AIRG - Earnings call transcript Q2 2021

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Operator

Good afternoon. Welcome to Airgain’s Second Quarter 2021 Earnings Conference Call. My name is Chena and I will be your coordinator for today’s call.

Joining us for today’s call are Airgain’s CEO, Jacob Suen; CFO, David Lyle; and Senior Vice President of Product and Marketing, Morad Sbahi.

As a reminder, this call will be recorded and made available for replay via link available in the Investor Relations section of Airgain’s website at www.airgain.com.

the publishing be sell-side remarks, questions up prepared Airgain’s from analysts. management’s call open will for Following I would now to Mr. like to turn the call over Lyle.

David Lyle

the and that due and about Airgain circumstances those by call. future earnings associated date Thank is I business. the and materially by conference Airgain’s no after uncertainties conference management or afternoon from revise good and events undertakes or to Actual accurate be SEC during future forward-looking these qualified call These cautionary and results This strategy this XXXX. listeners of as of differ are financial will statements obligation to the statements to you this contained implied Airgain performance. company’s today’s filings. this forward-looking reflect any stated statements forward-looking to making that of events risks only update release live in contains or business statements broadcast, call, operating date statements and information time-sensitive XX, with Airgain’s caution forward-looking everyone. could August

call results. include this a conference further of including financial to earnings release may see addition, a for details, non-GAAP discussion reconciliation GAAP the measures. In Please non-GAAP of today’s

Now, CEO, over like turn to I would Jacob the call to our Suen. Jacob?

Jacob Suen

out. Welcome, progress commentary QX outlook the as financial expect color our we about for executing as around towards made will play Dave. XXXX joining then provide I some with year update us everyone financial on have Dave and to the well you you, we and thank then today. results Thank QX our QX strategy. details how start on the will call an and

financial our results. Let’s start addressing QX by

to our range, earnings the EBITDA the share. margins Our peak and from low improved at us non-GAAP midpoint expense operating end in gross QX controls our of range previous allow revenue guidance guidance of and total per but came

Let’s address revenues more specifically.

beginning to integrated AirgainConnect grow half the to poised industrial our for first play is Wi-Fi coming important in IoT is of systems our the out enterprise strategy our quarters. in and continuing wireless note and revenue that First, growing to while revenue traditional with QX, XXXX to our it’s revenue systems growth in grow is

was lower extent, QX global AirgainConnect supply revenue, a Our by previously to than affected and expected the revenue lesser shortage.

look are anticipated, let’s believe new AirgainConnect. in we this we at more on products with really has all closely timing sell-through the would which So, new our a for I uncommon not about issue. what future. primarily Based is we excited the for markets. partners, prospects slower launching are say than Current of is been discussions channel AirgainConnect with in growth

to some we leads. data you have about points. in So additional with XXX wanted customers’ already We provide

than more demos XXX as speak. have we going We on

interest XX We have indicating purchases. future different almost for customers

customers those by feedback positive products. our very have We using already

to in product well our $XXXX limited for commitment the AirgainConnect distributors to price spirit that the partnerships a purchases are our AT&T, to a as but light $XXX underlying to in business to are service sales. in and partners, total the AirgainConnect by of we performance AirgainConnect In value-added commitment the AirgainConnect. by good of of excited FirstNet. of our for amounts pleased customer. global we our FirstNet, very ramp In device with of AirgainConnect to XX customer that of importance speaks resellers, distributors supply with new chain about with of in difficult the to as only This per device AT&T purchases specifically and new promotion savings of to the shortages energize states slower recognizing resellers as All-in-all, introduced together addition, not a just of launched just per a in committed we our value-added we $XXX credit targeted customers time. channel such reductions

solutions We transitioned we supplier momentum from a encouraged a component the system integrated are antenna as to in our growth systems provider. especially wireless by

components impacted shortages. Our antenna global is contributing the embedded supply revenue overall being by customers passive still transitory our revenue chain our despite materially to

