Airgain, Inc.

Good afternoon. Welcome to AirGain's second quarter 2026 conference call. My name is Jasmina and I will be your operator for today's call. Joining us today on AirGain's president and CEO, Jacob Suen and CFO, Michael Elbaz. As a reminder, this call will be recorded. and made available for replay via a link found in the investor relations of Airgain's website at investors.airgain.com. Following management's prepared remarks, the call will be open for questions from Airgain's covering analysts. I caution listeners that during this call, Airgain management will be making forward-looking statements about the as well as Ergain'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 Ergain's SEC filings. This conference call contains time sensitive information that is accurate only as of the date of this live broadcast, August 5th, 2026. 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 will include a discussion of non-GAAP financial measures. Please see today's earnings release for further details, including a reconciliation of GAAP to non-GAAP results. Now, I'd like to turn the call over to Ergame's CEO, Jacob Suen.

Good afternoon, everyone, and thank you for joining us. The second quarter marked another meaningful step forward for Airgain. Revenue increased 19% sequentially to $13.7 million. We achieved positive adjusted EBITDA, and we advanced important customer programs across the business. Enterprise and automotive continue their revenue growth trajectories. while consumer sales remain relatively stable, supported by Wi-Fi 7 demand and strong tier one relationships. We enter the second half with a stronger foundation than we had at the beginning of the year. Customer engagement is deeper. Our pipeline is more mature and more programs are progressing from evaluation into trials and deployments. We are encouraged by this progress, and we are increasingly confident in the direction of the business. Our priorities are clear. Build on the momentum in our core businesses, convert the AirGainConnect pipeline into revenue, advance Lighthouse toward commercialization, and increase the operating leverage of our business model. Let me start with AirGain Connect. During the second quarter, we continue to expand our AirGain Connect portfolio through our work with FirstNet, built with AT&T. We added MegaFive 2 and MegaGo 2, both FirstNet trusted solutions that use high-power technology designed for demanding coverage environments. together with AC Fleet and Go-Kit Pro. Aging Connect now provides multiple connectivity solutions for vehicle, fixed, portable, and rapid response applications. The portfolio serves first responders, utilities, transportation, energy, and other critical field operations. Through FirstNet, AT&T offers AirGain's HPE vehicle solution for public safety customers. AirGain also retains the ability to offer its HPE technology to other carrier networks globally. This broader portfolio gives customers greater deployment flexibility, simplifies installation, and improves operational readiness. It also gives AirGain more entry points with customers and more ways to support them as their connectivity needs expand. The AirGain Connect pipeline continued to grow since our last call and now includes approximately 60 tier one and tier two opportunities. Our focus is increasingly on pipeline conversion and more than half of the pipeline is now in trial or post trial stages, up from approximately one third since our last call. The mix remains balanced with approximately 55% of opportunities in first responder markets and 45% in utilities and other commercial fleet applications. In Q2, we secure five tier two design wins across AirGainConnect. Four are with first responder organizations and one is with a utility company. One of these wins is with a large countywide public safety customer covering fire, ambulance, and police fleets. The potential deployment and more than 1,000 vehicles. But units are expected to be added in phases of vehicles inter-service. This illustrates how these programs can begin modestly and grow into meaningful long-term opportunities. We are also in the final phase of the sales cycle for a Tier 1 first responder opportunity. which we are targeting to close by the end of the year. Work remains before a final award, including customer-specific certification requirements. We're making the necessary investments because the opportunity demonstrates the scale of the programs we are pursuing, and the certification can be leveraged to other lead opportunities as well. Carrier relationships are an important part of our go-to-market strategy. As announced in June, we expand our work with FirstNet built with AT&T across public safety, utilities, and other critical field operations. Under this model, carrier sales teams help identify and advance customer opportunities. while AirGain supports product demonstrations, trials, integration, and customization. This extends our commercial reach and helps move qualified opportunities toward deployment. We have also developed a plug-and-play AirGain Connect configuration for the AT&T channel with the ESAM and required cabling pre-installed. The goal is to simplify evaluation and deployment for utilities, sanitation fleets, and other non-first responder customers. We are working to extend this carrier-enabled model to additional markets. We continue to strengthen our relationship with carriers and the FirstNet Authority with the support of well-respected and industrial veterans. Most recently, Jim Begale, former president of AT&T FirstNet and a member of the prestigious Wireless Hall of Fame Class of 2026, has joined AirGain as a strategic advisor. Jim will help us deepen relationships with public safety, the FirstNet Authority, and large fleet OEMs. We believe the pipeline for AirGain Connect has reached a stable level, and our emphasis is now on execution, advancing trials, supporting post-trial requirements, and helping customers move into phased deployments. We believe this is the right approach to build a durable AirGain Connect business. Turning to Lighthouse, We continue to prioritize the U.S. market opportunity given the ongoing geopolitical dynamics in the Middle East. We are deepening our engagement with domestic mobile network operators, service providers, enterprises, and communities. We now have two scheduled end-customer trials in the U.S. that collectively support coverage across all three major carriers. This represents meaningful progress from our prior US testing, which was conducted primarily with a network provider. The first trial is with a large logistics company seeking to improve coverage across its operating environment. Our current production-ready configuration supports the mid-band spectrum used by AT&T and Verizon. The second trial is with a residential community seeking to address coverage gaps commonly experienced by large communities and HOAs. Our new configuration extends Lighthouse to the spectrum used by T-Mobile. and we expect pre-production samples during Q3. In Q3, we also secure an international customers trial for our integrated 4G and 5G combo solution. Initial samples are expected this quarter as well. These trials address a common problem, inconsistent cellular coverage across large operating environments and communities. Traditional solutions can be expensive, disruptive, and slow to deploy. Lighthouse is designed to provide a faster and more cost-effective alternative while giving mobile network operators control over network performance. We also continue to advance our engagement with a tier one US mobile network operator previously mentioned. We are now working through the final certification and approval process for its enterprise offering. And the operator has identified several customers for potential trials. Our commercial approach combines a top-down and bottom-up strategy. We work with the MNOs to obtain network approval and Rich Enterprise Accounts. At the same time, we engage directly with end customers, including enterprises and communities, to validate the need and create demand. Service providers and system integrators remain important deployment partners. While we are making very good strides with Lighthouse, we view Lighthouse primarily as a 2027 revenue opportunity. Our near-term objective is to complete trials, establish reference deployments, and demonstrate a repeatable commercial model. Any revenue before then would be incremental to that plan. Now, turning to our core markets, Enterprise IoT was the main driver of our sequential growth in second quarter, and we expect it to remain an important growth driver in Q3. Demand from our longstanding end customers continues to increase, primarily in the energy monitoring applications, and we see renewed activity in the EV charging market. Shipments under the previously announced $4 million purchase order accelerated and are now expected to be completed by the end of this quarter. In parallel, we continue to expand opportunities in emerging applications such as robotics, thrones, and data centers. Cocoa Robotics is preparing to launch its next generation autonomous delivery vehicles. and we expect the program to begin ramping up production shipments this quarter. Initial production shipments for a drone application are also expected to begin this quarter. The near-term revenue contribution is modest, but the program expands our presence in autonomous and mission critical applications. Finally, We recently secured a design win for remote energy monitoring in data centers, with revenue expected to begin in early 2027. This win extends the Skywire platform into the growing data center connectivity market and creates a reference point for similar opportunities. IoT order patterns can be uneven. So we are not assuming the current growth rate will continue every quarter. Still, the recovery in established programs and the breadth of newer applications give us greater confidence in the long-term opportunity.

The near-term picture in consumer is more mixed.