Q1 2025 Airgain Inc Earnings Call
David: [music].
Good afternoon.
Diego: Welcome to air gains first quarter 2025 conference call. My name is Diego and I will be your operator for today's call.
Jacobs Win: Joining us today are air gains President and C E O Jacobs win.
Speaker Change: And CFO, Michael I'll Beth.
Speaker Change: As a reminder, this call will be recorded and made available for replay via a link found in the Investor Relations section of air gains website at investors that are gained dot com.
Speaker Change: Following management's prepared remarks, the call will be opened for questions from air games covering analysts.
Speaker Change: I caution listeners that during this call are gained management will be making forward looking statements about future events as well as air games business strategy and future financial and operating performance.
Speaker Change: Actual results could differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the company's business.
Speaker Change: These forward looking statements are qualified by the cautionary statements contained in today's earnings release and are games SEC filings.
Speaker Change: This conference call contains time sensitive information that is accurate only as of the date of this live broadcast may seven 2025.
Speaker Change: Arrogant undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this conference call.
Speaker Change: In addition, this conference call will include a discussion of non-GAAP financial measures.
Speaker Change: We see today's earning release for further details <unk>.
Speaker Change: Including a reconciliation of GAAP to non-GAAP results now.
Speaker Change: Now I'd like to turn the call over to air gains CEO Jacob Suen.
Speaker Change: Jacob.
Speaker Change: Good afternoon, and thank you all for joining us today.
Speaker Change: And again into 2025 with real momentum and a focused strategy. We're now executing on the foundation that we laid last year and approaching D C or I'll say tier two scale lighthouse and again connect and deepen our presence in key global markets.
Speaker Change: Before I get into product related details I want to briefly address the broader macro backdrop and its potential impact on our business.
Speaker Change: Our standard customer terms and flexibility of our Fabless model and the terror classification, while many of our products to date resulted in no material impact on our product costs.
Speaker Change: Seth when you recognize the tariff environment remains fluid and I prepare to adapt quickly to minimize any potential impact on all of our customers.
Speaker Change: We are closely monitoring broadband and enterprise markets for any signs of downstream demand disruption as of early may we have not observed meaningful changes in customer purchasing behavior due to tariffs.
Speaker Change: Our published model supported by nine.
Speaker Change: First operating across diverse geographies.
Speaker Change: Containing took hold by operational resilience, we have experienced no significant disruption to date and are ready to adjust as needed. Unfortunately, our leadership team has navigated similar challenges in the past and we are applying that experience.
Manish: Manish evolving conditions.
Manish: Our transformation from a low ASP component supplier to a high value wireless solutions provider is well underway.
Manish: With platforms like lighthouse and are getting connect we are moving up the value chain into our higher margin system level solutions that address some of the most difficult connectivity challenges, including coverage power and deployment constraints ease.
Ship from components to intelligent wireless systems us expanded our addressable market from one point of $1 billion in 2024 to $2 $6 billion today with continued growth expected as adoption scales.
Manish: We have fundamentally redefine our business model transitioning from sub $5 embedded components to full systems solutions.
Manish: House, which carry asps in excess of 20000 Dallas These.
Manish: These projections are again to deliver not only top line growth, but also long term gross margin expansion and improved operating leverage.
Manish: As noted on our Q4 call excess inventory position across certain product areas, including Iot embedded modems.
Manish: Some products and aftermarket automotive antennas.
Manish: We are seeing improvement on the Iot side with Shell's returning.
Manish: The more normal levels.
Manish: We expect the inventory correction in our aftermarket automotive channel to take additional time.
Manish: Looking to the remainder of the year, we expect to try to sequential revenue pool supported by the consumer and Iot market recovery.
Manish: The transition of our lighthouse and Ed again connect platforms, while the trial to deployment.
Manish: The crawl walk for broader commercial adoption in 2020 six.
Manish: Well, we'd refer to lighthouse and again come back as platforms.
