iQSTEL Reports Q2 2026 Results: Full Earnings Call Transcr...

iQSTEL (NASDAQ:IQST) held its second-quarter earnings conference call on Wednesday. Below is the complete transcript from the call.

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Summary

iQSTEL Inc. reported a 59% year-over-year revenue growth for the first half of 2026, reaching approximately $207 million, with an annualized revenue level of about $414 million.

The company's strategy focuses on EBITDA expansion, leveraging its telecom platform to accelerate its digital services business, which currently constitutes 12.5% of total revenue.

iQSTEL Inc. anticipates completing the Ultranet acquisition, expected to significantly enhance profitability and increase the adjusted EBITDA run rate to $8-$9 million.

The company aims to achieve a $430 million revenue target for 2026 and is focusing on increasing gross profit, adjusted EBITDA, and cash generation.

Management highlighted the undervaluation of the company in the public market, emphasizing efforts to communicate their growth story and strategic initiatives more effectively.

Full Transcript

Thank you for standing by. At this time, I would like to welcome everyone to the IQSTEL second quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press STAR followed by the number one on your telephone keypad. I would now like to turn the conference over to Ethan Walfish, Head of Investor Relations. The floor is yours.

Good morning and thank you for joining IQ stealth second quarter 2026 earnings call. Joining me today, I am pleased to have Leandro Iglesias, President and Chief Executive Officer and Alvaro Quintana, Chief Financial Officer. During the call we will make forward looking statements such as dialogue regarding our revenue expectations or forecast for remaining quarters in the full fiscal year of 2026. These statements are based on our current expectations and information available as of today and are subject to a variety of risks, uncertainties and assumptions. Actual results may differ materially as a result of various risk factors that have been described in our periodic filings with the sec. As a result, we caution you against placing undue reliance on these forward looking statements.

We assume no obligation to update any forward looking statements as a result of new information or future events, except as required by law. In addition, other risks are more fully described in IQ Stealth public filing with the U.S. securities and Exchange Commission, which can be reviewed at www.sec.gov. yesterday, August 18, 2026, the company filed with the SEC its Form 10Q for Q2 2026 and this morning issued a press release announcing those financial results. So participants of this call who may not have already done so, may wish to look at those doctors as we provide a summary of the results on this call. With that, I will now turn the call over to our CEO, Leandro Iglesias.

Thank you, Ethan. Good morning everyone and thank you for joining us. I'm Leandriglessia, CEO of Icostel, and joining me today is our CFO, Alvaro Quintana. I want to begin by thanking our shareholders, NPRGS customers and partners for their continued support. Today I want to focus on one central message. IQCELL has spent years building scale. We believe we are now entering the next major phase of our evolution, the EBITDA expansion. During this first six months of 2026, IQSTAR generated approximately $207 million in revenue, compared with approximately $130 million during the same period last year, representing growth of approximately 59%. That puts Iqstel at an annualized revenue level of approximately $414 million. This is a significant milestone, but our story is no longer only about growing revenue.

Our focus is increasingly on converting this scale into stronger gross profit, adjusted EBITDA cash generation and ultimately shareholders value. Today we increasingly see i2 cell having two complementary business pillars, our telecom business and our digital services business. Our telecom division is the foundation of the company. Over nearly two decades we have built a global telecommunications platform with more than 600 telecom operator relationships and a potential commercial reach through our customers to approximately 2.3 billion end users. This platform gives us scale, infrastructure, international relationships and importantly a global distribution network. Our strategy is now to leverage that platform to accelerate our higher margin digital service business.

Digital service already represents approximately 12.5% of ITW sales revenue currently driven by our subsidiary Blocktopper. We believe this percentage can continue to grow as we commercialize additional FinTech, AI powered communications, cybersecurity and other vehicle solutions through our existing global network. And this is important because literal services has the potential to contribute exponentially to gross profit and adjust ebitda. The upcoming ultranet acquisition is another important step in this strategy. Ultranet will expand our international telecom footprint and more importantly is expected to significantly strengthen profitability. Following the acquisition, we expect IQStails adjusted EBITDA run rate to increase to approximately $8 million to $9 million.

