The following discussion and analysis and the interim unaudited condensed consolidated financial statements included in this quarterly report on Form 10-Q should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the year ended December 31, 2025. References to “Airgain, Inc.,” “Airgain,” the “Company,” “we,” “our” and “us” include Airgain, Inc. and our wholly owned subsidiaries. Forward-Looking Statements 18 This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). All statements other than statements of historical fact contained in this quarterly report, including statements regarding our future operating results, financial position and cash flows, our business strategy and plans, and our objectives for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “would,” “could,” “should,” “expect,” “plan,” “anticipate,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this quarterly report are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, operating results, business strategy, short-term and long-term business operations and objectives. These forward-looking statements speak only as of the date of this quarterly report and are subject to a number of risks, uncertainties and assumptions, including those described in Part II, Item 1A, “Risk Factors.” The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Overview Airgain is a leading provider of advanced wireless connectivity solutions. We are focused on delivering high-performance, cost-effective, and energy-efficient wireless solutions that enable rapid market deployment. Our mission is to connect the world through integrated, innovative, and optimized wireless solutions. Our diverse product portfolio serves three primary markets: enterprise, automotive, and consumer. While we have historically focused on high-performance radio frequency (RF) components, we are increasingly delivering integrated, system-level connectivity solutions that combine hardware, software and cloud management. Our enterprise products include Smart Network Controlled Cellular Repeaters (Smart NCRs), embedded cellular modems, asset tracking solutions, and antennas for access points and Internet of Things (IoT) applications. Our automotive products include our second-generation AirgainConnect® Fleet system solution, and our aftermarket antennas. Our consumer products include embedded antennas for consumer access points, wireless gateways, and fixed wireless access (FWA) devices. We have a rich history of providing RF expertise, services, and solutions to telecommunications operators and major original equipment manufacturers (OEMs). We leverage our RF and systems experience, and our Mobile Network Operator (MNO) and Multiple Service Operator (MSO) relationships, to deliver complex and differentiated system solutions. Markets The enterprise market demands reliable wireless access across diverse settings, including smart cities, campuses, stadiums, transportation hubs, utilities, buildings, and suburban developments. Our Lighthouse platform in the enterprise market is a carrier‑grade, high‑power 5G smart repeater designed to extend coverage and offload capacity for MNO and system integrators. Lighthouse supports rapid deployment and does not require wired backhaul, offering a cost‑effective alternative to small cells and distributed antenna systems (DAS) for coverage enhancement. Our NimbeLink embedded modems serve numerous enterprise IoT sectors that require cellular connectivity, including packaging, logistics, EV charging, smart buildings, agriculture, and self-service innovations. These NimbeLink cellular modems, which are both patented and end-device certified, minimize the need for additional OEM end-customer carrier certifications. Our asset tracking solutions are deployed across transportation, supply chain, and other specialized applications. Our enterprise IoT and machine-to-machine (M2M) antennas are extensively deployed in diverse systems, products, and applications, including access points, gateways, FWA devices and utility meters. In the automotive market, our products are deployed in a wide range of vehicles in the fleet and aftermarket applications, supporting a variety of technologies that include 5G, LTE, Wi-Fi, LPWAN, Global Navigation Satellite System (GNSS), and Bluetooth. Fleet and aftermarket products in the automotive market typically consist of applications where vehicular wireless routers are paired with external antenna systems to provide connectivity to mobile assets. In the third quarter of 19 2024, we completed the first commercial deployment of our second generation AirgainConnect® Fleet (AC-Fleet) system solution – a low profile, roof-mounted, all-in-one 5G vehicle gateway that provides 4G/5G cellular connectivity with built-in multi-profile eSIM, GNSS, Wi-Fi, and gigabit Ethernet router functionalities. We also offer a full line of external fleet antennas that are designed to be rugged, reliable, and flexible to meet almost any need. We design our products for performance, quality, and long product life, and our antennas connect to almost any vehicular router or modem. These antennas include high-performance and low-profile versions that mount on the roof, trunk, windshield, or dashboard and are optimized for 5G, 4G, Wi-Fi, and GNSS. On February 20, 2026, we acquired substantially all of the assets of the high-power user equipment (HPUE) product business from Nextivity. HPUE revenues are included in the automotive market. The consumer market represents a vast audience utilizing wireless-enabled devices. Our embedded antennas are deployed in various consumer applications including access points, wireless gateways, FWA devices, Wi-Fi routers and extenders, and smart home devices. These consumer products support a variety of technologies, products and services, including 4G/LTE, 5G, Wi-Fi, Bluetooth, LPWAN and GNSS. Macroeconomic Conditions Macroeconomic conditions have continued to create supply chain constraints in certain markets. Our sales increased by 0.7% compared with same period last year, as we experienced a stronger demand for our enterprise IoT modems and vehicle gateways, due to the acquisition of the HPUE product line from Nextivity. While we are experiencing demand growth, we anticipate memory-driven supply shortages to constrain our consumer market. We remain focused on the execution and commercialization of our strategic product initiatives, specifically design wins and revenue ramps of our AirgainConnect and Lighthouse platforms, which lay the foundation for our pursuit of revenue and profitability growth. Business Acquisition As discussed above, on February 20, 2026, we acquired substantially all of the assets of the HPUE product business from Nextivity. The acquisition expands our product portfolio and is expected to provide synergies with our existing operations. No cash, equity, or other consideration was transferred in connection with the acquisition, and the transaction represents a non-cash business combination under the acquisition method of accounting, resulting in a non-recurring gain on business acquisition recorded in other income of condensed consolidated statements of operations. Factors Affecting Our Operating Results We believe that our performance and future success depend upon several factors including macro-economic and geopolitical uncertainties, import/export controls, and tariffs and trade policies of the United States and other countries, the impact of inflation on consumer spending, and our ability to transition from a component provider to a wireless systems provider and to develop technology leadership and expand our markets. Our performance and future success also depend on factors such as continued investments in our growth, our ability to expand into growing addressable markets, including enterprise, automotive, and consumer, our ability to develop, market and sell advanced systems solutions that meet our customers’ requirements, the average selling prices of our products and solutions, and manufacturing costs. Our customers are price conscious, and our operating results are affected by pricing pressure which may force us to lower prices below our established list prices. Our ability to maintain or increase our sales depends on, among other things: •new and existing end customers selecting our solutions for their wireless devices and networks; •investments in our growth to address customer needs; •timely development of our differentiated product offerings and technology solutions; •our ability to target new end markets; •the proliferation of Wi-Fi connected home devices and data intensive applications; •the impact of global supply shortages on our business and that of our end customers; •international expansion in light of continuing global tensions and conflicts; and •the ability to successfully integrate any future acquisitions. In addition, inflation generally affects us by increasing our raw material and employee-related costs and other expenses. Our financial condition and results of operations may also be impacted by other factors we may not be able to control, such as uncertain global economic conditions, public health crises, global trade disputes, tariffs and trade policies, as well 20 as