Let’s making with closed NimbeLink, X the are our move this which progress to recent on we of now year. of January acquisitions on

the system the an to has you of space. broaden know, strategic As mission advanced integrated diversification, acquisitions role in overall especially NimbleLink deliver to levels plays market of growth significantly solutions NimbeLink, our important globally. our strategy wireless IoT within higher industrial

achieved global about we solid parts growth this the issue positive will the well NimbeLink excited into overall year continued other performed, growth shortage have XXXX. to how revenue and despite being products very are see chip results winning from and We pressure believe This is throughout our business. we

made We with addressable of summary, with integration. for Airgain with NimbeLink growth AirgainConnect, launch additions our NimbeLink is progress the and the In across have markets, growth. believe well-positioned excellent of together the we future opportunities

to as Prior as Innovations GE Chief Ventures. of GE as for of IoT Ericsson, also Ericsson. Development and he Business in you Commercial Director the Managing Before announcements Officer Qualcomm management Development Allgood. of to to We growth, brings President back for turn and and the of technology has essential to Head served working I in Kiva Airgain guide Kiva I to New member, Airgain diversity Business our board Intelligence board our particularly as Global wanted extensive industry, Dave, executive to markets forward our automotive insight Kiva strategic Vice XG to for industrial her it new and welcome She IoT. to into goals. as of as recently to all of Kiva recent point President with experience Directors. her well help long-term served and served Qualcomm. Board look and most knowledge Airgain’s to over Solutions

turn walk call to financial the over to like would I highlights. will who Now, through Dave Dave? back us

David Lyle

Thank you, Jacob.

and of was guidance QX of bottom million the quarter $XX.X XXXX previous flat relatively revenue end our Second with range. at

compensation assets $XXX,XXX. we million, an Jacob service revenue margin plus from our of of of consumer range operating This as million quarter’s QX, from to and primarily discussed. amortization of provider enterprise the expense AirgainConnect over American primarily shortage. due previous products to into as $X was was margin better revenue global to growth million Let’s NimbeLink due high-end million one Adjusted operating present million finished million dig $XXX,XXX our in was $XXX,XXX IoT a the as guidance in Enterprise of chip products. revenue $X.X guidance the products. our primarily up due was of previous QX well previously customer products, to $X.X both the due growth by primarily revenue as to $X.X expected. purchased as believe from EBITDA from equaling related which QX $X.X non-GAAP and mostly million about range $X.X revenue to seeing international products margin industrial and Automotive million acquisition, of to Excluded $X.X large consideration materially little was XXXX QX amortization through better weakness in traditional the revenue for revenue. with AirgainConnect, QX down in than Wi-Fi as from intangible from $XX.X increase QX. margin North QX each provider million from midpoint contingent is in lower fully value deeper out offset above we was was will lower expense, expense of our customers $X.X on gross revenue, fair service Excluded new markets the the non-GAAP QX, gross on sequentially non-GAAP three stock-based in minus Non-GAAP Beginning weakness expected earn-out, from out revenue in previously guidance revenue, million targeted by QX, much or $X.X somewhat understand of from growth for lower our we suite market related at do better gross NimbeLink end NimbeLink in XX.X% chip in value QX outstanding to gross than now our down mainly in range from our $XXX,XXX tangibles. from at its in to previous QX pressure be and are due offset which the about $XXX,XXX to also operating better shortage adjustment, NimbleLink but revenue expenses. the due paid was well based QX, our and of aftermarket

was million. $X.X net Moving income our non-GAAP to income, was GAAP net QX above previous $XXX,XXX guidance in on loss range. net QX

per earnings share, GAAP $X.XX, earnings our to QX per Moving $X.XX. share was was non-GAAP per share loss

the cash in cash support of cash, quarter. We equivalents QX. $X.X related the restricted QX not the inventory to mostly our the revenue million, during in increase nonlinearity did was Finally, shortage. quarter half shares towards million decline $XX.X customer repurchase global of and totaled during than approximately an to lower any about demand back The supply and in cash

XXXX. like Now, expect $XX preliminary I or quarter the at $XX outlook In the a million we $XX the of million be would range and revenue decline third of to million sequentially provide QX, and in for range. midpoint to the of

and We enterprise Wi-Fi aftermarket growth our and market. NimbeLink as growth both market and traditional in expect enterprise growth fleet markets automotive revenue grow well product our to enterprise from in our both sequentially primarily QX, from in automotive revenue as AirgainConnect

reflected customers, the revenue in in consumer will our guidance our shortage. revenue of We approximately million alone result range. We supply our a the on $X pressure impact to global market which shortage product QX the is of however, as from believe see chip already QX, expect consumer in be