Speaker Change: Yeah, not single products, a scalable modular solution families. Each platform is designed to support a range of use cases deployment environments and customer segments with the flexibility to evolve with new Skus certifications and geographic expansion.
Speaker Change: This platform based approach allows us to build repeatable go to market models and extend the value of our R&D investments over time.
Speaker Change: In Q1, we executed effectively across both of our primary equals victory.
Speaker Change: Let's start with our lighthouse in January we entered into a strategic and commercial agreement with <unk>, a leading telecom operator in the middle East. We view these I'll say multiyear opportunity supporting both indoor and outdoor deployment across all mom and potentially.
Speaker Change: Into a broader regional market.
Speaker Change: These partnership extends beyond the deployment. It includes commercial collaboration joint marketing and co development of New solutions.
Speaker Change: We're working closely with all Montel, one implementation planes with revenue contribution.
Speaker Change: To ramp in the second half of 2025 and expand further in 2026.
Speaker Change: The old Montel engagement also led to that they'd be lighthouse solar our off grid solar power smart meter design Kovich challenge in sustainability driven deployments initial field trials demonstrated strong performance in <unk>.
Speaker Change: Loading meaningful games in coverage and spectral efficiency reinforcing our technical differentiation.
Speaker Change: Recent field trials, so lighthouse solar.
Speaker Change: <unk> confirmed its market potential, including a 20% expansion in <unk> coverage.
Speaker Change: Average speeds, increasing well one megabits per second to 250 Megabits per second with peak over 425 Megabits per second.
Speaker Change: Over a 50% improvement in spectrum efficiency.
Speaker Change: And same day installation with no need for fiber or power grid access.
Speaker Change: Multiple lighthouse trials underway a plane across key regions.
Speaker Change: Including the Middle East Latin America, Southeast Asia and Europe.
Speaker Change: Each.
Speaker Change: It presents a meaningful opportunity elsewhere, you walk toward broader commercial adoption.
Speaker Change: Turning to AG and connect we also made key strike during the quarter, we achieved commercial certifications with all three major U S carriers.
Speaker Change: And I'll see if AT&T first met capable status.
Speaker Change: Supporting our N to address mission critical public safety Communications, we remain focused on converting solar cycle in tier two and tier three opportunities in the near term while building a long cycle tier one pipeline for 2026.
Speaker Change: Our sales team.
Speaker Change: In foods dedicated drops across five U S regions.
Speaker Change: They targeted challenge strategy aligned with carrier partnerships.
Speaker Change: In the first quarter. We also secured several notable wins across our embedded modems awesome truckers and after much market product lines, although signed a Tijuana M. S O launching it's Wi Fi seven offering.
Speaker Change: These design wins on the school the continued strength of our core business and play a critical role in supporting our overall operations as we scale revenue from our new strategic product platforms.
Speaker Change: Finally, I wanted to take a moment to highlight the strength of our leadership team. This is a season really just focused team built for today's environment.
Speaker Change: One that knows how to drive operational performance strategically engage customers and navigate global uncertainty.
Speaker Change: All while positioning it again for long term value creation.
Speaker Change: We are building a wireless connectivity company that doesn't just participate in the <unk> expansion, we help make it possible in places others can't.
Speaker Change: With that I'll turn it over to Michael to walk through our financial results and outlook Michael.
Michael: Thank you Jacob before diving into the numbers. Please note that my review of our financial results and guidance.
Michael: Refers to non-GAAP figures.
Michael: Information about the non-GAAP financial measures, including GAAP to non-GAAP reconciliations can be found in our earnings release.
Michael: Now, let's turn to our first quarter results.
Q1 sales came in at $12 million in line with the midpoint of our guidance range.
Michael: <unk> sales reached six $4 million down just over $1 million sequentially, reflecting another strong performance.
Michael: Automotive sales were $1 $3 million down $2 million sequentially.
