Good afternoon. Welcome to Airgain's Fourth Quarter and Full Year 2025 Conference Call. My name is Kevin, 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 link found on the Investor Relations section of Airgain's website at investors.airgain.com. [Operator Instructions] I caution listeners that during this 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 26, 2026. 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. Jacob, please go ahead.

Good afternoon, everyone. And thank you for joining us. First, I would like to reflect on 2025, which was a pivotal and highly productive year for Airgain as we executed against our long-term strategy and position the company for its next phase of growth. During the year, we strengthened the resilience of our existing business, improved margins and reinforce our financial foundation. We expanded our design win pipeline with Tier 1 service providers, securing important new programs that deepen our strategic customer relationships and position us for growth. We also made significant progress advancing our AirgainConnect vehicle gateway platform and our Lighthouse infrastructure platform. Both platforms achieved important technical validations, customer engagements and ecosystem milestones that move them closer to scaled commercial deployment. Together, these accomplishments marked an important transition for Airgain. Over the past several years, we have defined our strategy, develop differentiated platform solutions and validated them with customers. As we enter 2026, our focus is increasingly centered on commercial execution, converting our growing pipeline into deployments in scaling our platforms to drive sustainable long-term growth. This transformation is loaded in Airgain's DNA, our deep RF engineering expertise, system-level design capabilities and long-standing carrier relationships. By leveraging this strength we have deliberately repositioned Airgain beyond component level products into integrated connectivity platforms addressing large and expanding opportunities across fleet, enterprise and infrastructure markets. At the same time, we have remained disciplined in managing our business. We improved gross margins, optimized our cost structure and focused our investments on the highest ROI opportunities. These actions have lowered our breakeven point and improved the scalability and resiliency of our business. While fourth quarter revenue came in at the lower end of our guidance range, this was driven primarily by timing dynamics rather than any structural change in demand. Importantly, the…

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 our fourth quarter results. Q4 sales came in at $12.1 million, which was at the low end of our guidance range, primarily reflecting timing and supply factors within our Enterprise embedded modems product line. These dynamics were timing related and did not reflect a change in underlying customer demand. Consumer sales reached $7.3 million, reflecting another strong sequential performance, driven by increased Wi-Fi 7 antenna shipments to cable operators. $7.3 million, represents the highest quarterly consumer revenue since Q3 of 2022, reflecting the successful transition of MSO customers to next-generation Wi-Fi 7 platforms and reinforcing the strength and durability of our Consumer business. Enterprise sales came in at $4.3 million, down $2.6 million sequentially, driven by lower embedded modems and enterprise antenna sales. Automotive sales came in at $0.5 million, flat sequentially. Non-GAAP gross margin for the fourth quarter was 46.3%, 230 basis points higher than the midpoint of our guidance, and a 190 basis point sequential increase. The sequential gross margin improvement was driven by a favorable product mix in the consumer market, along with operational efficiencies. Non-GAAP operating expenses for the fourth quarter totaled $5.9 million, in line with our guidance and slightly lower sequentially. In Q4, adjusted EBITDA was negative $0.2 million compared to $0.1 million midpoint of guidance. Non-GAAP EPS was negative $0.03. As of December 31, 2025, our cash balance was $7.4 million, up $0.3 million sequentially, primarily due to cash proceeds of $0.4 million from our ATM. Turning to our results for the full year of 2025. Sales totaled…

