Airgain, Inc. Q3 FY2024 earnings call

• Q3 revenue was $16.1 million, a 6% sequential increase and slightly above the guidance midpoint. - Consumer market had best performance since Q3 2022 with strong Wi-Fi 7 and MNO antenna sales. - Automotive market made progress despite inventory challenges, with AirgainConnect fleet achieving certifications and customer trials. - Enterprise market faced decline due to inventory issues but continued to expand asset tracker portfolio. - Strategic shift to comprehensive wireless system solutions, focus on AirgainConnect and Lighthouse solutions. - Received first commercial order for Lighthouse smart repeater from an international MNO.

In Q3 2024, Airgain's segment performance was as follows: Consumer market delivered $6.9 million in revenue, a 6% sequential increase, driven by strong demand for tier-one MSO Wi-Fi 7 antennas and tier-one MNO FWA antenna sales. Automotive market saw $2.5 million in sales, up $0.8 million sequentially, due to increased aftermarket sales and initial shipments of AirgainConnect fleet. Enterprise market had $6.7 million in sales, a $1.9 million sequential decrease, primarily due to lower sales of embedded modems and custom products impacted by excess inventory.

• Q4 sales guidance: $16.2 million to $18.2 million, midpoint $17.2 million. - Non-GAAP gross margin: 41.5% to 44.5%, midpoint 43%. - Adjusted EBITDA midpoint: $0.3 million. - Expect AirgainConnect and Lighthouse solutions to support gross margin expansions.

• Inventory challenges impacting enterprise sales, with two strategic customers having excess inventory extending into first half of 2025. - Longer sales cycle for AirgainConnect fleet warrants cautious optimism. - Revenue linearity challenges led to negative operating cash flow of $1.2 million in Q3.

Q: Details on Lighthouse customer trials and AirgainConnect fleet qualifications A: Jacob mentioned AirgainConnect fleet has nearly forty customer trials ongoing with shipments expected to increase, and Lighthouse has two trials expected to complete in Q4 with one pending domestically.

Q: 5G network infrastructure opportunity and growth outlook A: Jacob stated the first commercial order for Lighthouse smart repeater from an international MNO, highlighting Lighthouse's ability to expand coverage and enhance network performance with recurring revenue potential.

Q: Lighthouse timeline and NimbleLink inventory A: Michael said Lighthouse expects initial revenue in Q4, and NimbleLink faces inventory challenges with excess inventory in custom products from two strategic customers extending through first half of 2025