Hello, and welcome to Inseego 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. [Operator Instructions] After today's presentation, there will be an opportunity for Q&A. [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 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 Inseego 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, Inseego 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 Inseego, 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…

Thanks, Juho. We're thrilled to have you here and welcome your energy and hit the ground running leadership in driving the company forward. Hi, everyone. I'll cover two pretty concise topics today. First, I'll take you through our Q4 and full year 2024 financial results. And second, I'll share some color on what we're seeing in the business that's consistent with our comments on the November call and around which we'll provide guidance for Q1 2025 and a high-level view of full year 2025 top line expectations. As noted, and as we always do, we'll of course wrap up by opening the call to your questions. Let's start with our Q4 and 2024 results. First off, as you know, we closed the sale of the Telematics business in late November 2024 for $52 million in cash. We're pleased with that price. That was roughly 2 times revenue or essentially double the multiple that the company received for the sale of the legacy South Africa Telematics business that Inseego sold back in 2021. And so far as our reporting of our financial results per US GAAP, the Telematics operations are reported in one net line item as discontinued operations on the P&L. As such, our Q4 and full year 2024 financial results for the company's core revenue and expenses are presented on a continuing operations basis. As we provided on our last call, we've laid out the apples-to-apples pro forma historical financial information for continuing operations by quarter for 2023 and 2024 in our earnings deck that's posted on our investor relations website. With that, let's get into the numbers. As Juho mentioned, Q4 was a solid quarter. Total revenue came in at $48.1 million, an increase of more than 33% year-over-year. And for the third consecutive quarter, total revenue grew…

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

Hey, good afternoon. Thanks for taking the questions. Juho, welcome board. Congratulations, especially someone of your caliber as part of the Inseego organization going forward. Before diving into some of your comments, Juho, in terms of the opportunity set and where you're taking the company in the future, I wanted to clarify some of the guidance. In terms of, Steve, from an inventory standpoint, customer inventory, can you give us an idea in terms of how many weeks of inventory we're looking through to burn down? And I want to clarify the comments around 2025 growth for the year. That would imply a pretty significant uptick through the second to fourth quarters of this year, north of $50 million a quarter, I think, on average, which is actually above where consensus numbers have been. I just want to clarify that if that's what you're communicating, that type of growth into the middle and second half of ‘25.

Hey, Scott, it’s Steven, we'll tag team, of course [indiscernible]. But yes, you heard the outcome explicitly as intended, which is the two dynamics, which is we are targeting and anticipate growing revenue for the full year 2025 over 2024. So yes, that's the takeaway. Yes, it is a challenging revenue start to the year with Q1, but we anticipate growing starting in Q2. And I'm with you on the math that does portend that the back half of the year should see some really good traction from a whole host of initiatives that we've really begun in earnest in the last five weeks with Juho’s arrival. And, Scott, like I mentioned in my remarks, there's a significant opportunity that we see in the marketplace today with our existing large partners as well as broadening our customer base. So that's one of the key drivers why we have the outlook for the entire year.

Very helpful. And maybe, Juho, just a follow up on that comment. Where do you see a lot of that growth coming from the second half of this year then? Is that -- do you have visibility to new customers and design wins on that front? You mentioned some new products as well, I think, on the hotspot front that will start to kick in the middle of this year. But also in your opening comments and in the release, you talked about some other vertical market opportunities that you're starting to hit as well, such as medical device and some other markets. I'm wondering if you could expand on some of those thoughts.

Yeah, absolutely. I'm happy to do that. If you look at our product plan for 2025, first of all, you'll see strong refreshes, if you will, for the product lines that we have in market today, which is absolutely key for us going forward. We also see great expansion opportunity, I would say particularly on the FWA side, as we continue to invest in our broadened device portfolio, but also Inseego Connect. So you should see us continue to grow from SMB to mid-market enterprise, and then even more so large enterprise and even industrial segments towards the end of the year. So those are some of the key core drivers that I see going forward in 2025.

