REDMOND, Wash.--(BUSINESS WIRE)--Data I/O Corporation (NASDAQ: DAIO), the leading global provider of data programming and security provisioning solutions for microcontrollers, security ICs and memory devices, today announced its participation in The Benchmark Company 14th Annual Discovery One-on-One Investor Conference on Thursday, December 4, 2025, in New York City. The investor presentation to be referenced during the conference will be made available within the investor relations section of. ...

REDMOND, Wash.--(BUSINESS WIRE)--Data I/O Corporation (NASDAQ: DAIO), the leading global provider of data programming and security provisioning solutions for microcontrollers, security ICs and memory devices, announced the Company will unveil Data I/O's next generation LumenX2 programming platform demonstrating the Unified Programming Platform strategy with the new LumenX2-M4 manual programmer and the new LumenX2-A4 at the upcoming productronica 2025 tradeshow in Munich, Germany from November 1. ...

Financial Performance - Net sales for the three months ended September 30, 2025, were $5,393,000, a slight decrease of 0.6% compared to $5,423,000 for the same period in 2024[13] - Gross margin for the nine months ended September 30, 2025, was $8,882,000, compared to $8,900,000 for the same period in 2024, reflecting a decrease of 0.2%[13] - Operating loss for the three months ended September 30, 2025, was $(1,393,000), compared to a loss of $(325,000) in the same period of 2024, indicating a significant increase in losses[13] - Net loss for the nine months ended September 30, 2025, was $(2,486,000), compared to $(1,911,000) for the same period in 2024, representing an increase in losses of approximately 30%[19] - The company reported a comprehensive loss of $(1,339,000) for the three months ended September 30, 2025, compared to a loss of $(39,000) in the same period of 2024[14] - The company reported a net loss of $1,362,000 for the three months ended September 30, 2025, compared to a net loss of $307,000 for the same period in 2024[55] - Basic and diluted earnings per share for the third quarter of 2025 were both $(0.15), compared to $(0.03) for the same period in 2024[56] Assets and Liabilities - Total current assets decreased to $19,493,000 as of September 30, 2025, down from $21,157,000 as of December 31, 2024, a decline of about 7.9%[9] - Total liabilities remained stable at $5,071,000 as of September 30, 2025, compared to $5,072,000 as of December 31, 2024[11] - Cash and cash equivalents decreased to $9,664,000 as of September 30, 2025, from $10,326,000 at the end of the previous quarter, a decline of approximately 6.4%[9] - Inventories decreased to $5.800 million as of September 30, 2025, from $6.212 million at December 31, 2024, indicating a reduction of 6.6%[42] - The product warranty liability at September 30, 2025, was $517,000, an increase from $350,000 at December 31, 2024, reflecting a rise of 47.7%[45] - Operating lease liabilities totaled $2.261 million as of September 30, 2025, with total lease commitments amounting to $2.467 million[46] - As of September 30, 2025, the company reported right-of-use assets of $2,164,000, down from $2,704,000 in December 2024[48] - Working capital as of September 30, 2025, was $14.4 million, down $1.6 million from December 31, 2024[86] Revenue and Sales - Equipment sales increased to $2.774 million for the three months ended September 30, 2025, compared to $2.509 million in 2024, representing a growth of 10.6%[34] - The company recognized revenue from software and maintenance of $869,000 for the three months ended September 30, 2025, compared to $909,000 in 2024, a decrease of 4.4%[34] - Net sales for Q3 2025 were $5.4 million, unchanged from Q3 2024, and down from $5.9 million in Q2 2025[73] - International sales accounted for approximately 99% of total net sales in Q3 2025, up from 93% in the prior year[74] - Automated programming systems sales decreased by 14.5% year-over-year to $3.4 million, while non-automated programming systems sales increased by 39.1% to $2.0 million[73] Expenses - Research and development expenses for the three months ended September 30, 2025, were $1,709,000, an increase of 10.7% from $1,544,000 in the same period of 2024[13] - Selling, general and administrative expenses rose to $2,418,000 for the three months ended September 30, 2025, compared to $1,705,000 in the same period of 2024, reflecting an increase of 42%[13] - Research and development expenses increased by 10.7% year-over-year to $1.7 million, representing 31.7% of net sales[79] - Selling, general, and administrative expenses rose by 41.8% year-over-year to $2.4 million, accounting for 44.8% of net sales[81] - Total share-based compensation for the three months ended September 30, 2025, was $115,000, down from $304,000 in the same period of 2024[58] Operational Insights - The company’s manufacturing operations are located in Redmond, Washington, and Shanghai, China, supporting global customer needs[21] - The company continues to evaluate the impact of the One Big Beautiful Bill Act on future periods, particularly regarding research and experimental expenditures[37] - The company has not made any new operating leases during the nine months ended September 30, 2025, maintaining existing commitments[46] - The company has confirmed purchase obligations totaling approximately $554,000,000 to be paid within one year and $480,000,000 to be paid beyond one year as of September 30, 2025[49] - The backlog at September 30, 2025, was $2.7 million, a slight decrease from $2.8 million at the end of the previous quarter[76] - Bookings for Q3 2025 were $5.1 million, down from $5.8 million in Q2 2025 but up from $4.7 million in Q3 2024[75] Challenges and Risks - The company remains cautious due to near-term headwinds affecting the global economy and customer end markets[69] - The company experienced a targeted cyber incident in August 2025, leading to a shutdown of most operating systems globally, which may result in revenue loss and business disruptions[103] - Management identified a material weakness in internal control over financial reporting as of December 31, 2024, related to user access and segregation of duties[96] - Remediation actions have been implemented to strengthen the control environment, including enhancements to system access controls and improved segregation of duties[97] - The company continues to monitor the effectiveness of its internal controls and expects to complete its evaluation as part of the 2025 annual assessment[98] Future Outlook - The company is focused on expanding its market reach beyond the automotive sector and revitalizing activities with semiconductor companies[68] - Management believes that the consolidated financial statements present fairly the company's financial position as of September 30, 2025[99] - The weighted average remaining lease term as of September 30, 2025, is 3.4 years, with a weighted average discount rate of 5%[48] - The company has sufficient working capital to fund operations and capital requirements for the next year, but may need to raise additional capital for significant acquisitions[89] - The company has ongoing initiatives to reduce material and logistic costs and enhance product quality[88]

