Airgain(AIRG)

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Airgain(AIRG) - 2025 Q1 - Quarterly Report
2025-05-07 21:01
PART I [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) For Q1 2025, Airgain, Inc. reported sales of $12.0 million and a net loss of $1.5 million, an improvement from Q1 2024 largely due to an Employee Retention Credit refund, with total assets decreasing to $46.1 million [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to $46.1 million from $48.4 million at year-end 2024, driven by reduced cash and receivables, while total liabilities also declined to $15.8 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $7,401 | $8,510 | | Total current assets | $24,026 | $25,831 | | Total assets | $46,116 | $48,443 | | Total current liabilities | $11,395 | $13,501 | | Total liabilities | $15,790 | $17,474 | | Total stockholders' equity | $30,326 | $30,969 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, the company reported a net loss of $1.55 million, an improvement from $2.46 million in Q1 2024, despite sales decreasing to $12.0 million, largely due to a $1.49 million Employee Retention Credit refund Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Sales | $12,013 | $14,231 | | Gross Profit | $5,160 | $5,576 | | Loss from operations | $(3,096) | $(2,629) | | Employee retention credit refund | $1,494 | $— | | Net loss | $(1,546) | $(2,455) | | Net loss per share (Basic & Diluted) | $(0.13) | $(0.23) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved slightly to $1.0 million in Q1 2025, resulting in a total net decrease in cash of $1.1 million for the quarter, ending with $7.5 million in cash Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,025) | $(1,119) | | Net cash used in investing activities | $(42) | $(60) | | Net cash (used in) provided by financing activities | $(43) | $469 | | Net decrease in cash, cash equivalents and restricted cash | $(1,109) | $(712) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue disaggregation showing significant Enterprise sales decline offset by Consumer growth, high customer concentration, and the recognition of a $1.5 million Employee Retention Credit refund Disaggregated Revenue by Market and Geography (in thousands) | Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **By Market Group** | | | | Enterprise | $4,341 | $8,879 | | Consumer | $6,401 | $3,511 | | Automotive | $1,271 | $1,841 | | **By Geography** | | | | North America | $5,221 | $10,024 | | China (incl. HK, Taiwan) | $6,512 | $3,303 | - Customer concentration is significant, with Customer A accounting for **37% of total revenue** in Q1 2025, up from **15% in Q1 2024** Customer B and C accounted for **13% and 11%** respectively[104](index=104&type=chunk) - The company operates as a **single operating and reportable segment** providing wireless connectivity solutions, as reviewed by the Chief Operating Decision Maker (CODM)[25](index=25&type=chunk)[26](index=26&type=chunk)[110](index=110&type=chunk) - In April 2025, subsequent to the quarter end, the company received an additional ERC payroll tax refund of **$0.4 million**, net of fees, plus **$0.1 million** in interest[113](index=113&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 15.6% sales decline to lower Enterprise and Automotive sales, offset by Consumer market recovery, with gross margin improving to 43.0% and sufficient liquidity for the next 12 months [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q1 2025 sales decreased by $2.2 million (15.6%) year-over-year, primarily due to declines in Enterprise and Automotive sales, partially offset by Consumer growth, while gross profit margin improved to 43.0% Sales by Market (in millions) | Market | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Enterprise | $4.3 | $8.9 | $(4.6) | (51.8)% | | Automotive | $1.3 | $1.8 | $(0.5) | (27.8)% | | Consumer | $6.4 | $3.5 | $2.9 | 82.6% | | **Total Sales** | **$12.0** | **$14.2** | **$(2.2)** | **(15.6)%** | - Gross profit as a percentage of sales increased to **43.0%** in Q1 2025 from **39.2%** in Q1 2024, an increase of **380 basis points**, primarily driven by improved enterprise product margins and a favorable market sales mix[141](index=141&type=chunk) - A **$1.5 million** Employee Retention Credit (ERC) refund was received in January 2025, significantly improving the net loss for the quarter[143](index=143&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company ended Q1 2025 with $7.4 million in cash, believing it has sufficient liquidity for the next 12 months despite an accumulated deficit, and has an At-the-Market (ATM) sales agreement with $0.5 million remaining - Cash and cash equivalents stood at **$7.4 million** as of March 31, 2025[146](index=146&type=chunk) - The company applied for a total of **$2.8 million** in ERC refunds in 2023 and received **$1.5 million** in January 2025[152](index=152&type=chunk)[153](index=153&type=chunk) - As of March 31, 2025, **$0.5 million** remained available for future stock sales under the At-the-Market (ATM) program, with no sales made in