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spk06: Thank you. THE END Thank you. Oh, my God. Thank you. Thank you. Thank you. Thank you. Thank you. THE END THE END THE END THE END THE END Good afternoon. Welcome to AirGames' fourth quarter and full year 2020 earnings conference call. My name is Ryan, and I'll be your coordinator for today's call. Joining us for today's call are AirGames CEO Jacob Soon, CFO David Lyle, and AirGames' new Senior Vice President of Product and Marketing, Rab Sabi. 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 www.airgain.com. Following management's prepared remarks, the call will be open for questions from Airgain's publishing sales side analysts. I would now like to turn the call over to Mr. Lyle.
spk01: 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 a company's business. These forward-looking statements are qualified by the cautionary statements contained in today's earnings release and AirGain's SEC filings. This conference call contains time-sensitive information that is accurate only as of the date of this broadcast, February 18, 2021. Ergain 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 gross margin, non-GAAP operating expenses, non-GAAP net income, non-GAAP diluted earnings per share, and adjusted EBITDA. Please see today's earnings release for further details, including the reconciliation of the GAAP to non-GAAP results. Now I'd like to turn the call over to our CEO, Jacob Sim.
spk02: Jacob? Thank you, Dave. Welcome, everyone, and thank you for joining us on the call today. I'll start with an update on the fourth 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 our Q1 2021 outlook and color around how we expect the year to play out. Let's begin with our two big announcements, the acquisitions of NimbleLink and the release of the first Egg and Connect product into general availability. The acquisitions of NimbleLink, which closed on January 7th, makes for a really exciting addition to the Airgame family. We're at a critical inflection point in our transition towards becoming a more system-level company by providing even higher levels of innovative solutions. The acquisition is an excellent fit with our business and will play an important role in our overall growth strategy to broaden market diversification. especially within the industrial IoT space. Nemblen significantly advances our strategic mission to deliver higher levels of integrated wireless systems solutions globally. The strategic rationale for this acquisition really revolves around six key points. First, Nemblen's expertise in industrial IoT puts them squarely in one of our targeted sub-markets. within the bigger enterprise market. Second, NimbleLink extends the breadth and opportunity for our game-changing AirGain Connect platform. With the addition of critical expertise gained through NimbleLink for future AirGain Connect products, such as with modem integrated design, cloud management software, as well as operator certification, we expect that NimbleLink will enable critical future features expand cellular module design, increase supply chain flexibility, and improve product time to market. Third, because NimbleLink's historical revenue has been almost all based in the US, we have a real opportunity to leverage our international sales force to expand NimbleLink's sales reach. Historically, NimbleLink, being a smaller private company, focus almost entirely on the U.S. market. However, its products can be adapted to international markets with minimal investment and can be ready, in most cases, to deploy into a new market in a matter of weeks, not months or years. This rapid time to market is because NimbleLink's modems are certified in 26 different bands and operator-specific adaptations can be completed really quickly. Given AirGain's existing global sales coverage through our direct sales force and channel partners across different regions in Asia, Europe, and the Middle East, we expect to quickly expand international sales force of NimbleLink products. Fourth, by joining a larger company, NimbleLink can gain access to design opportunities they were not previously able to win. as it can leverage Ergen's broader channel, well-known brand in larger scale. Fifth, all Neverlink's products require antennas, all of which provide the opportunity to leverage Ergen's antenna experience to enhance performance of those products. And finally, the combined business will provide our customers the most skilled company with a more diverse offering and set up expertise. We