Airgain Inc ((AIRG)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Airgain Inc’s recent earnings call reflected a generally optimistic sentiment, highlighting several positive achievements such as sequential revenue growth, strong gross margins, and key certification milestones. Despite these successes, the company acknowledged challenges in specific areas, including asset tracker sales, and predicted a revenue decline in the upcoming quarter. Overall, the call leaned towards optimism, driven by strategic progress and the potential for platform growth.
Sequential Revenue Growth
Airgain Inc reported its third consecutive quarter of sequential revenue growth, with Q3 revenue reaching $14 million, marking a 3% increase from Q2. This consistent growth trajectory underscores the company’s ability to expand its revenue base steadily.
Strong Gross Margins
The company achieved a non-GAAP gross margin increase to 44.4% in Q3, up from 43.8% in Q2, and a year-over-year increase of 160 basis points. This improvement in gross margins reflects Airgain’s efficiency in managing costs and enhancing profitability.
Positive Adjusted EBITDA
Airgain generated a positive adjusted EBITDA of $300,000 in Q3, a significant turnaround from a loss of $400,000 in Q2. This positive shift indicates improved financial health and operational efficiency.
Key Certification Milestones
The company achieved significant certification milestones, including T-Mobile’s key priority certification for AirgainConnect and FCC certification for Lighthouse. These certifications enable commercial deployment in the U.S. and are expected to drive future growth.
WiFi 7 Transition Success
Airgain’s consumer revenue is expected to grow at a double-digit rate for the second consecutive year, driven by the transition to WiFi 7 among Tier 1 cable operators. This transition is a key driver of the company’s growth in the consumer segment.
Embedded Modems Growth
The embedded modems product line recorded its third consecutive quarter of sequential sales growth, fueled by demand for utility infrastructure monitoring. This segment’s growth highlights its importance in Airgain’s product portfolio.
Challenges in Asset Tracker Sales
Despite overall positive performance, asset tracker sales have moderated, reflecting a lack of traction on customer projects. This challenge indicates areas where Airgain needs to focus on improving customer engagement and project execution.
Enterprise Custom Products Overhang
Airgain’s aftermarket antenna and enterprise custom products continue to face challenges due to channel inventory overhang, partly driven by delays in government agency project deployments. This overhang remains a hurdle for the company to overcome.
Automotive Revenue Decline
The automotive segment saw a revenue decline to $500,000, down $300,000 sequentially, primarily due to lower aftermarket antenna sales. This decline highlights the volatility and challenges within the automotive market.
Predicted Q4 Revenue Decline
Airgain anticipates a revenue decline in Q4, projecting revenue between $12 million and $14 million, with a midpoint of $13 million. This represents a sequential decline of approximately 7%, indicating potential challenges in maintaining the growth momentum.
Forward-Looking Guidance
Looking forward, Airgain is focusing on sustainable growth into 2026. The company expects Q4 revenue between $12 million and $14 million, with gross margins projected in the 42.5% to 45.5% range. Key certification milestones for AirgainConnect and Lighthouse are anticipated to drive significant revenue in 2026. The company remains committed to maintaining financial discipline, with non-GAAP operating expenses expected to be approximately $5.8 million in Q4, supporting a positive adjusted EBITDA outcome.
In summary, Airgain Inc’s earnings call conveyed an optimistic outlook, driven by strategic achievements and growth potential. While challenges remain, particularly in asset tracker sales and automotive revenue, the company’s focus on certifications and sustainable growth into 2026 positions it well for future success. Investors and stakeholders can take confidence in Airgain’s strategic direction and financial discipline as it navigates the evolving market landscape.