What Airgain (AIRG) Said on Its Q3 Earnings Call

Key Points

• Airgain reported Q3 revenue of $15.3 million, up 9% year over year, with adjusted EBITDA rising 50% sequentially to $0.6 million. It forecast Q4 revenue of $15.5 million to $17.5 million, citing continued enterprise demand.
• Enterprise sales climbed to $10 million, led by IoT growth, while consumer sales fell to $4.4 million amid memory shortages. Management expects consumer supply constraints to persist into early 2027, with a recovery potentially beginning in Q2.
• Airgain’s growth pipeline includes AI data-center design wins expected to contribute revenue in 2027, alongside robotics, drone and AirgainConnect opportunities. Q3 gross margin fell to 42.4% due to product mix, but the company expects gradual improvement toward about 44% over the next two quarters.

Airgain NASDAQ: AIRG reported third-quarter revenue of $15.3 million, up 9% from a year earlier, as demand for enterprise internet-of-things products offset a decline in consumer sales tied to memory shortages.

The wireless connectivity company forecast fourth-quarter revenue of $15.5 million to $17.5 million. The $16.5 million midpoint implies roughly 8% sequential growth, driven by enterprise demand, Chief Financial Officer Michael Elbaz said on the company’s Nov. 10 earnings call.

Revenue rose 12% from the second quarter, while adjusted EBITDA increased 50% sequentially to $0.6 million. “This performance demonstrates the operating leverage in our model as revenue scales,” President and CEO Jacob Suen said.

Enterprise growth offsets consumer weakness

Enterprise sales reached $10 million, up $3.3 million from the prior quarter, helped by higher IoT modem and custom product sales. Suen said enterprise IoT revenue increased nearly 50% sequentially to its strongest quarterly level to date, with demand from industrial customers across applications including energy management, smart buildings and public safety.

One longstanding IoT customer accelerated delivery of a previously announced multimillion-dollar order to the end of September from March 2027 and placed additional orders for subsequent quarters, Suen said.

Airgain also completed initial production shipments to Coco Robotics and is sampling products with three additional potential robotics customers and three potential drone customers. The company secured two IoT design wins for AI data center infrastructure and expects them to begin contributing revenue in 2027. In response to an analyst’s question, Suen said Airgain is pursuing three additional design wins in the area and expects a material revenue contribution from AI data centers in 2027.

Consumer sales fell $1.4 million sequentially to $4.4 million as memory shortages affected gateway production at original equipment and design manufacturers. Automotive sales declined $0.3 million to $1 million.

Elbaz said the consumer supply situation was likely to continue affecting sales in the fourth quarter and probably into the first quarter of 2027. He expects a consumer recovery beginning in the second quarter, supported by Wi-Fi 7 and mobile network operator design wins. One OEM customer has indicated it secured additional memory supply, although Suen cautioned that improved availability takes time to translate into production and antenna shipments.

Elbaz also said IoT supply-chain constraints and contract manufacturing capacity caused some missed deliveries in the third quarter, without quantifying the revenue impact.

Margin outlook reflects sales mix

Third-quarter non-GAAP gross margin was 42.4%, down 1.2 percentage points sequentially. Elbaz attributed the decline to a greater contribution from lower-margin IoT custom products and fewer sales of higher-margin consumer antennas.

Non-GAAP operating expenses were $6 million, while non-GAAP earnings per share were 4 cents. Airgain ended September with $7.7 million in cash, up $0.1 million from the prior quarter; net proceeds from its at-the-market offering were $0.2 million.

For the fourth quarter, Airgain forecast non-GAAP gross margin of 40% to 43%, non-GAAP operating expenses of about $6.2 million and, at the revenue guidance midpoint, non-GAAP earnings of 5 cents per share and adjusted EBITDA of $0.8 million.

Elbaz said pricing initiatives were offsetting higher component and module costs. He expects margin improvement initiatives to help gross margin gradually return to the approximately 44% level recorded in the first half of 2026 within the next two quarters.

AirgainConnect pipeline and new platform

Suen said AirgainConnect remains a modest contributor to near-term revenue, but its pipeline includes approximately 60 tier 1 and tier 2 opportunities, split roughly 55% in public safety and 45% in commercial fleets. About half have reached the trial or post-trial stage, he said.

The company secured four tier 2 designs since its previous earnings call: two in public safety and two outside that sector, Elbaz said. Airgain is targeting year-end completion of a tier 1 public safety opportunity, subject to final commercial and network certification requirements. It also received a small initial purchase order from a national construction company for its fleet product.

Separately, Airgain is developing an AI-powered platform called Airgain RF Intelligence to simplify antenna selection for smaller wireless-device opportunities. Suen said initial customer access is targeted for the first half of 2027, subject to development and testing.

About Airgain (NASDAQ:AIRG)

Airgain, Inc. is a wireless connectivity company that designs and develops antenna systems, embedded components and related products for connected devices and networks. Its technologies are intended to improve the performance, reliability and coverage of wireless communications across cellular, Wi-Fi and other radio-frequency applications. The company serves markets including automotive, consumer electronics, enterprise networking, public safety, fixed wireless access and the Internet of Things.

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