iQSTEL Inc

Previous wording

IQSTEL Inc. (www.IQSTEL.com) is a technology company with a presence in 20 countries (Argentina, Armenia, Austria, Canada, Colombia, Germany, Greece, Guatemala, India, Italy, Pakistan, Romania, Serbia, Spain, Switzerland, Turkey, UAE, UK, USA and Venezuela) and over 100 employees that offers leading-edge services through its four business divisions in the telecommunications, electric vehicle (EV), fintech, and AI-enhanced metaverse industries. Our presence is global, with offices in USA, Argentina, UK, Switzerland, Turkey, and Dubai, and we target diverse and high-growth markets. We maintain more than 603 high value network interconnections around the world, delivering international voice, SMS, and connectivity services that form the core of our business. The company’s strategy focuses on leveraging synergies between its 9 subsidiaries to drive innovation and capture emerging opportunities.

Current wording

IQSTEL Inc. (www.IQSTEL.com) is a technology company with a presence in 20 countries (Argentina, Armenia, Austria, Canada, Colombia, Germany, Greece, Guatemala, India, Italy, Pakistan, Romania, Serbia, Spain, Switzerland, Turkey, UAE, UK, USA and Venezuela) and over 100 employees that offers leading-edge services through its four business divisions in the telecommunications, electric vehicle (EV), fintech, and AI-enhanced metaverse industries. Our presence is global, with offices in USA, Argentina, UK, Switzerland, Turkey, and Dubai, and we target diverse and high-growth markets. We maintain more than 603 high value network interconnections around the world, delivering international voice, SMS, and connectivity services that form the core of our business. The company’s strategy focuses on leveraging synergies between its 10 subsidiaries to drive innovation and capture emerging opportunities.

Previous wording

Our Telecom Division, which represents the majority of current operations and which also represents the source for all of our revenues for the financial periods presented, offers Voice over Internet Protocol (VoIP), SMS, proprietary Internet of Things (IoT) solutions (www.iotsmartgas.com and www.iotsmarttank.com), and international fiber-optic connectivity through its subsidiaries: Etelix (www.etelix.com), SwissLink Carrier (www.swisslink-carrier.com), Smartbiz Telecom (www.smartbiztel.com), Whisl Telecom (www.whisl.com), IoT Labs (www.iotlabs.mx), QGlobal SMS (www.qglobalsms.com), and QXTEL Limited (www.qxtel.com).

Current wording

Our Telecom Division, which represents the majority of current operations and which also represents the source for 86% and 94% of our revenues for the three months and for the nine months ended September 30, 2025 respectively, offers Voice over Internet Protocol (VoIP), SMS, proprietary Internet of Things (IoT) solutions (www.iotsmartgas.com and www.iotsmarttank.com), and international fiber-optic connectivity through its subsidiaries: Etelix (www.etelix.com), SwissLink Carrier (www.swisslink-carrier.com), Smartbiz Telecom (www.smartbiztel.com), Whisl Telecom (www.whisl.com), IoT Labs (www.iotlabs.mx), QGlobal SMS (www.qglobalsms.com), and QXTEL Limited (www.qxtel.com).

Previous wording

Our developing Fintech Business Line (www.globalmoneyone.com) (www.maxmo.vip) offers a complete Fintech ecosystem MasterCard Debit Card, US Bank Account (No SSN Needed), Mobile App/Wallet (Remittances, Mobile Top Up). Our Fintech subsidiary, Global Money One, is to provide immigrants access to reliable financial services that makes it easier to manage their money and stay connected with their families back home.

