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What changed in KORE Group Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of KORE Group Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+197 added−147 removedSource: 10-K (2025-04-30) vs 10-K (2024-04-15)

Top changes in KORE Group Holdings, Inc.'s 2024 10-K

197 paragraphs added · 147 removed · 112 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeBelow are some of our key competitors across our lines of business: • For IoT Connectivity services: telecom carriers such as T-Mobile and Vodafone; and Mobile Virtual Network Operators such as Aeris and Wireless Logic. • For IoT Solutions and Analytics: device management services providers such as Velocitor Solutions and Futura Mobility; fleet management SaaS providers such as Fleetmatics and GPS Trackit; and analytics services providers such as Galooli and Intellisite. 5 Table of Contents We compete in the IoT Connectivity services market on the basis of our number of carrier integrations, KORE One platform, ConnectivityPro service and related APIs, the eSIM technology stack/proprietary IP, and Cloud Native Evolved Packet Core “EPC”.
Biggest changeBelow are some of our key competitors across our lines of business: • For IoT Connectivity services: telecom carriers such as T-Mobile and Vodafone; and Mobile Virtual Network Operators such as Aeris and Wireless Logic. • For IoT Solutions: device management services providers such as Velocitor Solutions and Futura Mobility; and fleet management SaaS providers such as Fleetmatics and GPS Trackit.
For information regarding our oversight and management of cybersecurity and related risks, see Part I, Item 1C, “Cybersecurity”. 6 Table of Contents Available Information We file electronically with the SEC our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other information.
For information regarding our oversight and management of cybersecurity and related risks, see Part I, Item 1C, “Cybersecurity”. Available Information We file electronically with the SEC our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other information.
KORE’s Competition and Differentiators We believe that we are one of the few providers in the current market that can provide IoT enablement services, delivering CaaS, IoT Solutions, and Analytics in a comprehensive manner. However, the individual markets for our products and solutions are rapidly evolving and are highly competitive.
KORE’s Competition and Differentiators We believe that we are one of the few providers in the current market that can provide IoT enablement services, delivering Connectivity and IoT Solutions in a comprehensive manner. However, the individual markets for our products and solutions are rapidly evolving and are highly competitive.
The information contained on the websites referenced in this Annual Report on Form 10-K is not incorporated by reference into this filing. Further, the Company’s references to website URLs are intended to be inactive textual references only.
The information contained on the websites referenced in this Annual Report on Form 10-K is not incorporated by reference into this filing. Further, the Company’s references to website URLs are intended to be inactive textual references only. 6 Table of Contents
The scope of our products and services is set forth below: 4 Table of Contents Line of Business Product / Service Product / service description Primary pricing method IoT Connectivity 73% and 66% of revenue for the years ended 2023 and 2022, respectively IoT Connectivity as a Service (CaaS) • IoT Connectivity services offered through our IoT platform ‘KORE One’™ • Our connectivity solutions allow devices to seamlessly and securely connect anywhere in the world across any network connected to the Internet, which we call our multiple devices, multiple locations, multiple carriers CaaS multi-value proposition Per subscriber per month for lifetime of device (7-10 years and growing) Multi-year contracts with automatic renewals IoT Connectivity Enablement as a Service (CEaaS) Not currently provided in the United States • IoT Connectivity Management Platform as a Service (or individual KORE One engine) • Cellular Core Network as a Service (Cloud Native Evolved Packet Core “EPC”) IoT Solutions 27% and 34% of revenue for the years ended 2023 and 2022, respectively IoT Device Management Services • Outsourced platform-enabled services (e.g., logistics, configuration, device management) • Sourcing of third-party devices globally, device design and selection services Upfront fee per device or per device per month IoT Security Location Based Services (LBS) • KORE’s SecurityPro® SaaS platform • KORE’s PositionLogic® SaaS platform and LBS APIs Per subscriber per month Customers Our customers operate in a wide variety of sectors, including healthcare, fleet and vehicle management, asset management, communication services, and industrial/manufacturing.
The scope of our products and services is set forth below: 4 Table of Contents Line of Business Product / Service Product / service description Primary pricing method IoT Connectivity 79% and 73% of revenue for the years ended 2024 and 2023, respectively IoT Connectivity as a Service (CaaS) • IoT Connectivity services offered through our IoT platform ‘KORE One’® • Our connectivity solutions allow devices to seamlessly and securely connect anywhere in the world across any network connected to the Internet, which we call our multiple devices, multiple locations, multiple carriers CaaS multi-value proposition Per subscriber per month for lifetime of device (7-10 years and growing) Multi-year contracts with automatic renewals IoT Connectivity Enablement as a Service (CEaaS) CEaas is not provided in the United States, and we plan to exit CEaaS by the end of 2025 • IoT Connectivity Management Platform as a Service (or individual KORE One® engine) • Cellular Core Network as a Service (Cloud Native Evolved Packet Core “EPC”) IoT Solutions 21% and 27% of revenue for the years ended 2024 and 2023, respectively IoT Device Management Services • Outsourced platform-enabled services (e.g., logistics, configuration, device management) • Sourcing of third-party devices globally, device design and selection services Upfront fee per device or per device per month Customers Our customers operate in a wide variety of sectors, including healthcare, fleet and vehicle management, asset management, communication services, and industrial/manufacturing.
No single customer accounted for more than 10% of our total revenue for the year ended December 31, 2023. One customer, a large multinational medical device and health care company, accounted for 11% of our total revenue for the year ended December 31, 2022. Key Partners We partner with leading cellular providers to enable our Connectivity business.
No single customer accounted for more than 10% of our total revenue for the years ended December 31, 2024 and 2023 . Key Partners We partner with leading cellular providers to enable our Connectivity business.
We compete in the IoT Solutions market on the basis of our deep industry vertical knowledge and experience ( e.g. , in Connected Health through the FDA Facilities Registration, ISO 9001/13485 certification and HIPAA compliance), our breadth of solutions and analytics services, and connectivity-only customers that provide cross-selling opportunities of additional IoT managed services.
We compete in the IoT Solutions market on the basis of our deep industry vertical knowledge and experience ( e.g. , in Connected Health through the FDA Facilities Registration, ISO 9001/13485 certification and HIPAA compliance), our breadth of solutions services, and connectivity-only customers that provide cross-selling opportunities of additional IoT Managed Services. 5 Table of Contents Intellectual Property Key areas of our intellectual property are as follows: KORE One ® Platform: The KORE One® Platform provides customers with a single platform through which they may choose various tools to manage and improve their use and enjoyment of Connectivity and IOT Solutions.
Apart from the intellectual property listed above, we maintain one active patent, several trademarks and ownership of domain and website names, all of which we consider our intellectual property. Employees We have over 600 total employees, of which substantially all employees are full-time employees.
ConnectivityPro : IoT Connectivity Management Platform that provides an array of global IoT Connectivity services such as provisioning connectivity, provisioning users, rating and charging, distribution management, eSIM orchestration, diagnostics, and support. Apart from the intellectual property listed above, we maintain six active patents, several trademarks, and ownership of domain and website names, all of which we consider our intellectual property.
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Intellectual Property Key areas of our intellectual property are as follows: KORE One ™ Platform: The KORE One Platform provides customers with a single platform through which they may choose various tools to manage and improve their use and enjoyment of Connectivity and IOT Solutions.
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We compete in the IoT Connectivity services market on the basis of our number of carrier integrations, KORE One® platform, ConnectivityPro service and related APIs, and the eSIM technology stack/proprietary IP.
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IoT Network and Application Services • ConnectivityPro : IoT Connectivity Management Platform that provides an array of global IoT Connectivity services such as provisioning connectivity, provisioning users, rating and charging, distribution management, eSIM orchestration, diagnostics, and support. • SecurityPro ® : IoT security service that enables deep network traffic monitoring for IoT connections, potentially mitigating the risk of data breaches and providing packet-level visibility into IoT communications. • PositionLogic ® : LBS platform for position mapping, global fleet tracking, intelligent routing, and integrated telematics services such as in-vehicle video and cargo monitoring.
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Employees As of December 31, 2024, we had 539 full-time employees.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSecurities research analysts may establish and publish their own periodic projections for us. These projections may vary widely and may not accurately predict the results we actually achieve. Our share price may decline if our actual results do not match the projections of these securities research analysts.
Biggest changeReports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our common stock. 21 Table of Contents Securities research analysts may establish and publish their own periodic projections for us. These projections may vary widely and may not accurately predict the results we actually achieve.
We have a history of operating losses and may not be able to achieve or sustain profitability in the future. We have a history of operating losses, and we may not achieve or maintain profitability in the future. We are not certain whether or when we will be able to achieve or sustain profitability in the future.
We have a history of operating losses, and we may not achieve or maintain profitability in the future. We are not certain whether or when we will be able to achieve or sustain profitability in the future.
Natural disasters, civil unrest, public health crises and pandemics, political crises, climate change, and other catastrophic events or other events outside of our control could damage our facilities or the facilities of third parties on which we depend and could impact consumer spending.
Natural disasters, public health crises and pandemics, political crises, civil unrest, climate change, and other catastrophic events or other events outside of our control could damage our facilities or the facilities of third parties on which we depend and could impact consumer spending.
We may be unable to compete effectively; • If we are unable to protect our intellectual property and proprietary rights, our competitive position and business could be harmed; • Failure to maintain the security of our information and technology networks, including information relating to our customers and employees, could adversely affect us; • Our internal and customer-facing systems, and systems of third parties they rely upon, may be subject to cybersecurity breaches, disruptions, or delays; • We are subject to evolving privacy laws that are subject to potentially differing interpretations in the United States as well as other jurisdictions that can adversely impact our business and require that we incur substantial costs; • Our technology contains third-party open-source software components and failure to comply with the terms of the underlying open-source software licenses could restrict our ability to provide our platform; • We face risks inherent in conducting business internationally, including compliance with international as well as U.S. laws and regulations that apply to our international operations; 7 Table of Contents • We may be subject to legal proceedings and litigation, including intellectual property and privacy disputes, which are costly to defend and could materially harm our business, financial condition and results of operations; • Our management has identified internal control deficiencies that have resulted in material weaknesses in our internal control over financial reporting and disclosure controls and procedures; • Our future capital needs are uncertain, and we may need to raise additional funds in the future, but may not be able to raise such additional funds on acceptable terms or at all; and • We have a history of losses and may not be able to achieve or sustain profitability in the future.
