AIRG - Earnings call transcript Q1 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. Welcome to Airgain's First Quarter 2024 Earnings Conference Call. My name is Shamali, and I will be your operator for today's call.

Joining us today 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 investors.airgain.com.

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

release GAAP In will non-GAAP a addition, measures, of to conference including discussion include call a reconciliation further non-GAAP for details, today's results. of and this earnings financial please see

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

Jacob Suen

background, will some begin Elbaz. of before opening afternoon. call call Thank I'll give for you, us joining second to handing operator. this company by Welcome, as for everyone, today's the for our XXXX. CFO, quarter begin. discussion, for the I'll you over our performance for He [indiscernible] before as Michael financial well our quarter provide that, After quarter closing thank outlook followed a review To remarks the and some share in our review results questions.Let's the

Airgain, we components connectivity For those wireless to at of you new simplified systems. story, who may the our from integrated value be across chain, embedded to

trackers, controlled outdoor our access our cellular modems, and enterprise XG wireless and XG sectors asset our embedded our the device smart market, products consumer enterprise, primary products, antennas, fixed include repeaters. network new and IoT encompass cell automotive markets Our XG custom within

expertise comprised is Airgain. of for mostly antenna market area consumer of a embedded traditional business, our Our

such products stores and CPE, WiFi consumer customer enable X. well-enabled equipment, design embedded WiFi that for antenna custom devices premises as include Our X or

across connectivity vehicle our including well We recently opportunity large by our increased a Airgain, secular will networking includes Fleet is our of aftermarket market offering to our record our growing pretail developing to global At have get optimized as and automotive we company them adoption and antennas announced product our market addressable both our forward. track wireless customers durable serviceable, Airgain the and and devices, continue and partners the Lastly, device. connected channel that help as technology suite Connect highlighted connectivity believe quickly. tailwinds, solutions industry

confident too we As new leading-edge technologies providing we continue emerge, will that are products much.

in markets. recent increase operational XX% generated prior Turning now $XX.X We of range guidance core million quarter. the the over X results of in quarter, review to above a our in and a midpoint sales the our first

headwinds industry-wide we to are indicators for is positive demand which and at sign recent Our a sold dissipate, the we in continuing the softness quarters rest faced the of have macroeconomic that believe year.

Specifically, shipments we few custom of our products in embedded in our QX such areas, modems. and completed as a significant product

be. where behind expect we typical still to while rate run Additionally, our would

our our to these areas efforts. our significant in and we investing we and revenue. as the anticipated, experience are consumer Our it and sales continue products our invest believe of to discussed is to above have better usual sales in year. cutting-edge crucial our seasonality that expect prior teams Also, that We performed the long-term we for market and we R&D in than we growth beginning continue contributors as train for grow quarters, growth,

X look a for opportunity QX in remain we positive a at headwinds markets. result Taking that believe the year. second growth is expected markets, sales in While the our our sign half of closer each our our of

our was modems lines. product largely QX custom performance market enterprise products embedded Our driven in by and

a in showing stock, ramp-up in Canada from [ opportunities strong the pipeline through is both of off to good IoT a an ] QX Our year. increase

IoT position product's within closing router internal sometimes take solutions. antenna the Although to due time contracts

and is we're in We of that that believe confident rest this demand a growth us the XXXX. are seeing through opportunity the for

we even strong decline to in ], to as product expansion project the new tracker hold enterprise features expect a and second our cloud-focused Roma products real the pipelines. revenue With sequential for we with IoT expect steady completed total we Looking our to quarter. through quarter, first shipments [ which in as ahead antenna large portfolio custom XG

this offset custom are that confident We product we can law.

growth extensive and are to in the quarter, show first our signs, organization certifications to get QX consumer products, FWA our indicators products pleased seasonality to market, our milestone, first market consumer are for products which the slower show consumer of to light outperformed key there set positive with in our encouraging a that to market. tends second our our that we efforts believe typical We the quarter are In we XXXX these that Also, this the ship. the ship in some a stock our achievement even addition, in quarter. across require in of In year. significant especially will

in and X expect MSOs. among mentioned to from a EX have recent transition quarters, WiFi we we as significant First, WiFi X

has We its long-term as shift to keen compelling year customers will a likely user and the to to X Airgain indicated in second shift for WiFi performance cutting-edge that technology. inventory. experience. opportunity this avoid continues our antenna behavior excess presents this to they The are MSOs causes believe of improve the deliver While OEM buying start this as among work half industry shift