have made very good progress on all six of these fronts and believe we will see positive results on all of these this year in terms of the integration effort. We are right on schedule and our employees are excited about the prospects of the combined companies. Now, let's move on to AT&T Connect. AT&T turned on and formally launched the HPE portions of the FirstNet network on January the 26th. AT&T rebranded the HPE network mega-range. So we'll be using these terms interchangeably. In turn, AirGain released our first AirGain Connect product into general availability. Since then, we have been providing products to prospective customers for demo purposes and have generated an extensive opportunity funnel. We've garnered significant interest and gain traction from police, fire, and EMS target market segments and expect to have some converted into purchase orders for delivery this quarter. Now let's move on to our strategy. This quarter, I will keep my remarks brief regarding our strategy as they lay out our strategy in detail in last quarter's earnings call. And on the conference call, we held to discuss the nimble link acquisition on January the 7th. Over the past few years, we've been transitioning the company from primarily a consumer market focused company towards the enterprise and automotive market. In parallel, We have also been broadening our capabilities beyond antennas into integrated wireless systems. We believe we have successfully executed on that plan and are now ready to resume our growth this year. We expect we'll see growth from our enterprise and automotive markets, especially with the introduction of the new game-changing platform, AirGames Connect, as well as the addition of NumberLink. If you look beyond those two major growth drivers, we believe we will see growth from our enterprise market as we begin to rent products from design lanes with our two traditional Wi-Fi enterprise global customers. Additionally, following a refresh of our automotive aftermarket product portfolio to 5G and with a renewed focus on selling our products into those markets, We believe we will see growth out of our historical automotive revenue this year as well. Now, last, shifting gears to our key design wins in the quarter and discussion about our ongoing programs in our three end markets. Starting first with our consumer products, we continue to see momentum for our Wi-Fi 6 embedded antenna solutions against Wi-Fi 6 and Wi-Fi 60 antenna designs provide numerous enhancements over preceding Wi-Fi technologies, including greater throughput, improved spectrum utilization, and enhanced multi-user experiences. During Q4, we received volume orders from both SKUs from different OEMs for a Wi-Fi 6 gateway program from a North American T01 operator. which we mentioned in our Q3 call last November. We expect volume shipments to continue through 2021. In Q4, we received initial orders to support first production shipments by Wi-Fi 6 tri-band router extender program, which we first mentioned in our Q1 2020 earnings call. We expect volume shipments to rent in the first half of 2021. We were also selected to provide a new Wi-Fi 6 router design shipping to an OEM in Japan. Production shipments will place in Q1, and we expect to begin shipping this year. In our enterprise market, we secure a new five-year LPWAN design for an industrial IoT smart utility application. We expect volume shipments to rent in Q2 and continue through 2025. Our design success in this project has led to engagement in two other programs with this same customer. In automotive, we continue to see solid momentum for our fleet products. This is best demonstrated by the multiple design wins we secure with the Tier 1 in-car video system provider. which we mentioned in our Q3 call. We expect these programs to go into production in Q2. As it relates to our game-changing AirGain Connect platform, during Q4, we received a meaningful purchase order from our strategic distribution partner, GetWireless, one of the largest distributors of cellular connectivity devices that support HPE communications for first responders offering an extensive product portfolio of public safety solutions. In summary, with the additions of NimbleLink and the production launch of AirGain Connect, together with growth opportunities across our addressable markets, AirGain is positioned to accelerate growth in 2021 and the years ahead. Now, I would like to turn the call back to Dave, who will walk us to the financial highlights for the quarter and outlook for 2021. Dave.