We may be unable to compete effectively; • If we are unable to protect our intellectual property and proprietary rights, our competitive position and business could be harmed; • Failure to maintain the security of our information and technology networks, including information relating to our customers and employees, could adversely affect us; • Our internal and customer-facing systems, and systems of third parties they rely upon, may be subject to cybersecurity breaches, disruptions, or delays; • We are subject to evolving privacy laws that are subject to potentially differing interpretations in the United States as well as other jurisdictions that can adversely impact our business and require that we incur substantial costs; • Our technology contains third-party open-source software components and failure to comply with the terms of the underlying open-source software licenses could restrict our ability to provide our platform; • We face risks inherent in conducting business internationally, including compliance with international as well as U.S. laws and regulations that apply to our international operations; • We may be subject to legal proceedings and litigation, including intellectual property and privacy disputes, which are costly to defend and could materially harm our business, financial condition, and results of operations; • Our management has identified internal control deficiencies that have resulted in material weaknesses in our internal control over financial reporting and disclosure controls and procedures; • Our future capital needs are uncertain, and we may need to raise additional funds in the future, but may not be able to raise such additional funds on acceptable terms or at all; and • We have a history of losses and may not be able to achieve or sustain profitability in the future.
To the extent the 5G rollout is further delayed due to interference with existing technologies, or adoption of 5G is slowed as a result of such concerns, we may incur significant costs and asset impairments, which could adversely affect our business, financial condition, and results of operations.
To the extent the 5G rollout is delayed due to interference with existing technologies, or adoption of 5G is slowed as a result of such concerns, we may incur significant costs and asset impairments, which could adversely affect our business, financial condition, and results of operations.
Fluctuations in our results of operations may be due to a number of factors, including: • the portion of our revenue attributable to IoT Connectivity and IoT Services, including hardware and other sales; • our ability to manage the businesses we have acquired, and to integrate and manage any future acquisitions of businesses; • fluctuations in demand, including due to seasonality or broader economic factors, for our platforms and solutions; • changes in pricing by us in response to competitive pricing actions; • the ability of our hardware vendors to continue to manufacture high-quality products and to supply sufficient components and products to meet our demands; • the timing and success of introductions of new solutions, products or upgrades by us or our competitors and the entrance of new competitors; • changes in our business and pricing policies or those of our competitors; • our ability to control costs, including our operating expenses and the costs of the hardware we purchase; • changes in U.S. trade policies, including new or potential tariffs or penalties on imported products; • competition, including entry into the industry by new competitors and new offerings by existing competitors; • issues related to introductions of new or improved products such as supply chain disruptions or shortages of prior generation products or short-term decreased demand for next-generation products; • perceived or actual problems with the security, privacy, integrity, reliability, quality or compatibility of our solutions, including those related to security breaches in our systems, our subscribers’ systems, unscheduled downtime, or outages; • the amount and timing of expenditures, including those related to expanding our operations (including through acquisitions), increasing research and development, introducing new solutions or paying litigation expenses; 8 Table of Contents • the ability to effectively manage growth within existing and new markets domestically and abroad; • changes in the payment terms for our platforms and solutions; • collectability of receivables due from customers and other third parties; • the strength of regional, national and global economies; and • the impact of natural disasters such as earthquakes, hurricanes, fires, power outages, floods, epidemics, pandemics and public health crises, and other catastrophic events or man-made problems such as terrorism, civil unrest and actual or threatened armed conflict, or global or regional economic, political, and social conditions.
Fluctuations in our results of operations may be due to a number of factors, including: • the portion of our revenue attributable to IoT Connectivity and IoT Services, including hardware and other sales; • our ability to manage the businesses we have acquired, and to integrate and manage any future acquisitions of businesses; • fluctuations in demand, including due to seasonality or broader economic factors, for our platforms and solutions; • changes in pricing by us in response to competitive pricing actions; • the ability of our hardware vendors to continue to manufacture high-quality products and to supply sufficient components and products to meet our demands; • the timing and success of introductions of new solutions, products or upgrades by us or our competitors and the entrance of new competitors; • changes in our business and pricing policies or those of our competitors; • our ability to control costs, including our operating expenses and the costs of the hardware we purchase; • changes in U.S. trade policies, including new or potential tariffs or penalties on imported products; • competition, including entry into the industry by new competitors and new offerings by existing competitors; • issues related to introductions of new or improved products such as supply chain disruptions or shortages of prior generation products or short-term decreased demand for next-generation products; • perceived or actual problems with the security, privacy, integrity, reliability, quality or compatibility of our solutions, including those related to security breaches in our systems, our subscribers’ systems, unscheduled downtime, or outages; • the amount and timing of expenditures, including those related to expanding our operations (including through acquisitions), increasing research and development, introducing new solutions or paying litigation expenses; • the ability to effectively manage growth within existing and new markets domestically and abroad; • changes in the payment terms for our platforms and solutions; • collectability of receivables due from customers and other third parties; • the strength of regional, national and global economies; and • the impact of natural disasters such as earthquakes, hurricanes, fires, power outages, floods, epidemics, pandemics and public health crises, and other catastrophic events or man-made problems such as terrorism, civil unrest and actual or threatened armed conflict, or global or regional economic, political, and social conditions. 8 Table of Contents We have a history of operating losses and may not be able to achieve or sustain profitability in the future.
Any errors, defects, or security vulnerabilities in our products or any defects in, or compatibility issues with, any third-party hardware or software or customers’ network environments discovered after commercial release could result in loss of revenue or delay in revenue recognition, loss of customers, theft of trade secrets, data or intellectual property and increased service and warranty cost, any of which could adversely affect our business, financial condition, and results of operations.
Any errors, defects, or security vulnerabilities in our products or any defects in, or compatibility issues with, any third-party hardware or software or customers’ network 11 Table of Contents environments discovered after commercial release could result in loss of revenue or delay in revenue recognition, loss of customers, theft of trade secrets, data or intellectual property and increased service and warranty cost, any of which could adversely affect our business, financial condition, and results of operations.
Any disruptions or unexpected incompatibilities in our information systems and those of the third parties upon which we rely could have a significant impact on our business. An increasing portion of our revenue comes from subscription solutions and other hosted services in which we store, retrieve, communicate, and manage data that is critical to our customers’ business systems.
Any disruptions or unexpected incompatibilities in our information systems and those of the third parties upon which we rely could have a significant impact on our business. 12 Table of Contents An increasing portion of our revenue comes from subscription solutions and other hosted services in which we store, retrieve, communicate, and manage data that is critical to our customers’ business systems.
If our remediation measures are insufficient to address the material weaknesses, or if additional material weaknesses in our internal control are discovered or occur in the future, our financial statements may contain material misstatements and we could be required to restate our financial results.
If our remediation measures are insufficient to address the material weaknesses, or if additional material weaknesses in our internal control are discovered or occur in the future, our financial statements may contain material misstatements and we could be required to further restate our financial results again.
In addition, while the FCC has not sought to specifically regulate the manner in which broadband internet service providers manage network traffic, the FCC has nonetheless continued to adopt other forms of regulation over such services, which in the future may affect our operations and subject us to sanctions if we fail to comply with them.
In addition, while the FCC has not sought to specifically 17 Table of Contents regulate the manner in which broadband internet service providers manage network traffic, the FCC has nonetheless continued to adopt other forms of regulation over such services, which in the future may affect our operations and subject us to sanctions if we fail to comply with them.
Risks Related to Customers and Demand for Our Solutions Our inability to adapt to rapid technological change in our markets could impair our ability to remain competitive and adversely affect the results of operations. 12 Table of Contents All of the markets in which we operate are characterized by rapid technological change, frequent introductions of new products, services and solutions, and evolving customer demands.
Risks Related to Customers and Demand for Our Solutions Our inability to adapt to rapid technological change in our markets could impair our ability to remain competitive and adversely affect the results of operations. All of the markets in which we operate are characterized by rapid technological change, frequent introductions of new products, services and solutions, and evolving customer demands.
The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions, which are required to be computed on an arm’s-length basis pursuant to the intercompany arrangements or disagree with our determinations as to the 17 Table of Contents income and expenses attributable to specific jurisdictions.
The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions, which are required to be computed on an arm’s-length basis pursuant to the intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions.
Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, value added or similar taxes, and we could be subject to liability with respect to past or future sales, potentially adversely affecting our operating result s. Sales and use, value added, and similar tax laws and rates vary greatly by jurisdiction.
Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, value added or similar taxes, and we could be subject to liability with respect to past or future sales, potentially adversely affecting our operating result s. 18 Table of Contents Sales and use, value added, and similar tax laws and rates vary greatly by jurisdiction.
Risks Related to Our Intellectual Property 13 Table of Contents We are dependent on proprietary technology, and protection of our interests in such could result in litigation that could divert significant valuable resources. Our future success and competitive position are dependent upon our proprietary technology.
Risks Related to Our Intellectual Property We are dependent on proprietary technology, and protection of our interests in such could result in litigation that could divert significant valuable resources. Our future success and competitive position are dependent upon our proprietary technology.
Our Series A-1 preferred stock does, and additional preferred stock could, have a preference on liquidating distributions or a preference on dividend 20 Table of Contents payments or both that could limit our ability to pay a dividend or other distribution to the holders of shares of our common stock.
Our Series A-1 Preferred Stock does, and additional preferred stock could, have a preference on liquidating distributions or a preference on dividend payments or both that could limit our ability to pay a dividend or other distribution to the holders of shares of our common stock.
The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, 9 Table of Contents testing, and remediation. Testing and maintaining our internal control over financial reporting and remediating material weaknesses may divert our management’s attention from other matters that are important to our business.
The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing, and remediation. Testing and maintaining our internal control over financial reporting and remediating material weaknesses may divert our management’s attention from other matters that are important to our business.
In addition, in the event that we acquire another business or company, the success of an acquisition may depend in part on our retention and integration of key personnel from the acquired company or business.
In addition, in the event that we acquire 15 Table of Contents another business or company, the success of an acquisition may depend in part on our retention and integration of key personnel from the acquired company or business.
We may not be able to obtain additional financing on terms favorable to us, if at all, particularly during times of market volatility and general economic instability.
We may not be able to obtain additional financing on terms favorable to us, if at all, particularly during times of market volatility 19 Table of Contents and general economic instability.
Any new solutions we develop or acquire might not be introduced in a timely or cost-effective manner and might not achieve the broad market acceptance necessary to generate significant revenue.
Any new solutions we develop or acquire might not be introduced in a timely or cost-effective manner and might not achieve the broad market acceptance necessary to generate 13 Table of Contents significant revenue.
We entered into an Amended and Restated Investor Rights Agreement dated November 15, 2023 (the “Amended Investor Rights Agreement”) with these stockholders and an investor (Searchlight) who controls our Series A-1 Preferred Stock, $0.0001 par value per share (the “Series A-1 Preferred Stock”), and as of December 31, 2023 beneficially owned 13% of our outstanding common stock underlying 12,024,711 warrants exercisable for nominal consideration or on a cashless basis.
