Core Viewpoint - Lantronix, Inc. reported quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $0.09 per share, representing a -33.33% earnings surprise [1][2] Financial Performance - The company posted revenues of $34.42 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 7.22%, compared to $33.03 million in the same quarter last year [2] - Over the last four quarters, Lantronix has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Performance - Lantronix shares have declined approximately 34.8% since the beginning of the year, contrasting with the S&P 500's gain of 24.3% [3] Future Outlook - The company's earnings outlook will be crucial for stock performance, with current consensus EPS estimates at $0.11 for the coming quarter and $0.46 for the current fiscal year, with revenues expected to be $39.3 million and $159.8 million respectively [7] - The Zacks Rank for Lantronix is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Computer - Networking industry, to which Lantronix belongs, is currently in the top 11% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% of industries [8]

First Quarter Net Revenue of $34.4 Million, up 4 Percent Year-Over-YearFirst Quarter GAAP EPS of ($0.07) vs. ($0.05) in the Prior Year First Quarter Non-GAAP EPS of $0.06 vs. $0.07 in the Prior Year IRVINE, Calif., Nov. 07, 2024 (GLOBE NEWSWIRE) -- Lantronix Inc. (NASDAQ: LTRX), a global leader of compute and connectivity IoT solutions, today reported results for its first quarter of fiscal 2025. Net revenue totaled $34.4 million, up 4 percent year-over-year and down sequentially as expected. GAAP EPS of ($ ...

IRVINE, Calif., Oct. 31, 2024 (GLOBE NEWSWIRE) -- Lantronix Inc. (the “Company”) (NASDAQ: LTRX), a global leader of compute and connectivity IoT solutions, today announced it will release financial results from its fiscal 2025 first quarter ended Sept. 30, 2024, after the close of the market on Thursday, Nov. 7, 2024. Management will host an investor conference call and audio webcast at 3:30 p.m. Pacific Time (6:30 p.m. Eastern Time) on Nov. 7, 2024. To access the live conference call, investors should dial ...

Core Insights - Lantronix, Inc. has launched the SmartLV, an AI-powered IoT Edge Compute Cellular Gateway aimed at enhancing low-voltage substations and distribution automation in smart grids and industrial applications [1] - The SmartLV Gateway is designed to provide real-time visibility, control, and automation for Distribution System Operators (DSOs), optimizing energy flow and ensuring grid stability [2] Product Features - The SmartLV Gateway features Multi-Protocol Communication, supporting various interfaces such as Ethernet, Serial, and industrial protocol conversion, ensuring compatibility with both legacy and modern systems [3] - It is LTE and 5G-ready, enabling high-speed data transmission for quick decision-making by DSOs [3] - The AI-driven edge computing capability allows for low-latency analysis at the substation level, improving grid efficiency and response times [3] Cybersecurity and Management - The SmartLV Gateway includes InfiniShield, a cybersecurity framework designed to protect against evolving cyber threats [4] - Lantronix's Percepxion IoT Edge Platform simplifies deployment management for DSOs, integrating features like global cellular plans and VPN security [4] Strategic Partnerships - The development of the SmartLV Gateway is a result of collaboration between Lantronix and Qualcomm, leveraging both companies' expertise to address challenges in the energy sector [5] - Recently, five new System-in-Package (SiP) solutions were introduced, enhancing industrial and enterprise IoT capabilities [5] Financial Performance - The IoT System Solutions business saw a significant revenue increase of 156% year-over-year, while the Embedded IoT Solutions and Software & Services segments experienced declines of 40% and 3.2%, respectively [6] - Lantronix currently holds a Zacks Rank of 4 (Sell), with shares declining by 5.5% over the past year compared to a 4.3% growth in the sub-industry [7]

Core Viewpoint - Lantronix Inc. has launched SmartLV, the first AI-enabled IoT Edge Compute Cellular Gateway, aimed at enhancing real-time visibility, control, and automation in the energy sector, particularly for low-voltage substations and distribution automation applications [1][2][3]. Product Features - SmartLV is designed for Distribution System Operators (DSOs) to manage energy precisely, ensuring robust operations with advanced cybersecurity and AI capabilities [2][4]. - Key features include multi-protocol communication for integration with existing infrastructure, high-speed LTE and 5G-ready connectivity, AI-enabled edge computing for real-time decision-making, and advanced cybersecurity through Lantronix's InfiniShield™ security framework [4]. - The product also offers simplified management through Lantronix's Percepxion™ IoT Edge Platform, enabling automated control of Distributed Energy Resources (DERs) based on actual grid conditions [4]. Industry Impact - The SmartLV Gateway represents a significant advancement in energy management, allowing utility operators to optimize energy flow and maintain stability during peak loads, thus addressing critical challenges in smart grid operations [3][4]. - This innovation is part of a long-standing collaboration between Qualcomm Technologies and Lantronix, combining AI and connectivity to transform energy delivery and consumption [5]. Availability - The SmartLV Gateway is set to launch in calendar year 2025, with trials beginning at the end of calendar year 2024 for selected DSOs [6].

