Airgain, Inc. (AIRG) Earnings Call Transcript & Summary

Good afternoon, and welcome to Airgain's conference call to discuss its acquisition of NimbeLink. My name is Sunidra, and I will be your operator for today's call. Joining us for today's presentation is Airgain's President and Chief Executive Officer, Jacob Suen; Airgain's Chief Financial Officer, David Lyle; and NimbeLink's Co-Founder and Chief Executive Officer, Scott Schwalbe. Following their remarks, we will open up the call for questions from Airgain's publishing sale-side analysts. Now I would like to turn the call over to David Lyle. Sir, please go ahead.

Thanks, operator. Welcome, everyone, and thank you for joining today's conference call to discuss Airgain's acquisition of NimbeLink. This is Dave Lyle, CFO of Airgain. I am joined by Jacob Suen, President and CEO of Airgain; and Scott Schwalbe, Co-Founder and CEO of NimbeLink. As you saw from the press release we issued today, January 7, 2021, Airgain signed and closed the acquisition of NimbeLink, a leader in cellular industrial Internet of Things solutions and services. Our objective for the call today is to give you a better understanding of the strategic rationale of the transaction. 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. In a few instances, we report non-GAAP financial measures for NimbeLink, which financial measures should not be considered a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Please read our disclaimer on Slide 2 of this presentation. Before getting into the details of the transaction, I'd like to introduce Scott Schwalbe, Co-Founder and CEO of NimbeLink. Scott will continue on with Airgain and join the management team. NimbeLink Co-Founder and CTO, Kurt Larson, will also continue on with Airgain. Scott has an extensive resume with significant experience in both large and small companies and is a veteran in the IoT market. Scott will kick off this discussion with an introduction of NimbeLink. Scott?

Thanks for the introduction, Dave. On behalf of the NimbeLink team, I want to express how excited our company is to be part of the Airgain organization. We believe that the combination of the 2 companies with very similar cultures and missions will be exciting for our customers and our employees. At NimbeLink, we have a passion to help our customers succeed. This passion has enabled us to grow into a $12 million revenue company with 24 employees. On top of this, our nimbleness and business model resiliency allowed us to realize year-over-year growth and EBITDA profitability despite the challenges that the COVID-19 pandemic has created for businesses globally. NimbeLink's tagline, Smart, Simple, Cellular, drives our professional lives to deliver proven cellular connectivity to the industrial Internet of Things, our IoT market. We do this by designing and delivering smart, simple solutions. We have 3 focused solutions: the Skywire modem, asset tracking and custom design products. The Skywire modem is a certified end device modem that is embedded into a machine. This product can serve a broad range of verticals. For example, we can put a Skywire modem in a drone, a kiosk, a compressor or a vehicle. Any machine that connects to or should connect to the Internet is a potential customer for the Skywire modem. Our second focus solution is asset tracking. Due to NimbeLink's expertise in cellular and our proven ability designing efficient, low-power products, we created a solution focused on tracking assets that move indoors and outdoors outside of dedicated networks. A good example of this is a pallet of goods or a piece of equipment that moves from one place to the next and could end up anywhere. Our solution allows for long battery life, cellular connectivity and various sensors to know where the asset is and the surrounding conditions to allow the enterprise the ability to better manage their assets. Our solution is much more than a tracker. It's an unmeshed system that tightly ties software and hardware together to provide for edge configuration over the air. From a financial standpoint, this solution provides us with a recurring revenue stream with each sale of a tracking device. The third solution is our custom design to end products. For the right customer, we bring to bear our know-how and intellectual property to create robust, private-labeled industrial IoT solutions. Here, we are highlighting some of the applications for our technology to give you a sense of the diversity and growth potential that we have. We believe NimbeLink's foundation of channel partners, customers and solutions provide a robust launching path for the combined business to accelerate growth and add even more value to customers. I will now turn it over to Jacob to share his vision and strategic rationale for the transaction.