We entered into a Second Amended and Restated Investor Rights Agreement dated October 30, 2024 (the “Amended Investor Rights Agreement”) 20 Table of Contents with these stockholders and an investor (Searchlight) who controls our Series A-1 Preferred Stock, $0.0001 par value per share (the “Series A-1 Preferred Stock”), and as of December 31, 2024 beneficially owned 14% of our outstanding common stock underlying 12,024,711 warrants exercisable for nominal consideration or on a cashless basis.
Further, market reaction to an acquisition may not be as we anticipate. Any or all of the foregoing could materially harm our financial condition and operating results, and / or cause our stock price to decline substantially. As a public company, we must maintain internal control over financial reporting.
Further, market reaction to an acquisition may not be as we anticipate. Any or all of the foregoing could materially harm our financial condition and operating results, and / or cause our stock price to decline substantially.
The above list is not exhaustive, and we face additional challenges and risks. Please carefully consider all of the information in this Annual Report on Form 10-K, including the matters set forth below in this Part I, Item 1A. Risks Related to Our Business and Industry Our actual operating results may differ significantly from any guidance provided.
Please carefully consider all of the information in this Annual Report on Form 10-K, including the matters set forth below in this Part I, Item 1A. 7 Table of Contents Risks Related to Our Business and Industry Our actual operating results may differ significantly from any guidance provided.
We have identified material weaknesses in our internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act, which are disclosed in Item 9A, “Controls and Procedures”.
We have identified material weaknesses in our internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act, which are disclosed in Part II, Item 9A, “Controls and Procedures” in this Annual Report on Form 10-K.
Many of our products are subject to U.S. export law restrictions that limit the destinations and types of customers to which our products may be sold or that require an export license in connection with sales outside the United States.
Bribery Act, and other anti-corruption laws that have recently been the subject of a substantial increase in global enforcement. Many of our products are subject to U.S. export law restrictions that limit the destinations and types of customers to which our products may be sold or that require an export license in connection with sales outside the United States.
Our products compete with a variety of solutions, including other subscription-based IoT platforms and solutions. We expect competition to continue to increase and intensify, especially in the 5G market. Many of our competitors or potential competitors have significantly greater financial, technical, operational, and marketing resources than we do.
We expect competition to continue to increase and intensify, especially in the 5G market. Many of our competitors or potential competitors have significantly greater financial, technical, operational, and marketing resources than we do.
In the case of a delisting, we and our stockholders could face significant material adverse consequences including: • a limited availability of market quotations for our securities; • a determination that our common stock is a “penny stock,” which will require brokers trading in our common stock to adhere to more stringent rules, generally resulting in a reduced level of trading activity in the secondary trading market for our common stock; • a limited amount of analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future. 19 Table of Contents Risks Related to Our Corporate Governance Certain significant stockholders of ours have significant influence over us and our Board, and their actions might not be in your best interest as a stockholder.
In the case of a delisting, we and our stockholders could face significant material adverse consequences including: • a limited availability of market quotations for our securities; • a determination that our common stock is a “penny stock,” which will require brokers trading in our common stock to adhere to more stringent rules, generally resulting in a reduced level of trading activity in the secondary trading market for our common stock; • a limited amount of analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
In the absence of such cash flows and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.
In the absence of such cash flows and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. We may require additional capital to support our business, and this capital might not be available on acceptable terms, if at all.
Similarly, if one or more of the analysts write reports and downgrade our stock or publish inaccurate or unfavorable research about our business, our share price could decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, our securities price or trading volume could decline.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, our securities price or trading volume could decline.
Risks Related to Competition The market for the products and services that we offer is rapidly evolving and highly competitive. We may be unable to compete effectively. 14 Table of Contents The market for the products and services that we offer is rapidly evolving and highly competitive.
Risks Related to Competition The market for the products and services that we offer is rapidly evolving and highly competitive. We may be unable to compete effectively. The market for the products and services that we offer is rapidly evolving and highly competitive. Our products compete with a variety of solutions, including other subscription-based IoT platforms and solutions.
A cybersecurity incident in our own systems or the systems of our third-party providers may compromise the confidentiality, integrity, or availability of our own internal data, the availability of our products, and websites designed to support our customers or our customer data. 11 Table of Contents Computer hackers, ransom attacks, foreign governments, or cyber terrorists may attempt to or succeed in penetrating our network security and our website.
A cybersecurity incident in our own systems or the systems of our third-party providers may compromise the confidentiality, integrity, or availability of our own internal data, the availability of our products, and websites designed to support our customers or our customer data.
Additional consolidation of carriers could further reduce our bargaining power in negotiations with carriers, adversely affecting our business, financial condition, and results of operations. 15 Table of Contents We are dependent on a limited number of suppliers for certain critical components of our solutions; a disruption in our supply chain could adversely affect our revenue and results of operations.
We are dependent on a limited number of suppliers for certain critical components of our solutions; a disruption in our supply chain could adversely affect our revenue and results of operations.
The technology industries involving mobile data telecommunications, IoT devices, software, and services are characterized by the existence of a large number of patents, copyrights, trademarks, and trade secrets and by frequent litigation based on allegations of infringement or other violations of intellectual property rights.
An assertion by a third-party that we are infringing on its intellectual property could subject us to costly and time-consuming litigation or expensive licenses and our business could be harmed. 14 Table of Contents The technology industries involving mobile data telecommunications, IoT devices, software, and services are characterized by the existence of a large number of patents, copyrights, trademarks, and trade secrets and by frequent litigation based on allegations of infringement or other violations of intellectual property rights.
If we are unable to regain and maintain compliance with the NYSE criteria for continued listing, our common stock may be delisted. Delisting may have an adverse effect on the liquidity of our common stock and, as a result, the market price for our common stock might decline.
Delisting may have an adverse effect on the liquidity of our common stock and, as a result, the market price for our common stock might decline.
Thus, holders of shares of our common stock bear the risk of our future offerings reducing the market price of shares of our common stock and diluting their stock holdings in us. Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our common stock.
Thus, holders of shares of our common stock bear the risk of our future offerings reducing the market price of shares of our common stock and diluting their stock holdings in us.
The discovery of wide-scale cybersecurity intrusions into U.S. government and private company computer networks by alleged Russian state actors underscores the ongoing threat posed by sophisticated and foreign state-sponsored attacks. The frequency of ransomware and malware attacks has also been increasing over time.
Computer hackers, ransom attacks, foreign governments, or cyber terrorists may attempt to or succeed in penetrating our network security and our website. The discovery of wide-scale cybersecurity intrusions into U.S. government and private company computer networks by alleged Russian state actors underscores the ongoing threat posed by sophisticated and foreign state-sponsored attacks.
Our contracts with large telecommunications carriers are not long-term, and so are subject to frequent renegotiation.
Our contracts with large telecommunications carriers are not long-term, and so are subject to frequent renegotiation. Additional consolidation of carriers could further reduce our bargaining power in negotiations with carriers, adversely affecting our business, financial condition, and results of operations.
We may require additional capital to support our business, and this capital might not be available on acceptable terms, if at all. 18 Table of Contents We intend to continue to make investments to support our business and may require additional funds.
We intend to continue to make investments to support our business and may require additional funds.
Certain significant stockholders of ours together own approximately 38% of our outstanding common stock as of December 31, 2023.
Risks Related to Our Corporate Governance Certain significant stockholders of ours have significant influence over us and our Board, and their actions might not be in your best interest as a stockholder. Certain significant stockholders of ours together own approximately 37% of our outstanding common stock as of December 31, 2024.
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We have identified material weaknesses in our internal control over financial reporting.
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The above list is not exhaustive, and we face additional challenges and risks.
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In January 2022, several major U.S. wireless carriers had to temporarily delay the deployment of new wireless facilities that were meant to facilitate the evolution of their wireless networks to 5G technology in response to concerns of the aviation industry that those 5G facilities could interfere with equipment used for aviation and could impede aviation safety.
Added
We face risks related to the restatement of our previously issued unaudited condensed consolidated financial statements and financial information for the interim financial period for the second quarter of 2024, which may adversely impact our business.
Removed
Although the Federal Communications Commission, Federal Aviation Administration, the wireless telecommunications industry, and the aviation industry are working on solutions to 10 Table of Contents alleviate those concerns, the timing for resolution is unclear, and such uncertainty could further impact the amount of and timing of 5G network investment.
Added
As described in Item 4.02 of our Current Report on Form 8-K filed with the SEC on November 12, 2024, during the preparation of our condensed consolidated financial statements for the quarter ended September 30, 2024, we concluded that the Company’s previously issued unaudited condensed consolidated financial statements contained within the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, which was originally filed with the SEC on August 14, 2024, should no longer be relied upon, and that such financial statements should be restated.
Removed
An assertion by a third-party that we are infringing on its intellectual property could subject us to costly and time-consuming litigation or expensive licenses and our business could be harmed.
Added
It was concluded that the Company’s goodwill impairment expense was materially misstated in the second quarter of 2024.
Removed
Bribery Act, and other anti-corruption laws that have recently been the subject of a substantial increase in 16 Table of Contents global enforcement.
Added
The conclusion was based on management’s determination that it miscalculated its goodwill impairment for the quarter ending June 30, 2024 by deducting debt issuance costs from the fair value of the debt which was then used to determine the value of the Company’s goodwill impairment at that time.
Removed
On September 5, 2023 we were notified by the NYSE that, as of August 30, 2023, we had failed to meet the NYSE’s minimum average share price requirement. We have submitted a plan to the NYSE regarding regaining our compliance with this requirement.
Added
The debt issuance costs should not have been deducted from the fair value of the associated debt. As a result of the restatement, we are subject to a number of additional risks and uncertainties which may affect investor confidence in the accuracy of our financial disclosures and may raise reputational issues for our business.
Added
We expect to continue to face many risks and challenges related to the restatement, including the risk that the processes undertaken to effect the restatement may not have been adequate to identify and correct all errors in our historical financial statements and, as a result, we may discover additional errors and our financial statements remain subject to the risk of future restatement.
Added
We are also at risk of potential litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, or other claims arising from the restatement. As of the date of this Annual Report on Form 10-K, we are not aware of any such disputes arising out of the restatement.
Added
If one or more of the foregoing risks or challenges persist, our business, operations and financial condition are likely to be materially and adversely affected. 9 Table of Contents As a public company, we must maintain internal control over financial reporting. We have identified material weaknesses in our internal control over financial reporting.
