Core Insights - Interlink Electronics, Inc. has appointed Darren Whittaker as the European Business Development Director to support its organic growth strategy in Europe [1] - Whittaker brings over 20 years of sales experience in high-tech sectors, having previously increased revenue by 8.3 times at Teledyne FLIR [2] - The company aims to drive significant growth across its technology offerings globally, as stated by CEO Steven Bronson [4] Company Overview - Interlink Electronics is a leader in sensor technology and printed electronics solutions, with 40 years of experience serving diverse markets including medical, industrial, automotive, wearables, and IoT [4] - The company operates from multiple locations, including its headquarters in Fremont, California, and manufacturing facilities in Shenzhen, China, Irvine, Scotland, and Barnsley, England [5] - Interlink's expertise encompasses materials science, manufacturing, embedded electronics, firmware, and software, allowing for tailored solutions for customers [4]

Financial Data and Key Metrics Changes - The company reported revenue of $29.8 million for Q1 2026, reflecting a 3% increase sequentially and year-over-year, excluding GRIT's fatigue [4][11] - Non-GAAP EPS improved to $0.04 from $0.01 in Q4 2025, driven by gross margin expansion and operating leverage from cost optimization initiatives [4][13] - GAAP gross margin increased to 44.8% from 40% in the previous quarter and 42.1% a year ago, while non-GAAP gross margin rose to 45.3% from 40.6% in Q4 2025 [11][12] Business Line Data and Key Metrics Changes - The OEM engagements grew from 10 to 17, indicating accelerating customer adoption in the drone business [6] - The company introduced edge AI drone solutions and partnered with Red Cat, leading to follow-on orders and enhanced customer confidence [5][6] - The asset monitoring segment launched compress.ai, targeting the $27 billion global industrial air compressor market, which is expected to create high-margin recurring revenue [9] Market Data and Key Metrics Changes - The overall market environment remains favorable, with record defense funding and strong demand for networking and connectivity solutions [4][5] - The company is experiencing strong demand in the drone sector, with expectations for continued growth throughout fiscal 2026 [8][19] Company Strategy and Development Direction - The company aims to scale high-growth verticals, expand software-enabled recurring revenue, and drive operating leverage from a leaner cost structure [9][15] - The introduction of edgefabric.ai is designed to simplify AI application deployment, enhancing customer engagement and creating a foundation for recurring revenue [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory ahead, expecting nearly 20% year-over-year growth in Q2 2026, excluding GRIT's fatigue [15][41] - The company anticipates continued strong performance in its core network infrastructure business, supported by healthy demand [15][41] Other Important Information - The company ended Q1 with cash and cash equivalents of $22.2 million, an increase of over $2 million from the prior quarter [13] - Positive operating cash flow of approximately $3.6 million was generated during the first quarter [13] Q&A Session Summary Question: Drone opportunities and competitive landscape - Management noted that they are working with 17 OEMs, with some already in design and shipping phases, indicating accelerating momentum in the drone business [18][19] Question: Update on generator win with a major service provider - The generator win is progressing well, expanding beyond diesel generators to other equipment for asset tracking [20][21] Question: Sales and fulfillment model for compress.ai - Compress.ai is an AI-powered SaaS solution aimed at generating long-term high-margin recurring revenue, with Vodafone providing connectivity [22] Question: Growth in out-of-band management - Management confirmed growth in out-of-band management and plans to introduce a new product targeting new markets [26][29] Question: Recurring revenue opportunities - Management expects software and services revenue to grow from 5-7% to 10% in the future, with significant opportunities in adjacent markets like robotics and security [31] Question: Timeline for drone revenue contribution - Management anticipates that drone revenue could reach 10-15% of total revenue by fiscal year 2027 [33] Question: Revenue recognition from tier one telecom service provider - Revenue from the $8 million-$10 million win was recognized in the September quarter, with expectations for continued revenue recognition in the December quarter [34] Question: Gross margin outlook - Management expects gross margins to remain in the low 40s, consistent with previous quarters [39][40]

