in Q4 2025, we expect an increase in sales and marketing to drive growth and in R&D as we fund new products, as we've discussed. Our robust new product launch are also expected to drive higher levels of capitalized software development costs in Q4.

Importantly, we're driving efficiencies across the company and expect G&A to improve as a percentage of revenue going forward. Pulling this all together, we're providing the following guidance for Q4 2025 total revenue in a range of $45 million to $48 million and adjusted EBITDA in a range of $4 million to $5 million. With that, we appreciate your time and support. We're glad to open the call for questions. Operator?

[Operator Instructions] And your first question today will come from Scott Searle with ROTH Capital.

Nice job on the quarter, guys. Steven, maybe to start on Subscribe and Connect. As you started to make some changes in investment, I'm wondering if you could take us through how the monetization changes and how you go to market and access to the channel, how we should be thinking about how that ramps up in '26 and beyond?

So, maybe I'll start with the Inseego Connect part. Today, we have a strong attach with our FWA together with the lead big carrier partner. What we've done and what's really important to understand with the FX4200 launch is that we've graduated Inseego Connect from what you could look at as a support tool to a core part of the enterprise platform.

And we're driving usage to the cloud. The FX4200 will do a couple of things for us. It's going to expand our presence with the MSPs and MSOs as well as provide expansion with the carrier channel. So what you can expect to see with the FX4200 and with sequential launches is a richer value capture when it comes to the -- what I would call device cloud.

And then good question. On Subscribe, the counterpart on the software services, it's a piece of the business, Scott, that you know and as others know, we've begun to invest in. It's a really compelling part of the portfolio that complements what we do with our carrier customers and our MSOs and all of the strategic service providers that have similar wireless subscriber models. And so we continue to invest in that. We just onboarded and hired 2 executives in that business. And so they're getting up to speed right now. And so 2026 is what we look to be a growth year in that part of the business on the software side.

Very helpful. And maybe looking out into the first quarter, I think you addressed it sequential growth within the fourth quarter. There's typically a little bit of seasonality within that, I think as carriers have historically kind of worked down their inventory levels. But given the new product launches that you're expecting, it sounds like across MiFi in addition to new carrier wins starting to ramp up. Does one -- does the first quarter have different seasonality? Will we see sequential growth starting a little bit higher in the first quarter as we start to progress into '26?

Yes, a really good point. And also just to clarify a bit, part of the reason that Q4 is "seasonal" is just fewer selling days and weeks at the risk of stating the obvious with the last 2 weeks of December and the Thanksgiving week is just 3 fewer weeks.

And so there's a little bit of math, less so industry dynamics. Whereas what you said in our view, Scott, is that you do see some end of year buying and inventory management so that sometimes January is a slower month. And so Q1, it's been a little bit different year-to-year here, but we are focused on making the most as we go into the year.

And Scott, on your note on this new carrier ramp and broad renewal, I believe we mentioned this in the prepared remarks. But when it comes to MiFi, the new carrier customer will start recurring revenue in Q1. In addition, we're renewing the existing 2 MiFi customers in Q1. What you should expect to see us do is to enter a, I'll call it, a higher velocity price point in the market, drive significant share gains when it comes to volume share and with that, continue to drive MiFi growth. Meanwhile, in FWA, the new carrier, we will start shipping a bit later in Q4. And then, of course, with that, we'll be in full motion with the new carrier with the FX4200 come Q1.

Got you. And if I could, just one last one, Juho, I guess from a higher level conceptual view of the industry, there's been a lot of different dynamics going on, starting with AT&T buying EchoStar Spectrum. So a couple of things. I'm wondering, how are you seeing that kind of play out into 2026 in terms of investment and growth in FWA in general. With the 4200 as well, you put a stake in the ground with more processing power at the edge.

And I'm wondering how that's driving not only adoption cycles from a carrier perspective, but also revenue-generating opportunities for Inseego with recurring and otherwise. And then maybe just some thoughts as well in terms of the competitive landscape. It seems like you guys continue to gain share. Just kind of curious as to your high-level thoughts in terms of what you're seeing on the competitive front.

Scott, excellent set of questions. Let me start with the -- with the opportunity when it comes to wireless broadband, you're correct. Like if you look at the addressable market today, I would say that it's heavily constrained by available spectrum, right? Because the carrier needs to make sure that they take care of the high ARPU mobile customers. What happened with the EchoStar transaction with AT&T is that AT&T's mid-band assets dramatically increased.

