Lantronix, Inc. LTRX reported in-line earnings for the third quarter, after the closing bell on Thursday.The company posted quarterly earnings of 3 cents per share which met the analyst consensus estimate. The company reported quarterly sales of $28.50 million which missed the analyst consensus estimate of $29.12 million.“We’re positioning Lantronix to lead the next wave of industrial and enterprise transformation at the edge,” said Saleel Awsare, president and CEO of Lantronix. “This quarter reflects conti ...

Financial Performance - In the three months ended March 31, 2025, net revenue decreased by $12,683,000 or 30.8% compared to the same period in 2024, driven by a 45.0% decrease in the IoT System Solutions product line [107]. - The company reported a net loss of $3,868,000 for the three months ended March 31, 2025, compared to a net loss of $423,000 for the same period in 2024 [107]. - Net revenue for the nine months ended March 31, 2025, decreased by $17,168,000 or 15.4% compared to the same period in 2024, primarily due to a 24.4% decrease in the IoT System Solutions product line and a 14.3% decrease in Software and Services [118]. - The company reported a net loss of $8,742,000 for the nine months ended March 31, 2025, compared to a net loss of $4,902,000 for the same period in 2024 [118]. Gross Profit and Margins - Gross profit for the three months ended March 31, 2025, was $12,403,000, representing a gross margin of 43.5%, compared to 40.1% in the same period in 2024 [112]. - Gross profit for the nine months ended March 31, 2025, was $40,162,000, a decrease of $5,470,000 or 12.0% from $45,632,000 in 2024, with a gross margin of 42.7% [124]. - The company anticipates fluctuations in gross margin based on changes in product mix, average selling prices, and manufacturing costs [113]. Expenses - Selling, general and administrative expenses decreased by $794,000 or 8.1% to $9,753,000 for the three months ended March 31, 2025, primarily due to lower headcount-related costs [115]. - Research and development expenses decreased by $723,000 or 13.9% to $5,186,000 for the three months ended March 31, 2025, mainly due to lower personnel-related expenses [117]. - Selling, general and administrative expenses decreased by $1,910,000 or 6.6% to $27,237,000 for the nine months ended March 31, 2025, primarily due to lower spending on sales conferences and reduced share-based compensation [126]. - Research and development expenses decreased by $614,000 or 4.1% to $14,403,000 for the nine months ended March 31, 2025, mainly due to lower personnel-related expenses and reduced share-based compensation [127]. Revenue by Region and Product Line - The Americas region accounted for 57.9% of net revenue in the three months ended March 31, 2025, while EMEA accounted for 21.2%, and APJ accounted for 20.9% [108]. - The IoT System Solutions product line saw a significant revenue drop, with no revenue from a major European smart energy grid customer, which previously contributed nearly $12,000,000 in the prior year [110]. - Embedded IoT Solutions revenue decreased by 3.7% to $11,990,000, while Software and Services revenue decreased by 8.3% to $1,780,000 [108]. Cash Flow and Working Capital - Working capital as of March 31, 2025, was $47,897,000, a decrease of $10,897,000 from $58,794,000 as of June 30, 2024 [134]. - Cash and cash equivalents decreased by $6,238,000 to $19,999,000 as of March 31, 2025, compared to $26,237,000 as of June 30, 2024 [134]. - Net cash provided by operating activities for the nine months ended March 31, 2025, was $6,233,000, a decrease of $10,115,000 from $16,348,000 in 2024 [141]. - Cash provided by operating activities decreased compared to the prior year period, with a net loss of $9,705,000 in non-cash charges and net cash from operating assets and liabilities of $5,270,000 for the nine months ended March 31, 2025 [142]. Restructuring and Acquisition - The company incurred restructuring charges of $2,674,000 for the nine months ended March 31, 2025, primarily related to headcount reductions [128]. - Acquisition-related costs of approximately $337,000 were incurred during the nine months ended March 31, 2025, primarily in connection with the acquisition of Netcomm [130]. - The acquisition of Netcomm Wireless Pty Ltd for $6,458,000 in cash is expected to enhance connectivity solutions in critical infrastructure and telecommunications [103]. Inventory and Receivables - Accounts receivable decreased by $7,631,000, or 24.4%, from June 30, 2024, primarily due to lower net revenue levels and timing of payments from customers [143]. - Inventories increased by $453,000, or 1.6%, from June 30, 2024, mainly due to $797,000 of net inventories acquired in the Netcomm acquisition [143]. - Accounts payable increased by $658,000, or 6.4%, from June 30, 2024, primarily due to timing of inventory receipts and vendor payments [144]. - Accrued payroll and related expenses decreased by $1,931,000, or 33.1%, from June 30, 2024, due to accrued variable compensation paid out during the current year [144]. Investing and Financing Activities - Net cash used in investing activities included the acquisition of Netcomm for $6,458,000 and property and equipment totaling $362,000 for tooling and R&D projects for the nine months ended March 31, 2025 [145]. - Cash used in financing activities was primarily for principal payments on Senior Credit Facilities and tax withholdings for restricted shares during the nine months ended March 31, 2025 [146].

