Lantronix(US:LTRX)2026-02-05 13:13Revenue Performance - In the three months ended December 31, 2025, net revenue decreased by $1,387,000 or 4.5% compared to the same period in 2024, driven by a 28.6% decrease in IoT System Solutions revenue, partially offset by a 28.6% increase in Embedded IoT Solutions and a 47.2% increase in Software and Services [87]. - For the three months ended December 31, 2025, net revenue by product line was $13,865,000 (46.6%) for Embedded IoT Solutions, $13,281,000 (44.6%) for IoT System Solutions, and $2,628,000 (8.8%) for Software and Services [88]. - For the six months ended December 31, 2025, net revenue decreased by $6,016,000 or 9.2%, driven by a 20.4% decrease in IoT System Solutions revenue, partially offset by increases in Embedded IoT Solutions (4.8%) and Software and Services (10.7%) [100]. - Net revenue for the six months ended December 31, 2025, was $59,568,000, a decrease of 9.2% compared to $65,584,000 in 2024 [1]. Profitability - The company reported a net loss of $1,330,000 for the three months ended December 31, 2025, an improvement from a net loss of $2,372,000 in the same period in 2024, primarily due to a decrease in operating expenses [87]. - Gross profit for the three months ended December 31, 2025, was $12,967,000, representing a gross margin of 43.6%, an increase from 42.6% in the prior year [94]. - Gross profit for the six months ended December 31, 2025, was $27,759,000, with a gross margin of 42.3%, down from 44.2% in 2024 [5]. Expenses - Research and development expenses decreased by 7.3% to $4,620,000 for the three months ended December 31, 2025, primarily due to lower personnel-related expenses and reduced share-based compensation [98]. - Selling, general and administrative expenses slightly decreased to $8,740,000, representing 29.4% of net revenue, due to lower legal fees and professional services costs [97]. - Selling, general and administrative expenses remained consistent at $18,282,000, accounting for 30.7% of net revenue in 2025 [7]. - Research and development expenses decreased to $9,218,000, representing 15.5% of net revenue, down from $9,940,000 in 2024 [8]. Cash Flow and Financial Position - Cash and cash equivalents increased to $22,964,000 as of December 31, 2025, up by $2,866,000 from June 30, 2025 [14]. - Net cash provided by operating activities increased to $5,783,000 for the six months ended December 31, 2025, compared to $3,003,000 in 2024 [20]. - Accounts receivable decreased by $1,831,000, or 7.3%, from June 30, 2025, indicating improved collections [22]. - Net cash used in investing activities was $166,000, significantly lower than $6,699,000 in 2024, which included an acquisition [23]. - The company incurred restructuring charges of $136,000 for the six months ended December 31, 2025, compared to $1,093,000 in 2024 [9]. Strategic Focus - The company continues to focus on enhancing its product portfolio, particularly in Embedded IoT Solutions and Software as a Service offerings, to drive future growth [77]. - The company expects gross margin to fluctuate based on changes in product mix, average selling prices, and manufacturing costs [95].