Airgain, Inc. (Nasdaq: AIRG), a leading provider of wireless
connectivity solutions that creates and delivers embedded
components, external antennas, and integrated systems across the
globe, today reported financial results for the second quarter
ended June 30, 2023.
“Our team continues to execute on our three major product
initiatives, expand our customer base, and launch new products, as
these lay the foundation of our revenue growth when market
conditions improve,” said Airgain’s President and Chief Executive
Officer, Jacob Suen. “We delivered quarterly sales of $15.8 million
while remaining focused on increasing our operational efficiency
and delivering adjusted EBITDA profitability.”
Second Quarter 2023 Financial Highlights
GAAP
- Sales of $15.8 million
- GAAP gross margin of 39.7%
- GAAP operating expenses of $8.5 million
- GAAP net loss of $2.2 million or $(0.21) per share
Non-GAAP
- Non-GAAP gross margin of 40.4%
- Non-GAAP operating expenses of $6.5 million
- Non-GAAP net loss of $0.1 million or $(0.01) per share
- Adjusted EBITDA of $37,000
Second Quarter 2023 Financial Results
Sales for the second quarter of 2023 were $15.8 million, of
which $7.3 million was generated from the enterprise market, $6.2
million from the consumer market, and $2.3 million from the
automotive market. Sales decreased by 3.7%, or $0.6 million in the
second quarter of 2023 compared to $16.4 million in the first
quarter of 2023. Sequentially from the first quarter of 2023,
enterprise sales decreased by $1.1 million and automotive sales
decreased $0.6 million, but they were partially offset by an
increase in consumer sales of $1.1 million. Sales for the second
quarter of 2023 decreased by 17.9%, or $3.5 million from $19.3
million in the same quarter a year-ago primarily driven by to lower
sales of $1.9 million from the automotive market and $1.8 million
from the enterprise market.
GAAP gross profit for the second quarter of 2023 was $6.3
million, compared to $6.3 million for the first quarter of 2023 and
$7.5 million for the same quarter a year ago. Non-GAAP gross profit
for the second quarter of 2023 was $6.4 million, compared to $6.4
million for the first quarter of 2023 and $7.6 million for the same
quarter a year ago (see note regarding "Use of Non-GAAP Financial
Measures" below for further discussion of this non-GAAP
measure).
GAAP gross margin for the second quarter of 2023 was 39.7%,
compared to 38.4% for the first quarter of 2023 and 38.9% for the
same quarter a year ago. Non-GAAP gross margin for the second
quarter of 2023 was 40.4% compared to 39.1% for the first quarter
of 2023 and 39.4% for the same quarter a year ago (see note
regarding "Use of Non-GAAP Financial Measures" below for further
discussion of this non-GAAP measure).
GAAP operating expenses for the second quarter of 2023 were $8.5
million, compared to $9.1 million for the first quarter of 2023 and
$9.1 million for the same quarter a year ago. Non-GAAP operating
expenses for the second quarter of 2023 were $6.5 million compared
to $7.3 million in the first quarter of 2023 and $7.2 million for
the same quarter a year ago (see note regarding "Use of Non-GAAP
Financial Measures" below for further discussion of this non-GAAP
measure).
GAAP net loss for the second quarter of 2023 was $2.2 million or
$(0.21) per share (based on 10.4 million shares), compared to a net
loss of $2.9 million or $(0.28) per share (based on 10.3 million
shares) for the first quarter of 2023 and a net loss of $1.6
million or $(0.16) per share (based on 10.2 million shares) for the
same quarter a year ago. Non-GAAP net loss for the second quarter
of 2023 was $0.1 million or $(0.01) per share (based on 10.4
million shares), compared to a non-GAAP net loss of $0.9 million or
$(0.08) per share (based on 10.3 million shares) for the first
quarter of 2023 and a non-GAAP net income of $0.4 million or $0.03
per share (based on 10.4 million diluted shares) for the same
quarter a year ago (see note regarding "Use of Non-GAAP Financial
Measures" below for further discussion of this non-GAAP
measure).