Core Insights - Lantronix Inc. is showcasing its Edge AI solutions at the AUSA Annual Meeting, emphasizing its role in the U.S. Army's Short-Range Reconnaissance (SRR) Program and partnerships with Gremsy and Teledyne FLIR [1][5][10] Company Overview - Lantronix Inc. is a leader in Edge AI and Industrial IoT solutions, focusing on intelligent computing, secure connectivity, and remote management for critical applications [6] - The company serves high-growth markets, including smart cities, enterprise IT, and defense unmanned systems, aiming to optimize operations and accelerate digital transformation [6] Strategic Partnerships - Lantronix's partnerships with Qualcomm, Teledyne FLIR, and Gremsy enhance its drone platforms, ensuring NDAA compliance and improving flight times and ISR capabilities [5][7] - The integration of Lantronix's Edge AI solution with Gremsy's Lynx ISR payload and Teledyne FLIR's Hadron 640R camera positions the company for long-term growth in the UAV market [7] Technology Advantages - The Open-Q™ 5165RB System on Module, based on the Qualcomm® Dragonwing™ processor, enables low-power, high-performance AI computing essential for UAV applications [4] - The Edge AI solutions are designed to provide real-time data processing and improved power efficiency, crucial for defense and industrial UAV applications [7][8] Market Engagement - Lantronix is actively engaging with UAV developers and investors at the AUSA 2025 event, which attracts over 44,000 attendees from the defense sector [2][10] - The company is in production with Teal Drones, providing early revenue visibility and reinforcing its position as a trusted partner in defense systems [7]

Core Insights - The strategic partnership between Lantronix and Gremsy aims to drive long-term, high-margin growth in the defense and commercial drone markets, which is projected to reach $57.8 billion by 2030 [1][7]. Company Overview - Lantronix Inc. is a global leader in edge AI and industrial IoT solutions, focusing on critical applications that require intelligent computing, secure connectivity, and remote management services [8]. - The company serves high-growth markets such as smart cities, enterprise IT, and defense unmanned systems, helping clients optimize operations and accelerate digital transformation [8]. Strategic Partnership - Lantronix's NDAA/TAA compliant solutions have been selected by Gremsy, a leading manufacturer of advanced camera gimbals for drones, enhancing Lantronix's momentum in the drone market [1][2]. - The collaboration is expected to shorten Gremsy's product time-to-market while creating long-term revenue opportunities for Lantronix in the rapidly growing commercial and defense drone sectors [2][7]. Technological Advancements - The solution is based on Lantronix's Open-Q™ 5165RB module system, powered by Qualcomm® Dragonwing™ processor, enabling seamless integration with Teledyne FLIR OEM's Hadron 640R dual thermal imaging-visible light camera [2][5]. - The edge AI processing capabilities allow for real-time object detection, scene recognition, and anomaly detection, enhancing operational decision-making in mapping, surveying, and defense [5]. Market Positioning - Lantronix's solutions are designed for high-value applications in government, energy, agriculture, and infrastructure sectors, providing a competitive edge in the defense and autonomous systems market [5][7]. - The company has established itself as a trusted provider of compliant solutions, expanding its global market reach through partnerships with Gremsy and other drone manufacturers [2][3]. Financial Highlights - Early revenue generation has begun as Lantronix confirms design wins, indicating a positive momentum in production shipments [5]. - The focus on high-margin opportunities and compliance with stringent regulations positions Lantronix favorably for future growth in the industrial IoT sector [5][7].

Core Insights - Lantronix Inc. has established a strategic collaboration with Gremsy to enhance its position in the rapidly growing defense and commercial drone markets, projected to reach $57.8 billion by 2030 [1][8] Group 1: Strategic Collaboration - The NDAA/TAA-compliant solution from Lantronix has been selected by Gremsy, a leading manufacturer of camera gimbal stabilizers for drones, indicating a strong partnership [1][4] - This collaboration allows Lantronix to leverage its expertise in camera applications to improve power efficiency and operational times for drones [1][3] Group 2: Technological Advancements - The solution is built on Lantronix's Open-Q™ 5165RB System on Module, utilizing the Qualcomm® Dragonwing™ processor, which powers Gremsy's new drone platform [2] - The integrated solution supports advanced capabilities such as onboard inference for object detection and real-time analytics, enhancing operational decision-making [7][8] Group 3: Market Position and Growth Potential - Lantronix is positioned as a trusted source for reliable, compliant solutions in the drone industry, expanding its global go-to-market reach [3][5] - The partnership with Gremsy and other manufacturers is expected to create long-term revenue opportunities in the fast-growing commercial and defense drone sectors [3][8] Group 4: Financial Highlights - Lantronix is already generating early revenue from production shipments and confirming design win momentum, indicating a high-margin opportunity in mission-critical applications [7] - The company's solutions are fully compliant with NDAA/TAA regulations, essential for U.S. defense and federal integrations, providing a regulatory advantage [7][8]

