Industry Overview - The technology sector is experiencing strong growth in 2025, driven by cloud computing, artificial intelligence (AI), cybersecurity, data-center expansion, and digital transformation [2] - The sector has gained 25.3% year to date, outperforming the S&P 500's growth of 19.2% [3] - Approximately 61% of investors believe the technology sector will attract the most investment over the next three years, surpassing all other sectors [3] Future Outlook - The outlook for the technology sector in 2026 appears positive, supported by ongoing enterprise investment in AI, software automation, and digital engagement tools [4] - Demand for specialized technologies is expected to accelerate as organizations seek to extract more value from data and improve operational agility [4] Investment Opportunities - Investing in low-priced tech stocks can provide attractive upside potential, especially when these companies show improving fundamentals and clear growth drivers [5] - Nokia (NOK) is well-positioned in the technology cycle, with a strong 5G portfolio and a stable balance sheet, holding €4.89 billion ($5.74 billion) in cash as of September 30, 2025 [6][7] - Lantronix, Inc. (LTRX) is gaining traction in Edge AI and drones, with a significant increase in drone OEM engagements from 10 to 17 [12][13] - Taboola.com Ltd. (TBLA) is expanding its performance advertising platform, Realize, and reported adjusted EBITDA of about $48 million with margins exceeding 27% in Q3 2025 [19][20] - TransAct Technologies (TACT) is experiencing strong momentum in its Foodservice Technology business, with expected net sales between $50 million and $53 million for full-year 2025 [23][24] Company Performance - Nokia targets an annual comparable operating profit of €2.7–€3.2 billion by 2028 and has a Zacks Rank 2 (Buy) [10] - Lantronix has a Growth Score of A, with a stock surge of 48.8% over the past year and earnings estimates for the current and next fiscal year increasing by 42.9% and 90%, respectively [16] - Taboola has a Growth Score of A, with a stock gain of 11.4% over the past three months and earnings estimates moving up by 2.2% and 4.3% for the current and next fiscal year [22] - TransAct has a Growth Score of A, with a stock increase of 15.8% over the past six months and earnings estimates rising by 18.4% and 6.9% for the current and next fiscal year [26]

Core Insights - Lantronix, Inc. (LTRX) has partnered with Trillium Engineering to provide NDAA/TAA-compliant Edge AI technology, enhancing its position in the growing drone market projected to reach $57.8 billion by 2030 [1][5] Company Developments - The collaboration emphasizes Lantronix's capability to deliver AI-powered edge computing solutions, creating recurring revenue opportunities in both defense and commercial sectors [2][5] - Trillium's imaging systems, powered by Lantronix's technology, support various applications including intelligence, surveillance, reconnaissance, and infrastructure inspection [2][4] - The partnership showcases the scalability of Lantronix's Edge AI platform for military and commercial drone applications, reinforcing its leadership in high-growth markets [3][5] Technology Highlights - A key differentiator is the Open-Q 5165RB System on Module, utilizing Qualcomm Dragonwing processors, which enables advanced AI capabilities such as real-time edge processing and adaptive object detection [4][9] - Lantronix's technology allows for precision targeting in GPS-denied environments and is designed for compact uncrewed systems [4] Financial Outlook - For Q2 of fiscal 2026, Lantronix expects revenue between $28 million and $32 million, with a midpoint of $30 million, and non-GAAP EPS projected between 2 cents and 4 cents [7][9] - The design win with Trillium is seen as a significant milestone in Lantronix's strategy for sustainable, high-margin growth through differentiated Edge AI solutions [5][6] Market Performance - LTRX has a Zacks Rank 2 (Buy) and its shares have increased by 91.3% over the past year, outperforming the Zacks Computer Networking industry's growth of 37.7% [8]

