Core Insights - Lantronix Inc. is set to showcase its latest intelligent switching and edge computing platforms at ISC West, highlighting its SmartSwitch.ai, SmartEdge gateways, and PoE solutions aimed at enhancing security, industrial, and smart city networks [1][2] Group 1: Product Offerings - The SmartSwitch.ai platform integrates Edge AI with existing Lantronix PoE infrastructure, allowing for agentic network management and autonomous control through real-time analytics from IP devices [3] - SmartEdge gateways enhance existing cameras and sensors by providing secure compute and local AI processing, enabling real-time detection and insights without the need for hardware replacement [4] - Lantronix's PoE platform includes a range of options from PoE+ to PoE++, designed to power critical assets while simplifying installation and reducing operational costs [5] Group 2: Market Positioning - Lantronix aims to leverage its combined portfolio to capture sustained growth in defense, industrial, and commercial security markets, focusing on scalable and repeatable solutions [7] - The company is addressing a broad total addressable market, which positions it to increase win rates on high-volume Edge AI and networking programs, supporting long-term revenue expansion [7] Group 3: Demonstrations and Use Cases - Live demonstrations at ISC West will showcase how existing infrastructure can be quickly connected and managed at the edge, facilitating the deployment of AI-driven services [2] - Advanced Edge AI use cases will be presented, including integration with FLIR thermal/RGB fusion and low-latency edge processing for drone intelligence [6]

Core Viewpoint - Lantronix Inc. is participating in the 38th Annual ROTH Conference, which will include a fireside chat and one-on-one meetings with institutional investors, highlighting its focus on engaging with the investment community [1][2]. Company Overview - Lantronix Inc. is a global leader in Edge AI and Industrial IoT solutions, providing intelligent computing, secure connectivity, and remote management for mission-critical applications [3]. - The company serves high-growth markets such as smart cities, enterprise IT, and unmanned systems, including drones, enabling customers to optimize operations and accelerate digital transformation [3]. - Lantronix's portfolio includes hardware, software, and services that support applications like secure video surveillance and resilient out-of-band network management, helping organizations achieve efficiency and security in an AI-driven environment [3]. Conference Details - The 38th Annual ROTH Conference will take place from March 22 to 24, 2026, at The Ritz-Carlton, Laguna Niguel, California [2]. - A fireside chat featuring ROTH analyst Scott Searle is scheduled for March 24, 2026, from 12:00 p.m. to 12:25 p.m. Pacific Daylight Savings Time [2]. - Interested parties can request one-on-one meetings with Lantronix by contacting ROTH representatives [2].

