Inseego NASDAQ: INSG reported first-quarter fiscal 2026 results that management said were in line with expectations, while also outlining the strategic rationale and structure for its planned acquisition of Nokia’s fixed wireless access (FWA) device business.
Q1 revenue rose 8% year over year as software services remained steady
Chief Executive Officer Juho Sarvikas said the company is in “a year of investment in carrier ramps, product launches, and portfolio expansion in the first half, followed by benefits of greater scale, improving operating leverage, and stronger profitability as the year progresses.”
Total Q1 revenue increased 8% year over year to $34.3 million, with adjusted EBITDA of $1.8 million, both within guidance. The company reported non-GAAP gross margin of 48.9%.
Chief Financial Officer Steven Gatoff said results reflected “year-over-year revenue growth, healthy gross margins, and adjusted EBITDA within our guided range,” while the company continued investing in product, go-to-market, and operating capabilities.
By segment, Gatoff said:
- Mobile revenue was $16.7 million (the largest dollar contributor for the quarter).
- FWA revenue was $5.3 million, down sequentially from Q4 2025 but “up meaningfully year-over-year,” supported by higher carrier volumes and a broader customer footprint.
- Software services revenue was $12.3 million, which management characterized as a stable, high-margin contribution.
Gatoff attributed the sequential improvement in non-GAAP gross margin primarily to mix, citing “a higher proportion of software services revenue” in the quarter.
Operational updates: FWA disruption at a large customer; mobile launch timing issues
Sarvikas highlighted two operational headwinds in the quarter.
In FWA, Sarvikas said a “large FWA customer overhauled its executive team and changed its approach to enterprise go-to-market,” which created disruption during Q1. He said Inseego is working with the customer to realign and “expect to see progress.” Sarvikas added that Inseego has secured a commitment for its next-generation FWA platform with that same customer.
In mobile, Sarvikas said the company previously disclosed engineering delays in a new mobile hotspot product family. He said Inseego has launched two of three models, while “the delay in the third is persisting into Q2,” and the company anticipates launch “in late June.”
To address execution issues, Sarvikas said he brought in a new Chief Product Officer and launched a search for a head of engineering. He introduced Koroush Saraf as the new Chief Product Officer, citing Saraf’s more than 20 years of experience across networking, cybersecurity, hardware and software, and edge infrastructure.
Sarvikas also said Inseego secured a carrier commitment for a new low-tier MiFi product, framing it as part of a strategy to broaden the mobile portfolio across multiple value tiers.
Balance sheet: cash ended higher than expected; preferred stock eliminated at a discount
Gatoff said Inseego ended Q1 with $19 million in cash, which he described as “higher than anticipated” due to “a large customer clearing their quarter end AP balances.” He added the company finished the quarter with approximately $49 million of debt.
He noted the debt balance was $8 million higher than year-end due to Inseego’s elimination of “all of the $42 million in outstanding preferred stock” in January “at a meaningful 38% discount.”
Q2 guidance calls for sequential revenue growth, but lower adjusted EBITDA
For Q2 fiscal 2026, management guided to revenue of $36.5 million to $43.5 million and adjusted EBITDA of $250,000 to $2 million. Gatoff said the company expects revenue to rise about 12% sequentially from Q1, driven by improved FWA contribution across carrier and channel customers, “offset somewhat by a lower mobile quarter on MiFi” due to the delayed product launch.
Software services revenue is expected to remain consistent at approximately $12 million, according to Gatoff.
On profitability, Gatoff said Q2 adjusted EBITDA is expected to be lower sequentially as the company increases spending in sales and marketing and R&D, before that spend lowers again and revenue ramps in the second half of the year.
Looking to the full year, Gatoff said Inseego continues to “see a path to deliver $190 million of revenue,” with sequential building through the year and “profitability improving meaningfully in the back half as revenue scales.”
Nokia FWA acquisition: ~$200 million run-rate business, equity-funded with transition support
Sarvikas said Inseego’s planned acquisition of Nokia’s FWA business would be “the largest revenue deal in the company’s history,” and described it as transformational on scale, global reach, portfolio breadth, and partnership with Nokia across “go-to-market, AI, 6G, and the future of the wireless edge.”
He said Inseego is acquiring Nokia’s “approximately $200 million revenue run rate FWA business,” which he said would more than double Inseego’s revenue base and expand its presence beyond North America to Asia-Pacific and EMEA.
Gatoff emphasized that the financial results and guidance discussed for Q1 and Q2 exclude the Nokia business, and said the acquisition is anticipated to close in Q4 2026.
On the deal structure, Gatoff said it is an asset purchase with aggregate consideration of $20 million, consisting of $15 million in Inseego common stock and $5 million in warrants issued to Nokia. He highlighted that the transaction increases scale “without using cash or incurring any debt,” and that Nokia will become a shareholder, creating alignment around execution and long-term value.
Gatoff also described a transition support framework designed to keep the acquired FWA business at EBITDA break-even for the first year after closing. He said this would be achieved through quarterly cash payments from Nokia equal to the negative EBITDA of the acquired business during that year, capped at $38 million in aggregate. In years two and three, Nokia would be eligible for profit sharing tied to performance; on the Q&A, Gatoff said the profit share is based on revenue performance and would allow Nokia to participate in “somewhere between 0 and 50%” of positive EBITDA generated by the acquired business, depending on revenue levels.
When asked about gross margin potential for the Nokia FWA business, Gatoff said the margin profile “is more of a teens kind of gross margin than it is…in the twenties right now,” noting the customer base includes a high-velocity consumer/residential model. Sarvikas and Gatoff both pointed to variability by market and customer, and discussed an opportunity over time to add higher-margin business and realize efficiencies.
On go-to-market, Sarvikas said Inseego and Nokia intend to continue strategic cooperation, including joint account and pipeline management and incentives for Nokia’s global sales team “to continue to hunt for us.”
Management also discussed the potential for the company’s software platform, Subscribe, to benefit from an expanded global footprint. Sarvikas said the acquisition “opens up more market opportunity for Subscribe,” while noting the company’s near-term priority remains expanding engagement with additional large U.S. tier-one carriers.
About Inseego NASDAQ: INSG
Inseego Corp is a U.S.-based technology company specializing in 5G and intelligent Internet of Things (IoT) device-to-cloud solutions. The company develops hardware and software platforms designed to connect devices, vehicles and remote locations to high-speed wireless networks. Its core offerings include mobile hotspots, fixed wireless access gateways and ruggedized routers optimized for enterprise, industrial and government applications.
Inseego's product portfolio encompasses 5G MiFi® mobile hotspots, virtual network functions (VNFs) for network management, telematics devices for fleet tracking and asset monitoring, as well as a suite of cloud-native software for device lifecycle management and data analytics.
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