As design were we evidenced by March. in win, MSO X the awarded Tier

weeks. in another Tier Additionally, we MSO to the our receive expect order first purchase production coming from X

wireless FWA. on Second, to year focus help to this recognized for and consumer transition We consumers penetrating from our as trend wire Internet demand market. growing strategy last service to providers this continues shift

X indoor antenna a and win November, the for mobile As in we last began Tier in announced router, network we shipments have operator QX. secured the product with design FWA a we design

quarter. some sequential market with recovery MSOs along shipment to generate product, second with We in expect ramp MNO the the of our our growth

automotive our market. Lastly,

continues wide mostly Inventory vehicles, products our Across products our focused face deployed strengthen to corrections aftermarket on headwinds. from industry-wide public market this of As we automotive customers and the which range transportation. safety market, in in have growth. include that are expected, a

We to market as in some in face second this challenges to quarter continue well. expect the now

least especially AC away still while are our from seeing However, a inventory Airgain clearing in are our interest at Fleet we're quarter the market, that we challenges, Fleet with Connect our we automotive pleased products. or for

of milestones into are these will our industry are understand progress environment, second of but our Fleet we clear we that indications other that yet half. these We markets last the have challenges sight macroeconomic to still not markets. in fully the by development and track of that on we were in believe and we continued recovery and persistent consumer AC remain to few early the line products reaching across to early encouraged responsive We anticipate are ship the important rebound. enterprise witnessed we a in Overall,

As we've communicated being manufacturer are system solutions wireless in from a a past we provider. transitioning exclusively to quarters, component

our growth strategy is focused X such, As on key elements.

embedded applications. our deployed products, aftermarket First, of automotive continued and in component-based expertise our that execution in traditional business and various antennas are custom products, ended enterprise Airgain's consumer modems, products is established across

are and have believe there strong chain partners We for developed ahead the with relationships these opportunities value available lucrative that our product through categories.

And X the a shipments to will our Also, XXXX growth Tier half still launched established X our XXXX. in we win secured we new win year panel, As last for start announced is I we increase this year. with to industrial the line year. We up that Tier we're this other our that a ramp and agreements to design expect as of markets both quarter automotive in With MSOs MSO. top mentioned, already business are of expected products in antennas on well. of we that design the to second customer custom the products, return throughout IoT in IoT have

integrated solutions expansion. Second, wireless

existing to business wireless continue upside. with greatest forward, many as for our indicators our While of we solutions forward-looking XXXX the our to components our lines product point connectivity drive

asset opportunities trackers side, our transportation, deployed business. XG and largest over tracking Specifically, tracking asset growth our products and supply strategic our are applications. specialized asset on connectivity for other the the chain across

components as device tracking multiple cloud-based recurring a Asset subscription-based NimbleLink our trackers as revenue platform dashboards. information our bring opportunity and such enablement well with

home coverage wide XG connectivity for high-quality XG fleets. Our FWA, to connectivity the operators. safety, built at expand office, improve public and across network Lantern vehicle the in vehicle offer our WiFi to local our and include or our AC products mobile created transportation recently public connectivity Fleet to cellular private area area designed Repeater next-generation And and Smart Lighthouse announced gateway

for received solutions. We of these have significant interest each

with network AC currently formal Lighthouse, quarter, on of partnership trial. strategic including the have Fleet, we active are for customer we X XX Also, trials that live have for Altogether, second progress making international trials the customer customers Again, market For year. existing over steady the effectively XXXX, we half our XXXX for last and lines plan mentioned we product serviceable potential for SAM SAM represent in projected doubling and of million $X.X of additional addressable domestic of $XXX our scheduled international $X.X quarter. product billion across in billion these potential second over X additional lines. our a

Airgain several from of significant systems, upside in we shifting to that these areas. investments and of we combination believe the years exclusively are products in components connectivity Our have full

greater of by work that to Mobile FWA Lastly, our designed announced is we point as Congress, beyond.With we call that, the we customer discuss Michael the to FWA, demand results Michael? is XG World XXXX quarter entry Lantern customer especially in number a strong second optimizing of during in operators the to delivery rolls this in ship for truck and XXXX returns our currently turn base experience Smart to in reducing connectivity FWA which quarter February I technology, the Smart transform experience, believe XXXX outlook and financial our and over market to will establish first eventual detail. the

