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 third quarter ended
September 30, 2024.
“We achieved solid sequential revenue growth this quarter, even
as we navigate a challenging macroeconomic environment,” said Jacob
Suen, president and CEO of Airgain. “With third-quarter sales
reaching $16.1 million, we saw a 6.0% increase from the previous
quarter and a 17.6% increase year-over-year. We also successfully
launched our next-generation AirgainConnect® Fleet vehicle gateway,
marking a significant advancement in our product portfolio. Looking
ahead, our priorities remain clear: reinforcing our leadership
position in our established business, accelerating design wins for
AirgainConnect Fleet, and advancing our Lighthouse customer trials
to drive sustainable, long-term growth.”
Third Quarter 2024 Financial Highlights
GAAP
- Sales of $16.1 million
- GAAP gross margin of 41.7%
- GAAP operating expenses of $8.5 million
- GAAP net loss of $1.8 million or $(0.16) per share
Non-GAAP
- Non-GAAP gross margin of 42.8%
- Non-GAAP operating expenses of $6.9 million
- Non-GAAP net income of $6,000 or $0.00 per share
- Adjusted EBITDA of $0.1 million
Third Quarter 2024 Financial Results
Sales for the third quarter of 2024 were $16.1 million, of which
$6.8 million was generated from the consumer market, $6.7 million
from the enterprise market, and $2.6 million from the automotive
market. Sales increased by 6.0%, or $0.9 million in the third
quarter of 2024 compared to $15.2 million in the second quarter of
2024. Consumer sales increased by $2.0 million from the second
quarter of 2024 driven by higher sales to cable and mobile network
operators. Automotive sales increased $0.8 million from the second
quarter of 2024 driven by higher aftermarket sales and initial
shipments of AirgainConnect Fleet. Enterprise sales decreased by
$1.9 million driven by lower embedded modem and custom product
sales. Sales for the third quarter of 2024 increased by 17.6%, or
$2.4 million from $13.7 million in the same quarter a year ago
primarily due to higher sales of $2.4 million from the consumer
market.
GAAP gross profit for the third quarter of 2024 was $6.7
million, compared to $6.1 million for the second quarter of 2024
and $5.2 million for the same quarter a year ago. Non-GAAP gross
profit for the third quarter of 2024 was $6.9 million, compared to
$6.3 million for the second quarter of 2024 and $5.4 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 third quarter of 2024 was 41.7%,
compared to 40.5% for the second quarter of 2024 and 38.2% for the
same quarter a year ago. The increase in gross margin compared to
the second quarter of 2024 was primarily due to a favorable market
sales mix. The increase in gross margin compared to the same
quarter a year ago was primarily due to improved automotive and
enterprise product margins. Non-GAAP gross margin for the third
quarter of 2024 was 42.8% compared to 41.5% for the second quarter
of 2024 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 third quarter of 2024 were $8.5
million, compared to $8.7 million for the second quarter of 2024
and $7.1 million for the same quarter a year ago. Operating
expenses for the third quarter of 2024 compared to the second
quarter of 2024 were relatively flat. Operating expenses were
higher for the third quarter of 2024 compared to the same quarter a
year ago primarily due to higher employee expenses. Non-GAAP
operating expenses for the third quarter of 2024 were $6.9 million
compared to $6.9 million in the second quarter of 2024 and $6.0
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 third quarter of 2024 was $1.8 million or
$(0.16) per share (based on 11.3 million shares), compared to a net
loss of $2.5 million or $(0.23) per share (based on 10.9 million
shares) for the second quarter of 2024 and a net loss of $1.9
million or $(0.18) per share (based on 10.4 million shares) for the
same quarter a year ago. Non-GAAP net income for the third quarter
of 2024 was $6,000 or $0.00 per share (based on 12.0 million
diluted shares), compared to a non-GAAP net loss of $0.6 million or
$(0.05) per share (based on 10.9 million shares) for the second
quarter of 2024 and a non-GAAP net loss of $0.7 million or $(0.06)
per share (based on 10.4 million 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 third quarter of 2024 was $0.1 million,
compared to $(0.4) million for the second quarter of 2024 and
$(0.5) 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).
