Q1 2026 Airgain Inc Earnings Call

May 6, 2026

Operator 2: Good afternoon. Welcome to Airgain's Q1 2026 Conference Call. My name is Sherry, I will be your operator for today's call. Joining us today are Airgain's President and CEO, Jacob Suen, and CFO, Michael Elbaz. As a reminder, this call will be recorded and will be made available for replay via the link found in the investor relations section of Airgain's website at investors.airgain.com. Following management's prepared remarks, the call will be open for question from Airgain's covering analysts. I caution listeners that during this call, Airgain's management will be making forward-looking statements about future events, as well as Airgain's business strategy and future financial and operating performance. 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.

Operator: Good afternoon. Welcome to Airgain's Q1 2026 Conference Call. My name is Sherry, I will be your operator for today's call. Joining us today are Airgain's President and CEO, Jacob Suen, and CFO, Michael Elbaz. As a reminder, this call will be recorded and will be made available for replay via the link found in the investor relations section of Airgain's website at investors.airgain.com. Following management's prepared remarks, the call will be open for question from Airgain's covering analysts. I caution listeners that during this call, Airgain's management will be making forward-looking statements about future events, as well as Airgain's business strategy and future financial and operating performance. 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 #2: As a reminder, this call will be recorded and will be made available for replay via the link found in the investor relations section of AIRGAIN's website at investors.airgain.com.

Speaker #2: Following management's prepared remarks, the call will be open for questions from AIRGAIN's covering analysts. I caution listeners that during this call, AIRGAIN's management will be making forward-looking statements about future events as well as AIRGAIN's business strategy and future financial and operating performance.

Speaker #2: 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. These forward-looking statements are qualified by the questionnaire statements contained in today's earnings release and AIRGAIN's SEC filings.

Operator 2: These forward-looking statements are qualified by the cautionary statements contained in today's earnings release and Airgain's SEC filings. The conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, 6 May 2026. Airgain undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. In addition, this conference call will include a discussion of non-GAAP financial measures. Please see today's earnings release for further details, including a reconciliation of GAAP to non-GAAP results. I would now like to turn the call over to Airgain CEO, Jacob Suen. Jacob.

Operator: These forward-looking statements are qualified by the cautionary statements contained in today's earnings release and Airgain's SEC filings. The conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, 6 May 2026. Airgain undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. In addition, this conference call will include a discussion of non-GAAP financial measures. Please see today's earnings release for further details, including a reconciliation of GAAP to non-GAAP results. I would now like to turn the call over to Airgain CEO, Jacob Suen. Jacob.

Speaker #2: The conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 6, 2026. AIRGAIN undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call.

Speaker #2: In addition, this conference call will include a discussion of non-GAAP financial measures; please see today's earnings release for further details including a reconciliation of GAAP to non-GAAP results.

Speaker #2: I would now like to turn the call over to AIRGAIN CEO, Jacob Suen. Jacob? Good afternoon, everyone. And thank you for joining us. The first quarter marked a solid start to 2026 as we begin converting the strategic groundwork we laid last year into broader commercial momentum across the business.

Jacob Suen: Good afternoon, everyone, and thank you for joining us. The Q1 marked a solid start to 2026 as we began converting the strategic groundwork we laid last year into broader commercial momentum across the business. Over the past several years, we have been transforming Airgain into a higher value system-level connectivity company. In Q1, that transformation showed up through customer wins, expanded platform capabilities, and deeper commercial engagements across our core markets and growth platforms. Let me start with our platform initiatives. First, we expand AirgainConnect's capabilities through the acquisition of the MegaFi 2 assets from Nextivity. This acquisition expands our portfolio and strengthens our vehicle gateway capabilities across public safety, utility, and enterprise fleet applications. It also broadens what we can offer to our customers. Some customers need a fully integrated vehicle gateway. Others want a simpler high-power router solution.

Speaker #2: Over the past several years, we have been transforming AIRGAIN into a higher-value system-level connectivity company. In Q1, that transformation showed up through customer wins.

Speaker #2: Expanded platform capabilities, and deeper commercial engagements across our core markets and growth platforms. Let me start with our platform initiatives. First, we expanded AIRGAIN Connect's capabilities through the acquisition of the HPUE Megafied II asset from Nextivity.

Speaker #2: This acquisition expands our portfolio and strengthens our vehicle gateway capabilities across public safety, utility, and enterprise fleet applications. It also broadens what we can offer to our customers.

Speaker #2: Some customers need a fully integrated vehicle gateway. Others want a simpler, high-power router solution. With AIRGAIN Connect, we can now support a wider range of deployment needs, both AIRGAIN Connect fleet and AIRGAIN Connect Megafied II are part of the AT&T FirstNet offering.

Jacob Suen: With AirgainConnect, we can now support a wider range of deployment needs, both AirgainConnect Fleet and AirgainConnect MegaFi 2 are part of the AT&T FirstNet offering. Customers can order these solutions directly through the AT&T SPiP portal. We are also seeing encouraging progress in the AirgainConnect pipeline. In March, we closed a tier 2 customer in the energy sector that operates across multiple US regions. This customer is deploying AirgainConnect across a fleet of more than 300 maintenance and service vehicles following field trials that demonstrated improved connectivity, performance and ease of installation. As of last week, our pipeline include more than 55 tier 1 and tier 2 opportunities, up roughly 40% from the approximately 40 tier 1 and tier 2 opportunities we mentioned on our last call. The mix is also becoming more attractive with most of these opportunities now coming from non-first responder markets.

