FWA business up 122% year-over-year, making up 30% of revenue

Cloud software up 6% year-over-year, making up 27% of revenue

Gross margin expands to 30% on continued ramp in FWA and cloud software revenues

Inseego Corp. (Nasdaq: INSG) (the “Company”), a leader in 5G edge cloud solutions for the enterprise, today reported its results for the fourth quarter and year ended December 31, 2022. The Company reported fourth quarter net revenue of $52.9 million, GAAP operating loss of $14.2 million, GAAP net loss of $15.3 million, GAAP net loss of $0.14 per share, adjusted EBITDA of negative $3.0 million, and non-GAAP net loss of $0.11 per share. Unrestricted cash and cash equivalents at quarter end was $7.1 million. On a full year basis, 2022 net revenue was $245.3 million.

“The fourth quarter proved to be a transformative period for Inseego, as our FWA business experienced significant growth,” said Ashish Sharma, CEO of Inseego. “This resulted in a 390 basis point increase in gross margin to 30%, despite a decline in our hotspot sales. In 2023, we are committed to achieving positive EBITDA and cash flow. This is driven by the ramp in our FWA business and the significant savings realized from our cost reduction initiatives implemented in 2022.”

Business Highlights

  • FWA revenue comprised 30% of revenue in Q4, up 122% year-over-year
  • Cloud software comprised 27% of revenue in Q4, up 6% year-over-year
  • Enterprise FWA customer base grows to well over 1,000 at year-end
    • In Q4, 90% of enterprise FWA sales included cloud software
    • In Q4, new enterprise customers deployed FWA for multi-location retail and restaurants, construction, home builders, and the SD-WAN market
  • Next generation 5G mobile hotspot launch with T-Mobile in the fourth quarter

“We entered 2023 with strong momentum in our FWA business, which we expect to lead to further improvement in gross margin,” said Bob Barbieri, CFO of Inseego. “In the fourth quarter, we consumed more cash than initially anticipated due to the combined impacts of lower hotspot sales, the timing of payments made to suppliers and some one-time expenses related to our cost initiatives. We have worked diligently to streamline our organization and cost structure in 2022. As a result, we expect to achieve positive cash flow in Q2 and build upon that progress over the remainder of the year.”

Conference Call Information

Inseego will host a conference call and live webcast for analysts and investors today at 5:00 p.m. ET. A Q&A session with analysts will be held live directly after the prepared remarks. To access the conference call:

  • Online, visit https://investor.inseego.com/events-presentations
  • Phone-only participants can pre-register by navigating to https://dpregister.com/sreg/10175578/f5e0645982
  • Those without internet access or unable to pre-register may dial-in by calling:
    • In the United States, call 1-844-282-4463
    • International parties can access the call at 1-412-317-5613

An audio replay of the conference call will be available beginning one hour after the call through March 15, 2023. To hear the replay, parties in the United States may call 1-877-344-7529 and enter access code 9478810 followed by the # key. International parties may call 1-412-317-0088. In addition, the Inseego Corp. press release will be accessible from the Company's website before the conference call begins.

About Inseego Corp.

Inseego Corp. (Nasdaq: INSG) is the industry leader in 5G Enterprise cloud WAN solutions with millions of end customers and thousands of enterprise and SMB customers on its 4G, 5G and cloud platforms. Inseego’s 5G Edge Cloud combines the industry’s best 5G technology, rich cloud networking features and intelligent edge applications. Inseego powers new business experiences by connecting distributed sites and workforces, securing enterprise data and improving business outcomes with intelligent operational visibility---all over a 5G network. For more information on Inseego, visit www.inseego.com. #Putting5GtoWork

©2023. Inseego Corp. All rights reserved. The Inseego name and logo, MiFi, Inseego Wavemaker, and Inseego 5G SD Edge are registered trademarks and trademarks of Inseego Corp. Other company, product or service names mentioned herein are the trademarks of their respective owners.