Michael: Driven by lower shipments of aftermarket antennas and are getting internet gateways.
Michael: Enterprise sales were $4 $3 million down $1 million sequentially, marking a low point for the year due primarily to lower shipments of enterprise antennas and costume Iot products.
Michael: Q1, gross margin was 44, 3%, marking our fifth consecutive quarterly increase the 90 basis point sequential improvement was largely due to higher enterprise product margins.
Michael: Operating expenses totaled $6 $6 million.
Michael: Both $1 million sequentially and flat year over year.
Michael: While expenses have remained stable over the past sure.
Michael: Our engineering sales and marketing organizations has undergone some significant changes.
Michael: In Q1, 'twenty 'twenty five strategic initiatives.
Michael: Accounted for two thirds of our total R&D sales and marketing expenses up from roughly 50% in Q1 of 2024.
Michael: Over the past year, we have built dedicated sales marketing and customer support teams to support AC fleet that lighthouse, while streamlining the engineering and sales expenses of our existing business.
Michael: As a result, adjusted EBITDA was negative $1 $2 million.
Michael: Mainly due to the lower revenue base.
Michael: non-GAAP EPS came in and negative 11 cents.
Michael: We ended the quarter with a cash balance of $7 $4 million.
Michael: The one thing $1 million sequentially and up one $2 million from the same quarter a year ago.
Michael: Now moving to our outlook for the second quarter ending June 32025.
Michael: As a reminder, we provide quarterly guidance for sales non-GAAP gross margin and expenses non-GAAP EPS and adjusted EBITDA as we believe these metrics are key indicators of our overall performance.
Michael: For Q2, we project sales to range between 12, and a half million dollars and fortunate in a half million dollars with a midpoint of $13 $5 million.
Michael: Representing approximately 12% sequential growth.
Michael: The growth is expected to come from a rebound in our enterprise market.
Michael: Enterprise performance will be supported by the correction of excess inventory.
Michael: And increased design win activity, specifically, among our industrial Iot customers.
Michael: We also anticipate lighthouse deployments beginning to contribute to enterprise revenue in the second half of the year.
Michael: Consumer market remains a bright spot.
Michael: As an uptick in March shipments.
Michael: Head of anticipated tariff activity offset the negative seasonal impact.
Michael: We do expect some moderation in Q2, followed by steady growth throughout the rest of the year, especially as another tier one M. S. So launched its why five seven platform this quarter.
Michael: Automotive hit a low point in Q1 and it is expected to remain relatively flat in Q2. However.
Michael: However shipments of again connect gateways are expected to drive meaningful growth in the second half of 2025.
Michael: We expect non-GAAP gross margin to be 42% to 45% or 43, 5% at the midpoint.
Michael: We expect operating expenses to be approximately $6 $6 million.
Michael: non-GAAP EPS is expected to be negative six cents at the midpoint.
Michael: And that adjusted EBITDA is expected to be negative.
Michael: $6 million at the midpoint.
Michael: We expect to receive at least half a million dollars in E. R series phones, this quarter, which will help mitigate the impact of the adjusted EBITDA loss.
Michael: We remain mindful of the current macroeconomic environment.
Michael: And we are focused on executing our strategy, while targeting positive adjusted EBITDA in Q3.
Michael: Finally, as a housekeeping item, we plan to file an updated S. Three shelf as our current shelf registration is set to expire in two days.
Michael: While we have no imminent plans to raise capital maintaining this filing reflects good corporate governance and financial flexibility in times of uncertainty.
Jacob Suen: Now I would like to turn the call over to Jacob for his closing thoughts Jacob.
Jacob Suen: Thanks, Michael.
Jacob Suen: As we move through Q2 and into the second half of 2025.
Jacob Suen: Our focus remains on converting early traction into a sustained commercial momentum.
Jacob Suen: Across both of our it can connect and lighthouse clot forms.