Added
The ultimate effect of the 1-for-5 reverse stock split on the market price of our common stock cannot be predicted with any certainty and shares of our common stock have likely experienced decreased liquidity as a result of such reverse stock split. On July 1, 2024, the Company effected a 1-for-5 reverse stock split of its common stock.
Added
The liquidity of our common stock may be adversely affected given the reduced number of shares of our common stock that are now outstanding following the reverse stock split.
Added
As a result of the lower number of shares outstanding following the reverse stock split, the market for our common stock may also become more volatile, which may lead to reduced trading and a smaller number of market makers for our common stock. Our share price may not attract new investors, including institutional investors.
Added
In addition, the market price of our common stock may not satisfy the investing requirements of those investors. The trading liquidity of our common stock may not improve. All the foregoing risks may result in a material adverse effect to our stockholders.
Added
Our liabilities exceed our assets, which may have a material adverse effect on our ability to raise further equity capital, refinance our debt on favorable terms or at all, or issue new debt. 10 Table of Contents The consolidated financial statements included in this Annual Report on Form 10-K reflect that the book value of our liabilities exceeds the book value of our assets.
Added
Further, the fair value of our debt reflects a discount to its par (or principal) value. We may therefore face constraints on our ability to raise further equity capital, refinance our debt on favorable terms or at all, or issue new debt, all of which could have a material adverse effect on our business.
Added
The frequency of ransomware and malware attacks has also been increasing over time.
Added
Natural disasters, public health crises and pandemics, political crises, civil unrest, climate change, and other catastrophic events or other events outside of our control could impair the abilities of our employees to function effectively in their roles, given our mostly-remote workforce. Our workforce is mostly remote and not office-based.
Added
If any member of our remote workforce is affected by a natural disaster (such as an earthquake, tsunami, wildfire, power shortage, flood, or hurricane), public health crisis (such as a pandemic and epidemic), political crisis (such as terrorism, war, political instability or other conflict), civil unrest (whether as an isolated incident or connected to an event such as a natural disaster or political crisis), climate change, or other catastrophic events outside our control, including a cyberattack, our employees’ ability to 16 Table of Contents work effectively could be severely disrupted, and our ability to conduct normal business operations and our revenue, financial condition, and operating results could be adversely affected.
Added
Our operations at our properties are subject, or may become subject, to environmental, health and safety regulations, which could impose additional costs and compliance requirements, and we may face claims and liability for breaches, or alleged breaches, of such regulations and other applicable laws.
Added
We could be liable for any environmental contamination at, under or released from our or our predecessors’ currently or formerly owned or operated properties. Certain environmental laws impose joint and several strict liability for releases of hazardous substances at such properties, without regard to fault or the legality of the original conduct.
Added
Costs associated with liability for removal or remediation of contamination or damage to natural resources could be substantial and liability under these laws may attach without regard to whether the responsible party knew of, or was responsible for, the presence of the contaminants.
Added
Accordingly, we may be held responsible for more than our share of the contamination or other damages, up to and including the entire amount of such damages.
Added
In addition to potentially significant investigation and remediation costs, such matters can give rise to claims from governmental authorities and other third parties, including for orders, inspections, fines or penalties, natural resource damages, personal injury, property damage, toxic torts and other damages.
Added
Our costs, liabilities and obligations relating to environmental matters could have a material adverse effect on our business, financial position, and results of operations.
Added
On September 12, 2024, we were notified by the NYSE that we had failed to meet the NYSE’s continued listing standards set forth in Section 802.01B of the NYSE Listed Company Manual because our average global market capitalization over a consecutive 30 trading-day period was less than $50 million, and, at the same time, our stockholders’ equity was less than $50 million.
Added
We have submitted a plan to the NYSE regarding regaining our compliance with this requirement. If we are unable to regain and maintain compliance with the NYSE criteria for continued listing, our common stock may be delisted.
Added
Our share price may decline if our actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts write reports and downgrade our stock or publish inaccurate or unfavorable research about our business, our share price could decline.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur vendor risk management program establishes governance, processes and tools for managing various risks related to third-party service providers, including information security and supplier-related risks. As a condition of working with KORE, suppliers who access sensitive business or customer information are expected to meet certain information security requirements.
Biggest changeVendor risk management program – We have implemented processes to oversee, identify and manage risks from cybersecurity threats associated with our use of third-party service providers. Our vendor risk management program establishes governance, processes and tools for managing various risks related to third-party service providers, including information security and supplier-related risks.
Our Board is responsible for overseeing our enterprise risk management activities in general, and each of our Board committees assists the Board in its role of risk oversight. The full Board receives an update on the Company’s risk management process and the risk trends related to cybersecurity at least annually from the CTO.
Our Board is responsible for overseeing our enterprise risk management activities in general, and each of our Board committees assists the Board in its role of risk oversight. The full Board receives an update on the Company’s risk management process and the risk trends related to cybersecurity at least annually from the COO.
As of December 31, 2023, we have not identified risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
As of December 31, 2024, we have not identified risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
The SDGS manages a team of cybersecurity professionals with broad experience and expertise, including in cybersecurity threat assessments and detection, mitigation technologies, cybersecurity training, incident response, cyber forensics, insider threats and regulatory compliance.
The VPITSC manages a team of cybersecurity professionals with broad experience and expertise, including in cybersecurity threat assessments and detection, mitigation technologies, cybersecurity training, incident response, cyber forensics, insider threats and regulatory compliance.
ITEM 1C. CYBERSECURITY We recognize the critical importance of maintaining the safety and security of our systems and data and have a process for overseeing and managing cybersecurity and related risks, which is supported by both management and our Board. Our cybersecurity functions are led by our Chief Technology Officer (“CTO”), who reports to our Chief Executive Officer.
ITEM 1C. CYBERSECURITY We recognize the critical importance of maintaining the safety and security of our systems and data and have a program for overseeing and managing cybersecurity and related risks, which is supported by both management and our Board. Our cybersecurity functions are led by our Chief Operating Officer (“COO”), who reports to our Chief Executive Officer.
Included in this evaluation is a report on our cybersecurity posture and related matters that is presented to the leaders of the relevant business teams, who are responsible for prioritizing and addressing the risks identified. Internal training and awareness – We provide training to our employees to help identify, avoid, and mitigate the risk from cybersecurity threats.
Included in this evaluation is a report on our cybersecurity posture and related matters that is presented to the leaders of the relevant business teams, who are responsible for prioritizing and addressing the risks identified.
Our employees are required to complete required cybersecurity awareness training upon hiring and also participate annually in required cybersecurity awareness training, unless on a leave of absence. Vendor risk management program – We have implemented processes to identify and manage risks from cybersecurity threats associated with our use of third-party service providers.
Our employees are required to complete mandatory cybersecurity awareness training upon hiring and also participate annually in required cybersecurity awareness training, unless on a leave of absence.
Our approach to cybersecurity risk management includes the following key elements: Internal Audit Program – We operate an internal audit program. On an annual basis, our internal audit team conducts an overall business risk assessment, which includes an evaluation of cybersecurity risks.
Communication protocols have been established to notify relevant stakeholders, including regulators and customers, as required. Our incident response team conducts regular simulations and exercises to ensure readiness and effectiveness. Internal Audit Program – We operate an internal audit program. On an annual basis, our internal audit team conducts an overall business risk assessment, which includes an evaluation of cybersecurity risks.
Our Senior Director - Global Security (“SDGS”), under the direction of the CTO, is responsible for overseeing our cybersecurity management program and the protection and defense of our networks and systems.
Our Vice President - IT Security & Compliance (“VPITSC”), under the direction of the COO, is responsible for overseeing our cybersecurity management program and the protection and defense of our networks and systems. The VPITSC’s relevant experience in cybersecurity includes over twelve years of extensive experience at the Company in cybersecurity, in various progressive roles.
Removed
The audit committee of the Board (the “Audit Committee”) specifically assists the Board in its oversight of risks related to cybersecurity. To help ensure effective oversight, the Audit Committee receives an update on cybersecurity from the CTO on an as-needed basis.
Added
Our COO’s relevant experience in cybersecurity includes previous experience, such as having previously served as Chief Executive Officer of a company that provides geospatial intelligence software and as Chief Technology Officer at a global cloud-based enterprise software company.
Added
Our cybersecurity strategy includes but is not limited to the following key elements: Risk Assessment and Management – We comply with the international standard ISO 27001, an Information Security Management System (ISMS), which helps safeguard the confidentiality, integrity, and availability of information through a structured risk management process. This approach assures stakeholders that cybersecurity risks are effectively managed.
Added
To support this commitment, we conduct regular risk assessments to identify, evaluate, and mitigate potential threats. Internal training and awareness – We provide training to our employees to help identify, avoid, and mitigate the risk from cybersecurity threats.
Added
Technical Security Controls – We employ layered security controls, including Managed Endpoint Detection and Response, firewalls, intrusion detection systems, encryption technologies, and a Security Operations Center that is operated 24 hours a day, seven days a week.
Added
As a condition of working with KORE, suppliers who access sensitive business or customer information are expected to meet certain information security requirements. Incident Response – We have put in place a formal incident response plan to address and mitigate potential security breaches in a timely and effective manner.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAlthough the outcome of these and other claims cannot be predicted with certainty, management does not believe that the ultimate resolution of these matters will have a material adverse effect on our financial condition or results of operations. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 22 Table of Contents PART II
Biggest changeAlthough the outcome of these and other claims cannot be predicted with certainty, management does not believe that the ultimate resolution of these matters will have a material adverse effect on our financial condition or results of operations. 23 Table of Contents ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 24 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following table sets forth information with respect to our repurchases of common stock in each month of the fourth quarter of 2023: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program October 1, 2023 - October 31, 2023 — $ — — $ — November 1, 2023 - November 30, 2023 — $ — — $ — December 1, 2023 - December 31, 2023 5,001,255 $ 0.57 — $ — (1) As previously disclosed, on December 13, 2023, we purchased 5 million shares of our common stock from Twilio, Inc.
Biggest changeIssuer Purchases of Equity Securities The following table sets forth information with respect to our repurchases of common stock in each month of the fourth quarter of 2024: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program October 1, 2024 - October 31, 2024 10,141 $ 2.60 — $ — November 1, 2024 - November 30, 2024 — $ — — $ — December 1, 2024 - December 31, 2024 — $ — — $ — (1) On October 1, 2024, 10,141 shares of common stock were surrendered by employees vesting in RSUs, in order to pay for applicable tax withholding.
The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in “street name” accounts by brokers and other nominees. Dividends We have not paid any cash dividends on our common stock to date.
