Airgain Inc ((AIRG)) has held its Q4 earnings call. Read on for the main highlights of the call.
Airgain Inc. recently held its earnings call, revealing a year of transformative change and strategic advancements in 2024. The company reported increased revenue and improved gross margins, largely due to strategic partnerships and a shift in business focus. However, challenges such as sequential revenue declines and inventory issues were also highlighted. Looking forward to 2025, Airgain anticipates growth opportunities despite some short-term headwinds.
Strategic Transformation
2024 was a pivotal year for Airgain as the company transitioned from being a component supplier to a high-value wireless systems provider. This strategic shift was marked by the introduction of the Lighthouse solution, which boasts average selling prices exceeding $20,000, underscoring Airgain’s enhanced market position.
Revenue Growth
Airgain reported a total of $60.6 million in sales for 2024, marking an 8% increase compared to the previous year. This growth was driven by significant gains in both consumer and enterprise sales, showcasing the company’s expanding footprint in these segments.
Gross Margin Improvement
The company achieved a notable improvement in gross margins, which increased by 410 basis points from 37.9% in 2023 to 42% in 2024. This improvement was attributed to steady gains in enterprise and automotive solutions, reflecting Airgain’s strategic focus on high-margin areas.
Strategic Partnership with Omantel
Airgain secured a multiyear strategic commercial partnership with Omantel, aimed at scaling Lighthouse deployments. This partnership reinforces Airgain’s position as a leader in 5G wireless connectivity and is expected to drive further growth in this area.
Sequential Revenue Decline in Q4
Despite the overall annual growth, Airgain experienced a 6% sequential revenue decline in Q4, with sales totaling $15.1 million. However, this still represented a 50% increase year-over-year, indicating underlying strength in the company’s operations.
Enterprise Sales Decline
In Q4, enterprise sales decreased by $1.3 million sequentially, primarily due to reduced sales of embedded modems and custom IoT products. This decline was largely impacted by excess customer inventory, highlighting challenges in inventory management.
Automotive Sales Shortfall
While automotive sales increased by $0.7 million sequentially in Q4, reaching a high point for the year, they fell short of expectations. This shortfall was attributed to channel excess inventory, which the company aims to address moving forward.
Projected Q1 2025 Decline
Looking ahead to Q1 2025, Airgain projects a 20% sequential decline in sales, with expectations ranging between $11 million and $13 million. This decline is primarily due to seasonal impacts and aftermarket excess inventory, posing short-term challenges for the company.
Forward-Looking Guidance
During the earnings call, Airgain provided guidance for 2025, with a focus on addressing a $2.6 billion serviceable addressable market. The company aims to leverage its AirgainConnect Fleet and Lighthouse solutions to drive growth. Despite projecting a negative non-GAAP EPS of $0.10 and an adjusted EBITDA of negative $1.1 million for Q1 2025, Airgain remains optimistic about its long-term prospects.
In summary, Airgain’s earnings call highlighted a year of strategic transformation and growth in 2024, despite facing some challenges. The company’s focus on high-value solutions and strategic partnerships positions it well for future growth, although short-term headwinds are anticipated in early 2025. Investors will be keen to see how Airgain navigates these challenges and capitalizes on its market opportunities.