Lantronix, Inc. (LTRX) recently launched five new System-in-Package (SiP) solutions. These modules, powered by Qualcomm Technologies' (QCOM) cutting-edge processors, are poised to redefine industrial and enterprise Internet of Things (IoT) possibilities, combining leading-edge performance, scalability and cost efficiency. These innovative SiP solutions are tailored to cater to the growing demand for efficient and reliable artificial intelligence (AI)-powered systems across various industries, including robo ...

IRVINE, Calif., Oct. 09, 2024 (GLOBE NEWSWIRE) -- Lantronix Inc. (NASDAQ: LTRX), a global leader of compute and connectivity IoT solutions, today announced its powerful new System-in-Package (SiP) solutions powered by Qualcomm® Technologies' chipsets that reinforce Lantronix's position in industrial and enterprise IoT innovation, bringing advanced Artificial Intelligence (AI) and Machine Learning (ML) capabilities to the edge. "Qualcomm Technologies and Lantronix have had strong relationships for more than ...

IRVINE, Calif., Sept. 16, 2024 (GLOBE NEWSWIRE) -- Lantronix Inc. (NASDAQ: LTRX), a global leader in compute and connectivity IoT solutions, today announced the resignation of Chief Financial Officer (CFO) Jeremy Whitaker, who has accepted the CFO role at a private company. Whitaker departed on September 13, 2024. Brent Stringham, currently the company's Controller, is appointed Interim CFO while the company conducts a search for the next CFO. Stringham, an experienced financial leader, has been with Lantro ...