And maybe just quickly to follow-up and then I'll get back in the queue. Like, in terms of some of the relationships you've talked about with I think the wireless ISP that you mentioned in the current quarter, but also your discussion about narrowing the digital divide, there's obviously a lot going on as it relates to B funding and I think fixed wireless access is gaining much greater traction in terms of probably the mix going forward in terms of those connections. Is that an opportunity for you guys, or are you guys a little bit behind the curve on that front, and we'll see you focusing more on the higher end, I'll call them enterprise types of opportunities? Thanks.

I think it will be, so you'll definitely see us expand our portfolio, also in terms of tiering in the marketplace, right? So we are the household name today in premium MiFi. I see no reason why we wouldn't be participating in the marketplace in a broader sense. When it comes to government funding, like, once that picture clears out, we're definitely going to enjoy the benefit of that together with the rest of the ecosystem. So we're paying close attention as to how that will play out. If you look at fixed wireless access, I'm also very excited to explore residential use cases in addition to the enterprise and commercial segment. There's definitely an opportunity with the broadening of the partnership with the large wireless players in the industry, but there might also be wired partnerships that you'll see us enter during 2025.

Great, thanks so much. I'll get back in queue.

Thanks, Scott.

And your next question today will come from Lance Vitanza with TD Cowen. Please go ahead.

Hi, thanks for taking the questions. Juho, welcome. And I appreciate the background that you discussed on the call. But could you perhaps talk a bit more about the customer relationships that you bring to bear coming from Qualcomm and how quickly you think you can implement and improve and see those go to market processes? I mean I did note the implication for the growth in the back half of the year, and frankly, that's a little bit faster than I would have expected. But I guess what I'm trying to drive toward is some sort of timeline on an expected sustainable revenue ramp. If we think that what we see in the second half of this year could extend out in the future or should we expect some additional lumpiness coming off of that strong back half of this year?

Lance, great to hear your voice. Excellent questions. And you're absolutely correct. If you look at the cycle in the wireless industry, like the way that the carriers decide their stock SKUs, that is a 12-month cycle. But what's important to note that we already today have a broad portfolio, which is going to refresh and expand during 2025, of products that have been certified across multiple carriers, which is one of the strengths that we have given that we also operate in channel. Going back to your question on the relationships that I bring there and what to expect in terms of engagement on that front, I think it's safe to say that we've engaged with all of the major players when it comes to broadband, wireless or wired, in North America. And what we're now hard at work is converting the opportunities that we discussed into a revenue roadmap. And that's one of the key things that's giving us the confidence to [indiscernible] guide on a year-to-year growth for the full year of 2025, like Steve has said.

And then -- thank you, that's helpful. And then a similar question on the procurement/supply logistics side, are those processes that take several quarters to successfully implement? I mean, I would kind of imagine that, this year is the year that you put the pieces in place and then you begin reaping some of the benefits from these investments next year, again on the cost side, procurement and whatnot, is that sort of fair or do you think you could get more immediate relief through the numbers this year?

As we grow our top line year-on-year, I think that warrants new discussions with our supplier base, whether it's key component vendors, ODMs, or our manufacturing partners for that matter. So, I definitely look forward to engaging also the supply chain part of our partners with the discussion. If you look at them from a time to market standpoint of view, one of the things that we have as a core asset for the company is the ability to rapidly develop prototypes and basically iterate on the hardware design for new products. That's also very helpful as we're developing new, I'll call it delivery modalities for different segments in our portfolio. So you will definitely start engaging differently already during 2025, in terms of how we bring the products to market and how do we think about our development and manufacturing partnerships.

Great, and then just one last one for me. With the Telematics sale now behind you, is it safe to assume that this is the right asset mix going forward and we really shouldn't be expecting to see any incremental sales divestitures or the need to go out and make any technology acquisitions going forward? Is this sort of we have the pieces in place right now?

Look, so our objective is to become the leading provider, the partner of choice in both mobile and fixed broadband. That’s a statement on both hardware portfolio, device software, the very unique cloud assets that we command, as well as go to market. That is the area where you should expect to see us continue to invest as we further accelerate our revenue roadmap. We will absolutely also consider inorganic opportunities, but that's going to be through a very diligent and thoughtful process as we start engaging in those activities.

Okay, great. Thanks for your help.

