Airgain® Reports First Quarter 2023 Financial Results
“We are pleased with our execution in the first quarter in the face of difficult macroeconomic conditions,” said Airgain’s President and Chief Executive Officer, Jacob Suen. “We delivered quarterly sales of
First Quarter 2023 Financial Highlights
GAAP
-
Sales of
$16.4 million -
GAAP gross margin of
38.4% -
GAAP operating expenses of
$9.1 million -
GAAP net loss of
$2.9 million $(0.28)
Non-GAAP
-
Non-GAAP gross margin of
39.1% -
Non-GAAP operating expenses of
$7.3 million -
Non-GAAP net loss of
$0.9 million $(0.08) -
Adjusted EBITDA of
$(0.7) million
First Quarter 2023 Financial Results
Sales for the first quarter of 2023 were
GAAP gross profit for the first quarter of 2023 was
GAAP gross margin for the first quarter of 2023 was
GAAP operating expenses for the first quarter of 2023 was
GAAP net loss for the first quarter of 2023 was
Adjusted EBITDA for the first quarter of 2023 was
Second Quarter 2023 Financial Outlook
GAAP
-
Sales are expected to be in the range of
$15.7 million $17.3 million $16.5 million -
GAAP gross margin is expected to be in the range of
36.7% to39.7% -
GAAP operating expense is expected to be approximately
$8.0 million -
GAAP net loss per share is expected to be (
$0.16
Non-GAAP
-
Non-GAAP gross margin is expected to be in the range of
37.5% to40.5% -
Non-GAAP operating expense is expected to be approximately
$6.4 million -
Non-GAAP net income per share is expected to be
$0.00 -
Adjusted EBITDA is expected to be
$0.2 million
Our financial outlook for the three months ending June 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, May 11, 2023, at 5:00 PM Eastern Time (2:00 PM Pacific Time) to discuss financial results for the first quarter ended March 31, 2023.
Airgain management will host the presentation, followed by a question and answer period.
Date: May 11, 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=apml4mP8
A replay of the webcast will be available via the registration link after 8:00 PM Eastern Time on the same day until May 11, 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
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 second 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; the overall global supply shortage and logistics delays within the supply chain that our products are used in, as well as adversely affecting the general
Note Regarding Use of Non-GAAP Financial Measures
To supplement our condensed financial statements presented in accordance with
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) |
||||||||
|
|
March 31,
|
|
December 31,
|
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
9,839 |
|
|
$ |
11,903 |
|
Trade accounts receivable, net |
|
|
8,148 |
|
|
|
8,741 |
|
Inventories |
|
|
4,481 |
|
|
|
4,226 |
|
Prepaid expenses and other current assets |
|
|
1,729 |
|
|
|
2,284 |
|
Total current assets |
|
|
24,197 |
|
|
|
27,154 |
|
Property and equipment, net |
|
|
2,683 |
|
|
|
2,765 |
|
Leased right-of-use assets |
|
|
2,022 |
|
|
|
2,217 |
|
Goodwill |
|
|
10,845 |
|
|
|
10,845 |
|
Intangible assets, net |
|
|
10,460 |
|
|
|
11,203 |
|
Other assets |
|
|
216 |
|
|
|
216 |
|
Total assets |
|
$ |
50,423 |
|
|
$ |
54,400 |
|
Liabilities and stockholders’ equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
6,744 |
|
|
$ |
6,507 |
|
Accrued compensation |
|
|
871 |
|
|
|
2,874 |
|
Accrued liabilities and other |
|
|
2,156 |
|
|
|
2,615 |
|
Short-term lease liabilities |
|
|
889 |
|
|
|
904 |
|
Total current liabilities |
|
|
10,660 |
|
|
|
12,900 |
|