Speaker #2: And customers can order these solutions directly through the AT&T SPE portal. We are also seeing encouraging progress in the AIRGAIN Connect pipeline. In March, we closed a Tier 2 customer in the energy sector that operates across multiple US regions.

Speaker #2: This customer is deploying AIRGAIN Connect across a fleet of more than 300 maintenance and service vehicles. Following field trials that demonstrated improved connectivity performance and ease of installation, as of last week, our pipeline includes more than 55 Tier 1 and Tier 2 opportunities.

Speaker #2: Up roughly 40% from the approximately 40 Tier 1 and Tier 2 opportunities we mentioned on our last call. The mix is also becoming more attractive.

Speaker #2: With most of these opportunities now coming from non-first responder markets, importantly, these opportunities are also advancing through the funnel. More than one-third of our Tier 1 and Tier 2 opportunities are now in trial or post-trial stages.

Jacob Suen: Importantly, these opportunities are also advancing through the funnel. More than one-third of our tier 1 and tier 2 opportunities are now in trial or post-trial stages compared to a quarter on our last call. This gives us increasing confidence that the pipeline is not only broader, but also moving closer to conversion. At the same time, tier 1 engagement continues to deepen, with several opportunities becoming more strategic. While these larger opportunities take longer to convert, we believe the pipeline is moving in the right direction. These emerging opportunities reinforce our view that the strategy we outlined on our last call is working, and that AirgainConnect is positioned to become a more meaningful contributor as we move through 2026 and beyond. Second, we continue to advance Lighthouse.

Speaker #2: Compared to a quarter on our last call, this gives us increasing confidence that the pipeline is not only broader but also moving closer to conversion.

Speaker #2: At the same time, Tier 1 engagement containing to deepen. With several opportunities becoming more strategic. While this larger opportunities take longer to convert, we believe the pipeline is moving in the right direction.

Speaker #2: This emerging opportunities reinforce our view that the strategy we outline on our last call is working and that AIRGAIN Connect is positioned to become a more meaningful contributor as we move through 2026 and beyond.

Speaker #2: Second, we continue to advance Lighthouse. In the US, we are now working with a business sponsor at a Tier 1 mobile network operator to progress toward a live enterprise trial.

Jacob Suen: In the US, we are now working with a business sponsor and a tier 1 mobile network operator to progress toward a live enterprise trial. This moves Lighthouse from network validation into the business and commercial base. If the trial progresses as expected, we believe initial commercialization opportunities could begin toward the end of 2026, with a broader opportunity developing in 2027. This opportunity with the tier 1 MNO is being driven by clear customer pain points around coverage, capacity, and the cost of network upgrades. In many in-building environments, traditional solutions such as DAS or small cells can be expensive, disruptive, and slow to deploy. Lighthouse gives customers a faster and more cost-effective path to upgrading from 4G to 5G coverage. For indoor deployments, the value proposition is straightforward: better coverage, lower cost, and faster deployment.

Speaker #2: This moves Lighthouse from network validation into the business and commercial phase. If the trial progresses as expected, we believe initial commercialization opportunities could begin toward the end of 2026.

Speaker #2: With a broader opportunity developing in 2027. These opportunities with the Tier 1 MNO are being driven by clear customer pain points around coverage, capacity, and the cost of network upgrades.

Speaker #2: In many in-building environments, traditional solutions such as DAS or small cells can be expensive, disruptive, and slow to deploy. Lighthouse gives customers a faster and more cost-effective path to upgrading from 4G to 5G coverage.

Speaker #2: For indoor deployments, the value proposition is straightforward: better coverage, lower cost, and faster deployment. For outdoor use cases, Lighthouse reduces coverage gaps and provides network performance benefits.

Jacob Suen: For outdoor user cases, Lighthouse reduces coverage gaps and provides network performance benefits, non-disruptive integration, and scalability. Based on our engagement with this tier one MNO, we believe indoor deployments could represent the near-term opportunity, with initial deployments targeted toward the end of this year. Outdoor deployments remain an important longer-term opportunity and are expected to follow a more expanded evaluation and commercialization cycle. In the Middle East, our relationship with Omantel remains an important entry point. Deployment activity was paused due to the conflict in the region, engagement is now ongoing, and we expect to move forward with initial deployments over the coming months.

Speaker #2: Non-disruptive integration and scalability based on our engagement with this Tier 1 MNO, we believe indoor deployments could represent the near-term opportunity. With initial deployments targeted toward the end of this year, outdoor deployments remain an important longer-term opportunity and are expected to follow a more expanded evaluation and commercialization cycle.

Speaker #2: In the Middle East, our relationship with Omantel remains an important entry point. Deployment activity was paused due to the conflict in the region. But engagement is now ongoing, and we expect to move forward with initial deployments over the coming months.

Speaker #2: We continue to advance our roadmap for integrated 4G and 5G coverage solutions designed for challenging indoor and outdoor environments. This roadmap supports 4G and 5G co-location, expands the range of deployment scenarios we can address, and strengthens the long-term commercial opportunity for Lighthouse.