Fourth Quarter 2024 Financial Outlook
GAAP
- Sales are expected to be in the range of $16.2 million to $18.2
million, or $17.2 million at the midpoint
- GAAP gross margin is expected to be in the range of 40.4% to
43.4%
- GAAP operating expense is expected to be approximately $8.8
million
- GAAP net loss per share is expected to be $(0.13) at the
midpoint
Non-GAAP
- Non-GAAP gross margin is expected to be in the range of 41.5%
to 44.5%
- Non-GAAP operating expense is expected to be approximately $7.2
million
- Non-GAAP net income per share is expected to be $0.02 at the
midpoint
- Adjusted EBITDA is expected to be $0.3 million at the
midpoint
Our financial outlook for the three months ending December 31,
2024, including reconciliations of GAAP to non-GAAP measures can be
found at the end of this press release.
Conference Call
Airgain management will hold a conference call today, Tuesday,
November 12, 2024, at 5:00 PM Eastern Time (2:00 PM Pacific Time)
to discuss financial results for the third quarter ended September
30, 2024.
Airgain management will host the presentation, followed by a
question and answer period.
Date: November 12, 2024 Time: 5:00 PM Eastern Time (2:00 PM
Pacific Time) Dial-In: (877) 407-2988 or (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 until November 12, 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 X.
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 fourth quarter 2024 financial outlook, our
ability to navigate the macro-economic environment, expected
launches of company initiatives and the ability to increase market
share and growth in markets 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, workforce reduction 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, workforce reduction 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.
Airgain, Inc.
Condensed Consolidated Balance
Sheets
(in thousands, except par
value)
(unaudited)
September 30, 2024
December 31, 2023
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
7,346
$
7,881
Trade accounts receivable, net
11,800
7,375
Inventories
2,618
2,403
Prepaid expenses and other current
assets
1,501
1,422
Total current assets
23,265
19,081
Property and equipment, net
2,128
2,507
Leased right-of-use assets
938
1,392
Goodwill
10,845
10,845
Intangible assets, net
6,009
8,234
Other assets
69
170
Total assets
$
43,254
$
42,229
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
7,438
$
6,472
Accrued compensation
1,760
728
Accrued liabilities and other
2,053
1,926
Short-term lease liabilities
848
865
Total current liabilities
12,099
9,991
Deferred tax liability
163
151
Long-term lease liabilities
181
674
Total liabilities
12,443
10,816
Commitments and contingencies (Note
13)
Stockholders’ equity:
Common stock and additional paid-in
capital, par value $0.0001, 200,000 shares authorized; 11,881
shares issued and 11,340 shares outstanding at September 30, 2024;
and 11,010 shares issued and 10,469 shares outstanding at December
31, 2023.
121,412
115,295
Treasury stock, at cost: 541 shares at
September 30, 2024 and December 31, 2023.
(5,364
)
(5,364
)
Accumulated deficit
(85,246
)
(78,521
)
Accumulated other comprehensive income
9
3
Total stockholders’ equity
30,811
31,413
Total liabilities and stockholders’
equity
$
43,254
$
42,229
Airgain, Inc.