Financial Data and Key Metrics Changes - The company reported revenue of $29.8 million for Q2 2026, with a Non-GAAP EPS of $0.04, both within guidance range [4][16] - Year-over-year growth was experienced when excluding the MER Smart Grid customer, Gridspertise, indicating strong underlying performance [4][16] - GAAP gross margin was 43.6%, slightly down from 44.8% in the previous quarter but up from 42.6% a year ago [16][17] - Non-GAAP gross margin was 44%, compared to 45.3% last quarter and 43.2% in the prior year quarter [17] - GAAP net loss improved to $1.3 million, or $0.03 per share, compared to a loss of $2.4 million, or $0.06 per share in the year-ago quarter [18] Business Line Data and Key Metrics Changes - The drone business saw significant growth, with revenue expectations raised to $8 million-$12 million for fiscal 2026, up from $5 million-$10 million [11][21] - The company is focusing on Group One and Two short-range reconnaissance drones, aligning with current unmanned funding [7][11] - The critical infrastructure monitoring segment is progressing, with revenue recognized from a tier one U.S. mobile network operator [12][14] Market Data and Key Metrics Changes - The U.S. defense budget for fiscal 2026 includes over $13 billion allocated for unmanned systems, indicating a favorable environment for the company's drone initiatives [5][6] - The company is positioned to capture a growing share of future defense modernization spending, particularly in unmanned and AI-enabled platforms [6][10] Company Strategy and Development Direction - The company is transitioning from a component supplier to a platform partner, focusing on reducing integration complexity and development risk for customers [8][10] - The Edge AI strategy is driving customer adoption across multiple end markets, with a focus on drones, critical infrastructure, and enterprise connectivity [15][21] - The company aims to create a unified platform for real-time video analytics and intelligent connectivity, expanding its addressable market [14] Management's Comments on Operating Environment and Future Outlook - Management noted that the government shutdown caused a short-term slowdown in purchasing activity from federal agency customers, but solid execution led to strong results [5][19] - The company expects continued growth through the remainder of fiscal 2026 and into fiscal 2027, with drones projected to represent 15%-20% of total revenue in fiscal 2027 [21][28] - Management expressed confidence in the durability and scale of the drone opportunity, supported by a disciplined cost structure and expanding recurring revenue [21][28] Other Important Information - The company generated positive operating cash flow of nearly $2.2 million during the quarter and paid down approximately $1 million of outstanding debt [19] - The company is actively working to mitigate supply chain issues related to memory shortages, ensuring adequate product supply for new business areas [46][47] Q&A Session Summary Question: Can you provide commentary on IoT systems and the December quarter's contribution? - Management acknowledged a sequential decline in IoT systems due to the government shutdown but noted strong execution in other areas [24][33] Question: What is the expected growth rate for the core business in fiscal 2027? - Management indicated that the overall business is expected to grow, with the drone business showing high double-digit growth rates [40] Question: What impact did the government shutdown have in the December quarter? - Management stated that the shutdown caused some friction but overall execution was strong, allowing the company to make up for lost time [45][46] Question: How should we think about the gross margin profile moving forward? - Management expects margins to remain near current levels in the near term but anticipates slight increases as software services grow [48][49]

Industry Overview - The technology sector is experiencing strong growth in 2025, driven by cloud computing, artificial intelligence (AI), cybersecurity, data-center expansion, and digital transformation [2] - The sector has gained 25.3% year to date, outperforming the S&P 500's growth of 19.2% [3] - Approximately 61% of investors believe the technology sector will attract the most investment over the next three years, surpassing all other sectors [3] Future Outlook - The outlook for the technology sector in 2026 appears positive, supported by ongoing enterprise investment in AI, software automation, and digital engagement tools [4] - Demand for specialized technologies is expected to accelerate as organizations seek to extract more value from data and improve operational agility [4] Investment Opportunities - Investing in low-priced tech stocks can provide attractive upside potential, especially when these companies show improving fundamentals and clear growth drivers [5] - Nokia (NOK) is well-positioned in the technology cycle, with a strong 5G portfolio and a stable balance sheet, holding €4.89 billion ($5.74 billion) in cash as of September 30, 2025 [6][7] - Lantronix, Inc. (LTRX) is gaining traction in Edge AI and drones, with a significant increase in drone OEM engagements from 10 to 17 [12][13] - Taboola.com Ltd. (TBLA) is expanding its performance advertising platform, Realize, and reported adjusted EBITDA of about $48 million with margins exceeding 27% in Q3 2025 [19][20] - TransAct Technologies (TACT) is experiencing strong momentum in its Foodservice Technology business, with expected net sales between $50 million and $53 million for full-year 2025 [23][24] Company Performance - Nokia targets an annual comparable operating profit of €2.7–€3.2 billion by 2028 and has a Zacks Rank 2 (Buy) [10] - Lantronix has a Growth Score of A, with a stock surge of 48.8% over the past year and earnings estimates for the current and next fiscal year increasing by 42.9% and 90%, respectively [16] - Taboola has a Growth Score of A, with a stock gain of 11.4% over the past three months and earnings estimates moving up by 2.2% and 4.3% for the current and next fiscal year [22] - TransAct has a Growth Score of A, with a stock increase of 15.8% over the past six months and earnings estimates rising by 18.4% and 6.9% for the current and next fiscal year [26]

