Inseego Corp.

Hello, and welcome to NSEGO Corp's fourth quarter and full year 2024 financial results conference call. Please note that today's event is being recorded. All participants today will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity for Q&A. To ask a question, please press star, then one on your telephone keypad. And to withdraw your question, please press star and then two. On the call today are Juho Sarvikas, Chief Executive Officer, and Stephen Gaitoff, 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 section of the company's website. An audio replay of this call will be also 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 risks factors described in the company's Form 10-K, 10-Q, and other SEC filings, which are available on the company's website. Please also refer to the cautionary note regarding forward-looking statements section contained in today's press release. With that, I'd like to turn the call over to Juho Sarvikas, Chief Executive Officer. Please go ahead, sir.

Thank you, and good afternoon, everyone. I'm incredibly excited to be here. First, I want to thank the board for their trust and support. I also want to extend my deep appreciation to the Insego team. You've given me a warm welcome throughout my first 45 days, and it already feels like home. This company has so much great talent, and I look forward to leading us into the next chapter. I want to take a moment to reflect on the past 12 months. During this time, Insigo has undergone a significant transformation. We have recapitalized the company by optimizing working capital, restructuring the balance sheet, and materially reducing debt. At the same time, we have streamlined our portfolio by divesting non-core assets and strengthening business fundamentals, laying a solid foundation for future growth and expansion. These transformational efforts have positioned us for the future, and as CEO, I couldn't be more excited to focus my energy on driving our go-forward strategy. Again, I want to thank the team for their resilience and determination in getting us to this pivotal moment. Next, I'd like to share why I joined Insego, the compelling market opportunity in front of us, and what I'm driving as our strategic focus areas moving forward. My entire career has been dedicated to wireless innovation and market expansion. Whether in leadership roles across the North America carrier business at Nokia and Microsoft, founding an OEM company to relaunch Nokia phones and scaling it to $3 billion top line, or serving as president of Qualcomm North America. I've had the privilege of driving industry transformation and shaping the evolution of wireless technology. I understand this space, its challenges, opportunities, and the immense potential. I think it's also important to note that when I ran Qualcomm North America, Inseego was my customer. This experience, combined with my industry background, gave me valuable insights into Inseego's position and market opportunity before I even came on board. It's safe to say that I knew what I was stepping into. There are three main reasons why I found the opportunity to join Insigo as CEO to be so compelling. First, Insigo sits right in front of a large and very attractive market opportunity. Wireless broadband is entering a golden age, evolving from niche use cases to become the preferred primary broadband solution for homes and businesses alike. Today, there are 2 billion 5G connections globally. And by the end of the decade, that number is expected to exceed 10 billion. According to Wireless Infrastructure Association, fixed wireless access, or FWA, is the largest growing broadband technology in the U.S. and has accounted for the maturity of net additions over the past 18 months, leading all other broadband segments. The wireless broadband market is growing already today, despite the current network capacity constraint environment. We believe this trend will only accelerate as 5G Advanced and 6G take hold in conjunction with the new spectrum that I expect will get unlocked in the upper mid-band and the 7 to 8 GHz spectrum in the 6G era. I'm very bullish on this whole market and the tremendous opportunity it presents. The second reason I joined the company is Inseego's unmatched engineering expertise and track record of wireless innovation. Inseego has a long history of industry firsts and pioneering breakthroughs that have shaped the wireless industry. From developing the world's first handheld cradle modem to inventing the MiFi hotspot, revolutionizing mobile connectivity to leading the pack in millimeter wave, it's safe to say that Inseego has always been a wireless pioneer. We have a strong engineering team here in San Diego, quite frankly the best I've seen in wireless, paired with an impressive prototyping and testing facility. This combination enables us not only to be the first to market with the latest technology, but also engineer superior products. All our core IP is created right here in the US, which is an invaluable asset. We are building the future of wireless broadband right here in San Diego. Finally, the third reason I joined Insego is because it represents a rare opportunity to create significant value. The combination of an incredibly expanding market opportunity and Inseego's unique capabilities make this an exciting moment to lead the company. With the right technology, talent, and market position, we have a clear path to expand our product portfolio and go-to-market strategy to capture the opportunity ahead of us. Opportunities like these don't come along very often. As CEO, my focus is on unlocking that value and driving sustained long-term growth. I could not be more excited about the journey ahead. Next, I'd like to share with you what I see looking ahead and the direction I'm going to take. At Insigo, we believe that wireless is the future of broadband