Cautionary Note Regarding Forward-Looking Statements

Some of the information presented in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements often address expected future business and financial performance and often contain words such as “may,” “estimate,” “anticipate,” “believe,” “expect,” “intend,” “plan,” “project,” “will” and similar words and phrases indicating future results. The information presented in this news release related to our future business outlook, the future demand for our products, as well as other statements that are not purely statements of historical fact, are forward-looking in nature. These forward-looking statements are made on the basis of management’s current expectations, assumptions, estimates and projections and are subject to significant risks and uncertainties that could cause actual results to differ materially from those anticipated in such forward-looking statements. We therefore cannot guarantee future results, performance or achievements. Actual results could differ materially from our expectations.

Factors that could cause actual results to differ materially from the Company’s expectations include: (1) the future demand for wireless broadband access to data and asset management software and services; (2) the growth of wireless wide-area networking and asset management software and services; (3) customer and end-user acceptance of the Company’s current product and service offerings and market demand for the Company’s anticipated new product and service offerings; (4) increased competition and pricing pressure from participants in the markets in which the Company is engaged; (5) dependence on third-party manufacturers and key component suppliers worldwide; (6) the impact that new or adjusted tariffs may have on the cost of components or our products, and our ability to sell products internationally; (7) the impact of fluctuations of foreign currency exchange rates; (8) the impact of geopolitical instability and supply chain challenges on our ability to source components and manufacture our products; (9) unexpected liabilities or expenses; (10) the Company’s ability to introduce new products and services in a timely manner, including the ability to develop and launch 5G products at the speed and functionality required by our customers; (11) litigation, regulatory and IP developments related to our products or components of our products; (12) dependence on a small number of customers for a significant portion of the Company’s revenues and accounts receivable; (13) the Company’s ability to raise additional financing when the Company requires capital for operations or to satisfy corporate obligations; (14) the Company’s plans and expectations relating to acquisitions, divestitures, strategic relationships, international expansion, software and hardware developments, personnel matters, and cost containment initiatives, including restructuring activities and the timing of their implementations; (15) the global semiconductor shortage and any related price increases or supply chain disruptions; (16) the potential impact of COVID-19 on the business; and (17) the impact of high rates of inflation and rising interest rates.

These factors, as well as other factors set forth as risk factors or otherwise described in the reports filed by the Company with the SEC (available at www.sec.gov), could cause actual results to differ materially from those expressed in the Company’s forward-looking statements. The Company assumes no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future, except as otherwise required pursuant to applicable law and our on-going reporting obligations under the Securities Exchange Act of 1934, as amended.

Non-GAAP Financial Measures

Inseego Corp. has provided financial information in this news release that has not been prepared in accordance with GAAP. Adjusted EBITDA, non-GAAP net loss, non-GAAP net loss per share and non-GAAP operating costs and expenses exclude preferred stock dividends, share-based compensation expense, amortization of intangible assets purchased through acquisitions, amortization of discount and issuance costs related to our 2025 Notes and the revolving credit facility, fair value adjustments on derivative instruments, a one-time prior period adjustment related to unamortized debt discount and loss on debt extinguishment relating to our 2025 Notes, and other non-recurring legal expenses. Adjusted EBITDA also excludes interest, taxes, depreciation and amortization (unrelated to acquisitions and the 2025 Notes), impairment of capitalized software, foreign exchange gains and losses, and other.

Adjusted EBITDA, non-GAAP net loss, non-GAAP net loss per share and non-GAAP operating costs and expenses are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. These non-GAAP financial measures have limitations as an analytical tool and are not intended to be used in isolation or as a substitute for operating expenses, net loss, net loss per share or any other performance measure determined in accordance with GAAP. We present these non-GAAP financial measures because we consider each to be an important supplemental measure of our performance.