Supply Chain and Manufacturing Risks - The company faces supply chain risks, including potential shortages of single-source integrated circuits and other components, which could disrupt product shipments and lead to revenue loss[45][46] - The company outsources most of its manufacturing to contract manufacturers in Asia, exposing it to risks such as reduced control over quality, delivery schedules, and production costs[47] - The COVID-19 pandemic and other potential pandemics have adversely impacted the company's operations, including disruptions in supply chains and reduced demand for products[50] - Natural disasters and supply chain disruptions could negatively impact the company's revenues and profitability[90][91] - The company's operations are vulnerable to interruptions from events like earthquakes, power loss, and cybersecurity breaches, with no earthquake insurance coverage[92] Revenue and Demand Fluctuations - Revenue fluctuations are driven by project-based orders, with sales cycles ranging from 3 to 24 months or longer, making demand forecasting difficult[54][56] - The company lacks visibility into future demand due to factors such as lengthy sales cycles, project-driven customer requirements, and reliance on distributors[58] - The company operates in mature markets with declining demand, and its future growth depends on the successful development and market acceptance of new products[52] - The company's reliance on distributors for a majority of sales poses risks, including potential defaults or reduced efforts by key distributors[63] - A substantial part of the company's revenues is generated through sales by distributors and resellers, and failure to manage them effectively could materially and adversely affect the business[64] Competitive and Market Risks - The company operates in a highly competitive market with rapid technological advances, and failure to compete could result in reduced prices and loss of market share[68] - The company expects increased competition to result in downward pressure on pricing, potentially leading to reduced gross margins and sales volumes[65] - Intense competition and rapid technological changes require frequent product revisions, which may delay sales if customers require requalification[60] - The company's software and SaaS offerings face significant risks, including competition and challenges in adapting to evolving market conditions[53] - Failure to obtain industry certifications or regulatory approvals could impede revenue growth in wireless products[106] Financial and Operational Risks - The company has a history of net losses and may require additional funding, which may not be available on favorable terms[95][96] - The company's loan agreement requires holding 50% of cash balances at SVB, limiting cash management flexibility[99] - The company maintains cash deposits exceeding FDIC limits, and bank failures could adversely affect its liquidity and financial performance[93][94] - Rising international tariffs and trade uncertainties could materially impact the company's business and operations[100][101] - Foreign currency exchange rate fluctuations could adversely affect the company's revenues and operating results[105] Cybersecurity and Data Privacy Risks - Cybersecurity breaches could compromise the company's information, expose it to liability, and harm its reputation[73] - The company collects and stores sensitive data, and unauthorized access could result in significant costs, liabilities, and loss of customer confidence[76] - The company must comply with evolving data privacy laws, such as GDPR and CCPA, with potential fines up to 4% of annual worldwide revenue for non-compliance[82] - The company has established a cybersecurity risk management program, leveraging the NIST Cybersecurity Framework, to address potential threats and incidents[124][126] - The Board oversees the company's cybersecurity risk management program, with quarterly updates from senior management on initiatives and incidents[128] Product and Inventory Risks - The company faces risks of inventory obsolescence, which could require write-downs or write-offs, harming operating results[66] - The company's products may contain undetected software or hardware errors, leading to increased costs, reduced revenue, or reputational damage[87] - Inventories are stated at the lower of cost or net realizable value, with a reserve for excess and obsolete inventories based on estimates of future demand and market conditions[238] - The company's auditors highlighted the challenge of auditing management's estimates for inventory reserves due to inherent uncertainties in demand and market conditions[239] Financial Performance and Reporting - Net revenue increased by $29.138 million, or 22.2%, in fiscal 2024 compared to fiscal 2023[166] - IoT System Solutions product line net revenue increased by 81.7% in fiscal 2024[166] - Embedded IoT Solutions product line net revenue decreased by 26.2% in fiscal 2024[166] - Software & Services product line net revenue decreased by 11.3% in fiscal 2024[166] - Net loss decreased to $4.516 million in fiscal 2024 from $8.980 million in fiscal 2023[166] - Gross profit as a percentage of revenue decreased from 42.9% in fiscal 2023 to 40.1% in fiscal 2024[166] - Operating expenses increased by 6.8% in fiscal 2024[166] - Net revenue increased by 22.2% to $160.3 million in 2024, compared to $131.2 million in 2023[167] - IoT System Solutions revenue grew by 81.7% to $104.5 million, contributing 65.1% of total net revenue in 2024[167] - Embedded IoT Solutions revenue decreased by 26.2% to $47.0 million, primarily due to lower unit sales in the Americas and APJ regions[167][169] - EMEA region revenue surged by 175.0% to $64.0 million, driven by increased sales of custom solutions and out-of-band products[167][170] - Gross profit increased by 14.4% to $64.4 million, but gross margin decreased to 40.1% due to product mix changes and higher logistics costs[172] - Selling, general and administrative expenses rose by 8.8% to $40.2 million, primarily due to higher personnel-related expenses and share-based compensation[175] - Research and development expenses increased by 3.3% to $20.3 million, driven by higher personnel-related costs and share-based compensation[176] - The company incurred $1.4 million in restructuring, severance, and related charges in 2024, compared to $0.7 million in 2023[178] - Working capital increased by $8.6 million to $58.8 million, and cash and cash equivalents grew by $12.8 million to $26.2 million in 2024[186] - The effective tax rate increased to 19.8% in 2024, up from 9.1% in 2023, due to domestic losses and state/foreign earnings taxed at different rates[183][185] - Cash and cash equivalents are defined as highly liquid deposits with original maturities