We expected of gross acquisition-related lower growth was from with in the in quarter higher XXX be kind third we expect consumer points non-GAAP $XXX,XXX to product should margin considerably minus intangibles. basis as to be revenue gross margin gross lower. see or Excluded plus gross in amortization purchased in non-GAAP XX% margin margin revenue of

minus chip Excluded expect of revenue our $X.X was to of compensation value plus $XXX,XXX estimate intangibles expense about million the focus per expenses begins to and loss $XXX,XXX. the continue to pressure about about expect on and expect of $X.X the about additional of QX will of from $X.XX. be related be share and revenue QX the per guidance, non-GAAP loss non-GAAP At we shortage share midpoint guidance, operating $XXX,XXX we million operating stock-based basis QX ease. fair purchased minimizing we midpoint as At NimbeLink adjusted would amortization acquisition-related in operating expense be about until a expense or earn-out. aggressively to on in of non-GAAP $XXX,XXX We GAAP negative adjustment on EBITDA $X.XX our

Wi-Fi providing our in with to to be of QX integrated our XXXX. the as well QX grow our We sequentially, revenue addition commentary across thought QX to sequentially continue all revenue in will consumer it with We revenue industrial QX as our revenue see as this enterprise well color year share will growth through that and and IoT AirgainConnect. believe particularly about this we you revenue some believe of will also of product We and through will automotive ramp guidance, as markets. grow XXXX. would three continue traditional valuable that we beginning enterprise In system believe in

Now, to will it I turn Jacob. Jacob? over back

Jacob Suen

to near-term transitory Thanks, ability wanted long-term Dave. strategy and supply reiterate chain confidence to our I in our through our manage our issues.

products industrial IoT, and traditional really We our integrated and particularly are of way. about leg next the newer seeing growth, systems enterprise begin Wi-Fi excited are leading to with from our AirgainConnect the ramp wireless products

foundational being We we have profitable Airgain, multiple provide AirgainConnect enterprise growth. instructions. targeted we are innovative out will continue provide business. products call consumer and long-term our while the ready for our products With cash to appropriate and the questions. are platform, new for we open confidence Operator, your of transition new that, please revenue believe our And the flow with that submarkets we for for foundational developed to positioned

Operator

Instructions] Company. Ackerman question from [Operator line Cowen comes & Karl of First from the

open. now is line Your

Karl Ackerman

gross be relates quarter, Yes, on would XXX less gentlemen. for first begin decline good to a there announcing margin rebates also that’s of tended I the want that have are AirgainConnect. third thought appreciate wouldn’t point gross I here. substantial as favorable if margins to have margins. you thought much afternoon, for just lower, you’re basis of the the mix forecasting in consumer I question. so that comment to How I the with the and

about you helpful? that dynamics could talk those be So, if would

David Lyle

Yes, sure, that. I’ll take

seen On on the of the will just gross it, check haven’t consumer would That that our gross is de website. you pressure we That which minimis opposite. AirgainConnect promo, gross is a promo you actually corporate being pretty I margins they a announced, be piece, pretty are actually being, our say consumer said, margins. should the The potentially gross above amount fantastic comment on are our if your margins. now, Right the lower margins about side high.

new just these shift like we about kind of QX that – we that of alone gross some ramp on million but I in said pressure, margin. that we pressure will the products, kind as in start see didn’t to of out So, $X having gross little consumer talked historical a QX that our margins, should to

Karl Ackerman

of it have sounds see very helpful. be visibility you like that was beyond I revenue in in beyond impacted just I that you. on it. hand, touch Thank that. ability indicated, That appreciate constraints why you the could your challenges. consumer versus chain you decline will entire OEMs? Got appreciate back, have was the orders specific order you Customer that I supply further firm talked hoping And a to procure How you the much your to due secondarily, own outlook kit customers then will whether gateway you snapping QX, QX? about snap back, perhaps extending just

Jacob Suen

Carl. Thanks, hi. Yes,

this here. Jacob So is

going on stability a of issue as down certainly the is chipset due they look in that as by pandemic, supply of far as is be from this lot pandemic regions of of better. turnaround Again, impacted, based part the issue, things to lot the that So customers, predicting the quarter selling much this the the some shortage and how our that thing down should are on – now, of times. to right as and right well many chain indications indication that they of based information, latest shut that QX is were

the strong demand, have really of demand. So, them when I into look all

with the chipset, much on capacity, not how can their more of issue about out only but build, the the shortage it’s about factory. So they

Okay.