Core Insights - Lantronix's Edge AI technology has been selected by Trillium Engineering to enhance gimbaled imaging systems for military and commercial unmanned aircraft, showcasing its compliance with NDAA/TAA standards [1][2] Industry Overview - The global drone market is projected to reach $57.8 billion by 2030, indicating significant growth potential for companies like Lantronix that provide advanced connectivity solutions [2] - The collaboration with Trillium Engineering positions Lantronix as a key player in defense and intelligence technology innovation, capitalizing on the increasing demand for mission-critical edge computing [2][3] Strategic Significance - The partnership with Trillium Engineering highlights Lantronix's capability to deliver AI-powered edge computing solutions, creating long-term recurring revenue opportunities in both defense and commercial sectors [3][6] - Trillium's systems are utilized in various applications, including intelligence, surveillance, reconnaissance (ISR), infrastructure inspection, and wildland fire operations, further expanding Lantronix's market reach [3][6] Technology Advantage - Lantronix's Open-Q 5165RB System on Module (SOM), powered by Qualcomm® Dragonwing™ processors, enables advanced on-device AI capabilities for Trillium's products, enhancing operational efficiency and real-time intelligence [5][7] - The technology supports features such as real-time edge AI processing, AI object detection and tracking, and precision targeting with low latency, making it suitable for compact, power-efficient uncrewed platforms [7][8] Investor Insights - The collaboration with Trillium Engineering is a strategic move for Lantronix to drive sustainable, high-margin growth through differentiated Edge AI solutions, particularly in the robust drone and defense markets [5][6] - By expanding its footprint in high-growth sectors characterized by long product lifecycles, Lantronix aims to capture additional recurring revenue opportunities and strengthen its competitive position in the global IoT and AI ecosystem [5][6]

Core Insights - Lantronix Inc. is set to launch new Edge AI solutions at CES 2026, showcasing its advancements in compute and connectivity IoT solutions for Edge AI applications [1][2] Company Developments - The company is enhancing its leadership in the Edge AI market with new embedded compute, surveillance, and autonomous systems solutions [2] - CEO Saleel Awsare emphasized the importance of collaboration with technology leaders like Qualcomm, Teledyne Flir, and Vodafone to deliver high-performance Edge AI solutions [2] - Lantronix will provide demonstrations of its new Edge AI solutions aimed at real-time decision-making in high-growth industries during CES [3] Strategic Impact and Market Opportunity - The edge computing market is expected to experience exponential growth, positioning Lantronix to benefit from the increasing demand for distributed AI processing [4] - Analysts predict a rapid shift of enterprise data processing towards the edge, driven by the need for real-time AI and distributed intelligence [4] - Lantronix's AI-at-the-edge solutions are gaining traction across various sectors, including autonomous systems, critical infrastructure, and industrial AI applications, which supports a long-term shift towards higher-value, recurring-revenue Edge AI offerings [4] Product Innovations - The company is introducing new System-on-Module (SOM) solutions powered by Qualcomm chipsets, designed for demanding AI workloads [7] - An integrated Smart Surveillance Gateway and Smart PoE/LV Switches will create a comprehensive AI-driven video analytics platform for enterprise and industrial use [7] - New compute solutions for robotics and UAVs are being developed on the latest Qualcomm processors to support autonomous platforms [7] Industry Applications - Lantronix is involved in advanced decision-making and data optimization for drones, including support for the U.S. Army's Short-Range Reconnaissance drone program [8] - The company is enabling remote management of power and communications assets in smart cities through edge boxes for a global mobile network operator [8] - Intelligent event detection and real-time alerts are being implemented to reduce bandwidth and storage needs for enterprises and security companies [8] Company Overview - Lantronix Inc. is recognized as a global leader in Edge AI and Industrial IoT solutions, providing intelligent computing, secure connectivity, and remote management for mission-critical applications [9] - The company serves high-growth markets such as smart cities, enterprise IT, and unmanned systems, helping customers optimize operations and accelerate digital transformation [9]