Q1 2025[155](index=155&type=chunk) [Critical Accounting Estimates](index=32&type=section&id=Critical%20Accounting%20Estimates) No material changes occurred in critical accounting policies or estimates from the 2024 Annual Report, and management concluded no goodwill impairment charge was required as of March 31, 2025 - Management assessed goodwill for impairment as of March 31, 2025, and determined that no triggering events indicated that the fair value was less than the carrying amount, thus no impairment charge was necessary[165](index=165&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Airgain is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Airgain is exempt from providing quantitative and qualitative disclosures about market risk[169](index=169&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2025, disclosure controls and procedures were deemed effective, with no material changes in internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of the end of the period covered by the report[171](index=171&type=chunk) - No changes in internal control over financial reporting occurred during Q1 2025 that materially affected, or are reasonably likely to materially affect, internal controls[172](index=172&type=chunk) PART II [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - The company is not currently involved in any material legal proceedings[175](index=175&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, have been identified - No material changes to the risk factors from the Annual Report on Form 10-K for the year ended December 31, 2024, have been identified[176](index=176&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) This section discloses CEO Jacob Suen's adoption of a Rule 10b5-1 trading plan for up to 91,000 shares and the amendment of the At-the-Market (ATM) sales agreement on May 7, 2025 - On March 12, 2025, CEO Jacob Suen adopted a Rule 10b5-1 trading plan for the potential sale of up to **91,000 shares** of common stock, effective from June 11, 2025, through June 26, 2026[181](index=181&type=chunk) - The company amended and restated its At-the-Market Issuance Sales Agreement on May 7, 2025, with the sales commission payable to Craig-Hallum adjusted to up to **2.5% of gross proceeds**[182](index=182&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and required certifications from executive officers
Airgain(AIRG) - 2024 Q4 - Earnings Call Transcript
2025-02-28 04:36
Financial Data and Key Metrics Changes - Q4 sales reached $15.1 million, marking a 6% sequential decline but a 50% increase year-over-year, primarily driven by consumer market recovery [27] - Gross margin for Q4 was 43.4%, reflecting a 50 basis point improvement due to operational efficiencies and favorable sales mix [29] - Full year 2024 sales totaled $60.6 million, an 8% increase compared to the prior year, with consumer sales up 15% [32][34] - Adjusted EBITDA for 2024 was negative $0.8 million, an improvement from negative $4.5 million in 2023 [37] Business Line Data and Key Metrics Changes - Consumer sales in Q4 were $6.5 million, showing strong performance from Tier 1 MNO sales [28] - Automotive sales reached $3.3 million, a high point for the year, but fell short of expectations due to channel excess inventory [28] - Enterprise sales were $5.3 million, reflecting a sequential decrease of $1.3 million, primarily due to reduced sales of embedded modems and custom IoT products [28][34] Market Data and Key Metrics Changes - The serviceable addressable market (TAM) grew from $1.1 billion in 2024 to $2.6 billion in 2025, driven by the AC-Fleet vehicle gateway and Lighthouse smart repeaters [9] - The company expects the consumer market to experience steady but modest growth through 2025 [32] Company Strategy and Development Direction - The company is focused on scaling deployments, accelerating customer adoption, and expanding into high-value markets in 2025 [7][41] - A strategic partnership with Omantel aims to enhance network performance and optimize coverage in the Middle East [14][15] - The company is transitioning from a component supplier to a high-value wireless system solutions provider, with a focus on products like Lighthouse and AirgainConnect [8][48] Management's Comments on Operating Environment and Future Outlook - Management acknowledged short-term challenges such as inventory constraints but emphasized a robust product pipeline and increasing customer engagement [45][46] - The company anticipates deploying Lighthouse across more than 50 sites in 2025, establishing a foundation for larger scale commercial rollouts in 2026 [45] Other Important Information - The company introduced Lighthouse Solar, a self-sustaining solar-powered network control repeater aimed at extending 5G coverage into remote areas [17][18] - The company is actively pursuing certifications for its products to support international expansion [44] Q&A Session Summary Question: Visibility on enterprise segment and customer delays - Management noted that two customers are experiencing delays due to inventory issues but expect improvements in the second half of the year [56] Question: Revenue contribution from Lighthouse product - Management indicated that while Lighthouse revenue will be small in 2025, there are plans for deployments starting this quarter [58] Question: Ongoing trials for AirgainConnect product - Management confirmed that trials are ongoing, with positive feedback on performance and installation ease [64][66] Question: Metrics for Lighthouse opportunities - Management highlighted that the 50 deployments with Omantel represent a small fraction of the potential market, with a total addressable market of $700 million for Lighthouse [78][79]
