Airgain, Inc.

Good afternoon. Welcome to Airgain's third quarter 2020 earnings conference call. My name is Ian, and I will be your coordinator for today's call. Joining us for today's call are Airgain's CEO, Jacob Suen, CFO, David Weil, and Senior Vice President of Engineering, Kevin Thill. As a reminder, this call will be recorded and made available for replay via a link available in the investor relations section of Airgain's website at http://www.airgain.com. Following management's prepared remarks, the call will be opened up for questions from Airgain's publishing self-side analysts. I would now like to turn the call over to Mr. Lyle.

Thank you, and good afternoon to everyone. I caution listeners that during this call, Airgain management will be making forward-looking statements about future events. and 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. These forward-looking statements are qualified by the cautionary statements contained in today's earnings release and Airgain's SEC filing. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast November 5, 2020. Air Gain 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 may include a discussion of non-GAAP financial measures, including non-GAAP operating expense, non-GAAP net income, non-GAAP diluted earnings per share, and adjusted EBITDA. We have seen today's earnings released for further details, including a reconciliation of the GAAP to non-GAAP results. Now I'd like to turn the call over to our CEO, Jacob Suen. Jacob?

Thank you, Dave. Welcome, everyone, and thank you for joining us on the call today. I'll start with an update on the third quarter and a review of our strategy, and then discuss progress we've made on key programs. They will then provide financial details as well as a quick update on the impact of COVID-19 on our business. Let's begin with AirGain Connect. In our August earnings call, we discussed our innovation around the migration to integrated wireless solutions with our new patented AirGain Connect platform launch. While it could be a game changer for AirGain in automotive markets, and our next-generation Wi-Fi and 5G offerings. We also discussed progress with our first AirGainConnect product, which targets public safety in fleet vehicles in the U.S. and is designed to provide exceptional emergency communications on AT&T's network as well as on AT&T's FirstNet gain reporting. We have made great progress toward launching this product, so we are excited to provide an update. We are now operating in a phase that we call HPUE Control Introduction, a period just before AT&T launches service for HPUE products on the FirstNet network nationwide. In this HPUE Control Introduction phase, We have been conducting field trials with prospective customers and are taking orders. We have now successfully completed several field trials of our first AgInConnect product and we have seen outstanding results with AgInConnect outperforming conventional router modems. On the revenue front for Aging Connect, we have already received purchase orders from one of our value-add distributor partners and have received indication from three others for more purchase orders to be shipped this quarter. Therefore, we expect to generate about $500,000 in revenue in the current quarter from this product. Looking forward into the first quarter of next year, when we anticipate that the HPV feature will have been launched, we believe we will be able to sell our egg and tonic product on a much broader scale. Now let's move on to our strategy. With the year coming to a close, I thought it would be valuable to revisit our strategy and provide some more clarity around the direction we're headed. As you are aware, AirGain excelled throughout the evolutions of the IEEE A011 protocol standards and is now viewed as the Wi-Fi antenna expert. Over the years, we've diversified into cellular communications, starting with 3G technology and more recently, IoT. As the number of wireless standards increase, we've adapted to develop solutions for many of them. Our initial revenue growth was driven primarily through the Tier 1 North American video service providers. And to this day, these end customers contribute meaningfully to our current top-line revenue. Those revenue streams which we include in our consumer market revenue should continue to contribute significantly to our overall revenue over the next few years, despite being a slower growth market versus our newer addressable market enterprise and automotive. If you look back at our history, back in the days of 3G and Wi-Fi 1, 2, and 3, antennas were an afterthought. Since then, devices have slowly begun to have more antennas per device, more frequency bands per device, shrinking form factors, faster product regression cycles, and more stringent high performance requirements. These have made antennas the differentiating factor in the performance of these devices. As we move into Wi-Fi 6, which addresses more dense areas, and 6E, which adds new spectrum to deal with, and then sub-6 gigahertz and millimeter wave within 5G are very complex. The market is moving straight into our core competency in opening up opportunities in the enterprise and automotive markets, where we have been focusing on product innovations in recent years. On the enterprise market part, we are targeting new 5G device programs, primarily sub-6 gigahertz in Wi-Fi 6 and 6E opportunities for integrated systems. This allows us to leverage our core competencies in advanced antenna design in a market that offers significantly higher selling prices in the tens of dollars to hundreds of dollars range. In particular, we see opportunities in several enterprise submarkets. First, our current primary focus is on traditional