We use these non-GAAP financial measures to make operational decisions, evaluate our performance, prepare forecasts and determine compensation. Further, we believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance when planning, forecasting and analyzing future periods. Share-based compensation expenses are expected to vary depending on the number of new incentive award grants issued to both current and new employees, the number of such grants forfeited by former employees, and changes in our stock price, stock market volatility, expected option term and risk-free interest rates, all of which are difficult to estimate. In calculating non-GAAP financial measures, we exclude certain non-cash and one-time items in order to facilitate comparability of our operating performance on a period-to-period basis because such expenses are not, in our view, related to our ongoing operating performance. We use this view of our operating performance for purposes of comparison with its business plan and individual operating budgets and in the allocation of resources.

We further believe that these non-GAAP financial measures are useful to investors in providing greater transparency to the information used by management in its operational decision-making. The Company believes that the use of these non-GAAP financial measures also facilitates a comparison of our underlying operating performance with that of other companies in our industry, which use similar non-GAAP financial measures to supplement their GAAP results.

In the future, we expect to continue to incur expenses similar to the non-GAAP adjustments described above, and exclusion of these items in the presentation of our non-GAAP financial measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring. Investors and potential investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. The limitations of relying on non-GAAP financial measures include, but are not limited to, the fact that other companies, including other companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting their usefulness as a comparative tool.

Investors and potential investors are encouraged to review the reconciliation of our non-GAAP financial measures contained within this news release with our GAAP financial results.

INSEEGO CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2022

 

2021

 

2022

 

2021

Net revenues:

 

 

 

 

 

 

 

IoT & Mobile Solutions

$

46,272

 

 

$

66,214

 

 

$

218,401

 

 

$

217,984

 

Enterprise SaaS Solutions

 

6,643

 

 

 

6,678

 

 

 

26,922

 

 

 

44,415

 

Total net revenues

 

52,915

 

 

 

72,892

 

 

 

245,323

 

 

 

262,399

 

Cost of net revenues:

 

 

 

 

 

 

 

IoT & Mobile Solutions

 

34,228

 

 

 

51,827

 

 

 

166,033

 

 

 

168,604

 

Enterprise SaaS Solutions

 

2,876

 

 

 

2,905

 

 

 

12,381

 

 

 

17,870

 

Total cost of net revenues

 

37,104

 

 

 

54,732

 

 

 

178,414

 

 

 

186,474

 

Gross profit

 

15,811

 

 

 

18,160

 

 

 

66,909

 

 

 

75,925

 

Operating costs and expenses:

 

 

 

 

 

 

 

Research and development

 

11,640

 

 

 

13,719

 

 

 

59,237

 

 

 

52,673

 

Sales and marketing

 

7,699

 

 

 

8,237

 

 

 

33,488

 

 

 

38,234

 

General and administrative

 

7,238

 

 

 

5,593

 

 

 

27,339

 

 

 

28,250

 

Amortization of purchased intangible assets

 

430

 

 

 

443

 

 

 

1,749

 

 

 

2,092

 

Impairment of capitalized software

 

3,014

 

 

 

 

 

 

3,014

 

 

 

1,197

 

Total operating costs and expenses

 

30,021

 

 

 

27,992

 

 

 

124,827

 

 

 

122,446

 

Operating loss

 

(14,210

)

 

 

(9,832

)

 

 

(57,918

)

 

 

(46,521

)

Other income (expense):

 

 

 

 

 

 

 

Gain on sale of Ctrack South Africa

 

 

 

 

 

 

 

 

 

 

5,262

 

Loss on debt conversion and extinguishment, net

 

 

 

 

 

 

 

(450

)

 

 

(432

)

Interest expense, net

 

(1,985

)

 

 

(1,696

)

 

 

(8,606

)

 

 

(6,874

)

Other (expense) income, net

 

1,685

 

 

 

554

 

 

 

(1,460

)

 

 

845

 

Loss before income taxes

 

(14,510

)

 

 

(10,974

)

 

 

(68,434

)

 

 

(47,720

)

Income tax provision (benefit)

 

117

 

 

 

(254

)

 

 

(465

)

 

 

191

 

Net loss

 

(14,627

)

 

 

(10,720

)

 

 

(67,969

)

 

 

(47,911

)

Less: Net income attributable to noncontrolling interests

 

 

 

 

 

 

 

 

 

 

(214

)

Net loss attributable to Inseego Corp.