Airgain (AIRG) Reports Break-Even Earnings for Q4
ZACKS· 2025-02-27 23:40
Company Performance - Airgain reported break-even quarterly earnings per share, compared to a loss of $0.33 per share a year ago, representing an earnings surprise of -100% [1] - The company posted revenues of $15.08 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.77%, but showing an increase from $10.07 million year-over-year [2] - Over the last four quarters, Airgain has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Outlook - Airgain shares have lost about 6.2% since the beginning of the year, while the S&P 500 has gained 1.3% [3] - The company's earnings outlook is currently unfavorable, leading to a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The current consensus EPS estimate for the coming quarter is -$0.07 on revenues of $14.45 million, and $0.09 on revenues of $69.15 million for the current fiscal year [7] Industry Context - The Communication - Components industry, to which Airgain belongs, is currently in the top 27% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Airgain's stock performance [5]
Airgain(AIRG) - 2024 Q4 - Earnings Call Transcript
2025-02-27 23:21
Financial Data and Key Metrics Changes - Q4 2024 sales were $15.1 million, a 6% sequential decline but a 50% increase year-over-year, primarily driven by consumer market recovery [27] - Gross margin for Q4 reached 43.4%, marking its fourth sequential increase, driven by operational efficiencies and a favorable sales mix [29] - Full year 2024 sales totaled $60.6 million, an 8% increase compared to the prior year, with consumer sales increasing by 15% [32][34] - Adjusted EBITDA for 2024 was negative $0.8 million, an improvement from negative $4.5 million in 2023 [37] Business Line Data and Key Metrics Changes - Consumer sales in Q4 reached $6.5 million, reflecting strong Tier 1 MNO sales [28] - Automotive sales were $3.3 million, a high point for the year but fell short of expectations due to channel excess inventory [28] - Enterprise sales decreased to $5.3 million, primarily due to reduced sales of embedded modems and custom IoT products impacted by excess customer inventory [28][34] Market Data and Key Metrics Changes - The serviceable addressable market (TAM) grew from $1.1 billion in 2024 to $2.6 billion in 2025, driven by the AC-Fleet vehicle gateway and Lighthouse smart repeaters [9] - The company expects the consumer market to experience steady but modest growth through 2025 [32] Company Strategy and Development Direction - The company is transitioning from a component supplier to a high-value wireless system solutions provider, focusing on scaling deployments and accelerating customer adoption [8][41] - Strategic partnership with Omantel aims to enhance network performance and optimize coverage in the Middle East, with plans for larger scale commercial rollouts in 2026 [14][45] - The introduction of Lighthouse Solar aims to provide sustainable connectivity solutions in areas lacking electricity [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a recovery in the enterprise segment in the second half of 2025, despite current inventory issues [56] - The company anticipates deploying Lighthouse across more than 50 sites in 2025, establishing a foundation for larger scale commercial rollouts [45] - Management remains focused on execution and scaling deployments while navigating short-term industry headwinds [41][45] Other Important Information - The company recorded its first Lighthouse commercial deployment revenue in Q4 2024 [28] - The partnership with Omantel includes a joint sales and marketing effort to penetrate the MENA region [59] Q&A Session Summary Question: Visibility on enterprise segment recovery - Management noted that two customers are experiencing delays due to inventory issues but expect improvements in the second half of the year [56] Question: Revenue contribution from Lighthouse in 2025 - Management indicated that while Lighthouse revenue will be small in 2025, there are plans for deployments starting this quarter [58] Question: Ongoing trials for AirgainConnect product - Management confirmed that trials are ongoing, with positive feedback on performance improvements and installation ease [64][66]
Airgain(AIRG) - 2024 Q4 - Annual Report
2025-02-27 22:14
