Airgain, Inc. (NASDAQ: AIRG), a leading provider of wireless connectivity solutions that creates and delivers embedded components, external antennas, and integrated systems across the globe, today reported financial results for the first quarter ended March 31, 2024.

“We are pleased to report strong sequential revenue growth as we continue to effectively navigate a challenging macro-economic environment,” said Airgain’s President and Chief Executive Officer, Jacob Suen. “We delivered sales of $14.2 million in the first quarter, driven by sequential and year-over-year revenue growth in our enterprise market. As we look to the rest of 2024, we remain focused on the launch of our 5-G connectivity initiatives and are confident that we can build on this momentum to continue executing on our strategy.”

First Quarter 2024 Financial Highlights

GAAP

• Sales of $14.2 million
• GAAP gross margin of 39.2%
• GAAP operating expenses of $8.2 million
• GAAP net loss of $2.5 million or $(0.23) per share

Non-GAAP

• Non-GAAP gross margin of 40.2%
• Non-GAAP operating expenses of $6.6 million
• Non-GAAP net loss of $0.8 million or $(0.08) per share
• Adjusted EBITDA of $(0.7) million

First Quarter 2024 Financial Results

Sales for the first quarter of 2024 were $14.2 million, of which $8.9 million was generated from the enterprise market, $3.5 million from the consumer market, and $1.8 million from the automotive market. Sales increased by 41.3%, or $4.1 million in the first quarter of 2024 compared to $10.1 million in the fourth quarter of 2023. Sequentially, enterprise sales increased by $4.2 million driven by higher industrial IoT product sales. Consumer sales increased by $0.3 million from the fourth quarter of 2023 driven by a Tier 1 Mobile Network Operator antenna shipments. Automotive sales decreased by $0.4 million from the fourth quarter of 2023 due to customer excess inventory correction. Sales for the first quarter of 2024 decreased by 13.5%, or $2.2 million from $16.4 million in the same quarter a year-ago primarily due to lower sales of $1.6 million from the consumer market and $1.1 million from the automotive market, partially offset by higher sales of $0.5 million from the enterprise market.

GAAP gross profit for the first quarter of 2024 was $5.6 million, compared to $2.9 million for the fourth quarter of 2023 and $6.3 million for the same quarter a year ago. Non-GAAP gross profit for the first quarter of 2024 was $5.7 million, compared to $3.1 million for the fourth quarter of 2023 and $6.4 million for the same quarter a year ago (see note regarding "Use of Non-GAAP Financial Measures" below for further discussion of this non-GAAP measure).

GAAP gross margin for the first quarter of 2024 was 39.2%, compared to 29.1% for the fourth quarter of 2023 and 38.4% for the same quarter a year ago. The increase in gross margin compared to the fourth quarter of 2023 was due to an inventory charge in the fourth quarter of 2023. Non-GAAP gross margin for the first quarter of 2024 was 40.2% compared to 30.3% for the fourth quarter of 2023 and 39.1% for the same quarter a year ago (see note regarding "Use of Non-GAAP Financial Measures" below for further discussion of this non-GAAP measure).

GAAP operating expenses for the first quarter of 2024 were $8.2 million, compared to $8.4 million for the fourth quarter of 2023 and $9.1 million for the same quarter a year ago. Operating expenses were lower for the first quarter of 2024 compared to the fourth quarter of 2023 primarily due to lower stock-based compensation and general and administrative expenses, offset by higher engineering project and trade show expenses. Non-GAAP operating expenses for the first quarter of 2024 were $6.6 million compared to $6.5 million in the fourth quarter of 2023 and $7.3 million for the same quarter a year ago (see note regarding "Use of Non-GAAP Financial Measures" below for further discussion of this non-GAAP measure).