Thanks, Michael. As we look ahead, Airgain is operating from a position of strength, supported by the stronger foundation, expanding platform capabilities and growing strategic momentum. We have entered the next stage of our evolution, focused on commercial execution, scaling our platforms and converting our expanding pipeline into meaningful revenue growth. While near-term timing dynamics and the natural growing pains of scaling a platform business remain. The progress we are making is clear. Customer engagement is accelerating, our pipeline continues to expand, and we are advancing key initiatives that position us to scale and accelerate commercialization. We are strengthening our go-to-market capabilities with the addition of Frank Jules as Strategic Adviser. Frank previously served as President of AT&T Global Business Solutions, where he led a $44 billion organization, serving enterprise and carrier customers worldwide. His deep industry relationship and strategic insights are already helping accelerate customer engagement and open doors with key enterprise and carrier customers. His involvement enhances our ability to scale our go-to-market efforts, expand our reach with strategic customers and more efficiently convert pipeline opportunities into commercial deployments. We are also strengthening our platform towards strategic and capital-efficient initiatives, including the acquisition of the HPUE product line from Nextivity, which enhances our leadership in mission-critical connectivity. In addition, the strategic co-development partnership, we mentioned will further enhance Lighthouse capabilities and accelerate its path toward commercialization. At the same time, our core markets continue to provide a stable and cash-generating foundation that supports ongoing investment in our growth platforms. Importantly, the work we have done over the past few years has fundamentally repositioned Airgain. We have strengthened our operating model, improved margins, expanding our addressable market and build differentiated platform capabilities aligned with large and growing connectivity opportunities. We are encouraged by the continued expansion of our pipeline, the strengthening of our go-to-market capabilities and recent multiyear design wins with Tier 1 service providers, which reinforced the durability and strategic importance of our core business. Our priorities are clear: execute with discipline; convert pipeline opportunities into deployments; accelerate commercialization; and scale our platforms to drive sustainable growth. We are confident in our strategy, encouraged by our progress and believe Airgain is well positioned to deliver meaningful long-term growth. Operator, we are now ready to take questions.

[Operator Instructions] Our first question today is coming from Jaeson Schmidt from Lake Street Capital.

Just curious if you could update us on what we should be looking for, for the next steps for these Lighthouse trials? Obviously, they were completed this past quarter. How should we think about these opportunities finally impacting the P&L?

Yes. Jaeson, great to have you joining us. Yes, great questions, by the way. So for the trial that we mentioned for the U.S. market, the trial was very successful. So now we're engaging with their business side, the product side, on a couple of things. One is to creating a business plan, a business support case. Additionally, we are also working on the networking capability. As far as the international opportunity that we mentioned in Latin America, also been very successful. And as a result of that, we're actually going to have a follow-up meeting next week doing MWC with the executive members to discuss the next step.

And Jaeson, in terms of timing, your question there, those are -- we're not counting on those for any FY '26 revenues, but this would be for '27. What we are accounting on in FY '26 are really the system integrators that we have in the U.S., we have one partner so far. We are actively working on signing a couple of them as well to over the next few months. And this will definitely allow us to have more of a deployment of some of the critical needs that exist in the U.S. In the Middle East, we're also making progress there as well, too, with our partner, Omantel, but also with other Middle Eastern partners, but we foresee that to be a meaningful contribution from a revenue standpoint certainly in the second half of 2026.

Okay. That's really helpful. And then looking at the Nextivity product line announcement, just curious if there is a built-in customer base here? Or how we should be thinking about the potential demand pull for these products?

Very good question, Jaeson. I'll start and then Jacob can weigh on that as well too. So first of all, we are very excited about this acquisition. This is a small acquisition, but it is highly strategic to our vehicle gateway platform. Just a couple of items there is that it is a noncash, non-equity type of acquisition. We essentially are acquiring the HPUE intellectual property along with the customer base. And we're basically going to be running the MegaFi 2 product line, supporting the current FirstNet customers, with a goal of expanding the current revenue run rate by the end of the year. I'm mentioning this because as part of the acquisition, we also have entered into a reseller agreement with Nextivity. Nextivity has been working on some international customers who are interested with the HPUE solution. And therefore, once those designs are won and the project revenue start to ramp up, certainly by the end of this year, we'll be able to support Nextivity on the -- with this reseller agreement. To give you a sense about the revenue run rate, last year's revenue, we are close to $2 million or about $0.5 million of run rate on a quarterly basis with a potential uptick by the end of 2026 and '27 as those international customers ramp up. And most importantly is that this acquisition here is going to be adjusted EBITDA on day 1. Jacob?

