Airgain Releases First-Quarter Financial Results
Friday, May 07, 2021 | Comments

Airgain reported financial results for the first quarter ended March 31.

“We are very proud that we generated our highest quarterly revenue in Airgain’s history,” said Airgain President and CEO Jacob Suen. “We saw contributions from all three of our target markets with both AirgainConnect, our new game-changing platform, and NimbeLink, our recent acquisition in the industrial IoT market, leading the way. We are very excited about the growth prospects for Airgain in 2021 and beyond.”

Sales for the first quarter of 2021 were $17.4 million, of which $10.3 million was generated from the consumer market, $4.4 million from the enterprise market and $2.7 million from the automotive market. Sales increased by 35.4%, or $4.5 million, in the first quarter of 2021, compared to $12.8 million in the fourth quarter of 2020.

The increase in sales was primarily due to $3.2 million of revenue recognized from NimbeLink, which was acquired on January 7, and whose revenue is included in the enterprise segment, as well as higher sales in Airgain's consumer and automotive markets. Sales for the first quarter of 2021 increased by 54.9%, or $6.2 million, from $11.2 million in the same year-ago period.

Generally accepted accounting principles (GAAP) gross profit for the first quarter of 2021 was $6.9 million, compared to $5.8 million for the fourth quarter of 2020 and $5.3 million in the same year-ago period. Non-GAAP gross profit for the first quarter of 2021 was $7.3 million, compared to $5.9 million for the fourth quarter of 2020 and $5.4 million in the same year-ago period.

GAAP gross margin for the first quarter of 2021 was 39.7%, compared to 45.5% for the fourth quarter of 2020 and 47.5% in the same year-ago period. The decrease in gross margin is primarily due to the addition of lower gross margins from NimbeLink product sales as well as amortization of inventory step-up adjustment and amortization of intangible assets resulting from the NimbeLink acquisition.

Non-GAAP gross margin for the first quarter of 2021 was 42.2% compared to 45.8% for the fourth quarter of 2020 and 47.8% in the same year-ago period. Non-GAAP gross margin decreased 360 basis points from the fourth quarter of 2020 and 560 basis points from the same year-ago period primarily due to the impact of NimbeLink, higher production and procurement costs and product mix.

Total GAAP operating expenses for the first quarter of 2021 were $8.8 million, compared to $6.9 million for the fourth quarter of 2020 and $6.6 million in the same year-ago period. The higher operating expense was mostly due to the incremental operating expenses from NimbleLink. Non-GAAP operating expense for the first quarter of 2021 was $7 million, compared to $5.7 million in the fourth quarter of 2020 and $5.8 million in the same year-ago period.

GAAP net income for the first quarter of 2021 was $0.2 million or $0.02 per share based on 10.8 million diluted shares, compared to a net loss of $1.1 million or $0.11 per share based on 9.8 million shares for the fourth quarter of 2020 and a net loss of $1.2 million or $0.12 per share based on 9.7 million shares, in the same year-ago period.

The $1.3 million increase in net income from the fourth quarter of 2020 was due to increased gross profit and a $2.2 million tax benefit offset by an increase in operating expenses. In connection with the NimbeLink acquisition, the company recorded deferred tax liabilities associated with the intangible assets in the first quarter.

As a result, the company released $2.3 million of valuation allowance, which in turn resulted in the $2.1 million tax benefit. Non-GAAP net income for the first quarter of 2021 was $0.3 million, or $0.03 per share based on 10.8 million diluted shares, compared to non-GAAP net income of $0.2 million, or $0.02 per share based on 10.2 million diluted shares, for the fourth quarter of 2020 and a non-GAAP net loss of $0.5 million or $0.05 for the same year-ago period. Adjusted EBITDA for the first quarter of 2021 was $0.4 million, compared to adjusted EBITDA of $0.3 million for the fourth quarter of 2020 and adjusted EBITDA of negative $0.4 million in the same year-ago period.

In the second quarter, sales are expected to be in the range of $17.25 million to $19.25 million, representing a quarter-over-quarter increase of 5% at the midpoint. GAAP gross margin is expected to be in the range of 40.5% to 42.5%, and non-GAAP gross margin is expected to be in the range of 41% to 43%

GAAP operating expense is expected to be $8.9 million, plus or minus $150,000, and non-GAAP operating expense is expected to be $7.2 million, plus or minus $150,000. GAAP earnings per share is expected to be negative $0.13 at the midpoint, and non-GAAP net income per diluted share is expected to be $0.04 at the midpoint. Adjusted EBITDA is expected to be $0.6 million at the midpoint.

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