Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Airgain Inc (AIRG, Financial) achieved strong sequential revenue growth with sales of $16.1 million, a 6% increase over the second quarter.
- The company reported robust sales in consumer embedded antennas and successfully launched the Airgain Connect Fleet for automotive applications.
- Airgain Inc (AIRG) achieved certification from major operators including T-Mobile and AT&T, opening broader commercialization opportunities.
- The consumer market delivered exceptional growth, marking the best performance since Q3 of 2022, with significant ramp-up in Wi-Fi 7 router antenna shipments.
- Airgain Inc (AIRG) is expanding its addressable market with strategic entry into high-growth sectors like vehicle gateways and smart network control repeaters, projecting substantial market growth by 2028.
Negative Points
- The enterprise market saw a larger than anticipated decline in Q3, with sales decreasing by $1.9 million due to lower sales of embedded modems and custom products.
- Inventory challenges continue to pressure revenue, particularly with excess inventory impacting custom product sales.
- There is an anticipated moderation in demand during Q4, leading to a reduction in Wi-Fi 7 shipments.
- The transition from indoor to outdoor solutions for the long-term FWA product suite has been slower than expected, contributing minimally to Q3 revenue.
- Persistent inventory challenges in the custom IoT products sector may extend into the first half of 2025, affecting revenue growth.
Q & A Highlights
Q: Can you provide more details on the ongoing customer trials for Lighthouse and Airgain Connect Fleet? When do you expect these to turn into volume production?
A: (Jacobsen, CEO) We have roughly 40 trials ongoing for Airgain Connect Fleet, primarily in the US, and expect this number to grow. For Lighthouse, we expect to complete two trials this quarter, with one pending domestically. We anticipate these trials to transition into volume production as we close out the year.
Q: How many customers have yet to launch Wi-Fi 7 with you, and what is the timeline for these launches?
A: (Jacobsen, CEO) In the US, there are two major MSOs. We have won both, with one already accelerating deployment since Q2. The second MSO is expected to start deployment in the first half of next year. Additionally, we are working with MNOs on indoor FWA products.
Q: What is the market potential for your auto airplane mode tracker, and do you need to conduct trials with additional healthcare customers?
A: (Jacobsen, CEO) While still a niche market, the technology can be applied to various sectors beyond healthcare. The use of artificial intelligence in this product is a first for Airgain, and we are excited about its potential across multiple applications.
Q: Regarding the 5G network infrastructure opportunity, is the initial commercial order part of a broader rollout commitment?
A: (Jacobsen, CEO) Yes, the initial order is part of a broader deployment with a major customer, and we are working on a larger scale deployment contract. This opportunity includes product sales and maintenance services, providing recurring revenue.
Q: How do you expect growth across your segments, particularly with the 5G side, in 2025?
A: (Michael Ves, CFO) While it's early to provide guidance beyond Q4, we expect slight growth in existing businesses and significant growth potential in new systems like Airgain Connect and Lighthouse. The design win to sales cycle is lengthy, but we are poised for growth in these markets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