Jacob Suen: Provide a compelling value proposition lower total cost of ownership.
Jacob Suen: Simplified installation and maintenance in alignment with sustainability and cost efficiency priorities.
Jacob Suen: Especially important in today's environment.
Jacob Suen: Following stronger than expected performance in our consumer segment during Q1 and increasing visibility into enterprise engagements. We entered Q2 on firmer footing.
Jacob Suen: <unk> by the sequential momentum building in our pipeline and are executing with growing confidence.
Jacob Suen: In summary, we're executing well against it.
Jacob Suen: Our strategy with early traction across both platforms, we are investing prudently maintaining a strong balance sheet, managing working capital carefully and keeping operating expenses aligned with our growth base.
Jacob Suen: And we are building, whether it be mature with a clear roadmap a seasoned leadership team and growing customer engagement.
Jacob Suen: I wanted to take a moment to thank all our employees for their continued hard work and dedication you'll focus on innovation and disciplined execution is what propels Eric Fuller.
Jacob Suen: I also want to thank our customers partners and investors for their trust and support we remain energized by the opportunities ahead and confident in our ability to deliver meaningful value as we execute our strategy.
Jacob Suen: With a strong foundation.
Jacob Suen: Proven leadership team and clear growth initiatives I am optimistic about what lies ahead operator, we're now ready to take questions.
Jacob Suen: Thank you.
Jacob Suen: We will now take questions from air gains sell side analysts if you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Jacob Suen: You May press Star two if you would like to remove your question from the queue.
Jacob Suen: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: And our first question comes from Anthony Stoss with Craig Hallum. Please state your question.
Speaker Change: Good afternoon, Jacob Michael a few things I wanted to focus on your comments I think it was yours, Mike <unk> connect meaningful.
Speaker Change: [noise] ramp in the second half of the year can you maybe talk about either design wins or customer traction and how many customers do you think you'd be launching with the new product.
Speaker Change: And then the second part of my question probably for Jacob.
Speaker Change: Just the expectation of the Iot business to rebound in Q2.
Speaker Change: Given the visibility you may or may not happen to the rest of the year do you think that your enterprise can actually grow in 2025 over 2024.
Michael: Hi, Toni this is Michael thank.
Speaker Change: Thank you for the questions.
Speaker Change: So in terms of the AC fleet.
Speaker Change: Done quite a bit in terms of laying the foundation, we need to scale the overall AC fleet business.
Speaker Change: As we mentioned in the script, we have on boarded a full team dedicated to the fleet with a very deep experience and covering all of the regional Oh.
Speaker Change: U S. A this is a brand new theme for us and with brand New also type of experience. We also have established.
Speaker Change: Our distribution channels are now fully operational we also have launched a whole marketing campaign around a large U S carrier in the coming weeks.
Speaker Change: So right now we don't expect a strong odor is taking place in Q2 many of our customers are in the trial phase and some of them are nearing completion.
Speaker Change: We are very optimistic that we'll have those design wins in the coming months and we expect larger programs. The tier one top customer classification that we have explained last quarter.
Speaker Change: Those to start contributing in the second half of the year and laying the foundation for 2026.
Speaker Change: As we know this is a long cycle sales cycle and the momentum itself is building and we are looking also for executing on some low level partnership as well too.
Speaker Change: Brought in the overall market rich.
Speaker Change: Okay.
Jacob: And hi, Tony Yeah, So Jacob here, so entering your number.
Jacob: The second question in regards to Iot rebound Yeah. We are encouraged by the fact that at least couple of key customers.
Jacob: The inventory correction issue last year.
Jacob: Give us visibility.
For this year and in fact in second quarter. They already started to resume shipments so that gives us the confidence that we are near the end of some of this inventory correction, especially in the modem business. So that's encouraging to see.
Jacob: What's the overall enterprise market.
Jacob: Certainly we're still seeing the enterprise a P trucking well that's the business that we're selling through a partner or small you know for stadiums application arena application.
