Airgain, Inc. Q1 FY2025 earnings call

• Airgain entered 2025 with momentum and a focused strategy, executing on the foundation laid last year and aiming to scale Lighthouse in AirgainConnect and deepen presence in key global markets. - Addressed macro backdrop, noting standard customer terms, fabless model, and tariff classifications had no material impact on product costs yet, but tariff environment is fluid. - Transformation from low ASP component supplier to high-value wireless solutions provider is underway, with addressable market expanding from $1.1 billion in 2024 to $2.6 billion. - Excess inventory in certain product areas improved on IoT side but continued in aftermarket automotive. - Partnership with Omantel in Middle East for Lighthouse, with revenue contribution ramping in second half of 2025 and expanding in 2026; Lighthouse Solar debuted with strong field trial performance. - AirgainConnect achieved commercial citations with all three major US carriers and AT&T FirstNet capable status, with sales lead team expanded and notable wins across product lines. - Leadership team is seasoned and focused on driving operational performance, engaging customers, and navigating uncertainty.

Q1 sales came in at $12 million. Consumer sales reached $6.4 million (down $0.1 million sequentially, accounting for approximately 53.3% of total sales), Automotive sales were $1.3 million (down $2 million sequentially, ~10.8% of total sales), Enterprise sales were $4.3 million (down $1 million sequentially, ~35.9% of total sales). Q1 gross margin was 44.3%, marking the fifth consecutive quarterly increase.

• Q2 sales projected to range between $12.5 million and $14.5 million, midpoint $13.5 million, ~12% sequential growth, driven by enterprise market rebound and Lighthouse deployments. - Non-GAAP gross margin expected to be 42% to 45% (midpoint 43.5%). - Operating expenses expected to be approximately $6.6 million. - Non-GAAP EPS expected to be negative $0.06 at midpoint and adjusted EBITDA expected to be negative $0.6 million at midpoint. - Expect to receive at least $0.5 million in ERC refunds this quarter. - Targeting positive adjusted EBITDA in Q3. - Plan to file an updated S-3 shelf as current shelf registration is set to expire.

• Tariff environment remains fluid, which could impact product costs and customer purchasing behavior. - Macro-economic environment poses uncertainties that could affect business performance.

Q: Anthony Stoss asked about AirgainConnect meaningful ramp in the second half of the year and IoT business rebound.

A: Michael Elbaz said AC-Fleet team built, distribution channels operational, marketing campaign around large US carrier upcoming, with design wins expected in second half and momentum building; Jacob Suen said IoT key customers showing visibility for 2025, with region shipments in Q2 indicating end of inventory correction in modem business, and enterprise market showing progress with Lighthouse and Omantel partnership.

Q: Scott Searle asked about Lighthouse incremental pilots and AC-Fleet European opportunities.

A: Jacob Suen said Lighthouse with Omantel has Middle East expansion, Latin American trial, and Europe/Southeast Asia/US trials planned; Michael Elbaz said AC-Fleet fully focused on US market, CE certification on roadmap but taking a couple more quarters.

Q: Tim Savageaux asked about Lighthouse contribution quantification and IoT inventory clearing.

A: Jacob Suen discussed Lighthouse revenue expectation with Omantel and global potential; Michael Elbaz said enterprise IoT inventory issue clearing up sooner than expected, but aftermarket still needs more time to sort out.