 

(14,627

)

 

 

(10,720

)

 

 

(67,969

)

 

 

(48,125

)

Series E preferred stock dividends and deemed dividends from the preferred stock exchange

 

(707

)

 

 

(647

)

 

 

(2,736

)

 

 

(4,243

)

Net loss attributable to common stockholders

$

(15,334

)

 

$

(11,367

)

 

$

(70,705

)

 

$

(52,368

)

Per share data:

 

 

 

 

 

 

 

Net loss per common share:

 

 

 

 

 

 

 

Basic and diluted

$

(0.14

)

 

$

(0.11

)

 

$

(0.66

)

 

$

(0.51

)

Weighted-average shares used in computation of net loss per common share:

 

 

 

 

 

 

 

Basic and diluted

 

108,136,194

 

 

 

105,205,342

 

 

 

107,269,331

 

 

 

103,246,308

 

INSEEGO CORP.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

December 31,

 

2022

 

2021

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

7,143

 

 

$

46,474

 

Restricted cash

 

 

 

 

 

Accounts receivable, net

 

25,259

 

 

 

26,781

 

Inventories

 

37,976

 

 

 

37,402

 

Prepaid expenses and other

 

7,978

 

 

 

13,624

 

Total current assets

 

78,356

 

 

 

124,281

 

Property, plant and equipment, net

 

5,390

 

 

 

8,102

 

Rental assets, net

 

4,816

 

 

 

4,575

 

Intangible assets, net

 

41,383

 

 

 

46,995

 

Goodwill

 

21,922

 

 

 

20,336

 

Right-of-use assets, net

 

6,662

 

 

 

7,839

 

Other assets

 

488

 

 

 

377

 

Total assets

$

159,017

 

 

$

215,843

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

29,018

 

 

$

48,577

 

Accrued expenses and other current liabilities

 

27,945

 

 

 

26,253

 

Total current liabilities

 

56,963

 

 

 

74,830

 

Long-term liabilities:

 

 

 

2025 Notes, net

 

158,427

 

 

 

157,866

 

Revolving credit facility

 

6,919

 

 

 

 

Deferred tax liabilities, net

 

323

 

 

 

852

 

Other long-term liabilities

 

6,503

 

 

 

7,149

 

Total liabilities

 

229,135

 

 

 

240,697

 

Commitments and contingencies

 

 

 

Stockholders’ deficit:

 

 

 

Common stock

 

108

 

 

 

105

 

Additional paid-in capital

 

793,855

 

 

 

770,619

 

Accumulated other comprehensive loss

 

(6,329

)

 

 

(8,531

)

Accumulated deficit

 

(857,752

)

 

 

(787,047

)

Total stockholders’ deficit attributable to Inseego Corp.

 

(70,118

)

 

 

(24,854

)

Noncontrolling interests

 

 

 

 

 

Total stockholders’ deficit

 

(70,118

)

 

 

(24,854

)

Total liabilities and stockholders’ deficit

$

159,017

 

 

$

215,843

 

INSEEGO CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

2022

 

2021

 

2022

 

2021

Cash flows from operating activities:

 

 

 

 

 

 

 

Net loss

$

(14,627

)

 

$

(10,720

)

 

$

(67,969

)

 

$

(47,911

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

6,270

 

 

 

6,199

 

 

 

27,206

 

 

 

25,330

 

Fair value adjustment on derivative instrument

 

(24

)

 

 

(391

)

 

 

(926

)

 

 

(3,826

)

Provision for bad debts, net of recoveries

 

160

 

 

 

55

 

 

 

189

 

 

 

401

 

Impairment of capitalized software

 

3,014

 

 

 

 

 

 

3,014

 

 

 