Current wording

Our developing Fintech Business Line (www.globalmoneyone.com) (www.maxmo.vip) offers a complete Fintech ecosystem MasterCard Debit Card, US Bank Account (No SSN Needed), Mobile App/Wallet (Remittances, Mobile Top Up). Our Fintech subsidiary, Global Money One, is to provide immigrants access to reliable financial services that makes it easier to manage their money and stay connected with their families back home. Additionally, Globetopper LLC (www.globetopper.com) our most recent acquisitions, plays a strategic role in supporting the expansion and integration of our business divisions. Through its operations, the Company continues to strengthen its global presence and enhance the synergy in Fintech segments through its solution for gift card programs, currently representing 14% and 6% of our revenues for the three months and for the nine months ended September 30, 2025 respectively.

Previous wording

Gross revenue, which equals revenue before intercompany eliminations, represents a key performance metric that management uses to measure the scale of the Company’s operations, monitor revenue trends across reporting segments, and evaluate the effectiveness of sales and marketing initiatives on a consolidated basis prior to the impact of intercompany transactions.

Current wording

Gross revenue, which equals revenue before intercompany eliminations, represents a key performance metric that management uses to measure.

Previous wording

Our total revenue reported for the three months ended June 30, 2025 was $72,183,236, compared with $78,635,764 for the three months ended June 30, 2024. These numbers reflect a decrease of 8.21% quarter over quarter on our consolidated revenues. Our total revenue reported for the six months ended June 30, 2025 was $129,816,052, compared with $130,050,642 for the six months ended June 30, 2024; which reflect a decrease of 0.18%.

Current wording

Our total revenue reported for the three months ended September 30, 2025 was $102,867,553, compared with $54,249,614 for the three months ended September 30, 2024. These numbers reflect an increase of 89.62% quarter over quarter on our consolidated revenues. Our total revenue reported for the nine months ended September 30, 2025 was $232,683,605, compared with $184,346,412 for the nine months ended September 30, 2024; which reflects an increase of 26.22%.

Previous wording

When looking at the numbers by companies, we have the following breakout for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024:

Current wording

When looking at the numbers by companies, we have the following breakout for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024:

Previous wording

The organic growth during the three and six months ended June 30, 2025 was 100% of the total revenue for those periods. This reflects the solid foundation of our revenue and the growth capacity the Company has with its current operations.

Current wording

The organic growth during the three and nine months ended September 30, 2025 was 70% of the total revenue for those periods. This reflects the solid foundation of our revenue and the growth capacity the Company has with its current operations. We consider organic growth the revenues reported by our existing subsidiaries once fully integrated to our operations. These subsidiaries include Etelix, SwissLink, QGlobal, IoT Labs, Smartbiz, Whisl, QXTEL.

Previous wording

Our total cost of revenue for the three months ended June 30, 2025 decreased to $70,311,749, compared with $76,472,140 for the three months ended June 30, 2024. Our total cost of revenue for the six months ended June 30, 2025 decreased to $126,009,607, compared with $126,507,992 for the six months ended June 30, 2024.

Current wording

Our total cost of revenue for the three months ended September 30, 2025 increased to $100,126,838, compared with $52,229,695 for the three months ended September 30, 2024. Our total cost of revenue for the nine months ended September 30, 2025 increased to $226,136,445, compared with $178,737,687 for the nine months ended September 30, 2024.

Previous wording

When looking at the numbers by subsidiary, we have the following breakout for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024:

Current wording

When looking at the numbers by subsidiary, we have the following breakout for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024:

Previous wording

Our cost of revenue consists of direct charges from vendors that the Company incurs to deliver services to its customers. These costs primarily consist of usage charges for calls and SMS terminated in vendor’s network.

Current wording

Our cost of revenue consists of direct charges from vendors that the Company incurs to deliver services to its customers. These costs primarily consist of usage charges for calls and SMS terminated in vendor’s network, as well as the costs of the digital prepaid products related to Fintech (Globetopper) operations.

Previous wording

In this sense, the inclusion of QXTEL in the consolidation process, along with the restructuring of the portfolio among subsidiaries, reflects the synergies derived from the commercial and operational integration of all group companies. This integration has resulted in a significant volume of intercompany transactions, which are part of our strategic approach to optimizing routing and cost efficiency. We expect this to positively impact revenues and margins in the future.