This is exactly the direction that we

want to take the company going forward. Our focus is not simply on acquisition that add revenue. We are increasingly focused on opportunities that can add gross profit, EBITDA cash generation and strategic value. For the remainder of 2026, we continue pursuing our digitally announced $430 million revenue objective. With $207 million generated during the first half. We need approximately 223 million during the second half to achieve that objective.

We believe we remain on track, particularly because historically the second half of the year has been stronger for IQ sales than the first half. But again, revenue is only part of the story. We are increasingly focused on adjusted EBITDA operating leverage, cash generation and the growth of higher margin detail services. Our long term vision remains to build IQStail into a company capable of reaching 1 billion in annual revenue. But our objective is not simple to become larger. Our objective is to become larger and significantly more profitable. We are also increasing our efforts to communicate the i2 cell story to a broader investment audience. Our recent CNBC interview with Sepp's partner and the launch of our new corporate telecom, digital services and investor websites are part of this effort.

We believe there continues to be significant disconnect between IQ Stealth operating scale and the valuation currently being assigned to the company by the public market. The truth is that we cannot control the stock price, but we can control the execution. We can continue growing business, expanding ebitda, strengthening our balance sheet, growing digital services, completing strategic acquisitions and communicating our progress more efficiently.

And we believe consistent execution is ultimately the best way to close that valuation gap. So if there is one message I would like shareholders to take from today's

call, it is this. We have built the scale.

We are operating at more than 400 million in MRI set revenue.

We have built a global platform with

more than 600 telecom operator relationships. Data service already represents 12.5% of our revenue and with Ultranet we expect to move forward approximately $8 million to $9 million in adjusted EBITDA run rate. The next chapter of i2 scale is about turning that scale into profitability and long term shareholder value. We believe this is an important inflection point for IQStail and we are very excited about what comes next. Thank you again to our shareholders and to our entire team around the world. With that, I'll turn the call over to our CFO Alvaro Quintana to discuss our first half financial results in greater detail. Alvaro, please go ahead.

Thank you. Leandro Good morning everyone. From a financial perspective, our first half results reflect continued strong growth, improving gross profit and a strengthening balance sheet. For the first six months of 2026, IQSL generated approximately $207 million in revenue compared with approximately 130 million during the same period last year, representing growth of approximately 59% year over year, gross profit increased to approximately $4.8 million compared with approximately 3.8 million during the first half of representing growth of approximately 26%.

The second quarter also demonstrated continued commercial momentum with approximately $109 million in revenue compared with 97.9 million in the first quarter. As Leandro explained, we have spent years building revenue scale from a financial perspective. Our priority now is to increasingly convert that scale into gross profit, adjusted EBITDA operating leverage and cash generation. Our first half revenue of 207 million represents approximately 414 million on an annualized basis. To be clear, this analyzed figure is simple, the mathematical equivalent of multiplying our first half results by two and should not be considered as a forecast. Based on approximately 10 million shares used for our per share calculation, first half Revenue represents approximately $20.59 per share, or approximately $41.18 in annualized revenue per share.

Our balance sheets also continue to Strengthen as of June 30th Icrystel reported approximately $48.2 million in total assets, 31 million in total liabilities and $17.2 million in stockholders equity. Stockholders equity increased approximately 5% representing approximately $1.71 in equity per share, while total assets represent approximately $4.79 per share. Equally important, Iqstel maintains a clear capital structure with no convertible notes and no warrants outstanding. We believe this is particularly important for our shareholders. Maintaining a disciplined capital structure reviews potential sources of dilution and provides the company with greater flexibility as we execute our growth strategy.

Our objective is to continue funding growth in a disciplined manner while carefully considering the long term interests of our shareholders. We believe these financials per share metrics provide shareholders with another useful perspective on the financial scale and underlying balance sheet value of IQs Dell. I also want to highlight an important point regarding valuation at current market levels. Our approximately $17.2 million in stockholders equity is more than 50% greater than Iqstel's current market capitalization. In other words, the market is currently valuating the entire company at a substantial discount to its reported stockholders equity and that comparison does not assign additional value to a business generating more than $400 million in annualized revenue.

Our global telecom infrastructure, our more than 600 carry relationships, our digital services business and our future earnings potential. We believe this represents a significant disconnect between IQSL's current public market valuation and the underlying financials and operating value of the company. Of course our responsibility is not simple to point out that disconnect Our responsibility is to continue improving the fundamentals of the business.