Michael Elbaz

Thank Jacob. you,

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

let's first to quarter results. Now our turn

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

by products, While our first by $X.X because we driven a or for units consumer antennas custom a XX% headwinds our still markets. million were Enterprise growth primarily In in customer. on reflecting completed embedded they in project lower continued sequentially, shipments a sequential and our a along lines. products, quarter XX%, million, year-over-year costing sales increase basis, $X.X of and sales XX.X% increased were production the of modems automotive large IoT strategic of with product our by

sales gross reflecting a of $X.X new by million, sales million, $X.X which $X.X $X.X a a MNO on On expense win QX of In operating higher, Automotive design and expenses of million, points enterprise relatively over reduction higher million, primarily recorded flat expenses was on QX basis because our over reflecting channel basis, XX% sequentially. Consumer inventory support announced level marketing X%. by ongoing of offset sales driven distributors On in correction. decreased efficiencies, by totaled communication increased On margin. to of focus margin gross modem a expenses a inventory year-over-year the increase increased engineering quarter by XXXX. embedded higher product $X.X addition, increased excess Tier QX G&A the from sequentially than due our antenna continue in was were was increase year-over-year were inventory. sequential automotive basis, more XXX sequential as to recover excess pre-XXXX by million year-over-year XXXX a $X.X we to initiatives. X due year-over-year our XXXX. This decrease over basis, QX basis last a fourth expenses a of we a of charge to XX% points basis. XXX November. operating sales from resulted margin large XX.X%, shipments to primarily QX million

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

] proceeds operations Our as lower the $X.X offset months XXXX, of ATM million, launched March $X.X $X.X by cash negative was sequentially, cash ago. we offering [ XX, from flow resulting net from million X of balance from partially million,

sales. million sequentially, higher primarily $X.X higher balance million, Net Our to million, $X.X sequentially. higher was accounts due $X.X million inventory receivable was $X.X

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

to adjusted business. we provide we non-GAAP XXXX the project or for in $XX range indicators overall of key reminder, quarterly metric this million performance the and a second of As and gross guidance be sales, as our the range. EPS for the million midpoint to the non-GAAP at We sales to margin believe EBITDA, million for quarter expenses, of $XX.XX be $XX.XX

customers. markets by a our consumer both from our and sequential midpoint We growth X% expect our at MNO of approximately the MSO guidance, of growth in driven

our shipments the expect QX, with as asset our and project to shipments in an in relatively our by first embedded offset FWA as trackers, sales modems our enterprise products large of We to anticipated be growth in decline custom antennas flat due well IoT solution. sequentially

gross non-GAAP due to second increase of be range guidance. the to XX.X% in margin quarter XX% anticipate at expect in We margin or higher to the differentiated We driven and gross the applications. of margin to for be sequential products enterprise the midpoint the new by XX.X%

expenses approximately our expect million. We operating to be $X.X

midpoint our invest of in C-band to be expected the to sales we our of access, guidance. repeaters EPS to continue $X.X is strategic on negative EBITDA smart midpoint We engineering in vehicle $X.XX Non-GAAP at fixed teams markets. million the focus be our guidance. is initiatives expected and as Adjusted negative networking wireless our at and

back thoughts. for the Jacob over I call to Jacob? like Now to closing would his turn

Jacob Suen

A Michael. have before we thoughts few Q&A. closing Thanks,

am to map our First, initiatives. and road effort strategic I team's dedication our proud of

several And still our can team's have own executing we our time schedule. of management This commitment team. possible effective products on on only promised today, innovative as a are and say experienced strong is have confidently We that that highly and in what are highly with lines. we I

recovery. we our remain optimistic industry market Second, about and potential

resiliency our navigate in improving these several a rebounds growth the we initiatives QX, we invest force products, believe of lines in real along that as demand. aggressive several as including new our started corner, in geographies, expansion in face Even product more strategy confident has and I headwinds our headwinds, market made across aspects new many continue our in our including new progress pay we industry we will our while after coming a well, of and to to continue quarters. partners the to of Especially business. have significant response turn product effectively growth off as sales probably to am progress in

with tracking value for capabilities business. Third, XX points emerging long-standing our for geographies undertapped transitions proposition at asset worldwide especially industry, in confident X, and the customers, is demand trends products in the are within our are increased growing the represent vast the of including heart markets our XG WiFi our to for and our globe around we the opportunity coverage industry that our that space, many connectivity many and

to We the and strong For believe FWA, like Lighthouse player and Repeater example, in several solve products players. each in space, key our from our Fleet challenges that Smart Smart generated interest aim us next-generation this innovations AC industry. apart connectivity has key major sell as a

quarter, call business ahead look progress please we our the So for We initiatives. in believe with path far second and in have making And to our existing strategy in have confidence operator, forward maintained continue the open strategic execution team and overarching for that, our Q&A. the Airgain. our on

Operator

you. Thank

cell will We questions side Instructions]. now from [ take analysts. Airgain ] [Operator

from come first the Capital question line will Stoss our Anthony Group. Now with Craig-Hallum of

