Earnings Call: Q4 2022

Mar 9, 2023

Afternoon. Welcome to Airgain's 4th Quarter and Full Year 2022 Earnings Conference Call. My name is Shamali, and I will be your coordinator for today's call. Joining us for today's call are Airgain's President and CEO, Jacob Sewan and CFO, Michael Eldas. As a reminder, this call will be recorded and made available for replay via a link found in the Investor Relations section of Airgain's website at www.airgain.com. Following management's prepared remarks, the call will be opened for questions from Airgain's sell side analysts. I caution listeners that during this call, Airgain Management will be making forward looking statements about future events and Airgain's business strategy and future financial and operating performance. Actual results could differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the company's business. These forward looking statements are qualified by the cautionary statements contained in today's earnings release and Airgain's SEC filings. This conference call contains time sensitive information that is accurate only as of the date of this live broadcast, March 9, 2023. Airgain undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances after the date of this conference call. In addition, this conference call may include a discussion of non GAAP financial measures. Please see today's earnings release for further details, including a reconciliation of the GAAP to non GAAP results. Now, I'd like to turn the call over to our CEO, Jacob Sewan. Jacob? Thank you, operator. Welcome, everyone, and thank you for joining us today. For today's call, I will first I will cover our operational highlights and achievements for Q4 in 2022. Then I will hand it over to Michael to walk you through our financial performance for the Q4 and full year. Afterwards, I will provide an update on our strategic product and marketing initiatives and then share our 2023 outlook before opening the call for questions. As you saw from our earnings release, the 4th quarter was another record sales Quarter at $19,900,000 up 4% sequentially and 41% year over year, bringing our fiscal year sales to $75,900,000 This annual sales milestone reflects an 18% year over year increase, driven by Solid contribution from our enterprise market, which accounted for $10,000,000 in the quarter. Our strong results In the enterprise vertical, we're driven by higher WiFi access point and industrial IoT sales, both vectors I will expect to continue through 2023. Overall, our financial performance in 2022 And solid balance sheet coupled with our expanding product offerings will enable us to successfully mitigate The near term headwinds we are experiencing in our current quarter, while positioning our company for even greater success in 2023. A key financial highlight for the Q4 was the record sales Contribution from the enterprise market. This is Cam as we capitalize on our expanding backlog. Video surveillance as a service offering, ensure growth from the connected EV charging market. With market forces driving adoption in these key industries, Airgain has adeptly Capitalized by offering solutions and expertise to meet the strong demand to bring products to market quickly. In the quarter, we secured several opportunities in both new and existing markets, further supporting our strategic move into IoT. Now that we have reorganized our sales team Around verticals instead of product lines, our teams are gaining traction in cross selling and upselling new and existing customers. In addition, we recently partnered with 1 of the leading European IoT network providers to connect our asset tracking devices for a best in class solution. This allows Airgain to bundle connectivity With our asset tracking customers across Europe, the Middle East and Africa as well as within the U. S, This strategic partnership gives Airgain added global reach and capabilities for future IoT projects globally. On the automotive front, our focus continues to be on the aftermarket in 1st responder segments. So we saw significant interest in improved coverage within the 1st responder market. The adoption rate of our HPUE product was slower than anticipated due to the limitations of the total offering. With that, we're transitioning the AirgainConnect platform to the next generation product, Taking key learnings from the previous product, we are working with the customers on our latest vehicle networking trials and look forward to providing superior connectivity to a broadening set of customers. We find the demand for improved fleet connectivity to be stronger than ever, influencing the speed of our transition. Our consumer vertical experienced a slight step back quarter over quarter in Q4, A trend that we expect to continue in Q1 due to a combination of seasonality and demand softness From supply shortage and technology transitions, seasonality is a historical trend We have seen and communicated in the past and is typically made up for in the latter quarters of the year. However, Supply chain issues have caused many of our customers to delay development in order to transition directly From WiFi 6 to WiFi 7, both softness in market wide chipsets and excess The inventory played a role in Q4. On a year over year basis, we reported a 160% increase From the $2,500,000 in 2021 to the $6,500,000 in 2022. Recently, we announced that Airgain's embedded antennas were selected to power the Wi Fi 6 based VR AirBridge by D Link Corporation, which allows PC gamers to use their VR headset Without the hassle of a cable or WiFi router, Aegion's custom design, testing and optimization services Simplify the delivery of enhanced signal in challenging environments as we showcase our Wi Fi 6 capabilities in a