Financial Performance - Net sales for Q3 2025 were $5.4 million, unchanged from Q3 2024 and down from $5.9 million in Q2 2025[11]. - Net loss for Q3 2025 was $1.36 million, or $0.15 per share, compared to a net loss of $0.31 million, or $0.03 per share, in Q3 2024[14]. - Net income for the three months ended September 30, 2025, was a loss of $1,362,000 compared to a loss of $307,000 for the same period in 2024, representing an increase in loss of 344.57%[29]. - Adjusted EBITDA, excluding equity compensation, for the nine months ended September 30, 2025, was a loss of $1,683,000, compared to a loss of $324,000 for the same period in 2024, indicating a significant increase in loss[29]. Sales and Bookings - Bookings increased by over 7% year-over-year, reaching $5.1 million compared to $4.7 million in Q3 2024[12]. - Automotive electronics accounted for 78% of Q3 2025 bookings, up from 59% for the entire year of 2024[12]. - Backlog as of September 30, 2025, was $2.7 million, slightly down from $2.8 million on June 30, 2025[12]. - Deferred revenue increased to approximately $1.4 million as of September 30, 2025, up from $1.3 million on June 30, 2025[12]. Expenses and Liabilities - Operating expenses rose to $4.1 million in Q3 2025, up from $3.3 million in the same period last year[14]. - Total liabilities remained stable at $5,071,000 in September 2025 compared to $5,072,000 in December 2024[27]. - One-time expenditures related to cybersecurity incidents amounted to $230,000 for the three months ended September 30, 2025[30]. Assets and Equity - Total current assets decreased from $21,157,000 in December 2024 to $19,493,000 in September 2025, a decline of approximately 7.85%[27]. - Cash and cash equivalents decreased from $10,326,000 in December 2024 to $9,664,000 in September 2025, a decrease of 6.39%[27]. - Inventories decreased from $6,212,000 in December 2024 to $5,800,000 in September 2025, a decline of 6.64%[27]. - Total stockholders' equity decreased from $17,626,000 in December 2024 to $16,010,000 in September 2025, a decrease of 9.14%[27]. Awards and Strategic Initiatives - The LumenX-M8 Manual Programming System received two industry awards, reinforcing the company's Unified Programming Platform strategy[6]. - The company engaged a leading boutique investment bank for M&A aligned with its growth strategy[8]. Depreciation and Shares - The company reported a depreciation and amortization expense of $370,000 for the nine months ended September 30, 2025, down from $450,000 in the same period of 2024[29]. - The number of issued and outstanding common shares increased from 9,236,040 as of December 31, 2024, to 9,390,730 as of September 30, 2025[27].

