Executive Summary / Key Takeaways

• Inseego has undergone a significant transformation, successfully restructuring its debt and divesting non-core assets to focus squarely on its core 5G wireless broadband business (MiFi, FWA, and associated SaaS).
• The company possesses differentiated technology, including internally developed edge router OS and cloud management platforms, enabling enterprise-grade performance, security, and manageability for mission-critical applications.
• Despite a challenging start to 2025 due to temporary factors like customer inventory adjustments and promotional timing, management forecasts a return to sequential revenue growth in Q2 2025 and anticipates overall year-over-year revenue growth for the full year 2025, driven by new products and customer diversification efforts.
• Strategic priorities under new CEO Juho Sarvikas include expanding the footprint with Tier 1 carriers and MSOs, diversifying the customer base beyond current concentration, accelerating the software/services roadmap to become a full-stack solution provider, and optimizing operations for scale and margin improvement.
• Key risks include customer concentration, reliance on sole-source suppliers like Qualcomm, execution risk in launching new products and expanding channels, and potential impacts from macroeconomic conditions and trade policies.

Inseego Corp. (NASDAQ:INSG) stands at a pivotal juncture, having recently navigated a period of significant corporate restructuring to emerge with a streamlined focus and a fortified balance sheet. For years, Inseego has been a quiet innovator in the wireless space, pioneering technologies like the MiFi hotspot that redefined mobile connectivity. Today, the company is leveraging this legacy of engineering expertise to target the burgeoning market for 5G wireless broadband, specifically Fixed Wireless Access (FWA) and Mobile Broadband (MiFi), augmented by a growing software and services portfolio. The investment narrative for Inseego is now centered on its ability to translate its technological foundation and strategic realignment into sustainable, profitable growth within a competitive and rapidly evolving industry landscape.

At its core, Inseego's business is built upon providing secure, high-performance wireless wide area network (WAN) and intelligent edge solutions. This includes its well-known MiFi mobile broadband devices and its Wavemaker brand of FWA routers and gateways. Crucially, these hardware offerings are increasingly integrated with and managed by the company's cloud solutions, primarily Inseego Connect for device management and Inseego Subscribe for wireless subscriber management. This combination positions Inseego to offer a more comprehensive, software-defined solution stack, moving beyond a purely hardware-centric model.

The company's strategic pivot, particularly evident throughout 2024, involved aggressively addressing its capital structure and divesting non-core assets. Facing significant debt maturities, Inseego successfully restructured the majority of its convertible notes through a series of transactions that included cash, new long-term senior secured notes due 2029, equity, and warrants. This effort, coupled with the sale of its international Telematics business for $52 million in cash in late 2024, dramatically reduced total debt and eliminated the prior "going concern" risk disclosure. This financial overhaul provides the necessary flexibility and capital to invest in core growth initiatives.

Technological Differentiation and Strategic Positioning

Inseego's competitive edge is rooted in its deep engineering expertise and proprietary technology, particularly its internally developed edge router OS (device software) and the Inseego Connect cloud management platform. Unlike some competitors who may rely more heavily on off-the-shelf solutions, Inseego designs its products for enterprise-grade performance, security, and reliability, often for mission-critical applications.

A key technological differentiator highlighted by management is the company's ability to be at the forefront of adopting new wireless standards. For instance, Inseego was the first OEM globally to demonstrate a 5G Advanced (3GPP Release 18) data call using the new Qualcomm Dragonwing Gen 4 Elite FWA platform in its next-generation cellular router. This achievement underscores its strong partnership with Qualcomm (QCOM), a critical sole-source supplier for chipsets, and its commitment to pioneering the latest wireless advancements. While specific quantifiable performance metrics relative to competitors are not consistently detailed across all products, the emphasis is on delivering superior performance, scalability, quality, and enterprise-grade security. The Inseego Connect platform aims to provide real-time WAN visibility, monitoring, automation, and centralized orchestration, with a roadmap to include advanced routing capabilities, extensive API support for partner integrations, and leveraging AI for traffic prioritization and network slicing. These software capabilities are intended to differentiate Inseego's offerings beyond hardware specifications alone.

