Good afternoon. Welcome to Airgain's Fourth Quarter and Full Year 2024 Conference Call. My name is Julian, and I'll be your operator for today's call. Joining us today 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 investors.argain.com. Following management's prepared remarks, the call will be open for questions from Airgain's covering analysts. I caution listeners that during the call, Airgain's management will be making forward-looking statements about future events as well as 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, February 27, 2025. 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 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 Airgain's CEO, Jacob Suen.

Good afternoon, and thank you for joining us today. In the fourth quarter, we reached a key milestone with the successful commercial deployment of Lighthouse, marking significant progress toward our strategic objectives. We closed 2024 with strong across our AirgainConnect Fleet and Lighthouse smart network repeater platform, positioning Airgain for its next phase of growth. 2025 is the year of execution and expansion. We remain laser focused on scaling deployments, accelerating customer adoption and expanding into high-value markets. Momentum is already building. Our strategic partnership with Omantel demonstrates Lighthouse ability to deliver high performance network solutions with significantly reduced deployment times and a lower total cost of ownership. 2024 was a pivotal year for Airgain, marking our transformation from a component supplier to high-value wireless system solutions provider. This shift has fundamentally redefined our business. We have moved from sub-$500 ASPs for embedded antenna systems to ASPs exceeding $20,000 for our Lighthouse solution, positioning us in higher value, higher margin markets. Over the past year, we have expanded our portfolio, secured key customer wins and strengthened our position in both markets, setting the stage for sustained long-term growth with higher ASPs and expanding market opportunities. We have grown our serviceable addressable market from $1.1 billion in 2024 to $2.6 billion in 2025. Thanks largely to our AC-Fleet vehicle gateway and Lighthouse smart repeaters. And we expect our TAM to continue growing. One of our most significant milestones was launching and expanding key product lines across multiple high-growth markets, an achievement that solidify our market position and spud accelerated adoption. In consumer we ramped Wi-Fi 7 antenna shipments to Tier 1 MSOs, reinforcing Airgain's position as a leader in next-generation connectivity. In IoT asset tracking, we launched AT-Flight, an AI power solutions designed for the health care sector that ensures FAA…

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 can be found in our earnings release. Now let's turn to fourth quarter results. Q4 sales came in at $15.1 million, which was in line with the midpoint of our preliminary results announced in late January. While this result marks a 6% sequential decline, it represents a 50% increase year-over-year driven largely by the consumer market recovery. Consumer sales reached $6.5 million, reflecting another strong sequential performance as robust Tier 1 MNO sales partially offset the anticipated moderation in our Tier 1 MSO Wi-Fi 7 sales following initial Q2 shipments and a strong demand ramp in Q3. Automotive sales came in at $3.3 million, although sales were $0.7 million higher sequentially, a high point for the year, that fell short of our expectations, driven by channel excess inventory resulting from delayed aftermarket and customer deployments. Enterprise sales were $5.3 million, reflecting a sequential decrease of $1.3 million and a low point for the year. This decline was mainly due to reduced sales of embedded modems and custom IoT products impacted by excess customer inventory. Notably, we recorded our first Lighthouse commercial deployment revenue in Q4. In Q4, gross margin reached 43.4% marking its fourth sequential increase. It improved by 50 basis points, driven primarily by operational efficiencies and a favorable sales mix. Q4 operating expenses totaled $6.5 million, $0.4 million lower sequentially, primarily due to lower variable compensation expenses. In Q4, adjusted EBITDA reached $0.2 million, in line with our January preannouncement. This positive result was driven by higher gross margin and lower expenses, which helped mitigate the negative impact of a $2.1 million revenue shortfall.…

Thanks, Michael. 2024 was a year of strategic transformation for Airgain, marked by continued gross margin expansion, disciplined expense management and the successful execution of our growth initiatives, while short-term challenges such as inventory constraints impacted certain lines of business. Our focus on higher-value system-level solutions like Lighthouse and AirgainConnect continues to drive a long-term shift towards profitable growth. With this solid foundation in place, our focus in 2025 is clear: execution. We are committed to scaling deployments, accelerating market penetration and leveraging the momentum we have built. Building on these efforts, investors can expect us to remain laser focused on strategic objectives. For AC-Fleet, we are driving to secure key certifications for first responder use from Verizon frontline, AT&T FirstNet and T-Mobile T-Priority, along with CE certification to support international expansion. Our commercial strategy is centered on qualifying new opportunities, transitioning them into trials and converting existing trials into designings and ultimately design wins. For Lighthous, we are actively securing FCC certification and US operator approvals, while simultaneously pursuing CE certification to accelerate additional international markets. We expect our partnership with Omantel will unlock new customer opportunities across the MENA region, while we concurrently drive multiple new trials across Asia, Latin America, Europe and North America to expand our global footprint. In 2025, we anticipate deploying Lighthouse across more than 50 sites establishing the foundation for larger scale commercial rollouts in 2026. At the same time, we remain disciplined and proactive in navigating short-term industry headwinds, such as inventory constraints affecting the broader IoT and component sectors, which we expect to persist through the first half of the year. These temporary pressures do not indicate weak demand with our robust product pipeline, increasing customer engagement and clear commercialization strategy. We believe we are well-positioned for sustainable growth in the…