data rich setting like gaming. Continuing with consumer, our increased focus On the development of new products and solutions, over the last few years, it's beginning to bear fruit. We have built relationships over the years with service providers that now have even greater reason to turn to Airgame for solutions to their needs. Exciting developments in 5 gs connectivity have opened the door for more solutions based offerings, and we have commenced trials on major U. S. Operator networks. In a sense, Our step into new markets is ushered in by established long term relationships. Our commitment to being a systems company and our emerging leadership in 5 gs has opened market avenues In high growth verticals, with the recent introduction of our Lighthouse smart repeaters, We are streamlining our end to end 5 gs development that includes fixed wireless access, repeaters In Enterprise Software Management Solutions, this transition from exclusively Components designed to full systems targeted as service providers increases our serviceable available market Same by $7,200,000,000 As we mentioned last quarter, we have identified Three key differentiators Airgain has in relation to the market and our competition. First, Our core competency has always been simplifying wireless connectivity. 2nd, we provide a breadth of product line Suspense across the entire value chain, whether a customer is trying to solve a connectivity issue in a product design or in an operating environment. The third is Airgain's focus on high growth technologies, particularly in reference to our RF expertise. These three differentiators continue to shape Our approach to addressing the market and developing solutions that meet our customers' needs. Moving forward, we are laser focused on executing the roadmap we have put into motion, and I look forward to providing updates on our programs in future quarters. With that, I'll turn the call over to Michael. Michael? Thank you, Jacob. Before diving into the numbers, please note that my review of our financial results and guidance refers to non GAAP figures. Information about the non GAAP financial measures, including GAAP to non GAAP reconciliations, are found in our earnings release. Now let's turn to this quarter's results. Airgain delivered a quarter of strong sales and cash flows. As Jacob mentioned, Q4 sales were $19,900,000 within our guidance range of $19,700,000 to $21,100,000 Our sales grew 4% sequentially, driven by a strong performance in our enterprise market. Enterprise sales were $10,000,000 which increased sequentially by $3,200,000 On higher shipments of our industrial IoT and Wi Fi access products. Automotive sales were $3,400,000 Reflecting a sequential decrease of $1,700,000 consumer sales totaled $6,500,000 reflecting a sequential decrease of $800,000 Q4 gross margin was 30.5% As we recorded a one time $1,100,000 inventory charge related to our AC HPUE product. This non cash charge was primarily due to excess inventory as we transition our focus to our next generation of Airgain Connect product. In addition, we recognized Higher than expected purchase price variances during the quarter is purchase price variances or PPVs Generated from prior quarter's purchases of enterprise components at higher market costs due to supply chain shortages. As we had higher than expected enterprise product shipments, these PPVs negatively impacted our gross margin. Net of the AC HPUE inventory charge and the PPV releases, Our gross margin would have been 39%, in line with the midpoint of our guidance range. Q4 operating expenses totaled $7,200,000 lower than our guidance of $7,400,000 primarily due to tight expense management, while we prioritize our focus on our engineering programs. As a result, our Q4 adjusted EBITDA was negative $900,000 and non GAAP EPS was negative 0 point 11 Excluding the AC HPUE inventory charge of $1,100,000 Adjusted EBITDA and non GAAP EPS would have been positive. Our cash balance as of December 31 was $11,900,000 30% higher sequentially, driven by working capital improvements. Day sales outstanding or DSOs for the quarter was 40, the lowest DSO results we experienced in the past 2 years. Net inventory was $4,200,000 $5,100,000 lower sequentially. Net of the ACH BOE excess inventory charge, our inventory balance declined across all of our product lines. On a fiscal year basis, our sales totaled $75,900,000 $11,600,000 or 18% higher year over year. Enterprise sales increased $7,100,000 driven by higher sales of industrial IoT and Wi Fi Access Products. Automotive sales grew $5,000,000 on higher aftermarket sales. Consumer sales declined by $500,000 resulting from the global supply shortage we experienced last year. Fiscal year 2022 gross margin was 37.6%, 180 basis points Lower than the prior year, driven by the ACSPUE inventory charge in Q2 of 2022 And an unfavorable sales mix on lower year over year consumer sales. Fiscal year 2022 operating expenses totaled $29,100,000 5 percent higher year over year on conservative expense management. Adjusted EBITDA at $100,000 was slightly positive for fiscal year 2022 compared to a negative $2,000,000 in the prior year. Now moving to our outlook for the Q1 ending March 31, 2023. We expect sales to be in the range of $15,700,000 $17,300,000 or $16,500,000 at the midpoint We expect gross margin for the Q1 to be in the range of 37.5 percent to 40.5%. We project our expenses to be approximately $7,000,000 Adjusted EBITDA is expected to be negative $400,000 at the midpoint of our guidance range. Non GAAP EPS is expected to be negative $0.06 at the midpoint of our guidance range. Now, I would like to turn the call back over to Jacob, who will walk us through our product and marketing