So does that help you?

Karl Ackerman

Thank you. does. it Yes,

Operator

from comes question from Next Scott Partners. the line Searle Capital of ROTH

now is line Your open.

Scott Searle

Good afternoon. Thanks for taking questions. my

got the sequentially quickly in it of provided of think a is? as dollars? in And is how we should you initially, up seeing that in down as some year. What is? pipeline terms that materialize opportunity gives and you terms second half on of million. in that funnel. how you start absolute lower that was better, ongoing? those cycle dive I bit then into sales do the about What what do customers you was in Was Could us of talked you where sell-through comfort thinking maybe it there? so potential like it in like quarter. $X.X that this a that Are the And represent? know terms you What number the period Those long be in sounds represent little to that you’ve terms part AirgainConnect, be target like, you just are problem of calibrate they of units about distillation get XXXX, pilots units in that detail think looking near-term back ‘XX? of in to sounds Just the we about the end will they the terms of

David Lyle

of the Jacob So, question. I why part second question the take don’t of first the then and the take part can

was Just a from going to in QX was terms decline. big of pretty the QX. It revenue impact

have Most to And was low of we AirgainConnect midpoint impact. – the address how a QX kind don’t and AirgainConnect you and we revenue. landed in our big where of beyond? of ramping why end guidance So, Jacob it then range of to related the the did the comfortable are that

Jacob Suen

and AT&T several say timing meeting team they to say, confidence to and have I them pointing sure, feedback personally and I of have FirstNet of demonstrate the is all a executive with And weeks. is last the the I talking to issue. phenomenal, Yes, in the

here one value executive really was given can AT&T But quicker, of pointed little going. lot kicking trying us a me, really we’re a the the example. be ship that to cruise provides customers. speedboat this dealing with it out that get longer would is lot And it thing as this to faster, just of what you takes hoping to a bit an than as All off

able the you, some many with areas the previously in So, able it feedback managing Oregon, having from Deputy to video, effectively, in AirgainConnect, was Wi-Fi guys communicate he tell look, the he we was Wi-Fi. able I the do they on not him Chief that, while there from customers, he I actually the is and how to problem feedback is difference felt have the a of have signal. with other to people and And have think be now don’t much actually huge only to to one, the that, makes he is capture just managing more have AirgainConnect, the able don’t

volume So, one commitment more why us that strongly the with going they feel reason you’re about see and and a of and and going giving they more speaks promo the show. to that’s

that strongly about is this showing like about feel be is of next not and needed and value this think a feel the me sector, really during area, I off for to going if is by coverage, beyond. extended to urban the the it’s where next these sooner. Let just I take really crisis strongly really it’s year, I feel going tremendous – by – by not beginning and also QX product it’s product

Okay.

Scott Searle

thanks. any Jacob, way customers. you helpful, talked is what there, I think quantify there looks that to sales about Is like? Very funnel XXX

customers what think out in ‘XX, potential represent annualized into we terms get I kinds are XXX units ‘XX? was those as pilots, of it of

Jacob Suen

as some share I I’ll Okay. could.

it’s that even strongly customers back the There be mentioned. and small dollar to we the given to are formed descend about device. $X,XXX in have amount that it’s Some the, portions vehicles there, trend of for is feel and descend the into that’s of stable baked quite about. also that us mean, fact of plus a per why we out that through – XXX,XXX that So, told that and I trend looking units, We all the right? you going

precise just once the don’t to I’m start think and but going I once many So, with start cruise feel ships really as see we you’re the units, far share descend, know think rolling, that I as results. up, timeline, it trend and we that really how our great picking you strongly that

Scott Searle

great. Okay,

David Lyle

follow units Generally talking can Yes. of are more Morad I of single-digit of interested you XXs in but any believe flavor, you the up of the kind And you those got most kind and Scott. little give a we’re to I seeing of that if low say, kind customer of color, units, we’re customers hundreds just units. would to per speaking, here, about. way all the