Thank you. we'll now take questions from Airgain's sell-side analysts [Operator Instructions] And our first question comes from Anthony Stoss with Craig-Hallum. Please proceed with the question.

Good afternoon Jacob and Michael. Jacob, I wanted to focus in a little bit more on the enterprise segment. And I think when you guys pre-released the quarter, you talked about 2 customers delaying projects. And that seems to be your weakest segment. What kind of visibility do you have that gives the confidence that you'll expect a snap back in the second half of the year? And then for -- maybe for Michael, on the Lighthouse product, maybe you could help us gauge or some kind of detail or color on what kind of contribution in terms of revenues you might expect in the second half of 2025? Or is this more of a really beginnings of revenues in 2026?

Hi, Tony, yes, great questions. So regarding the IoT, the two customers are all relating to the custom projects we've been doing. And the thing is that they have not been able to give us the visibilities because of the inventory issue they have been having. However, one of them told us that they should expecting the second half to be better. They are working on a couple of key projects with a couple of key customers, and they're expecting some turnaround, I would say, starting in the second quarter. So those are the feedback we got. That gives us some assurance that second half should be getting better. Certainly, we still don't have the concrete evidence of that, but we're hopeful so to speak. Now regarding the revenue for the Lighthouse, maybe a comment before turning over to Michael. So Lighthouse as we indicated, have secured a strategic contract partnership with Omantel. And in the contract -- part of the contract has the revenue relevant to it where they are committing to so much revenue for the next several years. So for 2025, even though it will be small, there's already a plan for deployments starting this quarter. And maybe you can add more color to it.

Sure. And I would to this, Tony. First of all, on the Lighthouse, the partnership itself, and this is not a supplier type of agreement. This is really a strategic partnership where we are a long-term partner to Omantel. But at the same time, there's also a joint sales and marketing effort as well to initiative to be able to penetrate not only Oman, but also the Middle East and the MENA region altogether. And so we are, as you know, are also very much focused on the customer trials that we have. We have a couple this quarter. We have a couple of next quarter already scheduled or planned, and we expect to see through so that we can have a customer pipeline that is really ready for FY 2026. In terms of the enterprise business, a couple of additional comments on that. The asset tracker is really a source of potential growth for us, specifically starting in the first half the year. This has to do with the strategy shift that we've done last year toward the railcar, but also the air transportation sector. And so we've had new products and an overall partnership with some of our key customers, albeit I have to say that there is a lack of visibility primarily because of some of the macro factors that we're seeing specifically in terms of tariffs, in terms of sanctions, or at least a threat of that. And so there is an overall lack of visibility in the short-term. I hope this is helpful.

Yes, that was helpful. Thank you. And then if I could sneak in one more, and maybe I missed it in your prepared remarks. I think last quarter you talked about, Jacob, having 40 different trials ongoing for the new AirgainConnect product. Are they still ongoing? What you found? And kind of what's the hit rate if they are converting from a trial to revenue?

Yeah. So Tony, yes, so the trials will actually -- the feedback that we have received so far on the trials have been really positive. Overall, performance improvement was well spoken. All of them really was impressed -- were impressed with the performance improvement. They were able to get connected in an area where they could not connectivity before. And that was -- for them, that was very impressive. And certainly, the way the ease of installation that was also something that they really enjoy about the product. Now as well as how many design wins, designs, already, we're able to get a few of them out the 43 trials, and as I described early in the call that we are now seeing the three different tiers. For the projects that are in the Tier 1, those are the ones that's 500 vehicles or more. It takes longer time. Usually, it takes about 12 to 18 months because for those bigger deals, typically, they're going to go out and do an RFP. Even though they like our product, they're still going to have to go through what they call an RFP process. And that's why it takes much longer duration. The smaller deals, those are the ones, the Tier 2 is 50 to 500. We see that some of them, they are going to be able come to the commitment a lot sooner. They may not have to go through an extensive RFP process such as the bigger deals. So those are the ones we think that you can secure with six to 12 months. And then the smaller deal, those are the ones we -- under 50 units, we feel like those are the ones who really want a few of those, and those are the ones could be -- we can convert them into revenue as early as within three months. So we're going to continue to grow the pipeline, but we are now having a really clear strategy on how to attack them, which I described earlier with a -- with a partnership and with a VAR, system integrator model.