Deferred tax liability |
|
|
142 |
|
|
|
139 |
|
Long-term lease liabilities |
|
|
1,321 |
|
|
|
1,536 |
|
Total liabilities |
|
|
12,123 |
|
|
|
14,575 |
|
Commitments and contingencies (Note 15) |
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
|
||||
Common stock and additional paid-in capital, par value |
|
|
112,615 |
|
|
|
111,282 |
|
Treasury stock, at cost: 541 shares at March 31, 2023 and December 31, 2022. |
|
|
(5,364 |
) |
|
|
(5,364 |
) |
Accumulated deficit |
|
|
(68,951 |
) |
|
|
(66,093 |
) |
Total stockholders’ equity |
|
|
38,300 |
|
|
|
39,825 |
|
Total liabilities and stockholders’ equity |
|
$ |
50,423 |
|
|
$ |
54,400 |
|
Airgain, Inc. |
||||||||
Condensed Consolidated Statements of Operations |
||||||||
(in thousands, except per share data) |
||||||||
(unaudited) |
||||||||
|
|
|
||||||
|
|
Three months ended March 31, |
||||||
|
|
2023 |
|
2022 |
||||
Sales |
|
$ |
16,444 |
|
|
$ |
17,522 |
|
Cost of goods sold |
|
|
10,126 |
|
|
|
10,366 |
|
Gross profit |
|
|
6,318 |
|
|
|
7,156 |
|
Operating expenses: |
|
|
|
|
||||
Research and development |
|
|
2,449 |
|
|
|
3,242 |
|
Sales and marketing |
|
|
2,866 |
|
|
|
2,855 |
|
General and administrative |
|
|
3,793 |
|
|
|
3,485 |
|
Total operating expenses |
|
|
9,108 |
|
|
|
9,582 |
|
Loss from operations |
|
|
(2,790 |
) |
|
|
(2,426 |
) |
Other expense (income): |
|
|
|
|
||||
Interest income, net |
|
|
(18 |
) |
|
|
(5 |
) |
Other expense |
|
|
4 |
|
|
|
15 |
|
Total other (income) expense |
|
|
(14 |
) |
|
|
10 |
|
Loss before income taxes |
|
|
(2,776 |
) |
|
|
(2,436 |
) |
Income tax expense (benefit) |
|
|
82 |
|
|
|
85 |
|
Net loss |
|
$ |
(2,858 |
) |
|
$ |
(2,521 |
) |
Net loss per share: |
|
|
|
|
||||
Basic |
|
$ |
(0.28 |
) |
|
$ |
(0.25 |
) |
Diluted |
|
$ |
(0.28 |
) |
|
$ |
(0.25 |
) |
Weighted average shares used in calculating loss per share: |
|
|
|
|
||||
Basic |
|
|
10,266 |
|
|
|
10,130 |
|
Diluted |
|
|
10,266 |
|
|
|
10,130 |
|
Airgain, Inc. |
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(in thousands) |
||||||||
(unaudited) |
||||||||
|
|
|
||||||
|
|
Three months ended March 31, |
||||||
|
|
2023 |
|
2022 |
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net loss |
|
$ |
(2,858 |
) |
|
$ |
(2,521 |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
||||
Depreciation |
|
|
157 |
|
|
|
168 |
|
Impairment of fixed assets |
|
|
— |
|
|
|
8 |
|
Amortization of intangible assets |
|
|
743 |
|
|
|
757 |
|
Stock-based compensation |
|
|
981 |
|
|
|
1,241 |
|
Deferred tax liability |
|
|
3 |
|
|
|
8 |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
Trade accounts receivable |
|
|
593 |
|
|
|
2,578 |
|
Inventories |
|
|
(255 |
) |
|
|
230 |
|
Prepaid expenses and other current assets |
|
|
555 |
|
|
|
(175 |
) |
Other assets |
|
|
— |
|
|
|
7 |
|
Accounts payable |
|
|
250 |
|
|
|
1,572 |
|
Accrued compensation |
|
|
(1,109 |
) |
|
|
(735 |
) |
Accrued liabilities and other |
|
|
(459 |
) |
|
|
943 |
|
Lease liabilities |
|
|
(35 |
) |
|
|
71 |
|
Net cash (used in) provided by operating activities |
|
|
(1,434 |
) |
|
|
4,152 |
|
Cash flows from investing activities: |
|
|
|
|
||||
Purchases of property and equipment |
|
|
(89 |
) |
|
|
(128 |
) |
Net cash used in investing activities |
|
|
(89 |
) |
|
|
(128 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Taxes paid for net share settlement of restricted stock units |
|
|
(678 |
) |
|
|
— |
|
Issuance of common stock, net |
|
|
137 |
|
|
|
120 |
|
Net cash (used in) provided by financing activities |
|
|
(541 |
) |
|
|
120 |
|