No, yes, I think that's -- Michael, you said it well. I think that is really going to enhance us both domestically with the FirstNet partnership. And that's one of the main reasons that we are also really attracted because, as you know, we value the first responder market with our AC-Fleet. So there's a lot of synergy between the AC-Fleet and HPUE. It really fits another piece of the puzzle as far as the overall AirgainConnect platform is concerned. So we're really excited about this particular acquisition and we look forward to work with our partners, FirstNet partners and also our SIs to really expand this product line domestically and internationally.

[Operator Instructions] Our next question is coming from Anthony Stoss from Craig-Hallum Capital Group.

Jacob, Michael, you've always had a strong pipeline on the AirgainConnect, lots of trials. What can you do to convert those into sales faster? And I'm just curious why haven't a lot of these converted much sooner? And then I have a follow-up after that.

Yes. Thank you, Tony, for the questions. So let me start as well too. So first off, we're making some really good progress on the pipeline. As you pointed out, it is actually growing. We have currently about 100 active opportunities. Last November update, we provided 80 of overall opportunities, but unlike last November, we currently have about 40 of Tier 1 and Tier 2 opportunities today compared to 20 last November. So what changed here is that we are becoming much more successful with the non-first responder markets. Those tend to be a lot faster, and those represent the utility, the sanitation and the fleet enterprise or the enterprise fleet, I should say, customers. And those are coming online from a pipeline standpoint and they're also very eager to even start trials faster than first responder. First responders tend to have quite a bit of budget constraints or government funding, whereas some of those private and public companies have a much more centralized commercial decision-making process. So if we go back to the cycle time that we have mentioned before, with Tier 1 being 12 to 18 months of a cycle time and the Tier 2 being 6 to 12 months of a cycle time. If we go back to -- and I'll start with the AT&T certification as the clock starts, we are right on the cusp of closing down some of the Tier 2 customers, and we expect to have a couple of those by the end of this quarter. and start ramping up in Q2, certainly. And the Tier 1 would be definitely slated in Q4. Now things may change, of course. But right now, we feel we are progressing. We, of course, want to be doing faster, but we also have a handful with a lot of trials going on right now. Jacob?

No, I was going to add that we're actually in negotiation stage with a number of these opportunities. So we're getting closer and closer to be able to get some of the bigger deals as soon. We're getting the smaller deals. But the bigger deals are the one that takes longer time, but we are -- in our mind, we are right on track at this point.

Got it. And then two-part question probably for Michael. You commented that you expect gross margins to be up year-over-year. Do you need a whole bunch of these AirgainConnect people to convert to hit that bogey? And then also OpEx, do you expect to be roughly flat from where it was December and the March guide for the remainder of the year?

Yes. So on the gross margin, right now, where we are right now is a good place to be. And the fact of the matter is that Lighthouse and AirgainConnect are certainly higher margins than our corporate average, mainly because they are premium value type of solutions. And so depending upon the revenue that we estimate that will have a change on the overall gross margin. But as it come online, especially in the second half of 2026, we expect to see a benefit on our gross margin. From an OpEx standpoint, as I mentioned, in 2025 was quite a bit of a "transformation year" because we certainly optimize the overall cost structure of our core markets or existing business lines, and we were able to really make those quite profitable, specifically our consumer business and our IoT business as well too. And likewise, directing and reallocating some of those resources towards the growth platform. And so we expect that trend to continue. However, from an expense standpoint and vis-a-vis the overall EBITDA goal that we have, we expect to be remaining flat in Q1, likely to be flattish also in Q2. And then as the revenue ramps in the second half of the year, hopefully, we'll be able to increase our overall OpEx as well during the second half of the year.

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

Thank you all for your thoughtful questions and for your continued interest in Airgain. If there's one key takeaway it is that Airgain is a more focused and disciplined company entering 2026 with a stronger foundation and improving operating model in a position for sustainable growth and increasing platform adoption. We believe the strategic foundation we have built positions Airgain to deliver meaningful and sustainable long-term growth. Michael and I will be attending the 38th Annual ROTH conference in Dana Point next month, and we look forward to connecting with many of you there and continuing the conversation. Operator, you may now conclude the call.

Thank you for joining us today for Airgain's Fourth Quarter and Full Year 2025 Earnings Call. You may now disconnect.