Got it. Thanks for the color, Jacob. Appreciate it.

Thank you.

Thank you, Tony.

Thank you. And our next question comes from Tim Savageaux with Northland Capital Markets. Please proceed with your question.

Hey, good afternoon. I had a question on the Lighthouse side, where you guys had mentioned, I guess what I'm looking for trying to get to is a metric or a set of metrics to assess the size of these opportunities that you're facing? And I don't know whether it's based on subscribers with a certain carrier or base stations, but -- and you mentioned 50 sites to be deployed in '25 with Omantel, I imagine that represents a small fraction of the opportunity there. But I would be interested as to any color you can give there as well as higher level, how should we be thinking about the addressable market opportunity for Lighthouse based on some of those metrics I throw out there, subscribers, base stations, et cetera. Thanks.

Yes. Great questions, Tim. I'll start and then have Michael to chime in. So you are right, the 50 deployments that we announced. Those are certainly relating to the Omantel commitment. So we feel really good about that. And that it will be a small fraction of what we're going to be able to do with them. We certainly are working with them on a much more strategic sales and marketing plan outside of Oman. That is something, actually, we're going to actually have a joint announcement next week, doing MWC, that's next Wednesday. So certainly, you're going to expect another announcement. We're going to go in depth about what the partnership is going to look like with a really innovative solution that is going to be announced as well. That's really going to be addressing the MENA region, in the Middle East, North Africa region. Now talking about the market size, we talk about on the same that TEM we described, we already talked $700 million relating to the lighthouse. And I would say that's only taking into account on some of the opportunity we are chasing. Now in a much bigger scale, we certainly -- in the U.S. and the rest of the world, we can see a much bigger TEM. Now I think that there are 2 different major applications that we're seeing. One is indoor. The other one is outdoor. The deployment in December that we describe the commercial deployment, it's relating to an indoor application. And those are the ones that we're going to also describe a lot more next week, those are the ones that require a solution approach, means we are not only selling just the Lighthouse product itself, we're actually going to be there acting as a, what I call a mini…

I think you said well. Thank you, Jacob. But Tim, in terms of the internal work ahead of us, our team has been on the ground with Oman for the past six months on and off, and we are still working with them very, very closely in terms of developing the overall deployment plan of those 50 sites that we just mentioned. But there is a lot of work in terms of making sure that we are part of the process. We are aggressively pursuing all those opportunities and meeting all the customers' satisfaction requirements. But at the same time being ready as well to expand in the overall Middle East region. In parallel, we are also engaging quite a number of customer trials. Those are also pretty complex. Our goal ultimately is to have a trial a month, and this is really to secure that customer pipeline, and we expect to do so in South America, in Europe, in the US. And so really building not only the short-term but also the long-term approach as what

Great. And if I could just follow-up on that. I know you mentioned, I think, a trial a month, but either currently ongoing or expected throughout 2025. Can you quantify, I mean, is it 12? That's a trial a month. But can you quantify the number of trials ongoing or expected to be ongoing this year for Lighthouse?

Yeah. So right now, in Q1, we already completed two trials started in Q1 regarding Lighthouse. In second quarter, we already have two committed for the Lighthouse. In Q3, we already have one committed. So the two that was done we saw in the Middle East in Q1. In Q2, we are expecting one trial to be done in Latin America and then another trial to be done in Middle East. In Q3, we really have a trial committed in Asia, and we're also having another trial pending in e-certification. So those are the ones that we have clear visibility. We already have strong customer interest, and importantly with the local team to be able to make it happen.

Okay. Thanks.

Thank you. And remember, these are very sizable opportunities. All of these are major mobile network operators. That's millions of subscribers.

Thank you. At this time, that does conclude our question-and-answer session. If your question was not answered, you may contact Airgain's Investor Relations team -- our Investor Relations team at airg@gateway-grp.com. I'd now like to turn the call back to Mr. Suen for any closing remarks.

Thank you for your engaging questions. We appreciate your continued support and look forward to connecting with you again soon. Operator, please conclude the call. .

Thank you for joining us today for Airgain's fourth quarter 2024 earnings conference call. You may now disconnect your lines.