Core Insights - Lantronix Inc. announced a significant donation of 3.0 million shares of its common stock by founder Bernhard Bruscha to the TL Stiftung, a charitable foundation focused on scientific research and community well-being [1][2] - Following the donation, Bruscha retains over 2.3 million shares, indicating his ongoing commitment to the company and confidence in its future [2] Company Overview - Lantronix is a leader in Edge AI and Industrial IoT solutions, providing intelligent computing, secure connectivity, and remote management for critical applications [4] - The company serves high-growth markets such as smart cities, enterprise IT, and unmanned systems, helping clients optimize operations and accelerate digital transformation [4] - Lantronix's offerings include hardware, software, and services that support applications like secure video surveillance and resilient network management [4] TL Stiftung Overview - The TL Stiftung, founded by Bruscha in 2000, focuses on long-term projects that promote scientific research, education, and the well-being of underserved communities [3][2]

Industry Overview - The Zacks Computer - Networking industry is poised for growth driven by advancements in cloud computing, network security, big data, and next-gen connectivity, particularly with the rapid adoption of AI technology [1][2] - The proliferation of AI workloads and hyperscale data centers is leading to increased investments in high-speed interconnects, optical networking, and Ethernet switches [1] - The deployment of 5G technology is enhancing the Internet of Things (IoT), Advanced Driver Assistance Systems, AR/VR devices, and 5G smartphones, thereby increasing demand for robust networking infrastructure [1] Trends Influencing the Industry - The explosion of AI workloads necessitates significant upgrades in observability infrastructure, increasing the demand for innovative networking products [2] - The rapid deployment of 5G technology is expected to boost growth prospects, with substantial investments required to upgrade core fiber backhaul networks [5] - The upcoming Wi-Fi 7 upgrade cycle is anticipated to drive momentum in the industry, addressing Wi-Fi spectrum shortages and supporting a higher number of connected devices [6] Company Performance - NetScout Systems reported a 15% year-over-year revenue increase to $219 million in Q2 of fiscal 2026, driven by demand across enterprise and service provider markets [20] - Digi International achieved a 9% year-over-year revenue growth of $114 million in fiscal 2025, with a 31% surge in Annual Recurring Revenue (ARR) to $152 million [28] - Lantronix reported a 3% year-over-year revenue increase to $29.8 million in Q1 of fiscal 2026, with significant growth in its unmanned aerial systems segment [34] Stock Market Performance - The Zacks Computer - Networking industry has outperformed the S&P 500 Composite and the broader Zacks Computer and Technology sector, gaining 33.4% over the past year compared to the sector's 23.9% and the S&P 500's 12.9% [11] - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 22.45X, slightly below the S&P 500's 22.78X and the sector's 27.8X [14] Future Outlook - The Zacks Industry Rank for the Computer - Networking industry is 38, placing it in the top 16% of over 243 Zacks industries, indicating bright near-term prospects [9] - Companies in the industry are focusing on innovation in networking technologies, including network virtualization and Software-Defined Networking, to meet the growing demand for secure infrastructure [4]

Core Insights - Lantronix Inc. is a global leader in Edge AI and Industrial IoT solutions, focusing on intelligent computing, secure connectivity, and remote management for mission-critical applications [1] - The company serves high-growth markets such as smart cities, enterprise IT, and commercial and defense unmanned systems, enabling customers to optimize operations and accelerate digital transformation [1] - Lantronix's comprehensive portfolio includes hardware, software, and services that support applications like secure video surveillance and resilient out-of-band network management [1] Upcoming Investor Conferences - CEO Saleel Awsare will participate in the 16th Annual Craig-Hallum Alpha Select Conference on November 18 in New York City, with one-on-one meetings available [2] - The 14th Annual ROTH Technology Conference will take place on November 19 in New York City, also featuring one-on-one meetings with CEO Saleel Awsare and CFO Brent Stringham [2] - The 14th Annual Headgate Partners NYC Summit is scheduled for December 16 in New York City, offering small group and one-on-one meetings with CEO Saleel Awsare [2]

