Good afternoon. Welcome to Airgain's First Quarter 2020 earnings conference call. My name is Doug, and I'll be your coordinator for today's call. Joining us for today's call are 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 section of Airgain's website at www.airgain.com. [Operator Instructions]. 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 filings. This conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, May 11, 2023. Airgain 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. Please see today's earnings release for future 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, operator. Welcome, everyone, and thank you for joining us today. For today's call, I'll first cover our operational highlights and achievements for Q1. Then I'll hand it over to Michael to walk you through our financial performance for the first quarter. Afterwards, I will provide an update on our strategic product and marketing initiatives for 2023 before opening the call for questions. As you saw from our earnings release, the first quarter sales came in at $16.4 million, at the midpoint of our guidance range. As we communicated last quarter, a combination of demand softness in technology transitions in the consumer market contributed to a slight year-over-year first quarter decline. However, we are optimistic that new product introductions and design wins will result in sequential quarterly sales increases in the second half of 2023. We continue to see solid performance from our Enterprise market, which represented just over 50% of our total sales for the quarter. We also see growth from our key verticals such as rail, video surveillance, fleet and industrial IoT. Our Enterprise market represents a mix of components and systems that include our embedded modems, asset trackers, enterprise antenna design and custom products. With this increased revenue contribution, the Enterprise business continues showing resiliency against volatile market conditions. This is a result of the increased demand for connectivity to improve productivity for end customers, combined with a growing number of applications in this space. A prime example of this is the recent customer design win, we announced in Q1 with a leading provider of railcars and services to the nation's top railways. Airgain's cellular-based asset trackers and embedded modems, combined with our NLink software platform, offer a unique solution that solves key programs that have plagued this industry for years. We started shipments in Q1,…

Thank you, Jacob. Before diving into the numbers, please note that my review of our financial results and guidance refers to non-GAAP figures. Information about the non-GAAP financial measures, including GAAP to non-GAAP reconciliations are found in our earnings release. Now let's turn to this quarter's results. As Jacob mentioned, Q1 sales were $16.4 million at the midpoint of our guidance range of $15.7 million to $17.3 million. Our sales declined 6% year-over-year primarily due to demand softness in our consumer market. Enterprise sales were $8.4 million, which declined sequentially by $1.6 million on lower shipments of our WiFi access and industrial IoT products. Automotive sales were $2.9 million, reflecting a sequential decrease of $0.6 million. Consumer sales totaled $5.1 million, reflecting a sequential decrease of $1.3 million. Q1 gross margin was 39.1%, 860 basis points higher sequentially as we recorded a onetime inventory charge in the prior quarter. We also experienced higher Enterprise gross margins along with operational efficiencies. Q1 operating expenses totaled $7.3 million, higher than our guidance of approximately $7 million. The variance was due to higher-than-expected marketing communication expenses, including trade shows and professional services in the first quarter. We completed a workforce reduction at the end of the quarter, resulting in an approximately $0.5 million decrease in quarterly expenses. This action resulted in a $0.2 million of onetime severance and exit costs, which is excluded from our non-GAAP results. This decrease will lower our EBITDA breakeven point while allowing for increased investments for our initiatives in the second half of the year. In addition, we remain focused on streamlining our operational processes to reduce our operating expenses. As a result, our Q1 adjusted EBITDA was negative $0.7 million, and non-GAAP EPS was negative at $0.08. Our cash balance as of March 31 was in line with our expectations at $9.8 million, $2 million lower sequentially primarily due to annual variable compensation payments. Our accounts receivable balance was $8.1 million, $0.6 million lower sequentially. Net inventory was $4.5 million or $3 million higher sequentially. Now moving to our outlook for the second quarter ending June 30, 2023. We expect sales to be in the range of $15.7 million and $17.3 million or $16.5 million at the midpoint of the range. We expect gross margin for the second quarter to be in the range of 37.5% to 40.5%. We project our expenses to be approximately $6.4 million. Adjusted EBITDA is expected to be $0.2 million at the midpoint of our guidance range. Non-GAAP EPS is expected to be breakeven at the midpoint of our guidance range. Now I would like to turn the call over to Jacob, who will walk us through our product and marketing initiatives. Jacob?

