AI
AIRGAIN INC (AIRG)·Q1 2025 Earnings Summary
Executive Summary
- Q1 2025 revenue was $12.013M, down 20.4% q/q and 15.6% y/y; GAAP gross margin improved to 43.0% and non-GAAP gross margin to 44.3% on stronger enterprise product margins .
- Non-GAAP EPS was $(0.11), modestly below prior-quarter non-GAAP break-even, and adjusted EBITDA was $(1.196)M; management guided Q2 revenue to $12.5–$14.5M with non-GAAP gross margin 42–45% and targeted positive adjusted EBITDA in Q3 .
- Segment dynamics: consumer stayed resilient ($6.401M), enterprise weakened ($4.341M) with inventory correction, and automotive fell ($1.271M) on lower aftermarket antennas and AC-Fleet shipments .
- Catalysts: expanding Lighthouse trials (Omantel multi-year contract; debut of Lighthouse Solar), full U.S. carrier certifications and FirstNet Trusted for AC-Fleet, and new IoT modem launches strengthen the H2 ramp narrative .
What Went Well and What Went Wrong
What Went Well
- “We have fundamentally redefined our business model, transitioning from sub-$5 embedded components to full system solutions like Lighthouse, which carry ASPs in excess of $20,000,” positioning for margin expansion .
- Fifth consecutive quarterly increase in non-GAAP gross margin to 44.3%, driven by improved enterprise product margins .
- Operational momentum: Omantel strategic partnership and multi-region Lighthouse trials; all three U.S. carrier certifications and AT&T FirstNet capable status for AC-Fleet, later attaining FirstNet Trusted .
What Went Wrong
- Revenue declined q/q and y/y; enterprise down $1.0M q/q with lower antenna/custom IoT shipments, and automotive down $2.0M q/q on aftermarket antenna and AC-Fleet shipment timing .
- Adjusted EBITDA turned to $(1.196)M vs $0.163M in Q4, reflecting the lower revenue base .
- Inventory corrections continue in aftermarket automotive; AC-Fleet H2 ramp is long-cycle and trials delayed near-term orders .
Financial Results
Segment breakdown:
Key profitability KPI:
Guidance Changes
New Q2 2025 guidance:
Earnings Call Themes & Trends
Management Commentary
- CEO: “We are moving up the value chain into higher margin system-level solutions… expanding our addressable market from $1.1 billion in 2024 to $2.6 billion today” .
- CFO: “Q1 gross margin was 44.3%, marking our fifth consecutive quarterly increase… largely due to higher enterprise product margins” .
- CEO: “Omantel… a multiyear opportunity… revenue contribution expected to ramp in the second half of 2025 and expand further in 2026” .
- CFO: “We expect non-GAAP EPS… negative $0.06 and adjusted EBITDA… negative $0.6M at the midpoint [for Q2]… targeting positive adjusted EBITDA in Q3” .
Q&A Highlights
- AC-Fleet ramp: Foundation laid (dedicated team, distribution, marketing with major U.S. carrier); trials nearing completion; H2 contributions expected; Tier-1 programs targeted into 2026 .
- Enterprise outlook: Strong backlog vs recent quarters; design-win activity in industrial IoT; inventory correction improving .
- Lighthouse deployments: Omantel contract low seven-figure 2H contribution expected; CE certification pacing European trials; additional trials planned across regions including U.S. .
- Tariffs: No meaningful change in customer buying patterns; majority of products not impacted; fabless model with nine contract manufacturers and second-sourcing gives flexibility .
- Consumer: March uptick (ahead of anticipated tariffs) offset seasonality; expect Q2 moderation then normalized, modest growth with Wi-Fi 7 programs .
Estimates Context
- Q1 2025 vs consensus: Revenue $12.013M vs $12.067M*, slight miss; Primary EPS $(0.11) vs $(0.10)*, slight miss. Adjusted EBITDA was $(1.196)M; consensus EBITDA metric varies across providers. Values retrieved from S&P Global.
- Q2 2025 consensus (at time of call) vs guidance: Revenue consensus $13.467M* vs guidance midpoint $13.5M; EPS consensus $(0.06)* vs guidance $(0.06) midpoint. Values retrieved from S&P Global.
Values retrieved from S&P Global.
Key Takeaways for Investors
- Margin resiliency amid revenue pressure: Non-GAAP GM rose to 44.3% on enterprise mix; watch for sustainability as enterprise rebounds in Q2 .
- H2 growth vectors: Lighthouse commercialization (Omantel multi-year, multi-region trials) and AC-Fleet certifications/FirstNet Trusted support the sequential growth narrative into H2 .
- Near-term execution focus: Converting trials to deployments (Lighthouse, AC-Fleet) and managing aftermarket automotive inventory normalization .
- Consumer stability with Wi‑Fi 7: Expect moderation in Q2 after March pull-forward, then steady growth tied to additional Tier‑1 MSO launches .
- Guidance credibility: Q1 delivered at/near guided ranges on margins but below EPS; Q2 guide aligns with consensus, with CFO targeting positive adjusted EBITDA by Q3 .
- Operational flexibility: Diversified, fabless manufacturing footprint mitigates tariff risk; proactive second sourcing strengthens supply resilience .
- Monitor capital flexibility: Company intends to renew S‑3 shelf (no imminent raise) to maintain financial flexibility; watch cash trends ($7.401M at Q1-end) .
Additional Relevant Press Releases for Context
- AC-Fleet FirstNet Trusted certification enhances public safety positioning .
- AirgainConnect Go‑Kit Pro launch expands portable rapid-response connectivity use cases .
- NimbeLink Skywire Cat 1 bis embedded modem launch strengthens industrial IoT portfolio and accelerates time-to-market .