And that's really the sweet spot for FWA deployment. You might have seen there was some new news from FCC this week that they're looking at releasing more upper C-band, I believe it was 150 megahertz. All of this creates significant opportunity for the carrier to drive more FWA deployment. Why I think that we're extremely well positioned to capture on that opportunity is that we operate in the enterprise or in the business segment of the carrier portfolio, which obviously has a higher ARPU for the carrier than the consumer FWA.

In addition, if you look at the business FWA or enterprise FWA, it consumes on average 1/8 of the network resource or bandwidth of a consumer household. So I think that trend is going to be extremely favorable for us, and we look forward to being the partner of choice for the carriers with our solution offer, which is really designed to deliver enterprise-grade wireless broadband that's easy to use, easy to deploy, and fits well with the carrier go-to-market motion where we also have significant investment.

The opportunity space is huge. And to your point, continues to expand. One of the key things they are becoming spectrum availability. There's competition in the marketplace. But my very simple view here is that I think we have a unique position. On the other end of the spectrum, you have consumer grade, you could call white label FWA. And then you have very heavy complex, high cost of ownership solutions. We want to be that partner that's capable of driving mass scale deployment in strong alignment with the carrier and also starting with the MSOs and the MSPs like we mentioned in the prepared remarks.

And your next question today will come from Christian Schwab with Craig-Hallum Capital Group.

Congrats on the great quarter. As you look to the new customer ramping on both fixed wireless and mobile, can you give us an idea of the range of potential outcomes over the calendar '26 from revenue from this customer?

So if you look at the new customer addition, the hotspot or MiFi market is roughly -- this is not like exact accurate science, but you can think of it as 1/3, 1/3, 1/3 across the 3 carriers. And now what we've done is that we've unlocked the missing 1/3. So we expect to see significant volume growth.

There is ASP erosion in the category, but that will be offset by -- that will be offset by the increase in volume. And that gives us good confidence on the MiFi side. On FWA, we have this unique motion with one of the large Tier 1s, T-Mobile today that I was just describing, we're super excited to establish the same partnership on FWA also with our new carrier customer.

Great. My second question has to do with the software business given the broadening of this customer in particular, but also some of your other Tier 1s, I'm under the impression that a substantial portion of your software revenue comes from T-Mobile. Is there an opportunity at some point in calendar '26 that they would -- that any -- that other Tier 1 customers could adopt the same software platform to manage the network that T-Mobile uses?

Yes, Christian, it's a really good question, and it's spot on what we were just talking about a moment ago, which is we do share that view and see a lot of opportunity for Subscribe Inseego. Subscribe is the wireless subscriber IoT device management across -- agnostic across all devices and carriers platform, SaaS platform.

And so you may have heard me mention we just onboarded and created new roles, new leadership roles that did not exist at the company. And so the Board, the exec team are investing time, energy, people and capital to build the platform because of what you said. We see a decided opportunity, awesome that we have a large customer at Tier 1, great. No reason in the world why we shouldn't have more.

And if you look at the Inseego Connect, which is the device attached cloud, obviously, the name of the game is installed base. So I'm very happy with the solution that we've built, and now it's a matter of scaling that in the marketplace with a strong FWA attach. So if you take a longer time horizon a couple of years out, that's going to be a meaningful growth trajectory for us as well.

Great. And if I could just sneak in one last question regarding Scott's question on the market share gains in the competitive environment. Do you see an opportunity as you roll out new products targeted to the distribution channel and potentially less foreign competition?

I'm sorry, can you repeat the last part? I'm not sure if I heard you.

But potentially, the competitive front and some competitors might not be able to sell here. Is that an opportunity for you or not really?

Yes, yes, definitely. So we're actually uniquely positioned in that we have our engineering team here in San Diego, critical IP created in San Diego. If you look at the latest movement and everything that's being discussed, should there emerge an environment where for national security or for other reasons, U.S. and North America would prefer a domestic supplier is a great opportunity for us, absolutely.

Your next question today will come from Lance Vitanza with Cowen.

Can you hear me okay?

Yes.

So let me start with just sort of to follow up on the Tier 1 carrier contract. You mentioned that the FWA shipments begin over the next month or so versus mobile shipments beginning early in 2026. And I'm wondering, are we supposed to read anything into that staggered timing?

Is FWA definitively a bigger priority either for you or with this customer or for the customer in general? And related to that, as you look out 1 to 2 years from now when sort of the dust is sort of settled, so to speak, how should we think about the volume mix in terms of units between FWA and mobile with this new Tier 1 customer?

