Airgain Inc ((AIRG)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Airgain Inc. recently held its earnings call, revealing a mixed sentiment characterized by strategic growth opportunities and significant challenges. The company emphasized its strategic partnerships and product innovations, such as the agreement with Omantel and the promising performance of Lighthouse Solar. However, it also faced hurdles like declining automotive and enterprise sales and a negative adjusted EBITDA, reflecting the complexities of adapting to the current macroeconomic environment while preparing for future growth.
Strategic Partnership with Omantel
Airgain announced a strategic and commercial agreement with Omantel, which is set to enhance both indoor and outdoor deployments across Oman and potentially broader markets. This partnership involves commercial collaboration, joint marketing, and co-development of new solutions, highlighting Airgain’s commitment to expanding its market presence and capabilities.
Lighthouse Solar Performance
The initial field trials of Lighthouse Solar have shown impressive results, including a 20% expansion in 5G coverage, a significant increase in average speed from 1 Mbps to 250 Mbps, and over a 50% improvement in spectrum efficiency. These advancements underscore the potential of Lighthouse Solar to drive growth and innovation within Airgain’s product portfolio.
Q1 Gross Margin Improvement
Airgain reported a Q1 gross margin of 44.3%, marking the fifth consecutive quarterly increase. This improvement is largely attributed to higher margins on enterprise products, reflecting the company’s focus on enhancing profitability in its core business areas.
AirgainConnect Achievements
Airgain has achieved commercial certifications with all three major US carriers and attained AT&T FirstNet capable status. This milestone supports public safety communications and expands Airgain’s reach within the critical communications sector.
Increased Addressable Market
The company has expanded its addressable market from $1.1 billion in 2024 to $2.6 billion in 2025, driven by platforms like Lighthouse and AirgainConnect. This expansion highlights Airgain’s strategic initiatives to capture a larger share of the market and drive future growth.
Decline in Automotive Sales
Automotive sales experienced a decline, falling to $1.3 million, down $2 million sequentially. This decrease was primarily driven by lower shipments of aftermarket antennas and AirgainConnect gateways, reflecting challenges in the automotive segment.
Enterprise Sales Decline
Enterprise sales also saw a reduction, totaling $4.3 million, down $1 million sequentially. This decline marks a low point for the year, attributed to decreased shipments of enterprise antennas and custom IoT products.
Negative Adjusted EBITDA
Airgain reported a negative adjusted EBITDA of $1.2 million, primarily due to a lower revenue base. This financial result underscores the challenges the company faces in maintaining profitability amid declining sales in key segments.
Inventory Challenges in Automotive
The company continues to grapple with excess inventory in certain product areas, including aftermarket automotive antennas. This issue is expected to take additional time to correct, impacting the company’s short-term operational efficiency.
Forward-Looking Guidance
Looking ahead, Airgain projects sales between $12.5 million and $14.5 million for the second quarter, anticipating a 12% sequential growth driven by a rebound in the enterprise market. The company expects non-GAAP gross margins between 42% and 45% and operating expenses of approximately $6.6 million. Despite challenges, Airgain remains optimistic about its growth prospects, projecting a non-GAAP EPS of negative $0.06 and adjusted EBITDA of negative $0.6 million at the midpoint.
In conclusion, Airgain’s earnings call painted a picture of both opportunities and challenges. While strategic partnerships and product innovations offer promising growth avenues, the company must navigate the hurdles of declining sales and negative EBITDA. As Airgain looks to the future, its focus on expanding its market presence and improving operational efficiency will be crucial in achieving sustainable growth.