Current wording

The inclusion of GlobeTopper in the consolidation process, along with the traffic volumes by QXTEL and the reorganizing of the portfolio among subsidiaries, reflects the synergies derived from the commercial and operational integration of all group companies. This integration has resulted in a significant volume of intercompany transactions, which are part of our strategic approach to optimizing routing and cost efficiency. We expect this to positively impact revenues and margins in the future.

Previous wording

Our gross margin, which is simply the difference between our revenues and our cost of sales, discussed above, was $3,806,445 for the six months ended June 30, 2025 compared to $3,542,650 for six three months ended June 30, 2024, reflecting an increase of 7.45% quarter over quarter

Current wording

Our gross margin, which is simply the difference between our revenues and our cost of sales, discussed above, was $6,547,160 for the nine months ended September 30, 2025 compared to $5,608,725 for the nine months ended September 30, 2024, reflecting an increase of 16.73% quarter over quarter

Previous wording

For the six months ended June 30, 2025, gross profit increased by 7.45% compared to the same period in 2024. This growth is the result of commercial and operational synergies achieved through intercompany collaboration. We expect this trend to strengthen as we continue aligning internal operations and leveraging our integrated service portfolio.

Current wording

This growth is the result of commercial and operational synergies achieved through intercompany collaboration. We expect this trend to strengthen as we continue aligning internal operations and leveraging our integrated service portfolio.

Previous wording

Operating expenses, which consist solely of general and administrative costs, increased slightly by 0.94% for the three months ended June 30, 2025, compared to the same period in 2024. For the six months ended June 30, 2025, general and administrative expenses rose to $5,066,900 from $4,068,205 reported in the same period of 2024, reflecting a 24.55% increase. A detailed breakdown by major category for the three and six months ended June 30, 2025 and 2024 is presented in the table below:

Current wording

Operating expenses, which consist solely of general and administrative costs, increased by 58.91% for the three months ended September 30, 2025, compared to the same period in 2024. For the nine months ended September 30, 2025, general and administrative expenses rose to $8,366,698 from $6,144,677 reported in the same period of 2024, reflecting a 36.16% increase. A detailed breakdown by major category for the three and nine months ended September 30, 2025 and 2024 is presented in the table below:

Previous wording

When looking at the numbers by subsidiary, we have the following breakout for the six months ended June 30, 2025 compared to the six months ended June 30, 2024:

Current wording

When looking at the numbers by subsidiary, we have the following breakout for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024:

Previous wording

The most significant differences are: (1) the increase in technology expenses related to the deployment and upgrade of the Switching platform to allocate all subsidiaries; (2) the increases in other items such as salaries, wages and benefits; depreciation and amortization; and office, facility and other are largely the result of the addition of QXTEL to our consolidated financial statements.

Current wording

The most significant differences are: (1) the increase in technology expenses related to the deployment and upgrade of the Switching platform to allocate all subsidiaries, which will result in tremendous cost reduction once all companies are migrated to the new platform; (2) the increases in other items such as salaries, wages and benefits; depreciation and amortization; and office, facility and other are largely the result of the addition of QXTEL and GlobeTopper to our consolidated financial statements.

Previous wording

For the six months ended June 30, 2024, QXTEL consolidated only the expenses incurred between April and June 2024. In contrast, for the same period in 2025, expenses from January through June were included. This difference in the reporting periods explains the 113% increase in general and administrative expenses compared to the prior year.

Current wording

For the nine months ended September 30, 2024, QXTEL consolidated only the expenses incurred between April and September 2024. In contrast, for the same period in 2025, expenses from January through September were included. This difference in the reporting periods explains the 75% increase in general and administrative expenses compared to the prior year.

Previous wording

We are continually identifying operational synergies among all of our subsidiaries to be more cost efficient. The investment we are currently making in the development of a unique voice and SMS switching platform that will allow us to reduce costs between fifty and sixty thousand dollars per quarter.