Thanks, Lance. Appreciate it.

And your next question today will come from Tore Svanberg with Stifel. Please go ahead.

Yes, thank you and, Juho, welcome to the show. And, Steven, nice to talk to you. My first question is just a clarification question on the annual of the 2025 outlook. So you're saying that you would basically grow on top of the 191 that you reported for ‘24. There's no other pro forma number that we should think about in this sense.

Hey, Tore, thanks. Yeah, that's basically right. When you're coming off the base, as Juho was just going through, there's a whole bunch of initiatives and things that we're working on now that we see an acceleration to performance in the back half of the year and exiting the year, but that should portend to growth for the total year-over-year. So that is the correct takeaway and the numbers you have are correct.

Great, and I know this is a very difficult question to answer because obviously, we're sort of, you're just getting started here, but if you think about the mobile broadband versus FWA versus software services, how do you envision that mix to evolve over the next several years? Because obviously that's going to have some pretty major gross margin implications. So any sort of ballpark numbers that you have in mind?

I don't think I'm in a position to give you ballpark numbers, but I'm definitely happy to help you on how to think about the overall strategy and what to expect going forward. First, I would like to say that I look at this as a platform. So we have a very modular development strategy when it comes to our hardware. We have the same router OS, which is the device software and key part of our secret sauce that rides on whether it's MiFi or FWA. And of course, Inseego Connect helps you manage your entire fleet, whether you're mobile or fixed with the broadband. These two opportunities are very different. So if you look at the future growth, FWA, what I expect to see happen is that while the carriers will be capacity constrained on their consumer deployments, there's going to be no cap when it comes to the business or enterprise segment part of the carrier FWA rollout. The reason why I say that is that the argument of profitability is so strong that you'll continue to invest in network resource, whatever you need, to continue to drive your growth in the enterprise segment. That enterprise segment is also the area where our differentiation really shines. Whether it's the full-stack solution that I described or our go-to-market capability where we can bring the best of both worlds with evaluated resellers as well as the carrier, I strongly feel that FWA, both carrier wire, but carrier being the volume driver in this SMP all the way to industrial segment, it's going to be a great growth journey for us. On MiFi, the same applies. We have public sector. We have mobile enterprise use cases that our products are perfect and designed for. But then if you look at the net new white space, if you will, where we're not operating today, that would be MiFi in the carrier core stock SKUs more in the mass-market part of the line. So that's an area where I don't see any reason why we wouldn't go and participate more effectively.

That's great perspective. Just one last one for you, Steven. So OpEx, based on my math, per your EBITDA guidance, some are sort of high 9s. Is that sort of the run rate that we should use going forward, or will you see some step-ups throughout [calendar ‘25] (ph), especially given some of these new go-to-market strategies that Juho just talked about?

Yeah, that's a good point, and your rationale is correct. We will step up how much we are spending, particularly early on in the first half, Tore, of the year as we invest in a lot of the new products. You won't see that all flow through the P&L specifically, GAAP at least, but you will [indiscernible] cash as you build new products till they go GA that's capitalized. And so if you look at those two, which we obviously disclose all about, you'll see that pick up in Q1 and Q2 of the spend, and then it tapers in the back part of the year to drive that new product and growth.

Sounds good, thank you very much.

Absolutely. Thank you, Tore. Thank you.

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

Thank you, operator, and thank you everyone for the thoughtful questions. Inseego is at a pivotal moment with wireless broadband demand accelerating a strategy to expand in existing and to new markets and a team with the right capability to go and execute on it. We're deploying scalable long-term growth plan strengthening our carrier and value-added retailer partnerships, enhancing our solution portfolio and positioning Inseego in as a mobile and fixed wireless broadband provider of choice. While we're laying the foundation today, the real impact of our strategy will unfold later this year and beyond, delivering significant value to our customers, partners, and investors. In two weeks, Steven and I will be at the Mobile World Congress in Barcelona, where we look forward to connecting with many of you and showcasing some of our latest innovations. In closing, I want to thank our employees, customers, and partners. Your dedication and hard work drive Inseego and the entire industry forward. I couldn't be more excited about the journey ahead.

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