Core Viewpoint - The thermal imaging market is expected to grow steadily, reaching $669 million by 2030, driven by innovations in thermal detectors and increasing demand in various sectors, particularly in China and the automotive industry [2][5]. Market Overview - The global thermal imaging market remains stable with limited dynamics, dominated by industrial end markets, especially pyroelectric technology detectors. The market is anticipated to have a relatively stable year in 2024, with U.S. and European manufacturers focusing on mid-to-high-end applications while Chinese manufacturers target low-end products [2]. - The growth in the thermal imaging market in 2024 is primarily driven by China, where industrial demand continues to rise. In Western regions, emerging opportunities are more prevalent in sectors like drones and automotive [5]. Key Players - Major players in the thermal imaging market include Melexis and Infratec, which cater to smart buildings, industrial applications, and non-contact temperature measurement in consumer and automotive markets. Melexis is expected to gain significant design orders from major OEMs in 2024 [6]. - New entrants like STMicroelectronics and Calumino are preparing to compete in high-growth areas, focusing on innovative solutions for home appliances, smart buildings, and consumer electronics [6]. Regional Dynamics - The ongoing U.S.-China trade tensions and geopolitical events like the Russia-Ukraine war are impacting the thermal imaging supply chain, leading to a clearer distinction between China's thermal imaging industry and other regions. In 2024, China's thermal imaging shipments are projected to account for 60% of the global total [8]. - Western companies are concentrating on areas where Chinese firms are banned or not selected, such as defense and high-end monitoring, while the automotive market remains a significant growth area [8]. Technology Trends - Although pyroelectric technology has traditionally dominated, thermopiles are gaining traction and are expected to surpass pyroelectric technology in market size by 2028. Regulatory changes are supporting this shift, particularly concerning the use of lead in electronic components [9]. - New companies are integrating artificial intelligence to enhance market development, allowing their technologies to compete in applications previously limited by sensitivity and resolution [9]. Innovations and Challenges - The industry is focused on improving manufacturing processes to enhance yield and reduce costs, while also exploring new optical components like metasurfaces to improve optical performance and reduce lens size [10]. - Scene analysis is becoming crucial in applications such as security, drones, and automotive, with companies working to integrate AI-based functionalities into standard processing units [10].

Core Insights - Lantronix partners with Aerora to advance AI-driven drone solutions, enhancing edge AI capabilities for various applications [1][2] - The global drone market is projected to reach $163.6 billion by 2030, with a compound annual growth rate (CAGR) of 15% [1] - Aerora's solutions leverage Qualcomm® Technologies chipsets and Lantronix Open-Q™ system-on-modules (SoMs) for superior processing power [2] Company Overview - Lantronix Inc. is a global leader in IoT solutions, focusing on smart cities, automotive, and enterprise sectors [4] - Aerora provides fully integrated, NDAA-compliant propulsion, ground control, and AI payload systems, streamlining drone and robotics innovation [5][6] Technological Advancements - Aerora's solutions include advanced thermal and RGB imaging capabilities through integration with Teledyne FLIR Hadron 640R modules [2][3] - The collaboration aims to reduce engineering overhead and accelerate time-to-market for OEMs in the drone and robotics sectors [2][3]

