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DATE

Wednesday, November 12, 2025 at 5:00 p.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Ronald Totton
  • Chief Financial Officer — Anthony Bellomo

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RISKS

  • KORE (KORE +1.24%) suspended financial guidance for the remainder of fiscal year 2025 due to uncertainty from the announced strategic review, as CEO Ronald Totton said, "The potential range and timing of outcomes from the strategic review process, make it difficult to continue to provide an outlook that would meaningfully represent the range of expected outcomes."
  • Non-GAAP gross margin declined 147 basis points year-over-year to 55.2% on a non-GAAP basis.
  • Average revenue per user per month (ARPU) fell to $0.94 from $1.01 year-over-year due to lower ARPU use cases joining the connections base.
  • IoT Solutions revenue and non-GAAP gross margin decreased compared to the prior year, driven by order timing and revenue mix.

TAKEAWAYS

  • Revenue -- $68.7 million, approximately flat year-over-year.
  • IoT Connectivity Revenue -- $56.7 million, flat year-over-year but increased 1.7% sequentially from Q2 2025, marking a second consecutive quarter of sequential growth.
  • IoT Solutions Revenue -- $11.9 million, slightly lower year-over-year, attributed by Anthony Bellomo to "timing of orders from customers."
  • Adjusted EBITDA -- $14.5 million, up 12% or $1.5 million compared to Q3 2024, mainly due to reduced operating expenses from restructuring actions over the past 12 months.
  • Net Loss -- $12.7 million, improving from $19.4 million in Q3 2024, largely attributable to increased adjusted EBITDA and a tax recovery benefit under new U.S. legislation.
  • Operating Expenses -- $42.2 million, down $1.7 million compared to Q3 2024 as a result of cost-saving measures.
  • Connections Base -- Surpassed 20.5 million, increasing by 9% year-over-year, as a result of new customer wins and wallet share expansion.
  • eARR (new/expansion) -- $11.3 million closed in the quarter, indicating ongoing commercial momentum from both new and existing customers.
  • Total Pipeline (Connectivity eARR) -- Closed at $80.3 million, representing forward visibility for recurring connectivity revenue opportunities.
  • Non-GAAP Gross Margin -- 55.2%, down 147 basis points year-over-year, including a decrease for IoT Connectivity non-GAAP gross margin (to 59.6% from 60.9%) and IoT Solutions non-GAAP gross margin (to 34.3% from 37%) reflecting revenue mix shifts.
  • ARPU -- $0.94, down from $1.01 year-over-year with the decrease linked to new lower ARPU use cases; unchanged from Q2 2025.
  • Cash Provided by Operations -- $1.1 million, flat compared to the prior year period.
  • Free Cash Flow -- Improved by $1.1 million to negative $1.1 million versus the prior year, as capitalized expenditures declined.
  • Cash and Restricted Cash -- $19.6 million as of September 30, 2025.
  • Strategic Review and Acquisition Interest -- The Board received a letter from Searchlight Capital Partners and Abry Partners expressing interest in acquiring all shares not already owned by them, and formed a special committee to evaluate strategic alternatives.
  • Strategic Initiatives -- New platform "KORE One" launched, a limited release connectivity product with automated switching completed, and the launch of an AI assistant led to a more than 50% reduction in support tickets and improvement in customer E-score.
  • Product and Sales Wins -- Secured new business with a fleet management provider, an anti-theft innovator, a global healthcare leader, and an AI-powered telematics company, each citing KORE's technology differentiation and ability to address complex, regulated, or mission-critical use cases.
  • Facility Rationalization and AI Productivity Efforts -- Continued cost structure optimization, including deploying AI tools and launching an internal AI evangelist program.

SUMMARY

Management announced that guidance is suspended due to a strategic review triggered by acquisition interest from major existing shareholders, shifting the company's short-term visibility and outlook. A special committee is now responsible for evaluating all strategic alternatives, including a potential buyout. Declining non-GAAP gross margins and lower ARPU highlight ongoing challenges with revenue mix and pricing power. The company reported improved adjusted EBITDA, a smaller net loss, and flat operating cash flow, pointing to stable operations and successful cost control initiatives. Product innovation—including the launch of KORE One, an AI assistant, and new connectivity offerings—yielded efficiency gains and positioned KORE to address highly regulated and mission-critical client needs in core verticals.

  • The eARR pipeline closed at $80.3 million signifies management's stated "strong visibility and a growing degree of confidence in our ability to deliver sustained, predictable revenue growth into the future."
  • CEO Ronald Totton said management's "strategy is centered on our 5-pillar value creation plan," reinforcing operational discipline and focus as strategic differentiators.
  • The combination of operational streamlining, AI deployment, and direct customer wins in regulated industries may position KORE for further expansion if strategic uncertainty resolves positively.
  • Management specifically highlighted the board's "business as usual" directive during the strategic review, aiming to reassure stakeholders of continued operational focus despite pending M&A activity.

