SaaS, Software and Services Revenues Increased by 18.3% Year-Over-Year for the Fourth Quarter
Subscribers for Ctrack™ IoT Telematics Solutions Grew by 20.7% Year-Over-Year for the Fourth Quarter
Inseego Awaits Regulatory Approval from CFIUS to Close Pending Sale of MiFi® Mobile Broadband Business

SAN DIEGO—March 9, 2017—Inseego Corp. (Nasdaq: INSG) (the “Company”), a leading provider of solutions for the
Internet of Things (“IoT”), including software-as-a-service (“SaaS”) solutions, announced financial results for the fourth quarter
ended December 31, 2016.

“Our fourth quarter business performance once again demonstrates the financial and market strength of our portfolio of SaaS,
software and services solutions for the Internet of Things. Our overall subscriber base for our comprehensive IoT solutions
increased to 620,000 total subscribers, driven by 20.7% year-over-year growth in subscribers of our Ctrack telematics
offerings,” said Sue Swenson, Chair and CEO of Inseego. “We continue to set company records for our high-margin SaaS,
software and services revenues, with 18.3% year-over-year growth in these recurring revenues in the fourth quarter. I am
pleased that we are already achieving so many of our strategic goals, while we await regulatory approval from CFIUS to close
the pending sale of our MiFi mobile broadband business, which will complete our transformation into a pure-play IoT solutions
provider.”

Fourth Quarter 2016 Financial Highlights
The Company announced the following U.S. GAAP (“GAAP”) financial results for the fourth quarter of 2016:

  • Revenue decreased by 14.0% to $52.9 million in the fourth quarter of 2016, compared to $61.5 million in the fourth
    quarter of 2015. Revenue from the Company’s Ctrack™ products, which include a mix of hardware and SaaS, software
    and services sold as a bundled telematics solution, were greater than the midpoint of the Company’s fourth quarter
    guidance range, growing by 1.8% to $16.9 million in the fourth quarter of 2016, from $16.6 million in the fourth quarter
    of 2015. The Company’s overall revenue decrease was driven by reduced standalone hardware sales, particularly from
    the Company’s MiFi mobile broadband business, which is subject to a pending divestiture transaction to T.C.L.
    Industries Holdings (H.K.) Limited and Jade Ocean Global Limited.
  • Revenue from SaaS, software and services increased by 18.3% to $14.9 million in the fourth quarter of 2016, from
    $12.6 million in the fourth quarter of 2015, as the Company continued its focus on IoT SaaS, software and services
    solutions, including its Ctrack telematics solutions. Revenue from SaaS, software and services increased to a record
    28.2% of the Company’s total revenue in the fourth quarter of 2016, compared to 20.5% of total revenue in the fourth
    quarter of 2015.
  • Revenue from hardware products was $38.0 million in the fourth quarter of 2016, a decrease of 22.3% from
    $48.9 million in the fourth quarter of 2015. Sales of the Company’s MiFi mobile broadband products in the fourth
    quarter of 2016 were lower than the Company expected, primarily as a result of the delayed launch of the Company’s
    new Verizon Jetpack® Mobile Hotspot MiFi 7730L, which occurred in January 2017 rather than in the fourth quarter of
    2016 as had been planned. In addition, the Company continues to strategically de-emphasize lower margin hardwareonly
    sales in favor of bundled solutions that include higher-margin SaaS, software and services offerings.
  • Net loss was ($27.4 million), or ($0.50) per share, in the fourth quarter of 2016, compared to a net loss of
    ($14.4 million), or ($0.26) per share, in the fourth quarter of 2015. Net loss in the fourth quarter of 2016 includes a
    $11.5 million impairment charge related to the Company’s Enfora® hardware product line as the Company exits its
    Enfora standalone hardware business while focusing on the divestiture of its MiFi mobile broadband business, and
    $8.5 million of charges related to the Company’s 2015 acquisition activities and its current divestiture activities.
  • As of December 31, 2016, the Company had cash and cash equivalents of $9.9 million, declining from $17.2 million at
    September 30, 2016.

