Earnings call transcript Q1 2023

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Operator

Good afternoon. Welcome to Airgain's First Quarter 2020 earnings conference call. My name is Doug, and I'll be your coordinator for today's call.

Joining us for today's call are Airgain's President and CEO, Jacob Suen; and CFO, Michael Elbaz.

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

performance. that about Airgain business or future future company's and listeners making will strategy implied this differ business. uncertainties financial statements could associated statements forward-looking events operating risks by during these caution those due management call be and materially forward-looking I from results to stated and Actual and the Airgain's with

after call in contains statements live date qualified this Airgain information date filings. by today's contained earnings statements revise to the are statements SEC the release no update forward-looking undertakes accurate These This broadcast, of is any to cautionary conference time-sensitive that of call. circumstances XXXX. only forward-looking conference Airgain's and events the reflect obligation or May as XX, this of or

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

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

Jacob Suen

Welcome, operator. you today. everyone, thank you, Thank us for joining and

Afterwards, update I'll For product XXXX financial Then Michael will marketing our QX. and for over achievements it opening first hand before an strategic call initiatives I'll walk cover today's the quarter. for the you provide through to first performance on operational our questions. our highlights call, for I and to for

our range. quarter in at came guidance the $XX.X sales As the saw first earnings at midpoint our you of release, from million,

slight the first a quarter, market quarter last communicated demand a and transitions we of year-over-year consumer As softness technology contributed to combination in decline.

of increases result that in introductions in sales quarterly wins XXXX. optimistic design product will are we new However, the second half sequential and

for XX% total performance which Enterprise solid market, represented our sales just of over We quarter. continue to see our the from

industrial growth see and IoT. video We such fleet key rail, from verticals surveillance, as also our

represents trackers, modems, market and that a our antenna and systems enterprise components products. mix asset include Enterprise of design Our embedded custom

combined A is This is the resiliency of leading in productivity this continues revenue to number applications conditions. top railcars volatile recent increased to demand for with the growing services railways. QX the connectivity against in Enterprise design this market a space. increased we of contribution, end result business a customer prime this improve announced customers, and with showing of With nation's a provider win, example of the for

cellular-based asset Airgain's solution embedded unique with will programs over platform, that that shipments a which QX, combined grow trackers have started solves key and industry this NLink our continue modems, plagued years. to upcoming quarters. offer We in the for software

with space discussions solutions. companies to this similar in other also several in are provide We

wireless our market. market a or includes provide video time bandwidth focus connectivity, and requiring to segments expertise This needing With and processing. simplifying data on deployment VSaaS, which shorter requires to real-time high or we a broad video-surveillance-as-a-service those to appeal our

charging EV as solve with demand. that is backbone, connected quickly. connectivity provides its this struggling RF get segment as Airgain's and connectivity grow continues it keep is solutions, up market to markets another and such help problems complex simplified to

Within platform. aftermarket offerings includes such provide OEM AirgainConnect strong to a from solution large both to engagement antennas our bundle our networking in that vehicle as we total fleet Automotive, Our the devices, automotive our the market. their with our continue to antennas market see relationships

out our rolling In addition, market channels. we are strategies expand share within distribution to

designs; third, product globally. make and demand; a more responsive chain the threefold: first, strategy automotive us channel differentiation our second, channels supply flexibility to implement is that changes and of Our to expand our distribution to

the changes the benefits of see strategic weeks. and to are these beginning in already expect our coming direction in make several to We announcements

in commercial vehicles we're that demand utilities, Airgain within other equipment seeing that internal implementation OTR for simplified with all includes agriculture other performance, simplified better vehicles manage segments our is be progress focus connectivity. solve. While and problems on also automotive, fueling primary fleets, market the connectivity helps and over-the-road that first responder market This continues sectors. to need dependence for maintenance, This or