Morad Sbahi

get agencies introduced Jacob what are the like some, just before us and to at details said, Yes, I add look bit Jacob a right? your show folks the again have just product hands so a saying and AirgainConnect matter little so mentioned, with installed many want are timing any significant promotional that you purchase, initiatives, with companion. that like materialize, is this and committed say thing for customers Dave tried that if on testimonials when of that a what FirstNet have about we of and have you within proceed you talking funnel, the they have we’re if new this new talking AirgainConnect about out around talking leads, If more hundreds with will Airgain’s tried, to to that and that just really there number to and certainly thousands and we’re the starts become that an that activity we’re

Scott Searle

Dave, we of progressing, in got half come that lot fourth $X we us kind like the could early And bouncing you of earn-out comfort if number there, million is that two back us its Could some quick snap that, terms What’s consumer a here? it sounds use more snapback seeing? Thanks. little remind The sequentially. the question, quantify expect you actually sales sounds Because several you’ve of in quickly in see follow terms bit I idea second in quickly? quarters? do and Wi-Fi to Does what it the back? was up thought gives also what earlier to back that the it could on it Okay, so, term of tied that’s given a that to? you’re you quarter. of Does take the down it growth process hit Need how like on would NimbeLink, helpful. follow-ups. great, very the

David Lyle

Sure.

they the what it’s being of for than at earn-out were $XX.X they revenue never terms year In That publicly in said, finished last that the target last we we was. million materially disclosed said have revenue NimbeLink, year. better where

today, more of pretty on this accounting even we’re that number, we a it’s large than about. earn going just quarter adjusting what based And expected So in which growth – seeing to excited the out and pretty we’re we’re why the that’s growth have we’re upwards. seeing

to pure Jacob really In our that coming And this chain positive and never terms see consumer customers of the is know, got see but more assuming kind that related we come the to occurred happens. on simple like supply much are in we QX, of to said back this, shortage what back globally. in wait start you to

or I back some commentary? have Morad, other any have Jacob should decent to at see you size think, levels going color before. growth if been to probably we’re the we

Morad Sbahi

I Yes, really again that just to it’s going cycle, Scott, space, a right. that say, in was

to there. now really chipset the after so, in supply what in again we devices so for increasing shortage room and going then increases revenue Airgain wave the through got the how and X And itself so translates the constraints and that XE and when and Right. the issue is of that right we these opportunities depends on gates, opportunities are that execute The are on bring you’ve what those Wi-Fi and is dual-band and complexity complexity resolved will first play Wi-Fi chain. the the people had to

Scott Searle

Thank you. Okay, great.

Operator

Securities. Riley the Craig from Next question comes from Ellis of line B

now is line open. Your

Craig Ellis

and of the already taking addressed late was if apologize you’ve these question the call. some very I items, for on Thanks I Yes. guys getting

press better marketing to wanted looks joint came like So, I with that out what understanding start release the of of AirgainConnect just AT&T. with

near-term program AirgainConnect an price the an one, does do of place? what providing subscription incentive buy, think way potentially that something that incentive stays then there on that on in about AirgainConnect could margins like it to impact we to are long they So, margins say are the and if So looks that how could be the and AirgainConnect

Morad Sbahi

Yes. I’ll that. the Thanks for question. take

So, of as haven’t there have that noticed There interest, that we’ve a with AirgainConnect right? into interest started shown forward this we’ve is really is with moved the and customers we – effort market, lot also the purchase it’s then the partnership with is and and which $XXX is by by the that, with partners. savings, $X,XXX is this it way AT&T, plays rest Airgain in and total a out covered AT&T of

And and want so, enable that to adoption hopefully could move is with and and us we feel this ahead will customer that move forward faster then this I folks an get really to then AirgainConnect, that the to sell-through forward. think go help accelerate enabler

terms is that to in this the Airgain. on Dave we but something that. let to color for pressure really out maybe speak you nicely to of want I’ll just margins, Dave expect future some In add that, play to

