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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

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$14.231 $15.083 $12.013
GAAP Gross Margin %39.2% 42.2% 43.0%
Non-GAAP Gross Margin %40.2% 43.4% 44.3%
GAAP Operating Expenses ($USD Millions)$8.205 $8.344 $8.256
Non-GAAP Operating Expenses ($USD Millions)$6.564 $6.488 $6.634
GAAP EPS ($)$(0.23) $(0.17) $(0.13)
Non-GAAP EPS ($)$(0.08) $0.00 $(0.11)
Adjusted EBITDA ($USD Millions)$(0.688) $0.163 $(1.196)

Segment breakdown:

Segment Revenue ($USD Millions)Q1 2024Q4 2024Q1 2025
Enterprise$8.879 $5.338 $4.341
Consumer$3.511 $6.499 $6.401
Automotive$1.841 $3.246 $1.271
Total$14.231 $15.083 $12.013

Key profitability KPI:

KPI ($USD Millions)Q1 2024Q4 2024Q1 2025
GAAP Gross Profit$5.576 $6.364 $5.160
Non-GAAP Gross Profit$5.723 $6.544 $5.322

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Sales ($M)Q1 2025$11.0–$13.0 Actual $12.013 Met midpoint
GAAP Gross Margin %Q1 202540.6–43.8 Actual 43.0 Maintained / at high end
GAAP Operating Expenses ($M)Q1 2025~$8.0 Actual $8.256 Slightly higher
GAAP EPS ($)Q1 2025$(0.11) Actual $(0.13) Lower
Non-GAAP Gross Margin %Q1 202542.0–45.0 Actual 44.3 High end
Non-GAAP Operating Expenses ($M)Q1 2025~$6.5 Actual $6.634 Slightly higher
Non-GAAP EPS ($)Q1 2025$(0.10) Actual $(0.11) Lower
Adjusted EBITDA ($M)Q1 2025$(1.1) Actual $(1.196) Lower

New Q2 2025 guidance:

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Sales ($M)Q2 2025N/A$12.5–$14.5 (midpoint $13.5) New
GAAP Gross Margin %Q2 2025N/A40.8–43.8 New
GAAP OpEx ($M)Q2 2025N/A~$8.3 New
GAAP EPS ($)Q2 2025N/A$(0.18) midpoint New
Non-GAAP Gross Margin %Q2 2025N/A42.0–45.0 New
Non-GAAP OpEx ($M)Q2 2025N/A~$6.6 New
Non-GAAP EPS ($)Q2 2025N/A$(0.06) midpoint New
Adjusted EBITDA ($M)Q2 2025N/A$(0.6) midpoint New

Earnings Call Themes & Trends

TopicQ3 2024 (Previous Mentions)Q4 2024 (Previous Mentions)Q1 2025 (Current Period)Trend
AirgainConnect (AC-Fleet)Launched next-gen Fleet gateway; initial shipments; focus on design wins Additional carrier certifications; continued shipments; lighthouse deployment backdrop Full U.S. carrier certifications, AT&T FirstNet capable; H2 ramp expected; dedicated U.S. sales team Building pipeline; certification complete; H2 ramp
Lighthouse platformCustomer trials underway; preparing for broader deployments First commercial deployment completed; Omantel multi-year partnership Multi-region trials (Middle East, LatAm, SE Asia, Europe); Lighthouse Solar debuted with strong field results Scaling trials; commercial traction forming
Gross margin trajectory41.7% GAAP; improving mix 42.2% GAAP; operational efficiencies 43.0% GAAP; non-GAAP 44.3%; fifth consecutive quarterly increase; enterprise margins aided Upward margin momentum
Inventory/tariffsMacro challenges noted; aftermarket inventory issues Excess inventories and project delays weighed on Q4 IoT inventory correction easing; aftermarket auto still correcting; tariff exposure minimal due to fabless model; diversified manufacturing Normalizing IoT; manageable tariffs
Consumer Wi-Fi 7/MSOSequential growth; Wi-Fi 7 engagement MSO/cable strength; Wi-Fi 7 momentum March uptick ahead of tariffs; moderation expected in Q2; another Tier 1 MSO launched Wi-Fi 7 Resilient; seasonality/tariffs timing effects

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 $(0.06) midpoint. Values retrieved from S&P Global.
MetricQ1 2025 ActualQ1 2025 Consensus*
Revenue ($USD Millions)$12.013 $12.067*
Primary EPS ($)$(0.11) $(0.10)*
MetricQ2 2025 GuidanceQ2 2025 Consensus*
Revenue ($USD Millions)$12.5–$14.5 (Mid $13.5) $13.467*
Primary EPS ($)$(0.06) midpoint (non-GAAP) $(0.06)*

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 .