Inseego Corp. Common Stock 2026 Q2 Earnings Call

Please go ahead. Good afternoon, everyone, and thank you for joining us today.

Q2 revenue was $44 million, about the high end of our guidance range. We delivered 28% sequential growth and 9% year-over-year growth driven by strong product revenue. Our top-line results benefited from late quarter orders from select carrier customers tied to expected memory cost increases going in the second half of the year. These orders supported our customers and contributed to revenue outperformance in the quarter, but they also weighted on gross margin and are expected to result in lower ordering levels from those customers in Q3. Over the last 18 months, we have moved much faster than this business has historically operated. Inseego typically introduced roughly one new product annually. Since I joined the company, we have significantly accelerated that pace, launching multiple new products and variants across mobile and FWA while also broadening the customer base.

We now have six products across three tier 1 carriers for the first time in the company's history. That was the right strategic direction, and it helped us win important new customer opportunities, including our newest tier 1 carrier. As we accelerated the pace of product development, we discovered that our engineering processes could not support the rate of new product introduction. As a result, we experienced product delays, which created a revenue gap that we will not fully recover in 2026. It is disappointing, particularly against the customer wins we brought in. As I mentioned on the last call, we've taken immediate actions and amongst them the search for a new engineering leader, which is going well. We have several candidates deeply engaged, and I look forward to updating you as we move through the process.

Our newest tier 1 carrier relationship is performing well across mobile and FWA. However, instead of driving the incremental growth that we expected this year, that performance is filling the gap created by product delays and weakness with our largest FWA customer. In FWA, the recovery of our largest customer is taking longer than expected. The customer is still working through changes to its enterprise go-to-market strategy and internal organization. While I expect our next generation product to get us back on track, we are factoring in a slower recovery in our updated outlook. As such, we are updating our full year 2026 outlook to reflect a lower second half revenue expectation. It is important to note that the revenue opportunities we have won remain intact. Our focus is getting the business to a more appropriate product delivery cadence and quality to generate more consistent revenue and deliver profitability.

With that context, on today's call, I'd like to add my perspective on our Q2 operational progress, the operating dynamic behind our updated outlook, and our progress preparing for the Nokia FWA integration. Starting with Q2, a key milestone was completing the launch of our refreshed mobile product family across all three North America tier 1 carrier customers. The MiFi PRO M4 is now launched across all three carriers, including the delayed but on target late quarter launch with our largest MiFi customer. We also made a multi-carrier model available to the value-added reseller channel. This gives us a stronger mobile portfolio than the company has had in years and positions us across three largest carrier customers and the reseller channel. These launches took longer than planned, but they are now completed and in market. Our newest tier 1 carrier relationship performed well in both mobile and FWA.

That remains an important proof point for the strategy of broadening our customer base and reducing reliance on any one customer. When we started talking with this customer about a large Q2 purchase ahead of anticipated price increases later in the year, we worked to deliver that increased volume in quarter. In channel, we supported a large industrial deployment using our IoT product with Inseego Connect. That is a key proof point for the value of pairing our hardware with cloud-based device management. We continue to see Inseego Connect as an important part of our broader solution set. Overall, during Q2, we completed the key mobile portfolio launches, grew revenue, and executed with our newest tier 1 carrier. The quarter also made it clear where we need to do better.

Product execution and delivery needs to be reliable. We need to execute on our new broader customer base and product portfolio more consistently. That brings me to our updated 2026 outlook. We now expect full year revenue of approximately $155 million. Our updated outlook reflects a lower second half revenue expectation, particularly in Q3. There are four drivers to this updated outlook. The first half mobile delay, the slower recovery of our existing large FWA customer, Inseego Subscribe, and the MSO's unpredictable sales cycle. Let me start with Subscribe, since it's reflected in the updated outlook and remains a strategically important platform for us. Over the past year, we have continued to develop Subscribe from a customer-specific services arrangement into a carrier-grade subscriber lifecycle management platform. The platform is designed to help service providers sell, onboard, manage, and support complex enterprise and government wireless services more efficiently and at scale.

During the quarter, Inseego Subscribe achieved CMMC Level 2 certification, an important cybersecurity milestone for supporting U.S. federal government programs. This strengthens the platform's ability to support communication service providers serving government customers. As our tier-one carrier customer on the platform has evolved its internal IT and system capabilities, the Inseego Subscribe pricing is stepping down the professional services component. As a result, beginning in Q3, we expect software services and other revenue to decline by approximately $2 million per quarter. Inseego Subscribe remains a high-margin contributor and a strategically valuable platform. We continue to advance the roadmap, new customer business development activities, and believe Inseego Subscribe can play a broader role over time. In terms of the MSO opportunity, customer engagement remains active, and we continue to see opportunity in this market. However, the customer conversion is taking longer than expected.

Given that, we have removed MSO revenue from our 2026 outlook and will treat it as upside until customer conversation is proven. Let me now turn to the acquisition of Nokia's FWA business, which we announced on April 30th. This will mark an important step in our evolution into a global wireless broadband platform. The acquired business will more than double our revenue base, expand our product coverage, and deepen our strategic collaboration with Nokia. Strategically, the acquired business is highly synergistic and a natural extension of what we do. The business will add strong engineering capability, establish global tier-one customer relationships, and one of the strongest FWA portfolios in the market, including indoor, outdoor, and millimeter-wave products. Combining their portfolio with Inseego's North America carrier relationships, mobile and FWA product portfolio, and cloud software capability gives us a much broader platform for growth.

With an anticipated close in Q4 2026, we are taking concrete steps to build the operating foundation for a larger global Inseego. First, we have strengthened our international regional leadership. Pranav Shroff has joined Inseego to lead APAC sales, Ossi Korpela has joined to lead EMEA sales, and Steve Harmon has expanded his role to lead the Americas, including Latin America. Second, Steven has expanded his role to lead our international expansion, where he will oversee the global operating structure, support integration activities, and work closely with regional sales leadership to execute business primarily across EMEA and APAC. Third, we are establishing the engineering and operational footprint needed to support customers globally. We have selected Amsterdam as our center of international operations, extending the reach of our San Diego-based global headquarters.

We are also continuing to build Athens as a key software development center for our global FWA portfolio. These are targeted actions to support integration readiness and customer continuity with an overriding benefit of bringing on a talented and effective engineering team. With these actions, integration planning is well underway. Our priorities are customer continuity, employee integration, roadmap alignment, and operating discipline. The opportunity is significant, and our focus is on building the right foundation so we can integrate the business thoughtfully, support customers, and enter 2027 with a strong global platform. In summary, we have streamlined our portfolio to support reliable execution, and we are taking the required actions to improve the leadership and quality of our execution.

We are very clear on our focus areas as we move to the second half of the year, converting our current product portfolio into more consistent revenue, improving profitability, strengthening engineering and product delivery, and aligning costs with the revised revenue profile. That focus is also critical as we prepare for the anticipated close and integration of Nokia FWA acquisition. Nokia's FWA business gives us the opportunity to become a much larger global wireless broadband platform. Our immediate priority is clear. Execute against the revised outlook, rebuild consistency in the core business, and enter Q4 with stronger execution. With that, I'd like to hand off to Steven.