Current wording

We are continually identifying operational synergies among all of our subsidiaries to be more cost efficient.

Previous wording

For the three months ended June 30, 2025, the Company reported an operating loss of $656,229, representing a significant increase compared to the operating loss of $342,103 for the same period in 2024. Similarly, for the six months ended June 30, 2025, the operating loss widened to $1,260,455, up from $525,555 reported during the corresponding period in the prior year. These results reflect an overall rise in operating expenses, largely associated with ongoing investments in development and growth initiatives.

Current wording

For the three months ended September 30, 2025, the Company reported an operating loss of $559,083, representing a significant increase compared to the operating loss of $56,553 for the same period in 2024. Similarly, for the nine months ended September 30, 2025, the operating loss widened to $1,819,538, up from $535,952 reported during the corresponding period in the prior year. These results reflect an overall rise in operating expenses, largely associated with ongoing investments in development and growth initiatives.

Previous wording

A comparison of the tables below highlights the significant progress of our Telecom Division, as evidenced by the increase in revenue, gross profit, and operating income for both the three- and six-month periods ended June 30, 2025. As we have previously stated, our strategy remains centered on strengthening the telecommunications segment to serve as a growth engine for the develo pment and expansion of new business lines.

Current wording

A comparison of the tables below highlights the significant progress of our Telecom Division, as evidenced by the increase in revenue, gross profit, and operating income for both the three- and nine-month periods ended September 30, 2025. As we have previously stated, our strategy remains centered on strengthening the telecommunications segment to serve as a growth engine for the development and expansion of new business lines.

Previous wording

We had other expenses of $1,600,989 for the three months ended June 30, 2025, as compared with other expenses of $1,556,509 for the same period ended 2024. We had other expenses of $2,120,649 for the six months ended June 30, 2025, as compared with other expenses of $1,953,273 for the same period ended 2024. The increase in other expenses for the six months ended June 30, 2025 is mainly due to the change in the loss on settlement of debt, and increased interest expenses incurred.

Current wording

We had other expenses of $1,694,867 for the three months ended September 30, 2025, as compared with other expenses of $646,846 for the same period ended 2024. We had other expenses of $3,815,516 for the nine months ended September 30, 2025, as compared with other expenses of $2,646,275 for the same period ended 2024. The increase in other expenses for the nine months ended September 30, 2025 is mainly due to the change in the loss on settlement of debt.

Previous wording

We finished the three months ended June 30, 2025 with a loss of $2,348,914, as compared to a loss of $1,963,887 during the three months ended June 30, 2024. We finished the six months ended June 30, 2025 with a loss of $3,493,375, as compared to a loss of $2,544,103 during the six months ended June 30, 2024.

Current wording

We finished the three months ended September 30, 2025 with a loss of $2,325,869, as compared to a loss of $773,004 during the three months ended September 30, 2024. We finished the nine months ended September 30, 2025 with a loss of $5,819,244, as compared to a loss of $3,317,107 during the nine months ended September 30, 2024.

Previous wording

The net results of the periods reported are highly impacted by the expenses in the holding entity (IQSTEL), which has a high component of interest and other financial expenses related to the funds borrowed for the acquisition of QXTEL Limited.

Current wording

The net results of the periods reported are highly impacted by the expenses in the holding entity (IQSTEL), which has a high component of interest and other financial expenses related to the funds borrowed for the acquisition of QXTEL Limited and GlobeTopper LLC.

Previous wording

Our Telecom Division, the division presently generating revenue, has a positive operating income when presented separately from the rest of our Company. As we have indicated on several occasions, our strategy is to strengthen our telecommunications division so that it can serve as a lever for the development of new lines of business, such as Fintech and Cybersecurity.

Current wording

Our Telecom and Fintech Divisions, the divisions presently generating revenue, have a positive operating income when presented separately. As we have indicated on several occasions, our strategy is to strengthen our telecommunications division so that it can serve as a lever for the development of new lines of business, such as Fintech and Cybersecurity. During this quarter, the Company began generating revenue in the Fintech area, marking an important step in diversifying its sources of income and expanding its business model.

