Lantronix(US:LTRX)2025-11-06 21:18Revenue 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]