Thanks, Scott. First, I want to welcome NimbeLink to the Airgain team. I would like to describe why the combinations of Airgain and NimbeLink is so exciting. We are at a critical inflection point in our transition towards becoming a more system-level company by providing even higher levels of innovative solutions. The acquisition is an excellent fit with our business and will play an important role in our overall growth strategy to broaden market diversification especially within the industrial IoT space. NimbeLink significantly advances our strategic mission to deliver higher levels of integrated wireless systems solutions globally. In the following slides, I'll describe in more detail the strategic rationale for this acquisition. First, NimbeLink's expertise in industrial IoT puts them squarely in one of our targeted submarkets within the bigger enterprise market. Second, NimbeLink extends the breadth and opportunity for our game-changing AirgainConnect platform. Third, because NimbeLink's historical revenue has been almost all based in the U.S., we have a real opportunity to leverage our international sales force to extend NimbeLink's sales reach. Fourth, by joining a larger company, NimbeLink can gain access to design opportunities they were not previously able to win. Fifth, all of NimbeLink's products require antennas, all of which provide the opportunity to leverage Airgain's antenna experience through enhanced performance of those products. And finally, the combined business will provide our customers a more scaled company with a more diverse offering and field of expertise. Going back to our first strategic rationale point. Airgain is significantly expanding its enterprise total addressable market as well as growing its serviceable addressable market in the submarkets Airgain has already targeted. The additions of NimbeLink's embedded modem product and asset tracking solutions is key to our ongoing strategy to expand penetration into the multibillion-dollar industrial IoT and end-to-end markets. If you remember, our previous TAM was about $12 billion. With the addition of NimbeLink, we are now targeting an overall TAM of over $15 billion by 2023. Additionally, it allows us to accelerate our growth into our historical $4.4 billion enterprise TAM. Most importantly, expanding our opportunities in the enterprise market clearly accelerates our transition away from our consumer market. As you know, our AirgainConnect platform, which we first announced in May of 2020, is one of the most exciting offerings in Airgain's history. AirgainConnect represents our first major platform that signals the formal transition from passive antennas to wireless system solutions, having higher levels of integration and complexity and, therefore, higher selling prices and margins. The platform is specifically designed for first responders, public safety and aftermarket fleet vehicles globally. The first product from the AirgainConnect platform will be a FirstNet-ready, HPUE antenna modem, which is initially targeting vehicles used by first responders like police, fire and EMS and launched on the FirstNet network built by AT&T. With the additions of critical expertise gained through NimbeLink for future AirgainConnect products such as with modem integration design, cloud management software as well as operator certification, we expect that NimbeLink will enable critical future features, expand cellular modem designs, increase supply chain flexibility and improve product time-to-market. The potential to sell existing NimbeLink products into markets internationally could be significant for Airgain's future growth. Historically, NimbeLink, being a smaller private company, focused almost entirely on the U.S. market. However, its products can be adapted to international markets with minimal investment and can be ready, in most cases, to deploy into a newer market in a manner of weeks, not months or years. Its rapid time to market is because NimbeLink's modems are certified in 26 different bands and operator-specific adoption can be completed very quickly. Given Airgain's existing global sales coverage through our direct sales and channel partners across different regions in Asia, Europe and the Middle East, we expect to quickly expand international sales of NimbeLink products. Another strategic benefit of the acquisition is that we can quickly expand the sales channel to the broader market by highlighting NimbeLink's products and services globally. In addition, Airgain's brand equity moves NimbeLink to a Tier 1 provider with existing customers by more effectively capitalizing on its robust pipeline of opportunities. We also expect Airgain's resources will enable NimbeLink to attract and win larger enterprise customers. Another synergy of the combined company is allowing NimbeLink to leverage Airgain's expertise to further enhance its product. With NimbeLink's Skywire IoT cellular embedded modems, the customers' experience will be enhanced by substituting existing turnkey antennas with Airgain's high-performance antenna solutions. This is a significant growth opportunity to leverage the current installed base and new sales by upselling and bundling Airgain's antenna products. We will also be able to enable higher performance while simplifying infrastructure integration with enterprise-grade bundled solutions, which includes modem plus antennas. Furthermore, we will improve time to market by streamlining the antenna selection process and offering an expanded product portfolio. On the asset tracking side, we will be able to optimize NimbeLink's asset tracking connectivity and reliability by improving antenna performance. In addition, Airgain's engineering expertise will enhance NimbeLink's custom design and development services for high-volume customers with specific integration and connectivity requirements. I will now turn it back over to Dave, who will walk us through the financial impact and transaction overview. Dave?