Jacob: So we're seeing you know certainly the infrastructure what does he is also a part of the enterprise, which is headlined by our lighthouse product well at making some really good progress in all of certainly the the headliner there it's a the old Mantello partnership.
Jacob: Not to say strategic partnership, but also has a commercial element to it. So we're working with them on the deployment schedule as we speak and we should expect deployment for the second half of the year and then really ramping up our 2026. So all in all we are encouraged by the progress the positive.
Jacob: Let's talk about some of these are several funds and Tony to piggyback on the J class because you got the point right now the enterprise market.
Jacob: Backlog at this point of the quarter is one of the strongest that we've seen over the past three or four quarters and in addition to that.
Jacob: Excess inventory correction there, we're starting to see happening. We're also seeing a nice level of design win activity, especially with specifically industrial Iot customers. So this bodes well and of course the visibility in the second half of the year is clouded by the current macro.
Jacob: Could I make the environment, but the fact that we are where we are right now from a backlog perspective, we feel good about the enterprise business.
Speaker Change: Perfect. Thanks for all the color guys.
Jacob: Thank you.
Jacob: Okay.
Jacob: Thanks, I'll remind us of the audience to ask a question press star one to remove yourself from the queue Press star two.
Speaker Change: Your next question comes from Scott Searle with Roth Capital. Please ask your question.
Speaker Change: Thanks for taking the questions Hey, Jacob Michael I apologize I got on the call a little bit late so I apologize. If this is redundant but jumped a lighthouse I'm wondering if you could give us an update.
Speaker Change: In terms of any incremental pilots that are occurring I think the target was still a third quarter, where we start to see the search ramp up are we still tracking on that standpoint for omnicell and can we expect any other carriers in 2025.
Speaker Change: Hello, Scott Great questions. So regarding the lighthouse certainly they these products and I was pleasantly surprised that we're able to.
Speaker Change: Start getting commercialization back in Q4, and it's ramping up and and you know right now its with all Monto and end with Oman until the partnership it's not just about Omar we're actually working with them for other opportunities outside of Oman into several other regions within the middle East.
Speaker Change: We expect more trials going to be taking place outside of Oman. Our you know in the middle East and Additionally, we're also completing a trial.
Speaker Change: Order in the Latin America Division.
Speaker Change: Uh huh.
Speaker Change: Two more trials, one in Europe, and one in South East Asia in third quarter, and then also anticipate at least one other trial in the fourth quarter or in the Asia region as well as the hub to hub even trial here in the U S.
Speaker Change: So while we know we all.
Speaker Change: But are you optimistic about but we've got as you know it keeps you a place but right now many of them are still in the trial stage at this point. So all this is Scott you're going to ask for something no no. No. That's great I did a lot of color I appreciate that and then just going back to them.
Speaker Change: AC fleet.
Speaker Change: And we've talked about some European opportunities as well I'm wondering if you could update us in terms of what youre seeing on that front. If you go through the certification process or if that's been put on the backburner the 26.
Speaker Change: So right now Scott we are fully focused on the U S market.
Speaker Change: Sales and marketing the engineering the certification.
Speaker Change: And getting into even more of the first that trusted along with frontline with Verizon along with our.
Speaker Change: T mobile a priority one those are really our key focus we do have the C. E certification on our roadmap, but this may take a couple more quarters before we get there.
Speaker Change: Okay Fair enough and lastly, and I'm sure you probably addressed this but I'm wondering if you could just get to hit the highlights again in terms of tariff implications.
Speaker Change: What you guys are actually building into your expectations.
Speaker Change: Kind of what you're seeing out there from a competitive standpoint.
Speaker Change: You do have an advantage versus some other foreign suppliers. So I'm kind of wondering how that's transitioning to business in core nimble link and otherwise and how you guys are approaching it from a total strategy standpoint. Thanks.