Financial Performance - Lantronix, Inc. reported quarterly earnings of $0.03 per share, matching the Zacks Consensus Estimate, but down from $0.11 per share a year ago [1] - The company posted revenues of $28.5 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.40%, and down from $41.18 million year-over-year [2] - Over the last four quarters, Lantronix has only surpassed consensus EPS estimates once and has not beaten consensus revenue estimates [2][3] Stock Performance - Lantronix shares have declined approximately 48.3% since the beginning of the year, contrasting with the S&P 500's decline of 4.3% [3] - The current Zacks Rank for Lantronix is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.05 on revenues of $30.8 million, and for the current fiscal year, it is $0.18 on revenues of $125.6 million [7] - The trend of estimate revisions for Lantronix is mixed, which could change following the recent earnings report [6] Industry Context - The Computer - Networking industry, to which Lantronix belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests that the performance of stocks can be significantly influenced by the outlook for the industry [8]

Financial Data and Key Metrics Changes - The company reported revenue of $28.5 million for Q3 FY2025, which was down both sequentially and year-over-year due to no shipments to a large smart grid customer in Europe [4][10] - GAAP gross margin increased to 43.5% in Q3 FY2025 from 42.6% in the prior quarter and 40.1% in the year-ago quarter [10] - Non-GAAP gross margin was 44.1% in Q3 FY2025 compared to 43.2% in the prior quarter and 41% in the year-ago quarter [10] - GAAP net loss was $3.9 million or $0.10 per share during Q3 FY2025, compared to a GAAP net loss of $0.4 million or $0.01 per share in the year-ago quarter [11] - Non-GAAP net income was $1.1 million or $0.03 per share during Q3 FY2025, down from $4.2 million or $0.11 per share in the year-ago quarter [12] Business Line Data and Key Metrics Changes - Revenue impact was partially offset by sequential organic growth in embedded connectivity and switch products, along with growth in gateways and routers from the NetComm acquisition [10] - The company reduced non-GAAP operating expenses by approximately $1.2 million compared to the year-ago quarter and by about $200,000 sequentially [11] Market Data and Key Metrics Changes - The company is expanding its distribution network in the European Union and Asia Pacific, leveraging partnerships with TD SYNNEX and the acquired channel network from NetComm [7] - The integration of NetComm products has gone well, leading to increased customer engagement and cross-selling opportunities [7] Company Strategy and Development Direction - The company is focused on expanding its distribution network and managing costs amid tariff uncertainties [5][6] - There is a strong emphasis on developing edge AI solutions, particularly in the areas of drones, robotics, and surveillance [8][30] - The company is cautious about the macroeconomic environment but is generating positive cash flow and maintaining a strong balance sheet [15] Management's Comments on Operating Environment and Future Outlook - Management is closely monitoring the operating environment and has established a task force to address tariff impacts [5][6] - The company expects revenue for Q4 FY2025 to be in the range of $26.5 million to $30.5 million, with some pressure on gross margins anticipated [14] - Management is optimistic about double-digit growth in FY2026 based on design activity and new product releases [36][45] Other Important Information - Cash and cash equivalents at the end of Q3 FY2025 totaled $20 million, slightly up from the prior quarter [12] - The company paid down approximately $2 million of its existing term debt, reducing interest expenses [13] Q&A Session Summary Question: What was the NetComm contribution in March and its growth potential? - Management expects NetComm revenue to be $6 million to $7 million on an annualized basis, tracking to exceed that run rate [18] Question: How is customer engagement tracking amid macro uncertainties? - There are no cancellations or push-outs, and design activity remains strong [21] Question: What is the outlook for edge compute initiatives? - The company is seeing positive engagement and expects revenue from AI activities, particularly around cameras, in FY2026 [30] Question: What visibility is there for June guidance and growth into FY2026? - Management is cautious but confident in the June guidance, expecting double-digit growth driven by core business and new design wins [36][45] Question: Is the company still the sole supplier to Gridspertise? - Yes, the company remains the single source for Gridspertise, and management is working closely with them [47]