Jacob Suen: We continue to advance our roadmap for integrated 4G and 5G coverage solutions designed for challenging indoor and outdoor environments. This roadmap supports 4G and 5G co-location, expands the range of deployment scenarios we can address, and strengthens the long-term commercial opportunity for Lighthouse. We are seeing customer interest in trialing the combined solution as units become available. Our engagement with the tier 1 MNO and enterprise customers has progressed, we believe we now have a clear path to commercialization with our current product roadmap. As a result, we have realigned our resources and priorities to focus on accelerating commercialization and revenue generation. Now, turning to our core markets. In consumer, we secure a multi-year, multi-million dollar embedded antenna design win for a next generation 5G home connectivity platform with a tier 1 North American MNO, with production units anticipated later this year.

Speaker #2: We are seeing customer interest in trialing the combined solution as units become available. As our engagement with the Tier 1 MNO and enterprise customers has progressed, we believe we now have a clear path to commercialization with our current product roadmap.

Speaker #2: As a result, we have realigned our resources and priorities to focus on accelerating commercialization and revenue generation. Now, turning to our core markets, in consumer, we secure a multi-year, multi-million dollar embedded antenna design win for a next-generation 5G home connectivity platform with a Tier 1 North American MNO.

Speaker #2: With production units anticipated later this year, as expected, consumer revenue decline sequentially due to seasonality. Looking into Q2, we expect consumer revenue to remain relatively stable with underlying demand still healthy.

Jacob Suen: As expected, consumer revenue declined sequentially due to seasonality. Looking into Q2, we expect consumer revenue to remain relatively stable, with underlying demand still healthy. The primary factor we are monitoring in the near term is a supply constraint at the gateway level, particularly around memory availability and pricing. This is impacting our OEM's ability to ship finished systems and in turn can affect the timing of our antenna shipments. At this point, this dynamic is limited to a single OEM serving cable operators. Based on feedback from this OEM, they are actively working to address the issue, and we believe the impact is temporary. As we mentioned earlier, we have secured 2 tier 1 MNO design wins, and we remain on track for those programs to ramp in the H2 of the year. In enterprise IoT, momentum is building.

Speaker #2: Deployment refactor we are monitoring in the near term is a supply constraint at the gateway level. Particularly, around memory availability and pricing. This is impacting our OEM's ability to ship finished systems and, in turn, can affect the timing of our antenna shipments.

Speaker #2: At this point, this dynamic is limited to a single OEM serving cable operators. Based on feedback from this OEM, they are actively working to address the issue.

Speaker #2: And we believe the impact is temporary. As we mentioned earlier, we have secured two Tier 1 MNO design wins, and we remain on track for those programs to ramp in the second half of the year.

Speaker #2: In enterprise IoT, momentum is building. We received a $4 million purchase order from a long-standing IoT solution customer. With shipments expected to be completed this year, including initial shipments in Q2, this order reflects the resumption of demand from this customer and improves our near-term visibility.

Jacob Suen: We received a $4 million purchase order from a long-standing IoT solution customer, with shipments expected to be completed this year, including initial shipments in Q2. This order reflects the resumption of demand from this customer and improves our near-term visibility. We are also seeing continued traction across our embedded modem portfolio and expanding opportunities in emerging applications. We increased our IoT presence in robotics through a new design win with Coco Robotics, and we are seeing additional activity in adjacent areas such as drones, including pre-production shipments in Q2 for a new customer program focused on autonomous VTOL rotorcraft for defense and commercial applications. Stepping back, Q1 reflect progress across our growth platforms in our core markets. Both enterprise and automotive grew sequentially. IoT momentum improved. AirgainConnect engagement broadened. Lighthouse moved into more focused commercialization discussions.

Speaker #2: We are also seeing continued traction across our embedded modem portfolio and expanding opportunities in emerging applications. We increased our IoT presence in robotics, through a new design win with Coco Robotics.

Speaker #2: And we are seeing additional activity in adjacent areas such as storms, including pre-production shipments in Q2 for a new customer program focused on autonomous VTOL rotor graph for defense and commercial applications.

Speaker #2: Stepping back, Q1 reflects progress across our growth platforms and our core markets. Both enterprise and automotive grew sequentially. IoT momentum improved. AegeanConnect engagement broadened.

Jacob Suen: Both enterprise and automotive grew sequentially. IoT momentum improved. AirgainConnect engagement broadened. Lighthouse moved into more focused commercialization discussions. Our consumer business remains supported by strong tier one relationships. Just as important, our pipeline is broader and continues to expand. We enter this next phase with a more focused operating model, improving visibility and clear opportunities to convert customer engagement into revenue. With that, I'll turn the call over to Michael.

Speaker #2: Lighthouse moved into more focused commercialization discussions. And our consumer business remains supported by strong Tier 1 relationships. Just as important, our pipeline is broader and continues to expand.

Jacob Suen: Our consumer business remains supported by strong tier one relationships. Just as important, our pipeline is broader and continues to expand. We enter this next phase with a more focused operating model, improving visibility and clear opportunities to convert customer engagement into revenue. With that, I'll turn the call over to Michael.

Speaker #2: We enter this next phase with a more focused upgrading model. Improving visibility, and clear opportunities to convert customer engagement into revenue. With that, I'll turn the call over to Michael.

Speaker #2: Thank you, Jacob. Before diving into the numbers, please note that my review of our financial results and guidance refers to non-GAAP figures. Information about the non-GAAP financial measures including GAAP to non-GAAP reconciliations, can be found in our earnings release.