Thank you, Jacob. Based on our current estimates of Airgain's Q4 2020 revenue, we expect Airgain to report $48.5 million in revenue for the full fiscal 2020 year. Combined with expected revenue for the full fiscal year 2020 of $12.5 million for NimbeLink, we anticipate the pro forma 2020 combined revenue to be $61 million. We believe both companies are poised for growth in 2021 and are excited about the prospects for the combined company and the synergy revenue that could add to that growth. NimbeLink's 2020 gross margins are expected to come in at 32.9%, which is lower than Airgain's historical gross margins as well as our long-term model of 44% to 45%. However, NimbeLink has already executed a plan to improve those gross margins beginning Q2 2021 following a product transition by NimbeLink's current contract manufacturers to Vietnam. The base purchase price to acquire 100% of NimbeLink shares is $15 million, all cash. Based on our current estimate for NimbeLink's 2020 revenue, that's a 1.2x 2020 sales multiple off of the base purchase price. In addition to the base purchase price, Airgain has agreed to pay a performance-based earn-out of up to $8 million based on NimbeLink's calendar 2021 revenue target. The first dollar of earn-out does not get earned until the first dollar of 2021 revenue over $13 million. For purposes of calculating NimbeLink's target revenue, we have not included any revenue that is generated as a result of synergies gained through Airgain's global sales force. As we do not provide guidance beyond the current quarter as a matter of Airgain policy, we won't be providing full year guidance on NimbeLink's top end target revenue. That being said, we believe the growth potential of the NimbeLink business can add significantly to our top line revenue. We expect the earnout to be paid in the first quarter of 2022. We expect the transaction to be accretive to our non-GAAP earnings per share immediately in Q1 2021. The transaction was signed and closed on the same day, January 7, 2021. Now I'll turn it back over to Jacob, who will provide the summary review and closing comments.

Thank you, Dave. So in summary, the combination of Airgain and NimbeLink accelerates Airgain's industrial IoT growth and broader enterprise market diversification. It enables the expansion of the AirgainConnect platform's breadth and opportunity. It explains NimbeLink's international sales force reach. It expands the sales channel to address larger design win opportunities. It provides opportunities to improve NimbeLink's product performance with Airgain's expertise. And it increases Airgain's revenue growth and diversification opportunities. That concludes our prepared remarks. We are ready to open the call to questions from our publishing sell-side analysts.

[Operator Instructions] And your first question comes from Karl Ackerman with Cowen and Company.

This is Sam on for Karl. I was wondering if you guys could expand a little bit on the recurring revenue component of NimbeLink's asset tracking business maybe in terms of size, if you can. And then I'm assuming the revenues are tied to the physical device itself. But is there a recurring revenue stream associated with the platform that you might have commercialized? And then I have a follow-up, please.

So why don't -- Scott, why don't you give a little preview on that? We won't be talking specifically about the revenue amounts related to that, but you can talk qualitatively about how that works.

Yes. Sure. So with every physical device that we deploy in the field, we capture a monthly recurring revenue on the connectivity service. And we do have an enablement platform that is attached to the device that -- actually, we capture recurring revenue on that and then we do -- we send the data then out to the end customers. So each device has a recurring revenue with an enablement platform and with the cellular connectivity tied to that.