Speaker Change: Sure. Thank you Scott. This is a very good question. So of course, the tariff situation is really fluid very dynamic.
Speaker Change: And it can change on a week by week basis at this point at this point, we're not seeing a change in the buying patterns of our customers, which is very good news that was our first worry and at this point from a supply chain constraints in the beginning there was quite a bit of a signals of hoarding and constrained.
Speaker Change: On that and we're not seeing that either right now and right now.
Speaker Change: I would say that the majority of our products are not going to be impacted by the terrorists, although things can change very fast as well too and this is a combination of our standard terms. It's a combination of our fabless model as well too and it's also the overall tariff codes and.
Speaker Change: Exemptions associated with those depending upon the different up our regions. So our key focus right now is really our customers and to minimize really minimize the impact on our customers from the tariffs. So that we have basically a very transparent and also smooth relationship with them on that and I would say.
Speaker Change: That the Fabless model.
Speaker Change: Nine a.
Speaker Change: Contract manufactures in the different regions of the world.
Speaker Change: Some of them do operate our factories in other type of geography. So we've been very proactive on a second sourcing strategy a year ago by running some pilot runs across different regions and so we are ready to adopt there would be some disruption of course on that but we are ready to adapt whatever.
Speaker Change: Wherever the the signals are really show us basically yes and.
Speaker Change: To add to that I think that that's really a competitive advantage at this point right versus all other competitors out there they are getting somewhat impacted by the tariff one way or the other and this really speaks to the extremes with the operation team. We've been preparing for this thing you know the last time four years ago and that's what we saw.
Speaker Change: Really diversify and then really having these are unique fabless model across different regions Asia, and North America et cetera. So that way, we can actually go to talk to the customers and telling them not with US no tariff go ahead and place more orders and that's what we're encouraging them as we speak.
Speaker Change: Okay, great if I could just one more in in terms of consumer Wi Fi I'm just wondering are.
Speaker Change: Are we at a steady state now or is there some more growth either with incremental msos coming onboard or Wi Fi seven are we kind of at a steady state we should be thinking about that business going forward. Thanks.
Speaker Change: Good question, Scott actually [laughter] I wish we were kind of the level of a normalized level at this point, but as you know in Q1, we were expecting about a one to one and a half men dollars impact from the seasonal Oh Hum factor.
Speaker Change: Basically the lunar new year. However, as you can see as you can tell the revenue came in pretty much flat to Q4. So what we saw was a bit of an uptick in the month of March with a especially cable operators.
Speaker Change: Odm's, placing some orders and we believe in anticipation of the impending tariffs taking place. So we expect a moderation in our Q2 because of the uptick in Q1, but our overall after Q2, we expect to come back to some normalized level with some steady but modest growth.
Speaker Change: Especially as another M. S. So tier one has also launched it towards Wi Fi seven program.
Speaker Change: Great. Thanks, so much ill get back in the queue.
Tim: Your next question comes from Tim <unk> with Northland Capital markets. Please state your question.
Speaker Change: Hey, good afternoon.
Tim: Mentioning the expectation.
Tim: Listen the expectation for a lie.
Tim: Lighthouse to begin to contribute in the second half.
Tim: I Wonder if you could quantify that we've talked about the total opportunity.
Tim: I'm talking to a few million bucks or anything you know kind of material there.
Tim: And in addition to that I know you mentioned Europe I don't I don't know that we've heard about that trial before but.
Tim:
Tim: You know as you.
Tim: And maybe the U S as well.
Tim: As you look at this.
Tim:
Tim: Group of trials I Wonder if you could take a stab.
Tim: A stab.
Tim: Yes.
Tim: Sizing that.
Tim: Forget opportunity relative to what you what you're looking at an end with Oman seller.
Tim: Each individual opportunity or in the aggregate.
Tim: Thanks.
