Enabling High Performance Wireless Connectivity - Investor Presentation March 2019
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Enabling High Performance Wireless Connectivity Investor Presentation March 2019 NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. © Copyright 2019 Airgain, Inc. All Rights Reserved. NASDAQ:AIRG 1
Important Caution Regarding Forward Looking Statements This presentation contains forward-looking statements. significantly, including based on seasonal risk factors, represent a significant portion of our sales, and if we lose place undue reliance on these forward looking All statements other than statements of historical facts which makes our future operating results difficult to any of these customers, our sales could decrease statements, which speak only as of the date here of, and contained in this presentation, including statements predict and could cause our operating results to fall significantly; we rely on a few contract manufacturers to we undertake no obligation to revise or update this regarding our future operating results, financial position below expectations or our guidance; risks and produce and ship all of our products, a single or limited presentation to reflect events or circumstances after the and cash flows, our business strategy, our 2018 financial uncertainties related to recent management changes and number of suppliers for some components of our products date hereof. All forward- looking statements are qualified outlook, and plans and our objectives for future any difficulties or delays we encounter in identifying a and channel partners to sell and support our products, in their entirety by this cautionary statement, which is operations are forward-looking statements. In some successor CEO; a slower than anticipated rollout of and the failure to manage our relationships with these made under the safe harbor provisions of the Private cases, you can identify forward-looking statements by certain customers' deployments; our products are subject parties successfully could adversely affect our ability to Securities Litigation Reform Act of 1995. terms such as “believe,” “may,” “will,” “estimate,” to intense competition, including competition from the market and sell our products; if we cannot protect our “continue,” “anticipate,” “plan,” “target,” “project,” customers to whom we sell, and competitive pressures intellectual property rights, our competitive position This presentation also contains estimates and other “contemplate,” “predict,” “potential,” “would,” from existing and new companies may harm our business, could be harmed or we could incur significant expenses statistical data made by independent parties and by “could,” “should,” “intend” and “expect” or the sales, growth rates and market share; our future success to enforce our rights; our international sales and us relating to market size and growth and other data negative of these terms or other similar expressions. depends on our ability to develop and successfully operations subject us to additional risks that can about our industry. This data involves a number of These statements involve known and unknown risks, introduce new and enhanced products for the wireless adversely affect our operating results and financial assumptions and limitations, and you are cautioned uncertainties and other important factors that may cause market that meet the needs of our customers; risks that condition; our ability to identify and consummate not to give undue weight to such estimates. In addition, our actual results, performance or achievements to be we may not fully realize the benefits associated with the strategic acquisitions, and risks associated with projections, assumptions and estimates of our future materially different from any future results, performance partnerships we have entered into, or that existing completed acquisitions adversely affecting our operating performance and the future performance of the or achievements expressed or implied by the forward- partnerships may be terminated by either party; our results and financial condition; and other risks described markets in which we operate are necessarily looking statements. These risks, uncertainties and other business is characterized by short product development in our filings with the Securities and Exchange subject to a high degree of uncertainty and risk. factors include, without limitation: the market for our windows and short Commission (SEC), including under the heading “Risk antenna products is developing and may not develop as product lifecycles; we sell to customers who are Factors” in our Annual Report on Form 10-K and any we expect; our operating results may fluctuate extremely price conscious, and a few customers subsequent filings with the SEC. You are cautioned not to NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 2