Very helpful. And then just on the deal side, did you assume any explicit cost synergies in the deal or operational synergies that could drive operating income growth over time over and above revenue? I know you didn't explicitly say anything in the deck, but I'm just curious if you guys are expecting anything over the next couple of years.

Yes. We're going to present in our earnings call coming up in February a lot more about those the potential there, a lot more of the financial details as well as the potential for synergies. That being said, this is a small company at 24 heads and will be really integrated into the company pretty quickly and function -- continue to run their business. I think over the longer term, as they grow and as we grow, we'll certainly see some synergies. I think as Jacob talked earlier, we see some potential significant synergies just related to them being tacked on to a bigger public company with more capital.

[Operator Instructions] And your next question comes from Craig Ellis with B. Riley Securities.

Jacob, again, Dave, happy new year. Scott, welcome to the team and happy new year to you, too.

Thanks, Craig.

What -- yes. You're welcome. So I wanted to start with just a higher-level background question, and it's really probably for Jacob and Scott together. The question is how long have the companies known each other? And why are we doing the transaction now? And Scott, on your end, was this part of a competitive process? Or were you just engaged exclusively with Airgain in moving to a different business?

Yes. Great questions, Craig. I'll answer the first part and then I'm going to defer to Scott to answer the second part. So definitely, we've been looking for a company that fits our strategic objectives, which we described to you earlier. Certainly, the industrial IoT is a big part of the submarket within the enterprise market that we are focusing on. And we've been looking -- we actually know about NimbeLink a couple of years ago. Only recently, I'd say for the last few months, we started to learn that they are looking to potentially get a partnership together. And because of that, we got involved with the bankers. And the more we learn about NimbeLink, the more we feel strongly about the synergy, the strategic objectives we're going to be able to achieve. And again, it's not just a product that we are able to get. I think that it's also the engineering expertise and how can we wrap around in having a total solution, right, that still differentiates their product even more. And on top of that, they're going to help us to be able to do the software, the hardware on the major AirgainConnect platform. So there are so many strategic objectives that we are able to unleash as a combined company. Now I'm going to let Scott talk about his...

My process?

Yes, yes. The process, yes.

Yes. So it was a competitive process. As Jacob mentioned, we had an investment banking organization involved. Strategically, we -- in late 2019 and early 2020, we are growing nicely. We have a good portfolio of customers, good distribution. We are at that inflection point of our company to actually scale and grow to the next stage. We had a couple of options, go find the right strategic partner or go bring in capital and just take it on and go through that next step for ourselves. So through the process, as we got to know Airgain, it really made sense to work with them in this strategic relationship, as we -- as Jacob talked about earlier, the synergies of the global sales force, the ability to -- for us to scale, to have a partner that actually has complementary technology with the antennas because every one of our modems and asset trackers has an antenna with it. We were just bringing that to bear with other partners. And so this is really from our next steps for strategic growth. We saw the partnership. It's very exciting about being able to go global, scale and be able to hit the ground running without building out that infrastructure of the sales team. So it would have taken us 18 months to do that. We're -- now we're going to be able to hit the ground running and tomorrow take advantage of what Airgain has built. So we're excited about this.

That's very helpful, guys. So Scott, since your company is newer to me. I'm very familiar with the IoT space and we'll come back to that with a subsequent question. But can you just help me understand, as we look at your customer base, are there any 10% customers? And as we think about your business and the 3 types of capabilities that you have, IoT, asset tracking and custom, how does revenue mix shake out across those 3 capabilities?

Yes. So typically, we're -- as Dave mentioned, we're going to break more of that out in the financials as far as the revenue mix and how we're going to bring that forward. So Dave, I don't know if you want to talk a little bit more about the financial aspect of that.

Yes. Sure. You're asking specifically revenue for Skywire versus asset tracker versus each one of the...

Exactly.

Major element.

Just trying to get a sense for, yes, what constitutes that $12 million across the 3 different capabilities.