Core Insights - Lantronix and Aerora are collaborating to enhance AI-powered drone solutions, focusing on Edge AI technologies for applications in drones, robotics, and surveillance [1][2] - The global drone market is projected to reach $163.6 billion by 2030, with a compound annual growth rate (CAGR) of 15% [2] - Aerora's solutions leverage Lantronix's Open-Q™ System-on-Module (SoM) powered by Qualcomm® Technologies, providing advanced processing capabilities for AI applications [3] Company Overview - Lantronix is a leader in compute and connectivity IoT solutions, targeting high-growth industries such as Smart Cities, Automotive, and Enterprise [8] - Aerora specializes in integrated NDAA-compliant propulsion, ground control, and precision AI payload systems, managing the entire supply chain for drone manufacturers [11] Technological Advancements - Aerora's integrated solution includes advanced thermal and RGB imaging capabilities through the Teledyne FLIR Hadron 640R module and Prism software [4] - The full-stack solution from Aerora features pre-integration of essential components, enabling simultaneous 4K video streaming and high-resolution thermal video [5] Market Opportunities - The collaboration is expected to open new opportunities in both private and government sectors, enhancing operational capabilities and reducing development timelines for drone OEMs [2][6]

Financial Data and Key Metrics Changes - The company reported revenue of $28.5 million for Q3 FY2025, which was down both sequentially and year-over-year due to no shipments to a large smart grid customer in Europe [4][10] - GAAP gross margin increased to 43.5% in Q3 FY2025 from 42.6% in the prior quarter and 40.1% in the year-ago quarter [10] - Non-GAAP gross margin was 44.1% in Q3 FY2025 compared to 43.2% in the prior quarter and 41% in the year-ago quarter [10] - GAAP net loss was $3.9 million or $0.10 per share during Q3 FY2025, compared to a GAAP net loss of $0.4 million or $0.01 per share in the year-ago quarter [11] - Non-GAAP net income was $1.1 million or $0.03 per share during Q3 FY2025, down from $4.2 million or $0.11 per share in the year-ago quarter [12] Business Line Data and Key Metrics Changes - Revenue impact was partially offset by sequential organic growth in embedded connectivity and switch products, along with growth in gateways and routers from the NetComm acquisition [10] - The company reduced non-GAAP operating expenses by approximately $1.2 million compared to the year-ago quarter and by about $200,000 sequentially [11] Market Data and Key Metrics Changes - The company is expanding its distribution network in the European Union and Asia Pacific, leveraging partnerships with TD SYNNEX and the acquired channel network from NetComm [7] - The integration of NetComm products has gone well, leading to increased customer engagement and cross-selling opportunities [7] Company Strategy and Development Direction - The company is focused on expanding its distribution network and managing costs amid tariff uncertainties [5][6] - There is a strong emphasis on developing edge AI solutions, particularly in the areas of drones, robotics, and surveillance [8][30] - The company is cautious about the macroeconomic environment but is generating positive cash flow and maintaining a strong balance sheet [15] Management's Comments on Operating Environment and Future Outlook - Management is closely monitoring the operating environment and has established a task force to address tariff impacts [5][6] - The company expects revenue for Q4 FY2025 to be in the range of $26.5 million to $30.5 million, with some pressure on gross margins anticipated [14] - Management is optimistic about double-digit growth in FY2026 based on design activity and new product releases [36][45] Other Important Information - Cash and cash equivalents at the end of Q3 FY2025 totaled $20 million, slightly up from the prior quarter [12] - The company paid down approximately $2 million of its existing term debt, reducing interest expenses [13] Q&A Session Summary Question: What was the NetComm contribution in March and its growth potential? - Management expects NetComm revenue to be $6 million to $7 million on an annualized basis, tracking to exceed that run rate [18] Question: How is customer engagement tracking amid macro uncertainties? - There are no cancellations or push-outs, and design activity remains strong [21] Question: What is the outlook for edge compute initiatives? - The company is seeing positive engagement and expects revenue from AI activities, particularly around cameras, in FY2026 [30] Question: What visibility is there for June guidance and growth into FY2026? - Management is cautious but confident in the June guidance, expecting double-digit growth driven by core business and new design wins [36][45] Question: Is the company still the sole supplier to Gridspertise? - Yes, the company remains the single source for Gridspertise, and management is working closely with them [47]