Michael Elbaz: Thank you, Jacob. Before diving into the numbers, please note that my review of our financial results and guidance refers to non-GAAP figures. Information about the non-GAAP financial measures, including GAAP to non-GAAP reconciliations, can be found in our earnings release. Now, let's turn to our Q1 results. Q1 sales came in at $11.5 million, which was at the midpoint of our guidance range. Enterprise sales were $5 million, up $0.7 million sequentially, driven by higher embedded modem sales. Automotive sales were $0.9 million, up $0.4 million sequentially, reflecting higher sales of AirgainConnect vehicle gateways. Consumer sales came in at $5.6 million, sequentially down $1.7 million, primarily due to seasonal impact.

Speaker #2: Now, let's turn to our first quarter results. Q1 sales came in at 11.5 million dollars, which was at the midpoint of our guidance range.

Speaker #2: Enterprise sales were $5 million, up $0.7 million sequentially, driven by higher embedded modem sales. Automotive sales were $0.9 million, up $0.4 million sequentially, reflecting higher sales of AegeanConnect vehicle gateways.

Speaker #2: Consumer sales came in at 5.6 million dollars, sequentially down 1.7 million dollars, primarily due to seasonal impact. Non-GAAP gross margin for the first quarter was 44.2%.

Michael Elbaz: Non-GAAP gross margin for Q1 was 44.2%, compared to 46.3% in the prior quarter and relatively flat year over year. The sequential decline was primarily due to a lower enterprise margin rate, driven by a unfavorable product mix. Non-GAAP operating expenses for Q1 amounted to $6.1 million. While modestly higher sequentially due to typically higher Q1 marketing and trade show activities, operating expenses declined by 8%, or $0.5 million year over year as we continued to optimize our OPEX model. In Q1, adjusted EBITDA was -$0.9 million, $0.2 million lower than the midpoint of guidance. Non-GAAP EPS was -$0.08 compared to -$0.07 midpoint of guidance. As of 31 March 2026, our cash balance was $7.1 million, relatively flat sequentially.

Michael Elbaz: Non-GAAP gross margin for Q1 was 44.2%, compared to 46.3% in the prior quarter and relatively flat year-over-year. The sequential decline was primarily due to a lower enterprise margin rate, driven by a unfavorable product mix. Non-GAAP operating expenses for Q1 amounted to $6.1 million. While modestly higher sequentially due to typically higher Q1 marketing and trade show activities, operating expenses declined by 8%, or $0.5 million year-over-year as we continued to optimize our OPEX model. In Q1, adjusted EBITDA was -$0.9 million, $0.2 million lower than the midpoint of guidance. Non-GAAP EPS was -$0.08 compared to -$0.07 midpoint of guidance. As of 31 March 2026, our cash balance was $7.1 million, relatively flat sequentially.

Speaker #2: Compared to 46.3% in the prior quarter, and relatively flat year over year. The sequential decline was primarily due to a lower enterprise margin rate, driven by an unfavorable product mix.

Speaker #2: Non-GAAP operating expenses for the first quarter amounted to 6.1 million dollars, while modestly higher sequentially due to typically higher first quarter marketing and trade show activities, operating expenses declined by 8% or 0.5 million dollars year over year as we continue to optimize our OPEX model.

Speaker #2: In Q1, adjusted EBITDA was negative $0.9 million, $0.2 million lower than the midpoint of guidance. Non-GAAP EPS was negative $0.08, compared to negative $0.07 at the midpoint of guidance.

Speaker #2: As of March 31, 2026, our cash balance was 7.1 million dollars. Relatively flat sequentially. Net cash proceeds from our ATM were 0.6 million dollars.

Michael Elbaz: Net cash proceeds from our ATM were $0.6 million. Now, moving to our outlook for the Q2 ending 30 June 2026. 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 to be key indicators for the overall performance of our business. For the Q2 of 2026, we project sales to range from $12.5 million to $14.5 million, with a midpoint of $13.5 million. The midpoint represents a 17% sequential increase driven by enterprise and automotive. We believe our outlook reflects improving demand visibility across the business and continued progress in converting the commercial traction Jacob discussed into revenue.

Speaker #2: Now, moving to our outlook for the second quarter ending June 30, 2026. 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 to be key indicators for the overall performance of our business.

Speaker #2: For the second quarter of 2026, we project sales to range from 12.5 million dollars to 14.5 million dollars, with a midpoint of 13.5 million dollars.

Speaker #2: The midpoint represents a 17% sequential increase, driven by enterprise and automotive. We believe our outlook reflects improving demand visibility across the business and continued progress in converting the commercial traction Jacob discussed into revenue.

Speaker #2: We expect non-GAAP gross margin for the second quarter to be in the range of 42.5% to 45.5%, or 44% at the midpoint. We project operating expenses to decrease sequentially to approximately 5.8 million dollars, non-GAAP EPS is expected to be positive 0.01 cents at the midpoint of our guidance, adjusted EBITDA is expected to be positive 0.2 million dollars at the midpoint of our guidance.

Michael Elbaz: We expect non-GAAP gross margin for Q2 to be in the range of 42.5% to 45.5%, or 44% at the midpoint. We project operating expenses to decrease sequentially to approximately $5.8 million. Non-GAAP EPS is expected to be +$0.01 at the midpoint of our guidance. Adjusted EBITDA is expected to be +$0.2 million at the midpoint of our guidance. Overall, the actions we have taken over the past 2 quarters have improved our operating leverage and positioned us to convert top-line growth in more effectively into profitability. I would like to turn the call back over to Jacob for his closing thoughts. Jacob?

