ATLANTA - KORE Group Holdings, Inc. (NYSE: KORE), a global provider of Internet of Things (IoT) solutions, announced a 1-for-5 reverse stock split approved by its Board of Directors, set to take effect at the start of trading on July 1, 2024. The reverse stock split aims to elevate the company's per share market price to satisfy the New York Stock Exchange's minimum price requirement for continued listing.
Every five shares of KORE common stock will be converted into one new share. This consolidation is expected to proportionally adjust outstanding equity awards and shares under the company's equity incentive plan, without altering the number of authorized shares or the stock's par value. No fractional shares will be issued; shareholders will receive rounded-up whole shares in lieu of fractions.
The decision, ratified by stockholders on June 12, 2024, will not necessitate action from shareholders holding shares electronically or through a bank, broker, or nominee, as adjustments will be made automatically. Continental Stock Transfer & Trust is managing the exchange process for the reverse split.
KORE, self-described as an IoT hyperscaler, provides connectivity, solutions, and analytics, aiming to simplify IoT complexity and deliver operational and business improvements for clients. The company's recent move is a strategic effort to maintain its listing status and market standing.
This news is based on a press release statement from KORE Group Holdings, Inc. and further information can be found in the definitive proxy statement filed with the SEC on May 13, 2024. The company has cautioned that this press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those projected.
In other recent news, KORE Group Holdings (KORE) reported a significant increase in its Q1 2024 revenue, which rose to $76 million, a 15.2% year-over-year (YoY) increase. This growth was largely driven by a 33% surge in IoT connectivity revenue, which reached $57.9 million, despite a 19% YoY decline in IoT Solutions revenue, which settled at $18.1 million. The company also managed to narrow its net loss.
In addition to these financial results, KORE highlighted a robust global sales pipeline, comprising nearly 1200 opportunities with a potential total contract value (TCV) of $422 million. The company anticipates double-digit organic growth, along with additional growth from the Twilio (NYSE:TWLO) acquisition. KORE is also focusing on high bandwidth deals for future growth, particularly in the healthcare and fleet sectors.
However, the company did experience a rise in operating expenses by $4.8 million, primarily due to costs associated with the Twilio IoT acquisition. Despite this, KORE remains optimistic, aiming for positive cash flow by the end of the year. These are some of the recent developments in KORE Group Holdings.
InvestingPro Insights
In the wake of KORE Group Holdings' announcement of a 1-for-5 reverse stock split, a glance at the InvestingPro data and tips provides a deeper financial perspective on the company's current standing. With a market capitalization of $49.34 million USD and a negative price-to-earnings (P/E) ratio of -0.31, reflecting the company's lack of profitability over the last twelve months as of Q1 2024, KORE's financial health is under scrutiny.
One of the InvestingPro Tips highlights that KORE operates with a significant debt burden, which is a critical factor for investors to consider when assessing the company's long-term viability. Additionally, the management's aggressive share buyback strategy is noteworthy. Share buybacks can indicate management's belief in the company's undervalued shares or be used to improve financial ratios. However, with analysts not anticipating the company to be profitable this year, the effectiveness of this strategy remains to be seen.
From the data, it is also apparent that KORE's stock price has been quite volatile, with a 6-month price total return showing a steep decline of -36.02%. The company's revenue growth over the last twelve months stands at 7.97%, which could be a silver lining for investors looking for growth potential. Nevertheless, the company's gross profit margin of 53.78% during the same period suggests that while KORE is generating revenue, it's not translating effectively into net income, given the negative operating income margin of -13.68%.
For those interested in further analysis, additional InvestingPro Tips are available, which could shed light on KORE's cash burn rate, EBITDA valuation multiple, and the implications of its current stock price relative to its 52-week high. Currently, InvestingPro lists 12 more tips that could provide valuable insights for potential investors.
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