conflicts around the world. We do not believe that such factors had a material adverse impact on our results of operations during the six months ended June 30, 2026. While each of these areas presents significant opportunities for us, they also pose significant risks and challenges we must successfully address. We discuss many of these risks, uncertainties and other factors in greater detail in the section entitled “Risk Factors” included in this quarterly report on Form 10-Q and in Item 1A of our Annual Report on Form 10-K. Our operating results historically have not been subject to significant seasonal variations. Although it is difficult to make broad generalizations, our sales tend to be lower in the first quarter of each year compared to other quarters due to the Lunar New Year. Results for any quarter may not be indicative of the results that may be achieved for the full fiscal year and these patterns may change because of general customer demand or product cycles. Key Components of Our Results of Operations and Financial Condition Sales We primarily generate revenue from the sales of our products. We recognize revenue to depict the transfer of control over promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled for those goods or services. We generally recognize product sales at the time of shipment to our customers, provided that all other revenue recognition criteria have been met. We also generate service revenue from agreements to provide design, engineering, and testing services as well as subscription revenue from the sale of data plans. Cost of Goods Sold The cost of goods sold reflects the cost of producing antenna, embedded modem and system solutions products that are shipped to our customers as well as costs incurred for service agreements. This primarily includes manufacturing costs of our products payable to our third-party CMs. The cost of goods sold that we generate from services and subscription revenues primarily includes personnel costs and the cost to maintain data lines. Operating Expenses Our operating expenses are classified into three categories: research and development, sales and marketing, general and administrative. The largest component of expense is personnel costs, which include salaries, employee benefit costs, bonuses, and stock-based compensation. Operating expenses also include allocated overhead costs for depreciation of equipment, facilities and information technology. Allocated costs for facilities consist of amortization of leasehold improvements as well as rent and utility expenses and taxes. Operating expenses are generally recognized as incurred. Research and Development. Research and development expenses primarily consist of personnel and project development costs. These expenses include work related to design, development and testing of system solutions and components. These expenses include salaries, stock-based compensation, benefits, bonuses, project development and testing, prototype material, consulting, travel, and similar costs, and depreciation and allocated costs for certain facilities. We expect research and development expenses to increase in absolute dollars in future periods as we continue to invest in the development of advanced system solutions, although our research and development expenses may fluctuate as a percentage of total sales. Sales and Marketing. Sales and marketing expenses primarily consist of personnel and facility-related costs for our sales, marketing, and business development personnel, stock-based compensation and bonuses earned by our sales personnel, and commissions earned by our third-party sales representative firms. Sales and marketing expenses also include the costs of trade shows, advertising, marketing programs, promotional materials, demonstration equipment, travel, and allocated costs for certain facilities. We expect sales and marketing expenses to increase in absolute dollars in future periods as we continue to market and sell our advanced system solutions globally, although our sales and marketing expenses may fluctuate as a percentage of total sales. General and Administrative. General and administrative expenses primarily consist of personnel and facility related costs for our executives, legal, human resources, finance, and administrative personnel, including stock-based compensation, 21 as well as legal, accounting, other professional services fees, depreciation and intangible amortization, and other corporate expenses. We expect general and administrative expenses to fluctuate as we grow our operations. Other Income (Expense) Gain on business acquisition. Gain