Sure. The Skywire was actually the first kind of big revenue generator for NimbeLink. So that's got a history to it, and that generated a significant portion of their overall revenue even up to recently. That being said, the asset trackers are relatively new. Scott, those started shipping, what, about a year ago or so?

Yes, just about 14 months ago.

So that's actually a relatively new stream for them but has really gained some steam over the past 6 months or so. So we expect that to be a good grower as well as the Skywire modem. There's -- go ahead.

Go ahead.

I was going to say there are other revenue streams related to custom design products and recurring revenue that are much smaller today and also kind of more in their nascent stages. Custom products, asset tracker and Skywire are probably the biggest revenue generators. Would you say that's correct, Scott?

That's correct.

Got it. Okay. And then on the gross margin point, so understanding that there's a manufacturing transition taking place and -- can you give us some sense for how much that might be worth versus the 33-ish percent levels that we're at in terms of closing the gap to the mid-40s where we're at with Airgain? Could that close 1/3, half? Any scoping there? And then relatedly -- so I'll just add it into the gross margin question. It seems like some of the benefit from this deal is COGS destocking if we've got Airgain modems and NimbeLink solutions or maybe vice versa. And if we were to see that play out over time, how material could that be in terms of taking 33-ish percent gross margins and moving them up towards the mid-40s?

Yes. I can start with that one. In the long term, you're looking at the right way, the latter part of your question there. We think we can get gross margins up into a much better range versus where they're at today. In terms of just 2021 alone, I think we're going to see some pretty material improvements on the gross margin side. I think there are 2 things there. The first one is I don't think it's going to come close in 2021 to our corporate averages, but it certainly will improve just to give you an idea relatively speaking. I think the other thing is from just a timing perspective and a revenue generation perspective, certain products will have more material advantage on the gross margin. So when the -- those products start shipping, if they ship faster and ramp up bigger, you'll see those improvements hit the overall corporate gross margin in a much bigger way. So it's really going to be mix dependent in terms of how far we can drive that gross margin up. But again, I think next year, you won't see it come close to our corporate averages.

Got it. And then a couple more before I hop back in the queue. First, just on the technology road map, Scott. So can you just -- one, for the modem that you're using as part of the LTE solution and 3G, 2G capability that you have, is that a modem that's designed in-house? Or are you buying a modem from somebody and having them make some customizations to it? So it's really a NimbeLink product but with most of the circuit design developed externally. And then related to the modem, I didn't see 5G on the company's website or in the presentation. So how do we think about the road map through 5G on the modem side for the business?

Sure. So with our Skywire modem, it -- we take a module from the natural module providers like Quectel, Sierra Wireless, Telit, Sequans. And then we do all the in-house design and development of the printed circuit board and the end-device certification and documentation. So that's our intellectual property. We have patents on the design and the utility of the Skywire modem, designed internally, built and then manufactured. So we -- and then same thing with our asset trackers. All of our asset tracker designs are all done with our internal resources. And with respect to 5G, it's not on our website. We're continuing to assess that and look at it from a maturity and when to launch it. So it's definitely going to be -- it's on our longer-term road map just depending on the uptake and moving forward, depending on who you listen to in the market. LTE-M and narrowband IT -- IoT are considered to be part of the 5G but at that lower latency, lower power, low speed and -- but on the other side, where we all think about 5G, we're definitely assessing all of the module providers and determining where the need is so we can actually determine when to launch and which products to launch.

That's helpful. And then just a couple more for me. Scott, on -- when you're competing in the field and you're going up against competing LTE-M or NB-IoT solutions, who are you actually seeing there? And what are you finding is the difference-maker in terms of when you win versus something that might go to a competitor?

Yes. So most of the time, our competitors are the internal engineering resources themselves to make a decision, should we make or build. So when a company or an OEM has the opportunity to design a product, they make a decision if they want to put a chipset or if they want to do a module or if they want to do a modem. And the real differentiator with our end-device Skywire modem is time to market. And overall -- I said overall speed and flexibility is really what helps us win. So if -- and it's interesting. A good chunk of our customers are customers that designed a module down in the past and decided they don't ever want to do that again with all of the certification processes and the headaches that go along with that. So I would say that's our largest make-versus-buy competitors, the own internal engineering service.