Anthony Stoss

products, over I one that -- in heard believe to on year? call I you just seemed it are At wanted I And is got had a focus confirm Jacob, follow-up the shipping that the point talked did be it you or to trial say going are, about a half in the fleet you've on? like in for progress. Nice dozen, of to you'll Michael. revenue second the then what

Jacob Suen

Yes.

in cycle development is half and we second to scheduled second meanwhile, to going year. through customer to and both the in the quarter XX-plus due process. quarter, the shipping early actually domestically the go the are last of this have trials, product we But stage So product the internationally of

Anthony Stoss

you months? this think Okay. revenue? is many do you many, handicap converts you it how Is into do think trial? Or a short that when Or

Jacob Suen

from it of I varies. be potentially could to or X a X It months. couple weeks think

Anthony Stoss

potentially Michael, into that? QX? then, And like is future, if on thoughts maybe the in EBITDA peak Any seemed I'm do curious shot you a be you to want you'll Or in QX? think it positive better

Michael Elbaz

of positive that think this in much give a like we be direction standpoint, we But breakeven a QX. at Yes, together. in in EBITDA be guidance to They terms would Tony. a point. don't QX certainly of might from I

Anthony Stoss

Got second X? it. up you WiFi for more I everything is Jacob. can If think teed MSOs, seems a It the revenue you'll meaningful of this half more have one Or in is the that for on Do year. on like sneak being event? a XXXX WiFi

Jacob Suen

on Based going receiving we're already indicating we Yes. the MSO the, MSOs, have U.S., already them and but be in to Tier I shipping from PR current I to that think would the has one feedback, be they're in major say, going that QX. then X

second material we're revenue the of half one, that expecting year. for contribution So the

U.S. seems bit situation little ship a high. we'll that And be major the part in second some of maybe the year. to to MSO The is able Tier latter X the be

Operator

from question next comes with Roth line Searle Our MKM. of the Scott

Scott Searle

to a the you dive us this And give Connect, dealer that an idea the how a WiFi that's just channel And half you're and to the from next-gen like of of maybe second what that Jacob, year, the looking the on bit seeing for of in and second perspective business back consumer you up in consumer Michael, on pipeline front? or expectations shaping little Airgain product. early gets then, had a then to a this more in year. enough million dive follow-up quarter? $X I doing the Are with half two. in Could

Jacob Suen

from hear you, to Good Scott.

Michael. address and turn first I Connect the I before over to So it

to about market AC So going experience, our do talk the how we we of Fleet. really to previous feel with confident because go to

we ones previously. are is bus, dealt X the targeting the have disputes, aspects. the the are on and now, One we right those major So channels, really with

We're is customers XX right second as one what are is about now relationship, currently companies targeting on the market. talk roughly as accounts. the we're guess, example. partner then These private And the I that companies about we focusing on. an direct so actually one such mostly utility free this And

are are strategic like ones but there's another, actually the of of [indiscernible], can be And Motor with who capital what those life in they of in directly well. the this should AT&T then And don't And these from the that somebody buy the engaging partners. call so work us, us that we as And third, directly. type names. likes Solution,

to or for expect year. revenue So really X customers And we the material second are actively partners the are that half generate that those of engaging. we do the

Michael Elbaz

Scott, time cycle market, And short very to answer market. is consumer the the lead question, this on your on

So predict data is the backlog very the year. data to or meaningful not half for second will what happen of

what is is However, the now have for backlog WiFi ramping X, of too. the And us and small, encouraging as also have It at I up will but second first sitting sequential a can is basis. we're is the of in for promising increase well say point. definitely that the the do We PO for first a X that the one sure this that current design win that promising nonetheless, main for on that thing is right on driver MNO the quarter. Tier we process that's be announced

be And in second do recovery to of right to as so will year, taking see a might the be tell the growth half of the it shape place, a so somewhat bit now. early it we what

Scott Searle

And I Lantern up Helpful. could Great. on if front. follow the

you're wonder going And on I with there's could of like deployment that lot certification half lot you of advanced contribution other to AT&T I line walk the end you us a idea could and news perspective, pilot more a this And trial the and lower give front. that the had in if the the some if of that second activity us on time from T-Mobile with it some activity a this in for baking year? the carriers. of You of seems activity through range is what believe, geographies seeing week, and paces you're of an

Jacob Suen

Scott. question, Great Yes.

has There's team's be [ various so effort. the done phenomenal of lot I'm to and as trials So navigate I It's job. this the of team not certification, is, phenomenal to a clinacious a easy. indicated, just uncertainties for the and ] proud the

operators, anywhere different get we on depends mobile We about the you actual takes from talk the weeks just several the as Now certification, mentioned. the to several [indiscernible] network it months, types. such specifications also to PTCRB, from

trials the As we Canada. far in say, as right of America, trials and I would majority is now have, including the North happening U.S.

as some We EMEA Latin also America also internationally and have in in well.