David Lyle

amount buyer of pressure Yes. This really the contributing AirgainConnect up $XX little kind of de the to bit But revenue. a minimis Yes, it’s have on $XXX too. big stepped on in a has we’re that a group will sure. really have

it’s us, really by our So, buyers. an less for of we which appreciate decreasing impact

Craig Ellis

approach more terms in And of with you’re question on the taking AT&T then strategic the program. a

with further I’m incentives? what’s the – the with on may isn’t beyond insight many on to there you can the you’ve why not would wondering of or and can had pricing There just I communication price be out line work. many may us where for see discussions in but about any the help pricing consideration so think I some would So, just if wouldn’t or under incentives given AT&T field? possible what are other are be mechanisms demand working agencies, primary the entities consideration that incentivize And incentive

Morad Sbahi

absolutely. Yes,

that a we to that to So it those because us helps it’s the that with this you activity, know, initiatives have, really want a move, promotional them not very folks make with right? we’re the address are ones that to make good question and price this agencies we’re absolutely, talking those that are is cycle. going are there point, by to your held that where for about really some the difference To talking

first don’t. that that we look Airgain. that agencies we’re product. with that I said those that have move And at that with As in talked really we they We for forward in have want to hands trickle from leads and this that that those customers a feel we of us of you to have budget, budget. is The than those get like opportunity the understand, specifically those wait earlier to the about that those others targeting for responders these Airgain need short-term one are of provides thousands products XXXs that the really

It And more so are responders as week, initiative go in one. to us be with AT&T with to the promotional help a on terms first have of FirstNet additional well. to it of should AirgainConnect get the the with first that AT&T, is talking be this to last expect to activities, series we don’t to and I partnerships we plan

Craig Ellis

that of checks community. number the And capabilities to and forecast and have and agencies be my our for That’s shown question. enthusiastic is more first it It AirgainConnect a that very I’ll the but near-term to question number the helpful. Dave, Jacob the comment it’s the steady And of over next offers for all X.X intermediate-term we growth of is than very one term subscribers responder a may very of following that then are the harder longer it, the years community. preface last have part oftentimes quarter-after-quarter and response seen in

‘XX gives way are what calendar can give the was constrained the of about growing know some good if, I you of assuming component with absence they it’s I have One, just as even What of a the years help you Thank what year? have let’s not look a way all But have the population. other of characterize side at products good you we be a opportunity can about and on given solved, consumer really and maybe is there. issues, think design NimbeLink And think of side, realistic and next of in X that to that Is takes get you wins if with pressures. of question and on flip but qualitatively? that, are know key with the year to today, aware guidance, the Two, think and of business the am the gives supposed we a ‘XX think And seen areas the the to the or that can then next beyond not look couple back you consumer there? we that of just enterprise at we what’s business? the us AirgainConnect? businesses, what’s potential flat So, asking look the a you. some I disguise momentum that secular year this in of say half where scenario, ready for we happen are to takes some as of almost

Jacob Suen

I Craig, questions. let try great as chime I can I will to much Dave address and Hey, could as Morad or in.

effort a not towards So, And I our how growth. all, we go how perspective. pleased be could the executing long-term from we are more strategy on company first strategic back of with team’s let’s executing to overall are

going becoming we able future much is we that with a it’s seen mentioned, I to to of and of market. broader them an already provider up momentum are company, AirgainConnect the is and of antenna the that the kind we have and come just, integrated projects obtain we a from and products AT&T transitioning are building traction of We now you type a for system platform type component are are with phenomenal. are one as

well company with the what we position that described, for our doing addition, wireless XXXX. very IoT, all already the of with we enterprise IoT, systems, what In are industrial

we next year. future also XG Ali, whose That’s products. our just our all against for addition, of support with for working on also of additions strongly the growth going system In are – future building beyond to Mr. And is growth. the projects that Sadri

I that closely fronts. with on with are we separate Now, three having, going what AT&T we full we motion are think working back that now with with AT&T, working AirgainConnect, the are to really

is side. First the sell

people be to executive moving we now co-selling that’s their So, with and there to got team we at basin huge. together able and do AT&T They X,XXX senior the with are the going product. regional up in for sales are a

marketing Additionally, going marketing campaigns and with you are their and we see is launching going to closely very team Morad’s working with together. be that we more are and interfacing are so team more them to

is sign the that, up and side on are operation people can Those for the how for, to promo. that’s Third we make the easier it stuff right.

