Airgain, Inc. (NASDAQ:AIRG) Q1 2024 Earnings Call Transcript

Scott Searle: And if I could follow-up on the Lantern front. You had some news this week I believe with AT&T and T-Mobile activity on that front, and it seems like there’s a lot of other trial activity going on. I’m wondering if you could walk us through the paces of certification and timeline to deployment with some of the more advanced carriers. And if you could give us an idea from a pilot perspective the geographies that you are seeing a lot of that activity, and kind of what you’re baking in is the lower end of the range for contribution in the second half of this year?

Jacob Suen: So this is — as I indicated, I am just so proud of the team’s effort. It’s not easy, it’s a lot of uncertainties. And for the team to be tenacious and navigate through the various certification, the trials and has been — this has been phenomenal, done a phenomenal job. Now the certification, it takes anywhere from several weeks to several months, depends on the different types. We talk about PTCRB. We also have to get the certifications from the actual mobile network operators, such as the names you just mentioned. As far as the trials, we have — I would say, majority of the trials is happening right now in North America, including US and Canada. We also have some internationally in Latin America and also in EMEA as well.

Operator: Our next question comes from the line of Tim Savageaux with Northland Capital Markets.

Tim Savageaux: I wanted to follow-up on the 5G repeater, the Lighthouse trials. I think you mentioned two active network trials and four more plans in the second half. You’ve talked about the strategic partnership. But in terms of the trials that you have upcoming, I wonder if you could characterize sort of what carriers you’re planning on working with those trials either US, international, Tier 1, et cetera?

Jacob Suen: Tim, good to talk to you again. And it’s a great question on the 5G initiative that we’re doing. So there are two active trials right now. One is the one that we mentioned last quarter and that one is international. And here when we talk about with this thing, we are making nice progress. We are going from a, what I call, more of just a field trial now to what I call a live network trial. What I mean by that is that they are actually having customers that we are actually going to and they were actually going to install our system into their network and going to stay there supposedly permanently if everything goes well. So this is, I would say, the final trial before they go ahead and proceed with a purchase order.

So from that perspective, we are very encouraged by the progress and that’s international customers. We also have another active trial domestically here in the US with Tier 1 MSOs as well, and that one is still early stage. We have four more planned for the second half of the year. Let me see, we have one in US, one in EMEA and then two in Latin America. And all of the four are either mobile network operators or power companies.

Tim Savageaux: And then can I just try and summarize what we’re hearing here with regard to the second half. It looks like you’ve got some growth drivers in consumer. As you talk about the ramp of the fixed wireless antenna, I guess you saw some of that in Q1. But I guess how long does that take to get to what you might consider full or run rate deployment throughout the year? And then a follow-up after that.

Jacob Suen: So we are starting to see what we call these IoT antennas, certainly, really for the enterprise market, and for different applications. Some of them are for what you call the fixed wireless access applications, some of them for actually for some other unique applications, such as smart city traffic light applications. So all-in-all, we are really seeing a nice demand in couple of these markets and we expect that to continue. Maybe Michael can add more color about some of the specific numbers.

Michael Elbaz: So just to summarize overall, from a consumer standpoint, as we mentioned that we do see growth in Q2 and we expect continued growth in the second half of the year, driven by the MNO design win along with the MSO’s Wi-Fi 7 early adoption rate. The strength of that rebound in the second quarter is just too early to tell right now. On the aftermarket part of automotive, there is still some ongoing excess inventory at this point and we expect that to be sorted out at the end of the year during probably the last quarter of the year. Now on the enterprise business, we came out with $8.9 million of revenue in Q1. A large part of the growth was due to the large project that we had mentioned in the past of custom products.

That one — not having that anymore in second quarter, we are very pleased with the offsetting growth that we are seeing on the embedded modems, on the asset tracker, the first shipment of the FWA solution and on this — what you just mentioned, the IoT antennas, which is really those products that we had mentioned about six to eight months ago as introduction. And they’re finding their way very nicely in those communities in terms of a — it’s a bit of a long sales cycle altogether, but it definitely helped us with the ramp or the increase in Q1. We’re seeing in Q2 and we expect some more in Q3 and Q4. So enterprise, we expect it to be relatively flat for the time being. But the unknown right now are going to be the contribution of the AC Fleet, but also Lantern as we mentioned.