Kore Group (KORE -6.12%), an independent provider of Internet of Things (IoT) connectivity and solutions, released its second quarter fiscal 2025 earnings on August 14, 2025. The company reported GAAP revenue of $71.3 million, a 5.0% increase from the same period last year and ahead of the $70.3 million GAAP consensus estimate. Adjusted EBITDA rose sharply to $16.7 million, up from $11.4 million in Q2 2024, while total IoT connections grew to 20.1 million, and showed a significant reduction in net loss (GAAP) versus Q2 2024. Overall, the quarter highlighted tangible progress in operating performance, margin improvement, and customer expansion, though top-line growth remained modest and the business continued to operate at a net loss.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | N/A | $(0.61) | N/A | N/A |
| Revenue (GAAP) | $71.3 million | $70.3 million | $67.9 million | 5.0% |
| Adjusted EBITDA | $16.7 million | $11.4 million | 46.3 % | |
| Free Cash Flow | $1.6 million | N/A | NM | |
| Total Connections | 20.1 million | 18.6 million | 8.1 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Kore Group’s business, recent focus, and key success factors
Kore Group focuses on enabling enterprises to connect their devices securely and efficiently through IoT connectivity services. Its core offerings consist of global IoT Connectivity as a Service (CaaS), managed through the KORE One platform, and an expanding suite of integrated IoT solutions for verticals such as healthcare, fleet management, asset monitoring, industrial, and retail.
Over recent quarters, the company has prioritized expanding its IoT customer base and deepening its pipeline of recurring revenue opportunities. Management cited the importance of shifting toward higher-margin solutions, controlling general and administrative expenses, and moving away from less profitable hardware lines. Success in these areas depends on maintaining robust partnerships with major cellular carriers and ecosystem providers, sustaining compliance in regulated markets (especially healthcare), and leveraging proprietary technology like eSIM for differentiation.
Quarterly highlights and financial performance
The quarter saw modest but steady growth in revenue, up 5.0% year-over-year (GAAP) and exceeding analyst estimates by $1.0 million (GAAP). Management attributed the revenue performance to both new business wins and expansion in existing customer deployments, highlighted by an 8% increase in total IoT connections. The company added over 1.5 million new connections compared to a year earlier. Key new contract wins included a significant partnership with Winnebago for connected recreational vehicle platforms, which came with minimum revenue guarantees and illustrates Kore’s ability to expand into new customer segments.
Segment performance showed that IoT Connectivity was 79% of revenue compared to 82% in Q2 2024, and IoT Solutions was 21% compared to 18% in the same period last year. The IoT Connectivity segment remained the largest contributor at 79% of revenue, but posted only a slight increase from the prior year, indicating limited growth in this core category. Non-GAAP gross margin in this segment held steady at 60.0%. IoT Solutions, which accounted for 21% of revenue, grew approximately 25.6% compared to Q2 2024 (GAAP) and saw non-GAAP gross margin rise to 45.3%, driven largely by exiting low-margin hardware business.
Profitability metrics improved on several fronts. Adjusted EBITDA climbed 46% year over year to $16.7 million. The net loss (GAAP) contracted sharply to $16.9 million -- a year-over-year improvement of $66.8 million in net loss -- although this was flattered by the absence of a $65.9 million goodwill impairment in Q2 2024. Free cash flow (non-GAAP) became positive in Q1 2025.
Management cited a run-rate net operating expense of $25 million on a go-forward basis after recent restructuring efforts. Company-wide non-GAAP gross margin stayed nearly flat compared to the prior-year quarter at 56.9%, as margin gains in IoT Solutions balanced slight compression in IoT Connectivity. In addition, the company increased its focus on estimated annual recurring revenue (eARR) as a metric for tracking the health and momentum of its pipeline.
The company did not declare or change a dividend in this period.
Looking ahead: Guidance and areas of focus
Kore Group management reiterated its FY2025 guidance, projecting revenue between $288 million and $298 million (approximately 2% growth for the year), adjusted EBITDA in the range of $62 million to $67 million, and free cash flow (non-GAAP) of $10 million to $14 million. Management continues to stress disciplined expense control, margin recovery, and investments in platform innovation as areas of focus for the balance of the year.
Kore Group does not currently pay a dividend. Investors should watch for further conversion of new pipeline opportunities into revenue, trends in average revenue per user (ARPU) as the mix of higher- and lower-margin connections evolves, and execution on expansion in verticals like Connected Health. With free cash flow (non-GAAP) now turning positive and a growing base of recurring contracts, the path to sustainable profitability will remain a central theme in upcoming quarters.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