Previous wording

As of June 30, 2025, we had total current assets of $35,555,030 and current liabilities of $36,843,884, resulting in a negative working capital of $1,288,854.

Current wording

As of September 30, 2025, we had total current assets of $29,837,729 and current liabilities of $28,742,676, resulting in a positive working capital of $ 1,095,053.

Previous wording

Our operating activities used $1,649,283 in the six months ended June 30, 2025 as compared with $3,151,688 used in operating activities in the six months ended June 30, 2024. Our negative operating cash flow for both periods is a result of our net loss and changes in operating assets and liabilities which varies depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable. Despite a larger net loss, operating cash burn decreased due to working capital changes, especially receivables and payables.

Current wording

Our operating activities used $2,602,320 in the nine months ended September 30, 2025 as compared with $2,526,651 used in operating activities in the nine months ended September 30, 2024. Our negative operating cash flow for both periods is a result of our net loss and changes in operating assets and liabilities which varies depending on our operating results and the timing of operating cash receipts and payments, specifically trade accounts receivable and trade accounts payable. Despite a larger net loss in 2025, cash used in operations only slightly increased. This is due to substantial non-cash adjustments and working capital changes:

Previous wording

Financing activities provided $1,351,026 in the six months ended June 30, 2025 compared with $5,306,444 provided in the six months ended June 30, 2024. Financing inflows dropped significantly, indicating a reduced reliance on equity and convertible debt.

Current wording

Financing activities provided $2,570,726 in the nine months ended September 30, 2025 compared with $6,239,489 provided in the nine months ended September 30, 2024. Financing inflows dropped significantly, indicating a reduced reliance on equity and convertible debt. Additionally, note that proceeds from financing activities in 2024 were largely used in the acquisition of QXTEL. In 2025 financing inflows dropped sharply, indicating less reliance on new debt or equity. Proceeds from loans payable remained strong ($5.5M in 2025), but repayments and other outflows (e.g., repayments of acquisition notes, dividends to non-controlling interests) offset much of this. Convertible notes and equity-related inflows were lower than in 2024, reflecting a more mature capital structure and less aggressive fundraising.

Previous wording

The Company is shifting from aggressive expansion in 2024 with the acquisition of QXTEL to consolidation and cash preservation in these first six months of 2025, with a heavy reliance on working capital management and non-cash financing tools. The Company’s debt repayments suggest a maturing capital structure.

Current wording

The Company is shifting from aggressive expansion in 2024 with the acquisition of QXTEL to consolidation and cash preservation in these first nine months of 2025, with a heavy reliance on working capital management and non-cash financing tools. The Company’s debt repayments suggest a maturing capital structure. At the same time, the expansion of GlobeTopper during this quarter reflects the Company’s continued commitment to strengthening and scaling the operations of its other business divisions.

Previous wording

Although our operations are influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations during the six-month period ended June 30, 2025.

Current wording

Although our operations are influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations during the nine-month period ended September 30, 2025.

Previous wording

Our accounting policies are discussed in detail in the footnotes to our financial statements included in this Quarterly Report on Form 10-Q for the six months ended June 30, 2025; however, we consider our critical accounting policies to be those related to allowance for doubtful accounts, valuation of long-lived assets, and income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. See the Consolidated Financial Statements in this Quarterly Report for a complete discussion of our significant accounting policies.

Current wording

Our accounting policies are discussed in detail in the footnotes to our financial statements included in this Quarterly Report on Form 10-Q for the nine months ended September 30, 2025; however, we consider our critical accounting policies to be those related to allowance for doubtful accounts, valuation of long-lived assets, and income taxes. Management bases its estimates and judgments on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. See the Consolidated Financial Statements in this Quarterly Report for a complete discussion of our significant accounting policies.