IQSTEL INC. Common Stock 2026 Q2 Earnings Call

The floor is yours. Good morning, and thank you for joining iQSTEL's second quarter 2026 earnings call.

Joining me today, I'm pleased to have Leandro Iglesias, President and Chief Executive Officer, and Alvaro Quintana, Chief Financial Officer. During the call, we will make forward-looking statements such as dialogue regarding our revenue expectations or forecast for remaining quarters in the full fiscal year of 2026 and 2027. These statements are based on our current expectations and information available as of today and are subject to a variety of risks, uncertainties, and assumptions. Actual results may differ materially as a result of various risk factors that have been described in our periodic filings with the SEC. We caution you against placing undue reliance on these forward-looking statements. We assume no obligation to update any forward-looking statements as a result of new information or future events, except as required by law.

In addition, other risks are more fully described in the iQSTEL's public filing with the U.S. Securities and Exchange Commission, which can be reviewed at www.sec.gov. Yesterday, August 18th, 2026, the company filed with the SEC its Form 10-Q for Q2 2026, and this morning issued a press release announcing those financial results. Participants of this call who may not have already done so may wish to look at those documents as we provide a summary of the results on this call. With that, I will now turn the call over to our CEO, Leandro Iglesias.

Thanks, Ethan. Good morning, everyone, and thank you for joining us. I'm Leandro Iglesias, CEO of iQSTEL, and joining me today is our CFO, Alvaro Quintana. I want to begin by thanking our shareholders and previous customers and partners for their continued support. Today, I want to focus on one central message. iQSTEL has spent years building a scale. We believe we are now entering the next major phase of our evolution, the EBITDA expansion. During this first six months of 2026, iQSTEL generated approximately $207 million in revenue, compared with approximately $130 million during the same period last year, representing growth of approximately 59%. That puts iQSTEL at an annualized revenue level of approximately $414 million. This is a significant milestone, but our story is no longer only about growing revenue.

Our focus is increasingly on converting this scale into a stronger gross profit, adjusted EBITDA, cash generation, and ultimately, shareholders value. Today, we increasingly see iQSTEL having two complementary business pillars, our telecom business and our digital services business. Our telecom division is the foundation of the company. Over nearly two decades, we have built a global telecommunications platform with more than 600 telecom operator relationships and a potential commercial reach through our customers to approximately 2.3 billion end users. This platform gives us scale, infrastructure, international relationships, and importantly, a global distribution network. Our strategy is now to leverage that platform to accelerate our higher margin digital service business. Digital service already represents approximately 12.5% of iQSTEL's revenue, currently driven by our subsidiary, GlobeTopper. We believe this percentage can continue to grow as we commercialize additional fintech, AI-powered communications, cybersecurity, and other digital solutions through our existing global network.

This is important because digital services has the potential to contribute exponentially to gross profit and adjusted EBITDA. The upcoming Ultranet acquisition is another important step in this strategy. Ultranet will expand our international telecom footprint and, more importantly, is expected to significantly strengthen profitability. Following the acquisition, we expect iQSTEL's adjusted EBITDA run rate to increase to approximately $8 million to $9 million. This is exactly the direction that we want to take the company. Going forward, our focus is not simply on acquisition that adds revenue. We are increasingly focusing on opportunities that can add gross profit, EBITDA, cash generation, and strategic value. For the remainder of 2026, we continue pursuing our previously announced $430 million revenue objective. With $207 million generated during the first half, we need approximately $223 million during the second half to achieve that objective.

We believe we remain on track, particularly because historically, the second half of the year has been stronger for iQSTEL than the first half. But again, revenue is only part of the story. We are increasingly focused on adjusted EBITDA, operating leverage, cash generation, and the growth of higher-margin digital services. Our long-term vision remains to build iQSTEL into a company capable of reaching $1 billion in annual revenue. But our objective is not simply to become larger. Our objective is to become larger and significantly more profitable. We are also increasing our efforts to communicate the iQSTEL story to a broader investment audience. Our recent CNBC interview with Seth Farbman and the launch of our new corporate telecom digital services and investor website are part of this effort.