spk01: Thank you, Jacob. Fourth quarter 2020 revenue of $12.8 million was consistent with the preliminary results we issued on January 7th and just above the midpoint of our previous guidance range issued on November 5th. Consumer revenue was $9.6 million down from $10.4 million in Q3 primarily due to initial inventory builds in Q3 as a result of product cycle transitions at our North American service provider and customers. Enterprise revenue was about $1.3 million in Q4, up from $800,000 in Q3 as we began ramping two new design wins into traditional enterprise Wi-Fi customers, as well as some recovery in M2M antennas, as COVID-related pressure began to resolve. Automotive revenue was $1.9 million, up slightly from $1.8 million in Q3, due to incremental revenue from AirGain Connect product sales in Q4. Q4 gross margin of 45.5% was at the low end of our previous guidance range, primarily due to product mix. Non-GAAP operating expense in Q4 of $5.7 million was at the top end of our previous guidance range, primarily because of the final quarter 2020 management bonus accrual and sales commission true-up moving slightly upward, as well as higher travel expense as our sales team in Asia has begun to travel again following the COVID shutdown. Excluded from non-GAAP operating expense was $606,000 in stock-based compensation expense and $121,000 in amortization of intangible assets. We also excluded from our non-GAAP operating expense $484,000 in NimbleLink transaction-related expenses. Adjusted EBITDA was $277,000 in Q4. Non-GAAP net income in Q4 was $162,000, and Q4 GAAP net loss was $1.1 million. Moving to earnings per share, our Q4 non-GAAP earnings per share was $0.02, and GAAP loss per share was $0.11. Our Q4 cash, cash equivalents, and short-term investments totaled $38 million, about unchanged from the prior quarter. Note that the NimbleLink transaction closed after Q4. On that date, January 7, 2021, we had about $23 million in cash, cash equivalents, and short-term investments. We did not repurchase any shares during the quarter. Now I'd like to provide a preliminary outlook for the first quarter of 2021. In Q1, We expect revenue to be in the range of $16.5 million and $17.5 million, or $17 million at the midpoint of the range, higher sequentially by about $4.2 million from last quarter at a sequential growth rate of about 33%. We expect Nimbolink product revenue to contribute about $2.7 million to our first quarter top line revenue. Today, NimbleLink demand exceeds $3 million in Q1. However, supply constraints at the module supplier level caused by shortages from chip suppliers will add some risk to timely shipments during the quarter. Regarding AirGain Connect, since the launch of HPE on the AT&T network just over three weeks ago, We have seen a significant number of requests for demo units and expect AirGain Connect to contribute about $1 million in revenue for the first quarter. Overall, we expect all of our three targeted markets, consumer, enterprise, and automotive, to grow sequentially in Q1. We expect non-GAAP gross margin in the first quarter to be in the range of 42.5% to 43.5%, lower sequentially versus Q4, primarily due to the addition of lower gross margin Nimblink product revenue. Nimblink has already executed a plan to improve those gross margins beginning Q2 2021, following a product transition by Nimblink's current contract manufacturers to Vietnam. Excluded from non-GAAP gross margin is approximately $260,000 of purchased intangible asset amortization, including inventory step-up charges based on a preliminary valuation analysis. We expect Q1 non-GAAP operating expense will be about $7 million plus or minus $150,000. The expected sequential increase in operating expense is primarily due to the addition of just under $1 million of NIMBA Link operating expense. We also expect to see some operating expense increases in the remainder of the business, mostly related to an accrual reset associated with the annual management bonus and sales commissions for 2021. Excluded from our non-GAAP operating expense estimate was $880,000 in stock-based compensation expense and $700,000 in amortization of intangible assets based on our preliminary valuation analysis. We also excluded from our expected Q1 non-GAAP operating expense approximately $180,000 in NimbleLink transaction-related expenses. At the midpoint of guidance, adjusted EBITDA in Q1 would be about $500,000. At the midpoint of guidance, we expect Q1 non-GAAP earnings per share to be about 3 cents, and on a GAAP basis, we expect a loss per share of 18 cents. Although we are not providing specific annual financial guidance, I would like to provide some color around how we expect revenue to play out in 2021. We expect consumer market revenue to remain a core foundational revenue base for Airegame with some small possible growth year over year as this is heavily dependent on a success of our top service provider and customers to deliver next generation gateway and client devices. We expect our enterprise market revenue to grow materially year over year with the addition of NimbleLink revenue and additional growth from penetration into new submarkets with 5G sub-6 gigahertz and Wi-Fi products, primarily in the traditional enterprise Wi-Fi market. We expect the most significant growth year-over-year to come from our automotive market revenue, primarily from our newly launched AirGain Connect platform's first product, but also, to a lesser extent, growth from our existing aftermarket fleet markets. In terms of risks to our growth this year, until we are through the peak of the COVID pandemic, we expect to continue to see some pressure on revenue on automotive fleet, as well as on enterprise products that are designed for large venues like stadiums and arenas. Additionally, in our consumer market, although we are seeing solid demand for service provider-based gateway and access point routers, we expect cord cutting to continue, which will continue to put pressure on our set-top box and client product revenue. However, with multiple new consumer products ramping over the past few quarters, we expect that will alleviate