they that sticker So get way, don’t shock. a

what fronts. are So all – three that’s and on doing we

feedback they giving type phenomenal see from seeing their is because of to mentioned I commitment value. AT&T is the As we commitment their they are The from earlier, AirgainConnect. reinforcing customers can the are

in. ensure help Dave chime see some that please the Airgain futures hopefully of So, a and Morad, from – perspective. strategic I the what of

Morad Sbahi

Yes, one I add to just wanted just Jacob. note,

product – terms In AirgainConnect to even that first want is target that we the of release clarify I a AT&T. that initiative. just AirgainConnect, the The just today only have HPUE product is

us with significant that AT&T will and out And America, opportunity allows so are better – of from that first only first on responders AT&T’s expect address being products North that which worldwide. are there and said, we and the augment network, we number learned in and provide not at other really ton a here That to with of a alone. are have looking but markets not that also market a other a opportunity, we that responders

David Lyle

contribution. And color our of just we more expect give how little XXXX and products what I in a the add, expect to major terms grow – of on we in kind will Yes.

side, the the product believe drivers we growth into AirgainConnect clear side biggest those is it’s NimbeLink On there are XXXX. the and that –

the address and timing have I AirgainConnect on thing the going they the be just really immediate to largest to side. it’s market think got

citing. to revenue see We And out think year. this are in for consumer in still much lot XE drive into we XXXX which there. promo, I the changed it’s really hopes service really good. were can’t growth traditional expectations for and continue into unless we side But to enterprise our looking believe grow on next really providers haven’t a seeing AirgainConnect instance, side, on year gateway a of the the we business, the slow number new that there. small of this we XXXX. high number, is all but Wi-Fi can type product, X that, of After have with major in of the which we through the guess, continued year, pretty So, sell-through believe this you from going end We have we changes revenue Wi-Fi us

So, grow year, I to next can consumer think grow. has it the potential

how just like. of timing these of it’s going think I design terms would we wins be, out products the to in roll

Craig Ellis

that have the thing And is promotions, responder that in – been and response had to with some the you those of we agencies the might watch that then first on place. to early which just duration the Yes. have the Dave stay of

think through if just things half the then So, place, that if margins of and in of next stay are early year, year. our first the a maybe would response, reasonable? they on stronger those say to you those we half that about place And ASPs were with for back that Is in have were the ASPs. some get to the

David Lyle

we that when you quarterly. sell-through not is we not think was that at unusual promos I need. Hey, look to. it the historically This out think they more I are an and response AT&T seeing Yes, puts do just of – a typically one it there,

to supply out supply So, kind going. get the really the figure together of ramp – chain how sell-through including to entire we stimulate to AT&T got that

play already It’s kind quarter terms have that. so, last, lasts for that’s a to of to are they how of quarter-to-quarter, – it, do it’s introduce how while. typically to long in this late how we So, hoping in going will it the that we

Craig Ellis

queue. nine me with – for jump been last the and lastly in just I over touch back months. the then in we And It’s it. companies will Got have

is headwinds decisions constraint or business. that things to – that margin that are have of an of to the not gross there components all One know was the they from been increase things it was to make have allocate I things the release, like that mix has looked different about to opportunity of how more there margin we is companies there the that that prioritizing seen in and months are how about $X lever to expected the what Thank the stream able future revenue –- things we do ago. available far than a are component the quality in are the been happening and that’s the Airgain? in the amidst But that or you. so improving three is business just million you

David Lyle

Yes.

front there That of think the in of that in gives there we are the terms a look and a product in – want balance the I on out as future. also margins company consider lot is product initiatives to a of gross us to So, opportunities balances well.

fully give we we have ahead we this opportunity Yes, so, go how with of And profit. out that on us comes to now to AT&T that. to are And plan execute that will what want right where committed of we directions Jacob. then –

Jacob Suen

consumer typically improve there Yes. yes, I among That good closely. and was saying AirgainConnect also are the will also I others. and side, that, on products gross think we the products operational have the on margins and margins we pretty working margins NimbeLink