INDUSTRY GLOSSARY

  • IoT: Internet of Things—networked physical devices with the capability to collect and exchange data.
  • eARR: Expansion Annual Recurring Revenue—forward-looking, annualized revenue from newly closed or expanded recurring contracts, specifically including committed connectivity deals.
  • Super SIM: KORE's proprietary multi-carrier, resilient SIM card technology designed for reliable connectivity across various networks and geographies.
  • ARPU: Average Revenue Per User—monthly average revenue recognized per device or user connection.
  • KORE One: KORE's unified customer platform integrating device, connectivity, support, and analytics into a single interface.
  • E-score: Internal customer satisfaction and support metric tracked by KORE.

Full Conference Call Transcript

Ronald Totton: Thank you, Vik, and good afternoon, everyone. For today's call, I'll provide an update on the company's business highlights for the third quarter and then turn the call over to Anthony Bellomo, the company's CFO, to go through the financial results. As we look at our results for the third quarter, we delivered steadily improving operating performance with solid growth and profitability, while revenue held steady. Our revenue for the quarter was $68.7 million. Notably, our connectivity revenue increased 1.7% over Q2 2025, our second consecutive quarter of strong connectivity sequential growth. Adjusted EBITDA rose by 12% or $1.5 million to $14.5 million from Q3 2024, as we stay focused on operational excellence and profitability.

Net loss also improved by $6.7 million due to the improved adjusted EBITDA, along with the tax benefit from recently enacted U.S. legislation. Now let's turn to a critical measure of our financial health and operational discipline, our cash flow. In the third quarter, we generated $1.1 million in cash from operations while our free cash flow improved $1.1 million over the same period last year. The steady improvement in our free cash flow profile is a direct result of our disciplined execution and our commitment to building a resilient and profitable business. Our strategy is centered on our 5-pillar value creation plan, and this quarter's results demonstrate that plan in action.

On Slide 7, you can see clear tangible proof points on how our focused execution is translating into progress across the entire business. At the heart of our strategy is profitable growth and this quarter, we delivered driving a 12% increase in adjusted EBITDA. This financial discipline is complemented by strong commercial momentum as we secured $11.3 million in new and expansion eARR and grew our total connections to over 20.5 million. This growth is fueled by our commitment to both product innovation and customer intimacy. This quarter, we launched KORE One, our unified customer platform and we completed a limited release of a new connectivity offering, providing proprietary automated switching and enhanced network resilience.

With investments in our products, platform and infrastructure and with the launch of a new AI assistant KORE we've seen a greater than 50% reduction in support tickets while continuing to improve our customer E-score. It is this combination of superior products and deep partnership that differentiates us in the market and fuels our sales momentum. Underpinning all of this is our relentless drive for operational excellence powered by our winning team. We're becoming a leaner, more agile company by executing on our facility rationalization plan and aggressively deploying AI tools to boost productivity. Simultaneously, we are investing in our people, launching our internal AI evangelist program and new development tools to build a culture of accountability and continuous improvement.

Now let's dive deeper into our KORE IoT Connectivity business on Slide 8. The foundational metric for our recurring revenue model is our connection base, which continued its strong, steady growth. This quarter, we grew our total connections by 9% year-over-year to surpass 20.5 million. This is a direct result of our ability to win new logos and expand our share of wallet with existing customers. Turning now to Slide 9, which illustrates our sales momentum in the forward-looking health of our business. We closed $11.3 million in new eARR this quarter. This is a direct result of our sales team's success in converting opportunities in the committed recurring revenue.

This success is well balanced, coming from both winning new logos and expanding our relationship with existing customers and validates our land-and-expand strategy. And looking at our total pipeline, we closed at a healthy $80.3 million in eARR which, as a reminder, is purely connectivity-related opportunities. Our solid eARR closed one and healthy pipeline gives us strong visibility and a growing degree of confidence in our ability to deliver sustained, predictable revenue growth into the future. As we have done previously, here are just four examples from the quarter that showcase how we are winning in the marketplace, highlighting our unique value proposition.

First, a major win in fleet management with a leading provider who needed true multi-carrier capabilities and superior economics with our Super SIM technology. But just as importantly, they chose us because we acted as a true strategic partner, building a strong, responsive relationship at both the executive and technical levels. Next, we secured an exciting innovator in the anti-theft space. For their solution to work, connectivity must be flawless. They chose our Super SIM for its resilience and reliability enabling them to remotely access devices for GPS tracking and video transmission across different networks. This is a mission-critical application where good enough connectivity simply isn't an option.