Shifting custom key to remains design antenna X now Wi-Fi primarily CPE product service an market sold major of see continue our the providers. several devices to result of challenges Consumer as represented ongoing transitions conditions customers. to near-term embedded yet to is for by in important This our Wi-Fi our of consumer. part we a and from strategy, macroeconomic X

space. a U.S. their XE this provider Despite Wi-Fi major these service design to a growth Tier the wins headwinds, see won next-generation from secure OEM X in we opportunities device We for in recently a for

antennas D-Link that QX in its in embedded Bridge. Air the announced Wi-Fi Corporation Airgain power selected also to We VR X signal

connectivity. Air VR a router. ultra-low capabilities VR dedicated the Headset dependence of connection latency It a Airgain's on built Wi-Fi between was that long allow without PC The cables wireless deliver Bridge design, a to and optimal or to testing as solutions hassle manufacturing this provide such and is innovative

our we integrated our markets, we better in connectivity solve with design. design XG we problems various how RF as continue addition, RF complex to products In showcase superior can

short-term map our half believe the Not only advanced targets. in future. growth team in the deliver discuss to presents us each will existing that right we we of we exciting do to have later challenges, in the first strategic position strategies on some the XXXX While markets, our that announcements see of have some our we call, opportunities and should growth development accelerate from I road

Michael. With over will to the call that, I Michael? turn

Michael Elbaz

Jacob. you, Thank

reconciliations in guidance my of figures. and about are including non-GAAP Before note measures, diving please results numbers, earnings the review financial the found to non-GAAP our financial that our Information refers release. to into GAAP non-GAAP

Now let's quarter's to results. this turn

our million range QX to the million. guidance $XX.X $XX.X million $XX.X of mentioned, Jacob sales midpoint of at were As

X% in IoT Our our WiFi million, by access shipments sales $X.X and lower primarily consumer of to softness declined on year-over-year industrial demand Enterprise were million $X.X due sales market. declined products. sequentially which our

higher of a recorded we million. inventory gross a were reflecting $X.X points XX.X%, million. sequential the $X.X decrease sequentially prior quarter. margin Automotive million, QX charge totaled as Consumer sequential million, onetime $X.X $X.X was sales a of in decrease XXX basis sales reflecting

million, expenses higher than approximately also experienced our higher along guidance million. Enterprise $X.X QX with operational We gross of efficiencies. margins totaled $X operating

due The higher-than-expected is including completed This which resulting end We communication marketing and results. of non-GAAP workforce quarter, an resulted million quarter. shows exit $X.X in million from action at services of variance a first the approximately the expenses, in in expenses. in the our professional to reduction trade onetime excluded severance $X.X and a quarterly costs, decrease was

point lower increased for decrease our will EBITDA the the initiatives This year. in allowing investments while of our second half for breakeven

on our addition, streamlining remain processes our to focused operational reduce expenses. In we operating

negative QX negative was million, at and non-GAAP was $X.X our As a result, EPS $X.XX. adjusted EBITDA

of payments. was balance with million lower as cash to in due Our variable compensation $X $X.X our million, March annual primarily XX line expectations at sequentially

balance $X.X Net lower Our million was sequentially. accounts higher was million, million $X.X inventory or $X $X.X receivable sequentially. million

quarter Now June second moving to the XXXX. for XX, ending outlook our

of sales the range million million $XX.X in expect be $XX.X We to or the the at $XX.X million and of range. midpoint

our the be at expected margin to $X.X gross project range range. be to second XX.X%. EPS expected the of We to in breakeven the EBITDA to million. range. We of quarter million Non-GAAP be be our of the guidance guidance our Adjusted midpoint is XX.X% for the expect to midpoint approximately at is $X.X expenses

like and marketing over would will initiatives. the product turn I to our call who Jacob? walk to through Jacob, Now us

Jacob Suen

us an terms Thanks, in of product was exciting for announcements. Michael. quarter QX

on the that technologies Technology on Day We our spent leadership Analyst Dr. last Investor new developing team lines an and future trajectory. new where discussed our development impact of advanced Our Chief these market Airgain. Ali under help shape Officer, X we the hosted March business the the has of and years Sadri the product will of XX,

The the positive. been has from market community investment feedback and the

With our that on we mention we to I of of simplify experience efforts we event. those XG operator unique entire ongoing We believe milestones. improve. since identify wireless, to specific the At opportunities advancement set have are focus technologies to presents made to on positioned customer initiatives to some want uniquely significant progress the from challenges these customer a of the And to Airgain, solve.