Adjusted EBITDA for the second quarter of 2023 was $37,000,
compared to $(0.7) million for the first quarter of 2023 and $0.5
million for the same quarter a year ago (see note regarding "Use of
Non-GAAP Financial Measures" below for further discussion of this
non-GAAP measure).
Third Quarter 2023 Financial Outlook
GAAP
- Sales are expected to be in the range of $13.25 million to
$14.75 million, or $14.00 million at the midpoint
- GAAP gross margin is expected to be in the range of 37.6% to
40.6%
- GAAP operating expense is expected to be approximately $7.4
million
- GAAP net loss per share is expected to be ($0.18) at the
midpoint
Non-GAAP
- Non-GAAP gross margin is expected to be in the range of 38.5%
to 41.5%
- Non-GAAP operating expense is expected to be approximately $5.8
million,
- Non-GAAP net loss per share is expected to be $(0.02) at the
midpoint
- Adjusted EBITDA is expected to be break-even at the
midpoint
Our financial outlook for the three months ending September 30,
2023, including reconciliations of GAAP to non-GAAP measures can be
found at the end of this press release.
Conference Call
Airgain, Inc. management will hold a conference call today,
Thursday, August 10, 2023, at 5:00 PM Eastern Time (2:00 PM Pacific
Time) to discuss financial results for the second quarter ended
June 30, 2023.
Airgain management will host the presentation, followed by a
question-and-answer period.
Date: August 10, 2023 Time: 5:00 PM Eastern Time (2:00 PM
Pacific Time) Participant Dial-In: (877) 407-2988 or +1 (201)
389-0923
The conference call will be broadcast simultaneously and
available here and for replay via the investor relations section of
the company's website at investors.airgain.com.
For webcast access, please follow the below web address below to
register for the conference call.
Registration:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=r667PIJ0
A replay of the webcast will be available via the registration
link after 8:00 PM Eastern Time on the same day until August 10,
2024.
About Airgain, Inc.
Airgain is a leading provider of wireless connectivity solutions
that creates and delivers embedded components, external antennas,
and integrated systems across the globe. Airgain simplifies
wireless connectivity across a diverse set of devices and markets,
from solving complex connectivity issues to speeding time to market
to enhancing wireless signals. Our product offering includes three
distinct sub-brands. Airgain Embedded represents our embedded
modems, antennas, and development kits that are designed to help
design teams bring connected products to market quickly. Airgain
Integrated represents our fully integrated, off-the-shelf products,
such as our asset trackers and AirgainConnect® platform, that help
solve connectivity issues in an organization’s operating
environment. Airgain Antenna+ represents our external antennas,
such as our fleet and internet of things (IoT) antennas, that help
enhance wireless signals in some of the harshest environments. Our
mission is to connect the world through optimized integrated
wireless solutions. Airgain is headquartered in San Diego,
California, and maintains design and test centers in the U.S.,
U.K., and China. For more information, visit airgain.com, or follow
Airgain on LinkedIn and Twitter.
Airgain, AirgainConnect, and the Airgain logo are trademarks or
registered trademarks of Airgain, Inc.
Forward-Looking Statements
Airgain cautions you that statements in this press release that
are not a description of historical facts are forward-looking
statements. These statements are based on the company’s current
beliefs and expectations. These forward-looking statements include
statements regarding our third quarter 2023 financial outlook and
overall long-term strategy and priorities. The inclusion of
forward-looking statements should not be regarded as a
representation by Airgain that any of our plans will be achieved.
