Inseego Corp.

As we evaluated various CFO candidates, it became obvious to us that Bob is the ideal CFO to help us successfully execute on our strategic priorities. With that, let me turn the call over to Ashish, who will share more details regarding deals that have progressed beyond the pilot phase to actual deployments and are rapidly moving forward towards revenue generation 4 in Siegel.

Thank you, Dan. Let me also join Dan in recognizing the Insego team for delivering another solid quarter and achieving a major milestone in Q3. We had outstanding performance in the third quarter, driven by strength across our 5G and software portfolio. As Dan mentioned, it now represents 62% of our overall business. Our product order growth was the highest we've seen in recent history, and we are continuing to see strong customer reception of our 5G product innovations. Notably, our 5G revenue surpassed $25 million during this quarter, representing triple-digit growth year over year. Increased demand and accelerating digital transformation have increased the need for our 5G solutions. This great momentum is reaffirming our position as the worldwide leader in 5G technology that is enabling access to a new generation of broadband not possible with legacy technologies. As Dan mentioned, let me spend a moment on the most important announcement so far in our 5G FWA efforts. I am thrilled that T-Mobile for Business is launching our compact indoor 5G solution for their enterprise customers. This achievement is a testament to the diligent efforts by the Insego team that has been working side-by-side with T-Mobile and its customers for many months. We have a number of additional 5G FWA products certified by T-Mobile, and we are incredibly excited about the pipeline of opportunities we are building with them. In addition to T-Mobile, we also signed up new service provider customers in Australia and the Middle East. We recently shipped 5G FWA products to these customers to support launches in the fourth quarter. As I think about the transformation of Inseego over the past several quarters, three things give me confidence in our ability to achieve our financial goals. First is the validation of our significant FWA product investment over the past 24 months with important wins with multiple Tier 1 carriers and Fortune 500 enterprise accounts. Given these recent wins, both announced and unannounced, we expect to see material revenue contribution in 2022 with FWA driving a majority of our growth next year and beyond. I can see a time in the near future where FWA revenue exceeds our current hotspot revenue given the significantly larger market these products address. Second is the diversification of our revenue streams. There was a time in the not so distant past where majority of our revenue came from a single product, the hotspot, sold to a single carrier. Everything we have done over the last three years has been to change that dynamic. As of today, we have two technology lines in 4G LTE and 5G, which also includes our cloud technology for a complete solution. Today, we sell to virtually every carrier in North America, including the two largest 5G providers in the U.S. We also sell directly to a growing list of large enterprises who are integrating 5G into their business. We are doing this not only in North America, but also in Europe, the Middle East, and Asia. This is no longer the in-sigo of old. Third is the important revenue mix shift underway. You've heard us talk in prior earnings calls about the higher margins we are seeing with our 5G solutions. As the same engine that powers our mobile hotspots is at the heart of all of our 5G solutions, including the 5G FWA solutions. The ability to use a common engine across all solutions allows for significant operating leverage. In addition, we are seeing a significant uptake of our cloud software alongside our FWA products. This adds both attractive gross margins and an important recurring revenue component to our business. On prior quarterly calls, I illustrated examples of customer pilots we've been conducting and in order to give everyone a sense of the amazing opportunities ahead of us. This quarter, I'm pleased to announce that we are beginning to see some of these trials go live and the momentum is accelerating across numerous verticals. To start, we are seeing some interesting industry 4.0 use cases. One large systems integrated in Europe that is a recognized global leader in the manufacturing vertical is testing our 5G FWA product line to enable high capacity, low latency data capabilities for the automotive manufacturing market. We're also working with a factory that manufactures telecom equipment. In this use case, they're testing our industrial 5G CPE, the S2000E, to power automation and robotics with the goal to find new innovative ways to improve workplace safety and to create more agility on the production side. In the education market, KIPP SoCal Public Schools is using our 5G indoor routers for in-classroom Wi-Fi, bringing high-speed Internet to charter public schools in underserved areas and connecting students to new AR VR learning experiences. And in Utah, two school districts are using our outdoor FWA solution in a CBIS private network to provide long-distance connectivity for students who live in remote areas. As mentioned on prior earning calls, CBRS and private networks are key focus areas for us. In addition to the use case in Utah I just described, a couple of other customers are using cloud-managed 5G connectivity, including one of the top 25 business schools in the US. That university is testing our 5G solutions to provide on-campus connectivity for their dorms. And a collection of hotels in the large US cities is testing our solution with the goal to improve the quality of internet services for their guests. In Kentucky, our new industrial gateway is being deployed on downtown light poles and city parks to connect public Wi-Fi access points. Similarly, in Australia, a manufacturer of solar-powered streetlights is using our 5G CPE to provide public Wi-Fi and connect surveillance cameras in areas where wired connections are impractical or impossible. The utility sector is another interesting vertical for Insego, with needs to connect critical infrastructure in remote areas. In Europe, for example, we are working with a large global systems integrator to enable real-time monitoring of wind turbines. Public safety is another market where we are seeing 5G use cases. A major city in Arizona is using our outdoor 5G millimeter wave solution to provide high-speed broadband for remote monitoring in high-traffic areas. In the healthcare industry, Fisk University in Tennessee is using our 5G solutions for low-latency connections to enable virtual reality applications to help train medical professionals in operating procedures. And we are engaged in a trial with an integrated healthcare network to power their facilities across the US. These are just a few examples of the diverse and exciting use cases being powered by our 5G solutions. Lastly, we continue to make good progress with our cloud software business that is now 20% of our revenue. During this quarter, we signed large 5G FWA service provider customers who are attaching our cloud software solutions to their 5G offerings for multi-year terms. While these are still early days, it validates our strategy of investments in software to improve our value proposition as well as improve our margins over the long term. And now, I would like to turn the call over to Bob.

