Airgain, Inc. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• 2024 was a pivotal year with successful Lighthouse commercial deployment, transformation to high-value wireless system solutions provider, expanded portfolio, and secured key customer wins. Serviceable addressable market grew from $1.1 billion in 2024 to $2.6 billion in 2025.
• 2025 focus: Execution and expansion, scaling deployments, accelerating customer adoption, and expanding into high-value markets. Strategic partnership with Omantel demonstrates Lighthouse's capabilities. Developed Lighthouse Solar, an off-grid solar-powered network repeater. AirgainConnect Fleet targets fleet markets with tiered sales approach (Tier 1: large fleets, 12-18 months; Tier 2: midsized fleets, 6-12 months; Tier 3: small fleets, 3 months).
• Product launches: Wi-Fi 7 antenna shipments to Tier 1 MSOs, AT-Flight IoT asset tracker for healthcare, railcar asset trackers, Lantern outdoor 5G fixed wireless access, AirgainConnect Fleet 5G vehicle gateway, and Lighthouse Smart Network Control repeater commercial deployment.

Segment Performance

• Fourth Quarter 2024: Sales were $15.1 million, a 6% sequential decline but 50% YOY increase. Consumer sales were $6.5 million (strong sequential performance). Automotive sales were $3.3 million, $0.7 million sequential increase but below expectations due to channel excess inventory. Enterprise sales were $5.3 million, sequential decrease due to reduced sales of embedded modems and custom IoT products. Gross margin was 43.4%, a fourth sequential increase with a 50 basis points improvement.
• Full Year 2024: Sales totaled $60.6 million, up 8% YOY. Consumer sales increased by $2.8 million (15% YOY). Enterprise sales increased by $2.3 million (8% YOY), though second half declined due to customer inventory. Automotive sales decreased by $0.5 million (5% YOY), partially offset by AirgainConnect shipments. Gross margin was 42%, a 410 basis points improvement YOY. Operating expenses were $26.8 million (2% YOY increase). Adjusted EBITDA was -$0.8 million, an improvement from -$4.5 million in 2023.

Guidance

• First Quarter 2025: Projected sales between $11 million and $13 million (midpoint $12M, 20% sequential decline). Non-GAAP gross margin expected 42%-45%. Operating expenses ~$6.5 million. Non-GAAP EPS expected -$0.10 midpoint. Adjusted EBITDA expected -$1.1 million midpoint, mitigated by $1.6 million employee retention credit.
• Longer Term: Focus on scaling Lighthouse and AirgainConnect Fleet deployments, securing certifications (e.g., FCC, CE), expanding into global markets. Expect Lighthouse deployments in over 50 sites in 2025, with partnerships like Omantel unlocking new opportunities.

Risks

• Inventory Constraints: Impacting certain business lines, expected to persist through first half of 2025.
• Macro Factors: Affecting enterprise business visibility, including tariffs, sanctions, and related uncertainties.
• Industry Headwinds: Temporary pressures in IoT and component sectors affecting short-term visibility.

Question and Answer

Q: Focus on enterprise segment visibility and Lighthouse revenue contribution A: Enterprise customers faced inventory issues, but feedback suggests second half improvement; Lighthouse has a strategic partnership with Omantel, with deployments starting in 2025 though revenue is small initially.

Q: AirgainConnect trials and conversion to revenue A: Trials for AirgainConnect have been positive, with 43 trials ongoing. Tiers include Tier 1 (500+ vehicles, 12-18 months), Tier 2 (50-500 vehicles, 6-12 months), and Tier 3 (<50 vehicles, 3 months).

Q: Lighthouse market size metrics A: 50 deployments with Omantel in 2025, multiple trials ongoing in regions like Middle East, Latin America, Asia, targeting major mobile network operators with millions of subscribers.