Airgain projects double-digit revenue growth in key markets while advancing 5G platform certifications for 2026 scaling

Earnings Call Insights: Airgain (AIRG) Q3 2025

MANAGEMENT VIEW

* Jacob Suen, President, CEO, Chief Revenue Officer & Director, highlighted that "in Q3, we delivered our third consecutive quarter of sequential revenue growth, met guidance, achieved strong gross margins and generated positive adjusted EBITDA. We also reached key certification milestones that move our growth platforms closer to scale." Suen emphasized that Airgain's consumer business expects "revenue to grow at a double-digit rate for the second consecutive year, driven by the Wi-Fi 7 transition among Tier 1 cable operators and growth of FWA antenna sales to a Tier 1 mobile network operator." He also noted a new design win with a Tier 1 U.S. carrier for a next-gen Wi-Fi 7 gateway, targeting commercial launch in the second half of 2026 with projected shipments exceeding 5 million units within 5 years.
* Suen described embedded modem sales as now representing more than half of enterprise market revenue, anticipating continued double-digit growth due to demand in utility infrastructure monitoring. The Skywire Cat 1-bis embedded modem launched in Q3 is expected to be a growth driver in 2026.
* Suen reported moderation in asset tracker sales and persistent inventory overhang in aftermarket antenna and enterprise custom products, attributed to government agency project delays, with this overhang expected to persist through the first half of 2026.
* Suen explained that AirgainConnect achieved T-Mobile T-Priority certification and that Lighthouse achieved FCC certification. He stated, "Our sales opportunity pipeline continues to expand with roughly 80 opportunities in play, 2/3 of which are in pretrial phases."
* Michael Elbaz, CFO, stated, "Third quarter revenue came in at $14 million at the midpoint of our guidance and up 3% sequentially from the second quarter. Consumer revenue was $6.7 million, up $1 million sequentially, driven by higher Wi-Fi 7 antenna shipments to cable operator. Enterprise revenue was $6.9 million, down $0.3 million sequentially due to lower enterprise antenna sales. Automotive revenue was $0.5 million, down $0.3 million sequentially, driven by lower aftermarket antenna sales."
* Elbaz added, "Third quarter non-GAAP gross margin was 44.4%, up from 43.8% in Q2. Adjusted EBITDA improved to a gain of $0.3 million compared to a loss of $0.4 million in Q2. Q3 non-GAAP net income was $0.1 million or $0.01 per share compared to a loss of $0.5 million or $0.04 per share in Q2."

OUTLOOK

* Elbaz shared, "Looking ahead to the fourth quarter, we expect revenue in the range of $12 million to $14 million with a midpoint of $13 million, representing a sequential decline of approximately 7%."
* He also guided, "We expect non-GAAP gross margin for the fourth quarter to be in the range of 42.5% to 45.5% or 44% at the midpoint. We do not anticipate a material impact from tariffs or the recent government shutdown, although this environment may result in supply chain disruption costs. We expect non-GAAP operating expenses for the fourth quarter of approximately $5.8 million, resulting in positive adjusted EBITDA of approximately $0.1 million at the midpoint of our guidance range."
* Suen indicated, "Looking ahead to 2026, we expect continued growth supported by the Wi-Fi 7 transition and new design wins, such as the one we announced this week with another Tier 1 U.S. carrier for its next-gen Wi-Fi 7 fiber broadband gateway."

FINANCIAL RESULTS

* Revenue for Q3 was $14 million, with consumer revenue at $6.7 million, enterprise revenue at $6.9 million, and automotive revenue at $0.5 million. Non-GAAP gross margin reached 44.4%. Non-GAAP operating expenses declined to $6.1 million. Adjusted EBITDA improved to $0.3 million. Non-GAAP net income was $0.1 million or $0.01 per share. Cash and equivalents were $7.1 million at quarter end.
* Year-to-date, Airgain received $2.1 million in net proceeds from employee retention credits, helping offset a $1.7 million non-GAAP operating loss.

Q&A

* Bryan, Craig-Hallum Capital Group, asked about the recent Wi-Fi 7 design win with a Tier 1 carrier and its impact. Suen responded, "The customers, it's an existing customers, although this is as far as the end customers is a U.S. Tier 1 operator, and this is their flagship gateway for the next generation. So this is their largest SKU." When asked about revenue impact for 2026, Suen replied, "It's in excess of 5 million units. It's going to be within 5 years because that's usually how operators roll out their deployment. As far as 2026, we will be able to get more visibility, I would say, in the first half of the year because it's planned to be -- start deploying in the beginning of second half of next year."
* Bryan asked about OpEx outlook. Elbaz answered, "Our goal is really to be at EBITDA breakeven, if not positive. And so as we have some runway left to have the revenue ramp in the AC-Fleet and Lighthouse, we will maintain that tight management of OpEx. We're always looking for efficiencies in our G&A expenses."

SENTIMENT ANALYSIS

* Analysts' tone was neutral to slightly positive, focusing on design win cadence, OpEx discipline, and product ramp expectations.
* Management maintained a confident and disciplined tone, with Suen stating, "The opportunity ahead of us is clear, and our conviction has never been higher."
* Compared to the previous quarter, the sentiment remains steady, with both management and analysts emphasizing disciplined execution, growth visibility, and platform ramp progress.

QUARTER-OVER-QUARTER COMPARISON

* Q3 marked the third consecutive quarter of sequential revenue growth following a similar trend in Q2, but Q4 guidance projects a sequential revenue decline.
* Gross margin improved from Q2 to Q3. Non-GAAP operating expenses declined further, reflecting continued cost discipline.
* The sales pipeline for AirgainConnect expanded from roughly 40 opportunities in Q2 to about 80 in Q3, showing increased momentum, with certifications advancing.
* Both quarters highlighted Wi-Fi 7 and embedded modems as growth engines. Certification milestones and initial trials continued to be emphasized as prerequisites for platform scaling into 2026.
* Management's confidence and focus on platform adoption and disciplined execution remained consistent, while analysts maintained a pragmatic, data-focused approach.

RISKS AND CONCERNS

* Suen noted persistent challenges in asset tracker sales and inventory overhang in aftermarket antenna and enterprise custom products, driven by government agency project deployment delays, with expectations for this overhang to persist through the first half of 2026.
* Elbaz mentioned the potential for supply chain disruption costs but does not anticipate a material impact from tariffs or the recent government shutdown.
* Analysts raised questions about the timing and impact of new product ramps and the sustainability of cost discipline.

FINAL TAKEAWAY

Airgain closed Q3 2025 with continued revenue growth, improved margins, and key certifications across its platform products. Management emphasized double-digit growth in consumer and embedded modem markets, an expanding pipeline for AirgainConnect, and the commercial readiness of Lighthouse. The company expects modest revenue in Q4 but remains confident about its growth trajectory, driven by Wi-Fi 7 adoption and large Tier 1 design wins, and is focused on maintaining cost discipline and scaling its platform strategy through 2026.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/airg/earnings/transcripts]

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