Yahoo Finance Airgain Inc (AIRG) (Q1 2024) Earnings Call Transcript Highlights: Navigating Market Challenges ...
Q1 Revenue: $14.2 million, above guidance midpoint, 41% sequential increase, 13.5% year-over-year decrease.
Enterprise Sales: $8.9 million, 92% sequential increase, 5% year-over-year increase.
Consumer Sales: $3.5 million, slight increase from previous quarter.
Automotive Sales: $1.8 million, decrease due to inventory correction.
Q1 Gross Margin: 40.2%, 990 basis points higher sequentially, 120 basis points higher year-over-year.
Operating Expenses: $6.6 million, flat sequentially, $0.7 million decrease year-over-year.
Adjusted EBITDA: Negative $0.7 million.
Non-GAAP EPS: Negative $0.08.
Cash Balance: $7.2 million as of March 31, 2024.
Q2 Revenue Guidance: $14.25 million to $15.75 million.
Q2 Non-GAAP Gross Margin Guidance: 39.5% to 42.5%.
Q2 Operating Expenses Guidance: Approximately $6.8 million.
Q2 Non-GAAP EPS Guidance: Expected to be negative $0.06.
Q2 Adjusted EBITDA Guidance: Expected to be negative $0.5 million.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Airgain Inc (NASDAQ:AIRG) reported Q1 sales of $14.2 million, exceeding the midpoint of their guidance and marking a 41% increase over the previous quarter.
The company has seen positive signs of recovery in both enterprise and consumer markets, indicating potential growth opportunities for the rest of the year.
Airgain Inc (NASDAQ:AIRG) has successfully secured significant design wins, including a Tier one MSO for WiFi 7 antenna technology, which is expected to drive future revenue.
The company is actively expanding its product lines, including the launch of new IoT and 5G connectivity products, which are expected to significantly increase the serviceable addressable market.
Airgain Inc (NASDAQ:AIRG) has maintained a strong focus on R&D and sales efforts, which are crucial for long-term growth and maintaining competitive edge in the industry.
Negative Points
Despite the sequential increase in sales, Q1 sales were still down 13.5% year-over-year due to ongoing challenges in consumer and automotive markets.
Airgain Inc (NASDAQ:AIRG) reported a negative adjusted EBITDA of $0.7 million and a non-GAAP EPS of negative $0.08 in Q1.
The automotive market continues to face industry-wide headwinds, impacting the sales and growth in this sector for Airgain Inc (NASDAQ:AIRG).
There are ongoing excess inventory issues in the automotive sector, which are expected to continue affecting sales performance in the upcoming quarter.
The company's cash balance decreased sequentially, with a negative cash flow from operations, indicating potential financial challenges.
Q & A Highlights
Q: Hey, guys, nice progress on Jacobs I wanted to focus in on the fleet products, just to confirm what I heard. I believe I heard you say that you've got it seems like over a dozen trials that are going on at one point on the call, you talked about you'll be shipping to revenue in the second half of the year. And then I had a follow-up for Michael. A: Yes. So we are going to the last stage of the product development cycle in a product. It's due to shipping in the early second half of the year. But meanwhile, we actually have 20 plus customer trials, both domestically and internationally schedule in this quarter, second quarter, to go through the process.
Q: Okay. Is that. Is that a short trial or do you think this is many, many months? Or how do you handicap when you think it converts into revenue? A: I think it varies. It could be from couple of weeks to potentially one or two months.
Q: Got it. And then, Michael, on I'm curious, your thought if you want to peek into the future, do you think you'll be potentially positive EBITDA in Q3? Or it seems like maybe have a better shot in Q4. Maybe thoughts on that TietoEnator. A: Yes, we don't give that much of the guidance together. But I think from a directional standpoint, we certainly would like to be breakeven in Q3. They might be in Q4 in terms of a positive EBITDA at this point.
Q: Got it. And if I could sneak one more in on WiFi seven for the MSO's jack-up arm, it seems like everything has been teed up for the second half of this year, do you think you'll have meaningful revenue and WiFi seven or is that more a 2025 event. A: Based on the current feedback, I think that we have one major MSOs, Tier one MSO in the US, but already in all of that's already indicating that we're going to be receiving POs from them and then they're going to be shipping in, I would say, Q3. So that one, we're expecting material revenue contribution for the second half of the year. The second major U.S. Tier one MSO seems to be a little bit behind and the anticipation is that we'll be able to ship maybe some and the latter part of the year.
Q: Good afternoon. Thanks for taking the questions. Maybe I'll take it. Maybe to dive in on AirgainConnect, the next-gen product. Could you give us an idea of how that's shaping up for the second half of this year? Kind of what you're looking like from a channel and dealer perspective and kind of your early expectations on that front? A: I can connect first before I turn over to Michael. So I'll because of our previous experience we feel when it comes to Volvo about the how do we going to go to market with the AC fleet. So right now, we are targeting really three major aspects. One is on the vast, the distributors, the channels and those are the ones we have dealt with previously and also the DCs one in oh one partner relationship, I guess the market and then the second one is what we call our direct accounts. We actually currently targeting about roughly about 80 customers right now that we're focusing on. These are mostly private and private fleet companies such as the utility companies as an example.
Q: And then, Michael, just to dive in a little bit more consumer in the second half of this year. Are you seeing enough in the pipeline that the consumer business with WiFi gets back to doing $5 million a quarter? And then I had a follow-up or two. A: And to answer your question, Scott, on the consumer market, the lead time cycle is very short on this market. So our data, our backlog data is not very meaningful to predict what will happen for the second half of the year. However, what I can say for sure is that the current backlog that we're sitting on right now is definitely promising for the second quarter, it will be the main driver of the increase on a sequential basis. We do have a first PO for WiFi, seven, small, but first nonetheless. And that's promising as well, too. And the one thing that is also encouraging for us is the M&O Tier one design win that we had announced that is in the process of ramping up at this point and so we do see the growth taking place. So somewhat of a recovery are as to what shape it will be the second half of the year it might be a bit early to tell right now.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