The FWA for experience as allows development cable for solutions wire into the in user. believe compete a solutions connection home. We broadband have home access app building these wireless is the office begins the XG with or the challenges. We XG it wireless and fixed with to advanced technologies or with killer our to team

mobile In devices, easy an Enterprise environments. will FWA addition ease for outdoor the an to integrated strong announced between our we performance signal not the with product embedded our antenna operators, installation. that reference design and to to network only has but interest maximize This system a for for trade-off FWA device design partners external installation directional and from appeals of break kit

phase development finalizing are verification. into are have We and product validation and our moving completed where testing we the

or lighthouse to the best the off signal delivering Barcelona. set showcased we In enterprise. XG tackle announced Mobile February, and smart the repeaters we to at next The experience our of was in challenge World technology Congress home this customer the in launch

implementation of lower a solving signal called shorter small the significantly this reduced and capacity or on version problem distance comes version stations station costs a While from smart promises and simplify deployment XG delivers a frequencies. increased and exclusively with the higher home the base higher with Micro. small cells, Airgain's additional expensive than of throughput, at latency, Rather the expense its it base of because both Lighthouse repeaters network office

trial to of a home your and enterprise. delivery on X on and completed in operator signal Airgain initial Tier optimizations are of simplifies the the or the network. network an that XG trials additional middle We

station of The base speeds antennas improves better to a to the standard challenge transfer which cellular MIMO, base compared high data MIMO Massive increases on third a capacity. delivering was network and off adds signal generally solve the number we station set at itself.

key latest antenna an samples XX with wireless and are beamforming of in high-performance in process built pair transmit February, design XX infrastructure, technology. the We MaxLinear, partnership array to their in XG reference transceiver announced World receive and go-to-market Congress strategies. we the implementation Mobile and the Airgain's At a with industry for finalizing leader show a

their communications way to tracking, including devices for with performance management matrix, management, in service all give X-way providers and network automation to end-to-end devices graphing more. Airgain operation, With monitoring, manage future a announced change and current Finally, and network and its enterprise partnership mind, Airgain alert in their with network an we management. company software that specializing Errigal, on remotely, configuration needed operators

streamlined final middleware and devices and will our to integrated stages data and we integration monitoring. platform. are Errigal's in push of testing is for platform complete, and within firmware the management Airgain's Initial testing the

in our months. products, Airgain. new future In we XG from in operator, connectivity stages upcoming experience the announce innovations for addition have the we to of will XG other product final we the these With development and improving that brighter believe the several customer solutions customer looks to

are we our headwinds, In about prospects markets. closing, short-term on optimistic what we near- facing growth -- expected focused X in remain our are major long-term and and

the We as expect portfolio, to and stability our footprint. our grow of into we market expand Enterprise international new continue our verticals expand product

with our designs, We our for also expand to automotive aftermarket aftermarket our anticipate improve strategies differentiation vertical product channels growth chain our supply antennas. new and [indiscernible] distribution and our flexibility

our service provider we customers, to expect continued For performance product driven our partnerships years. our in the the great complexity integrated by with consumer solve whom be built vertical, global launches will with have growing throughout ability the we major

product road is ambitious with initiatives. map Our paved

the address customer Given have introduced, deployment new or billion. coverage $X.X market products from experience to systems-based than provider the breadth on to improve we addressable are the designed has SAM, the and customer and $XX.X service products more costs issues These we operator. side, to solutions reduce doubled from billion have service of our

of conditions. market to proud the they I'm responded team how and Airgain have challenging at

our footing future and positioned leadership seasoned solid the in team position and I in market has the confident our kept for our growth. market excited a that deployment for am efforts have strategies, and us company We product I'm our on future.

ready that, Operator, provide for open appropriate questions. instructions. your to call the And the we're with please

Operator

[Operator Instructions].

