Data I/O (DAIO) - 2025 Q2 - Quarterly Results

Management Comments Management reported sequential bookings growth, driven by a major Chinese EV order for UFS 4.0 systems, validating R&D and preparing for future 1TB UFS memory for AI - Delivered the second consecutive quarter of sequential bookings growth, following increases in Q1 2025 and Q4 2024[3] - Received a significant order for 10 PSV automated programming systems, valued at over $1.4 million, from a major Chinese EV manufacturing supplier, based on robust support for Universal Flash Storage (UFS) 4.0 technology[3] - The company focuses on technology leadership for the growing UFS memory market (expected 14% CAGR over five years) and is preparing for next-generation 1TB UFS memory for advanced AI applications by 2027[6] Second Quarter 2025 Financial Results Q2 2025 saw net sales of $5.9 million, sequential bookings growth to $5.8 million, a gross margin of 49.8%, and a net loss of $742,000, with a solid $10.0 million cash balance Revenue, Bookings and Margin Q2 2025 net sales were $5.9 million, bookings reached $5.8 million, and gross margin was 49.8% due to product mix, with automotive electronics contributing 66% of bookings Net Sales and Bookings (in millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Sales | $5.9M | $6.2M | $5.1M | | Bookings | $5.8M | $4.6M | $5.6M | - Gross margin was 49.8% in Q2 2025, compared to 51.6% in Q1 2025 and 54.5% in Q2 2024, with the decline driven by product mix and configuration for a large customer order[9] - Backlog stood at $2.8 million and deferred revenue was $1.3 million as of June 30, 2025[8] - Automotive electronics represented 66% of Q2 2025 bookings, up from 59% for the full year 2024[7] Profitability and Expenses Q2 2025 operating expenses were $3.8 million, including $480,000 in one-time costs, resulting in a net loss of $742,000 and an Adjusted EBITDA of ($437,000) Profitability and Expense Highlights | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Operating Expenses | $3.8M | $3.6M | $3.3M | | Net Loss | ($742,000) | ($382,000) | ($797,000) | | EPS (loss) | ($0.08) | ($0.04) | ($0.09) | | Adjusted EBITDA | ($437,000) | ($98,000) | $3,000 | - Q2 2025 operating expenses included approximately $480,000 in one-time expenses for investments and transition requirements[10] - Excluding one-time expenses, Adjusted EBITDA for Q2 2025 would have been $43,000[10] Balance Sheet and Liquidity The company maintained a solid balance sheet with $10.0 million in cash, $15.6 million in net working capital, and no debt as of Q2 2025 - Cash balance was $10.0 million as of June 30, 2025[10] - Net working capital was $15.6 million on June 30, 2025[10] - The Company continues to have no debt[10] Financial Statements This section presents unaudited consolidated financial statements for Q2 2025 and 2024, including the Statement of Operations, Balance Sheet, and GAAP to non-GAAP reconciliations Consolidated Statements of Operations Q2 2025 net sales were $5.95 million, resulting in an operating loss of $844,000 and a net loss of $742,000, or ($0.08) per share Q2 2025 vs Q2 2024 Statement of Operations (in thousands) | Line Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net sales | $5,948 | $5,062 | | Gross margin | $2,960 | $2,757 | | Total operating expenses | $3,804 | $3,323 | | Operating income (loss) | $(844) | $(566) | | Net income (loss) | $(742) | $(797) | | Diluted earnings (loss) per share | $(0.08) | $(0.09) | Consolidated Balance Sheets As of June 30, 2025, total assets were $24.1 million, with $10.0 million in cash, total liabilities of $6.9 million, and stockholders' equity of $17.2 million Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $9,969 | $10,326 | | Total Current Assets | $20,627 | $21,157 | | Total Assets | $24,117 | $24,970 | | Total Current Liabilities | $5,076 | $5,072 | | Total Stockholders' Equity | $17,246 | $17,626 | Non-GAAP Financial Measure Reconciliation Q2 2025 GAAP net loss of $742,000 was reconciled to an Adjusted EBITDA (excluding equity compensation) of ($437,000), which would be $43,000 excluding one-time expenses Q2 2025 GAAP to Non-GAAP Reconciliation (in thousands) | Metric | Amount | | :--- | :--- | | Net Loss (GAAP) | $(742) | | EBITDA | $(687) | | Adjusted EBITDA (excl. equity comp) | $(437) | | One-time expenses/investments | $480 | | Adjusted EBITDA (excl. one-time items) | $43 | Other Information This section provides investor conference call details, business information, forward-looking statement disclaimers, and clarification on non-GAAP financial measures - A conference call to discuss the financial results was scheduled for July 24, 2025, at 2 p.m. Pacific Time[11] - The press release contains forward-looking statements and non-GAAP financial measures, with the company stating that non-GAAP measures provide meaningful supplemental information and reconciliations are provided[13][15]