The Company also announced the following non-GAAP financial results for the fourth quarter of 2016. A reconciliation of
these non-GAAP financial measures to the Company’s GAAP financial results is included in the tables accompanying this news
release:

  • The Company’s overall non-GAAP gross margin increased to a record 39.9% in the fourth quarter of 2016, compared to
    33.4% in the fourth quarter of 2015, as the Company continued its transition toward an improved mix of higher-margin
    IoT solutions with significant SaaS and recurring revenue components. Non-GAAP gross profit was $21.1 million in the
    fourth quarter of 2016, an increase of 2.4% compared to $20.6 million in the fourth quarter of 2015, as the Company’s
    transition to higher margin SaaS, software and services solutions enabled the Company to generate an increased non-
    GAAP gross profit despite a $10.9 million decline in hardware revenue.
  • Non-GAAP gross margin on SaaS, software and services increased to 69.5% in the fourth quarter of 2016, compared to
    63.6% in the fourth quarter of 2015, primarily driven by revenues from high-margin SaaS and software solutions
    delivered by Ctrack as well as Inseego’s North American sales from its Eugene, Oregon operations.
  • Non-GAAP gross margin on hardware products increased to 28.2% in the fourth quarter of 2016, compared to 25.7% in
    the fourth quarter of 2015, primarily as a result of reduced sales of lower-margin legacy hardware products in the fourth
    quarter of 2016.
  • The Company’s Ctrack telematics solutions which include a mix of hardware, SaaS, software and services, generated
    non-GAAP gross margins of 64.5% in the fourth quarter of 2016, compared to 60.5% in the fourth quarter of 2015,
    continuing to drive the Company’s overall gross margin expansion.
  • Non-GAAP operating expenses decreased by 11.8% to $20.2 million in the fourth quarter of 2016, compared to
    $22.9 million in the fourth quarter of 2015, primarily due to restructuring initiatives undertaken during 2016 to improve
    the Company’s strategic focus on its most profitable business lines while de-prioritizing certain hardware-only product
    lines to non-carrier customers.
  • Adjusted EBITDA increased to $2.6 million in the fourth quarter of 2016, compared to ($0.1 million) in the fourth
    quarter of 2015, primarily due to the Company’s emphasis on growing SaaS, software and services revenue, while also
    rationalizing the costs associated with its hardware business in an effort to generate improved performance across
    multiple areas of the Company. Adjusted EBITDA contributed by Ctrack’s telematics solutions was $2.4 million in the
    fourth quarter of 2016 compared to $2.5 million in the fourth quarter of 2015.
  • Non-GAAP net loss for the fourth quarter of 2016 was ($2.8 million), or ($0.05) per share, compared to ($2.3 million),
    or ($0.04) per share, in the fourth quarter of 2015.

Other Key Metrics

Q4-2016 Q3-2016 Q4-2015
Revenue
SaaS, Software and Services Revenue $14.9 million $14.8 million $12.6 million
Non-GAAP Gross Margin 69.5% 67.3% 63.6%
Hardware Revenue $38.0 million $46.1 million $48.9 million
Non-GAAP Gross Margin 28.2% 29.5% 25.7%
IoT Revenue(1) $24.2 million $23.1 million $31.8 million
Non-GAAP Gross Margin 60.4% 58.5% 44.2%
MiFi Revenue(1) $28.7 million $37.8 million $29.7 million
Non-GAAP Gross Margin 22.7% 26.5% 21.9%
Subscribers
Ctrack Fleet Subscribers 187,000 182,000 157,850
Ctrack Non-Fleet Subscribers 245,000 229,000 200,200
Inseego North America Subscribers (f/k/a FW Subscribers) 188,000 179,000 162,170
Total Consolidated Subscribers 620,000 590,000 520,220
(1) The Company currently places primary emphasis on its mix of SaaS, software and services revenues as compared to its hardware revenues. However, since the Company has historically reported its mix of MiFi (or mobile computing) revenues as compared to its IoT (or M2M) revenues, these metrics are presented as well. Commencing with the first quarter of 2017, the Company will no longer report its IoT and MiFi revenue metrics.

Divestiture of MiFi Mobile Broadband Business

On February 3, 2017, the Company announced that in connection with the proposed sale of its MiFi mobile broadband business, with its subsidiary, Novatel Wireless, Inc. (“Novatel Wireless”), to T.C.L. Industries Holdings (H.K.) Limited and Jade Ocean Global Limited (“Purchasers”, and together with the Company and Novatel Wireless, the “Parties”), the Parties voluntarily withdrew and re-filed the Joint Voluntary Notice (“JVN”) that they had previously submitted to the Committee on Foreign Investment in the United States (“CFIUS”) under the Defense Production Act of 1950 in order to provide additional time for CFIUS to evaluate possible terms of mitigation which would allow the transaction to be approved. Any proposed mitigation terms would also need to be approved by the Parties before CFIUS would approve the transaction.