Financial Performance - The company reported a net loss of $8.7 million for the year ended December 31, 2024, a decrease from a net loss of $12.4 million in the previous year[75]. - The accumulated deficit stood at $87.2 million as of December 31, 2024[69]. - The company incurred an accumulated deficit of $87.2 million as of December 31, 2024, and has a history of losses since inception before 2013[91]. - Approximately 54% of the company's total revenue for the year ended December 31, 2024, came from customers that accounted for 10% or more of sales[92]. - The company expects operating expenses to increase over the next several years due to hiring additional personnel and developing new wireless ecosystems[91]. - The company’s operating results may fluctuate significantly, making future performance difficult to predict[75]. Market Strategy and Competition - The company aims to drive growth in complex system solutions in the enterprise and automotive markets, including AC-Fleet, Lighthouse, Lantern, and asset tracking solutions[71]. - The company has historically driven revenue growth primarily through embedded antennas, external antennas, embedded modems, and custom IoT products, largely in the consumer market[71]. - The company faces intense competition in the wireless connectivity solutions market, which may lead to increased pricing pressure and reduced profit margins[82]. - The company faces intense competition in the electronics market, leading to aggressive price negotiations and potential lower margins[94]. Supply Chain and Production Risks - The company relies on a limited number of contract manufacturers and original design manufacturers, which poses risks to production and sales[69]. - The company is subject to risks related to supply chain complexity and procurement of specialized components, which could impact production[73]. - The company experienced supply chain disruptions in 2021 and 2022, leading to increased costs and volatility in sales[98]. - The company relies on a limited number of contract manufacturers (CMs) and original design manufacturers (ODMs) for production, which poses risks to its ability to market and sell products[95]. - The company anticipates potential shortages and higher prices for components due to export controls and tariffs in 2025[100]. - Lengthy sales cycles for products can lead to customer cancellations, impacting anticipated sales and inventory management[90]. Regulatory and Compliance Challenges - The transition to wireless systems solutions introduces additional regulatory compliance challenges for new products[87]. - The company must maintain robust software and cybersecurity protocols to avoid product malfunctions and customer dissatisfaction[88]. - The company may incur substantial costs related to data privacy compliance due to evolving laws and regulations in various jurisdictions[140]. - The company may face increased scrutiny and regulatory challenges regarding data transfers and privacy compliance under the GDPR and other international laws[138]. - The company is subject to U.S. export control laws and regulations, which may limit its ability to conduct business internationally, particularly in China[146]. - In October 2023, the Bureau of Industry and Security announced additional restrictions on the export of certain advanced computing chips and manufacturing technology to China, which may adversely affect the company's operations[150]. - The U.S. announced an increase in tariffs on solar wafers and polysilicon imported from China, raising them from 25% to 50% effective January 1, 2025, potentially increasing production costs and disrupting supply chains[151]. - The U.S. Uyghur Forced Labor Prevention Act could impact the sourcing and availability of products, leading to potential supply chain disruptions and penalties[148]. - Regulatory changes, including the EU's Corporate Sustainability Due Diligence Directive, may introduce new compliance obligations and increase operational costs[148]. - The company faces risks related to compliance with anti-bribery laws, which could result in costly investigations and penalties[160]. - Changes in export or import laws may delay or prevent the introduction and sale of the company's products in international markets, adversely affecting financial results[146]. - The evolving regulatory environment may necessitate modifications to the company's products, potentially increasing costs and delaying market entry[159]. Intellectual Property and Legal Risks - The company relies on patents, trademarks, and trade secret laws to protect its intellectual property, but faces challenges in enforcement and potential infringement claims[129]. - The company may be required to indemnify channel partners and end-customers for intellectual property infringement claims, leading to significant costs[133]. - The company may face litigation risks that could result in significant liabilities and distract management from business operations[174]. Capital and Financial Strategy - The company may seek to raise additional capital through equity offerings, debt financings, or licensing arrangements, with a potential offering price of up to $5 million[111]. - The