on business acquisition represents the excess of the fair value of net assets acquired over the consideration transferred in connection with our acquisition of the HPUE business from Nextivity in February 2026. No consideration was transferred in the transaction, resulting in a non-recurring gain recorded in other income. Employee retention credit refund. On March 27, 2020, the CARES Act was signed into law, providing an employee retention credit ("ERC"), a refundable tax credit against certain employment taxes on qualified wages. In 2023, we applied for ERC refunds totaling $2.8 million. As of December 31, 2025, we had received an aggregate of $2.0 million in ERC refunds. We did not receive any additional ERC refunds during the three and six months ended June 30, 2026. Interest Income, net. Interest income generally consists of interest earned on cash and cash equivalents and ERC-related interest, offset by interest expense consisting of interest charges on credit card balances and certain vendor bills. Other Income and Expense. Other income and expense includes gains or losses on disposal of property and equipment, realized foreign exchange gains or losses, state franchise taxes and penalties. Provision for Income Taxes Provision for income taxes consists of federal, state and foreign income taxes. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies in making this assessment. It is difficult for us to project future taxable income as the timing and size of sales of our products are variable. We concluded that it is not more likely than not that we will utilize our deferred tax assets other than those that are offset by reversing temporary differences. Results of Operations The following tables set forth our operating results for the periods presented and as a percentage of our total sales for those periods. The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods. Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Statements of Operations Data (in thousands): Sales $ 13,698 $ 13,623 $ 25,209 $ 25,636 Cost of goods sold 7,909 7,784 14,447 14,637 Gross profit 5,789 5,839 10,762 10,999 Operating expenses: Research and development 2,881 2,553 5,130 5,051 Sales and marketing 2,122 2,419 4,452 4,883 General and administrative 2,471 2,867 4,978 6,161 Total operating expenses 7,474 7,839 14,560 16,095 Loss from operations (1,685 ) (2,000 ) (3,798 ) (5,096 ) Other income (expense): Gain on business acquisition — — 340 — Employee retention credit refund — 495 — 1,989 Interest income, net 14 100 32 321 Other expense, net (63 ) (56 ) (133 ) (197 ) Loss before income taxes (1,734 ) (1,461 ) (3,559 ) (2,983 ) Income tax (benefit) expense (28 ) 14 44 38 Net loss $ (1,706 ) $ (1,475 ) $ (3,603 ) $ (3,021 ) 22 Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Statements of Operations Data: Sales 100.0 % 100.0 % 100.0 % 100.0 % Cost of goods sold 57.7 57.1 57.3 57.1 Gross profit 42.3 42.9 42.7 42.9 Operating expenses: Research and development 21.0 18.7 20.3 19.7 Sales and marketing 15.5 17.8 17.7 19.0 General and administrative 18.0 21.1 19.7 24.0 Total operating expenses 54.5 57.6 57.8 62.8 Loss from operations (12.2 ) (14.7 ) (15.1 ) (19.9 ) Other income (expense): Gain on business acquisition — — 1.4 — Employee retention credit refund — 3.7 — 7.8 Interest income, net 0.0 0.7 0.1 1.3 Other expense, net (0.5 ) (0.4 ) (0.5 ) (0.8 ) Loss before income taxes (12.7 ) (10.7 ) (14.1 ) (11.6 ) Income tax (benefit) expense (0.2 ) 0.1 0.2 0.1 Net loss (12.5 )% (10.8 )% (14.3 )% (11.8 )% Comparison of the Three and Six Months Ended June 30, 2026 and 2025 (dollars in thousands) Sales Three months ended June 30, 2026 2025 $ Change % Change Sales $ 13,698 $ 13,623 $ 75 0.7 % Six months ended June 30, 2026 2025 $ Change % Change Sales $ 25,209 $ 25,636 $ (427 ) (1.7 )% Sales for the three months ended June 30, 2026 increased $0.1 million or 0.7% compared to the same period in the prior year. Automotive market sales increased $0.4 million compared to the same period in the prior year, driven by higher vehicle gateway shipments. Consumer market sales increased $0.2 million for the three months ended June 30, 2026 compared to the same period in the prior year, primarily due to higher Wi-Fi 7 antenna shipments. Enterprise market sales decreased $0.5 million compared to the same period in the prior year, primarily due to lower enterprise antenna sales, partially offset by higher IoT modem sales. Sales for the six months ended June 30, 2026 decreased $0.4 million or 1.7% compared to the same period in the prior year. Consumer market sales decreased by $0.6 million for