ROTH the first Searle of Partners. Our Capital comes question from Scott line with

Mr. Searle, you're cutting in out. and

Scott Searle

revenue a the end a the front? on of demand supply channel couple to the the ramp expect then perspective of market both be of introduction And and one product working latest through latest And and in time lot that that contribute. terms of a some where of thoughts perspective. been I a of line product from on what we on been standpoint? demand, the that think when NimbeLink, areas inventory, also uptake on chain Update from This And I we'll has were had follow-ups. there's a the

Jacob Suen

your What the will We here. part address. introduction? questions understand Jacob NimbeLink missed part regarding of was your is part which we of first regarding question questions. product, the new inventory, Scott, first We the of second to your product

Scott Searle

My Yes. apologies.

to when X.X and the a time ramping beyond of when the and that be AirgainConnect revenue On XX, that expanding Band we line front, start standpoint? auto as would you're from introduced AT&T up see

Jacob Suen

Okay.

Quick the on So chime the address and then next have NimbeLink I'll in Michael and questions, AirgainConnect, have side. yes. generation first I'll one,

have So now. something AirgainConnect, have not years regarding we formally I the working that we've almost for been we been It's Certainly, say, informing next-generation the investment announcement. community. X.X on, made would

learned actually the initial bit AirgainConnect from good And prospect, think We and we the great I quite HPUE. we already got a really from feel customers. feedback about that the

available update when are something hope the EU in still able as and far future. going to we As is working is that to to be it near be on

the been about wanting. development, prospect. a again, So we at and of shortly. the hope features feel have update that to great And really product it's under got good customers you And lot this point, is

Michael Elbaz

Michael. this Scott, is

The of market, products. our On markets. majority is the that Enterprise know, actually, IoT is really NimbeLink you The part here news as has our are the The question. industrial good NimbeLink eased significantly. supply Enterprise chain of product,

plagued were able large or PPVs in purchase and price 'XX pass-through to costs, been quarters we all through have higher basically to X FY material our FY which with 'XX variances, customers. We

few time lead lead cycle, also overall lead see time. And do were the and components months of time parts a of some We issues. some have that those months

was we QX the that disappeared expectation quite one lower in And However, shipments release had That QX. reasons entirely. margin the our bit Enterprise the on of XXXX PPVs with why was of we the that have PPVs. a the in of than devices, did

So done we that. are with

come clean shipments sheet resumption balance is have of back. the and pretty Our on And that. supply the the chain

Scott Searle

earliest into you you're if some from changed would line, sounds access we on gave moving about from lastly, When development. wireless field be the design could you've think like could, that? and reference going all? has time when product the 'XX And trials I of the the solution. Perfect. updates that I revenue talked expect at fixed and if It

like bringing you product main just I each improve front. of into growth the categories start secondly, half, is the NimbeLink the together, up optimism half wonder into then for like well certainly going starting second consumer on this we could expectation products auto. all of in the the And address there? pick see WiFi, year. there's the of it sounds to to a If And as it enterprise sounds second if terms

Jacob Suen

questions, Great Scott. Yes.

outside So that let I'll little think going Again, can to a And the prospect. is the second we're and talk first play second next the of half as well for I what about the you half. FWA talk the although prospect important about to we then don't out. about I it's know provide bit guidance seeing quarter,

year. of indicated, expect Wi-Fi latter we regarding at consumer So do as half, transition second do from we the the this the really X, part that happening start to that think -- Wi-Fi to X

of the that's want seeing side. clean they transition, why reasons the so we're on short-term one why speak, that's to to some inventory the with consumer up the of the And because headwinds, --

in Although that we chain to X line. are really its come or last see supply pleased to issue the so the that, is to years stopped plagued finishing

we're see So that. to really happy

I resolve, As channel inventory again, the do the the see is the first side that going on by some would Enterprise, of we issue to half. far -- the as say,

the half well up to pick IoT second our really on pick business AP expecting So the going I to expect WiFi second the is half. we're side And as up. both as in

area momentum. where really of we're seeing an that's So lot a

seeing continue customers. our demand with the introduction as on product we And well And automotive, expect antenna we're our are as the to to aftermarket growing the flexibility new that providing products. then a we on specifically,