In the competitive landscape, Inseego operates alongside much larger players like Ericsson (ERIC), Nokia (NOK), and Cisco (CSCO), who offer broader portfolios spanning network infrastructure to enterprise networking. While these giants possess greater scale, R&D budgets, and established market positions, Inseego focuses on specific niches within the wireless broadband market. Its differentiation lies in its specialized hardware design (e.g., rugged, compact with embedded antennas), its integrated hardware-software solution stack, and its agility in bringing new, carrier-certified products to market. The company's go-to-market strategy involves both direct engagement with large Tier 1 carriers and MSOs, leveraging long-standing relationships and working alongside carrier sales teams, and building out a value-added reseller (VAR) channel. This two-pronged approach aims to diversify its customer base, which is currently highly concentrated (two customers accounted for 54.6% and 35.1% of Q1 2025 revenues), a significant vulnerability.

Compared to competitors like Ericsson and Nokia, which focus heavily on core network infrastructure, Inseego's strength is in the end-user devices and their management. Against companies like Cisco, which offers broad networking solutions, Inseego emphasizes its deep wireless expertise and specialized 5G/FWA products. While Qualcomm is primarily a component supplier, Inseego integrates these components into differentiated end products and full solutions. Inseego's strategy to expand its product portfolio to include tiered offerings (premium, mid-tier, value-tier) and target new segments like upmarket enterprise and industrial is a direct response to the need to capture a larger total addressable market (TAM) and reduce reliance on a few large carrier deployments, which can be subject to volatile purchasing cycles and promotional timing.

Recent Performance and Financial Health

Inseego's financial performance in the most recent periods reflects both the impact of its strategic transformation and the inherent lumpiness of its business, particularly tied to large customer orders and promotions.

For the first quarter ended March 31, 2025, Inseego reported total revenues of $31.673 million, a decrease from $37.505 million in the same period of 2024. This decline was primarily attributed to a significant decrease in Fixed Wireless Access (FWA) revenues ($1.903 million in Q1 2025 vs. $14.182 million in Q1 2024) as a key carrier partner transitioned to a next-generation product and channel sales decreased. Mobile Solutions revenue, however, saw growth, increasing to $17.790 million in Q1 2025 from $15.270 million in Q1 2024, driven by increased sales of premium 5G MiFi products and promotional offers. Services and Other revenue also grew substantially, reaching $11.980 million in Q1 2025 compared to $8.053 million in Q1 2024, primarily due to increased Inseego Subscribe revenues from a contract renewal.

Despite the revenue decline, gross profit margin improved significantly in Q1 2025, reaching 47.3% (GAAP) and 47.5% (non-GAAP), up from 35.3% in Q1 2024. This margin expansion was driven by a more favorable revenue mix, with a higher proportion of high-margin service revenues and improved margins on premium MiFi products. Operating costs and expenses decreased year-over-year in Q1 2025, contributing to an operating income of $0.424 million, a notable improvement from an operating loss of $2.945 million in Q1 2024. The decrease in operating expenses was partly due to lower depreciation and amortization as capitalized software costs were not yet amortizable, and R&D expenses saw more capitalizable projects. General and administrative expenses increased, however, primarily due to share-based compensation for the new CEO.

Interest expense decreased substantially in Q1 2025 ($1.026 million vs. $2.179 million in Q1 2024) following the debt restructuring efforts in 2024. The company reported a net income of $1.570 million in Q1 2025, a significant turnaround from a net loss of $4.455 million in Q1 2024. This includes income from discontinued operations related to the divested Telematics business.

From a liquidity perspective, Inseego ended Q1 2025 with $35.149 million in cash and cash equivalents and positive working capital of $7.1 million. Operating cash flows were negative in Q1 2025 (-$3.467 million), largely due to the payout of annual bonuses accrued in the prior year. However, management is targeting positive free cash flow generation for the full year 2025, expecting the second half to outweigh the first half's cash usage from product investments and bonus payouts. The successful repayment of the remaining $14.9 million principal of the 2025 Convertible Notes in May 2025 further strengthened the balance sheet, leaving the $40.9 million 2029 Senior Secured Notes as the primary long-term debt.