Actual results may differ from those set forth in this press
release due to the risks and uncertainties inherent in our
business, including, without limitation: the market for our antenna
products is developing and may not develop as we expect; our
operating results may fluctuate significantly, including based on
seasonal factors, which makes future operating results difficult to
predict and could cause our operating results to fall below
expectations or guidance; supply constraints and our customers'
ability to obtain necessary components in our respective supply
chains may negatively affect our sales and operating results; risks
associated with the performance of our products, including bundled
solutions with third-party products; our products are subject to
intense competition and competitive pressures from existing and new
companies may harm our business, sales, growth rates, and market
share; risks associated with quality and timing in manufacturing
our products and our reliance on third-party manufacturers; we may
not be able to maintain strategic collaborations under which our
bundled solutions are offered; overall global supply shortages and
logistics delays within the supply chain that our products are used
in, as well as adversely affecting the general U.S. and global
economic conditions and financial markets, and, ultimately, our
sales and operating results; rising interest rates and inflation
may adversely impact our margins, the supply chain and our
customers’ sales, which may negatively affect our sales and
operating results; our future success depends on our ability to
develop and successfully introduce new and enhanced products for
the wireless market that meet the needs of our customers, including
our ability to transition to provide a more diverse solutions
capability; we sell to customers who are price conscious, and a few
customers represent a significant portion of our sales, and if we
lose any of these customers, our sales could decrease
significantly; we rely on a limited number of contract
manufacturers to produce and ship all of our products, and our
contract manufacturers rely on a single or limited number of
suppliers for some components of our products and channel partners
to sell and support our products, and the failure to manage our
relationships with these parties successfully or a failure of these
parties to perform could adversely affect our ability to market and
sell our products; if we cannot protect our intellectual property
rights, our competitive position could be harmed or we could incur
significant expenses to enforce our rights; and other risks
described in our prior press releases and in our filings with the
Securities and Exchange Commission (SEC), including under the
heading “Risk Factors” in our Annual Report on Form 10-K and any
subsequent filings with the SEC. You are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date hereof and we undertake no obligation to revise
or update this press release to reflect events or circumstances
after the date hereof. All forward-looking statements are qualified
in their entirety by this cautionary statement, which is made under
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995.
Note Regarding Use of Non-GAAP Financial Measures
To supplement our condensed financial statements presented in
accordance with U.S. generally accepted accounting principles
(GAAP), this earnings release and the accompanying tables and the
related earnings conference call contain certain non-GAAP financial
measures, including adjusted earnings before interest, taxes,
depreciation, amortization (Adjusted EBITDA), non-GAAP net income
(loss) attributable to common stockholders (non-GAAP net income
(loss)), non-GAAP net income (loss) per (basic or diluted) share
(non-GAAP EPS), non-GAAP operating expense, non-GAAP gross profit
and non-GAAP gross margin. We believe these financial measures
provide useful information to investors with which to analyze our
operating trends and performance.
In computing Adjusted EBITDA, non-GAAP net income (loss), and
non-GAAP EPS, we exclude stock-based compensation expense, which
represents non-cash charges for the fair value of stock awards;
interest income, net of interest expense offset by other expense;
depreciation and amortization; change in the fair value of
contingent consideration, acquisition-related expenses, severance
and exit costs, amortization of inventory step-up and provision
(benefit) for income taxes. In computing non-GAAP operating
expense, we exclude stock-based compensation expense, amortization
of intangibles, change in the fair value of contingent
consideration, acquisition-related expenses and severance and exit
costs. In computing non-GAAP gross profit and non-GAAP gross
margin, we exclude stock-based compensation expense, amortization
of inventory step-up and amortization of intangible assets. Because
of varying available valuation methodologies, subjective
assumptions, and the variety of equity instruments that can impact
a company’s non-cash operating expenses; we believe that providing
non-GAAP financial measures that exclude non-cash expense allows
for meaningful comparisons between our core business operating
results and those of other companies, as well as providing us with
an important tool for financial and operational decision making and
for evaluating our own core business operating results over
different periods of time. Management considers these types of
expenses and adjustments, to a great extent, to be unpredictable
and dependent on a considerable number of factors that are outside
of our control and are not necessarily reflective of operational
performance during a period.