David Lyle

Does that question, Craig? answer your

Craig Ellis

guys. Yes, thanks

Operator

Capital Tim comes line question Markets. Northland of Next from the Savageaux from Instructions] [Operator

line Your is open. now

Tim Savageaux

to Okay, keep I good this try afternoon. will brief.

seen customer you lot a and On very bookings there have have supply sort and of large. mean, and the kind amongst premise service seen and of provider base given we strong been equipment, backlog of has what the to-date. I impact but customer by issues, side, consumer the

given this chance the is supply push So, business? I next may of issues there business our in into overall consumer a year what being question decent guess consumer year growth absence for the those grown have is, be demand and a could that

Jacob Suen

go I Morad in. and chime answer that then one. Hey, will can and And Dave

the So, and you But pandemic, issues the growth. – the are will absence issue correct shortage of a in we seen have absolutely that our issues, demand.

broadband a revenue service the and issues macro the are for I think much we by if that that very you translate into not providers overall for bigger with. can see are dealing the should us, demand strong that

Now fairly that are first decently for with that I the we being half. said, think still doing

I feel a is are the that mode headwind goes going – think more we quarter – the that a this back in recovery quarter lot before we third it quarter is to get to more quarter like QX.

back and to do we strongly year, perspective, issues that competitor, see traditional any the behind we side. consumer right. to growth say you should feel a lost not have us from business to on our macro Next the our business have should that be I

seeing issues. So, relating what we right now to macro all is are

Morad Sbahi

also to and in is the opportunities for complex sit North EMEA that here home in gateway the other new activity increasing of I of used on I you see does these complexity Airgain as been America the board we more see sit design We the the say And and with the the into know, We that the as adds – that the cycle used just more more And gateways, well. we is opportunities. it lot that RF would Yes. and devices with a the the space, what wins are markets design, across complexity the inside lot and box gateway. functionality business. we in as – chains, other to of and what that are see that and see the move of consumer increases we to set-top in chains in moved more has RF box a the right. the that functionality that that mean

is opportunities the of issue, They the matter The So, get can are just happen consumer chip hopefully beyond that could a shortage the chipset opportunities we beyond get there. make It’s more this to a here. so bring that ship cycle pandemic, business. guys boxes the the how give need the us to how and that we the boxes. do

Tim Savageaux

you traditional had characterized enterprise equally decent step but think then color we big up step and a look guiding pretty as big feeling Great, to and enterprise rate but over pretty maybe a that on that IoT, I company QX. there driven there And that address you on by function higher area thanks. any elevated given can industrial think to And side, that the for be you from this run is the maybe year? even that’s next a like build level saw you, degree a some and of to in growth step-up just the magnitude into heading

more a little on get that? to wanted color So,

Morad Sbahi

Yes.

first IoT industrial NimbeLink. and mostly the a about talk me let that’s So,

growth a tracking and asset in business. So, the the both modem lot there in is also of

that is gives in stations. solution we in, momentum in that to that customers our one-stop see able the forward continue you we is growing, in car, As product opportunities. rail, saw and complete providing are few that cellular we digital, and good that adopting we area around seen wins then that that see us that the narrowband XXX QX, NimbeLink are charging it that to really with Wi-Fi dynamics the into opportunities The and provide. very shop talking the business lots very, are complexity industrial to are almost the And first we It’s the the – to those that are enterprise expect world feel we are the terms that you lock space, about wins that where IoT designs remember scooters, can want filings we heading want In they we consumer. to Many plus of through have that plus of Airgain so able we is and again cellular line and feed because every operators the folks. initiative spike really to in traditional business connectivity, down but report, have design coming the the IoT electric design than been driving XX in different increase. train,

talking business, of are enterprise terms our of of we talking talking dollars. we look hundreds are You about space, consumer are in we at the When ones ASP. about dollars

there. direction going more the a heading in So, of systems of where becoming the in is of – is truly Airgain company growth the and terms

we it. So, about excited are really

Tim Savageaux

Okay. Thanks very much.

Operator

now for no closing will are over at I further remarks. this time. the to there Jacob questions And back call turn

Jacob Suen

updating us you joining to for look next We on Operator? today’s call. call. you on forward Thank our

Operator

conference call. today’s concludes participating. Thank for you This

You may disconnect. now

Airgain (AIRG) 11 Aug 212021 Q2 Earnings call transcript