Condensed Consolidated
Statements of Operations
(in thousands, except per
share data)
(unaudited)
Three months ended September
30,
Nine months ended September
30,
2024
2023
2024
2023
Sales
$
16,101
$
13,696
$
45,516
$
45,970
Cost of goods sold
9,387
8,460
27,078
28,137
Gross profit
6,714
5,236
18,438
17,833
Operating expenses:
Research and development
2,855
2,298
9,091
7,337
Sales and marketing
2,395
1,704
6,902
6,875
General and administrative
3,278
3,144
9,393
10,533
Total operating expenses
8,528
7,146
25,386
24,745
Loss from operations
(1,814
)
(1,910
)
(6,948
)
(6,912
)
Other (income) expense:
Interest income, net
(29
)
(34
)
(82
)
(68
)
Other expense, net
11
1
4
16
Total other income, net
(18
)
(33
)
(78
)
(52
)
Loss before income taxes
(1,796
)
(1,877
)
(6,870
)
(6,860
)
Income tax (benefit) expense
(39
)
4
(145
)
84
Net loss
$
(1,757
)
$
(1,881
)
$
(6,725
)
$
(6,944
)
Net loss per share:
Basic
$
(0.16
)
$
(0.18
)
$
(0.62
)
$
(0.67
)
Diluted
$
(0.16
)
$
(0.18
)
$
(0.62
)
$
(0.67
)
Weighted average shares used in
calculating loss per share:
Basic
11,315
10,430
10,930
10,370
Diluted
11,315
10,430
10,930
10,370
Airgain, Inc.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Nine months ended September
30,
2024
2023
Cash flows from operating
activities:
Net loss
$
(6,725
)
$
(6,944
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation
418
500
Amortization of intangible assets
2,233
2,227
Stock-based compensation
3,334
2,472
Deferred tax liability
12
7
Amortization of prepaid assets
132
—
Changes in operating assets and
liabilities:
Trade accounts receivable
(4,426
)
2,469
Inventories
(214
)
276
Prepaid expenses and other current
assets
(119
)
203
Other assets
101
6
Accounts payable
965
(1,100
)
Accrued compensation
707
(1,338
)
Accrued liabilities and other
138
(102
)
Lease liabilities
(57
)
(40
)
Net cash used in operating activities
(3,501
)
(1,364
)
Cash flows from investing
activities:
Purchases of property and equipment
(177
)
(172
)
Net cash used in investing activities
(177
)
(172
)
Cash flows from financing
activities:
Proceeds from at-the-market common stock
offering, net of offering costs
3,006
—
Payments for withholding taxes related to
net share settlement of equity awards
(95
)
(690
)
Proceeds from employee stock purchase and
option exercises
187
232
Net cash provided by (used in) financing
activities
3,098
(458
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
5
—
Net decrease in cash, cash equivalents and
restricted cash
(575
)
(1,994
)
Cash, cash equivalents, and restricted
cash; beginning of period
7,976
12,078
Cash, cash equivalents, and restricted
cash; end of period
$
7,401
$
10,084
Supplemental disclosure of cash flow
information:
Income taxes paid
$
42
$
78
Income taxes refunded
$
50
$
—
Supplemental disclosure of non-cash
investing and financing activities:
Operating lease liabilities resulting from
right-of-use assets
$
179
$
11
Accrual of property and equipment
$
—
$
17
Cash, cash equivalents, and restricted
cash:
Cash and cash equivalents
$
7,346
$
9,989
Restricted cash included in prepaid
expenses and other current assets and other assets long term
$
55
$
95
Total cash, cash equivalents, and
restricted cash
$
7,401
$
10,084
Airgain, Inc.
(in thousands)
(unaudited)
Sales by Target Market
Three months ended
Nine months ended September
30,
September 30, 2024
June 30, 2024
September 30, 2023
2024
2023
Enterprise
$
6,665
$
8,615
$
6,791
$
24,159
$
22,594
Consumer
6,854
4,827
4,404
15,192
15,725
Automotive
2,582
1,742
2,501
6,165
7,651
Total sales
$
16,101
$
15,184
$
13,696
$
45,516
$
45,970
Reconciliation of GAAP to
non-GAAP Gross Profit
Three months ended
Nine months ended September
30,
September 30, 2024
June 30, 2024
September 30, 2023
2024
2023
Gross profit
$
6,714
$
6,148
$
5,236
$
18,438
$
17,833
Stock-based compensation
97
65
29
220
73
Amortization of intangible assets
88
89
89
266
266
Non-GAAP gross profit
$
6,899
$
6,302
$
5,354
$
18,924
$
18,172
Reconciliation of GAAP to
non-GAAP Gross Margin
Three months ended
Nine months ended September
30,
September 30, 2024
June 30, 2024
September 30, 2023
2024
2023
Gross margin
41.7
%
40.5
%
38.2
%
40.5
%
38.8
%
Stock-based compensation
0.6
%
0.4
%
0.2
%
0.5
%
0.1
%
Amortization of intangible assets
0.5
%
0.6
%
0.7
%
0.6
%
0.6
%
Non-GAAP gross margin
42.8
%
41.5
%
39.1
%
41.6
%
39.5
%
Reconciliation of GAAP to
non-GAAP Operating Expenses
Three months ended
Nine months ended September
30,
September 30, 2024
June 30, 2024
September 30, 2023
2024
2023
Operating expenses
$
8,528
$
8,653
$
7,146
$
25,386
$
24,745
Stock-based compensation expense
(984
)
(1,142
)
(494
)
(3,114
)
(2,399
)
Amortization of intangible assets
(660
)
(654
)
(654
)
(1,967
)
(1,961
)
Severance and exit costs
—
—
22
—
(548
)
Non-GAAP operating expenses
$
6,884
$
6,857
$
6,020
$
20,305
$
19,837
Airgain, Inc.