We believe there continues to be significant disconnect between iQSTEL's operating scale and the valuation currently being assigned to the company by the public market. The truth is that we cannot control the stock price, but we can control the execution. We can continue growing business, expanding EBITDA, strengthening our balance sheet, growing digital services, completing strategic acquisitions, and communicating our progress more efficiently. We believe consistent execution is ultimately the best way to close that valuation gap. If there is one message I would like shareholders to take from today's call, it is this. We have built the scale. We are operating at more than $400 million in annualized revenue. We have built a global platform with more than 600 telecom operator relationships. Digital service already represents 12.5% of our revenue.

With Ultranet, we expect to move toward approximately $8 million-$9 million in adjusted EBITDA run rate. The next chapter of iQSTEL is about turning that scale into profitability and long-term shareholder value. We believe this is an important inflection point for iQSTEL, and we are very excited about what comes next. Thank you again to our shareholders and to our entire team around the world. With that, I'll turn the call over to our CFO, Alvaro Quintana, to discuss our first-half financial results in greater detail. Alvaro, please go ahead. Thank you, Leandro.

Good morning, everyone. From a financial perspective, our first half results reflect continued strong growth, improving gross profit, and a strengthening balance sheet. For the first six months of 2026, iQSTEL generated approximately $207 million in revenue, compared with approximately $130 million during the same period last year, representing growth of approximately 59% year-over-year. Gross profit increased to approximately $4.8 million, compared with approximately $3.8 million during the first half of 2025, representing growth of approximately 26%. The second quarter also demonstrated continued commercial momentum with approximately $109 million in revenue, compared with $97.9 million in the first quarter. As Leandro explained, we have spent years building revenue scale. From a financial perspective, our priority now is to increasingly convert that scale into gross profit, adjusted EBITDA, operating leverage, and cash generation.

Our first half revenue of $207 million represents approximately $414 million on an annualized basis. To be clear, this annualized figure is simply the mathematical equivalent of multiplying our first half results by two and should not be considered as a forecast. Based on approximately 10 million shares used for our per-share calculation, first half revenue represents approximately $20.59 per share, or approximately $41.18 in annualized revenue per share. Our balance sheets also continue to strengthen. As of June 30, iQSTEL reported approximately $48.2 million in total assets, $31 million in total liabilities, and $17.2 million in stockholders' equity. Stockholders' equity increased approximately 5%, representing approximately $1.71 in equity per share, where total assets represent approximately $4.79 per share. Equally important, iQSTEL maintains a clear capital structure with no convertible notes and no warrants outstanding. We believe this is particularly important for our shareholders.

Maintaining a disciplined capital structure reduces potential sources of dilution and provides the company with greater flexibility as we execute our growth strategy. Our objective is to continue funding growth in a disciplined manner while carefully considering the long-term interests of our shareholders. We believe these financials and per-share metrics provide shareholders with another useful perspective on the financial scale and underlying balance sheet value of iQSTEL. I also want to highlight an important point regarding valuation. At current market levels, our approximately $17.2 million in stockholders' equity is more than 50% greater than iQSTEL's current market capitalization. In other words, the market is currently evaluating the entire company at a substantial discount to its reported stockholders' equity. That comparison does not assign additional value to a business generating more than $400 million in annualized revenue.

Our global telecom infrastructure, our more than 600 carrier relationships, our digital services business, and our future earnings potential. We believe this represents a significant disconnect between iQSTEL's current public market valuation and the underlying financials and operating value of the company. Of course, our responsibility is not simply to point out that disconnect. Our responsibility is to continue improving the fundamentals of the business. That means increasing gross profit, expanding adjusted EBITDA, improving operating leverage, strengthening cash generation, and maintaining disciplined capital allocation. As we move through the second half of 2026, our financial priorities remain very clear. Improve EBITDA performance, expand gross profit, enhance operating leverage and cash generation, support the growth of higher margin digital services, maintain a disciplined and clean capital structure, and continue strengthening our balance sheet.