Executive Summary
Inseego reported a strong sequential rebound in Q2 2024, with revenue of $59.15 million, up 31.4% QoQ and 10.4% year over year, signaling improved demand for its wireless hardware, IoT, and cloud solutions. The company delivered a gross profit of $23.04 million and a robust EBITDA of $7.04 million, translating into a gross margin of 38.95% and an EBITDA margin of 11.90%, underscoring improving operating leverage as volumes recover. Despite a positive bottom-line contribution of $0.62 million and a non-GAAP-like cash generation profile, net income remained modest due to ongoing interest expense and non-operating charges, with reported earnings per share of -$0.0155 for the quarter.
On the balance sheet, liquidity remains constrained despite meaningful operating cash flow. Total assets stood at $149.56 million while total liabilities reached $251.33 million, resulting in negative equity of approximately -$101.76 million. The company reported strong operating cash flow of $28.76 million and free cash flow of $26.96 million, led by a substantial working capital swing of $23.24 million. Cash balance rose to $48.99 million, and net debt stood at roughly $128.32 million, with a current ratio of 0.389 and a quick ratio of 0.314, indicating limited near-term liquidity headroom.
Overall, the QQ2 2024 results illustrate a potential recovery path supported by growing revenue, improving gross margins, and meaningful cash flow generation, but the balance sheet remains a material restraint. Management's ability to deleverage, sustain revenue momentum, and monetize SaaS offerings will be critical to materially improve liquidity and earnings quality going forward.
Key Performance Indicators
QoQ: 285.84% | YoY:171.70%
QoQ: 114.01% | YoY:112.64%
Key Insights
Key profitability and efficiency metrics (Q2 2024 vs prior periods): Revenue $59.15 million, up 10.44% YoY and 31.42% QoQ. Gross Profit $23.04 million, gross margin 38.95%; YoY gross profit up 21.93%, QoQ up 67.48%. EBITDA $7.04 million, EBITDA margin 11.90%.
Operating Income $2.35 million, operating margin 3.97%; YoY operating income rose 171.70%, QoQ rose 285.84% as prior quarter showed a smaller profit base and seasonality effects.
Net Income $0.62 million, net margin 1.05%; YoY net income up...
Financial Highlights
Key profitability and efficiency metrics (Q2 2024 vs prior periods): Revenue $59.15 million, up 10.44% YoY and 31.42% QoQ. Gross Profit $23.04 million, gross margin 38.95%; YoY gross profit up 21.93%, QoQ up 67.48%. EBITDA $7.04 million, EBITDA margin 11.90%.
Operating Income $2.35 million, operating margin 3.97%; YoY operating income rose 171.70%, QoQ rose 285.84% as prior quarter showed a smaller profit base and seasonality effects.
Net Income $0.62 million, net margin 1.05%; YoY net income up 112.64%, QoQ up 114.01% as non-operating items moderated. EPS (diluted) -$0.0155, YoY EPS up 96.48%, QoQ up 95.92%.
Cash flow and liquidity: Net cash provided by operating activities $28.76 million; capital expenditures $1.80 million; free cash flow $26.96 million. CFO-to-revenue conversion and free cash flow generation underscore cash discipline amid a challenging balance sheet.
Balance sheet and leverage: Total assets $149.56 million; total liabilities $251.33 million; shareholders’ equity negative at approximately -$101.76 million. Cash and cash equivalents $48.99 million; short-term debt $172.92 million; total debt $177.32 million; net debt $128.32 million. Current ratio 0.389; quick ratio 0.314; debt-to-capitalization 2.35; negative book value complicates lender sentiment and funding flexibility.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
59.15M |
10.44% |
31.42% |
| Gross Profit |
23.04M |
21.93% |
67.48% |
| Operating Income |
2.35M |
171.70% |
285.84% |
| Net Income |
624.00K |
112.64% |
114.01% |
| EPS |
-0.02 |
96.48% |
95.92% |
Key Financial Ratios
operatingProfitMargin
3.97%
operatingCashFlowPerShare
$2.42
freeCashFlowPerShare
$2.42
Management Commentary
transcriptHighlights: No earnings call transcript data provided in the input. As a result, management quotes or thematic takeaways from a live call are not available for inclusion.
Forward Guidance
Forward-looking guidance is not provided in the supplied data. However, given the revenue acceleration and improving gross margins in QQ2 2024, management could be positioning the business for continued top-line growth and cash generation, contingent on sustaining demand for private LTE/5G deployments and IoT solutions. Investors should monitor the following factors: (1) trajectory of enterprise orders and backlog for fixed wireless and IoT platforms; (2) progression of SaaS monetization through Inseego Subscribe and related platforms; (3) deleveraging pace and any additional financing or refinancing arrangements; (4) working capital dynamics and potential working capital pullbacks as volumes normalize; (5) competitive positioning and supply chain resilience in a competitive technology hardware landscape.