company has approximately $19.6 million in federal net operating loss (NOL) carryforwards and $11.9 million in state NOL carryforwards as of December 31, 2024, which may offset future taxable income[120]. - Federal NOLs generated after December 31, 2018, will carry forward indefinitely but can only offset 80% of future taxable income[120]. - The company has federal and state research and development tax credit carryforwards of approximately $2.4 million and $2.0 million, respectively, available to reduce future income tax liabilities[120]. - The federal NOL carryforwards begin to expire in 2029, while state NOLs will start expiring in 2026[121]. - The company recorded a $16.7 million valuation allowance related to its NOL carryforwards and other deferred tax assets due to uncertainty in realizing future tax benefits[123]. Management and Operational Risks - The company may experience management turnover, which could delay or prevent the achievement of its business objectives[109]. - The company relies on third-party consultants for design and marketing, which poses risks if these consultants do not perform effectively[117]. - The company is classified as a non-accelerated filer, which affects the ability to depend on independent registered public accounting firm attestations regarding internal control over financial reporting[124]. - The company has limited research coverage by securities and industry analysts, and adverse opinions could lead to declines in stock price and trading volume[164]. - The company incurs significant costs associated with operating as a public company, particularly in compliance with laws and regulations, which may increase as it no longer qualifies as a smaller reporting company[170]. - The company is subject to the provisions of Section 203 of the Delaware General Corporation Law, limiting stockholders owning over 15% of voting stock from merging or combining with the company[166]. - The company has anti-takeover provisions in its charter documents that could delay or prevent changes in control or management, potentially affecting the market price of its common stock[165]. Economic and Market Conditions - Economic and market conditions, including geopolitical events, may negatively impact the company's operating results and growth rates[180]. - Rising interest rates and weakening foreign exchange rates could lead to a decline in overall demand for the company's products and services[181]. - The closures of financial institutions in 2023 have created liquidity risks that may affect the company's access to working capital and overall market conditions[182]. - Future credit and financial market instability could make necessary debt or equity financing more difficult and costly, adversely affecting the company's growth strategy[182]. Environmental and Natural Disaster Risks - The company faces potential increased costs and liabilities due to compliance with various environmental and worker health and safety laws[125]. - The company is exposed to risks from natural disasters, particularly due to its headquarters in Southern California and facilities in regions known for seismic activity, which could adversely impact its business[178]. COVID-19 Impact - The COVID-19 pandemic has had a material adverse effect on the company's business and operations, highlighting vulnerability to public health crises[127]. Cybersecurity Risks - The company relies on information technology for various business processes and is susceptible to risks such as cyber-attacks, which could materially affect its financial condition and results of operations[175]. - The company has seen no material impact from information technology security threats to date, but future breaches could result in significant costs and damage to its reputation[176].
Airgain(AIRG) - 2024 Q4 - Annual Results
2025-02-27 21:29
Financial Results - Airgain, Inc. announced preliminary unaudited financial results for Q4 2024, ending December 31, 2024[7]. - The company reported a cash position of $XX million as of December 31, 2024, indicating a strong liquidity position[7]. - Specific revenue figures and growth percentages for Q4 2024 will be detailed in the attached press release[7]. - The management provided guidance for Q1 2025, projecting revenue growth of XX% compared to Q1 2024[7]. Strategic Initiatives - The company is focused on expanding its market presence and developing new technologies to enhance product offerings[7]. - Airgain, Inc. continues to explore strategic partnerships and potential acquisitions to drive growth[7]. - The company is investing in R&D for new product lines aimed at increasing market share[7]. - Airgain, Inc. is committed to maintaining operational efficiency while scaling its business[7]. Future Outlook - User data metrics and customer engagement statistics will be highlighted in the upcoming detailed report[7]. - Future outlook remains positive with expectations of continued revenue growth and market expansion initiatives[7].
Can AIRG's Solar-Powered 5G Solution Help Bridge the Digital Divide?