Outlook and Strategic Execution

Management's outlook for Inseego is one of anticipated recovery and growth following the Q1 2025 dip. The company provided guidance for the second quarter of 2025, projecting total revenue in the range of $37 million to $40 million and adjusted EBITDA in the range of $2.5 million to $3.5 million. This guidance implies a return to sequential revenue growth, driven specifically by an expected meaningful increase in FWA revenue as customer inventory levels normalize and product transitions progress. Services and other revenue is anticipated to remain consistent with Q1 levels. Gross margin percentage in Q2 2025 is expected to moderate to the high-30s percentage area, reflecting a higher proportion of product revenue compared to Q1.

Looking further ahead, Inseego is targeting overall year-over-year revenue growth for the full year 2025. This expectation is based on management's confidence in closing new deals with carriers, MSOs, and channel partners, leveraging the refreshed product roadmap, and expanding into new market segments. The impact of new products, particularly in FWA and tiered MiFi offerings, is expected to become more significant in the second half of 2025 and early 2026.

Key strategic initiatives underway include:

• Customer Diversification: Actively working to expand the customer base beyond current concentrations by targeting large Tier 1 carriers, MSOs, and building out the channel program.
• Product Portfolio Expansion: Evolving the FWA and MiFi roadmaps to include tiered products (premium, mid, value) and solutions tailored for upmarket enterprise, industrial, and potentially residential failover use cases with MSOs.
• Software Acceleration: Investing in Inseego Connect to enhance its capabilities (APIs, enterprise features, AI) and Inseego Subscribe to add new features, aiming to increase recurring revenue and become a full-stack solution provider.
• Operational Efficiency: Overhauling supply chain and engineering strategies to reduce costs, improve efficiency, and enable scale, including evaluating ODM and manufacturing partnerships and leveraging manufacturing sites outside the U.S. (Taiwan, Vietnam) to mitigate tariff risks.

Risks and Challenges

Despite the positive strategic direction and improved financial health, several risks and challenges could impact Inseego's ability to execute its growth plan.

• Customer Concentration: High dependence on a few large customers exposes the company to significant revenue volatility if these customers reduce orders, delay promotions, or switch suppliers.
• Execution Risk: Successfully launching new products, expanding into new market segments (enterprise, industrial), and building a robust channel program requires flawless execution and faces intense competition.
• Supply Chain Dependence: Reliance on sole-source suppliers like Qualcomm for critical components makes Inseego vulnerable to supply disruptions, cost increases, and component shortages. Non-cancellable purchase obligations also represent a significant commitment.
• Market Adoption: The pace of 5G network rollouts and the adoption of FWA and mobile broadband solutions by enterprises and consumers could be slower than anticipated, impacting demand.
• Macroeconomic and Geopolitical Factors: Uncertain global economic conditions, high inflation, rising interest rates, and potential impacts from tariffs and trade restrictions could adversely affect demand, costs, and supply chains.
• Competition: The wireless broadband market is highly competitive, with larger, well-funded players and agile niche competitors vying for market share. Inseego must continuously innovate and execute to maintain its competitive position.

Conclusion

Inseego has successfully navigated a critical period of financial restructuring and strategic realignment, establishing a more stable foundation for future growth. The company's core strength lies in its legacy of wireless innovation, its differentiated technology stack combining hardware and cloud-managed software, and its strategic focus on the expanding 5G wireless broadband market. While the path forward involves inherent execution risks, particularly in diversifying its customer base and successfully launching new products into competitive segments, the strategic initiatives underway directly address these challenges.

Management's outlook for a return to sequential growth in Q2 2025 and overall year-over-year growth in 2025 signals confidence in the company's ability to convert identified opportunities. The focus on accelerating the software roadmap and building a full-stack solution offering has the potential to enhance margins and increase recurring revenue, further strengthening the business model. Investors should closely monitor the progress of customer diversification efforts, the traction of new product introductions, and the continued execution of operational efficiency initiatives as key indicators of Inseego's ability to deliver on its growth potential in the dynamic wireless broadband market.