That means increasing gross profit, expanding adjusted ebitda, improving operating leverage, strengthening cash generation and maintaining disciplined capital allocation. As we move through the second half of 2026, our financial priorities remain very improved EBITDA performance, expand gross profit enhancement, operating leverage and cash generation support the growth of Harheart margin digital services, maintain a disciplined and clean capital structure and continue strengthening our balance sheet with $207 million in first half revenue, 48.2 million in assets, $17.2 million in sole holders equity, no convertible notes and no warrants outstanding.

We believe IQ style enters the second half of 2026 with a strong financial foundation for the next phase to growth. Our objective now is to convert that scale into stronger profitability and long term shareholders value. Thank you Ethan, we are ready to open the line for questions.

Thank you Alvara Operator, we are now ready to open the line for questions.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press Star then the number one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. Your first question comes from Barry. Sign with Litchfield Hills Research. Your line is open.

Hey, good morning gentlemen and congratulations on the quarter. I want to ask about organic growth. If I look at the quarterly results, that looks to me like it's all organic. The Globetopper didn't close until July 1 of 25, so that wasn't in the year ago quarter. Ultranet is still pending, so it looks like, I think it's about 50% revenue growth. Was all organic growth. Correct me if I'm wrong, what is driving that? And then most importantly, the drivers of that growth, can they continue into the second half of the year to continue to drive organic growth? Thank you.

Thank you, Barry. Thank you very much for this question. Listen, we have been working over the last months with our team in the way to maximize our current technological platform and our current business relations with our customers. In that sense, we are in the process to reorganize the telecom business or in one single subsidiary that was announced that we create an Icusel operating holding and we move all of our subsidiaries, telecommunications there. So our next move is to create corporation with all the telecom business. And our idea is to keep increasing the synergies between the organizations and increasing the.

We have been moving all the technological and switching platforms to one single platform. So in this process we have been accelerating and expanding the organic growth as part of our strategy. And this is like a process, you know, we start like a holding company operating different subsidiaries and right now we are moving into a corporation. So this is a process that will unlock the potential, the real potential that the company has and the real potential that our technological platform advantage that we have and the business relationship that we have. So as you have seen, the organic growth has been important and is going to even accelerate over the next months.

That's very helpful. But a lot of that sounds like it's forward looking, it's actions that you expect to take. But the last three, the three months ended June 30 were very, very strong growth. Did you add more salespeople? Did you change their compensation? Did you just see more demand? Did you see competitive factors change? What drove the competitive growth in the quarter ended June 30th?

Yeah, well, in two of our subsidiaries like Coexcel and Qglobal, we have been making some change at the Commercial side and the reorganization, hiring new self divisions. And this is a process, you know, but this is like a standard regular process. We need to keep improving our sales team and you know, giving them training and giving, explaining them the potential of the company. But at the same time with our customer happens something really interesting to point out that in the process that we have been becoming in a larger company, they trust more in us and selecting us to increase the amount of business that we have been doing with them.

So it's like, you know, a virtuous circle where you know, as long as we grow the company, as long as we are in a better shape of the company, they are choosing us for doing more business with us. So but basically we have been improving our sales team in two of our divisions. But you know, this is just the starting point of the things that we are going to do. We have plans to start moving toward creating a corporation and we are really excited about the future, about the complete acquisition of Ultranet because it's going to increase our international footprint in a very attractive region of growth like Africa is. And you know, that's the process.

You know, our telecom business keeps representing the majority percentage of our revenue stream and we are keep improving the business and the potential for the telecom business division.

Yeah, that's very helpful. And the last thing I wanted to ask about was ebitda. What, what was the number for the quarter and then two drivers. One you just mentioned the integration of all the divisions and I know you've been routing traffic between your operating subsidiaries to take advantage of least cost routing and improve margins that way. How much more margin lift is there once you integrate, once you finish integrating all the divisions.

And then the other thing I think, and correct me if I'm wrong, you said with Ultranet you'll be at an 8 to 9 million dollars annual EBITDA run rate. Is that all from alternate? Does that include some of the organic. And then I believe you've said that that'll close around end of third quarter. So that would be effective for fourth quarter results.

Okay, let's split this answer into part. Let's start Alvaro talking about EBITDA and all the things. And finally I'm going to talk about the alternate acquisition. Thank you, Alvaro.