GAAP net loss for the first quarter of 2024 was $2.5 million or $(0.23) per share (based on 10.5 million shares), compared to a net loss of $5.5 million or $(0.52) per share (based on 10.5 million shares) for the fourth quarter of 2023 and a net loss of $2.9 million or $(0.28) per share (based on 10.3 million shares) for the same quarter a year ago. The decrease in net loss compared to the fourth quarter of 2023 was driven by higher sales and higher gross margin due to a fourth quarter inventory charge. Non-GAAP net loss for the first quarter of 2024 was $0.8 million or $(0.08) per share (based on 10.5 million shares), compared to a non-GAAP net loss of $3.5 million or $(0.33) per share (based on 10.5 million shares) for the fourth quarter of 2023 and a non-GAAP net loss of $0.9 million or $(0.08) per share (based on 10.3 million diluted shares) for the same quarter a year ago (see note regarding "Use of Non-GAAP Financial Measures" below for further discussion of this non-GAAP measure).

Adjusted EBITDA for the first quarter of 2024 was $(0.7) million, compared to $(3.3) million for the fourth quarter of 2023 and $(0.7) million for the same quarter a year ago (see note regarding "Use of Non-GAAP Financial Measures" below for further discussion of this non-GAAP measure).

Second Quarter 2024 Financial Outlook

GAAP

• Sales are expected to be in the range of $14.25 million to $15.75 million, or $15.0 million at the midpoint
• GAAP gross margin is expected to be in the range of 38.7% to 41.7%
• GAAP operating expense is expected to be approximately $8.4 million
• GAAP net loss per share is expected to be $0.22 at the midpoint

Non-GAAP

• Non-GAAP gross margin is expected to be in the range of 39.5% to 42.5%
• Non-GAAP operating expense is expected to be approximately $6.8 million
• Non-GAAP net loss per share is expected to be $(0.06) at the midpoint
• Adjusted EBITDA is expected to be a loss of $0.5 million

Our financial outlook for the three months ending June 30, 2024, including reconciliations of GAAP to non-GAAP measures can be found at the end of this press release.

Conference Call

Airgain, Inc. management will hold a conference call today, Wednesday, May 8, 2024, at 5:00 PM Eastern Time (2:00 PM Pacific Time) to discuss financial results for the first quarter ended March 31, 2024.

Airgain management will host the presentation, followed by a question and answer period.

Date: May 8, 2024

Time: 5:00 PM Eastern Time (2:00 PM Pacific Time)

Dial-In: (877) 407-2988 or +1 (201) 389-0923

The conference call will be broadcast simultaneously and be available for replay via the investor section of the company’s website at investors.airgain.com.

For webcast access, please follow the web address below to register for the conference call.

Registration: Here

A replay of the webcast will be available via the registration link after 8:00 PM Eastern Time on the same day until May 8, 2025.

About Airgain, Inc.

Airgain is a premier provider of wireless connectivity solutions, offering a range of embedded components, external antennas, and integrated systems worldwide. We streamline wireless connectivity across devices and markets, with a focus on solving complex connectivity challenges, expediting time to market, and optimizing wireless signals. Our mission is to connect the world through optimized, integrated wireless solutions. Our product portfolio focuses on three key markets: enterprise, consumer, and automotive. Airgain is headquartered in San Diego, California. For more information, visit airgain.com, or follow Airgain on LinkedIn and Twitter.

Airgain, AirgainConnect, and the Airgain logo are trademarks or registered trademarks of Airgain, Inc. All other trademarks are the property of their respective owner.