at least some of that potential revenue pressure. Lastly, supply shortages out of chip suppliers in the first half of this year will put some minor pressure on growth expected out of our enterprise IoT revenue. Before moving on, I'd like to provide some color around Nimblink's financials, primarily around historical revenue. The Skywire modem product revenue stream has historically provided the vast majority of revenue, as it was Nimblink's first major product introduced. Custom products revenue has historically been the second largest contributor to Nimblink's top line revenue. Nimblink's asset tracker product revenue has been the third largest revenue stream. It didn't begin generating revenue in earnest until Q1 of last year, 2020, and didn't begin to contribute materially until the second half of last year. Note that with each asset tracker sold, NimbleLink creates recurring revenue from its proprietary N-Link device enablement software and has the opportunity to sell cellular data plan connectivity with it. That is a recurring revenue stream that averages two years and is likely to be extended additional years. The recurring revenue stream ramped with the sales of asset tracking last year. In summary, we expect to see growth in 2021 from all of these revenue streams as they are mostly in the early stages of growth with exposure to an abundance of opportunity. With regards to gross margins, Nimblink has been historically focused on revenue growth, as most earlier stage companies do. That leaves opportunities for gross margin improvement. Nimblink finished 2020 at about 33% gross margins. Prior to the close of our acquisition, Nimblink had already executed on a plan to improve margins by transitioning products made in the US and China to a contract manufacturer in Vietnam. That will be completed this quarter with the benefit expected to be seen in Q2 of this year. It won't get the NimbleLink products to our long-term corporate gross margin range, but it will improve them materially. We have already begun to put together a strategy to further improve gross margins through opportunities associated with air game scale. All in all, we are very excited about the long-term prospects for the Niblink assets and capabilities and its potential to help Airgain achieve its long-term goals. In terms of additional inorganic growth and technology expansion potential, although our primary focus is to successfully integrate Niblink into Airgain, we will continue to evaluate opportunities that either expedite our time to market for new innovative products or that help us gain the benefits of scale in our markets, especially in our growth markets, enterprise and automotive. Summing up where we are today, we expect 2021 to be an exciting year for AirGain as we have multiple catalysts for growth across all three of our primary target markets. Our strong balance sheet with more than $23 million in cash following the purchase of NimbleLink on January 7th and no debt provide a durable and sustainable foundation to execute our growth plan, and capitalize on the abundant opportunities in front of us. Now, I'll turn it back over to Jacob. Jacob?
spk02: Thanks, Dave. We continue to experience robust demand for our products, and we are very excited about the prospects for us to grow in 2021, even in this very challenging environment. With the formal release into general availability of our first AirGain Connect product, the expected revenue contribution and growth from our Nendolink products, the length of products into our traditional global Wi-Fi enterprise customers, and the refresh of our outdoor aftermarket products to 5G, we believe we have positioned AirGain for a year of growth in 2021. with new and innovative products being developed for our targeted enterprise submarkets. Multiple new products out of our AirGain Connect platform. We believe we are positioned for long-term profitable growth. Additionally, we are very appreciative of all the hard work our employees have put into our company during an unprecedented and difficult environment. We are also really appreciative of our supportive customers, suppliers, and shareholders. As we announced in our earnings co-release today, our Senior Vice President of Engineering, Kevin Thiel, will be retiring from AireGain effective May 7, 2021. Kevin made many valuable contributions to our organization since he joined the company in 2017 through AirGames acquisitions of Antenna Plus, where he was founder and CEO. Under Kevin's leadership, our engineering organization is well-structured with strong management at each of our R&D centers across the globe to continue the engineering development and research efforts. Over the next two and half months, Kevin will assist in the search process to identify a successor to execute our technology roadmap and further extend AirGain's technological leadership. On behalf of the entire organization, I wish Kevin the utmost happiness and health as he enjoys retirement with his wife, four adult children, and three grandchildren, two of which were just born in the last eight months. In addition, earlier today, we announced the promotions of Moray Sabahi, to the positions of Senior Vice President, Global Product and Marketing. Since joining AirGain in 2013, Mauler has held a number of senior management positions, including General Manager of EMEA and most recently as Vice President of Corporate Strategy, where he spearheaded our recent acquisitions of NimbleLinks. Prior to joining Airgame, Molret held various executive management roles in leading semiconductor companies like Texas Instruments, Applied Micro, and Boacom. While at Boacom, Molret was an integral part of a senior marketing team responsible for a $250 million business within the company. With Molret's strong mix of semiconductor service provider sales, and marketing experience. We look forward to leveraging his skill set to accelerate adoptions of our product portfolio, including Egg & Connect, the NimbleLink portfolio, and 5G millimeter wave. And with that, we are ready to open the call for your questions. Operator, please provide the appropriate instructions.