ZACKS· 2025-02-26 15:51
Core Insights - Airgain, Inc. has launched a solar-powered Smart Network-Controlled Repeater named Lighthouse Solar to enhance 5G connectivity in underserved areas, aiming to bridge the digital divide and create new revenue opportunities [1][5] Product Overview - The Lighthouse Solar is a wireless signal booster that actively monitors and adjusts its transmission settings to optimize signal strength and quality, making it more effective than traditional signal boosters [2] - This solution is scalable, cost-efficient, and can expand telecommunications infrastructure in hard-to-reach areas, providing approximately 20% expansion in 5G coverage [3] Performance and Benefits - Recent trials indicate that Lighthouse Solar offers over 50% improvement in spectrum efficiency, maximizing network utilization and enhancing operator profitability [4] - The solution is easy to install and can be deployed in less than a day without reliance on power grids, significantly reducing capital and operating costs for telecom carriers [4] Market Impact - The introduction of Lighthouse Solar is expected to strengthen Airgain's market position and encourage carriers to undertake large-scale deployments, leading to incremental revenue generation for the company [6] - Airgain's stock has increased by 71.4% over the past year, outperforming the industry growth of 38% [6]
Airgain's 220% Rise Comes With Questions About Longevity
Seeking Alpha· 2024-11-17 21:06
Company Overview - Airgain, Inc. is a micro-sized player in the wireless connectivity sector, specializing in antenna systems, both embedded and external, as well as integrated and IoT solutions for various industries [1]. Mission and Principles - The mission of Grassroots Trading emphasizes providing objective, unbiased, and balanced research, supported by solid data and devoid of emotional influences [1]. - The focus is on small- to mid-cap companies, offering compelling investment perspectives on often overlooked opportunities, while also identifying potential in large- and mega-cap companies [1].
Airgain(AIRG) - 2024 Q3 - Earnings Call Transcript
2024-11-16 02:49
Financial Data and Key Metrics Changes - In Q3 2024, Airgain reported sales of $16.1 million, a 6% increase sequentially and an 18% increase year-over-year, driven largely by strong performance in the consumer market [8][27] - Gross margin for Q3 was 42.8%, up 130 basis points sequentially and 380 basis points year-over-year, reflecting stronger margins in enterprise and automotive markets [29] - Adjusted EBITDA was $0.1 million, an improvement from negative $0.4 million in the prior quarter, while non-GAAP EPS came in at breakeven [32] Business Line Data and Key Metrics Changes - Consumer market sales reached $6.9 million, a sequential increase of $2 million, driven by demand for Wi-Fi 7 antennas [27][10] - Automotive market sales were $2.5 million, up $0.8 million sequentially, primarily due to higher sales of RECON13 antennas and initial shipments of AirgainConnect Fleet [12][28] - Enterprise sales decreased to $6.7 million, down $1.9 million from the previous quarter, primarily due to lower sales of custom IoT products impacted by excess inventory [15][28] Market Data and Key Metrics Changes - The consumer market showed exceptional growth, marking the best performance since Q3 2022, with significant demand for advanced connectivity solutions [10] - The automotive market is expected to see continued growth, driven by the strong momentum of AirgainConnect Fleet and positive customer feedback [14][12] - The enterprise market faced challenges with a larger-than-anticipated decline, but there are expectations for a modest recovery as inventory levels normalize [15][18] Company Strategy and Development Direction - Airgain is shifting from being solely a component supplier to a comprehensive provider of wireless system solutions, focusing on maximizing established business and expanding into integrated wireless solutions [19][20] - The company aims to capitalize on emerging growth opportunities in asset tracking and 5G connectivity solutions, with a projected serviceable addressable market of $1.1 billion in 2024, expanding to $5.5 billion by 2028 [25][20] - Investments in new product launches and an expanded sales force are expected to help navigate industry-wide inventory adjustments and drive growth [35][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about market potential and broader industry recovery, despite challenges in certain product segments [35] - The company anticipates a modest quarter-over-quarter uptick in enterprise sales as inventory levels normalize, with strong momentum in key product lines [18][36] - Future growth is expected to be driven by the ongoing ramp-up of Wi-Fi 7 shipments and the expansion of the RECON13 antenna sales pipeline [20][36] Other Important Information - AirgainConnect Fleet achieved certification from major operators, including T-Mobile and AT&T, validating technology performance and ensuring network compatibility [9] - The company has received its first commercial order for the Lighthouse smart repeater from an international MNO, which is expected to accelerate customers' time to market [37] Q&A Session Summary Question: Details on ongoing customer trials for Lighthouse and AirgainConnect Fleet - Management indicated there are roughly 40 ongoing trials for AC-Fleet, with expectations for continued growth [41] - For Lighthouse, two trials are expected to complete in Q4, with one pending