Financial Data and Key Metrics Changes - The company reported revenue of $28.5 million for Q3 2025, which was down both sequentially and year-over-year due to no shipments to a large smart grid customer in Europe [9][10] - GAAP gross margin increased to 43.5% in Q3 2025 from 42.6% in the prior quarter and 40.1% in the year-ago quarter [10] - Non-GAAP gross margin was 44.1% in Q3 2025 compared to 43.2% in the prior quarter and 41% in the year-ago quarter [10] - GAAP net loss was $3.9 million or $0.10 per share, compared to a GAAP net loss of $0.4 million or $0.01 per share in the year-ago quarter [11] - Non-GAAP net income was $1.1 million or $0.03 per share, down from $4.2 million or $0.11 per share in the year-ago quarter [12] - Cash and cash equivalents totaled $20 million at the end of Q3 2025, slightly up from the prior quarter [12] Business Line Data and Key Metrics Changes - Revenue decline was partially offset by organic growth in embedded connectivity and switch products, as well as growth in gateways and routers from the NetComm acquisition [10] - The integration of NetComm products has been successful, leading to increased customer engagement and cross-selling opportunities [7] Market Data and Key Metrics Changes - The company is expanding its distribution network in the European Union and Asia Pacific, leveraging partnerships with TD SYNNEX and the acquired channel network from NetComm [7] - The company is focused on edge AI solutions, which are gaining traction among customers moving towards hybrid architectures [8] Company Strategy and Development Direction - The company is closely monitoring the operating environment and has established a task force to manage tariff impacts and supply chain disruptions [6] - There is a strong focus on developing edge intelligence solutions and expanding distribution channels [5][8] - The company aims to grow its channel distribution and has announced new AI-powered products, including a camera solution and a system using Qualcomm's processor [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the macroeconomic environment but noted positive cash flow and a strong balance sheet [15] - Customer design activity is reportedly growing, and the company is optimistic about future revenue from AI initiatives [15][30] - For Q4 2025, revenue is expected to be in the range of $26.5 million to $30.5 million, with some pressure on gross margins anticipated [13] Other Important Information - The company paid down $2 million of its existing term debt, reducing interest expenses [13] - The remaining debt balance is approximately $12.5 million, giving the company a net cash position of $7.5 million [13] Q&A Session Summary Question: What was the NetComm contribution in March and its growth potential? - Management expects NetComm revenue to be $6 million to $7 million on an annualized basis, tracking to exceed that run rate [18][19] Question: What is the current quoting activity and order patterns in Q4? - Management reported no cancellations or unusual customer behavior, with design activity remaining strong [21][22] Question: How is the edge compute side developing? - The company is seeing traction in edge AI initiatives, with expected revenue from AI activities in fiscal 2026 [30] Question: What visibility is there for June guidance and growth into fiscal 2026? - Management is cautious but optimistic about double-digit growth in fiscal 2026, driven by design activity and new product releases [36][46] Question: Is the company still the sole supplier to Gridspertise? - Yes, the company remains the single source for Gridspertise, continuing to engage with them on deployments [48]

Q3 FY2025 Financial Results "We're positioning Lantronix to lead the next wave of industrial and enterprise transformation at the edge," said Saleel Awsare, president and CEO of Lantronix. "This quarter reflects continued investment in high-growth areas—from AI-enabled gateways to 5G connectivity—while advancing our innovation roadmap, global partnerships, and talent base." Lantronix Reports Results for Third Quarter of Fiscal 2025 IRVINE, Calif., May 8, 2025 – Lantronix Inc. (NASDAQ: LTRX), a global leader ...