1,197

 

Provision for excess and obsolete inventory

 

1,284

 

 

 

70

 

 

 

2,614

 

 

 

657

 

Share-based compensation expense

 

1,983

 

 

 

2,182

 

 

 

17,875

 

 

 

16,649

 

Amortization of debt discount and debt issuance costs

 

488

 

 

 

378

 

 

 

2,960

 

 

 

1,495

 

Loss on debt conversion and extinguishment, net

 

 

 

 

 

 

 

450

 

 

 

432

 

Gain on sale of Ctrack South Africa

 

 

 

 

 

 

 

 

 

 

(5,262

)

Deferred income taxes

 

(347

)

 

 

(228

)

 

 

(570

)

 

 

(53

)

Right-of-use assets

 

211

 

 

 

(220

)

 

 

1,268

 

 

 

1,144

 

Other

 

 

 

 

(286

)

 

 

 

 

 

286

 

Changes in assets and liabilities, net of effects of divestiture:

 

 

 

 

 

 

 

Accounts receivable

 

3,002

 

 

 

(3,982

)

 

 

2,441

 

 

 

(1,148

)

Inventories

 

2,861

 

 

 

(4,605

)

 

 

(3,065

)

 

 

(12,494

)

Prepaid expenses and other assets

 

2,919

 

 

 

(2,273

)

 

 

5,642

 

 

 

(1,988

)

Accounts payable

 

(12,765

)

 

 

4,098

 

 

 

(26,313

)

 

 

(3,108

)

Accrued expenses, income taxes, and other

 

(2,826

)

 

 

(952

)

 

 

3,450

 

 

 

4,448

 

Operating lease liabilities

 

(189

)

 

 

220

 

 

 

(1,555

)

 

 

(1,461

)

Net cash (used in) provided by operating activities

 

(8,586

)

 

 

(10,455

)

 

 

(33,289

)

 

 

(25,212

)

Cash flows from investing activities:

 

 

 

 

 

 

 

Acquisition of noncontrolling interest

 

 

 

 

 

 

 

 

 

 

(116

)

Purchases of property, plant and equipment

 

(278

)

 

 

(629

)

 

 

(1,481

)

 

 

(4,928

)

Proceeds from the sale of property, plant and equipment

 

 

 

 

195

 

 

 

 

 

 

1,338

 

Proceeds from sale of Ctrack South Africa, net of cash divested1

 

 

 

 

2,163

 

 

 

 

 

 

33,689

 

Additions to capitalized software development costs and purchases of intangible assets

 

(2,596

)

 

 

(3,316

)

 

 

(11,838

)

 

 

(23,905

)

Net cash (used in) provided by investing activities

 

(2,874

)

 

 

(1,587

)

 

 

(13,319

)

 

 

6,078

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Net borrowing of bank and overdraft facilities

 

(111

)

 

 

(50

)

 

 

(569

)

 

 

265

 

Principal payments on financed assets

 

 

 

 

 

 

 

(1,567

)

 

 

 

Borrowings on asset-backed revolving credit facility

 

3,351

 

 

 

 

 

 

12,351

 

 

 

 

Repayment on asset-backed revolving credit facility

 

 

 

 

 

 

 

(4,500

)

 

 

 

Payment of debt issuance costs on asset-backed revolving credit facility

 

 

 

 

 

 

 

(1,126

)

 

 

 

Principal payments under finance lease obligations

 

 

 

 

(62

)

 

 

(62

)

 

 

(3,200

)

Proceeds from a public offering, net of issuance costs

 

 

 

 

 

 

 

 

 

 

29,370

 

Proceeds from stock option exercises and ESPP, net of taxes paid on vested restricted stock units

 

704

 

 

 

1,054

 

 

 

900

 

 

 

3,486

 

Net cash (used in) provided by financing activities

 

3,944

 

 

 

942

 

 

 

5,427

 

 

 

29,921

 

Effect of exchange rates on cash

 

(3,404

)

 

 