The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in “street name” accounts by brokers and other nominees.
Shares so surrendered by participants in the Incentive Plan are repurchased pursuant to the terms of the Incentive Plan and applicable award agreement and not pursuant to publicly announced share repurchase programs. These shares of common stock have been cancelled. ITEM 6. [RESERVED] 23 Table of Contents
Under the Incentive Plan, participants may surrender shares as payment of applicable tax withholding on the vesting of equity awards. Shares so surrendered by participants in the Incentive Plan are repurchased pursuant to the terms of the Incentive Plan and applicable award agreement and not pursuant to publicly announced share repurchase programs. These shares of common stock have been cancelled.
Our ability to declare dividends is limited by the terms of financing or other agreements entered into by us or our subsidiaries from time to time.
Dividends We have not paid any cash dividends on our common stock to date and we have no current plans to pay cash dividends to holders of our common stock. Our ability to declare dividends is limited by the terms of financing or other agreements entered into by us or our subsidiaries from time to time.
Holders of Record As of April 9, 2024, there were approximately 83.2 million shares of our common stock outstanding with 49 holders of record of our common stock.
Holders of Record As of April 28, 2025, there were approximately 17,160,061 shares of our common stock outstanding with 40 holders of record of our common stock.
Removed
(“Twilio”) at the price of $0.5713 per share, which was equal to the volume weighted average purchase price per share of the common stock on the NYSE for the 10 consecutive trading days ending on December 8, 2023. This purchase was not made pursuant to a publicly announced share repurchase program.
Removed
These shares of common stock have been retained by us as treasury stock. On December 13, 2023, 1,255 shares of common stock were surrendered by an employee vesting in RSUs, in order to pay for applicable tax withholding. Under the Incentive Plan, participants may surrender shares as payment of applicable tax withholding on the vesting of equity awards.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

51 edited+51 added−24 removed63 unchanged
Biggest changeThe table below sets forth our cost of revenue, exclusive of depreciation and amortization, for the years ended December 31, 2023 and 2022, disaggregated by “cost of IoT Connectivity” and “cost of IoT Solutions”: For the Year Ended Year-over-Year Increase / (Decrease) ($ in thousands) December 31, 2023 December 31, 2022 $ % Cost of IoT Connectivity $ 77,263 $ 63,051 $ 14,212 23 % Cost of IoT Solutions 51,300 66,103 (14,803) (22) % Total cost of revenue $ 128,563 $ 129,154 $ (591) — % The table below sets forth our revenue less our cost of revenue, excluding depreciation and amortization, as a percentage of revenue, based upon the categories of revenue and associated costs disaggregated by “cost of IoT Connectivity” and “cost of IoT Solutions”: For the Year Ended December 31, 2023 December 31, 2022 Cost of IoT Connectivity 61.8 % 64.2 % Cost of IoT Solutions 30.9 % 28.5 % Overall blended rate 53.5 % 51.9 % The cost of IoT Connectivity increased by $14.2 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to additional carrier costs driven by the acquisition of Twilio’s IoT business along with growth in connections across multiple carriers. 26 Table of Contents During the year ended December 31, 2023, the cost of IoT Connectivity as a percentage decreased 2.4% compared to December 31, 2022.
Biggest changeThe table below sets forth our cost of revenue, exclusive of depreciation and amortization, for the years ended December 31, 2024 and 2023, disaggregated by “cost of IoT Connectivity” and “cost of IoT Solutions”: For the Year Ended December 31, Year-over-Year Increase / (Decrease) ($ in thousands) 2024 2023 $ % Cost of IoT Connectivity $ 89,597 $ 77,263 $ 12,334 16 % Cost of IoT Solutions 36,564 51,300 (14,736) (29) % Total cost of revenue $ 126,161 $ 128,563 $ (2,402) (2) % The cost of IoT Connectivity increased by approximately $12.3 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
For example, to calculate our DBNER for the trailing 12 months ended December 31, 2023, we divide (i) revenue, for the trailing 12 months ended December 31, 2023, from go-forward customers that started generating revenue on or before December 31, 2022, by (ii) revenue, for the trailing 12 months ended December 31, 2022, from the same cohort of customers.
For example, to calculate our DBNER for the trailing 12 months ended December 31, 2024, we divide (i) revenue, for the trailing 12 months ended December 31, 2024, from go-forward customers that started generating revenue on or before December 31, 2023 , by (ii) revenue, for the trailing 12 months ended December 31, 2023 , from the same cohort of customers.
Cost of revenue, exclusive of depreciation and amortization The cost of revenue associated with IoT Connectivity include carrier costs, network operations, technology licenses, and SIMs. The cost of revenue associated with IoT Solutions include the cost of devices, shipping costs, warehouse lease and related facilities expenses, and personnel cost. The total cost of revenue excludes depreciation and amortization.
Cost of revenue, exclusive of depreciation and amortization The cost of revenue associated with IoT Connectivity includes carrier costs, network operations, technology licenses, and SIMs. The cost of revenue associated with IoT Solutions includes the cost of devices, shipping costs, warehouse lease and related facilities expenses, and personnel cost. The total cost of revenue excludes depreciation and amortization.
Although management often engages third party experts to perform such calculations, management is responsible for the ultimate conclusions reached in any valuation report. 32 Table of Contents Goodwill is not amortized, but is tested for impairment both on a routine annual basis and also when an indicator of impairment is deemed to have occurred.
Although management often engages third party experts to perform such calculations, management is responsible for the ultimate conclusions reached in any valuation report. Goodwill is not amortized, but is tested for impairment both on a routine annual basis and also when an indicator of impairment is deemed to have occurred.
During both the third quarter of 2023 and the fourth quarter of 2022, we experienced (among other qualitative indicators described in Part II, Item 8, Notes to the Consolidated Financial Statements, Note 8 — Goodwill and Other Intangible Assets ) declines in our stock price and market capitalization that, in management’s opinion, represented at each time, a possible indicator of impairment as the observed declines were both significant and sustained, and thus, impairment testing was deemed to be indicated.
During both the second quarter of 2024 and the third quarter of 2023, we experienced (among other qualitative indicators described in Part II, Item 8, Notes to the Consolidated Financial Statements, Note 8 — Goodwill and Other Intangible Assets ) declines in our stock price and market capitalization that, in management’s opinion, represented at each time, a possible indicator of impairment as the observed declines were both significant and sustained, and thus, impairment testing was deemed to be indicated.
Liability for Indirect Taxes Indirect taxes to which we may be subject include sales tax, telecommunications use tax, federal universal service fund fees, and other similar levies imposed by various federal, state, and local governmental authorities on the sale of certain defined products and services.
Liability for Indirect Taxes 39 Table of Contents Indirect taxes to which we may be subject include sales tax, telecommunications use tax, federal universal service fund fees, and other similar levies imposed by various federal, state, and local governmental authorities on the sale of certain defined products and services.
There can be no assurance that goodwill will not be further impaired in the future, and there can be no assurance that management will identify potential qualitative, off-cycle indicators of further goodwill impairment on a timely basis, as these matters are subjective in nature.
There can be no assurance that goodwill will not be further impaired in the future, and there can be no 38 Table of Contents assurance that management will identify potential qualitative, off-cycle indicators of further goodwill impairment on a timely basis, as these matters are subjective in nature.
This requires us to make assumptions about future taxable income, tax rates, and the timing of reversals of temporary differences. 33 Table of Contents • Uncertain tax positions : We may be subject to tax audits which could result in adjustments to our estimations of tax liabilities.
This requires us to make assumptions about future taxable income, tax rates, and the timing of reversals of temporary differences. • Uncertain tax positions : We may be subject to tax audits which could result in adjustments to our estimations of tax liabilities.
Mandatorily Redeemable Preferred Stock The Company has authorized 35,000,000 shares of preferred stock, and has issued to a single investor (Searchlight) who is currently the sole holder of 152,857 shares of Series A-1 preferred stock, which is mandatorily redeemable for cash payable to the holder on November 15, 2033. The number of issued and outstanding shares are currently the same.
Mandatorily Redeemable Preferred Stock The Company has authorized 35,000,000 shares of preferred stock, and has issued to a single investor (Searchlight) who is currently the sole holder of 152,857 shares of Series A-1 preferred stock, which is mandatorily redeemable for cash payable to the holder on November 15, 2033.
The original amount borrowed was approximately $3.6 million at a fixed rate of 4.6% per annum, amortized over twenty months. The premium finance agreement requires 20 fixed monthly principal and interest payments of approximately $0.2 million per month from August 15, 2022 to March 15, 2024.
The original amount borrowed was approximately $3.6 million at a fixed rate of 4.6% per annum, amortized over twenty months. The premium finance agreement requires 20 fixed monthly principal and interest payments of approximately $0.2 million per month from August 15, 2022 to March 15, 2024. The borrowing was fully repaid as scheduled.
TCV is used by management as a measure of the revenue opportunity of KORE’s sales funnel, which we define as opportunities our sales team is actively pursuing, potentially leading to future revenue. As of December 31, 2023, our sales funnel included over 1,600 opportunities with an estimated potential TCV of over $545 million.
TCV is used by management as a measure of the revenue opportunity of KORE’s sales funnel, which we define as opportunities our sales team is actively pursuing, potentially leading to future revenue. As of December 31, 2024, our sales funnel included over 1,062 opportunities with an estimated potential TCV of over $312 million.
Non-GAAP Financial Measures In conjunction with net income (loss) calculated in accordance with GAAP, we also use EBITDA and Adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes.
Non-GAAP Financial Measures In conjunction with net income (loss) calculated in accordance with GAAP, we also use EBITDA and Adjusted EBITDA, free cash flow, and Non-GAAP Profit and Non-GAAP Margin to evaluate our ongoing operations and for internal planning and forecasting purposes.
Revenue increases from new customer wins, and a decline in revenue from non-go-forward customers are also important factors in assessing KORE’s revenue growth, but these factors are independent of DBNER. KORE’s DBNER was 96% for the twelve months ended December 31, 2023, as compared to 92% for the twelve months ended December 31, 2022.
Revenue increases from new 33 Table of Contents customer wins, and a decline in revenue from non-go-forward customers are also important factors in assessing KORE’s revenue growth, but these factors are independent of DBNER. KORE’s DBNER was 95% for the twelve months ended December 31, 2024, as compared to 96% for the twelve months ended December 31, 2023.
Capitalized internal use software, net of accumulated amortization, was $35.8 million and $29.9 million as of December 31, 2023 and 2022, respectively, and is included in intangible assets on our consolidated balance sheets.
Capitalized internal use software, net of accumulated amortization, was $32.7 million and $35.8 million as of December 31, 2024 and 2023, respectively, and is included in intangible assets on our consolidated balance sheets.