On March 8, 2017, CFIUS informed the Parties that, with the conclusion of the 30-day period for reviewing the re-filed JVN, CFIUS is undertaking an investigation of the proposed transaction, to be completed no later than April 24, 2017. In the interim, the Company will continue to work cooperatively and diligently with CFIUS and the Purchasers in an effort to obtain approval.

First Quarter Outlook

The following statements are forward-looking and actual results may differ materially. Please see the section titled “Cautionary Note Regarding Forward-Looking Statements” at the end of this news release. A more detailed description of risks related to our business is included in the reports filed by the Company with the Securities and Exchange Commission (the “SEC”). Our guidance for the first quarter of 2017 reflects current business indicators and expectations as of the date of this news release, including current exchange rates for foreign currencies.

Given the pending divestiture of the Company’s MiFi mobile broadband business, the Company will not provide overall corporate guidance for the first quarter of 2017. However, in order to provide visibility into one of the Company’s key post-divestiture businesses, the Company is providing guidance as to Ctrack’s anticipated contribution the Company’s overall results for the first quarter of 2017, as follows:

Ctrack First Quarter 2017 Outlook
Revenue  $15.5 million – $17.5 million
Non-GAAP Gross Margin  60% – 65%
Adjusted EBITDA  $2.0 million – $3.0 million

Conference Call Information

Inseego will host a conference call and live webcast for analysts and investors today at 5:00 p.m. ET. To access the conference call:

  • In the United States, call 1-844-881-0135
  • International parties can access the call at 1-412-317-6727

Inseego will offer a live audio webcast of the conference call, which will be accessible from the “Investors” section of the Company’s website at investor.inseego.com. The webcast will be archived for a period of 90 days. An audio replay of the conference call will also be available beginning one hour after the call, through March 23, 2017. To hear the replay, parties in the United States may call 1-877-344-7529 and enter access code 10097513#. International parties may call 1-412-317-0088 and enter the same code.

About Inseego Corp.

Inseego Corp. (Nasdaq: INSG) is a leading global provider of software-as-a-service (SaaS) and solutions for the Internet of Things (IoT). The Company sells its telematics solutions under the Ctrack brand, including its fleet management, asset tracking and monitoring, stolen vehicle recovery, and usage-based insurance platforms. Inseego Corp. also sells business connectivity solutions and device management services. Inseego Corp. has over 30 years of experience providing customers with secure and insightful solutions and analytics, with approximately 620,000 global subscribers, including 187,000 fleet management subscribers. The Company is headquartered in San Diego, California. www.inseego.com Twitter @inseego

Cautionary Note Regarding Forward-Looking Statements

Some of the information presented in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements often address expected future business and financial performance and often contain words such as “may,” “estimate,” “anticipate,” “believe,” “expect,” “intend,” “plan,” “project,” “will” and similar words and phrases indicating future results. The information presented in this news release related to our outlook for the first quarter ending March 31, 2017 and our future business outlook, the future demand for our products, the expected timing and impact of anticipated divestiture and restructuring activities, prospects for CFIUS approval and satisfaction of other closing conditions related to the sale of the MiFi mobile broadband business, statements made by Sue Swenson, as well as other statements that are not purely statements of historical fact, are forward-looking in nature. These forward-looking statements are made on the basis of management’s current expectations, assumptions, estimates and projections and are subject to significant risks and uncertainties that could cause actual results to differ materially from those anticipated in such forward-looking statements. We therefore cannot guarantee future results, performance or achievements. Actual results could differ materially from our expectations.

