KonaTel Inc. reported third‑quarter 2025 revenue of $2.173 million, a 31% decline from the $3.148 million earned in the same period a year earlier. The company posted a GAAP net loss of $45,094, translating to $0.00 per share, and a non‑GAAP net loss of $550,935, or $0.01 per diluted share. Gross profit reached $709,037, giving a gross‑profit margin of 32.6%, up from 20.8% in Q3 2024. Operating expenses fell to $759,116 from $1.102 million, narrowing the operating loss to $1.050 million versus $1.593 million a year earlier. Cash and cash equivalents stood at $1.2 million, while the current ratio was 0.93, underscoring liquidity concerns highlighted in the company’s going‑concern disclosure.
The decline in total revenue is largely attributable to the loss of the Affordable Connectivity Program (ACP), which expired in June 2024. Mobile Services revenue dropped 77.4% YoY to $668,755, while Hosted Services, the company’s CPaaS‑driven segment, grew 4.1% to $1.504 million, representing 69% of consolidated revenue. The stability of Hosted Services offsets the sharp mobile decline and supports the company’s strategic pivot toward higher‑margin, recurring revenue streams.
CEO Sean McEwen emphasized that the company is accelerating its CPaaS expansion, including wholesale SMS and wireless POTS replacement, and is building Lifeline partnerships to offset the ACP loss. He noted a new partnership with a California healthcare provider to promote Lifeline services, expecting accelerated customer adoption. McEwen also reiterated the company’s “substantial doubt” about its ability to continue as a going concern over the next twelve months, citing limited cash and ongoing losses.
The results illustrate a classic cost‑control success: operating expenses were trimmed by $343 k, which helped improve gross‑profit margin despite a 31% revenue drop. However, the company’s cash position and current ratio indicate that liquidity remains a headwind. The strategic focus on CPaaS and hosted services is a tailwind, positioning KonaTel for a more resilient revenue mix, but the company must still navigate the transition from a subsidy‑dependent model to a subscription‑based one.
Management did not provide explicit guidance for the next quarter or fiscal year, but the emphasis on CPaaS growth and the acknowledgment of liquidity risk suggest a cautious outlook. Investors will likely monitor the company’s ability to convert hosted‑service growth into cash flow while managing the ongoing cash burn.
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