Tim: Yeah sure Tim I'll start and then I'll certainly in all my colleagues can add more color. So regarding the you know the new M&A expectation I think that we would still continue to be cautious about the second half as we as I.
Tim: And we are working with Oman tailing on the deployment schedule, but we actually have a multiyear multimillion dollar contract that we signed with them.
Tim: And you know and we expecting low seven figure numbers for the remainder of the year with them and then it ramps up and that's one only on old mom and we are certainly expecting to work with them.
Tim: In a bigger fashion for the rest of our middle East look that they are much bigger than we are not really on the.
Tim: Leveraging their sales and marketing and their influence.
Tim: Now all of them are connected in the middle East region, and and and and that's really going to help us to really be able to penetrate into other region and be able to be.
Tim: It'd be more successful really quick now like what do you mean somebody he grew up all these particular.
Tim: And all it has been waiting for us to get see certification.
Tim: On lighthouse.
Tim: Actually one of the reason why its been delay because we're still we're going to work on the Easter vacation, which should be completed by the end of the quarter. That's the plane and at that point. That's why you have that slated for Q3 because of that reason they are really seeing the value. They they have certainly you know they need and that's what we've seen.
Tim: Plus the clock.
Tim: The lighthouse really addressing a major deficiency today, where you know whether it's outdoor indoor where there are many places is simply a having connectivity issue and to put it another base station and now the small cell. Its a first of all it's time consuming to get all of the.
Tim: The approvals you know, it's a C D with a you know with the local municipality takes time, usually it takes about six months, that's what we are learning.
Tim: It's the cost right to put up a fiber to take out the fiber to the base station and small cell, sometimes is really cost prohibitive right and thinking about just simply putting a lighthouse there within a day and now now that's why when we talked to the upper management team of a long tail.
Tim: All about.
Tim: Lighthouse solar which will launch in Q1, this year and they really see a huge potential for the middle East region, and North Africa, where there are many area. It's out there and they've got a lot of some and it's difficult to have connectivity to the power grid and to simply installing lighthouse.
Speaker Change: Mandel of ours, that's actually what we did in Oman with the trial and game connectivity you know not only connectivity on the you know on the broadening base case, but also get them connectivity share literally it means a lot and that's what we're seeing out there what's interesting as you'll need a smarts expectation.
Speaker Change: We're going to continue to do the trial go through the process, but the market's English Ah I I think that we have started also penetrate into the U S market I think.
Speaker Change: Mark is little bit different you know dealing with it I mean, all the big N. M. I was just going to take time and we are working with the likes of Verizon and AT&T T. Mobile as you saw but we're also now come up with a in the class model.
Speaker Change: Also go after the broadband service provider.
Speaker Change: Some things out with our team is working all it's too early but when they give you a lot more color, but we're coming out with a strategy that's been a really accelerate.
Speaker Change: The sales cycle or the deployment cycle with our customers here in the U S.
Speaker Change: Okay, great. Thank you and to follow up.
Speaker Change: Seems like you at least the elements of the enterprise Iot inventory issue might be.
Speaker Change: Clearing up a little bit sooner than you might have expected is that fair to say.
Speaker Change: That is correct that is correct Tim on the other hand on the aftermarket we still think that.
Speaker Change: There is still a little bit more time to sort that out.
Speaker Change: Okay. Thanks very much.
Speaker Change: Thank you.
Speaker Change: At this time this concludes our question and answer session.
Speaker Change: If your question was not answered you may contact air gains Investor Relations team.
Speaker Change: Team at a I R G at Gateway.
Speaker Change: G R P dot com.
Speaker Change: I'd now like to turn the call back over to Mr. Suing for his closing remarks.
Speaker Change: Well. Thank you all for your thoughtful questions and continued interest in air game we.
Speaker Change: We really appreciate your support and look forward to updating you on our progress next quarter up later he may now conclude the call.
Speaker Change: Thank you for joining us today for <unk> first quarter 2025 earnings call you may now disconnect.