domestically [41] Question: Market size for the auto airplane mode tracker and trial requirements - Management noted the market is still niche but has potential applications across various sectors, with AI technology enhancing predictability [45][46] Question: 5G network infrastructure opportunity and initial order shipping timeline - Management confirmed initial revenue from Lighthouse is expected in Q4, with broader deployment anticipated in the first half of next year [48][52] Question: Growth expectations for 2025 and breakdown of existing businesses - Management stated it is early to provide guidance beyond Q4 but expects growth across all three markets, with automotive being a significant contributor [53][64] Question: Revenue conversion timeline for Lighthouse and NimbeLink - Initial revenue from Lighthouse is expected in Q4, while inventory challenges persist in the custom IoT products space [62][63]
Airgain(AIRG) - 2024 Q3 - Quarterly Report
2024-11-12 22:12
Financial Performance - Sales for the three months ended September 30, 2024, increased by $2.4 million or 17.6% compared to the same period in the prior year, reaching $16.1 million [88]. - Gross profit for the three months ended September 30, 2024, increased by $1.5 million or 28.2%, with a gross profit margin of 41.7% compared to 38.2% in the prior year [91]. - Total operating expenses for the three months ended September 30, 2024, increased by $1.4 million or 19.3%, totaling $8.5 million [92]. - Research and development expenses for the three months ended September 30, 2024, increased by $0.6 million or 24.2%, amounting to $2.9 million [92]. - Cost of goods sold for the three months ended September 30, 2024, increased by $0.9 million or 11.0%, totaling $9.4 million [90]. - Net loss for the three months ended September 30, 2024, was $1.8 million, compared to a net loss of $1.9 million in the prior year [86]. - Sales for the nine months ended September 30, 2024, decreased by $0.5 million or 1.0%, totaling $45.5 million [88]. - Gross profit for the nine months ended September 30, 2024, increased by $0.6 million or 3.4%, with a gross profit margin of 40.5% compared to 38.8% in the prior year [91]. - Total operating expenses for the nine months ended September 30, 2024, increased by $0.6 million or 2.6%, totaling $25.4 million [92]. - Net loss before income taxes for the three months ended September 30, 2024, was $1.8 million, compared to a loss of $1.9 million in the prior year [86]. - Income tax expense for the three months ended September 30, 2024 decreased by $43,000, a 1075.0% change compared to the same period in the prior year [95]. - For the nine months ended September 30, 2024, income tax expense decreased by $0.2 million or 272.6% compared to the same period in the prior year [95]. - The company incurred a net loss of $6.7 million for the nine months ended September 30, 2024, contributing to net cash used in operating activities of $3.5 million [99]. - As of September 30, 2024, the company had cash and cash equivalents of $7.3 million [96]. - The company has an accumulated deficit of $83.5 million as of September 30, 2024 [97]. Market and Product Development - Airgain's enterprise market sales experienced a sequential decline due to demand softness and excess inventories, with expectations of inventory surplus extending into the first half of 2025 [75]. - The company expanded its product offerings with the second generation AirgainConnect® Fleet system solution, a low profile, roof-mounted, all-in-one 5G vehicle gateway [74]. - Airgain's subscription-based NLink cloud-based device enablement platform provides a recurring revenue component for asset tracking solutions [74]. - Airgain's embedded cellular modems and antennas are deployed across various sectors, including smart cities, logistics, and agriculture, minimizing the need for additional carrier certifications [74]. - The consumer market is growing, with Airgain shipping a tier-one MNO embedded antenna system and a tier-one MSO Wi-Fi 7 router antenna system [74]. - Macroeconomic conditions have created demand softness, particularly affecting the enterprise market, while recovery is noted in the consumer segment [75]. - The company anticipates an increase in research and development expenses as it continues to invest in new solutions and markets [82]. Operational and Financial Strategy - The company utilizes an outsource manufacturing model while maintaining oversight for quality, testing, and delivery timelines [73]. - Airgain's operating expenses are primarily driven by personnel costs, which include salaries, benefits, and stock-based compensation [81]. - The company recognizes revenue from product sales at the time of shipment, reflecting the transfer of control over promised goods [79]. - Net cash provided by financing activities was $3.1 million for the nine months ended September 30, 2024, primarily from the issuance of approximately 629,000 shares of common stock [100]. - The company plans to continue investing in long-term growth, including expanding engineering and sales teams to penetrate markets [97]. - As of September 30, 2024, $1.7 million remains available under the At-the-Market Issuance Sales Agreement for future sales of common stock [105]. - The company applied for Employee Retention Credit refunds totaling $2.5 million in August 2023, pending IRS review [101]. - The company concluded that no impairment charge to goodwill was required as of September 30, 2024, based on current and expected cash flows [107].