Fees charged for device management services are generally billed on the basis of a fee per deployed IoT device, which depends on the scope of the underlying services and the IoT device being deployed. Location-based software services and IoT security software services are charged monthly on a per-subscriber basis.
Fees charged for device management services are generally billed on the basis of a fee per deployed IoT device, which depends on the scope of the underlying services and the IoT device being deployed.
Summary and Description of Financing Arrangements The table below sets forth a summary of the Company’s outstanding long-term debt as of December 31, 2023 and 2022: December 31, (in thousands) 2023 2022 Term Loan - Whitehorse $ 185,000 N/A Term Loan – UBS N/A 302,654 Backstop Notes 120,000 120,000 Other borrowings 561 2,754 Total $ 305,561 $ 425,408 Less: current portion of long-term debt (2,411) (5,345) Less: debt issuance costs, net of accumulated amortization of $0.8 million and $8.5 million, respectively (2,911) (6,153) Less: original issue discount (4,130) N/A Total Long-term debt and other borrowings, net $ 296,109 $ 413,910 Term Loan and Revolving Credit Facility — WhiteHorse Capital Management, LLC (“WhiteHorse”) On November 9, 2023, the Company only with respect to certain limited sections thereof, and certain subsidiaries of the Company entered into a credit agreement with WhiteHorse that consisted of a senior secured term loan of $185.0 million (“Term Loan”) as well as a senior secured revolving credit facility of $25.0 million (the “Revolving Credit Facility” and, together with the Term Loan, the “Credit Facilities”).
Summary and Description of Financing Arrangements The table below sets forth a summary of the Company’s outstanding long-term debt as of December 31, 2024 and December 31, 2023: December 31, (in thousands) 2024 2023 Term Loan - WhiteHorse $ 183,150 $ 185,000 Backstop Notes 120,000 120,000 Other borrowings — 561 Total $ 303,150 $ 305,561 Less: current portion of long-term debt (1,850) (2,411) Less: debt issuance costs, net of accumulated amortization of $1.4 million and $0.8 million, respectively (2,349) (2,911) Less: original issue discount on Term Loan - WhiteHorse (3,290) (4,130) Total Long-term debt and other borrowings, net $ 295,661 $ 296,109 Term Loan and Revolving Credit Facility — WhiteHorse Capital Management, LLC (“WhiteHorse”) On November 9, 2023, the Company only with respect to certain limited sections thereof, and certain subsidiaries of the Company entered into a credit agreement with WhiteHorse that consisted of a senior secured term loan of $185.0 million (“Term Loan”) as well as a senior secured revolving credit facility of $25.0 million (the “Revolving Credit Facility” and, together with the Term Loan, the “Credit Facilities”).
The Term SOFR rate is subject to a “floor” of 1.0%. The applicable margins for Term SOFR rate and base rate borrowings are each subject to a reduction to 6.25% and 6.00% if the Company maintains a first lien net leverage ratio of less than 2.25:1.00 and greater than or equal to 1.75:1.00 and less than 1.75:1.00, respectively.
The applicable margins for Term SOFR rate and base rate borrowings are each subject to a reduction as set forth in the credit agreement if the Company maintains a first lien net leverage ratio of less than 2.25:1.00 and greater than or equal to 1.75:1.00 and less than 1.75:1.00, respectively.
The cost of IoT Solutions decreased by $14.8 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to decreased costs associated with lower IoT Solutions revenue from existing customers.
The cost of IoT Solutions decreased by approximately $14.7 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The decrease in the cost of IoT Solutions was primarily due to decreased costs associated with lower IoT Solutions revenue from existing customers.
Selling, general, and administrative expenses The following table sets forth the Company’s selling, general, and administrative expenses incurred during the years ended December 31, 2023 and 2022: For the Year Ended Year-over-Year Increase / (Decrease) ($ in thousands) December 31, 2023 December 31, 2022 $ % Selling, general, and administrative expenses $ 129,816 $ 109,492 $ 20,324 19 % Selling, general, and administrative (“SG&A”) expenses relate primarily to expenses for general management, sales and marketing, finance, audit, legal fees, and other general operating expenses.
Selling, general, and administrative expenses The following table sets forth the Company’s selling, general, and administrative expenses incurred for the years ended December 31, 2024 and 2023: For the Year Ended December 31, Year-over-Year Increase / (Decrease) ($ in thousands) 2024 2023 $ % Selling, general, and administrative expenses $ 140,016 $ 129,200 $ 10,816 8 % Selling, general, and administrative (“SG&A”) expenses relate primarily to expenses for general management, sales and marketing, finance, audit, legal fees, and other general operating expenses.
The Backstop Notes are exchangeable into common stock of the Company at $12.50 per share (the “Base Exchange Rate”) at any time at the option of the lender. At the Base Exchange Rate, the Notes are exchangeable for approximately 9.6 million shares of the Company’s common stock.
The Backstop Notes are exchangeable into common stock of the Company at $62.50 per share (the “Base Exchange Rate”) at any time at the option of the lender. At the Base Exchange Rate, the Notes are exchangeable for a maximum of approximately 1.9 million shares of the Company’s common stock, but limited to 9.9% of common shares outstanding.
The Series A-1 preferred stock has a liquidation preference of $1,000 per share. No amounts are redeemable during the five years subsequent to December 31, 2023.
The number of issued and outstanding shares of Series A-1 preferred stock are currently the same. The Series A-1 preferred stock has a liquidation preference of $1,000 per share. No amounts are redeemable during the five years subsequent to December 31, 2024.
IoT Connectivity also includes charges for each SIM sold to a customer. Revenue from IoT Solutions is derived from IoT device management services, location-based software services, and IoT security software services. Fees charged for device management services include the cost of the underlying IoT device and the cost of deploying and managing such devices.
Revenue from IoT Solutions is derived from IoT device management services, location-based software services, and IoT security software services. Fees charged for device management services include the cost of the underlying IoT device and the cost of deploying and managing such devices.
The table below sets forth our Total Number of Connections at Period End and Average Connections Count as of and for the years ended December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Total Number of Connections at Period End 18.5 million 15.0 million Average Connections Count for the Period 17.3 million 15.2 million Period-end and average connections as of December 31, 2023, include an increase of approximately 3.3 million and 1.8 million, respectively, related to the acquisition of Twilio’s IoT business.
The table below sets forth our Total Number of Connections as of December 31, 2024 and December 31, 2023: December 31, 2024 December 31, 2023 Total Number of Connections at Period End 19.7 million 18.5 million The table below sets forth our Average Connections Count for the years ended December 31, 2024 and 2023: For the Year Ended December 31, 2024 2023 Average Connections Count for the Period 18.7 million 17.3 million Total Number of Connections as of December 31, 2024 and December 31, 2023, presented above included an approximate increase of 3.9 million and 3.3 million, respectively, related to the acquisition of Twilio’s IoT business.
In the third quarter of 2023, we recorded a goodwill impairment loss of $78.3 million, and in the fourth quarter of 2022 we recorded a goodwill impairment loss of $58.1 million.
In the second quarter of 2024, we recorded a goodwill impairment loss of $65.9 million, and in the third quarter of 2023 we recorded a goodwill impairment loss of $78.3 million.
Additional revenue growth was driven by SIM transfers from key strategic customers, organic growth in existing customers as a result of net new activations, and increased connectivity consumption. These increases were partially offset by customer churn.
The increase in IoT Connectivity revenue was primarily driven by the acquisition of Twilio’s IoT business completed in 2023. Additional revenue growth was driven by SIM transfers from key strategic customers, organic growth in existing customers as a result of net new activations, and increased connectivity consumption.
Such adjustments include goodwill impairment charges, changes in the fair value of certain of our warrants required by GAAP to be accounted for at fair value, gains or losses on debt extinguishment, “transformation expenses” as defined below, acquisition costs, integration-related restructuring costs, stock-based compensation, and foreign currency gains and losses. 27 Table of Contents The following table sets forth a reconciliation of net loss to EBITDA and Adjusted EBITDA for the years ended December 31, 2023 and 2022: For the Year Ended December 31, (in thousands) 2023 2022 Net loss $ (167,042) $ (106,200) Income tax benefit (4,158) (10,417) Interest expense, net 42,680 31,371 Depreciation and amortization 58,363 54,499 EBITDA $ (70,157) $ (30,747) Goodwill impairment loss 78,257 58,074 Loss on debt extinguishment 2,584 — Change in fair value of warrant liability 6,436 (254) Transformation expenses 6,624 8,302 Acquisition costs 1,776 1,400 Integration-related restructuring costs 16,532 14,814 Stock-based compensation 11,251 10,296 Foreign currency (gain) loss (182) 4 Other (1) 2,429 946 Adjusted EBITDA $ 55,550 $ 62,835 (1) “Other” adjustments are comprised of adjustments for certain indirect or non-income based taxes.
The following table sets forth a reconciliation of net loss to EBITDA and Adjusted EBITDA for the years ended December 31, 2024 and 2023: For the Year Ended December 31, (in thousands) 2024 2023 Net loss $ (146,076) $ (167,042) Income tax benefit (5,937) (4,158) Interest expense, net 51,396 42,680 Depreciation and amortization 56,218 58,363 EBITDA (44,399) (70,157) Goodwill impairment loss 65,861 78,257 Loss on debt extinguishment — 2,584 Change in fair value of warrant liability (4,040) 6,436 Transformation expenses — 6,624 Acquisition costs — 1,776 Integration-related restructuring costs 19,159 16,532 Stock-based compensation 8,481 11,251 Foreign currency (gain) loss 5,207 (182) Other (1) 2,869 2,429 Adjusted EBITDA $ 53,138 $ 55,550 (1) “Other” adjustments are comprised of adjustments for certain indirect or non-income based taxes.
The Term Loan agreement restricts cash dividends and other distributions from the Company’s subsidiaries to the Company and also restricts the Company’s ability to pay cash dividends to its shareholders, and contains customary financial covenants related to maximum total debt to Adjusted EBITDA ratio and a first lien debt to Adjusted EBITDA ratio.
The Term Loan agreement restricts cash dividends and other distributions from the Company’s subsidiaries to the Company and also restricts the Company’s ability to pay cash dividends to its shareholders.
Total Number of Connections and Average Connections Total Number of Connections constitutes the total of all our IoT Connectivity services connections, including both CaaS and CEaaS (explained below) but excluding certain connections where mobile carriers license our subscription management platform from us.