spk06: Thank you. We will now take questions from AirGames publishing sales side analyst. If you do have a question, please press star one for your question. Our first question comes from the line of Carl Ackerman from Catlin.
spk07: Yes, good afternoon, gentlemen. Two questions, if I may. Jacob, to me, your first quarter outlook implies the core business is growing rapidly. Above seasonality, after backing out the NimbleLink and FirstNet acquisitions, I think many of us are aware that there are supply shortages and customers are seeking continuity of supply. But as we think about several of the product launches you spoke about in your prepared remarks, how does channel inventory play into your outlook for the first quarter? Do you believe that you are shipping in line with demand? And I have a follow-up.
spk02: Okay. Hey. Good afternoon, Carl. Thanks for joining the call today. Good questions, by the way. So, you know, we have channel partners, and they do have some stocking inventory. And, you know, I think that some of the supply chain constraints on our traditional consumer business looks like it's minimal. There are some, you know, supply constraints around the, you know, the nimbling products. which we built, it's really short-term, and we'll be making the proper adjustment to make sure that it's just going to be really short-term and we'll be able to have it under control in second quarter of this year.
spk07: Got it. I guess for Dave, then, you know, we've heard several suppliers across the supply chain have raised prices given the shortages across the semiconductor supply chain. Now that you have pivoted toward an integrated device company, what's your strategy regarding the tradeoff between pricing and volume commitments from your customers? Thank you.
spk01: Yeah, that's a complex question because it depends on the market that we're addressing and the type of product that we're addressing, and that's pretty diverse as it stands today. That being said, I think we have pretty good control about where those ASPs are going to go, what kind of margins we're getting on those. I will say, though, that historically on the enterprise side as well as the automotive side, gross margins have been tighter in those, or we've seen more pressure relative to our historical gross margins, and those are our growth markets. But I think we're being pretty picky about how we look at projects from an ROI perspective to make sure that we maximize value in the field.
spk06: And again, as a reminder, you can press star 1 on your top one keypad for any questions. Again, that's star 1 for any questions. We do have more questions on the line. The next one comes from the line of Carlin Lynch from B. Riley.
spk08: Hey, guys, and congrats on the good quarter. Quick question on some of the supply constraints. I'm curious, do you guys feel confident that NimbleLink can still hit that $13 million in targeted revenue in calendar 21, given everything that's going on in the supply chain? And I have two follow-ups.
spk01: Yeah, first of all, we haven't guided revenue for 2021 on the NimbleLink side of the business. That being said, you know, they did over $12 million last year, so we expect growth to be pretty good on the NimbleLink business, especially since a lot of those revenue streams that I talked about in my comments are kind of in their nascent stages. So we expect some decent growth out of the entire NimbleLink business across all of its revenue streams.
spk08: Got it. Okay. And then with regards to gross margin in Q2, assuming that the business continues to grow, particularly in the auto, do we expect – could you provide some more color around what the corporate gross margins will look like in Q2, assuming that we do get the material step up in nimble link gross margins? Does that mean that nimble link gross margins can go towards – you know, closer to 40%? Or is that more of a do we need some more volume before we get to a 40% gross margin?