Our third win highlights our leadership in the heavy regulated connected health space, a global health care leader selected KORE for their medical technologies initiative. They chose us for our deep expertise our proven compliance framework, including HIPAA and ISO certifications and our ability to provide a complete single vendor solution for hardware, logistics and global connectivity. Finally, I mentioned a win with a fast-growing AI-powered telematics company where they required high reliability for a video telematics and in-cabin sensing platform. While competitors offered lower cost, we demonstrated that the superior reliability, performance and long-term quality of our native SIM technology provided far greater value.

They understood that for a mission-critical application, total cost of ownership and reliability are what truly matter. The common thread connecting these diverse wins is clear. These market leaders required more than just connectivity. They needed a global and strategic partner to solve complex IoT challenges at scale. Our ability to deliver resilient technology navigate highly regulated industries and provide a complete end-to-end service are our differentiators. This is why we continue to win marquee customers and it is the engine behind our sustained growth. And now I'll turn the call over to Anthony to cover the financials in more detail.

Anthony Bellomo: Thanks, Ron, and thanks for those joining us this evening for our third quarter results. Total revenue for the third quarter was approximately flat year-over-year to $68.7 million. Breaking revenue down by business lines, IoT Connectivity revenue was flat at $56.7 million. Most notably, IoT Connectivity revenue showed sequential quarter-over-quarter growth of 1.7%, which followed the second quarter sequential growth of 3.2%. This sequential growth is a clear indication that our transformation is producing results. IoT Solutions revenue was down slightly to the prior year at $11.9 million, driven primarily by timing of orders from customers. Overall, non-GAAP gross margin in Q3 2025 was 55.2%, down 147 basis points from the same quarter of the prior year.

By business line, IoT Connectivity non-GAAP gross margin was down to 59.6% from 60.9% and IoT Solutions non-GAAP gross margin was down to 34.3% from 37% due to revenue mix. Average revenue per user per month or ARPU for the current quarter was $0.94 compared to $1.01 in Q3 2024. The decrease in ARPU year-over-year was due to the recent additions to total connections coming from lower ARPU use cases. On a sequential basis, ARPU was unchanged from Q2 2025. Operating expenses in the third quarter were $42.2 million, a decrease of $1.7 million compared to Q3 2024 due to cost savings from restructuring actions taken over the last 12 months.

Adjusted EBITDA in the third quarter was $14.5 million, an increase of $1.5 million or 12% compared to the prior year. The $1.5 million increase in adjusted EBITDA was primarily attributable to lower operating expenses as discussed. Net loss in the third quarter was $12.7 million compared to $19.4 million in the prior year. The decrease in our net loss was due to a tax recovery as the result of recent U.S. tax legislation as well as the same factors that drove the improvement in adjusted EBITDA as described above. Finally, moving to cash flows. Cash provided by operations in the third quarter was $1.1 million, approximately flat with the prior year period.

Free cash flow, measured by cash provided by operations, less cash used in investing activities improved by $1.1 million to negative $1.1 million in Q3 2025 compared to the prior year quarter due to our lower level of capitalized expenditures. As of September 30, 2025, cash and restricted cash was $19.6 million. In closing, our solid third quarter performance is evidence that the company's transformation has begun to take hold. And with that, I'll pass it back to you, Ron.

Ronald Totton: Thank you, Anthony. As you may know, we recently announced that KORE received a letter from two existing investors in the company, Searchlight Capital Partners and Abry Partners on behalf of each of their affiliated funds. The letter indicated an interest in entering discussions to acquire all of KORE's common stock, not already held by Searchlight and Abry. In addition, KORE's Board of Directors has formed a special committee to review, evaluate and negotiate a potential strategic transaction and any alternative. The potential range and timing of outcomes from the strategic review process, make it difficult to continue to provide an outlook that would meaningfully represent the range of expected outcomes.

As a result, the company is suspending guidance for the remainder of fiscal year 2025. With that said, I want to emphasize we continue with business as usual with full attention on delivering innovation and service to our customers and working closely with our partners. I would like to express my deep appreciation and gratitude for our global KORE team. You've demonstrated an incredible focus on execution and innovation, not only by securing key wins but by doing so with a discipline that strengthens our entire business. I'm proud of the work you do every day to serve our customers and move our company forward. In closing, overall, we had a solid quarter.

We improved our profitability, produced the second sequential quarter of strong connectivity revenue growth and continue to stay focused on managing operating expenses. Thank you, everyone, for joining today's earnings call. We look forward to updating you next quarter on our progress in the fourth quarter of 2025 and our full year results. Have a good evening. Thank you.

Operator: This concludes today's conference. You may disconnect your lines at this time.