Speaker #2: Overall, the actions we have taken over the past two quarters have improved our operating leverage and positioned us to convert top-line growth in more effectively into profitability.

Speaker #2: Now, I would like to turn the call back over to Jacob for his closing thoughts. Jacob?

Speaker #3: Thanks, Michael. As we look ahead, we have good visibility into Q2 and see positive momentum for both our core and growth platforms for the rest of the year.

Jacob Suen: Thanks, Michael. As we look ahead, we have good visibility into Q2 and see positive momentum for both our core and growth platforms for the rest of the year. Beyond Q2, we see a broader set of drivers. Demand in our consumer business remains healthy, we expect improvement as supply constraints ease. IoT continues to build momentum through repeat orders and new application design wins. AirgainConnect is progressing from engagement toward conversion, with growing activity across utility and enterprise markets. Lighthouse is moving toward targeted commercial deployment in the US and Middle East. Taken together, these drivers reflect a more focused and better-positioned business with a stronger platform portfolio, a broader pipeline, and an operating model positioned for improved leverage as revenue scales. Our focus is execution, converting pipeline into deployments, driving growth, and improving profitability as we move through 2026.

Speaker #3: Beyond Q2, we see a broader set of drivers: demand in our consumer business remains healthy, and we expect improvement as supply constraints ease. IoT continues to build momentum through repeat orders and new application design wins.

Speaker #3: AegeanConnect is progressing from engagement to a conversion. With growing activity across utility and enterprise markets, and Lighthouse is moving toward targeted commercial deployment in the US and Middle East.

Speaker #3: Taken together, these drivers reflect a more focused and better positioned business, with a stronger platform portfolio. A broader pipeline, and an operating model positioned for improved leverage as revenue scales.

Jacob Suen: Taken together, these drivers reflect a more focused and better-positioned business with a stronger platform portfolio, a broader pipeline, and an operating model positioned for improved leverage as revenue scales. Our focus is execution, converting pipeline into deployments, driving growth, and improving profitability as we move through 2026. Operator, we're now ready to take questions.

Speaker #3: Our focus is execution—converting pipeline into deployments, driving growth, and improving profitability as we move through 2026. Operator, we're now ready to take questions.

Jacob Suen: Operator, we're now ready to take questions.

Speaker #1: Thank you. We will now be taking questions from AIRGAIN cell site analysts. If you would like to ask a question, please press star 1 on your telephone keypad.

Operator 2: Thank you. We will now be taking questions from Airgain 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. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Anthony Stoss with Craig-Hallum Capital Group. Please proceed.

Operator: Thank you. We will now be taking questions from Airgain 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. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Anthony Stoss with Craig-Hallum Capital Group. Please proceed.

Speaker #1: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker #1: And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Anthony Stoss with Craig Hallam Capital Group.

Speaker #1: Please proceed.

Speaker #4: Great. Thank you. Good afternoon, Jacob and Michael. Michael is trying to rate as fast as I could. Can you just give me the revenue splits?

Anthony Stoss: Great. Thank you. good afternoon, Jacob and Michael. Michael, I was trying to write as fast as I could. Can you just give me the revenue splits? I got consumer $5.6 million, but I missed auto and enterprise.

Speaker #4: I got consumer 5.6 million, but I missed auto and enterprise.

Michael Elbaz: The guidance you meant, Tony?

Speaker #2: The guidance you meant? Tony? Hi, Tony.

Michael Elbaz: The guidance you meant, Tony?

Anthony Stoss: No, the percent of revenue in the quarter.

Speaker #4: No, the percent of revenue in the quarter that came from auto and same question for enterprise.

Michael Elbaz: Oh.

Anthony Stoss: Auto, and same question for enterprise.

Speaker #2: So auto would be about 40% approximately. I don't have the other numbers in front of me. And enterprise would be a bit higher, actually, about 50% approximately.

Michael Elbaz: Auto would be about 40% approximately. I don't have the other numbers in front of me. Enterprise would be about higher actually, 50% approximately.

Speaker #4: Enterprise 50, auto 40, and consumer 10?

Anthony Stoss: Enterprise 50, auto 40, and consumer 10?

Speaker #2: No, no, no. It's consumer is 5.6 million.

Michael Elbaz: No, no.

Anthony Stoss: Yeah, consumer is $5.6 million.

Speaker #4: Yeah. I'll have to come back to you on this, Tony. Okay. I won't have those numbers in front of me.

Michael Elbaz: Yeah, I'll have to come back to you on this, Tony.

Anthony Stoss: Okay. Okay.

Michael Elbaz: I don't have those numbers in front of me.

Speaker #3: Yeah, but the bottom line is always the enterprise and automotive we're seeing a sequential growth, and we expect that momentum to continue. And consumer in Q1 was due to seasonality, so we also expect that consumer to improve throughout the year.

Jacob Suen: Yeah, the bottom line is always the enterprise and automotive, we're seeing a sequential growth. We expect that momentum to continue. Consumer in Q1 was due to seasonality, we also expect that consumer to, you know, improve throughout the year.