Net (decrease) increase in cash, cash equivalents and restricted cash |
|
|
(2,064 |
) |
|
|
4,144 |
|
Cash, cash equivalents, and restricted cash; beginning of period |
|
|
12,078 |
|
|
|
14,686 |
|
Cash, cash equivalents, and restricted cash; end of period |
|
$ |
10,014 |
|
|
$ |
18,830 |
|
|
|
|
|
|
||||
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
||||
Operating lease liabilities resulting from right-of-use assets |
|
$ |
11 |
|
|
$ |
197 |
|
Accrual of property and equipment |
|
$ |
13 |
|
|
$ |
— |
|
|
|
|
|
|
||||
Cash, cash equivalents, and restricted cash: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
9,839 |
|
|
$ |
18,655 |
|
Restricted cash included in prepaid expenses and other current assets and other assets long term |
|
$ |
175 |
|
|
|
175 |
|
Total cash, cash equivalents, and restricted cash |
$ | 10,014 |
$ | 18,830 |
||||
Airgain, Inc. |
||||||||||||
Sales by Target Market |
||||||||||||
(in thousands) |
||||||||||||
(unaudited) |
||||||||||||
|
|
Three months ended |
|
|||||||||
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
|
March 31, 2022 |
|
|||
Consumer |
|
$ |
5,132 |
|
|
$ |
6,416 |
|
|
$ |
6,062 |
|
Enterprise |
|
|
8,437 |
|
|
|
10,037 |
|
|
|
8,629 |
|
Automotive |
|
|
2,875 |
|
|
|
3,436 |
|
|
|
2,831 |
|
Total sales |
|
$ |
16,444 |
|
|
$ |
19,889 |
|
|
$ |
17,522 |
|
Airgain, Inc. |
||||||||||||
Stock-Based Compensation Expense by Department |
||||||||||||
(in thousands) |
||||||||||||
(unaudited) |
||||||||||||
|
|
Three months ended |
|
|||||||||
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
|
March 31, 2022 |
|
|||
Cost of goods sold |
|
$ |
15 |
|
|
$ |
98 |
|
|
$ |
13 |
|
Research and development |
|
|
237 |
|
|
|
268 |
|
|
|
267 |
|
Sales and marketing |
|
|
161 |
|
|
|
339 |
|
|
|
287 |
|
General and administrative |
|
|
568 |
|
|
|
698 |
|
|
|
674 |
|
Total stock-based compensation expense |
|
$ |
981 |
|
|
$ |
1,403 |
|
|
$ |
1,241 |
|
Airgain, Inc. |
|||||||||||
(in thousands) |
|||||||||||
(unaudited) |
|||||||||||
|
|
|
|||||||||
Reconciliation of GAAP to non-GAAP Gross Profit |
|||||||||||
|
Three months ended |
|
|||||||||
|
March 31, 2023 |
|
|
December 31, 2022 |
|
|
March 31, 2022 |
|
|||
Gross profit |
$ |
6,318 |
|
|
$ |
5,880 |
|
|
$ |
7,156 |
|
Stock-based compensation |
|
15 |
|
|
|
98 |
|
|
|
13 |
|
Amortization of intangible assets |
|
89 |
|
|
|
89 |
|
|
|
89 |
|
Non-GAAP gross profit |
$ |
6,422 |
|
|
$ |
6,067 |
|
|
$ |
7,258 |
|
Reconciliation of GAAP to non-GAAP Gross Margin |
|||||||||||
|
Three months ended |
||||||||||
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
||||||
Gross margin |
|
38.4 |
% |
|
|
29.6 |
% |
|
|
40.8 |
% |
Stock-based compensation |
|
0.1 |
% |
|
|
0.5 |
% |
|
|
0.1 |
% |
Amortization of intangible assets |
|
0.6 |
% |
|
|
0.4 |
% |
|
|
0.5 |
% |
Non-GAAP gross margin |
|
39.1 |
% |
|
|
30.5 |
% |
|
|
41.4 |
% |
Reconciliation of GAAP to non-GAAP Operating Expenses |
|||||||||||
|
Three months ended |
||||||||||
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
||||||
Operating expenses |
$ |
9,108 |
|
|
$ |
9,157 |
|
|
$ |
9,582 |
|
Stock-based compensation expense |
|
(966 |
) |
|
|
(1,305 |
) |
|
|
(1,228 |
) |
Amortization of intangible assets |
|
(654 |
) |
|
|
(668 |
) |
|
|
(668 |
) |
Severance and exit costs |
|
(205 |
) |
|
|
— |
|
|
|
— |
|
Non-GAAP operating expenses |
$ |
7,283 |
|
|
$ |
7,184 |
|
|
$ |
7,686 |
|
Airgain, Inc. |
|||||||||||
(in thousands, except per share data) |
|||||||||||
(unaudited) |
|||||||||||
|
|
||||||||||
Reconciliation of GAAP to non-GAAP Net Income (Loss) |