Revenue Performance - Net revenue for the three months ended September 30, 2025, decreased by $4,629,000 or 13.4% compared to the same period in 2024, driven by declines in all product lines: IoT System Solutions (down 12.3%), Embedded IoT Solutions (down 14.3%), and Software and Services (down 18.0%) [86] - The Americas region accounted for 69.3% of total net revenue in Q3 2025, with a year-over-year increase of $3,231,000 or 18.5%, while EMEA and APJ regions saw significant declines of 51.5% and 37.8%, respectively [87] - Net revenue from Embedded IoT Solutions decreased primarily due to lower unit sales in the APJ region and lower volume sales in the Americas and EMEA regions [88] - Net revenue from IoT System Solutions decreased significantly due to the absence of shipments to a key customer, Gridspertise, which accounted for over $5 million in the prior year [89] Profitability and Expenses - Gross profit for the three months ended September 30, 2025, was $14,475,000, representing a gross margin of 44.8%, an increase from 42.1% in the prior year, attributed to product sales mix and reduced logistics costs [91] - Selling, general and administrative expenses slightly increased to $9,542,000, representing 32.0% of net revenue, primarily due to higher share-based compensation costs [94] - Research and development expenses decreased to $4,598,000, or 15.4% of net revenue, due to lower personnel-related expenses and reduced costs for third-party contract labor [95] - The company reported a net loss of $1,401,000 for the three months ended September 30, 2025, an improvement from a net loss of $2,502,000 in the same period of 2024, driven by a decrease in operating expenses [86] - Charges related to restructuring and severance were $93,000 in Q3 2025, a significant decrease from $900,000 in the same quarter of 2024, indicating ongoing efforts to identify cost savings [96] Cash Flow and Working Capital - Working capital increased by $2,730,000, reaching $49,701,000 as of September 30, 2025, compared to $46,971,000 on June 30, 2025 [101] - Cash and cash equivalents rose by $2,093,000 to $22,191,000 as of September 30, 2025, from $20,098,000 on June 30, 2025 [101] - Net cash provided by operating activities for the three months ended September 30, 2025, was $3,605,000, an increase of $942,000 from $2,663,000 in the same period of 2024 [107] - Accounts receivable decreased by $3,167,000, or 12.6%, from June 30, 2025, to September 30, 2025 [109] - Contract manufacturers' receivables decreased by $2,619,000, or 85.3%, during the same period, primarily due to shipment timing [109] - Net inventories increased by $384,000, or 1.5%, from June 30, 2025, to September 30, 2025 [110] - Accounts payable decreased by $3,625,000, or 27.3%, from June 30, 2025, to September 30, 2025 [110] Investment and Financing Activities - Net cash used in investing activities was $74,000 for the three months ended September 30, 2025, compared to $157,000 in 2024 [111] - Net cash used in financing activities was $1,438,000 for the three months ended September 30, 2025, a decrease of $910,000 from $2,348,000 in 2024 [112] Future Outlook - The company expects fluctuations in gross margin in the future based on changes in product mix, average selling prices, and manufacturing costs [92] - The company anticipates that net revenue, working capital requirements, and capital expenditures will be primary factors affecting cash and liquidity [104]

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Core Insights - Lantronix, Inc. reported quarterly earnings of $0.04 per share, exceeding the Zacks Consensus Estimate of $0.03 per share, but down from $0.06 per share a year ago, indicating an earnings surprise of +33.33% [1] - The company posted revenues of $29.79 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 0.36% and down from $34.42 million year-over-year [2] - Lantronix shares have increased by approximately 13.1% since the beginning of the year, compared to a 15.1% gain in the S&P 500 [3] Earnings Outlook - The future performance of Lantronix's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is $0.04 on revenues of $30.9 million, and for the current fiscal year, it is $0.23 on revenues of $127.4 million [7] Industry Context - The Computer - Networking industry, to which Lantronix belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, which may impact the stock's performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that investors should monitor these revisions closely [5][6]