Got it. And then lastly and back to you, Dave, I think we -- many of us think of Airgain as a company that should have a growth rate of 10% to 20% given all the secular dynamics and the different opportunities that you have in 3 really large TAMs. How do we think about the implications for -- of NimbeLink on that type of growth? Is this something that accelerates your growth over time? Or is this something that adds a very significant level of incremental enterprise revenue and helps you retain that level of growth over time?

Yes. This certainly could be a big growth driver for us. We've already talked about our organic business really kind of hitting its curve in 2021, and we should see some decent growth there already. I think this is just going to add to it. The prospects for growth -- especially in industrial IoT right now, the opportunities are plentiful. It's really about targeting the right opportunities at the right margins and doing the ROIs that prove those out. I think NimbeLink's already done a fantastic job sourcing those. And I think there's really a lot of design opportunities out there for them historically that they just couldn't take because they weren't big enough, it didn't have that kind of long-term public company sustainability. So I think we could see some decent growth out of that -- out of this asset pretty quickly. So certainly, we'll add to our growth.

[Operator Instructions] And your next question comes from Gus Richard with Northland Capital Markets.

Just a couple real quick. The air interfaces you currently support, could you just list them off for me?

Could you repeat that question?

The air interfaces that are used for like CAT-M1 and NB-IoT, could you list the cellular standards that you support currently?

Sure. Yes. So it's interesting. We started in 2013 and had some legacy 2G. So we're still supporting some of that globally. And then actually, when it comes into the 4G, we're basically going from narrowband IOT, CAT-M. Category 1, CAT 3 and CAT 4 is typically. So we really try to get -- depending on the application. You talked about utilities and asset tracking, the lower data rates and then medium data rates in the CAT 1. And then if we're getting into drones or kiosks or something, the CAT 4 satisfies those.

Got it. And then once you get, I guess, FCC approval or qualified for one of your Skywire embedded modems, do you just need to do that once? Or do you have to do that for every application?

Yes. So that's the really nice part about it. It's if I take one of our part numbers or category 1 cellular modem, I go out and get that certified onetime and get a carrier certified or the PTCRB certification. And now we can sell that horizontally. It doesn't matter which vertical it goes into. We can sell that to multiple customers. And as long as the customer designs it in using our -- the requirements that we specify and specify done, we don't have to go back for any certifications and they don't have to go through any certifications. So it's very scalable from that perspective to actually have one part number that can go into multiple, multiple customers in multiple different types of products. That's the value proposition.

Got it, got it. Makes complete sense. And then my last question is when I think about a modular chipset, typically, the vendor has a reference design. How is your implementation different? Or what do you do? Is there any secret sauce in your implementation?

Yes. So one of the things that we've really spent a lot of time in is building development kits for the -- around the Skywire modem to help software engineers and engineers to implement. So we've made capes for BeagleBone Black and Arduino shields. We've worked with many of the processors. But more importantly, we've done a significant amount of documentation that we make available to the engineer right away. So we sell our distribution through -- our development kits through distribution. So an engineer can buy one development kit, one modem and then through the years to how to take friction out, make it easier. They can come buy a SIM card from us with a data plan. So we're really trying to take out all that friction. And what's exciting about -- with the Airgain opportunity is now we can actually add an antenna, take little -- take more friction out of the IoT product development. So we're really looking forward to that. And it's around differentiation in making the documentation. Our slogan, you'll see -- we've been using Smart, Simple, Cellular. And that's really what we've been living by and executing to, to help especially the companies that don't do things with cellular. So if you think about somebody that wants to make a garbage can IoT-ready -- they don't have those expertise, and so we've been trying to make that really easy for the industrial and especially the long-tail customers.