Speaker #4: Perfect. And then, Jacob, just I get it.

Anthony Stoss: Perfect. Jacob, just.

Michael Elbaz: Tony, sorry, Tony.

Anthony Stoss: Yeah?

Speaker #2: Tony, the number is 49% on the consumer, 8% on the automotive, and 43% on the enterprise in Q1.

Michael Elbaz: Tony, the number is 49% on the consumer, 8% on the automotive, and 43% on the enterprise in Q1.

Speaker #4: Perfect. Thank you. Related to the memory shortages, I get it. A lot of people are talking about it. Thinking it's going to get worse throughout the remainder of the year.

Anthony Stoss: Perfect. Thank you. Related to the memory shortages, I get it. A lot of people are talking about it, thinking it's gonna get worse throughout the remainder of the year. I guess the first part of the question is, how much of your revenue was affected in Q1 as a result of not being able to ship? Then, Jacob, more longer-term picture, when do you think, you know, which quarter, is it this year, is it next year, when you can get back to the kinda $7 to 10 million in quarterly revenue on the consumer side?

Speaker #4: But given I guess the first part of the question is, how much of your revenue was affected in Q1 as a result of not being able to ship?

Speaker #4: And then Jacob, more longer-term picture, when do you think which quarter? Is it this year? Is it next year? When you can get back to the kind of 7 to 10 million in quarterly revenue on the consumer side?

Speaker #2: So yes, Tony, this is Michael. So in terms of Q1 impact, we had no revenue impact from the shortages, and we had no gross margin impact from the shortages.

Michael Elbaz: Yes, Tony, this is Michael. In terms of Q1 impact, we had no revenue impact from the shortages, and we had no gross margin impact from the shortages. In Q2, we are being conservative on the consumer. Typically, you would see that seasonal down in Q1, which we saw, and a rebound in Q2. Right now we are expecting to be relatively flat, and mainly because 1 specific OEM is being impacted. They believe it's a temporary blip right now, and it'll be worked out by the end of the quarter. Again, we're being conservative on that.

Speaker #2: In Q2, we have been conservative on the consumer. Typically, you would see that seasonal down in Q1, which we saw, and a rebound in Q2.

Speaker #2: And right now, we are expecting to be relatively flat. And mainly because one specific OEM is being impacted, they believe it's a temporary blip right now.

Speaker #2: And it'll be worked out by the end of the quarter. But again, we've been conservative on that.

Speaker #3: Yes. And regarding your questions about the consumer revenue, certainly, as we indicated, the good news is that we always have the stability regarding the MSOs.

Jacob Suen: Yes. Regarding your questions about the consumer revenue, certainly as we indicated, the good news is that we always have the stability regarding the MSOs. We are now adding the MNOs. We are now working on two major MNOs in the US. That should help us well-positioned for the rest of the year. Are we able to get to the $7 to 8 million range like we used to have? We do have the path for that. Now is that gonna be happening this year or next year? We don't know that yet, although it's trending really positively. We mentioned about the design win with the MNO. That should be another part of this year.

Speaker #3: We are now adding the MNOs. We are now working on two major MNOs in the US. So that should help us well position for the rest of the year.

Speaker #3: Are we able to get to the $7 to $8 million range like we used to have? We do have the path for that.

Speaker #3: Now, is that going to be happening this year or next year? We don't know that yet, although it's trending really positively. We mentioned about the design win with the MNO.

Speaker #3: That should be start shipping a lot of part of this year.

Speaker #4: Got it. And then my last question related to AIRGAIN Connect. Are you seeing a speeding up of some of these trials or your ability to convert?

Anthony Stoss: Got it. My last question related to AirgainConnect. Are you seeing a speeding up of some of these trials or your ability to convert? It's great to see that Tier 2 energy customer. What's your feel on how quickly you can convert the trials into more side deals?

Speaker #4: It's great to see that tier two energy customer what's your feel on how quickly you can convert the trials into more side deals?

Speaker #2: So on the Q1 type of customers, we mentioned before 12 to 18 months of the cycle time. And we are in a cycle time.

Michael Elbaz: On the Tier 1 type of customers, we mentioned before 12 to 18 months of the cycle time, and we are in the cycle time. The good news here is that the pipeline is changing favorably to us quarter-over-quarter. For example, we mentioned on the call that we have a current pipeline of over 55 deals in a Tier 1 and Tier 2 customers. 20% of that is Tier 1 customers. Another 20% of that, the vast majority are for non-first responders, so they are tend to be moving quicker. However, because those tend to be also strategic type of deals, they also very much have a multilayer type of meetings, engagements, trials taking place.

Speaker #2: The good news here is that the pipeline is changing favorably to us over quarter over quarter. So for example, we mentioned on the call that we have a current pipeline of over 55 deals in tier one and tier two customers.

Speaker #2: 20% of that is tier one customers. Another 20% of that, the vast majority are for non-first responders. So there are 10 to be moving quicker.

Speaker #2: However, because those tend to be also strategic type of deals, they are also very much of a multi-layer type of meetings, engagements, trials, taking place.

Speaker #2: And so we are basically on track to what we had mentioned about the 12 to 18-month cycle. On the tier two, we just mentioned that we close a tier two customer.

