Airgain's Q1 2025: Unpacking Contradictions in IoT Recovery, Lighthouse Revenues, and Margin Forecasts

IoT inventory correction and rebound timeline, Lighthouse revenue contribution timeline, AC-Fleet market focus and European opportunities, gross margin expectations, and IoT rebound and revenue projections are the key contradictions discussed in Airgain's latest 2025Q1 earnings call.



Revenue and Segment Performance:
Datagain, Inc. reported Q1 2025 sales of $12 million, in line with the midpoint of their guidance range.Consumer sales reached $6.4 million, down just $0.1 million sequentially, while automotive sales were $1.3 million, down $2 million sequentially.Enterprise sales were $4.3 million, marking a low point for the year.
The varying performance across segments was due to factors such as inventory correction in aftermarket automotive antennas, seasonal impacts on consumer sales, and lower shipments of enterprise antennas and custom IoT products.
Operational Efficiency and Gross Margin:
Q1 gross margin was reported at 44.3%, marking the fifth consecutive quarterly increase, with a 90 basis point sequential improvement.
This improvement was attributed to higher enterprise product margins and operational efficiency gains.
Strategic Partnerships and Product Launches:
Airgain entered into a strategic and commercial agreement with Omantel,a leading telecom operator in the Middle East, expected to be a multiyear opportunity.
The partnership includes commercial collaboration and joint marketing, with revenue contribution expected to ramp in the second half of 2025
Future Outlook and Market Conditions:
For Q2 2025, Airgain expects sales to range between $12.5 million and $14.5 million, with a midpoint of $13.5 million, representing approximately 12% sequential growth.
This outlook is supported by a rebound in enterprise market performance, addressing excess inventory, and increased design win activity.
Tariff and Currency Impact:
Airgain acknowledged the fluidity of the tariff environment but emphasized that, thus far, there had been no material impact on product costs.
The company's fabless model and tariff classifications for many products have helped mitigate potential disruptions.
Enterprises Growth and IoT Recovery:
Enterprise sales are expected to grow, supported by the correction of excess inventory and increased design win activity, particularly among industrial IoT customers.
The company is encouraged by the progress and positive momentum in the enterprise market, including the strong Omantel partnership.```