Our non-GAAP measures may not provide information that is
directly comparable to that provided by other companies in our
industry, as other companies in our industry may calculate non-GAAP
financial results differently, particularly related to
non-recurring, unusual items. Our Adjusted EBITDA, non-GAAP net
income (loss), non-GAAP EPS, non-GAAP operating expense, non-GAAP
gross profit and non-GAAP gross margin are not measurements of
financial performance under GAAP and should not be considered as an
alternative to operating or net income or as an indication of
operating performance or any other measure of performance derived
in accordance with GAAP. We do not consider these non-GAAP measures
to be a substitute for, or superior to, the information provided by
GAAP financial results. Reconciliations with specific adjustments
to GAAP results and outlooks are provided at the end of this
release.
Airgain, Inc.
Condensed Consolidated Balance
Sheets
(in thousands, except par
value)
(unaudited)
June 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
9,270
$
11,903
Trade accounts receivable, net
8,626
8,741
Inventories
4,797
4,226
Prepaid expenses and other current
assets
1,688
2,284
Total current assets
24,381
27,154
Property and equipment, net
2,544
2,765
Leased right-of-use assets
1,814
2,217
Goodwill
10,845
10,845
Intangible assets, net
9,718
11,203
Other assets
210
216
Total assets
$
49,512
$
54,400
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
5,659
$
6,507
Accrued compensation
1,100
2,874
Accrued liabilities and other
3,527
2,615
Short-term lease liabilities
921
904
Total current liabilities
11,207
12,900
Deferred tax liability
146
139
Long-term lease liabilities
1,080
1,536
Total liabilities
12,433
14,575
Commitments and contingencies (Note
14)
Stockholders’ equity:
Common stock and additional paid-in
capital, par value $0.0001, 200,000 shares authorized; 10,964
shares issued and 10,423 shares outstanding at June 30, 2023; and
10,767 shares issued and 10,226 shares outstanding at December 31,
2022.
113,599
111,282
Treasury stock, at cost: 541 shares at
June 30, 2023 and December 31, 2022.
(5,364
)
(5,364
)
Accumulated deficit
(71,156
)
(66,093
)
Total stockholders’ equity
37,079
39,825
Total liabilities and stockholders’
equity
$
49,512
$
54,400
Airgain, Inc. Condensed
Consolidated Statements of Operations (in thousands, except per
share data) (unaudited)
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
Sales
$
15,830
$
19,286
$
32,274
$
36,808
Cost of goods sold
9,551
11,793
19,677
22,159
Gross profit
6,279
7,493
12,597
14,649
Operating expenses:
Research and development
2,590
2,962
5,039
6,204
Sales and marketing
2,305
2,889
5,171
5,744
General and administrative
3,596
3,255
7,389
6,740
Total operating expenses
8,491
9,106
17,599
18,688
Loss from operations
(2,212
)
(1,613
)
(5,002
)
(4,039
)
Other (income) expense:
Interest income, net
(16
)
(6
)
(34
)
(11
)
Other expense
11
15
15
30
Total other (income) expense
(5
)
9
(19
)
19
Loss before income taxes
(2,207
)
(1,622
)
(4,983
)
(4,058
)
Income tax (benefit) expense
(2
)
(3
)
80
82
Net loss
$
(2,205
)
$
(1,619
)
$
(5,063
)
$
(4,140
)
Net loss per share:
Basic
$
(0.21
)
$
(0.16
)
$
(0.49
)
$
(0.41
)
Diluted
$
(0.21
)
$
(0.16
)
$
(0.49
)
$
(0.41
)
Weighted average shares used in
calculating loss per share:
Basic
10,413
10,219
10,340
10,188
Diluted
10,413
10,219
10,340
10,188
Airgain, Inc.
