KORE Q1 2025 slides: positive free cash flow despite revenue dip, connections up 8%

KORE Group Holdings Inc (NYSE:KORE) reported its first quarter 2025 financial results on May 15, showing mixed performance with declining revenue but improved profitability metrics and positive free cash flow. The IoT solutions provider achieved significant cost reductions while growing its total connections by 8.2% year-over-year.

Quarterly Performance Highlights

KORE reported Q1 2025 revenue of $72.1 million, a 5.1% decrease from $76.0 million in the same period last year. Despite this decline, the company reduced its net loss to $14.9 million from $17.6 million in Q1 2024, an improvement of 15.2%. Adjusted EBITDA came in at $14.5 million with a margin of 20.0%, showing a 60 basis point improvement over the prior year’s 19.4%.

The company made significant progress in cost management, reducing operating expenses by 15.3% to $41.6 million compared to $49.1 million in Q1 2024.

As shown in the following comprehensive financial summary:

"We have transformed the company and returned to growth in connections, revenue, EBITDA, and free cash flow," CEO Ron Totten had stated during the company’s Q4 2024 earnings call, setting expectations for continued improvement in 2025.

Connection Growth vs Revenue Decline

A key highlight of KORE’s Q1 results was the continued growth in IoT connections, which increased 8.2% year-over-year to 19.8 million. However, this connection growth contrasted with a 6.9% decline in IoT Connectivity revenue, which fell to $53.9 million from $57.9 million in Q1 2024.

The company attributed this divergence to the strategic winding down of low-margin products and unusual high usage spikes from a few customers in the prior year period. Average Revenue Per Unit (ARPU) declined 13.3% to $0.91, reflecting this shift in business mix.

The following chart illustrates the connection growth despite revenue challenges:

KORE also introduced a new metric, Estimated Annual Recurring Revenue (eARR), to better illustrate the recurring nature of its connectivity business model. The company reported a strong pipeline with $51.7 million in potential new business and $29.8 million from existing customers.

As shown in the pipeline visualization below:

Cash Flow Improvements

One of the most significant achievements in Q1 2025 was KORE’s positive free cash flow of $0.6 million, a substantial improvement from negative $2.8 million in Q1 2024. Cash flow from operations increased by 50.9% to $2.9 million, marking the second consecutive quarter of positive cash flow.

The detailed financial results show these improvements across multiple metrics:

This cash flow improvement aligns with the company’s stated priority of enhancing financial discipline. During the previous quarter’s earnings call, CFO Paul Holtz had emphasized, "We are laying the ground for improved recurring revenue margin and cash flow performance."

Strategic Initiatives

KORE highlighted its success across multiple verticals, including cloud communications, HVAC manufacturing, multi-national IoT alliances, and remote patient monitoring. The company secured new business with an estimated annual recurring revenue of $2.1 million across these sectors.

The company’s value proposition across different industries is illustrated here:

KORE also outlined its Value Creation Plan focused on five key priorities: Customer Intimacy, Profitable Growth, Winning Team, Product Innovation, and Operational Excellence. The company’s vision is "to be the trusted global leader in IoT Connectivity Solutions for over 100,000,000+ connected devices."

2025 Outlook & Guidance

Despite the Q1 revenue decline, KORE maintained its full-year 2025 guidance, projecting revenue between $288-298 million (representing 2% year-over-year growth), adjusted EBITDA of $62-67 million (19% growth), and free cash flow of $10-14 million (443% improvement).

The company’s maintained guidance is shown below:

This multi-year financial performance visualization demonstrates the expected trajectory:

The maintained guidance suggests management’s confidence that growth will accelerate in the remaining quarters of 2025, particularly as new customer connections from 2024 continue to ramp up.

KORE’s stock closed at $2.23 on May 15, down 4.93% for the day, with an additional 1.87% decline to $2.10 in after-hours trading, indicating investor caution despite the improved profitability metrics and positive cash flow.

Full presentation:

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