Factors that could cause actual results to differ materially from the Company’s expectations include (1) failure to obtain CFIUS approval, satisfy other closing conditions and complete the sale of the Company’s MiFi mobile broadband business in a timely manner on the terms previously approved by the Company’s stockholders, (2) the future demand for wireless broadband access to data and fleet management software and services, (3) the growth of wireless wide-area networking and fleet management software and services, (4) customer and end-user acceptance of the Company’s current product and service offerings and market demand for the Company’s anticipated new product and service offerings, (5) increased competition and pricing pressure from participants in the markets in which the Company is engaged, (6) dependence on third party manufacturers and key component suppliers worldwide, (7) the success of the Company’s corporate development activities, including divestitures of lines of business that are not essential to the Company’s strategy, (8) unexpected liabilities or expenses, (9) the Company’s ability to introduce new products and services in a timely manner, (10) litigation, regulatory and IP developments related to our products or components of our products, (11) dependence on a small number of customers for a significant portion of the Company’s revenues and (12) the Company’s plans and expectations relating to acquisitions, divestitures, strategic relationships, international expansion, software and hardware developments, personnel matters and cost containment initiatives, including restructuring activities.

These factors, as well as other factors set forth as risk factors or otherwise described in the reports filed by the Company with the SEC (available at www.sec.gov), could cause actual results to differ materially from those expressed in the Company’s forward-looking statements. The Company assumes no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future, except as otherwise required pursuant to applicable law and our on-going reporting obligations under the Securities Exchange Act of 1934, as amended.

Non-GAAP Financial Measures

Inseego Corp. has provided financial information in this news release that has not been prepared in accordance with GAAP. Non-GAAP gross profit, gross margin, operating expenses, adjusted EBITDA, net loss and net loss per share exclude restructuring charges, share-based compensation expense, amortization of the debt discount and debt issuance costs associated with the Company’s convertible notes, an impairment charge related to the Company’s abandoned Enfora hardware product line as the Company exits its Enfora standalone hardware business, a legal settlement in September 2016 related to the Company’s hardware products, and charges related to the Company’s acquisition and divestiture activities. Adjusted EBITDA also excludes interest, taxes, depreciation and amortization (unrelated to acquisitions and the convertible notes), and foreign currency transaction gains and losses.

Non-GAAP gross profit, gross margin, operating expenses, adjusted EBITDA, net loss and net loss per share are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. These non-GAAP financial measures have limitations as an analytical tool and are not intended to be used in isolation or as a substitute for gross profit, gross margin, operating expenses, net loss, net loss per share or any other performance measure determined in accordance with GAAP. We present non-GAAP gross profit, gross margin, operating expenses, adjusted EBITDA, net loss and net loss per share because we consider each to be an important supplemental measure of our performance.

Management uses these non-GAAP financial measures to make operational decisions, evaluate the Company’s performance, prepare forecasts and determine compensation. Further, management believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company’s performance when planning, forecasting and analyzing future periods. Share-based compensation expenses are expected to vary depending on the number of new grants issued to both current and new employees, the number of grants forfeited by former employees, and changes in the Company’s stock price, stock market volatility, expected option term and risk-free interest rates, all of which are difficult to estimate. In calculating non-GAAP gross profit, gross margin, operating expenses, adjusted EBITDA, net loss and net loss per share, management excludes certain non-cash and one-time items in order to facilitate comparability of the Company’s operating performance on a period-to-period basis because such expenses are not, in management’s view, related to the Company’s ongoing operating performance. Management uses this view of the Company’s operating performance for purposes of comparison with its business plan and individual operating budgets and in the allocation of resources.

The Company further believes that these non-GAAP financial measures are useful to investors in providing greater transparency to the information used by management in its operational decision-making. The Company believes that the use of non-GAAP gross profit, gross margin, operating expenses, adjusted EBITDA, net loss and net loss per share also facilitates a comparison of our underlying operating performance with that of other companies in our industry, which use similar non-GAAP financial measures to supplement their GAAP results.

In the future, the Company expects to continue to incur expenses similar to the non-GAAP adjustments described above, and exclusion of these items in the presentation of our non-GAAP financial measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring. Investors and potential investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. The limitations of relying on non-GAAP financial measures include, but are not limited to, the fact that other companies, including other companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting their usefulness as a comparative tool.

Investors and potential investors are encouraged to review the reconciliation of our non-GAAP financial measures contained within this news release with our GAAP financial results.

(C) 2017 Inseego Corp. All rights reserved. The Inseego, Ctrack, FW, Novatel Wireless and Enfora names and logos are trademarks of Inseego Corp.

Media contact:
Inseego Corp.
Anette Gaven
+1 (619) 993-3058
Anette.Gaven@inseego.com

or

Investor Relations contact:
Investor.Relations@inseego.com
http://investor.inseego.com/

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