Lance, great question. You might remember earlier in the year, what I was saying is that the -- the product development and let's call it, design win cycle is 9 to 12 months. It's a simple matter of when we close on the opportunity and how long it took to develop the solution, the right maturity that we're able to ship. So we're equally excited on both hotspot and FWA. And then if you look at the -- from a mobile to FWA mix perspective, mobile, again, because it's a large market controlled by a couple of large carriers, you will see a significant uptake from a volume standpoint of view when we start shipping with the new customer.

But the mobile is also a fairly confined space. So I don't necessarily expect to see significant market growth in mobile. Meanwhile, our thesis is that the FWA enterprise opportunity, be that carrier MSO or MSP, we're only at the early stages of that. And we expect to see market growth and, of course, share gains within that market.

That's helpful. And then one other question. There's been action at the FCC against "untrustworthy gear" coming from foreign adversaries. And I'm wondering if this is something you're following. It looks like the FCC voted last week to close loopholes, which could cause network operators to actually go ahead and replace components in their networks. Is this something that could favorably bear on results in 2026 for you? And are you contemplating any of that? Or is this just beyond the scale?

Lance, I think this is a really important opportunity space for Inseego. And again, as a North America is U.S. OEM, we're uniquely positioned to capitalize on that. I think it's very good that the focus is in addition to the infrastructure, the macro network, where actions have already been taken. To me, it makes a whole lot of sense that the focus is now moving into the CPE or the broadband devices, whether that's hotspot or FWA and even looking at a level deeper where the IP is designed in U.S. as opposed to perhaps white labeling Chinese design, Chinese software. So I see this as a significant upside opportunity for us as a company.

And your next question today will come from Nick Rubino with Stifel.

This is Cam Tierney on behalf of Tore Svanberg at Stifel. Congrats on the quarter. I wanted to drill down a little bit into the Inseego Connect API that you guys rolled out, I believe it was last quarter. I'm curious if you -- what sort of like early read-throughs you guys are seeing from that? Any feedback from customers about how they're using it or whether that's driving service revenue attach rates?

We actually -- Cam, that's a great question. Thanks for joining us. So we just had our Channel Advisory council when it was 2 weeks ago, one of the -- like my biggest takeaway was that the APIs that we spent part of this year in building was a fantastic investment. The feedback was overwhelmingly positive. Look, we want to be the best partner, whether you're an MSP, MSO or a carrier.

And there are instances where it makes sense to consume our Inseego Connect device management to the service provider, a single pane of glass, if you will, so that we can integrate our solution offer as a part of a total solution offer. And that's exactly what the APIs does. The APIs are very important as we extend to MSOs, MSO cellular failover use cases, and it is a requirement when engaging with the MSP community.

Okay. Awesome. And then second question is, I just wanted to drill down a little bit more into the FWA sort of longer-term view. Obviously, the last couple of quarters, it's sort of exceeded the mobile business significantly. I'm curious if that's sort of more of a longer-term trend that you guys are seeing? And maybe could we expect then into 2026 and beyond? Or is that sort of more short-term chop in the business?

Yes. No, good question and a very important clarification to get out there for sure for how you're thinking about it, which is FWA is an important growth driver now and going forward. So we don't see it as chop. And if you go backwards in time, it probably was. It was more kind of one-off for various reasons. But the product portfolio, the technology, the customer breadth is much more diverse now and going forward. And so you're seeing a more steady growth CAM going forward. And so we see that contributing to both dollars and growth rate going forward.

Yes. Maybe to double-click on that, the strong Q3 on FWA was driven by our large carrier customer. In Q4, we diversified both in terms of add incremental revenue streams, both in terms of the new product and also in terms of new channels. So you should absolutely expect to see us further expand our portfolio as well as our market reach in terms of channels and market share as we go into 2026.

This concludes our question-and-answer session. I'd like to turn the call back over to Juho for any closing remarks.

Thank you for the insightful questions and for joining our call this afternoon. Steven and I will be attending a few sell-side conferences this month. We will be at the Craig-Hallum, ROTH and Needham conferences in New York in 2 weeks. We're particularly proud to be celebrating Inseego's 25th anniversary as a public company, hosting the closing bell on NASDAQ on Monday, December 8, a meaningful milestone for our employees, shareholders and the company as a whole. Thank you again for your time today, and we look forward to speaking with you soon.

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