Forward-Looking Statements

Airgain cautions you that statements in this press release that are not a description of historical facts are forward-looking statements. These statements are based on the company’s current beliefs and expectations. These forward-looking statements include statements regarding our second quarter 2024 financial outlook, expected recovery of markets the company serves, expected launches of company initiatives, and overall strategy. The inclusion of forward-looking statements should not be regarded as a representation by Airgain that any of our plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in our business, including, without limitation: the market for our products is developing and may not develop as we expect; our operating results may fluctuate significantly, including based on seasonal factors, which makes future operating results difficult to predict and could cause our operating results to fall below expectations or guidance; supply constraints on our and our customers' ability to obtain necessary components in our respective supply chains may negatively affect our sales and operating results; risks associated with the performance of our products, including bundled solutions with third-party products; our products are subject to intense competition, and competitive pressures from existing and new companies may harm our business, sales, growth rates, and market share; risks associated with quality and timing in manufacturing our products and our reliance on third-party manufacturers; we may not be able to maintain strategic collaborations under which our bundled solutions are offered; overall global supply shortages and logistics delays within the supply chain that our products are used in, as well as adversely affecting the general U.S. and global economic conditions and financial markets, and, ultimately, our sales and operating results; any rise in interest rates and inflation may adversely impact our margins, the supply chain and our customers’ sales, which may negatively affect our sales and operating results; our future success depends on our ability to develop and successfully introduce new and enhanced products for the wireless market that meet the needs of our customers, including our ability to transition to provide a more diverse solutions capability; we sell to customers who are price conscious, and a few customers represent a significant portion of our sales, and if we lose any of these customers, our sales could decrease significantly; we rely on a limited number of contract manufacturers to produce and ship all of our products, and our contract manufacturers rely on a single or limited number of suppliers for some components of our products and channel partners to sell and support our products, and the failure to manage our relationships with these parties successfully or a failure of these parties to perform could adversely affect our ability to market and sell our products; if we cannot protect our intellectual property rights, our competitive position could be harmed or we could incur significant expenses to enforce our rights; and other risks described in our prior press releases and in our filings with the Securities and Exchange Commission (SEC), including under the heading “Risk Factors” in our Annual Report on Form 10-K and any subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and we undertake no obligation to revise or update this press release to reflect events or circumstances after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Note Regarding Use of Non-GAAP Financial Measures

To supplement our condensed financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), this earnings release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures, including adjusted earnings before interest, taxes, depreciation, amortization (Adjusted EBITDA), non-GAAP net income (loss) attributable to common stockholders (non-GAAP net income (loss)), non-GAAP net income (loss) per (basic or diluted) share (non-GAAP EPS), non-GAAP operating expense, non-GAAP gross profit and non-GAAP gross margin. We believe these financial measures provide useful information to investors with which to analyze our operating trends and performance.

In computing Adjusted EBITDA, non-GAAP net income (loss), and non-GAAP EPS, we exclude stock-based compensation expense, which represents non-cash charges for the fair value of stock awards; interest income, net of interest expense offset by other expense, depreciation and amortization, severance and exit costs, and provision (benefit) for income taxes. In computing non-GAAP operating expense, we exclude stock-based compensation expense, amortization of intangibles, and severance and exit costs. In computing non-GAAP gross profit and non-GAAP gross margin, we exclude stock-based compensation expense, and amortization of intangible assets. Because of varying available valuation methodologies, subjective assumptions, and the variety of equity instruments that can impact a company’s non-cash operating expenses; we believe that providing non-GAAP financial measures that exclude non-cash expense allows for meaningful comparisons between our core business operating results and those of other companies, as well as providing us with an important tool for financial and operational decision making and for evaluating our own core business operating results over different periods of time. Management considers these types of expenses and adjustments, to a great extent, to be unpredictable and dependent on a considerable number of factors that are outside of our control and are not necessarily reflective of operational performance during a period.

Our non-GAAP measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. Our Adjusted EBITDA, non-GAAP net income (loss), non-GAAP EPS, non-GAAP operating expense, non-GAAP gross profit and non-GAAP gross margin are not measurements of financial performance under GAAP and should not be considered as an alternative to operating or net income or as an indication of operating performance or any other measure of performance derived in accordance with GAAP. We do not consider these non-GAAP measures to be a substitute for, or superior to, the information provided by GAAP financial results. Reconciliations with specific adjustments to GAAP results and outlooks are provided at the end of this release.

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