The operational metrics identified by management as key operational metrics are Total Number of Connections, Average Connections Count, Dollar-Based Net Expansion Rate, Total Contract Value, and Average Revenue per User. 32 Table of Contents Total Number of Connections and Average Connections Count The “Total Number of Connections” constitutes the total of all our IoT Connectivity services connections, including both CaaS and CEaaS (explained below) but excluding certain connections where mobile carriers license our subscription management platform from us.
During the year ended December 31, 2023, the “cost of services” percentage of our business decreased 3.2% compared to the year ended December 31, 2022 due to the inclusion of the lower margin services from the acquisition of Twilio’s IoT business.
Services Non-GAAP margin decreased 1.2% compared to the year ended December 31, 2023, primarily driven by the full year of inclusion of the lower margin services revenue from the acquisition of Twilio’s IoT business.
Results of Operations for the Years Ended December 31, 2023 and 2022: Revenue We derive revenue from IoT Connectivity services and IoT Solutions services (collectively, the “Services”) as well as products including IoT Connectivity (consisting of SIM cards) and IoT devices (within a comprehensive IoT solution) together referred to as “Products”. 24 Table of Contents Revenue arising from IoT Connectivity services generally consists of a monthly subscription fee and additional data usage fees that are part of a bundled solution which enables other providers and enterprise customers to complete their platforms for solutions to provide IoT Connectivity or other IoT Solutions.
Results of Operations for the Years Ended December 31, 2024 and 2023: Revenue We derive revenue from IoT Connectivity services and IoT Solutions services (collectively, the “Services”) as well as products including IoT Connectivity (consisting of SIM cards) and IoT devices (within a comprehensive IoT solution) together referred to as “Products”.
Purchase Commitments We had a total of $58.9 million of purchase commitments payable that were not recorded as liabilities on our consolidated balance sheet as of December 31, 2023.
As of December 31, 2024 , we owed approximately $23.8 million in such dividend liability, which is due to an affiliate (Searchlight). We also had a total of $58.0 million of purchase commitments payable that were not recorded as liabilities on our consolidated balance sheet as of December 31, 2024.
As of December 31, 2022, our sales funnel included over 1,400 opportunities with an estimated potential TCV of over $434 million. 29 Table of Contents Liquidity and Capital Resources Overview Liquidity is a measurement of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund our acquisitions and operating costs, and satisfy other general business needs.
ARPU was $0.97 and $0.99 for the three months ended December 31, 2024 and 2023, respectively. 34 Table of Contents Liquidity and Capital Resources Overview Liquidity is a measurement of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund our acquisitions and operating costs, and satisfy other general business needs.
During 2022, cash used in financing activities was primarily due to payment on the Term Loan — UBS. Cash Availability We have the ability to defer cash payment of interest due on the Series A-1 preferred stock, and plan to defer such payments in the near term in order to preserve cash for other purposes.
Cash Availability and Purchase Commitments We have the ability to defer the cash payment of dividends (which are accounted for under GAAP as interest due to the debt-like features of the underlying instrument) due on the Series A-1 preferred stock, and plan to defer such payments in order to preserve cash for other purposes.
The residual growth compared to the year ended December 31, 2022 was driven by new customer business and increased connectivity utilization in our existing customer base. Products revenue decreased by approximately $15.5 million, driven primarily by reduced demand from our largest customers for the year ended December 31, 2023, as they applied greater emphasis on inventory management and order fulfillment.
The increase in Services revenue was primarily driven by the acquisition of Twilio’s IoT business completed in 2023, and the residual growth was driven by new customer business and increased connectivity utilization in our existing customer base. Products revenue decreased by approximately $12.1 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
The table below sets forth the details of revenue disaggregated as arising from IoT Connectivity and IoT Solutions for the years ended December 31, 2023 and 2022: For the Year Ended Year-over-Year Increase / (Decrease) ($ in thousands) December 31, 2023 December 31, 2022 $ % IoT Connectivity $ 202,393 $ 175,942 $ 26,451 15 % IoT Solutions 74,217 92,505 (18,288) (20) % Total Revenue $ 276,610 $ 268,447 $ 8,163 3 % IoT Connectivity revenue increased by approximately $26.5 million, which was primarily driven by the acquisition of Twilio’s IoT business, which generated the majority of the increase.
The table below sets forth the details of revenue disaggregated as arising from IoT Connectivity and IoT Solutions for the years ended December 31, 2024 and 2023: For the Year Ended December 31, Year-over-Year Increase / (Decrease) (in thousands) 2024 2023 $ % IoT Connectivity $ 226,853 $ 202,393 $ 24,460 12 % IoT Solutions 59,234 74,217 (14,983) (20) % Total Revenue $ 286,087 $ 276,610 $ 9,477 3 % IoT Connectivity revenue increased by approximately $24.5 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
The infrastructure software and services offered to such providers are cellular Core Network as a Service, including Cloud Native Evolved Packet Core, Connectivity Management Platform as a Service, and Private Networking as a Service. 28 Table of Contents Total Number of Connections includes the contribution of eSIMs and is the principal measure used by management to assess the growth of the business on a periodic basis, on a SIM and / or device-based perspective.
The infrastructure software and services offered to such providers are cellular Core Network as a Service, including Cloud Native Evolved Packet Core, Connectivity Management Platform as a Service, and Private Networking as a Service.
Cost of products decreased by $15.9 million for the year ended December 31, 2023, compared to the year ended December 31, 2022 due to lower sales volume from existing IoT Solutions customers.
IoT Solutions revenue decreased by approximately $15.0 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
IoT Solutions revenue declined by approximately $18.3 million primarily due to reduced demand from our largest customers in the current year as these customers applied greater emphasis on inventory management and order fulfillment, as well as the conclusion of a significant LTE transition project that was completed during the year ended December 31, 2022.
The decrease in IoT Solutions revenue was primarily driven by reduced demand from our largest customers in the current year as these customers applied greater emphasis on inventory management and order fulfillment, in addition to our decision to accept fewer less-profitable hardware deals in 2024.
The Credit Facilities are secured by substantially all of the Company’s subsidiaries’ assets.
As of December 31, 2024 and December 31, 2023, there were no amounts outstanding on the Revolving Credit Facility. The Credit Facilities are secured by substantially all of the Company’s subsidiaries’ assets.
After September 30, 2023, if the Company’s shares are trading at a defined premium to the Base Exchange Rate or applicable Adjusted Exchange Rate, the Company may redeem the Backstop Notes for cash, force an exchange into shares of its common stock at an amount per share based on a time-value make whole table, or settle with a combination of cash and its common stock.
After September 30, 2023 and prior to the fifth business day after the last quarter end before the maturity date, if the Company’s shares of common stock are trading at a defined premium to the Base Exchange Rate or applicable Adjusted Exchange Rate, the Company may pay or deliver, as the case may be, in respect of each $1,000 principal amount of Backstop Notes being exchanged, cash, shares of its common stock, or a combination of cash and shares of its common stock.
Our operating cash flows decreased from 2022 primarily due to an increase in our net loss, along with timing of accounts payable and receivable.
The change in operating cash flows from 2023 was primarily due to the accrual of interest payable to affiliate in arrears, and timing of accounts payable and receivable.
Cash flows from investing activities Cash used in investing activities for the year ended December 31, 2023 was primarily used for investments in property and equipment and internally developed software, while 2022 included a non-recurring cash expenditure for a business acquisition.
Cash flows from investing activities Cash used in investing activities for the years ended December 31, 2024 and 2023 was primarily used for investments in property and equipment and internally developed software. 37 Table of Contents Cash flows from financing activities C ash used in financing activitie s for the year ended December 31, 2024, was primarily due to scheduled principal payments on the Term Loan.
The increase in SG&A expenses for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily driven by an increase in salaries and benefits including additional headcount from the acquisition of Twilio’s IoT business, higher license and subscription costs, along with one-time professional fees associated with our debt refinancing.
SG&A expenses increased by approximately $10.8 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase in SG&A expenses was primarily driven by an increase in personnel-related costs, including salaries and benefits, partially offset by decreases in professional service fees.
During the year ended December 31, 2023, the cost of IoT Solutions as a percentage increased 2.4% as compared to December 31, 2022, primarily driven by the mix of hardware compared to services included in IoT Solutions revenue.
During the year ended December 31, 2024, services gross margin increased 2.9% compared to the year ended December 31, 2023, primarily driven by the decrease in depreciation and amortization in the cost of revenue offset by a slight decrease in IoT Connectivity gross margins due to fiscal year 2024 having a full year of revenue from the Twilio IoT acquisition.
The decrease in the cost of IoT Connectivity as a percentage was primarily due to the inclusion of the lower margin IoT Connectivity revenue from the acquisition of Twilio’s IoT business.
The decrease in cost of products was primarily due to lower hardware sales volume from existing IoT Solutions customers.
The table below sets forth our cost of revenue, exclusive of depreciation and amortization, for the years ended December 31, 2023 and 2022, disaggregated by “cost of services” and “cost of products”: 25 Table of Contents For the Year Ended Year-over-Year Increase / (Decrease) ($ in thousands) December 31, 2023 December 31, 2022 $ % Cost of services $ 82,547 $ 67,268 $ 15,279 23 % Cost of products 46,016 61,886 (15,870) (26) % Total cost of revenue $ 128,563 $ 129,154 $ (591) — % The table below sets forth our revenue less our cost of revenue, excluding depreciation and amortization, as a percentage of revenue, based upon the categories of revenue and associated costs disaggregated by “cost of services” and “cost of products”: For the Year Ended December 31, 2023 December 31, 2022 Cost of services 61.2 % 64.4 % Cost of products 28.1 % 22.1 % Overall blended rate 53.5 % 51.9 % Cost of services increased by $15.3 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to additional carrier costs related to the acquisition of the Twilio IoT business, along with SIM transfers and increased connectivity consumption across multiple carriers.
The table below sets forth our cost of revenue, exclusive of depreciation and amortization, for the years ended December 31, 2024 and 2023, disaggregated by “cost of services” and “cost of products”: For the Year Ended December 31, Year-over-Year Increase / (Decrease) ($ in thousands) 2024 2023 $ % Cost of services $ 93,663 $ 82,547 $ 11,116 13 % Cost of products 32,498 46,016 (13,518) (29) % Total cost of revenue $ 126,161 $ 128,563 $ (2,402) (2) % Cost of services increased by approximately $11.1 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
The decrease in SG&A expenses incurred with affiliate for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to the termination of the technical assistance services agreement on February 14, 2023 and the termination of the office lease and professional services agreement on June 29, 2023.
We terminated the technical assistance services agreement on February 14, 2023 and terminated the office lease and professional services agreement on June 29, 2023.