Thanks, Michael. Q1 was an exciting quarter for us in terms of product announcements. Our advanced development team under the leadership of our Chief Technology Officer, Dr. Ali Sadri has spent the last 2 years developing new product lines that will help shape the future of Airgain. We hosted an Analyst and Investor Day on March 15, where we discussed the impact of these new technologies on the market and our business trajectory. The feedback from the market and the investment community has been positive. We have made significant progress on these initiatives since the event. And I want to mention some of those milestones. At Airgain, we believe the advancement of 5G technologies presents a specific set of challenges that we are uniquely positioned to solve. With our ongoing efforts to simplify wireless, we focus on the entire customer experience from customer to operator to identify unique opportunities to improve. We have our advanced development team with building solutions to these challenges. The 5G experience begins in the home or office with the user. We believe fixed wireless access or FWA is a killer app for 5G as it allows wireless technologies to compete with cable and wire solutions for the broadband connection into the home. In addition to our embedded and external antenna design to maximize the signal for FWA devices, we announced a reference design for an outdoor directional FWA device with an easy installation kit that will break the trade-off between performance and ease of installation. This product appeals not only to mobile network operators, but has strong interest from our system integrated partners for Enterprise environments. We have completed validation and are moving into the product development phase where we are finalizing our testing and verification. The next challenge we set off to tackle in…

[Operator Instructions]. Our first question comes from the line of Scott Searle with ROTH Capital Partners. Mr. Searle, you're cutting in and out.

Update on the time line on when we expect that to contribute. And in terms of introduction of the product and the ramp of that product from a revenue standpoint? And also the latest uptake on NimbeLink, both from a supply chain perspective and a demand perspective. This has been one of the areas where I think there's been a lot of end market demand, we'll be working through some channel inventory, what the latest thoughts were on that front? And then I had a couple of follow-ups.

Scott, Jacob here. We missed the first part of your questions. We understand the second part of your question is regarding to NimbeLink product, inventory, which we will address. What was the first part of your questions regarding new product introduction?

Yes. My apologies. On the auto front, AirgainConnect 2.0 as you're expanding beyond AT&T and Band 14, the time line of when that would be introduced and when we start to see that ramping up from a revenue standpoint?

Okay. So next generation AirgainConnect, yes. Quick questions, and I'll address the first one, and then I'll have Michael have chime in on the NimbeLink side. So regarding next-generation AirgainConnect, we have not formally made the announcement. Certainly, we have been informing the investment community. It's something that we've been working on, I would say, for almost 1.5 years now. We actually learned quite a bit from the initial AirgainConnect HPUE. And I think that we feel really good about the prospect, and we already got great feedback from the customers. As far as when is it going to be available is something that we are still working on and hope to be able to update EU in the near future. So at this point, the product is under development, and it's got a lot of great features that customers have been wanting. And we really feel good about the prospect. And again, hope to update you shortly.

Scott, this is Michael. On the NimbeLink question. The NimbeLink product, as you know, is part of our Enterprise markets. The majority of our Enterprise market, actually, are industrial IoT products. The good news here is that the supply chain has really eased significantly. We have been plagued in FY '21 and FY '22 through all 8 quarters with large PPVs or purchase price variances, basically higher material costs, which we were able to pass-through to our customers. And also the lead time cycle, some of those parts were months and months of overall lead time. We do see a few components that have some lead time issues. However, the PPVs have disappeared entirely. And in Q4 of 2022 with the shipments that we had on the Enterprise devices, we did release quite a bit of that PPVs. That was one of the reasons why the margin was lower than our expectation in Q4. So we are done with that. Our balance sheet is pretty clean on that. And the resumption of the shipments and the supply chain have come back.

Perfect. And lastly, if I could, you gave some updates on the fixed wireless access solution. It sounds like you're going from reference design and moving into the product development. When would be the earliest of when we could expect field trials and revenue from that? I think you've talked about the '24 time line, if that has changed at all? And then secondly, just bringing all the products together, it sounds like there's optimism going into the second half of this year. I wonder if you could address each of the main product categories in terms of the expectation for growth into the second half, consumer WiFi, auto. If we start to see a pick up there? And it certainly sounds like NimbeLink is starting to improve as well on the enterprise front.