spk01: Yeah, the normally gross margin I talked about last year was 33% for the year. And in my commentary, I said that we can't reach where we are with our existing historical air game business, but we can come close, which implies we can get to eventually to something closer to 40% like you're talking about. That can take a couple quarters until we have that opportunity. I think the other thing that's important to note here is that the gross margins vary by revenue stream and the revenue streams that I mentioned earlier. So for instance, if the business really takes off, of course that would put more pressure even on our corporate gross margins, even if we have improvements to the overall NimbleLink gross margin. So I just want to be clear about that because it's important. The abundance of opportunities for the industrial IoT market, and especially NimbleLink, are pretty good. So we're pretty excited about that. So if we go really well, you're going to see gross margins, more gross margin pressure. But I think that's a good thing. We'll see how it plays out. In terms of moving into Q2, we do expect to see improvement on the mingling side that's not immaterial. From the gross margin perspective, again, it's going to be dependent on mix and assuming the chip supply issue starts to resolve itself a little bit, which we do expect at some point to see that to happen. then the higher revenue would obviously put a little more pressure on corporate gross margin. That being said, again, from an overall viewpoint, we haven't guided Q2, and we won't guide. I don't think you're going to see our corporate gross margins vary dramatically from what we guided to in Q1.
spk08: Got it. Okay. And then just one more from me and then a really quick clarification. With regards to the – actually, within – just want to make sure that the AirGain Connect, you guys had said that you guys expected roughly $500,000 in AirGain Connect revenue in calendar fourth quarter. Did that materialize as expected? Yes. OK. And I think that's it for me from right now. I'll hop back in the queue if anything comes up. All right. Thanks, guys.
spk01: Thanks a lot.
spk06: And once again, as a reminder, if you do have a question, you can press star 1 on your telephone keypad. Again, that's star 1 for any further questions. We do have more questions on the line. Next question comes from Alex from William Byer.
spk03: Hey, it's actually Jake on for Alex. I know it's still early days, but we'd just love to get some color on how NimbleLink has been factoring in to some of your enterprise discussions and how quickly we can expect it to be fully adjusted in the new design lens.
spk01: When I start, then, Jacob, maybe you can follow up. In terms of the second part of your question, I think was how we integrate the air gain capability into the Nimblink products from an antenna perspective or vice versa. And that's going to take some time. That being said, in terms of integration on synergy revenue, selling Nimblink's products not only within North America where we already have an established sales force, but more importantly where Nimblink really didn't sell before, In APAC in Europe, we're seeing lots of opportunities pop up there, and a pretty excited Air Games sales force also because those products are great products.
spk02: Yeah, I think that's great.
spk00: Thank you.
spk02: Yeah, I will also add the fact that not only are we able to sell the existing NimbleLink product, we'll now also be able to bundle some of the, let's say, the Skywire product with the AirGain antenna solution and not offer customers a, you know, a more complete solution instead of before they were selling just the module. And the customers go and take off-the-shelf antenna. Now with the merger, now we're able to offer customers a complete solution that's prudent and that's fully tested with high performance.
spk03: That's great. Thanks for the call. That's it from me.
spk06: Our next question comes from Ross capital.
spk05: Hey, good afternoon. Thanks for taking my questions. Um, nice quarter, nice outlook. I do apologize. I got on the call very late. So, um, I did want to hit real quickly. Any, any of the high level commentary related to air game connect in terms of the early go to market or mega range product in terms of demand that you're seeing. And if you put any numbers around it, both for the first quarter and or for 2021.
spk02: Okay. Hey, good to have you here, Scott. So I just want to make sure I answer your questions correctly. You're looking for how do we roll out the AirGain Connect in the first quarter and the latter part of the year. Am I correct?
spk05: Yeah, and kind of the visibility demand. I don't know if you put any numbers or color around that as well.
spk02: Yeah, certainly. I think they've already shared some color around the perspective of AirGain Connect. What I would like to say is that, you know, January the 26th, you know, FirstNet, AT&T formally launched it, and we're really seeing a lot of excitement around the launch. As you can see some of the news out there, FirstNet actually have offered a 300 promo, among other things, so really incentivizing people to sign up for the service. And we already have not paints, but hundreds of leads in our pipeline already with customers eager to get a hold of our units for demo with trials. So we do deal really strongly about the growth potentials of the AirGain Connect product for this year.