Core Insights - Lantronix Inc. announced a significant donation of 3.0 million shares of its common stock by founder Bernhard Bruscha to the TL Stiftung, a charitable foundation focused on scientific research and community well-being [1][2] - Following the donation, Bruscha retains over 2.3 million shares, indicating his ongoing commitment to the company and confidence in its future [2] Company Overview - Lantronix is a leader in Edge AI and Industrial IoT solutions, providing intelligent computing, secure connectivity, and remote management for critical applications [4] - The company serves high-growth markets such as smart cities, enterprise IT, and unmanned systems, helping clients optimize operations and accelerate digital transformation [4] - Lantronix's offerings include hardware, software, and services that support applications like secure video surveillance and resilient network management [4] TL Stiftung Overview - The TL Stiftung, founded by Bruscha in 2000, focuses on long-term projects that promote scientific research, education, and the well-being of underserved communities [3][2]

Group 1: Core Insights - Lantronix Inc. has entered a strategic partnership with Vodafone IoT to develop a platform aimed at optimizing business performance and creating recurring revenue opportunities [1] - The partnership will launch Kompress.ai, an AI-powered subscription platform targeting the $27 billion global industrial air compressor market, focusing on cost reduction and minimizing downtime [2][3] - Kompress.ai integrates Lantronix's Edge hardware and cloud intelligence with Vodafone's global IoT connectivity, providing real-time insights and automation for compressor fleets [3] Group 2: Market Positioning - The Kompress.ai platform is designed as a scalable SaaS solution that aims to generate long-term, high-margin recurring revenue while addressing market needs in industrial efficiency and sustainability [4] - Lantronix positions itself as a global provider of Edge AI and Industrial IoT solutions, offering a variety of hardware, software, and engineering services to facilitate secure and connected devices across multiple industries [4]

Core Insights - ConnectM Technology Solutions, Inc. has launched a new subsidiary, Keen Labs, to focus on innovation and technology product development in areas such as artificial intelligence, industrial IoT, battery systems, and distributed energy technologies aimed at enterprise customers [1][2][3] Company Overview - Keen Labs will consolidate ConnectM's existing AI and technology assets into a single platform, enhancing strategic focus and capital efficiency [2][7] - The subsidiary aims to pursue both organic development and strategic M&A opportunities to accelerate product innovation across mobility, logistics, and energy transition markets [2][4] Financial Performance - The technology business that now forms Keen Labs has seen revenue growth from approximately $2.2 million in 2021 to an estimated $19.1 million in 2025, representing an ~80% compound annual growth rate (CAGR) [3] - Gross profit has improved more than tenfold since 2023, with EBITDA turning positive in 2024 and projected to triple in 2025 [3] - SG&A as a percentage of revenue has decreased from 63% in 2021 to roughly 15% projected in 2025, indicating a high degree of operating leverage [3] Strategic Goals - The goal of Keen Labs is to create a technology ecosystem that integrates modern energy, efficient mobility, and smart logistics through AI-driven intelligence and automation [4] - Keen Labs is expected to become a hub for future M&A and organically developed innovations, with ongoing discussions with several strategic technology partners [4]