(697

)

 

 

(1,488

)

 

 

(990

)

Net increase in cash, cash equivalents and restricted cash

 

(10,920

)

 

 

(11,797

)

 

 

(42,669

)

 

 

9,797

 

Cash, cash equivalents and restricted cash, beginning of period

 

18,063

 

 

 

61,609

 

 

 

49,812

 

 

 

40,015

 

Cash, cash equivalents and restricted cash, end of period

$

7,143

 

 

$

49,812

 

 

$

7,143

 

 

$

49,812

 

 

1 The amount for the year ended December 31, 2021 is net of cash divested of $5.0 million.

INSEEGO CORP.

Reconciliation of GAAP Net Loss Attributable to Common Shareholders to Non-GAAP Net Loss

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

December 31, 2022

 

Year Ended

December 31, 2022

 

Net Loss

 

Net Loss Per

Share

 

Net Loss

 

Net Loss Per

Share

GAAP net loss attributable to common stockholders

$

(15,334

)

 

$

(0.14

)

 

$

(70,705

)

 

$

(0.66

)

Adjustments:

 

 

 

 

 

 

 

Preferred stock dividends(a)

 

707

 

 

 

0.01

 

 

 

2,736

 

 

 

0.03

 

Share-based compensation expense

 

1,984

 

 

 

0.02

 

 

 

17,875

 

 

 

0.18

 

Purchased intangibles amortization

 

428

 

 

 

 

 

 

2,038

 

 

 

0.02

 

Debt discount and issuance costs amortization(b)

 

450

 

 

 

 

 

 

2,922

 

 

 

0.03

 

Fair value adjustment on derivative instrument(c)

 

 

 

 

 

 

 

(926

)

 

 

(0.01

)

Loss on debt conversion and extinguishment(e)

 

 

 

 

 

 

 

450

 

 

 

 

Other(f)

 

 

 

 

 

 

 

(109

)

 

 

 

Non-GAAP net loss

$

(11,765

)

 

$

(0.11

)

 

$

(45,719

)

 

$

(0.41

)

 

(a) Includes accrued dividends on Series E Preferred Stock and deemed dividend as part of preferred stock exchange.

(b) Includes the debt discount and issuance costs amortization related to the 2025 Notes.

(c) Includes the fair value adjustment related to the Company’s interest make-whole derivative instrument.

(e) Includes the loss on debt conversion and extinguishment of the 2025 Notes.

(f) Primarily includes non-recurring legal settlements.

 

See “Non-GAAP Financial Measures” for information regarding our use of Non-GAAP financial measures.

INSEEGO CORP.

Reconciliation of GAAP Cost of Net Revenues and Operating Costs and Expenses to Non-GAAP Operating Costs and Expenses

Three Months Ended December 31, 2022

(In thousands)

(Unaudited)

 

 

GAAP

 

Share-based

compensation

expense

 

Purchased

intangibles

amortization

 

Non-GAAP

Cost of net revenues

$

37,104

 

$

239

 

$

 

 

$

36,865

Operating costs and expenses:

 

 

 

 

 

 

 

Research and development

 

11,640

 

 

 

377

 

 

 

 

 

 

11,263

 

Sales and marketing

 

7,699

 

 

 

426

 

 

 

 

 

 

7,273

 

General and administrative

 

7,238

 

 

 

942

 

 

 

 

 

 

6,296

 

Amortization of purchased intangible assets

 

430

 

 

 

 

 

 

428

 

 

2

 

Impairment of purchased intangible assets

 

3,014

 

 

 

 

 

 

 

 

 

3,014

 

Total operating costs and expenses

$

30,021

 

 

 

1,745

 

 

 

428

 

 

$

27,848

 

Total

 

 

$

1,984

 

 

$

428

 

 

 

 

See “Non-GAAP Financial Measures” for information regarding our use of Non-GAAP financial measures.

INSEEGO CORP.