initiatives. Jacob? Thanks, Michael. With our transition to solution based selling, we have ducked deeper into markets Where we found a well suited niche, such as electric vehicle or EV charging and video surveillance as a service or VSAT. The common thread between these industries is that they build products that need to be brought to market quickly. On the EV front, There is a convergence of government investment, automakers' increased emphasis on building EVs In consumers' increasing demand for buying these vehicles, the bottleneck in this case is the charging network, which in turn created a need for our products and services. Our nimbleinc embedded modems are used by several top manufacturers who require reliable connectivity for billing, maintenance, status Trucking, usage monitoring and more, Airgain provides an elegant solution that shortens time to market and eliminates the need for in house RF expertise. On the Visa front, where end customers Similarly, we need to roll out new technology quickly to improve return on investment. Our design capabilities, support And FutureBlue products have helped a multitude of customers in this market get connected quickly. Our partners in this space operate on subscription based models, minimizing the focus on proprietary hardware design In manufacturing and opening the door for 3rd party collaboration during the design process, most of the leaders in the space focused on differentiating through software and partner with Airgain on the hardware to deliver complete solutions to their customers. This has resulted in a growing revenue stream for Air Game from this market. We also continue to find success in bundling our aftermarket antennas with fleet and first responder solutions. We work with key players in each industry to provide a reliable signal with which To operate the technology, with the longest limited warranty in the industry, 5 years, Again antennas are designed to enhance performance in challenging conditions. In addition, we feel strongly about the initiatives we have Put in place thus far on the IoT front, we have finalized a master supply agreement with 1 of the largest Railroad companies in the U. S. To provide a unique solution to their railcar trucking needs. We look forward to share more about this development at our Analyst Day next week. In addition to growing our existing product lines, we have announced several new offerings that will help Airgain grow its Leadership in 5 gs Connectivity. We recently announced the release of our fully integrated outdoor 5 gs fixed Wireless Access Reference Design. Wanda comes with an optimized antenna system, a 5 gs NR modem, An enterprise software management system and an EG installation kit, this latest Lawson's design extends our position as a leader in fixed wireless access antenna design by simplifying the process of playing a full FWA device to market. Overall, this helps Airgain tackle a greater share of the rapidly expanding 5 gs market on both the enterprise and private networks side of the equation. In order for our customers to effectively manage our growing portfolio of connected devices, we also announced A partnership with Erigo to develop a simplified end to end platform that provides Wireless Networking Monitoring Management Tools for both network infrastructure and client devices, Simplifying the deployment and management of our solutions, the collaboration aims to combine Airgain's innovations In wireless systems, Amerigo's expertise in software development and cloud management services to allow users to manage network worldwide, DI and easy to use digital interface. Finally, we recently announced a partnership to develop a reference design for a 64T64R Antenna array, who pair with the partner's massive MIMO radio units, typically used in 5 gs infrastructure, Such as space stations. Massive MIMO can offer a significant improvement over traditional MIMO systems. Combined with Airgain's Lighthouse Smart Repeaters, Outdoor FWA and Enterprise Network Management, Massive MIMO It's another product line to Airgain's growing portfolio of 5 gs connectivity systems For network operators intended to simplify 5 gs deployment, save operational costs and improve The customer experience. In closing, while we are facing near term headwinds, We are optimistic about our long term prospects and remain focused on growth in our 3 markets. We expect strong growth from our enterprise market as we continue to expand our product portfolio and international footprint with our IoT solutions. We anticipate meaningful growth with our aftermarket automotive vertical upon the introductions of our latest From the AgainConnect product family as well as expanded distribution for our aftermarket antennas. For our consumer vertical, we expect continued long term consumer growth will be driven by our Integrated product launches with the major global service providers customers that we have built great partnerships with throughout the years. Our roadmap is paved with ambitious product initiatives. Given the products we have and the breadth of systems based solutions we have introduced, our same has more than doubled From $7,600,000,000 to $16,500,000,000 These new products are designed to address coverage issues on the service provider side, reduce deployment costs and improve the customer experience. The changes to Airgain's executive team Over the past year, I've set the company in a position to better support sustainable growth in the coming years. The leadership team and I feel strongly about the position the company is in with its steady sales base and financial discipline. I am confident these initiatives will generate positive top and bottom line results as Well, as better positioned again for