Operator

question Our Northland Markets. of with from Capital line the comes Savageaux next Tim

Timothy Savageaux

I trials. wanted the on to follow XG repeater, the up Lighthouse

and half. trials think I in plans you network the mentioned X X active more second

you've X, you talked on the trials partnership. Let trials and wonder have what I you U.S. et working carriers those you're But planning could terms characterize that international upcoming, me in strategic of cetera. if about the Tier with either

Jacob Suen

and Jim, initiatives that talk you to again doing. of great good to do questions the we're XG

this having I right active customers X actually we is And to now. they're call didn't what [indiscernible]trial call, making network they're quarter. actually mean network a when now that going mentioned international. going to What if permanently actually is So to going and One they into about We're our nice install system there there to go live going and their supposedly by is stay well. we're we're I trials from that And that trial. one that the talk a, that last thing, I we what are one with here, progress.

say, purchase ahead close and is, final would holder. the I So they this with trial go before the

we encouraged by perspective, that from international the the customers. very and progress So that's are

that another still is X trial And in We one the as stage. here the also MSOs active Tier well. domestically have early with U.S.

have more We for planned the year. half the of X second

in X We and And the in either then are power network have or operators the mobile companies. in X EMEA one of U.S., all Latin America. one

Timothy Savageaux

regard with half looks got the try then Okay. drivers in we're consumer. like it summarize can some growth second you've what here just Great. And to I and hearing

throughout might follow-up And guess about run a to that that that. saw antenna, how wireless does But long As in the I fixed you year? what the a guess, you you QX. consider to deployment to of talk I rate take the ramp some full of get

Jacob Suen

Yes.

of other for put antennas, call applications, what such actually the started we've different IoT them traffic some like you unique wireless what seeing applications of call this market, applications, some for and really So for enterprise access fixed smart some as city the up applications. certainly for them we

in all color couple And then markets, demand are nice and that all, expect of can in some Michael seeing a So more of about the these get continue. specific we a we really to numbers.

Michael Elbaz

you, Thank is good This Sure. Tim. very actually a question.

a by in to summarize, from standpoint, X we do the just in early we that the QX, with MSOs, growth strength MNO see adoption half along in expect of just rebound rate. quarter design So win mentioned, as second second continued the that overall, consumer and WiFi we growth of to the now. The X too right year early the is tell driven

On of expect we be sorted last end of is the some and the inventory the the there that aftermarket at at out year still to this part during probably ongoing excess automotive, of point, the quarter year.

QX, with we mentioned not first FWA us a that large in sale solution. in of definitely the and and of QX. introduction, on thing the QX. the in A cycle communities bit are we the a some to the it's terms of the part project you on custom those finding their shipment just we asset we this, we or we but offsetting mentioned That that on million more in had are the increase long pleased very that QX, modems the in really -- ramp due antennas, was about having is nice tracker, the as a QX with and X they enterprise the And in one, growth way in very anymore the the embedded had on which what seeing of up ago are products. QX. months We're helped came altogether, seeing those of X mentioned, business, products growth in it that revenue $X.X to of with Now large IoT expect past

also as be So the going flat for Fleet it of year. the Lantern, light time some right the now unknown the be the AC contribution we of the enterprise, mentioned. to but And to being, us relatively but we at expect end are hopefully,

Timothy Savageaux

thing that And looking of to on in design Is win? growth just you. be include that's it final the the MNO say fair you're for driven. To the extent primarily one consumer front

Jacob Suen

It's mean level recovery. of MSO, that were just MNO actually even level see we've seen. QX lowest we we the and the to and at I really in some start were both the the some that QX,

So we recovery expect there. some do

Operator

time, this question-and-answer our this concludes session. At

If not Airgain's Investor the Olin for back turn your to over closing now AIRG@gateway-grp.com. Mr. contact answer you may team was taking Relations to call remarks. I'd like his

Jacob Suen

for investors ongoing contributions joining dedicated their our on support. our especially next their want and for to opportunity. Thank you call. thank today's employees I additional at look for our providing us continued updates to We forward

Operator

today First Thank Quarter you for for XXXX Call. joining us Earnings Airgain's

disconnect. now may You

Airgain (AIRG) 8 May 242024 Q1 Earnings call transcript