Financial Data and Key Metrics Changes - Net sales for Q3 2025 were $5.4 million, down from $5.9 million in Q2 2025 and flat compared to the prior year period [13] - Gross margin as a percentage of sales was 50.7% in Q3 2025, compared to 49.8% in Q2 and 53.9% in the prior year period [16] - Operating expenses for Q3 2025 were $4.1 million, up from $3.8 million in Q2 2025 and $3.3 million in the prior year period [18] - The reported operating loss for Q3 2025 was $1.393 million, compared to an operating loss of $325,000 in Q3 2024 [19] Business Line Data and Key Metrics Changes - Automotive electronics represented 78% of Q3 2025 bookings, up from 59% for all of 2024 [14] - Consumable adapters and services accounted for 24% of total revenue, providing a base of recurring revenue, while capital equipment sales represented 76% of total revenue [14] Market Data and Key Metrics Changes - Asia, particularly China and Korea, showed strong performance in Q3 2025, especially within the EV sector of automotive electronics [15] - Europe faced pressures with capital equipment spending impacted by tariff and trade uncertainties, as well as EV disruptions [15] - The Americas remained relatively flat, bolstered by systems to be deployed in Mexico [15] Company Strategy and Development Direction - The company aims to diversify beyond the automotive sector and explore new markets and businesses [5] - A new generation of products is being developed, with a focus on automation and addressing gaps in the solutions area [8] - The company is looking to expand into the services market, which is estimated to be a $1 billion-plus opportunity [9] Management's Comments on Operating Environment and Future Outlook - Management noted pressures from global trade and tariff negotiations, but these are now considered tertiary concerns [14] - The company is optimistic about future growth, particularly with new product launches and partnerships in the pipeline [12] - Management expressed confidence in the ability to drive revenue growth through new business units and leveraging core competencies [10] Other Important Information - The company has no debt and maintains a cash balance of approximately $9.7 million as of September 30, 2025 [20] - A thorough review of gross margin enhancement strategies is underway, focusing on pricing modifications and supply chain optimization [17] Q&A Session Summary Question: Future platform growth and core business focus - Management emphasized that the new platform being developed will support long-term growth while maintaining focus on the core business [26] Question: Customer feedback on new technologies - Management reported positive customer feedback and engagement, indicating that the products being developed align with customer needs [35] Question: Sales cycles and critical acclaim at trade shows - Management noted that technology events can drive significant spending, and improvements in yield rates for UFS technology are expected to lead to increased orders [38] Question: Optimism regarding trade partners and tariffs - Management expressed cautious optimism about trade negotiations but acknowledged ongoing challenges in the supply chain [44] Question: Partnerships and acquisitions - Management discussed ongoing conversations with larger test companies and the potential for partnerships that embed their technology [49] Question: EV disruptions and market conditions - Management highlighted that while Asian manufacturers are performing well, European automotive manufacturers are facing significant challenges [60]

Core Insights - Data I/O Corporation has been awarded the 2025 Step-by-Step Excellence Award for its LumenX-M8 Manual Programming System, highlighting its innovation in the field of data programming and security provisioning [1] Company Summary - Data I/O Corporation is recognized as a leading global provider of data programming and security provisioning for microcontrollers, security ICs, and memory devices [1] Industry Context - The award was presented at the NEPCON Asia tradeshow, which took place at the Shenzhen World Exhibition & Convention Center, emphasizing the importance of innovation and advancement within the industry [1]

Core Viewpoint - Data I/O Corporation is set to announce its third quarter financial results for 2025 on October 30, 2025, with a conference call scheduled for the same day to discuss these results [1]. Company Overview - Data I/O Corporation, established in 1972, specializes in data programming and security provisioning solutions for various electronic devices, including those in automotive, IoT, medical, and consumer electronics sectors [3]. - The company provides solutions that secure the global electronics supply chain and protect IoT device intellectual property, enabling customers to program and provision devices from early samples to high-volume production [3]. - Data I/O's offerings are supported by a portfolio of patents and a global network of support professionals, ensuring customer success [3].