Yes. Great questions, Scott. So I'll first talk about the prospect for second half. Again, we don't provide guidance outside of the next quarter, although I think that it's important to let you know what we're seeing the second half is going to play out. And then I can talk a little bit about the FWA as well and about the prospect. So regarding the second half, as indicated, we do think that consumer -- the transition from Wi-Fi 6 to Wi-Fi 7, we do expect that to really start happening at the latter part of this year. And that's one of the reasons why -- because they want to clean up the inventory with the transition, that's why we're seeing some of the short-term headwinds, so to speak, on the consumer side. Although we are pleased to see that, the supply chain issue that plagued in the last 2 years or so is really stopped to come to its finishing line. So we're really happy to see that. As far as the Enterprise, we do see that the -- again, some of the inventory issue on the channel side is going to resolve, I would say, by the first half. So I expect the second half to really pick up. And we're expecting both on the IoT side as well as our WiFi AP business is going to pick up in the second half. So that's an area where we're really seeing a lot of momentum. And then on the automotive, specifically, we're seeing a growing demand on the aftermarket antenna products. And we expect that to continue with our new product introduction as well as the flexibility we are providing to our customers. So we expect that to also start to really improve in the second half of this year. Now regarding fixed wireless access design, we made the announcement during we're actually able to work with our partners such as Errigal and provide an end-to-end solution. And eventually, that's what we really foresee Airgain to be, to give them not only -- provide customers with bits and pieces, but a complete end-to-end solution. So with the fixed wireless access, we can target towards major network operators, MNOs, such as T-Mobile, AT&T, Verizons, where they're really having a need to address the coverage issue. We are also able to target that prospect for Enterprise infastructure of customers for even a campus environment. So we already got a lot of interest, and we're in the process of working with them on trials. Again, I'd rather be conservative in not saying we're going to build a ship -- March this year, but we do see a really good traction and position the company well for next year. Does that help, Scott?

Great. Perfect.

[Operator Instructions]. Our next question comes from the line of with B. Riley Securities.

This is calling in for Craig Ellis. To start, I was hoping you could elaborate on your Lighthouse product and what you expect for timing to sales there?

Ethan, yes. On the product Lighthouse is really -- our really innovative 5G smart repeaters. And we have the network smart repeater side as well as the smart soho repeater. And as I indicated in the call that we are already doing a trial. We already complete the lab trial, we're into live field trial with one of the major mobile network operators in the U.S. We also received quite a bit of interest internationally as well. We actually demoed this product or marketing this product during Barcelona for MWC, and we already received interest from some of the network operators in Europe, in Middle East as well as in Asia as well. Now the product is still -- it's not a finished product. It's still a product that's more for demo. So we intend to work with our customers closely to make sure we're creating the features, that means what they need. But several key things with this product that we already have, one is what we call smart. As you know, Airgain was founded based on our smart antenna technology, and we're able to adapt that into this product. So that's a major differentiation to Airgain, smart repeater. The other thing is what we call echo cancellation, and that's another unique feature that we have. Last but not least, we're also able to do channel aggregation. And this is another feature that many network operators really like to have. And we will be -- we are the first one in the market with this particular feature. And we have many other things. But again, some of the nice differentiation we've created with our product, we really feel good about. And we intend this product to not be able to deploy this year. I would say next year will be what we are aiming for.

Got it. And then between consumer, auto and Enterprise, I was wondering if you are targeting a certain mix there and the implications for gross margin going forward, if that's the case?

Sure Ethan, this is Michael. So on the overall mix in Q1, we had a slightly over 50% -- 51% to be exact on the Enterprise sales market. And this has been actually a mix that has been growing steadily over the past couple of years. This was definitely deliberate in terms of diversifying our portfolio. It is the -- certainly the market that is very resilient, especially to the current conditions -- with economic conditions. And at the expense of the automotive and also the consumer mix, consumer happens to be a higher-margin market. So there is an impact on the overall gross margin. But so far, we've been able to offset that with operational efficiencies and really focusing on gross margin improvement initiatives.

There are no further questions. [Operator Instructions]. There are no further questions in the queue at this time. I'd like to hand it back to Jacob Suen for closing remarks.

Thank you for joining us on today's call. We look forward to updating you on our next call. Operator?

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.