Who We Are • Airgain (NASDAQ: AIRG) is a leading provider of advanced antenna technologies used to enable high performance wireless networking across a broad and increasing range of consumer, enterprise, and automotive applications. >125 Employees > 245 ~ 30% 2003 2016 Patents & Improved >1000 > 250M Founded IPO throughput over Antenna SKUs Wireless Devices > 40% Applications Engineering Industry standards Shipped NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 3
Who We Work With • Tier One Service Providers • Chipset Partners • Global OEMs & ODMs NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 4
World Class Leadership Team Years Experience Past Companies Experience Jim Sims • Chairman of the Board since November 2003 Chairman and 35+ • C-Level leadership experience with multi-billion dollar Chief Executive Officer public companies across the technology space • 13 years in global sales leadership roles at Airgain Jacob Suen 20+ President • Sales, marketing, operations, and business development roles • Finance and technology industry experience Anil Doradla 20+ • Wall Street experience along with a variety of strategic Chief Financial Officer and engineering roles Kevin Thill • Deep domain expertise in antenna systems & platforms Senior Vice President, 30+ • Founder of Antenna Plus that grew into a multi-million Engineering dollar per year business Kathy Pearson • HR leadership roles in building global organizations Vice President, Global 20+ • Specializes in small to mid-size growth companies across HR and Administration multiple industries NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 5
Airgain’s Global Presence Cambridge, UK Munich, Germany Chicago, IL Boston, MA San Diego, CA Suzhou, China Seoul, South Korea Kansas City, MO Scottsdale, AZ Marrakesh, Morocco Melbourne, FL Shenzhen, China San Antonio, TX Taipei, Taiwan Design Center Sales/Satellite Office Manufacturing NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 6
Solid Financial Execution and Strong Momentum 3 Consecutive Quarters of Double Digit YoY Growth Return to Consistent Profitability Record Revenue Annual Revenue ($M) 2018 Adjusted EBITDA ($M) 2018 Revenue by Quarter ($M) $60.6 $15.8 $49.5 $16.6 $43.4 $15.0 $15.8 $13.3 $1.84 $27.8 $1.04 $.39 $-.51 2015 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 *based on 2018 annual growth guidance NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 7
Airgain’s Targeted Markets Airgain will be focusing on 3 targeted markets with an aggregated TAM in excess of $6.7B by 2022 26% CAGR 15% CAGR 9% CAGR $780M $1.6B $4.4B Consumer Automotive Enterprise (Connected Home & IoT) (Fleet & OEM) (M2M & Industrial IoT) We believe we are well positioned to take advantage of the anticipated growth in current and new markets Sources: ABI Research Forecasts, 2018 + Airgain ASP assumptions NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 9
Airgain’s Product Markets Targeted markets have increasing product diversification. Emerging fragmentation provides more opportunity to develop more technology and sell into more applications. Consumer Enterprise Automotive Gateways Set Top Boxes Routers & Enterprise Access Carrier Grade Outdoor Mass Commercial Fleet Access Points Points Access Points Transportation Management Wi-Fi Smart TV OTT Devices Extenders Smart Utilities Kiosks ATM Machines Public Safety: Law Intelligent Warehouse Enforcement, Fire, EMS Sensors Smart Meters IIoT / LPWAN Wi-Fi Hotspots Femtocells Auto OEM Infotainment Home Wi-Fi IP Security Automation Speakers Cameras NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 10
Complex Antenna Systems: The Next Frontier Competitive Advantage: Airgain’s expertise in system performance 64 Element Massive optimization has become core to enabling FD-MIMO MIMO connectivity DU 5G 802.11ax 802.11ac 802.11n Antenna design becomes the most critical element in optimizing wireless systems – Significant 802.11b/g especially with smaller enclosures and much wireless performance more complex designs Wireless performance enhancements rely on better Chipsets key for wireless improvement via chipsets antenna systems performance – antennas were becomes more limited an afterthought in the design process NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 11
NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 12
What We Do • High end custom engineering shop • IP and system performance expertise • Each design is high volume Custom Engineering / Standard Product Market Mass Manufacturing Market • 3-6 month design cycle • Up to 6 month design cycle • Manufacturing 1-5m units • Manufacturing 5-10k units • Life cycle 2-4 years • Life cycle 4-5 years NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 13
How We Do It Antenna Simulation System Engineering Custom Validation Design & & Initial Throughput Review Integration & Quality Placement Testing Optimization NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 14
NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 15
Driver 1: 802.11 Wi-Fi Drivers of the Wi-Fi Revolution Today in the US alone: • Accelerating broadband speeds • Carriers serve 94M homes, with bandwidth now • Demand for increased throughput providing up to 1 GB Wi-Fi access points / • Increasing number of devices used concurrently gateways with 4-12 antennas each • More indoor and outdoor applications • Potential subscriber units to be upgraded: 233M* Sources: 1-CableLabs / 2-Wi-Fi Findings by D-Link, September 2014 3-Cisco Router Switch Blog, October 17 / 4-ITU Report M.2410-0, November 2017 NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 16
Driver 2: 5G Market Opportunities New 5G market opportunities • New product cycles = more system designs 25% Network Traffic • New applications = new business opportunities Projected by 2023* • New spectrum = more antennas needed Highly integrated designs require close relationship with OEM and Chipset Vendors Custom solutions and Performance focus align Airgain’s strategy and strength as a Performance and Integration leader New Applications New Spectrum Small Cell 5G Fixed Wireless Massive MIMO Sub 6GHz mmWave Indoor and Outdoor Point-to-Point Beamforming *ABI Research, 2018 NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 17
NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 18
Growth Opportunities Strategic M&A Manage Fragmented Markets Highly scalable platform for Cross-over opportunities within Consumer, inorganic growth Enterprise, and Automotive Execute Against Verticals Diversified, broad base of blue chip customers driving consistent revenue growth, with long product lifecycles NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 19
NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 20
Revenues Quarterly Revenue ($M) $60.6 $49.5 $16.6 $43.4 $12.8 $12.6 $15.8 $27.8 $12.4 $9.3 $12.4 $15.0 $13.0 $6.7 $9.9 $6.1 $15.0 - $11.3 $13.3 $5.7 $8.5 15.25 2015 2016 2017 2018 2019 (Projected) Q1 Q2 Q3 Q4 *based on 2018 annual growth guidance NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 21
GAAP Financial Model December FY 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 2018 Sales $43.4M $11.3M $13.0M $12.4M $12.8M $49.5M $13.3M $15.0M $15.8M $16.6M $60.6M Gross Profit 44.4% 47.0% 47.0% 48.2% 46.0% 47.1% 46.6% 44.1% 43.5% 41.4% 43.7% % of Sales Operating Expenses $15.8M $4.9M $6.2M $5.8M $5.4M $22.3M $7.4M $10.3M $6.6M $5.7M $29.9M Op Ex as a % of Sales 36.4% 43.2% 48.0% 46.6% 42.3% 45.1% 55.3% 68.5% 41.5% 34.6% 49.3% Operating Income (Loss) $3.4M $0.4M -$0.1M $0.2M $0.5M $1.0M -$1.2M -$3.7M $0.4M $1.2M -$3.3M Operating Margin 7.9% 3.8% -1.0% 1.6% 3.9% 2.0% -8.7% -24.4% 2.8% 6.8% -5.6% NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 22
First Quarter 2019 Guidance December FY 2016 2017 2018 Q1 2019 Guidance Sales $43.4M $49.5M $60.6M $15.0-$15.25M Gross Profit Up Sequentially from Q4 44.4% 47.1% 43.7% % of Sales 2018 Operating Expenses $15.8M $22.3M $29.90M OpEx as a % of Sales 36.4% 45.1% 49.3% Operating Income $3.4M $1.0M -$3.39M Operating Margin 7.9% 2.0% -5.6% GAAP EPS $0.40 $0.11 -$0.27 Break Even - $0.01 Non-GAAP EPS $0.31 $0.22 $0.04 - $0.05 NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 23
Contact Anil Doradla CFO Anthony Mariucci IR Contact investors@airgain.com Airgain, Inc. 3611 Valley Centre Drive Suite 150 San Diego, CA 92130 NASDAQ:AIRG © Copyright 2019 Airgain, Inc. All Rights Reserved. 24
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