SAN DIEGO - Inseego Corp. (NASDAQ:INSG), a leader in 5G and mobile technology with a market capitalization of $179 million, has finalized the sale of its global telematics business to Ctrack Holdings for $52 million in cash. The sale, which includes operations in the UK, EU, Australia, and New Zealand, is part of Inseego's strategy to concentrate on its core 5G offerings. The company's stock has shown remarkable performance, delivering a 443% return year-to-date according to InvestingPro data.
Philip Brace, Executive Chairman of Inseego, expressed satisfaction with the completion of the sale, noting the company's intention to focus on its primary 5G business. The company also acknowledges the contributions of the telematics team and wishes them well in their future endeavors.
The divestiture serves a dual purpose for Inseego: it enables a sharper focus on the growth of its 5G domestic business and provides liquidity for the company's recapitalization and debt reduction efforts. In line with this, Inseego has used part of the proceeds to repay the remaining $6 million balance of a loan agreement dated June 28, 2024.
Inseego is known in the industry for its 5G Enterprise cloud WAN solutions, serving millions of end customers and thousands of enterprise and SMB clients. Its 5G Edge Cloud platform promises to deliver improved business outcomes by connecting distributed sites and workforces, securing enterprise data, and offering operational visibility over a 5G network.
This transaction is based on a press release statement from Inseego Corp. and reflects the company's strategic shift towards strengthening its position in the 5G technology landscape.
In other recent news, Inseego Corp reported robust growth in its Q3 revenue, marking a substantial 27% increase to reach $61.9 million. This positive performance was driven by strong carrier promotions and the expansion of its SaaS management platform. Furthermore, the company made significant strides in restructuring its financial position, reducing its long-term senior debt from over $160 million to $41 million.
Analysts at TD Cowen maintained a Hold rating on Inseego but lowered the price target from $20.00 to $16.00 due to concerns about the company's growth prospects. However, Roth/MKM upgraded Inseego's stock rating from Neutral to Buy, citing a significant reduction in net debt and robust growth in the company's core products.
Inseego is also in the process of appointing a new CEO, a decision expected to be finalized in Q1 of 2025. Despite a merger involving a major U.S. carrier customer causing sales pressure in its fixed wireless segment, Inseego managed to improve its gross margin to approximately 38%. The company is focusing on diversifying its revenue base and improving gross margins. These are among the recent developments shaping the future of Inseego Corp.
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