Airgain, Inc. Q2 FY2025 earnings call

• Airgain started 2025 with a strategy to scale growth platforms, strengthen markets, and maintain disciplined financial and operational execution.
• Existing business environment: Tariff environment is fluid but hasn't materially impacted gross margin or end customer demand; supported by 7 global contract manufacturing partners, maintaining a lean cost structure.
• Consumer market: Wi-Fi 7 shipments to Tier 1 MSOs, including a leading U.S. cable provider that launched Wi-Fi 7 in April, continued ramping with demand normalizing at healthy levels.
• Enterprise market: NimbeLink embedded modem line was a strong performer in Q2, with Skywire Cat 1-bis embedded modem launched in June to broaden industrial IoT reach.
• Automotive market: Aftermarket antenna sales growth burdened by channel inventory overhang expected to persist through H2 2025; asset tracking sales moderated, with revenue now from existing customers and stable recurring revenue.
• AirgainConnect: AC-Fleet making progress on key carrier certifications, achieved FirstNet Trusted certification in May, introduced AirgainConnect Go-Kit Pro in June, secured Tier 2 utility deployment, pipeline grew ~20% in Q2, on track for T-mobile priority 1 certification in Q3 2025, Verizon Frontline certification in Q4 2025, and European certification in Q1 2026.
• Lighthouse: 5G smart network repeater platform targeting U.S. system integrators and international MNOs, scheduled for multiple trials by year-end, focusing on completing certifications and scaling channel/sales infrastructure.

In the second quarter, enterprise revenue was $7.2 million, increasing $2.8 million sequentially. Consumer revenue was $5.6 million, decreasing $0.8 million sequentially. Automotive revenue was $0.8 million, decreasing $0.4 million sequentially. Enterprise contributed approximately 52.9% to total revenue, consumer contributed around 41.2%, and automotive accounted for about 5.9%.

• Third quarter revenue expected in the range of $30 million to $50 million, midpoint at $40 million, representing ~3% sequential growth.
• Third quarter non-GAAP gross margin anticipated to be in the range of 42.5% to 45.5%.
• Third quarter non-GAAP operating expenses expected to be approximately $6.1 million, a sequential decrease.
• Mid-term expected adjusted EBITDA profit of approximately $0.2 million and non-GAAP net EPS of $0.01 per share.

• Tariff environment remains fluid, which could impact gross margin and end customer demand.
• Channel inventory overhang in automotive aftermarket is projected to persist through H2 2025, weighing on sales growth.
• Lack of traction on key projects in asset tracking market, with revenue now derived from existing customers and stable recurring revenue.

Q: Anthony Stoss inquired about the 40 sales opportunities for AC-Fleet and the time frame for conversions.

A: Jacob Suen responded that the 40 opportunities are qualified and actively engaged by the sales team. About 10%-15% are Tier 1 opportunities taking longer, ~30% are Tier 2, and Tier 3 are smaller immediate deals.

Q: Anthony Stoss asked about the sequential growth of the December quarter.

A: Michael Elbaz replied that Q3 and Q4 will benefit from stable existing markets, with consumer Wi-Fi 7 transition and embedded modem traction being bright spots, but automotive and asset tracking face a cautious environment with delayed deployments, and focus is on AirgainConnect and Lighthouse for scaling in 2026.