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
Six months ended June
30,
2023
2022
Cash flows from operating
activities:
Net loss
$
(5,063
)
$
(4,140
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation
342
337
Loss on disposal of property and
equipment
11
3
Amortization of intangible assets
1,485
1,513
Stock-based compensation
1,949
2,455
Deferred tax liability
7
18
Changes in operating assets and
liabilities:
Trade accounts receivable
115
935
Inventories
(571
)
328
Prepaid expenses and other current
assets
596
(554
)
Other assets
6
75
Accounts payable
(877
)
1,159
Accrued compensation
(880
)
(193
)
Accrued liabilities and other
912
94
Lease liabilities
(36
)
(50
)
Net cash (used in) provided by operating
activities
(2,004
)
1,980
Cash flows from investing
activities:
Purchases of property and equipment
(104
)
(174
)
Proceeds from sale of equipment
—
10
Net cash used in investing activities
(104
)
(164
)
Cash flows from financing
activities:
Cash paid for business acquisition
contingent consideration
—
(7,015
)
Payments for withholding taxes related to
net share settlement of equity awards
(690
)
—
Issuance of common stock, net
165
136
Net cash used in financing activities
(525
)
(6,879
)
Net decrease in cash, cash equivalents and
restricted cash
(2,633
)
(5,063
)
Cash, cash equivalents, and restricted
cash; beginning of period
12,078
14,686
Cash, cash equivalents, and restricted
cash; end of period
$
9,445
$
9,623
Supplemental disclosure of cash flow
information:
Income taxes paid
$
64
$
110
Supplemental disclosure of non-cash
investing and financing activities:
Operating lease liabilities resulting from
right-of-use assets
$
11
$
254
Accrual of property and equipment
$
29
$
429
Cash, cash equivalents, and restricted
cash:
Cash and cash equivalents
$
9,270
$
9,448
Restricted cash included in prepaid
expenses and other current assets and other assets long term
175
175
Total cash, cash equivalents, and
restricted cash
$
9,445
$
9,623
Airgain, Inc.
Sales by Target Market
(in thousands)
(unaudited)
Three months ended
Six months ended June
30,
June 30, 2023
March 31, 2023
June 30, 2022
2023
2022
Consumer
$
6,189
$
5,132
$
5,981
$
11,321
$
12,043
Enterprise
7,366
8,437
9,120
15,803
17,749
Automotive
2,275
2,875
4,185
5,150
7,016
Total sales
$
15,830
$
16,444
$
19,286
$
32,274
$
36,808
Airgain, Inc.
(in thousands)
(unaudited)
Reconciliation of GAAP to
non-GAAP Gross Profit
Three months ended
Six months ended June
30,
June 30, 2023
March 31, 2023
June 30, 2022
2023
2022
Gross profit
$
6,279
$
6,318
$
7,493
$
12,597
$
14,649
Stock-based compensation
29
15
22
44
26
Amortization of intangible assets
89
89
89
178
178
Non-GAAP gross profit
$
6,397
$
6,422
$
7,604
$
12,819
$
14,853
Reconciliation of GAAP to
non-GAAP Gross Margin
Three months ended
Six months ended June
30,
June 30, 2023
March 31, 2023
June 30, 2022
2023
2022
Gross margin
39.7
%
38.4
%
38.9
%
39.0
%
39.8
%
Stock-based compensation
0.2
%
0.1
%
0.0
%
0.1
%
0.1
%
Amortization of intangible assets
0.5
%
0.6
%
0.5
%
0.6
%
0.5
%
Non-GAAP gross margin
40.4
%
39.1
%
39.4
%
39.7
%
40.4
%
Reconciliation of GAAP to
non-GAAP Operating Expenses
Three months ended
Six months ended June
30,
June 30, 2023
March 31, 2023
June 30, 2022
2023
2022
Operating expenses
$
8,491
$
9,108
$
9,106
$
17,599
$
18,688
Stock-based compensation expense
(939
)
(966
)
(1,192
)
(1,905
)
(2,429
)
Amortization of intangible assets
(653
)
(654
)
(667
)
(1,307
)
(1,335
)
Severance and exit costs
(365
)
(205
)
—
(570
)
—
Non-GAAP operating expenses
$
6,534
$
7,283
$
7,247
$
13,817
$
14,924
Airgain, Inc.