Core Insights - Lantronix Inc. and Vodafone IoT have partnered to launch Kompress.ai, an AI-powered subscription platform aimed at optimizing performance and generating recurring revenue in the industrial air compressor market, valued at over $27 billion globally [1][2][5] - The platform integrates Lantronix's Edge hardware and cloud intelligence with Vodafone's IoT connectivity, providing real-time insights and automation for compressor fleets [1][2] Company Overview - Lantronix is a leader in Edge AI and Industrial IoT solutions, focusing on intelligent computing and secure connectivity for mission-critical applications [7] - Vodafone IoT is a global leader in managed IoT connectivity services, with over 215 million devices connected across more than 180 countries [9] Product Features - Kompress.ai is designed to address significant energy consumption in industrial environments, particularly air compressors, which account for over 10% of electricity use and 4.3 million tons of CO₂ emissions annually [3][5] - The platform offers predictive analytics, energy optimization, and compliance automation for industrial air compressor fleets, regardless of brand or age [2][5] Market Opportunities - The air compressor sector presents growth potential through both brownfield upgrades and greenfield projects, driven by industrial automation trends and sustainability initiatives [5] - Kompress.ai has shown energy savings of up to 30%, reducing unplanned downtime and service costs, making it a critical solution for cost-conscious industrial buyers [5] Revenue Model - Kompress.ai operates on a subscription basis, expected to enhance Lantronix's recurring revenue stream and improve business model predictability [5] - The partnership with Vodafone IoT enables secure and reliable connectivity, facilitating rapid deployment and scalability of the platform [5] Strategic Alignment - The platform aligns with global energy and ESG trends, addressing urgent market needs in industrial efficiency and sustainability [4] - It supports ISO 50001 compliance and CO₂ emissions reduction goals, helping customers achieve sustainability KPIs [5]

Core Insights - Lantronix Inc. has been recognized with the 2025 IoT Evolution Product of the Year Award for its Open-Q System-on-Module (SOM), which is utilized in drone development for defense unmanned aerial vehicles [1][2] - The company has strategically focused on the drone market, collaborating with 10 manufacturers to develop advanced technology for drone products [2] - Lantronix's Open-Q SOM solution is compliant with TAA and NDAA, ensuring it meets U.S. security requirements for deployment in sensitive Department of Defense missions [3] Company Overview - Lantronix is a global leader in Edge AI and Industrial IoT solutions, providing intelligent computing, secure connectivity, and remote management for mission-critical applications [5] - The company serves high-growth markets, including smart cities, enterprise IT, and commercial and defense unmanned systems, enabling customers to optimize operations and accelerate digital transformation [5] - Lantronix's solutions are designed to enhance efficiency, security, and competitive advantage in an AI-driven environment [5]

Core Insights - Lantronix Inc. reported a strategic transformation in fiscal 2025, focusing on operational streamlining and targeted investments in high-value markets, positioning itself for sustainable growth and enhanced supply chain resilience [2][6]. Financial Performance - For Q4 FY2025, Lantronix achieved net revenue of $28.8 million, with a GAAP EPS of ($0.07) and a Non-GAAP EPS of $0.01 [5][6]. - For the full fiscal year 2025, net revenue totaled $122.9 million, with a GAAP EPS of ($0.29) and a Non-GAAP EPS of $0.14 [6][23]. Business Highlights - The company secured a multi-year contract with a Tier-1 U.S. wireless operator to manage nationwide backup power systems, enhancing network resilience and reducing operational costs [6]. - Lantronix was selected by Red Cat's Teal Drones to power U.S. Army-approved drones, providing early revenue visibility for fiscal 2026 [6]. - The launch of the NTC-500 Series industrial-grade 5G routers aims to support private 5G, edge computing, and industrial IoT applications [6]. Strategic Initiatives - The leadership team was expanded with three strategic hires to accelerate growth in Edge IoT and Network Infrastructure, focusing on network resilience and AI-driven connectivity solutions [6]. - The company is positioned to capture multi-year, high-margin opportunities in the secure defense drone market and Edge AI solutions [2][6]. Revenue Breakdown - In Q4 FY2025, revenue from Embedded IoT Solutions was $10.2 million, IoT System Solutions was $16.7 million, and Software & Services was $2.0 million [30]. - For the fiscal year, revenue from Embedded IoT Solutions was $46.4 million, IoT System Solutions was $68.7 million, and Software & Services was $7.8 million [30]. Geographic Performance - In Q4 FY2025, revenue from the Americas was $19.8 million, EMEA was $5.3 million, and APJ was $3.7 million [31]. - For the full fiscal year, revenue from the Americas was $70.1 million, EMEA was $30.9 million, and APJ was $21.9 million [31].