Core Insights - Lantronix Inc. reported third-quarter fiscal 2025 results, achieving revenue of $28.5 million, which is within the guidance range of $27.0 million to $31.0 million despite a challenging macroeconomic environment [1][10] - The company continues to focus on becoming a leader in intelligent edge computing, with significant investments in AI-enabled gateways and 5G connectivity [3][6] Financial Performance - Third-quarter net revenue was $28.5 million, a decrease from $31.2 million in the previous quarter and $41.2 million in Q3 FY2024 [9][10] - GAAP EPS for the quarter was ($0.10), compared to ($0.01) in Q3 FY2024 and ($0.06) in Q2 FY2025, while Non-GAAP EPS was $0.03, down from $0.11 in Q3 FY2024 [10][23] - The company reported a net loss of $3.9 million for the quarter, compared to a loss of $2.4 million in Q3 FY2024 [23][26] Product and Market Developments - Lantronix launched the Open-Q™ 8550CS System on Module (SoM), enhancing its AI-capable compute portfolio for industrial and robotics applications [2] - The company enabled Teledyne/FLIR's AI-driven drone thermal camera, showcasing the reliability of its Open-Q™ platform in critical edge vision systems [2] Business Outlook - For the fourth fiscal quarter ending June 30, 2025, Lantronix anticipates revenue in the range of $26.5 million to $30.5 million and Non-GAAP EPS between $0.00 to $0.02 [11][3] - The company is positioning itself to capitalize on the next wave of industrial and enterprise transformation at the edge [3][6] Geographic Revenue Breakdown - In Q3 FY2025, revenue from the Americas was $16.5 million, EMEA contributed $6.0 million, and Asia Pacific Japan accounted for $6.0 million [27][28] - Year-over-year comparisons show a decline in revenue across all regions, reflecting broader market challenges [27][28]

Company Overview - Lantronix Inc. is a global leader in compute and connectivity IoT solutions, focusing on high-growth markets such as Smart Cities, Enterprise, and Transportation [3] - The company provides customizable solutions that enable AI Edge Intelligence, including Intelligent Substations infrastructure, Infotainment systems, and Video Surveillance [3] Investor Engagement - Lantronix CEO Saleel Awsare and CFO Brent Stringham will participate in one-on-one meetings with investors at the 22nd Annual Craig-Hallum Institutional Investor Conference on May 28, 2025 [1] - Interested investors can contact CFO Brent Stringham for meeting availability [2]

Core Viewpoint - Lantronix Inc. is set to release its financial results for the fiscal 2025 third quarter on May 8, 2025, after market close [1] Group 1: Financial Results Announcement - The financial results will cover the period ended March 31, 2025 [1] - An investor conference call and audio webcast will be held on May 8, 2025, at 1:30 p.m. Pacific Time [2] - Investors can access a replay of the conference call starting at approximately 8:00 p.m. Pacific Time on the same day [3] Group 2: Company Overview - Lantronix Inc. is recognized as a global leader in compute and connectivity IoT solutions, focusing on high-growth markets such as Smart Cities, Enterprise, and Transportation [4] - The company's offerings include customizable solutions that enable AI Edge Intelligence, with advanced products like Intelligent Substations infrastructure, Infotainment systems, and Video Surveillance [4]

Core Viewpoint - Lantronix, Inc. (LTRX) has experienced a significant stock decline of 26.8% over the past month, influenced by broader market sell-offs due to trade tensions and potential economic slowdowns [1][2]. Group 1: Company Developments - Lantronix is enhancing its partnerships and showcasing advanced IoT solutions aimed at digital transformation across various industries, including its IIoT portfolio featuring high-performance routers and gateways [3]. - The company introduced the SmartLV, an AI-enabled IoT Edge Compute Cellular Gateway, which optimizes power distribution in low-voltage grids by integrating real-time data [4]. - LTRX is expanding its collaboration with Qualcomm to implement AI-powered analytics in edge systems, targeting sectors like banking and smart farming [5]. - In Q2, Lantronix acquired NetComm for $6.5 million, enhancing its Connect business with 4G and 5G gateways, and is seeing growth potential in Australia and New Zealand [6]. - The company launched the Open-Q 8550CS System-on-Module, designed to deliver low-power, high-performance AI capabilities for edge computing across various industries [8]. Group 2: Financial Performance - In Q2 of fiscal 2025, Lantronix's IoT System Solutions revenues, which contributed 59.7% to total revenues, fell by 19.2% year over year, while Embedded IoT Solutions revenues, contributing 34.6%, decreased by 8.3% [12]. - Overall, the company's top line decreased by 15.9% year over year, attributed to reduced orders from key automotive customers and a slight slowdown in the enterprise market [13]. - LTRX is currently trading at a forward 12-month Price/Sales ratio of 0.58, significantly lower than the industry average of 3.74 [9].