Kore Posts Wider Loss In Q2, Cuts FY Revenue Outlook Below View, To Slash 25% Jobs; Names Totton CEO

(RTTNews) - Kore Group Holdings, Inc. (KORE), a technology firm focused on IoT solutions, on Thursday reported a wider net loss for the second-quarter, compared to the prior year.

The company also announced a restructuring plan, slashing 25 percent of its staff to return to profitability.

Further, Kore announced that it has appointed Ronald Totton as its chief executive officer.

For the three-month period to June 30, the company posted net loss of $64.3 million, wider than loss of $19.5 million, recorded for the same period a year ago.

This includes a non-cash goodwill impairment charge of $45.4 million related primarily to the company's share price decline in the second quarter.

Excluding items, EBITDA was $11.4 million, lower than $14.2 million, a year ago.

Revenue was $67.9 million, down from $69.5 million in the previous year.

Revenue from IoT Solutions slipped to $12.1 million from $21.3 million in 2023, due to the timing of orders from certain customers and a strategic decision to reduce lower margin hardware deals.

As part of its efforts to improve operational efficiency and return to profitability, Kore will be initiating a restructuring plan with an aim for gross cash savings of $5 million to $6 million in 2024, and $20 million to $22 million annually thereafter.

With this, the firm will axe full-time workforce of around 25 percent, including both employees and individual contractor staff.

The newly appointed CEO Totton has been serving as Interim CEO, following the resignation of former chief executive Romil Bahl.

Looking ahead to the full year, the company has revised down its annual revenue outlook below analysts' estimates.

The technology provider now expects revenue of $275 million to $285 million, compared with the prior outlook of $300 million to $305 million.

On average, five analysts, polled by Thomson Reuters forecast the firm to post revenue of $304.01 million, for the year.

For the Full year, adjusted EBITDA is now anticipated to be $54 million to $56 million, lesser than the prior projected range of $64 million to $66 million.

Totton said, "Our updated guidance reflects increasingly cost-conscious customer behavior and a cyclical trend within our IoT Solutions business, which includes the delay in launching a large contract with a Connected Health customer, now scheduled to begin implementation in 2025."

KORE was trading down by 3.83 percent at $3.260 in the pre-market trade on the New York Stock Exchange.