spk05: Okay, very good. And, Jacob, if I could, you know, on the 5G front, I think in the last call you were talking about some opportunities later in 2021 and 2022 as a related product. to 5G fixed wireless access and some other opportunities on that front. I was wondering if you could give any updates on that front in terms of design activity, level of engagement, and interest that you're seeing for those types of products.
spk02: Yeah, really good questions. I'll talk first and then maybe also have more to chime in as well in some color around 5G millimeter wave. So 5G in general, I think that this year we are going to be able to have products. It's already finished on the 5G sub-6 gigahertz side, especially with the antenna plus products. And then we expect those turning into revenue for the second half of the year. And certainly we're also working on 5G millimeter wave development. As a matter of fact, we do anticipate to incorporate that as our next generation egg and connect product.
spk04: So, yes, just to add a little bit of color on that, Scott. So, the first foray that we will have in that particular product category in the millimeter wave, we'll see if there's something in the enterprise space. And as the market starts to mature and becomes more and more pronounced, the EOC has to start to roll out those products into our traditional consumer space. So something that we're really excited about. It's a trajectory that we expect to give us a lot of growth.
spk05: That's very good. Thank you. And, and I apologize for being redundant again, but as it relates to NimbleLink and component availability, um, you know, certainly diversifies the product portfolio, really compliments what you guys are doing. Um, are, are you seeing any near-term issues on that front related to component availability or pricing? I'm sure you've already answered this, but, but thanks for indulging me.
spk01: No problem, Scott. Yeah, we, uh, we said in our, our, uh, written comments earlier in the call, that we expected nimble link revenue in Q1 to be about $2.7 million. That's actually lower than the actual demand that we're seeing. We're seeing over $3 million in revenue in terms of demand, but chip supply is constrained, and therefore the module guys that we buy from can't get us enough supply for the quarter. So the good news is that the demand is there, and actually the demand is really solid. That means, obviously, that it's going to put some pressure on the overall revenue. I think $2.7 million is a conservative number that we've got for Target.
spk02: Thanks so much, guys. Sorry, it's very short-term, and we've really got a solution for it.
spk06: Thanks, Jacob. And once again, if you do have a question, you can press star 1 on your telephone keypad for any further questions. Again, star 1 for any further questions. We do have a follow-up question from Carla Lynch from B. Reilly.
spk08: Hey, guys, really quick, just wanted to follow up on that supply point. Obviously, the $300,000 delta in Q1. As you work with your suppliers, how confident are you that, you know, assuming that that does kind of materialize in Q1, that that could come back in Q2? And what steps are you guys taking to ensure supply through the year as, you know, industry tightness kind of continues?
spk01: Yeah, we're really adjusting that. We started adjusting that very early on. It's really about getting in line and getting in the right order in line from a supply perspective. But in terms of the demand that we're seeing versus the supply that we've been told that we can get, we feel pretty good going into Q2 even. You know, if we see a low pressure in Q2, we have much more confidence that we're going to see Q3 availability. Again, that can depend on the demand, and the demand has been pretty robust on the MimbleLink side of the business. And just to comment on the rest of the business, the non-MimbleLink, the Airdame portion of the business, we've actually checked with end customers, our direct customers, across our supply chains also to make sure that we've got, you know, the right supply to meet demand. And we think in that part of the business that we're doing pretty well.
spk08: Got it. All right. Thanks, guys.
spk06: And there are no other questions in the queue. So at this time, this concludes our question and answer session. If your question was not taken, you may contact Air Games Investor Relations at 8 A-I-R-G at gatewayir.com. I would now like to turn the call over back to Mr. Sun for his closing remarks.
spk02: Thank you for joining us on today's call. We look forward to updating you on our next call. Talk to you later.
spk06: Thank you for joining us today for Air Games fourth quarter 2021 earnings call. You may now
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