Yes, sure. Yes. As Leandro remarked during the presentation, we have been focused on increasing our ebitda. If you compare, we usually show a table in our case and queues showing the EBITDA of our operating entities and then the consolidated figures. If you focus your attention in the operating side of the business. So the consolidated figures of subsidiaries, you will see that the EBITDA in the first quarter of this year was close to $190,000. And in the second quarter, so just for the three months of between April, May and June, we increased that ebitda to over $700,000 for the operating company. So that's an increase of more than 285% and that is basically impacted by the increase in the gross margin. The Gross margin increased 18% quarter comparing first quarter with second quarter. So this is the result of the integration of the subsidiaries and there are more room to grow in that reg.

Which was one of your questions, Barry. Now Leander, you can comment about Alternate and how that will impact company.

Yes, thank you, thank you.

Just to point out that Barbara west was talking about EBITDA and you asking us about adjusted EBITDA. Our adjusted EBITDA rate is red around $2.7 million and growing the adjusted EBITDA run rate and the consolidation process and the corporate to moving every single operation into a corporation. We believe that the EBITDA expansion is going to affect around 20% just with that measure, you know, reducing costs and increasing the efficiencies and everything.

So with that base and adding the Ultranet is how we are going to jump to 8 to $9 million EBITDA adjusted EBITDA run rate. So about the timing. Right now we are in the final stage of the due diligence of Ultranet and completing everything about the documents and everything. We are really excited about this process. Our intention is to execute the agreement this quarter and that's the idea and we are still on track for this. I think we already. Something important to remark is that we already got the financial statements from Ultranet of the first half of the year and they are growing with respect to the 2025 that we filed in the AK. So the company keeps in excellent shape, is increasing regions and marketing. So they have been doing an amazing job this year.

So we truly believe that, you know, one iqstel plus iqstel is going to be more than one plus one, it's going to be three is going to be a fantastic process of synergy and you know, Alternate has an incredible plan to penetrate the Middle east and Asia market and we are going to work together hand by hand. So that's basically where we stand with Ultranet and the EBITDA contribution.

Thank you very much.

Your next question

comes from Ralph Sheppard with Craft and More. Your line is open.

Yes, thank you so much. Are you ever concerned about A hostile takeover because the market cap is so

low and yet you have revenues of over $400 million.

Yes. Thank you Ralph, for coming. And this question giving us the chance to say something that. Listen, we have been this year giving presentations to several family offices and to several investment banks talking about the company. And you know, in a private session with them we explained that basically we did something really good last year when we got listed in a direct listed without an investment bank. And at that point was a very good idea doing that. But to be completely honest, one of the consequences of doing that is that we haven't had retail support from investment banks. So this is one of the things that we decide to change this year and start talking and attending to investors events. We have attended to three, four, sorry, four investors events so far.

We have had like four webinars to family offices and we are explaining to the, to the market. The reason why of our company market cap is because in all this process getting in natac, we haven't had return support from an investment bank. It's something that we need to improve the way that we are working and you know, addressing this is increasing the presentation explaining the plans of the company and this is the process that we truly believe that is going to impact our market cap. But at the same time something that we need to explain that, you know, we can keep talking here about our telecom business, everything but the really potential that the company has to unlock.

The market cap of the company is explaining to the market that we could reach 2.3 billion users. And our digital services strategy is the tip of the arrow of this strategy because we are going to start and we are right now knocking at the doors of the telecom operators, the mobile operators offering digital services in order to increase our revenue selling more than telecommunication services, selling digital services. Right now we are starting this process with content, something that we are going to be announcing over the next weeks. We have had a very successful process about this with a great products and everything. So that's the real potential that the company has, not only the revenue. Looking at the how can we reach 2.3 billion users and start sending them products and services through our customers is the real potential that the company has.

I don't know Alvaro, if you want to round up something at this point,

I think you summarized very well the thing. So we are, as Leandro said in the presentation, we cannot control the stock price, but we can. And whereas we are focused right now on delivering our targets and developing all the potential of our business.

That concludes the Q&A session and our call. Thank you for your participation. You may now disconnect and have a wonderful rest of your day.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.

iQSTEL Reports Q2 2026 Results: Full Earnings Call Transcript

Summary

Full Transcript