Michael Elbaz: We are basically on track to what we had mentioned about the 12 to 18-month cycle. On the Tier 2, we just mentioned that we closed a Tier 2 customer. Overall, the velocity of the design wins that we have, primarily on the Tier 3 and the Tier 2 so far, is accelerating. Last year we would be closing one deal per month, and this year so far, up until May, it's been about two deals per month. I hope this is helpful.

Speaker #2: Overall, the velocity of the design wins that we have primarily on the tier three and the tier two so far is accelerating. Last year, we would be closing one deal per month, and this year so far, up until May, it's been about two deals per month.

Speaker #2: I hope this is helpful.

Speaker #4: Perfect. Yeah, no, very helpful.

Anthony Stoss: Perfect. Yeah, no, very helpful.

Speaker #2: And also, yeah, Tony, I add that also the tier one opportunity size, the vehicle size is also getting bigger. As we go after the non-first responder vehicles, because a lot of these are large enterprise fleet.

Jacob Suen: Yeah, Anthony, I add that, also the Tier 1 opportunity size, the vehicle size is also getting bigger as we go up to the non-first responder vehicles. Of course, a lot of these are large enterprise fleet, so we're start to work on tens of thousands of vehicles instead of just several thousands or several hundred, as in the case of the first responders.

Speaker #2: So we'll start to work on tens of thousands of vehicles instead of just several thousands or several hundred as in the case of the first responders.

Speaker #4: Perfect. Thanks for all the color, guys. Appreciate it.

Anthony Stoss: Perfect. Thanks for all the color, guys. Appreciate it.

Jacob Suen: Sure.

Speaker #2: Sure.

Speaker #1: Our next question is from Jason Schmidt with Lake Street Capital Markets. Please proceed.

Operator 2: Our next question is from Jaeson Schmidt with Lake Street Capital Markets. Please proceed.

Operator: Our next question is from Jaeson Schmidt with Lake Street Capital Markets. Please proceed.

Speaker #4: Hey, guys. Thanks for taking my questions. Just looking at Lighthouse and that potential trial here in the US, what additional steps, if any, do you guys need to complete to continue to move that forward?

Jaeson Schmidt: Hey, guys. Thanks for taking my questions. Just looking at Lighthouse and that potential trial here in the US, what additional steps, if any, do you guys need to complete to continue to move that forward?

Speaker #3: Hi, Jason. Yes, Jacob here. So yes, it's actually a really significant milestone. And as I was alluding to in the call earlier, it's the fact that basically as far as the technology validation that looks to be already proven, with the trial we have done in the corporate office, so now we are working with the business sponsors.

Jacob Suen: Hi, Jaeson. Yes, Jacob here. Yes, it's actually a really significant milestone. As I was alluding to in the call earlier, is the fact that the basically as far as the technology validation, that looks to be already proven with the trial we have done in the corporate office. Now we are working with the business sponsor. Typically, they would not work with us to do a business sponsor until they feel really comfortable with the technology validation. That phase is done. We're now working with them on their sales team to identify several potential customers, that would be able to really take advantage of our Lighthouse product. These are customers as we work with this particular MNO, where they actually have to walk away from deals previously due to lack of budget, you know, using existing system.

Speaker #3: So typically, they would not work with us to do a business sponsor until they feel really comfortable with the technology validation. So that phase is done.

Speaker #3: We're now working with them on their sales team to identify several potential customers. That would be able to really take advantage of our Lighthouse product.

Jacob Suen: We're now working with them on their sales team to identify several potential customers, that would be able to really take advantage of our Lighthouse product. These are customers as we work with this particular MNO, where they actually have to walk away from deals previously due to lack of budget, you know, using existing system. Our solution are giving them a fraction of the cost otherwise. As an example, where they have to have, you know, using a system that's gonna be $4 per square foot, now we're gonna be able to offer them a fraction of that so we can meet that budget.

Speaker #3: And these are customers, as we work with this particular MNO, where they actually have to walk away from deals previously due to lack of budget using existing systems.

Speaker #3: So our solution is giving them a fraction of the cost otherwise. So as an example, where they have to have using a system that's going to be $4 per square foot, now we're going to be able to offer them a fraction of that so we can meet that budget.

Jacob Suen: Our solution are giving them a fraction of the cost otherwise. As an example, where they have to have, you know, using a system that's gonna be $4 per square foot, now we're gonna be able to offer them a fraction of that so we can meet that budget. Those are the customers that they are targeting, and we intend to get 1 or 2 of those customers for the live trial, and hopefully in turn become permanent. That's where we're at, regarding the progress with this particular MNO. Now, as you know, dealing with MNO, it takes time, although they're really seeing a unique value with our Lighthouse.

Speaker #3: So those are the customers that they are targeting. And we intend to get one or two of those customers for the live trial. And hopefully, in turn, become permanent.

Jacob Suen: Those are the customers that they are targeting, and we intend to get 1 or 2 of those customers for the live trial, and hopefully in turn become permanent. That's where we're at, regarding the progress with this particular MNO. Now, as you know, dealing with MNO, it takes time, although they're really seeing a unique value with our Lighthouse.

Speaker #3: So that's where we're at. Regarding the progress with this particular MNO, now, as you know, dealing with MNO, it takes time. Although they really see a unique value with our Lighthouse.

Speaker #4: Okay. No, that's good to hear. And then looking at the consumer segment, understanding the near-term dynamics, but do you guys have confidence that you will see that rebound in Q3, or is it just too early right now?