Reconciliation of GAAP Cost of Net Revenues and Operating Costs and Expenses to Non-GAAP Operating Costs and Expenses

Twelve Months Ended December 31, 2022

(In thousands)

(Unaudited)

 

 

GAAP

 

Share-based

compensation

expense

 

Purchased

intangibles

amortization

 

Non-recurring

costs (a)

 

Non-GAAP

Cost of net revenues

$

178,414

 

$

2,114

 

$

290

 

$

 

$

176,010

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

59,237

 

 

 

5,407

 

 

 

 

 

 

 

 

 

53,830

 

Sales and marketing

 

33,488

 

 

 

3,495

 

 

 

 

 

 

 

 

 

29,993

 

General and administrative

 

27,339

 

 

 

6,859

 

 

 

 

 

 

 

 

 

20,480

 

Amortization of purchased intangible assets

 

1,749

 

 

 

 

 

 

1,748

 

 

 

 

 

 

1

 

Impairment of purchased intangible assets

 

3,014

 

 

 

 

 

 

 

 

 

 

 

 

3,014

 

Total operating costs and expenses

$

124,827

 

 

 

15,761

 

 

 

1,748

 

 

 

 

 

$

107,318

 

Total

 

 

$

17,875

 

 

$

2,038

 

 

$

 

 

 

 

(a) Includes non-recurring legal settlement costs.

 

See “Non-GAAP Financial Measures” for information regarding our use of Non-GAAP financial measures.

INSEEGO CORP.

Reconciliation of GAAP Net Loss Attributable to Common Shareholders to Adjusted EBITDA

(In thousands)

(Unaudited)

 

 

Three Months Ended

December 31, 2022

 

Year Ended

December 31, 2022

GAAP net loss attributable to common shareholders

$

(15,334

)

 

$

(70,705

)

Preferred stock dividends(a)

 

707

 

 

 

2,736

 

Income tax provision (benefit)

 

117

 

 

 

(465

)

Depreciation and amortization

 

6,270

 

 

 

27,206

 

Share-based compensation expense

 

1,983

 

 

 

17,875

 

Fair value adjustment of derivative(b)

 

(24

)

 

 

(926

)

Impairment of capitalized software(c)

 

3,014

 

 

 

3,014

 

Loss on debt conversion and extinguishment(d)

 

 

 

 

450

 

Interest expense, net(e)

 

1,985

 

 

 

8,606

 

Other(f)

 

(1,685

)

 

 

2,408

 

Adjusted EBITDA

$

(2,967

)

 

$

(9,801

)

 

(a) Includes accrued dividends on Series E Preferred Stock and deemed dividend as part of preferred stock exchange.

(b) Includes the fair value adjustment related to the Company’s interest make-whole derivative instrument.

(c) Includes impairment charges related to abandoned internal-use software.

(d) Includes the loss on debt conversion and extinguishment of the 2025 Notes.

(e) Includes interest expense including debt discount and issuance costs amortization related to the 2025 Notes.

(f) Includes non-recurring legal settlement and foreign exchange gains and losses.

 

See “Non-GAAP Financial Measures” for information regarding our use of Non-GAAP financial measures.

INSEEGO CORP.

Quarterly Net Revenues by Product Grouping

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

December 31,

2022

 

September 30,

2022

 

June 30,

2022

 

March 31,

2022

 

December 31,

2021

IoT & Mobile Solutions

$

46,272

 

$

62,633

 

$

54,990

 

$

54,506

 

$

66,214

Enterprise SaaS Solutions

 

6,643

 

 

 

6,534

 

 

 

6,866

 

 

 

6,879

 

 

 

6,678

 

Total net revenues

$

52,915

 

 

$

69,167

 

 

$

61,856

 

 

$

61,385

 

 

$

72,892

 

 

Inseego Corp. Media Contact:

Anette Gaven +1 (619) 993-3058 Anette.Gaven@inseego.com

Investor Relations Contact:

Kevin Liu +1 (626) 657-0013 Investor.Relations@inseego.com

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