Thank you, Ashish. Let me now review the results of our third quarter fiscal 2021. Before I start, let me tell everyone how proud I am to have been named Chief Financial Officer. I started this assignment as I would with any other client to enhance the financial function at Inseco. Additionally, I was very happy connecting with the financial and executive leadership team to improve and strengthen the processes that we have in running the business. I see this as critically important. As I spent the last several months with the team, I became impressed with the potential this organization holds. And I'm excited to stay on as the Chief Financial Officer of INSEAD. With that, let me get to the financials. As a reminder to everyone, please note that year-over-year comparisons will include the pandemic-driven surge in sales of 4G hotspots, which began in the June quarter of last year and continued through the remainder of fiscal 2020. In addition, remember we closed the sale of our SeaTrek South Africa unit on July 30th of this year. I will be providing comparisons that reflect Insego's financial performance on a pro forma basis that excludes SeaTrack South Africa. Q3 revenue was $66.2 million, up 1% from last quarter, but down from the prior year period because of the COVID-related surge in demand for 4G products last year. Adjusted for the sale of SeaTrack South Africa, revenue was up a robust 9% from the last quarter. The strong sequential result was driven by accelerating demand for 5G and cloud software solutions, whose revenue was up 124% from the prior year. Third quarter IoT and mobile solutions revenue was approximately $57 million, up almost 10% quarter over quarter from what was a strong Q2. This quarter over quarter growth was a result of accelerating sell through of 5G hotspots at both Verizon and T-Mobile, our international service provider expansion, and the initial sell-in of our 5G FWA devices into T-Mobile as a result of our expanded relationship. Enterprise SaaS solutions revenue of $9.2 million, which included one month of C-Track South Africa revenue. After adjusting for the impact of the sale of C-Track South Africa, Enterprise SaaS solutions revenue was up 9.9% year-over-year, driven by the growth in recurring subscription revenue in C-Track across the world over the past 12 months and down 1% quarter-over-quarter due to unfavorable foreign exchange movements and a seasonal decrease in hardware sales. Cash at the end of Q3 was $61.6 million and includes $36.6 million of cash we received in payment for the sale of C-Track South Africa, which closed on July 3. There will also be a favorable working capital adjustment of $2.6 million we expect to receive in Q4. From this point forward, I will focus on non-GAAP measures. A reconciliation from GAAP to non-GAAP is detailed in our earnings release and is available on our IR webpage. Gross margin for the IoT and mobile business was 24.4%, a slight improvement over the 24% last quarter and 30 basis points better than the 24.1% in Q3 of 2020. As Dan discussed earlier, gross margin in Q3 was impacted by approximately $1 million in higher freight costs, but we were still able to improve the margin sequentially in year-over-year due to a favorable mix of higher ASP devices as well as our rapidly growing software business. Assuming similar trends in our product mix and absent any unforeseen factors, we see potential for further improvement in gross margin going forward. Our Q3 operating expense was $25.8 million, down $2.2 million from Q2, but up $1.2 million from prior year quarter. The increase in operating expense year-over-year reflects the investments made to take advantage of the 5G opportunities we are pursuing. Q3 net loss was $8.2 million, or $0.08 a share, in line with the prior quarter, but down from the positive $1.4 million, or $0.01 per share in the prior year. Again, last year's performance benefited significantly from what was the high watermark of the COVID surge in demand for our 4G products. Our EBITDA loss of $773,000 was higher than the $51,000 loss in Q2 and was down from the positive $7.4 million last year. The sequential decline was largely due to the sale of SeaTrek South Africa and the $1 million of higher freight costs I discussed earlier. For additional details on non-GAAP and adjusted EBITDA results, please refer to the reconciliation tables in our press release. Finally, some thoughts on the rest of 2021 and 2022. We continue to execute on our 5G and cloud solutions, and we're encouraged by strong current demand and our increasing opportunity pipeline. As Ashish and Dan mentioned, we see the company entering a new phase of growth in 2022 as we benefit from FWA accelerating both in the U.S. and internationally, the growth in higher margin enterprise sales, and uptake in cloud software alongside device sales. Given this, we are confident in our ability to achieve approximately 25% revenue growth in 2022 pro forma after taking into the account C-Track South Africa business. We also plan on moderating operating expenses on a gross basis. On an as-reported basis, however, please note that fluctuations in our capitalized R&D costs may result in higher net operating expenses in any given quarter. From my analysis of the operating model, I believe there is significant capacity, and as we return to growth in 2022, we should begin to see improved operating leverage. This, in turn, should support adjusted EBITDA growth and excessive R revenue growth rate. In terms of our view of next year, the management team is comfortable with the current street consensus of $310 million of revenue. We will begin providing more detailed guidance as we enter 2022. Lastly, given our revenue growth and margin improvement expectations, we're currently targeting the second half of 2022 to turn free cash flow positive. Again, I want to thank Dan and the board for giving me the opportunity to become NSEGO's new Chief Financial Officer. I look forward to meeting all of our existing and prospective shareholders in the coming months. With that, let me turn it back to Dan for his closing comments.