(in thousands, except per
share data)
(unaudited)
Reconciliation of GAAP to
non-GAAP Net (Loss)
Three months ended
Nine months ended September
30,
September 30, 2024
June 30, 2024
September 30, 2023
2024
2023
Net loss
$
(1,757
)
$
(2,513
)
$
(1,881
)
$
(6,725
)
$
(6,944
)
Stock-based compensation expense
1,081
1,207
523
3,334
2,472
Amortization of intangible assets
749
742
742
2,233
2,227
Severance and exit costs
—
—
(22
)
—
548
Other income, net
(28
)
(27
)
(34
)
(81
)
(62
)
Income tax (benefit) expense
(39
)
34
4
(145
)
84
Non-GAAP net income (loss) attributable to
common stockholders
$
6
$
(557
)
$
(668
)
$
(1,384
)
$
(1,675
)
Non-GAAP net (loss) per share:
Basic
$
0.00
$
(0.05
)
$
(0.06
)
$
(0.13
)
$
(0.16
)
Diluted
$
0.00
$
(0.05
)
$
(0.06
)
$
(0.13
)
$
(0.16
)
Weighted average shares used in
calculating non-GAAP net income (loss) per share:
Basic
11,315
10,938
10,430
10,930
10,370
Diluted
11,993
10,938
10,430
10,930
10,370
Reconciliation of Net Loss to
Adjusted EBITDA
Three months ended
Nine months ended September
30,
September 30, 2024
June 30, 2024
September 30, 2023
2024
2023
Net loss
$
(1,757
)
$
(2,513
)
$
(1,881
)
$
(6,725
)
$
(6,944
)
Stock-based compensation expense
1,081
1,207
523
3,334
2,472
Depreciation and amortization
883
881
900
2,651
2,727
Severance and exit costs
—
—
(22
)
—
548
Other income, net
(28
)
(27
)
(34
)
(81
)
(62
)
Income tax (benefit) expense
(39
)
34
4
(145
)
84
Adjusted EBITDA
$
140
$
(418
)
$
(510
)
$
(966
)
$
(1,175
)
Q4-2024 Financial
Outlook
Reconciliations of GAAP to
Non-GAAP Gross Margin, Operating Expense, Net (Loss) Income, EPS
and to Adjusted EBITDA
For the Three Months Ended
December 31, 2024
(dollars in millions, except
per share data)
Gross Margin
Reconciliation:
Operating Expense
Reconciliation:
GAAP gross margin
41.9
%
GAAP operating expenses
$
8.8
Stock-based compensation
0.6
%
Stock-based compensation
(1.0
)
Amortization
0.5
%
Amortization
(0.6
)
Non-GAAP gross margin
43.0
%
Non-GAAP operating expenses
$
7.2
Net (Loss) Income
Reconciliation
Net (Loss) Income per Share
Reconciliation(1):
GAAP net loss
$
(1.6
)
GAAP net loss per share
$
(0.13
)
Stock-based compensation
1.1
Stock-based compensation
0.09
Amortization
0.7
Amortization
0.06
Non-GAAP net income
$
0.2
Non-GAAP net income per share
$
0.02
Adjusted EBITDA
Reconciliation
GAAP net loss
$
(1.6
)
Stock-based compensation
1.1
Depreciation and amortization
0.8
Adjusted EBITDA
$
0.3
(1) Amounts are based on 11.4 million
basic and 12.3 million diluted weighted average shares
outstanding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241112549607/en/
Airgain Contact Michael Elbaz Chief Financial Officer
investors@airgain.com
Airgain Investor Contact Matt Glover and Matt Szot
Gateway Group, Inc. +1 949 574 3860 AIRG@gateway-grp.com
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