IQST · iQSTEL Inc.

Revenue increased 11.9% to $316.9 million in FY 2025 from $283.2 million in FY 2024, driven by sustained high-volume telecom traffic that necessitated additional international connectivity capacity to meet customer demand. This growth reflects the company's core telecom operations, where traffic mix continues shifting toward higher-margin services, reinforcing strategic portfolio evolution as noted in management discussion.

Gross profit improved 14.3% to $9.5 million, achieving a 3.0% margin versus prior year, as the difference between revenues and cost of sales expanded. Management highlights this year-over-year gain stems from optimized operations, with intercompany transactions rising to support routing efficiency and cost improvements. The traffic shift provides margin lift despite thin overall profitability in the high-volume wholesale model.

Net loss expanded 42.0% to -$8.5 million or -$2.86 diluted EPS from -$6.0 million or -$0.04 EPS. This reflects the combined impact of wider operating losses and other financing dynamics in a growth phase, underscoring execution challenges in scaling the telecom ecosystem.

Cash from operations consumed -$3.8 million, worsening from -$2.9 million, tied to material working capital requirements from high-volume telecom traffic settlement cycles. Free cash flow reached -$4.0 million after $113 thousand in capital expenditures, down from prior year's $152 thousand, indicating restrained investment amid cash pressures. These dynamics highlight liquidity strains from volume-driven AR growth and expansion investments.

Looking forward, platform upgrades and traffic optimizations position the company for potential revenue and margin contributions, though impairment risks persist if unit performance or macro conditions falter, as estimates carry inherent uncertainty.