enterprise Wi-Fi where AirGain can leverage its long-standing relationships with service providers and experience in gateways to win opportunities in next-generation routers for hyper-dense area Wi-Fi bannings like stadiums and arenas. Second, we are seeing opportunities in industrial IoT, including end-to-end, where we already have a small established set of customers from which to build up on. We think this is a large market opportunity in the longer term where we can leverage our experience in developing complex wireless systems. We see some smaller opportunities in indoor small-cell markets where we can leverage expertise in in-home wireless systems by exploiting our existing relationships with service providers. We're evaluating opportunities in 5G tech wireless access markets, leveraging our service provider network experience to win key indoor 5G tech and various access OEMs. That being said, the automotive market continues to be our largest growth opportunity, primarily in the aftermarket fleet market with our recent introductions of AirGain Connect, where we have a very large near-term opportunity that can be leveraged into a game-changer platform for airgain. Also important for our historical pipeline revenue is our existing automotive aftermarket fleet product portfolio. Our strategy is to continue to leverage our gold standard Antenna Plus brand in the North American fleet and public safety auto aftermarket segments to generate revenue as we refresh the product portfolio to address 5G. For the auto OEM markets, We believe the landscape for antennas is changing significantly as antennas are now being integrated into different parts of the car and making low profile, small form factor, multi-antenna complexity a problem to be solved. We are currently exploring opportunities in this market that could generate revenues beginning three to five years out. I would categorize this market as being in an exploratory phase. until the market matures and optimized future designs are better understood. All in all, I firmly believe that we are addressing the right markets at the right time and look forward to updating you on our progress with our strategy in future calls. Now, I would like to provide an update on some key programs we mentioned in previous earnings calls. In Q3, We re-engaged in a significant enterprise Wi-Fi platform with one of the leading enterprise lane networking equipment providers. This program was temporarily pushed out due to COVID-19 and is now back in development and expected to move into production by the second half of next year. Our design success on this project has led to engagement in two other significant programs with the same customer. One is an enterprise Wi-Fi access point with high-gain panel antennas that is expected to move into production in Q3 2021. The second is a SD-WAN access point with 5G wireless backhaul, and we expect this program to rent in the second half of 2021. It is important to note that these are more complex antenna system design ways, so we'll commend selling prices in the hundreds of dollars, well above our historical corporate averages. Additionally, we're in the final stages of development of 5G sub-6 gigahertz industrial IoT and fixed wireless access programs for North American enterprise IoT and mobile provider. and we expect these programs to wrap next year. We are also in the final stages of design for multiple auto fleet programs for a tier one in-car video system provider. We expect these significant programs to go into production next year. Now, I would like to highlight some notable design wins and key program initiatives that occurred specifically in the third quarter across our markets. On the consumer front, we continue to see momentum for our Wi-Fi 6 embedded antenna solutions. We received production orders for a significant Wi-Fi 6 gateway program for a North American tier 1 operator. which we mentioned in our August earnings call. We expect volume shipments to ramp by year end and continue into 2021. Initial orders will also place for a Wi-Fi 6 CPE for a wideband hybrid fiber wireless internet service provider in North America. We expect to see this program ramp in early 2021. Additionally, we have continued to collaborate with several leading chipset suppliers on the development of Wi-Fi 6E reference designs. We continue to engage with these suppliers on their new platforms for high-performance 6 GHz solutions, and we have sent all Wi-Fi 6E products into multiple reference programs. We are seeing an increase in demand for 5G cellular fixed wireless applications, which is in line with our strategy of winning designs where more complex antenna technology is required. We received initial production orders for a cellular fixed wireless access gateway for a tier one network infrastructure provider in North America. We expect this program to go into production early next year. In the enterprise market, we secured a design with one of the largest global energy management leaders for an outdoor IoT gateway. We mentioned our engagement on this program in our Q1 earnings call, and as expected, initial production orders have been placed. We expect this program to rip in 2021. On the automotive front, will receive our first purchase order for Gain, Inc. from one of our primary value-add distributors, one that offers an extensive product portfolio of public safety devices which support them blocking communications for first responders. We are very proud of the progress we've made over the past three quarters during a very dynamic period and especially the prospect of growth in 2021. Now, I'd like to turn the call over to our Chief Financial Officer, Dave Lyle, who will walk us through the financials. Dave?