(in thousands, except per
share data)
(unaudited)
Reconciliation of GAAP to
non-GAAP Net (Loss) Income
Three months ended
Six months ended June
30,
June 30, 2023
March 31, 2023
June 30, 2022
2023
2022
Net loss
$
(2,205
)
$
(2,858
)
$
(1,619
)
$
(5,063
)
$
(4,140
)
Stock-based compensation expense
968
981
1,214
1,949
2,455
Amortization of intangible assets
742
743
757
1,485
1,513
Severance and exit costs
365
205
—
570
—
Other (income) expense
(16
)
(12
)
9
(28
)
17
Income tax (benefit) expense
(2
)
82
(3
)
80
82
Non-GAAP net (loss) income attributable to
common stockholders
$
(148
)
$
(859
)
$
358
$
(1,007
)
$
(73
)
Non-GAAP net (loss) income per share:
Basic
$
(0.01
)
$
(0.08
)
$
0.04
$
(0.10
)
$
(0.01
)
Diluted
$
(0.01
)
$
(0.08
)
$
0.03
$
(0.10
)
$
(0.01
)
Weighted average shares used in
calculating non-GAAP net (loss) income per share:
Basic
10,413
10,266
10,219
10,340
10,188
Diluted
10,413
10,266
10,385
10,340
10,188
Reconciliation of Net Loss to
Adjusted EBITDA
Three months ended
Six months ended June
30,
June 30, 2023
March 31, 2023
June 30, 2022
2023
2022
Net loss
$
(2,205
)
$
(2,858
)
$
(1,619
)
$
(5,063
)
$
(4,140
)
Stock-based compensation expense
968
981
1,214
1,949
2,455
Depreciation and amortization
927
900
925
1,827
1,850
Severance and exit costs
365
205
—
570
—
Other (income) expense
(16
)
(12
)
9
(28
)
17
Income tax (benefit) expense
(2
)
82
(3
)
80
82
Adjusted EBITDA
$
37
$
(702
)
$
526
$
(665
)
$
264
Q3-2023 Financial
Outlook
Reconciliations of GAAP to
Non-GAAP Gross Margin, Operating Expense, Net (Loss) Income, EPS
and to Adjusted EBITDA
For the Three Months Ended
September 30, 2023
(dollars in millions, except
per share data)
Gross Margin
Reconciliation:
Operating Expense
Reconciliation:
GAAP gross margin
39.1
%
GAAP operating expenses
$
7.4
Stock-based compensation
0.2
%
Stock-based compensation
(0.9
)
Amortization
0.7
%
Amortization
(0.7
)
Non-GAAP gross margin
40.0
%
Non-GAAP operating expenses
$
5.8
Net (Loss) Income
Reconciliation
Net (Loss) Income per Share
Reconciliation(1):
GAAP net loss
$
(1.9
)
GAAP net loss per share
$
(0.18
)
Stock-based compensation
1.0
Stock-based compensation
0.09
Amortization
0.7
Amortization
0.07
Interest income, net
(0
)
Interest income, net
—
Income tax expense
0
Income tax expense
—
Non-GAAP net loss
$
(0.2
)
Non-GAAP net loss per share
$
(0.02
)
Adjusted EBITDA
Reconciliation
GAAP net loss
$
(1.9
)
Stock-based compensation
1.0
Depreciation and amortization
0.9
Interest income, net
(0
)
Income tax expense
0
Adjusted EBITDA
$
0.0
(1) Amounts are based on 10.5 million
basic and 10.5 million diluted weighted average shares
outstanding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230810621616/en/
Airgain Contact Michael Elbaz Chief Financial Officer
investors@airgain.com
Airgain Investor Contact Matt Glover and Thomas Thayer
Gateway Group, Inc. +1 949 574 3860 AIRG@gateway-grp.com
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