Core Insights - Data I/O Corporation's LumenX-M8 Manual Programming System has won the 2025 Mexico Technology Award in the Device Programming category, highlighting its innovation in electronics manufacturing [2][5] - The LumenX-M8 is designed to deliver high-speed, high-performance programming in manual production environments, supporting up to eight programming sites with the same engine used in automated systems [3][4] - The system is aimed at low volume production and new product introduction (NPI) environments, facilitating a seamless transition to volume production while ensuring quality and efficiency [3][4] Company Overview - Data I/O Corporation has been a leader in providing advanced security and data deployment solutions for microcontrollers, security ICs, and memory devices since 1972 [6] - The company focuses on enabling the design and manufacture of electronic products across various industries, including automotive, IoT, medical, and consumer electronics [6] - Data I/O's solutions are backed by a global support network, ensuring reliable and cost-effective product development for its customers [6]

Core Insights - Data I/O Corporation has successfully contained and remediated a ransomware incident that was identified on August 16, 2025, with no impact on customer orders or revenue [2][3] Company Update - The cybersecurity incident originated from a vulnerability in a third-party firewall service provider and has been fully addressed, restoring all global systems [2] - The company incurred approximately $180,000 in expenses related to remediation and investigation efforts for the third quarter ending September 30, 2025, while achieving an annualized reduction of about $300,000 in spending through performance optimization [3] Operational Status - Order flow from bookings to deliveries remains on track, and the company does not anticipate any revenue loss due to the incident [2] - The incident has led to significant improvements in corporate processes and IT systems, enhancing security and scalability [3] Company Background - Data I/O Corporation has been a provider of advanced security and data deployment solutions since 1972, serving various sectors including automotive, IoT, medical, and consumer electronics [4]