Got it, got it, got it. So most of your customers are relatively small and your customer concentration is relatively low?

I would say generally in the Skywire, we obviously have some bigger customers that will buy volume, but we do have a broad set of customers that are buying that lower to medium volume size through distribution, yes.

And your next question comes from Craig Ellis with B. Riley Securities.

Scott, I wanted to come back to the business model a little bit. So clearly, you built a successful business that's based on cellular-based IoT and yet with a strategy that employs modems from other entities, which are then customized. It seemed like you could also approach the long-range market with something like LoRa and expand your TAM and your SAM. So have you thought about unlicensed spectrum? And is that something that could be additive to the business? Or have you concluded that for some reason, it's not a good fit? And if the latter, why is that?

Sure. We continue to look at LoRa, Sigfox, all the different opportunities. And right now, up to this point, it's all about focus for a company that was of our size. And we had such a large market to go after with the cellular. We decided to stay focused and not do anything outside of that. But now with the connection here with Airgain, it's definitely something we can put back on the conversation and look at the road map. And if you look at our asset tracker, what we have done within the asset tracker, we have integrated WiFi and Bluetooth. And so our -- we have a mobile access point that actually has the ability to track Bluetooth tags with a mobile access point. So -- and we've done designs with those technologies for customs. So our team is very familiar with it. It's just -- it's been really a matter of focus and having a large enough market to go after with our current cellular focus but definitely something that is back on the table.

That's helpful. And then just lastly, in terms of the market and its appetite and its readiness to really accelerate, I think as I look back over the last 5 years at cellular IoT, there's always been a lot of promise. There's always been a lot of interest. But from '16 really to early to mid -- maybe even late '19, we didn't have the network readiness. We didn't have the plans. There are all sorts of issues that kind of needed to be worked out so that we have the solutions that could more comfortably drop on to networks and really work and start to fulfill the promise. And so where are we now with respect to really starting to ramp in meaningful volume? Do we have all the pieces in place? Or is 2021 really that year where we get a lot closer but the more meaningful volume ramps are still ahead of us in 2022 and 2023?

Sure. We're definitely seeing in some of the areas that if you look at -- you mentioned in the lower -- like LTE-M, for instance in 2019. Network isn't there. Nobody believed it. We spent a lot of time in 2019 and '20 convincing. But we saw -- we had a lot of deployments that started at different levels of volume in 2020. And then we had this little thing called COVID hit us. So a few of these projects slowed down. We're definitely seeing them pick up here in the fourth quarter. So nothing stopping it right now as far as the technology. We're still going to see improvements in 2021 with eSIMs and global plans and then more of software-defined antennas. And so it's always going to be enhanced to make it better and easier. But right now, for a lot of large deployments we're seeing, there's nothing stopping. It's a global network. Now it's ready. There's global SIMS. There's global connectivity. And customers are seeing the ROI when they do deploy smaller. So I think my sense right now, we started to see it already early in 2020. It kind of slowed down because of the -- of COVID, but we're definitely seeing it come back right now.

Yes. And then lastly from me. As we think about your business and the wins you've achieved, the things that are generating revenue, that things that are in the funnel, if we were to look at the -- if we're to size the number of end points, are we talking about business that's in the tens of thousands of units, hundreds of thousands of units? Or do you have wins in the funnel or -- that are shipping through in the millions of units?

I'd say more in the hundreds of thousands of units than millions right now with the overall shift and where we're at. But as we look at the funnel opportunity, there's definitely -- when we combine all 3 of the businesses, there's definitely some potentials that drive into much higher, but it's significant.

At this time, this concludes our question-and-answer session. If your question was not answered, you may contact Airgain's Investor Relations team at [email protected]. I would now like to turn the call back over to Mr. Suen for his closing remarks.

Thank you for joining us on today's call. I especially want to thank our employees, partners and investors for their continuing support, staying safe, and we look forward to speaking with you soon.

This concludes today's conference call. You may now disconnect.