and will ultimately be the dominant connectivity paradigm. Our mission is to accelerate that through our technology leadership. We will be first to market with the latest advancements at 5G walls to 6G and by engineering superior high-performing cloud-managed products. We've identified two strategic vectors to drive sustained long-term success. The first is driving execution and scaling of our FWA and MiFi businesses. Second is accelerating our software and services roadmap. In addition, we will revisit our operations strategy. Let me share some color on each of these. The first growth vector, executing and scaling our FWA and MyPipe businesses is a statement of both product and go-to-market. Our product roadmap will be evolved to be better aligned with carriers and their requirements. And we will expand to a tiered portfolio to drive higher velocity stock SKUs. For FWA, this means having stock products in the carrier business segment. And for MiFi, this includes expanding into high-volume, mid- and value-tier segments. We will also invest in scaling our product and solution offerings beyond the current prosumer, SMB, and mid-market enterprise to include upmarket enterprise as well as industrial segments. Alongside this renewed product strategy, we will strengthen our two-pronged go-to-market strategy. We have longstanding partnerships with the carriers in North America. Not only do we sell in to get our products stocked, but we also work alongside carrier sales teams to identify new opportunities, find the right solutions for the end customers, and close the deals. We also have a strong network of value-added resellers, or WARS, that we partner with. Oftentimes, the carrier tries an opportunity with an end customer while the VAR fulfills the order. At other times, the VAR directly leaves the deal. In both scenarios, Inseco plays a key role in aligning both parties to improve efficiency and to deliver the best possible customer outcome. The second growth vector is doubling down on our investment in software for the entire solution stack both device and in the cloud. We will further differentiate our FWA and MiFi products by introducing advanced routing capabilities to meet the needs of enterprise and industrial customers. We will look to accelerate our investment in Inseego Connect, our cloud-based device and edge management SaaS platform, to establish leadership in ease of deployment and remote management. We will offer extensive API support for partner integrations and leverage new AI capabilities to enhance the data traffic prioritization and network slicing functionality coming with 5G Advanced. Inseego Connect is a compelling path to adding recurring revenue as well as an important contributor to cross-margin. Also in our software and services portfolio, we have our very strong wireless subscriber management platform, Inseego Subscribe. This is an attractive business that we've built and will continue to invest in, and I'm excited about the prospects of adding new features and functionality to the value proposition. We also need to revisit our operations strategy to be able to scale our FWA and MiFi businesses to compete in new segments and to improve our margins. I have already introduced material changes to our procurement practices, how we manage our key vendors, our development partnerships with ODMs, as well as our manufacturing partnerships. We need to better align ourselves with the best players in the industry for each business segment. Just like with our US-based engineering team, I also view this as an area for us to differentiate from a geographic strategy perspective. I have deep expertise in this domain and have already identified focus areas for near-term improvements. With that, I'd like to provide some perspective on my market and customer-facing activities. I've only been here 45 days, but I've made it a priority to meet the large wireless broadband customers here in the U.S. It has been great to reconnect with my existing relationships and to see that Insigo is held at a high regard in the industry and our product leadership is widely acknowledged. We've already identified both near-term growth as well as long-term strategic opportunities and are now hard at work to materialize them. I'm very encouraged by the momentum and look forward to sharing more in our next earnings call. Above all, our focus remains on sustainable long-term growth. The wireless broadband industry operates on long cycles, and while we are laying down the groundwork today, the full impact of our strategy will emerge in late 2025 and 2026. Next, I'd like to comment briefly on our 24 results and provide my thoughts on Q1 as we move into 2025. This past quarter marked another important step in Inseco's transformation, demonstrating the power of our execution. I'm incredibly proud of the team's relentless focus, which delivers strong financial and operational performance. In Q4, we achieved 34% year-over-year revenue growth, improved gross margins, executed disciplined expense management, and delivered a third consecutive quarter of positive gap operating income. We delivered adjusted EBITDA margins, again in the double digits. And we sharpened our strategic focus with the closing of the sale of our telematics business. Looking ahead, as we mentioned on the last call, we expect a sequential decline in Q1 revenue due to higher than anticipated customer inventory at year-end, product transitions, and a promotional initiative that is additive but not at the same robust levels as the second half of 2024 that was two to three times higher than historical levels. I'm confident in our long-term strategy and anticipate delivering overall year-over-year revenue growth for 2025. With that, I'd like to hand it off to Stephen, who will provide more details on our financial results and outlook.

Over to you, Stephen. Thank you, Hope.