Part I. Financial Information [Financial Statements (Unaudited)](index=2&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements for H1 2025 show decreased assets and equity, a net loss, and negative operating cash flow compared to prior periods [Consolidated Balance Sheets](index=2&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $9,969 | $10,326 | ($357) | | Total Current Assets | $20,627 | $21,157 | ($530) | | Total Assets | $24,117 | $24,970 | ($853) | | **Liabilities & Equity** | | | | | Total Current Liabilities | $5,076 | $5,072 | $4 | | Total Liabilities | $6,871 | $7,344 | ($473) | | Total Stockholders' Equity | $17,246 | $17,626 | ($380) | - Total assets decreased from **$25.0 million** at the end of 2024 to **$24.1 million** as of June 30, 2025, primarily driven by a decrease in cash and cash equivalents[9](index=9&type=chunk)[10](index=10&type=chunk) [Consolidated Statements of Operations](index=3&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q2 2025 vs Q2 2024 Performance (in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net sales | $5,948 | $5,062 | +17.5% | | Gross margin | $2,960 | $2,757 | +7.4% | | Gross margin % | 49.8% | 54.5% | -4.7 p.p. | | Operating income (loss) | ($844) | ($566) | -49.1% | | Net income (loss) | ($742) | ($797) | +6.9% | | Diluted EPS | ($0.08) | ($0.09) | +11.1% | H1 2025 vs H1 2024 Performance (in thousands, except per share) | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net sales | $12,124 | $11,161 | +8.6% | | Gross margin | $6,148 | $5,977 | +2.9% | | Gross margin % | 50.7% | 53.6% | -2.9 p.p. | | Operating income (loss) | ($1,221) | ($1,426) | +14.4% | | Net income (loss) | ($1,124) | ($1,604) | +30.0% | | Diluted EPS | ($0.12) | ($0.18) | +33.3% | [Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)) - For the six months ended June 30, 2025, the company reported a comprehensive loss of **$820,000**, an improvement from the **$1,842,000** comprehensive loss in the same period of 2024, aided by a **positive foreign currency translation gain of $304,000**[14](index=14&type=chunk) [Consolidated Statement of Stockholders' Equity](index=4&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20STOCKHOLDERS'%20EQUITY) - Total stockholders' equity decreased from **$17.6 million** at the end of 2024 to **$17.2 million** at June 30, 2025, primarily due to a **net loss of $1.12 million** for the six-month period, partially offset by share-based compensation and positive other comprehensive income[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | ($233) | ($284) | | Cash provided by (used in) investing activities | ($347) | ($164) | | Cash provided by (used in) financing activities | ($95) | ($223) | | **Net change in cash** | **($675)** | **($671)** | - Cash and cash equivalents decreased by **$675,000** during the first six months of 2025, ending the period at **$10.0 million**, driven by cash used in operating and investing activities[19](index=19&type=chunk) [Notes to Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - The company operates as a global market leader for advanced programming and security deployment solutions used in electronics manufacturing[21](index=21&type=chunk) Revenue by Category - Six Months Ended June 30 (in thousands) | Net sales by type | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Equipment | $6,315 | $5,719 | +10.4% | | Adapter | $4,293 | $3,662 | +17.2% | | Software and Maintenance | $1,516 | $1,780 | -14.8% | | **Total** | **$12,124** | **$11,161** | **+8.6%** | - The company operates as a single segment entity, designing, manufacturing, and selling programming systems[59](index=59&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=12&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports operational progress and revenue growth despite economic headwinds, maintaining a debt-free balance sheet with $10 million in cash [Overview](index=12&type=section&id=Overview) - The company made progress in key operational areas and improved its cost basis despite a challenging global economic environment[63](index=63&type=chunk) - A significant automated programming system order was received late in Q2 from a leading global automotive EV supplier[63](index=63&type=chunk) - Management remains cautious due to near-term headwinds from economic and cross-border trade uncertainty, which has stalled some capital investments[66](index=66&type=chunk) [Results of Operations](index=15&type=section&id=Results%20of%20Operations) Q2 2025 Key Operational Metrics (in millions, except percentages) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $5.9M | $5.1M | +17.5% | | Bookings | $5.8M | $5.6M | +3.6% | | Gross Margin % | 49.8% | 54.5% | -4.7 p.p. | | R&D Expense | $1.66M | $1.41M | +17.6% | | SG&A Expense | $2.14M | $1.91M | +12.1% | - Net sales in Q2 2025 were **$5.9 million**, a **17.5% increase** from the prior year, driven by strong growth in non-automated programming systems and adapter sales[82](index=82&type=chunk) - Gross margin declined to **49.8%** in Q2 2025 from **54.5%** in Q2 2024, attributed to a lower margin product mix and configuration of automated systems for a large customer order[87](index=87&type=chunk) - Bookings in Q2 2025 were **$5.8 million**, including a **$1.4 million order** for 10 PSV automated systems from a major EV supplier in China, with automotive electronics constituting **66% of Q2 bookings**[84](index=84&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=17&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had working capital of **$15.6 million** and cash and cash equivalents of **$10.0 million**[93](index=93&type=chunk) - Cash decreased by **$534,000** from December 31, 2024, due to one-time expenses and investments, partially offset by an improved cost structure[93](index=93&type=chunk) - The company has no debt and believes it has sufficient cash to fund operations and capital requirements for at least the next year[93](index=93&type=chunk)[96](index=96&type=chunk) [Non-GAAP Financial Measures](index=17&type=section&id=NON-GENERALLY%20ACCEPTED%20ACCOUNTING%20PRINCIPLES%20(GAAP)%20FINANCIAL%20MEASURES) Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income (loss) | ($742) | ($797) | | EBITDA earnings (loss) | ($687) | ($379) | | Adjusted EBITDA, excluding equity compensation | ($437) | $3 | - Adjusted EBITDA, excluding equity compensation, was **($437,000)** in Q2 2025, a significant decrease from **$3,000** in Q2 2024[98](index=98&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=18&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that this section is not applicable for this reporting period - Not applicable[101](index=101&type=chunk) [Controls and Procedures](index=18&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, but a material weakness in IT user access and segregation of duties remains under remediation - Management concluded that disclosure controls and procedures were effective as of the evaluation date[102](index=102&type=chunk) - A material weakness in internal controls over financial reporting related to IT user access and segregation of duties, identified as of December 31, 2024, is still being remediated[103](index=103&type=chunk)[104](index=104&type=chunk) - Despite the material weakness, management performed additional procedures and concluded the financial statements are fairly presented in all material respects[103](index=103&type=chunk) Part II. Other Information [Legal Proceedings](index=18&type=section&id=Item%201.%20Legal%20Proceedings) As of June 30, 2025, the company was not a party to any material pending legal proceedings - The company reports no material pending legal proceedings as of June 30, 2025[106](index=106&type=chunk) [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - The company states there are no material changes to the Risk Factors described in its Annual Report on Form 10-K for the year ended December 31, 2024[107](index=107&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=18&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company reported no unregistered sales, use of proceeds, or issuer purchases of equity securities, nor any Rule 10b5-1 trading arrangements - During the quarter ended June 30, 2025, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or other non-Rule 10b5-1 trading arrangement[112](index=112&type=chunk) [Exhibits](index=19&type=section&id=Item%206.%20Exhibits) The report lists several exhibits filed with the Form 10-Q, including a material contractor agreement, CEO/CFO certifications, and Interactive Data Files - Exhibits filed include an Independent Contractor Agreement with Theisen Advisory Group, CEO/CFO certifications, and Interactive Data Files[110](index=110&type=chunk)