Key Operational Metrics We review a number of operational metrics to measure our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. The operational metrics identified by management as key operational metrics are Total Number of Connections, Average Connections, Dollar-Based Net Expansion Rate, and Total Contract Value.
IoT Solutions Non-GAAP margin increased 9.2% compared to the year ended December 31, 2023, primarily driven by the management’s decision to forgo low or zero margin hardware revenue and increase pricing. Key Operational Metrics We review a number of operational metrics to measure our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions.
The table below sets forth the details of revenue from services and products for the years ended December 31, 2023 and 2022: For the Year Ended Year-over-Year Increase / (Decrease) ($ in thousands) December 31, 2023 December 31, 2022 $ % Services $ 212,645 $ 188,985 $ 23,660 13 % Products 63,965 79,462 (15,497) (20) % Total Revenue $ 276,610 $ 268,447 $ 8,163 3 % Services revenue growth of approximately $23.7 million was driven primarily by the acquisition of Twilio’s IoT business, which generated the majority of the year-over-year increase.
Location-based software services and IoT security software services are charged monthly on a per-subscriber basis. 26 Table of Contents The table below sets forth the details of revenue from services and products for the years ended December 31, 2024 and 2023: For the Year Ended December 31, Year-over-Year Increase / (Decrease) ($ in thousands) 2024 2023 $ % Services $ 234,247 $ 212,645 $ 21,602 10 % Products 51,840 63,965 (12,125) (19) % Total Revenue $ 286,087 $ 276,610 $ 9,477 3 % Services revenue increased by approximately $21.6 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Selling, general, and administrative expenses incurred with affiliate The following table sets forth the Company’s sales, general, and administrative expenses incurred with affiliate during the years ended December 31, 2023 and 2022: For the Year Ended Year-over-Year Increase / (Decrease) ($ in thousands) December 31, 2023 December 31, 2022 $ % Selling, general, and administrative expenses incurred with affiliate $ 372 $ 2,600 $ (2,228) (86) % Selling, general, and administrative (“SG&A”) expenses incurred with affiliate relate primarily to expenses for technical assistance services, rent, and professional services incurred between one of our wholly-owned subsidiaries and two companies controlled by a key member of our subsidiary’s management team.
The Company has contracted with a new, unaffiliated, TPA for 2025, which will result in a reduction of administration costs on a per-employee per month basis. 28 Table of Contents For the year ended December 31, 2023, SG&A expenses incurred with affiliates related primarily to expenses incurred to HealthEZ for administration of our health insurance plan, along with immaterial expenses for technical assistance services, rent, and professional services to two companies controlled by a key member of our subsidiary’s management team.
Acquisition and integration-related restructuring costs for the years ended December 31, 2023 and 2022 are costs associated with legal, accounting diligence, quality of earnings, valuation, and search expenses related to acquisitions.
These costs for the year ended December 31, 2023 were primarily associated with legal, accounting diligence, quality of earnings, valuation, and search expenses related to the acquisition of the Twilio IoT business. 29 Table of Contents Free Cash Flow Free cash flow is defined as net cash provided by operating activities reduced by capital expenditures consisting of purchases of property and equipment, purchases of intangible assets and capitalization of internal use software.
Removed
Trends and Recent Developments Overall macroeconomic environment and its effect on us The overall U.S. economy seemed to fare well in 2023, as the economy expanded despite persistently elevated inflation and higher interest rates.
Added
Trends and Recent Developments Overall macroeconomic environment and its effect on us Over the course of 2024, signs of easing inflation and overall stability in the labor market generally continued their trends, and at its September 2024 meeting the Federal Reserve Bank of the United States (the “Federal Reserve”) reduced interest rates for the first time since March 2020.
Removed
Higher interest rates may hamper future business investment, and any economic weakness or perceived economic weakness may negatively impact business demand overall, and may cause reduced spending and longer sales cycles for IoT solutions, which in turn may be challenging to our business.
Added
At that meeting, the Federal Reserve elected to reduce its benchmark interest rate by what was then perceived to be an aggressive 50 basis points. The Federal Reserve later further reduced interest rates by 25 basis points in each of November 2024 and December 2024.
Removed
Recent developments in our business On November 9, 2023, the Company, only with respect to certain limited sections thereof, and certain subsidiaries of the Company entered into the Credit Facilities. The credit agreement became effective on November 15, 2023.
Added
Following the 2024 rate cuts, analysts are split over the expected timing and extent of future rate cuts, with 50 total basis points or less of interest rate reductions generally expected for 2025.
Removed
For a detailed discussion regarding the Credit Facilities, see “Term Loan and Revolving Credit Facility – WhiteHorse Capital Management, LLC (“WhiteHorse”)” in this Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K.
Added
As of the end of December 2024, annual inflation of 2.9% was lower than in the immediately preceding three years (2021 - 2023), but still above the Federal Reserve’s 2.0% target.
Removed
The proceeds of the Credit Facilities have been used to fully repay the Term Loan – UBS. For a detailed discussion regarding the Term Loan – UBS, see “Term Loan and Revolving Credit Facility – UBS” in this Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K.
Added
The potential for high tariffs on many imported goods from multiple countries being imposed by the U.S. government, and significant restrictions on immigration, along with any potential supply chain or demand shocks should avian influenza become a human pandemic, would have the effect of dramatically increasing inflation once again.
Removed
In addition, the Company entered into an Investment Agreement on November 9, 2023, as amended on December 13, 2023 (the “Investment Agreement”), with Searchlight, whereby the Company agreed to issue and sell to Searchlight (i) shares of Series A-1 Preferred Stock and (ii) a warrant (the “Original Warrant”) to purchase shares of common stock with an exercise price of $0.01 per share (as may be adjusted in accordance with the Original Warrant), in a private placement for an aggregate purchase price of $150 million.
Added
Recent developments in our business At this time, we generally expect revenue derived from the Connectivity verticals of our business to remain fairly stable, given the “stickiness” of this revenue, while the more volatile IoT Managed Services (or “IoTMS”) business verticals consisting of Solutions and Products may experience uneven revenue on both an actual and projected basis.
Removed
The foregoing private placement closed on November 15, 2023 (the “First Closing”), and the Company issued to Searchlight an aggregate of 150,000 shares of the Series A-1 Preferred Stock and an Original Warrant to purchase up to an aggregate of 11,800,000 shares of common stock (as may be adjusted in accordance with the Original Warrant).
Added
We expect that IoTMS projects may be delayed by customers due to overall macroeconomic conditions. We further expect that the overall IoT market may become more competitive from a pricing standpoint, and that our existing customers will continue to seek efficiency in terms of their operating expenses, all of which may create pressure on our revenue.
Removed
The Original Warrant was amended and restated in connection with the Second Closing (as defined below).
Added
Revenue arising from IoT Connectivity services generally consists of a monthly subscription fee and additional data usage fees that are part of a bundled solution which enables other providers and enterprise customers to complete their platforms for solutions to provide IoT Connectivity or other IoT Solutions. IoT Connectivity also includes charges for each SIM sold to a customer.
Removed
Pursuant to the Investment Agreement, on December 13, 2023 (the “Second Closing” and, together with the First Closing, the “Closings”), the Company issued and sold to Searchlight (i) an additional 2,857 shares of Series A-1 Preferred Stock and (ii) a warrant (the “Additional Warrant”) to purchase an additional 224,711 shares of common stock, with an exercise price of $0.01 per share (as may be adjusted in accordance with the Additional Warrant), in a private placement for an aggregate purchase price of approximately $2.9 million.
Added
The decrease in Products revenue was primarily driven by reduced demand from our largest customers in the Connected Health vertical, as they applied greater emphasis on inventory management and order fulfillment. In addition, we made the decision at the end of 2023 to accept fewer less-profitable hardware deals in 2024.
Removed
On December 11, 2023, the Company entered into a stock purchase agreement with Twilio, pursuant to which the Company agreed to repurchase from Twilio 5,000,000 shares of common stock for an aggregate purchase price of approximately $2.9 million (the “Repurchase”). The Repurchase was completed on December 13, 2023.
Added
The increase in costs of services was primarily due to additional carrier costs related to the acquisition of the Twilio IoT business completed in 2023, along with SIM transfers and increased connectivity consumption across multiple carriers. 27 Table of Contents Cost of products decreased by approximately $13.5 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Removed
In addition, products revenue for the year ended December 31, 2022 included a significant LTE transition project that did not repeat for the year ended December 31, 2023.
Added
The increase in the cost of IoT Connectivity was primarily due to additional carrier costs driven by the acquisition of Twilio’s IoT business completed in 2023 along with growth in connections across multiple carriers and increased connectivity consumption across those carriers from our existing customers.
Removed
Our total number of connections increased from 15.0 million connections on December 31, 2022 to 18.5 million connections on December 31, 2023, primarily due to the acquisition of Twilio’s IoT business.
Added
Selling, general, and administrative expenses incurred with affiliates The following table sets forth the Company’s SG&A expenses incurred with affiliates for the years ended December 31, 2024 and 2023: For the Year Ended December 31, Year-over-Year Increase / (Decrease) ($ in thousands) 2024 2023 $ % Selling, general, and administrative expenses incurred with affiliates $ 624 $ 988 * * * Not meaningful For the year ended December 31, 2024, SG&A expenses incurred with affiliates related solely to fees paid to HealthEZ, an ABRY Partners, LLC (“ABRY”) portfolio company.
Removed
During the year ended December 31, 2023 the “cost of products” percentage of our products business increased 6.0% compared to the year ended December 31, 2022, primarily driven by the volume mix of hardware devices supplied to one of our largest customers.
Added
HealthEZ was the Company’s third-party administrator (“TPA”) for its self-insured health insurance claims in both 2024 and 2023. As of each of December 31, 2024 and 2023, ABRY beneficially owned approximately 29% of the Company’s outstanding common stock. ABRY is therefore considered an affiliate of the Company, and two of the Company’s Board members are employed by ABRY.
Removed
In 2022, the volume of hardware devices supplied to that customer were higher than usual due to their LTE transition project. Margins for the hardware devices associated with this one-time project were lower due to the decrease in volume in 2023.
Added
Such adjustments include goodwill impairment charges, changes in the fair value of certain of our warrants required by GAAP to be accounted for at fair value, gains or losses on debt extinguishment, “transformation expenses” as defined below, acquisition costs, integration-related restructuring costs, stock-based compensation, and foreign currency gains and losses.
Removed
In 2023 these costs included the acquisition of the Twilio IoT business, and in 2022 these costs included the acquisition of 100% of the outstanding share capital of Business Mobility Partners, Inc. and Simon IoT LLC.

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Other KORE 10-K year-over-year comparisons