the six months ended June 30, 2026 compared to the same period in the prior year, primarily due to lower MNO and Broadband antenna shipments, partially offset by increased MSO Wi-Fi 7 antenna shipments. Enterprise market sales increased by $0.2 million for the six months ended June 30, 2026 during the same period in the prior year, primarily due to higher IoT modems sales, partially offset by lower enterprise antenna and asset tracker sales. Cost of Goods Sold Three months ended June 30, 2026 2025 $ Change % Change Cost of goods sold $ 7,909 $ 7,784 $ 125 1.6 % 23 Six months ended June 30, 2026 2025 $ Change % Change Cost of goods sold $ 14,447 $ 14,637 $ (190 ) (1.3 )% Cost of goods sold for the three months ended June 30, 2026 increased $0.1 million or 1.6% compared to the same period in the prior year. The increase was primarily due to higher sales. Cost of goods sold for the six months ended June 30, 2026 decreased by $0.2 million or 1.3% compared to the same period in the prior year. The decline was primarily due to lower sales. Gross Profit Three months ended June 30, 2026 2025 $ Change % Change Gross profit $ 5,789 $ 5,839 $ (50 ) (0.9 )% Gross profit (percentage of sales) 42.3 % 42.9 % (0.6 )% Six months ended June 30, 2026 2025 $ Change % Change Gross profit $ 10,762 $ 10,999 $ (237 ) (2.2 )% Gross profit (percentage of sales) 42.7 % 42.9 % (0.2 )% Gross profit for the three months ended June 30, 2026 decreased $0.1 million or 0.9%, compared to the same period in the prior year, driven by lower sales. Gross profit as a percentage of sales for the three months ended June 30, 2026 decreased by 60 basis points compared to the same period in the prior year, primarily due to lower enterprise product margins. Gross profit for the six months ended June 30, 2026 decreased by 0.2 million or 2.2%, compared to the same period in the prior year, driven by lower sales, partially offset by gross margin improvements. Gross profit as a percentage of sales for the six months ended June 30, 2026 decreased by 20 basis points compared to the same period in the prior year. Operating Expenses Three months ended June 30, 2026 2025 $ Change % Change Research and development $ 2,881 $ 2,553 $ 328 12.8 % Sales and marketing 2,122 2,419 (297 ) (12.3 )% General and administrative 2,471 2,867 (396 ) (13.8 )% Total operating expenses $ 7,474 $ 7,839 $ (365 ) (4.7 )% Six months ended June 30, 2026 2025 $ Change % Change Research and development $ 5,130 $ 5,051 $ 79 1.6 % Sales and marketing 4,452 4,883 (431 ) (8.8 )% General and administrative 4,978 6,161 (1,183 ) (19.2 )% Total operating expenses $ 14,560 $ 16,095 $ (1,535 ) (9.5 )% Operating expenses for the three months ended June 30, 2026 decreased $0.4 million or 4.7% compared to the same period in the prior year. The decrease was primarily due to lower amortization of intangible assets, partially offset by higher personnel expenses. Operating expenses for the six months ended June 30, 2026 decreased by $1.5 million or 9.5% compared to the same period in the prior year. The decrease was primarily due to lower amortization of intangible assets and lower personnel expenses. 24 Other Income (Expense) Three months ended June 30, 2026 2025 $ Change % Change Employee retention credit refund — 495 (495 ) (100.0 )% Interest income, net 14 100 (86 ) (86.0 )% Other expense, net (63 ) (56 ) (7 ) 12.5 % Total other income (expense), net $ (49 ) $ 539 $ (588 ) (109.1 )% Six months ended June 30, 2026 2025 $ Change % Change Gain on business combination $ 340 $ — $ 340 100.0 % Employee retention credit refund — 1,989 (1,989 ) (100.0 )% Interest income, net 32 321 (289 ) (90.0 )% Other expense, net (133 ) (197 ) 64 (32.5 )% Total other income (expense), net $ 239 $ 2,113 $ (1,874 ) (88.7 )% Total other income (expense), net for the three months ended June 30, 2026 was $49 thousand expense, compared with $0.5 million income for the same period in prior year. The decrease was primarily due to the receipt of $0.5 million ERC refunds in the first quarter of 2025 that was not repeated in the current period. Total other income (expense), net for the six months ended June 30, 2026 decreased $1.9 million compared to the same period in the prior year. The decrease was primarily due to our receipt of $1.9 million ERC refunds and $0.3 million interest earnings under the CARES Act that were not repeated in the current period, partially offset by a $0.3 million gain on a business combination recorded in 2026. Income Tax (Benefit) Expense Three months ended June 30, 2026 2025 $ Change % Change Income tax (benefit) expense $ (28 ) $ 14 $ (42 ) (300.0 )% Six months ended June 30, 2026 2025 $ Change % Change Income tax (benefit) expense $ 44 $ 38 $ 6 15.8 % Income tax benefit for the three months ended June 30, 2026 was $28 thousand compared to an income tax expense of $14 thousand in the same period of the prior year, primarily due to a reversal of first quarter tax expense, driven by a higher first quarter projection. Income tax expense for the six months ended June 30, 2026 increased $6 thousand or 15.8% compared to the same period in the prior year, primarily due to pre-tax loss in 2026 compared to 2025. Liquidity and Capital Resources We had cash and cash equivalents of $7.6 million at June 30, 2026. During the period from 2013 through 2025, we incurred several years of net losses. As a result, we have an accumulated deficit of $97.2 million as of June 30, 2026. We plan to continue to invest for long-term growth, including expanding our engineering and sales teams to execute on our product roadmap and further penetrate domestic and international markets. We anticipate that these investments will continue to increase in absolute dollars. We believe that our existing cash and cash equivalents balance will be sufficient to meet our working capital requirements for at least the next 12 months. 25 The following table presents a summary of our cash flow activity for the periods set forth below (in thousands): Six months ended June 30, 2026 2025 Net cash used in operating activities $ (2,550 ) $ (896 ) Net cash used in investing activities (90 ) (58 ) Net cash provided by financing activities 2,883 117 Effect of exchange rate changes on cash, cash equivalents and restricted cash 10 5 Net increase (decrease) in cash, cash equivalents and restricted cash $ 253 $ (832 ) Net cash used in operating activities. Net cash used in operating activities was $2.6 million for the six months ended June 30, 2026. This was primarily driven by a net loss of $3.6 million and a $1.1 million net change in operating assets and liabilities, partially offset by $2.1 million in non-cash adjustments. Net cash used in investing activities. Net cash used in investing activities was $0.1 million for the six months ended June 30, 2026, primarily for purchases of property and equipment. Net cash provided by financing activities. Net cash provided by financing activities was $2.9 million for the six months ended June 30, 2026, primarily from $1.6 million of net proceeds from the issuance of 313,139 shares of common stock under our at-the-market offering program (2025 ATM Program), and $1.3 million of proceeds from option exercises. At-the-Market Sales Agreement In May 2025, we established the 2025 ATM Program, to sell at our option up to $5.0 million of our common stock, pursuant to an amended and restated sales agreement (the Sales Agreement) with Craig-Hallum Capital Group LLC (Craig-Hallum) as sales agent or principal. During the three months ended June 30, 2026, we issued 141,651 shares of common stock under the 2025 ATM Program for net proceeds of $1.0 million after deducting commissions and other costs associated with the offering. As of June 30, 2026, we had $2.9 million available under the 2025 ATM Program for future sales of our common stock. We are not obligated to sell, and Craig-Hallum is not obligated to buy or sell, any shares of common stock under the Sales Agreement. No assurance can be given that we will sell any additional shares of common stock under the 2025 ATM Program, or, if we do, as to the price or amount of shares of common stock that we may sell or the dates when such sales will take place. Liquidity and Capital Resources Assessment As of June 30, 2026, management performed the annual assessment of the Company's ability to meet its obligations as they become due within one year based on relevant conditions and events that are known and reasonably knowable. Following ASC 205-40 guidance, management considered quantitative and qualitative information to evaluate the Company's ability to meet obligations. Based on the analysis of the relevant conditions and events that are known and reasonably known as of June 30, 2026, the Company concluded that it is probable that it will be able to meet all of its financial obligations as they become due in the next twelve months. The relevant conditions and events that are known and reasonably known as of August 5, 2026 related to the Company have not significantly changed since June 30, 2026. Therefore, the expected cash inflows along with the existing funds are expected to be sufficient for the Company’s financial obligations as they become due in the next twelve months.