key customer wins in new markets. I want to thank all of our team members for their dedication to our mission and ongoing commitment to our customers. Our Analyst Day next week Will provide us with the opportunity to share the progress we have made in a greater fashion, showcase our latest Innovate technology and better introduce our management team to the market. And with that, Thank you. We will now take questions from Airgain's sell side analysts. One moment please while we poll for questions. Our first question It comes from the line of Scott Searle with Roth MKM. Please proceed with your question. Hey, good afternoon. Thanks for taking my question. Hey, Jacob, maybe just to dive in on the enterprise front, it was a great quarter. Could you talk a little bit about the visibility You have on that front in terms of linearity and otherwise, it sounds like there's some large EV charging opportunities. How long does that last? What else is filling in the pipeline? And how should we think about that $10,000,000 over the next couple of quarters? Is that sustainable number? Do we grow from that? Is there seasonality involved? And then I've got a couple of follow ups. Yes, sure. Thank you, Scott. Yes, on the enterprise side, especially pertaining to IoT, Certainly, we do anticipate the EV charging market to continue to grow. We actually I mentioned in previous press release about couple significant design wins, and we expect that to continue throughout the years. As I indicated in the press release, it's absolutely a growing market with government support and then with more customers wanting to buy Electrical Vehicles, I think that is really creating a great opportunity for us. So it's just not a one time thing, but we do see that the time continue to grow. Now as far as the next couple of quarters or beyond, is it sustainable? I think that certainly as I indicated, we have some headwinds We have to deal with and certainly, there's also seasonality that we have to encounter. But overall, we do see that the IoT as a whole, we do see that grow throughout the year. Great, very helpful. And maybe if I could just hit on 5 gs coming back from Mobile World Congress. I'm wondering if you could provide a little bit of color in terms of Interest level from customers, I know it's very early, but what sort of level of engagements do you have? And when will we expect to see some of the first revenues on this front? Maybe if you could as well, Geographies, frequencies that we should be paying attention to that will be the first areas of deployment for you guys. Yes. Yes, MWC, and I just got back, we actually have a nice booth there in demonstrating our latest Technology and I think that people were pleasantly surprised actually to see us having a live demo in a BG environment such And I think that was very well received. We have high quality meetings. We met with Some existing customers and several potential customers and we also got a lot of network operators even in Europe, In Middle East, our Chairman expressed interest to really want to evaluate some of our up and coming products, such as the smart repeaters on the network side, The solo side in the fixed wireless access. So I think that we have more than 100 plus Meetings throughout those 3, 4 days and some very high quality meetings as a result of that. So that really give us optimism about where we are heading as a company. And so Jacob, does that mean 2024 is when we should expect the first revenue contribution from the 5 gs portfolio? I would like to count on that one, although I do not want to make the asset guidance. But generally, we see And we actually have technology product for them to do trial on. That will be the plan that we hope that In 2024, we can see material revenue contribution from the numerous products we're launching this quarter. Very helpful. And lastly, if I could, just to follow-up on the next gen HPUE product. There was a lot of excitement around The initial launch of the first product through AT and T, but it was a difficult process, I think, being controlled through one carrier. What's Different this time around, as you start to move into the next generation solution, either across carriers, geographies or otherwise, That gives you a little bit more diversity and opportunity for better success than you had being controlled through AT and T and FirstNet. Yes. Great questions, Scott. Yes, we would I have to admit that we were disappointed about The adaptation rate due to the total overall the total offering, right? And the things we learned is that it's important to be service provider agnostic. I cannot stress more about the fact that it's just difficult to be tied to a particular service provider, And that's what we learned. We're also understanding some of the sensitivity to performance versus cost, Well, people appreciate some of the performance benefit. They also have to really evaluate the cost factor. So we are taking all of that Into the next generation product that we're going to be a product that is going to be heading that right, the sweet spot, so to speak. And certainly, we also made a number of improvement on how we're going to launch the product. We also learned that Working very closely with viable installers are critical to the success of the deployment, right? Because to get it right the first time, it's critical. And when I say get it right the first time, I'm talking about installing the device properly. So all of that The lessons we learned and again going back to the demand, out of all of this is that we see a clear demand. We see a clear Margit that if we have the right product, the right price point, there's absolutely demand for us to take advantage of. And with our unique