So in we expect second start the improve that half to also of really to year. this

access wireless we're during partners as design, solution. and to Now with end-to-end provide the regarding made work our actually an announcement fixed such we Errigal able

be, to pieces, provide only foresee with end-to-end we really and what And complete eventually, bits solution. but a give that's them not Airgain customers to --

they're can So Verizons, with having to network target MNOs, coverage access, the address the as a AT&T, where fixed wireless such we operators, really T-Mobile, issue. major towards need

prospect of environment. able target for also infastructure campus for that are We even customers Enterprise to a

of already with to company going on trials. build Again, and good them that got but help, year. we're see interest, of the in saying Scott? March do well we Does be next rather lot the working we position for a we're not traction So conservative -- process and a really ship I'd year, this in a

Scott Searle

Great. Perfect.

Operator

Instructions]. [Operator

Securities. next Our Widell with comes Riley of line question from the Ethan B.

Ethan Widell

Ellis. timing start, your This To what on for is you Lighthouse Craig you and calling sales elaborate I product could was there? hoping in for to expect

Jacob Suen

yes. Ethan,

product complete call of as live smart really that -- side doing the network are we're the repeaters. And trial. we And repeater a is U.S. in operators into the the with soho the well XG the smart Lighthouse mobile network in already repeater. innovative our indicated as already major have I smart We the field On trial, really trial one as we lab

also We as internationally received of a interest well. quite bit

We Barcelona in operators and this from marketing as for actually well network as already MWC, product received in in or some Asia well. this East during product of Middle the demoed as Europe, we interest

not more still Now It's a that's -- finished a the for is product product still product. demo. it's

make intend need. to we work features, So that we're what to creating customers sure with our closely means they the

things is already key smart. this call with one what several we product we that have, But

product. to on As adapt technology, able you smart into our and that founded know, this based Airgain antenna we're was

So that's repeater. Airgain, a smart major differentiation to

is another echo and that that's have. cancellation, call The what we unique we other feature thing

to again, that are many the feature in be this other of product, this And I but And be have our things. really this also year. And about. would differentiation to feel what feature. aiming network be is And we one not do operators to able we're many with able for. least, we market we with year first nice we've But some to particular not aggregation. deploy good we will intend the will like really we next created another have. this the we Last -- channel product are say

Ethan Widell

then it. forward, the targeting for if wondering margin Enterprise, consumer, that's there between are the a and was mix auto Got gross case? going and if certain implications you I And

Michael Elbaz

Ethan, Sure Michael. is this

on of QX, And be mix market. over the steadily growing This in -- certainly economic the mix It we definitely years. -- XX% portfolio. to resilient, couple market a sales diversifying has -- slightly has past conditions over in deliberate the is overall on of is was exact been conditions. the been Enterprise had So the actually XX% that very a terms that to our especially the current this with

the expense happens also a consumer be higher-margin And market. and the at the of to automotive mix, consumer

is focusing overall gross impact with the so far, able But initiatives. there been really to on efficiencies margin that an So margin. operational on gross and improvement offset we've

Operator

There back further There for are Jacob time. [Operator the Suen I'd to closing remarks. no questions it no queue are further Instructions]. to this like questions. hand in at

Jacob Suen

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

Operator

and gentlemen, Ladies this your teleconference. for participation. does conclude you today's Thank

time, wonderful You day. a may disconnect this your have lines and at

Airgain (AIRG) 11 May 232023 Q1 Earnings call transcript