|||||||||||
|
Three months ended |
||||||||||
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
||||||
Net loss |
$ |
(2,858 |
) |
|
$ |
(3,220 |
) |
|
$ |
(2,521 |
) |
Stock-based compensation expense |
|
981 |
|
|
|
1,403 |
|
|
|
1,241 |
|
Amortization of intangible assets |
|
743 |
|
|
|
757 |
|
|
|
757 |
|
Severance and exit costs |
|
205 |
|
|
|
— |
|
|
|
— |
|
Other (income) expense |
|
(12 |
) |
|
|
(12 |
) |
|
|
7 |
|
Provision (benefit) for income taxes |
|
82 |
|
|
|
(50 |
) |
|
|
85 |
|
Non-GAAP net income (loss) attributable to common stockholders |
$ |
(859 |
) |
|
$ |
(1,122 |
) |
|
$ |
(431 |
) |
|
|
|
|
|
|
||||||
Non-GAAP net income (loss) per share: |
|
|
|
|
|
||||||
Basic |
$ |
(0.08 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.04 |
) |
Diluted |
$ |
(0.08 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.04 |
) |
Weighted average shares used in calculating non-GAAP net income (loss) per share: |
|
|
|
|
|
||||||
Basic |
|
10,266 |
|
|
|
10,225 |
|
|
|
10,130 |
|
Diluted |
|
10,266 |
|
|
|
10,225 |
|
|
|
10,130 |
|
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
|||||||||||
|
Three months ended |
||||||||||
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
||||||
Net loss |
$ |
(2,858 |
) |
|
$ |
(3,220 |
) |
|
$ |
(2,521 |
) |
Stock-based compensation expense |
|
981 |
|
|
|
1,403 |
|
|
|
1,241 |
|
Depreciation and amortization |
|
900 |
|
|
|
930 |
|
|
|
925 |
|
Severance and exit costs |
|
205 |
|
|
|
— |
|
|
|
— |
|
Other (income) expense |
|
(12 |
) |
|
|
(12 |
) |
|
|
7 |
|
Provision (benefit) for income taxes |
|
82 |
|
|
|
(50 |
) |
|
|
85 |
|
Adjusted EBITDA |
$ |
(702 |
) |
|
$ |
(949 |
) |
|
$ |
(263 |
) |
Q2-2023 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 June 30, 2023 |
||||||||||
(dollars in millions, except per share data) |
||||||||||
|
|
|
|
|
|
|
||||
Gross Margin Reconciliation: |
|
|
|
Operating Expense Reconciliation: |
|
|
||||
GAAP gross margin |
|
|
38.2 |
% |
|
GAAP operating expenses |
|
$ |
8.0 |
|
Stock-based compensation |
|
|
0.3 |
% |
|
Stock-based compensation |
|
|
(1.0 |
) |
Amortization |
|
|
0.5 |
% |
|
Amortization |
|
|
(0.6 |
) |
Non-GAAP gross margin |
|
|
39.0 |
% |
|
Non-GAAP operating expenses |
|
$ |
6.4 |
|
|
|
|
|
|
|
|
||||
Net (Loss) Income Reconciliation |
|
|
|
Net (Loss) Income per Share Reconciliation(1): |
|
|
||||
GAAP net loss |
|
$ |
(1.8 |
) |
|
GAAP net loss per share |
|
$ |
(0.16 |
) |
Stock-based compensation |
|
|
1.0 |
|
|
Stock-based compensation |
|
|
0.09 |
|
Amortization |
|
|
0.7 |
|
|
Amortization |
|
|
0.07 |
|
Interest income, net |
|
|
— |
|
|
Interest income, net |
|
|
— |
|
Income tax expense |
|
|
0.1 |
|
|
Income tax expense |
|
|
— |
|
Non-GAAP net income |
|
$ |
— |
|
|
Non-GAAP net income per share |
|
$ |
— |
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA Reconciliation |
|
|
|
|
|
|
||||
GAAP net loss |
|
$ |
(1.8 |
) |
|
|
|
|
||
Stock-based compensation |
|
|
1.0 |
|
|
|
|
|
||
Depreciation and amortization |
|
|
0.9 |
|
|
|
|
|
||
Interest income, net |
|
|
— |
|
|
|
|
|
||
Income tax expense |
|
|
0.1 |
|
|
|
|
|
||
Adjusted EBITDA |
|
$ |
0.2 |
|
|
|
|
|
||
|
|
|
|
|
|
|
||||
(1) Amounts are based on 10.5 million basic and 10.9 million diluted weighted average shares outstanding |
||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230511005913/en/
Airgain Contact
Michael Elbaz
Chief Financial Officer
investors@airgain.com
Airgain Investor Contact
Matt Glover
Gateway Group, Inc.
+1 949 574 3860
AIRG@gatewayir.com
Source: Airgain, Inc.