of 90 days or less, with balances exceeding FDIC insurance limits at certain financial institutions[188] - Net cash provided by operating activities increased to $18,623,000 in fiscal 2024 from $237,000 in fiscal 2023, a significant increase of $18,386,000[191] - Net cash used in investing activities decreased to $1,479,000 in fiscal 2024 from $7,323,000 in fiscal 2023, a reduction of $5,844,000[191] - Net cash used in financing activities was $4,359,000 in fiscal 2024, compared to net cash provided by financing activities of $3,317,000 in fiscal 2023, a decrease of $7,676,000[191] - Net inventories decreased by $22,038,000, or 44.3%, from June 30, 2023 to June 30, 2024, primarily due to shipments to a smart grid customer and efforts to reduce pandemic-induced inventory levels[192] - Accounts payable decreased by $2,054,000, or 16.6%, from June 30, 2023 to June 30, 2024, primarily due to decreased inventories and timing of vendor payments[194] - Accounts receivable increased by $3,597,000, or 13.0%, from June 30, 2023 to June 30, 2024, driven by increased sales and timing of customer payments[194] - Accrued payroll and related expenses increased by $3,405,000, or 140.1%, from June 30, 2023 to June 30, 2024, primarily due to variable compensation costs[194] - Other current liabilities decreased by $17,842,000, or 61.9%, from June 30, 2023 to June 30, 2024, mostly driven by a reduction in customer contract deposits[194] - Cash and cash equivalents increased to $26.2 million in 2024 from $13.5 million in 2023, reflecting a significant improvement in liquidity[242] - Accounts receivable, net, rose to $31.3 million in 2024 compared to $27.7 million in 2023, indicating higher sales or slower collections[242] - Inventories, net, decreased to $27.7 million in 2024 from $49.7 million in 2023, suggesting better inventory management or reduced stock levels[242] - Total current assets declined to $89.0 million in 2024 from $96.6 million in 2023, primarily due to lower inventory levels[242] - Total liabilities decreased to $54.9 million in 2024 from $74.1 million in 2023, reflecting reduced financial obligations[242] - Accumulated deficit increased to $(223.0) million in 2024 from $(218.5) million in 2023, indicating continued net losses[242] - Total stockholders' equity increased to $81.4 million in 2024 from $77.6 million in 2023, driven by higher additional paid-in capital[242] Internal Controls and Financial Reporting - A material weakness in internal control related to ineffective IT general controls was identified, which could impact financial reporting and investor confidence if not remediated by fiscal 2025[117][118] - The company identified a material weakness in internal control over financial reporting related to ineffective IT general controls, particularly in user access controls[228] Legal and Regulatory Compliance - The company must comply with evolving data privacy laws, such as GDPR and CCPA, with potential fines up to 4% of annual worldwide revenue for non-compliance[82] - The company faces risks of intellectual property infringement and misappropriation, which could harm its business and financial condition[89] Acquisitions and Partnerships - Acquisitions and partnerships, such as Maestro, Intrinsyc, and Uplogix, may require significant cash, equity issuance, or debt, potentially diluting stockholders and diverting management attention[70] Stock and Market Volatility - The company's quarterly operating results may fluctuate significantly, with potential adverse effects on stock price if results fall below market expectations[120] - The market price of the company's common stock is highly volatile and influenced by factors such as economic conditions, competition, and key personnel changes[122] ESG and Regulatory Scrutiny - Increasing ESG-related scrutiny and evolving expectations may adversely impact the company's reputation and operations[112] Interest Rate and Financing Risks - High interest rates may negatively impact the company's results of operations and financing costs, potentially leading to decreased customer spending and increased debt obligations[116] Facilities and Leases - The company's leased facilities total approximately 126,500 square feet across seven global locations, including corporate headquarters in Irvine, California[131] - Lantronix, Inc. executed a lease agreement with Discovery Center LLC on November 5, 2021[220] - Lantronix, Inc. signed a lease agreement with Jet 55 Property Owner LLC on January 20, 2022[220] Dividends and Stockholder Equity - The company does not anticipate paying cash dividends on its common stock in the foreseeable future, retaining earnings for business expansion and corporate purposes[135] Geographic and Market Focus - The company operates in three geographic regions: Americas, EMEA, and APJ, targeting high-growth industries such as Smart Cities, Automotive, and Enterprise markets[137] Revenue Recognition and Accounting - Revenue recognition follows a five-step approach, ensuring control transfer of products or services to customers aligns with expected consideration[142] - Company uses historical returns experience and other known factors to estimate future product returns and pricing adjustments[143] - Revenue recognition for fixed price contracts is based on the proportion of actual costs incurred to total expected costs[147] - Goodwill impairment testing was conducted qualitatively in Q4 fiscal 2024, with no quantitative test required[158] Loan Agreements and Financial Instruments - The maturity of the company's Senior Credit Facilities was extended from August 2, 2025 to August 2, 2026 through a Fourth Amendment to the Third Amended and Restated Loan and Security Agreement[208] - Lantronix, Inc. entered into a Third Amended and Restated Loan and Security Agreement with Silicon Valley Bank on August 2, 2021[220] - Lantronix, Inc. signed a Mezzanine Loan and Security Agreement with SVB Innovation Credit Fund VIII, L.P. on August 2, 2021[220] - Lantronix, Inc. entered into a Fourth Amendment to the Third Amended and Restated Loan and Security Agreement on September 3, 2024[221] Stock Incentive and Compensation Plans - Lantronix, Inc. amended and restated its 2010 Stock Incentive Plan on November 14, 2017[219] - Lantronix, Inc. established the 2020 Performance Incentive Plan, amended and restated on November 9, 2022[219] - Lantronix, Inc. revised its Non-Employee Director Compensation Policy effective November 8, 2022[220] Corporate Agreements and Filings - Lantronix, Inc. signed a Cooperation Agreement with 180 Degree Capital Corp. on August 9, 2024[221] - Lantronix, Inc. filed a Form 10-K for the fiscal year ending June 30, 2024, signed by President and CEO Saleel Awsare on September 9, 2024[224]

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