Socket Mobile(SCKT) - 2025 Q3 - Quarterly Report

Revenue Performance - Total revenues for Q3 2025 were approximately $3.1 million, a 20% decline from $3.9 million in the same period last year[99] - For the nine-month period, revenue decreased by 20.2% to approximately $11.1 million from $13.9 million in the prior year[99] Profitability Metrics - Gross profit margin on sales reached 47.7% in Q3 2025, down from 49% in the same period last year[100] Expense Management - Research and development expenses for Q3 2025 were approximately $1.0 million, a decrease of 12% compared to $1.2 million in the same period last year[101] - Sales and marketing expenses for Q3 2025 were approximately $0.9 million, representing a 17% decrease from $1.1 million in the same period last year[102] - General and administrative expenses for Q3 2025 were approximately $0.58 million, a decrease of 10% compared to $0.64 million in the same period last year[103] - The company anticipates a slight increase in general and administrative expenses for the remainder of the year[102] Cash Flow Analysis - Net cash used in operating activities was approximately $1.6 million in the first nine months of 2025, compared to $434,000 in the same period of 2024[107] - In the first nine months of 2025, net cash used in operating activities was approximately $513,000, primarily due to operating lease payments and a reduction in accrued payroll expenses[108] - In the first nine months of 2024, net cash used in operating activities was approximately $120,000, primarily due to operating lease payments, partially offset by a release of cash from reduced accounts receivable[109] - Net cash provided by financing activities was approximately $1.5 million in the first nine months of 2025, compared to approximately $1.0 million in the same period of 2024[111] Financial Obligations - Total contractual obligations as of September 30, 2025, amounted to $6,033,000, with $4,030,000 due within one year[114] - The company has no off-balance sheet arrangements as of September 30, 2025[115] - The company has a bank credit line facility with a capacity of up to $3.0 million, with interest rates based on the lender's prime rate plus 0.75%[116] Foreign Currency Risk - An adverse change of 10% in foreign exchange rates would have increased the net loss for the third quarter of 2025 by approximately $48,700[117] - The actual net adjustment for foreign currency changes in the third quarter of 2025 resulted in a net loss of approximately $840[117] - The company will continue to monitor and assess risks related to foreign currency fluctuations[117] Interest Expense - Interest expense, net of interest income, for Q3 2025 was approximately $140,000, compared to $84,000 in the same period last year[104]