Airgain Reports 2021 Second Quarter Financial Results
Wednesday, August 11, 2021 | Comments

Airgain reported financial results for the second quarter ended June 30.

“We saw revenue growth with our integrated wireless systems business especially within the industrial IoT and traditional enterprise Wi-Fi markets in the first half of 2021, and we expect that growth to continue in Q3 and beyond,” said Airgain President and Chief Executive Officer, Jacob Suen. “With AirgainConnect revenue poised for growth in the coming quarters and the revenue contribution from our enterprise products, we are very excited about Airgain’s strong growth prospects. Despite seeing current quarter pressure from transitory supply shortage constraints, we’ve made excellent progress in advancing our strategic mission to deliver higher levels of integrated wireless system solutions globally.”

Sales for the second quarter of 2021 were $17.3 million, of which $8.9 million was generated from the consumer market, $6.2 million from the enterprise market and $2.2 million from the automotive market. Sales decreased by 0.5%, or $100,000 in the second quarter of 2021 compared to $17.4 million in the first quarter of 2021.

Consumer sales declined from the first quarter of 2021 by $1.4 million, primarily due to weakness from the chip shortage at one large North American service provider end customer, as well as weakness from international service provider end customers also due to the global chip shortage.

Enterprise product sales increased from the first quarter of 2021 by $1.8 million, driven by the product ramp of industrial internet of things (IoT) devices through its acquisition of NimbeLink.

Generally accepted accounting principles (GAAP) gross profit for the second quarter of 2021 was $7.3 million, compared to $6.9 million for the first quarter of 2021 and $5.4 million in the same year-ago period. Non-GAAP gross profit for the second quarter of 2021 was $7.4 million, compared to $7.3 million for the first quarter of 2021 and $5.4 million in the same year-ago period.

GAAP gross margin for the second quarter of 2021 was 42.2%, compared to 39.7% for the first quarter of 2021 and 47.1% in the same year-ago period. The increase in gross margin compared to the first quarter of 2021 was primarily due to a one-time inventory step-up charge recorded in the first quarter of 2021, as well as favorable NimbeLink product mix. The decrease in gross margin compared to the second quarter of 2020 was primarily due to changes in the product mix including the sales of AirgainConnect and NimbeLink devices with lower product gross margins and higher amortization costs associated with the NimbeLink acquisition.

Non-GAAP gross margin for the second quarter of 2021 was 42.8%, compared to 42.2% for the first quarter of 2021 and 47.4% in the same year-ago period. Non-GAAP gross margin increased 60 basis points from the first quarter of 2021, and decreased 460 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 second quarter of 2021 were $10 million, compared to $8.8 million for the first quarter of 2021 and $6.0 million in the same year-ago period. The higher operating expenses compared to the first quarter of 2021 were primarily due to a $1.6 million charge to reflect the change in the fair value of contingent consideration related to the NimbeLink acquisition. The higher operating expenses compared to the second quarter of 2020 were primarily due to the incremental expenses associated with NimbeLink. Non-GAAP operating expenses for the second quarter of 2021 were $6.8 million, compared to $7 million in the first quarter of 2021 and $5.2 million in the same year-ago period.

GAAP net loss for the second quarter of 2021 was $2.6 million or $0.26 per share, compared to a GAAP net income of $200,000 or $0.02 per share for the first quarter of 2021 and a GAAP net loss of $700,000 or $0.08 per share in the same year-ago period. The $2.8 million decrease in net income compared to the first quarter of 2021 was due to an income tax benefit recorded in the first quarter of 2021 of $2.1 million, as well as a $1.6 million charge in the second quarter 2021 related to the change in the fair value of contingent consideration related to the NimbeLink acquisition.

Non-GAAP net income for the second quarter of 2021 was $600,000 or $0.05 per share, compared to non-GAAP net income of $300,000 or $0.03 per share, for the first quarter of 2021 and a non-GAAP net income of $200,000, or $0.02 per share, for the same year-ago period.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2021 was $700,000, compared to adjusted EBITDA of $400,000 for the first quarter of 2021 and $300,000 in the same year-ago period.

In the third quarter, sales are expected to be in the range of $15 million to $17 million, representing a quarter-over-quarter decrease of 7.5% at midpoint. GAAP gross margin is expected to be in the range of 38.4% to 40.4%, and non-GAAP gross margin is expected to be in the range of 39% to 41%.

GAAP operating expense is expected to be $9 million, plus or minus $100,000, and non-GAAP operating expense is expected to be $6.9 million, plus or minus $100,000. GAAP net loss per share is expected to be $0.27 at midpoint, while non-GAAP net loss per share is expected to be $0.05 at midpoint. Adjusted EBITDA is expected to be negative $0.35 million at midpoint.

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