design, it's something that we have the IP on. It's a really Especially with the newer product, we're actually adding other features potentially into it. And I think that's going to really help support The rollout of this next generation product. Okay. Great. Thanks. I'll get back in the queue. Our next question comes from the line of Anthony Stoss with Craig Hallum. Please proceed with your question. Hey, Jacob. Hey, Michael. Jacob, I wanted to focus on a comment you made On the weakness on the consumer Wi Fi side, did you say your carrier customers want to skip Wi Fi 6 and now they're waiting for YYX7, also can you give us a sense of what you expect that business to be this year? Is it going to be down year over year? Or how do you view it for the full year? Hey, Anthony. Yes, I'll speak a little bit and then we'll go for Michael to chime in as well. And a lot of the things, I think I want to caution that it's more about the forecast we're seeing is soft, Some of the reasoning, we still want to spend more time to dive into it. But clearly, we also know that Maybe the Q1 stay, the carrier start, they're transitioning into a new technology. And typically, it lasts about 3 to 4 years. And in this case, due to the pandemic, due to some of the supply shortage issue, the roll off of The Wi Fi 6 was delayed. And now that in the next cycle, which is the Wi Fi 7 or even the Wi Fi 6E, it's already here. So how are they going to smooth the transition? That's what we're also monitoring closely. I think that The things within our control, I always talk to the team. Let's do the things within our control. And the things within our control is that we have not lost any to our competition. And then it's more of a demand issue, a robot issue by the carriers, which are monitored closely. As far as this year, I think that given some of the softness on the demand, we already got, but we want to be cautious, especially with the first half of the year. And Tony, just to echo what Jacob mentioned, this is Michael. Yes, we don't have a whole lot of visibility currently. The feedback that we're getting from our partners, from our customers, even service providers is that there is a lot to be sorted out From a demand standpoint, but we do expect some recovery in the second half of the year. As to the overall full year guidance, It is just too early to talk about that, Mike. Got it. And then I guess a similar question and maybe you've already kind of already answered it. The IoT group has done phenomenally well. By our math, close to 30% growth in calendar 2022 year over year. Clearly, you're expecting that to grow again year over year. The rest of the business though seems like it's going to be down pretty, pretty A large amount year over year. What can you do to try to offset some of the costs in that legacy business that's been weak right now? Yes. I think that we also expect the automotive market that we're going to see some growth as well. I think that consumer So look, we have a lot better control on the automotive in the enterprise market, right? That's where we actually have our own product. And that's why we transition From a component company to a system company is that we have a lot more control with our own destiny, if you want to call it. Consumer, It's more about winning SKUs and just hoping the rollout is going to come, right, versus the automotive and The enterprise IoT, we're actually selling our own product most of the time, and we feel strongly that we're going to be able to grow the IoT and the automotive And then my last question for Michael on the gross margin side of things, The purchase price variance, do you think you guys have your arms around on the gross margin kind of we'll call it 39%, do you think it will remain at that level for the rest of the year or is there anything else that you could see that would have a negative impact? So, thank you, Tony. That's a very good question actually because it really So the PPV item, it really speaks to the broader inventory management and also the gross margin improvement Objections that we have. And just to clarify on the DPVs, those are material costs that we are Purchasing basically since the beginning of 2021 and those are basically applied to specific products and being released at time of shipment. And at this point, we have had quite a bit of A large increase in demand and shipments in the Q4 quarter for specific products that really carried quite a bit of PPVs, which was a bit of a surprise to us. But the silver lining is that we are pretty much done with all the PPVs on our inventory. This was one of the drivers of the inventory decrease. Our inventory decreased by 55%, dollars $6,000,000 of that was at HPUE inventory reserve. The rest was really the laser focus on inventory management. And so once we have now our inventory down to that level, we can take advantage of re driving gross margin improvement That will result into some noticeable improvements in the second half of the year. So this is still being worked on. Right now to your point, 39% is where we are guiding Q1. It's been a run rate or even a normalized number for the Q4 quarter. We expect to see the same level in Q2, but some improvements taking place. And that improvement is Coming from the leverage of the Centimeters or contract manufacturer model, even with the demand softness that we're Seeing right now, there's quite a bit of activity going on among the CMs, specifically the regional CMs, which are looking to capture a higher share And therefore, I'm becoming a whole lot more competitive from a cost and quality standpoint. So those are the advantages and the opportunities that we're going to be looking at and leveraging throughout the year. Thanks for