Jaeson Schmidt: Okay. No, that's good to hear. Looking at the consumer segment, understanding the near-term dynamics, but do you guys have confidence that you will see that rebound in Q3, or is it just too early right now?

Speaker #2: It's a bit early right now, but let me put it this way. The demand is very healthy, and the demand what we mentioned before last quarter is that we were expecting a modest growth on the consumer market across the year.

Michael Elbaz: It's a bit early right now, but let me put it this way, the demand is very healthy, and the demand, what we mentioned before, last quarter, is that we were expecting a modest growth on the consumer market across the year. From a demand standpoint, it's there. It's a question of supply and the timing of it. I should also mention from a consumer business model itself, the way it's being set up and, you know, really is based upon the strong relationship we have with the service providers, the OEMs themselves, the CMs, and the distribution channel as well too. That gives us quite a bit of visibility, at least in the short term, about some of the supply management that we have to do.

Speaker #2: So from a demand standpoint, it's there. It's a question of supply and the timing of it. I should also mention from a consumer business model itself, the way it's being set up and really is based upon the strong relationship we have with the service providers, the OEMs themselves, the CMs, and the distribution channel as well too.

Speaker #2: And that gives us quite a bit of visibility, at least in the short term, about some of the supply management that we have to do.

Michael Elbaz: That gives us quite a bit of visibility, at least in the short term, about some of the supply management that we have to do. The other piece also that I should mention is that typically service providers have 2 or 3 OEMs, and typically we are designed in with 2 OEMs. If there is any type of supplier allocation being redone, for instance, we're still somewhat covered by it.

Speaker #2: The other piece also that I should mention is that typically, service providers have two or three OEMs, and typically, we are designed in with two OEMs.

Michael Elbaz: The other piece also that I should mention is that typically service providers have 2 or 3 OEMs, and typically we are designed in with 2 OEMs. If there is any type of supplier allocation being redone, for instance, we're still somewhat covered by it.

Speaker #2: So if there is any type of supplier allocation being redone, for instance, we still somewhat covered by it.

Speaker #4: Okay. That's helpful. And then just the last one for me, and I'll jump back into Q. You're expecting a nice sequential downtick in operating expenses.

Jaeson Schmidt: Okay, that's helpful. Just the last one from me, and I'll jump back into queue. You're expecting a nice sequential downtick in OpEx. Is this sort of a level we should feel comfortable with in H2, or how should we be thinking about OpEx?

Speaker #4: Is this sort of a level we should feel comfortable with in the back half of the year, or how should we be thinking about OPEX?

Speaker #2: Yes. I think first half of the year, I believe, in 2026, is about 9% down compared to the first half of last year. As revenue grows, you would expect a modest uptick on that, but overall, our sense is that we definitely want to make sure that we have a very strong operating leverage so that when the top line grows and that top line should be having some higher gross margin that the corporate average, as it grows, then we really optimize our overall business model and be really offer some positive and accretive EBITDA margin.

Michael Elbaz: Yes. I think, H1, I believe, in 2026 is about 9% down compared to H1 of last year. As revenue grows, you would expect a modest uptick on that. Overall, our sense is that we definitely wanna make sure that we have a very strong operating leverage so that when the top line grows, and that top line should be having some higher gross margin than the corporate average. As it grows, we really optimize our overall business model and be really offer some positive and accretive EBITDA margin in the long run.

Speaker #2: In the long run.

Speaker #4: Okay. Perfect. Thanks a lot, guys.

Jaeson Schmidt: Okay, perfect. Thanks a lot, guys.

Speaker #2: Thank you.

Jacob Suen: Thank you.

Michael Elbaz: Thank you.

Speaker #1: At this time, this concludes our question and answer session. If your question was not answered, you may contact AIRGAIN's investor relations team at AIRG@gateway.grp.com.

Operator 2: At this time, this concludes our question and answer session. If your question was not answered, you may contact Airgain's investor relations team at airg@gateway-grp.com. I would now like to turn the call over to Mr. Suen for his closing remarks.

Operator: At this time, this concludes our question and answer session. If your question was not answered, you may contact Airgain's investor relations team at airg@gateway-grp.com. I would now like to turn the call over to Mr. Suen for his closing remarks.

Speaker #1: I would now like to turn the call over to Mr. Suen for his closing remarks.

Speaker #2: Thank you all for your thoughtful questions. And for your continued interest in AIRGAIN. If there's one key takeaway, it is that AIRGAIN is a more focused and disciplined company.

Jacob Suen: Thank you all for your thoughtful questions and for your continued interest in Airgain. If there's one key takeaway, it is that Airgain is a more focused and disciplined company with a stronger foundation, an improving operating model, and growing platform momentum. We believe the work we have done positions us to drive sustainable growth and improve profitability as we move through 2026 and beyond. We appreciate everyone joining us today and look forward to keeping you updated on our progress. Operator, you may now conclude the call.

Speaker #2: With a stronger foundation, and improving operating model, and going platform momentum. We believe the work we have done positions us to drive sustainable growth and improve profitability as we move through 2026 and beyond.

Speaker #2: We appreciate everyone joining us today and look forward to keeping you updated on our progress. Up later, you may now conclude the call.

Operator 2: Thank you for joining us today for Airgain's Q1 2026 earnings. You may now disconnect.

Operator: Thank you for joining us today for Airgain's Q1 2026 earnings. You may now disconnect.