all the detail Michael and good job on the cash management by the way. Thank you. Thank you. Our next question comes from the line of Craig Ellis with B. Riley Securities. Please proceed with your question. Yes. Thanks for taking the question. And Michael, welcome aboard. Look forward to working with you. So I just wanted to start with a clarifying question as we look at the Q1. So in the Q1 revenue guide, we're clearly Down meaningful quarter on quarter and we would always expect there to be seasonality in the quarter. But could you provide a little bit more color around What's at play because it seems like we wouldn't have any Airgain Connect in the quarter, although it's not clear If we had in the Q4, so maybe you can clarify that. And is it just declines in each segment? Or is it More pronounced declines in auto and enterprise given the fact that gross margins are staying very resilient despite the significant revenue decrease. Hi, Craig. Thank you very much for the welcome. The Q1 number, as you pointed out at the midpoint, is about 17% down sequentially, which would have the drop because of seasonality. Compared to last year it's about 6% down and that is me speaking about the demand softness That Jacob was mentioning on some of the inventory level that we currently are seeing and the market is trying to sort through over the next few months. The aftermarket business on the automotive, the aftermarket business remains a bright spot. We do expect some Continued improvement on that. To your question on the Airgain Connect, we did have some shipment of Airgain Connect In the Q4 quarter and overall it basically speaks mostly from the demand softness that we're seeing right now for the Q1 quarter. Got it. And then, Jacob, I wanted to cycle back to an issue that was brought up by a few of The others that inquired earlier and just focus on calendar 'twenty three and where you think the business can grow year on year as You look down through your 3 primary segments and sub segment. So clearly in consumer carriers you're trying to sort out What they do with WiFi 6E and 6 versus just hopping straight to 7. But can you talk about What your sense is for whether or not that business can grow and when you look at enterprise and auto, What the potential is for those businesses to grow as we think about kind of the exit velocity of the business overall as we work through the back half of the year? Yes, sure, Craig. So as I indicated in the press release with the new products So that we just recently announced, we actually have expanding our SAND, which is the it's actually our addressable market, Right. Almost it's more than double what we have. And one of the reasons is the new product that we now have With the service provider market that's under consumer, right? And now and it's really now we're executing on the strategy that we I'll lay out you guys actually a couple of years ago is that how do we excel To the service providers that we have built a strong relationship, we have earned their trucks throughout the years. So instead of selling them a $2 to $3 in 10 accounting on the component side, we're now able to sell them system product that are 10, 100 times more than we were able to do. And as a result of that, and the trials already alluding to that, we actually already have commenced This trial with 1 of the largest operator in the U. S. Today, and I expect more to come. Indicated earlier, even in NWC, we received qualitative inquiries to do trials, and these are major operators globally. So I feel strongly about the prospect of taking we've got some very, very highly differentiable products, products That really, I think, differentiate where we have as a company. And then the space wireless access, there's also the networking equipment Product that we're going to be launching. So overall, I feel good about where we're heading as a company. Now specifically about 2023, I think we're going to focus on heading the milestones, right? How do we get more customers' trials? How do we Get the trust to be successful and then get the certification, right, and then ultimately winning the SKU. So that's what we're going to be focusing a lot on. But meanwhile, We still have a steady stream of revenue that's going to support the company's growth. But I think the bigger growth is going to be 2024 and beyond. Does that answer your questions, Craig? Yes. And we can follow-up with more detail offline. Michael, I did want to cycle back on the cash point. Really nice to see it pop by $3,000,000 in the 4th quarter. What's your expectation for what can happen In the Q1, can we get another $3,000,000 increase and bring it to $15,000,000 or would it be flatter? Thank you. So Q1 quarter is a bit challenging because it tends to be operationally a cash outflow top of the quarter net. We are definitely very laser focused on our cash balance and really optimizing that and through really our working So in Q1, I do not expect it to be growing or to be flat. I'm hoping to be above the $10,000,000 mark on that. But hopefully over the next few quarters as we strive to be EBITDA positive is really a question of optimizing this overall cash balance. Got it. Thanks, Michael. Thanks, Jacob. Thank you. Question and answer queue. And at this time, This concludes our question and answer session. If your question was not taken, you may contact Airgain's Investor Relations atairggatewayir.com. I'd now like to turn the call back over to Mr. Sewan for his closing remarks. Thank you for joining us on today's call. We look forward to updating you on our next call. Operator? Thank you for joining us today for Airgain's 4th quarter and full year 2022 earnings call. 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