Lantronix (LTRX) 7 Nov 242025 Q1 Earnings call transcript

Good evening, and welcome to the Lantronix First Quarter Fiscal 2025 Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Brent Stringham, Chief Accounting Officer and Interim Chief Financial Officer. Please go ahead.

Good afternoon, and thank you for joining our quarterly earnings call.

call Awsare. our the Executive and on Saleel Officer, me today President is Chief Joining and webcast live the A archived company's available will website. on be of today's call

phone the In can call-in replay in details addition, today's find for you release. earnings the

release, the forward-looking We as to is undertakes on and furnished may reflect or uncertainties cause and was SEC review and company's cautionary events to available encourage which statements revise to Lantronix future our you call, today the update results involve or from materially in SEC XX-Qs. forward-looking risk publicly could no which to in website its statements make to and this risks statements, obligation filings, any factors the such During XX-K management's our differ management and that current earnings contained expectations. the circumstances.

the Please information management's website additional release details financial that of in the refer news supplement our to Relations section for the will and Investor commentary.

the non-GAAP differences reconciliations between Investor non-GAAP and during our that the the Relations describes company the measures Furthermore, reporting use. and website, GAAP will we section in financial Today's call, financial earnings our which posted discuss for the of is release, presents measures. non-GAAP

the turn that, I'll Saleel. over With now call to

shortly. first last which more you, XXXX, results Brent, quarter the CFO, will Non-GAAP was of today. EPS We up our $XX.X $X.XX. Interim us compared Thanks, reported year. thank Brent everyone, fiscal QX on was X% and the details revenue quarter financial in first million joining for the provide quarter same of Stringham, call fiscal for year to on the

highlight On the to X with topics you. today, call would I like

our are Qualcomm where while we cost acquisition line, emphasize IoT product continuing leadership collaboration and focus efficiency Edge to can on the announced AI, areas progress making we recently and savings. differentiate IoT in strategic our NetComm's demonstrate operational with investing of in Our and in

enterprise fits customers leading-edge very portfolio solutions. Routers markets in well blue-chip target-rich XG and Compute products line It generate our are NetComm's our acquisition as opportunities Australia products, Connect our our new cross-selling & NetComm New to is and The to expected our calendar and Connect EPS. strategy. the in to adds to opens for revenue $X solutions. for our with IoT unserved customers year be strengthens additional including approximately acquisition with It of $X million $X.X immediately Compute for also IoT product and Edge million enhancing Gateway, Modems products, providing Zealand. purchase In latest geographic XXXX, the our expected the cash in million such accretive expands First, by offerings

contributes competitive for requirements improves gateway In subject The revenue and Enterprise summary, gateway the conditions. market, business. position and transaction additional IoT router this reduces the to line, development to our customary our to cellular is deal our November, expected XG in of in R&D close closing

partners, for we complex customers collaboration modeling. AI We in Qualcomm collaboration to their Edge Second, manage are the accelerate AI. last delivered agreement of strategic for on AI making announce on do Learning. and AI The months for the report pleased the we to engagement users are Graphical our applications. Qualcomm's have very demonstrates milestones development the and First, a Qualcomm I'm productive thrilled ecosystem. to workflows, Qualcomm to ability been very with scalable, topic our signing high-performance including: toolkit new advance Machine X AI end recently, AI AI Composer Tool and What of AI with easier with is to to hub solutions Edge to doing our X deliver optimizing it

called Second, successfully vertical launching Edge gateway first with the by SmartLV Compute City the Smart AI-enabled Qualcomm. we our expanding are in offerings in collaboration

designed was real-time processor enabling IQ-XXX next-generation the deploys of to SmartLV management which operators grids, applications. them low-voltage their and specifically substations peak energy-on-demand of loading. during for provides industrial smart deliver with other in and ensuring stability Gateway, network periods networks, utilities SmartLV Our while

this new enterprise third, system and in the work robotics latest earlier new of and based month, the the video SOM markets announced AI solutions we and automation. Qualcomm industrial such processes. applications of SiPs package industrial the surveillance, accelerate on edge at in X And to help as solutions network These the development and

with ourselves to gateway moves our AI based but we As solutions. package the and Edge, only Qualcomm in system lead to positioning also hardware are not solutions software

and we Western-based are have a IP, capabilities, We supplier. development differentiated

this we time, momentum take in XXXX to and see will in this While area expect beyond.

to Together, Edge and the an us evolving address innovation in a our these long-term player for of foundation achievements allow delivering become AI industries with that driving the the to solutions key architecture. end-to-end AI-powered to ecosystem, needs lay transitioning edge-centric Qualcomm strategy

implementing drive to efficiency we improve And are and finally, profitability. initiatives business focus, future enhance operating

streamlining product of our are we the Specifically, portfolio. process in

some want growth will in we products, our and differentiation leadership. provide development WiFi smaller and we forward, lines areas direct modules. top noncore where our on to our and investments making future line, as resources be we not to GNSS Going are These such contributors core

and We globally are moving in sites from the providing of to X process of scale centers efficiency. excellence, X

initiatives year and year to expect approximately 'XX, XXXX. initiatives already operating fiscal fiscal expect March we be reduce end implemented million by our relative $X.X to 'XX these others by of to the these and fully With expenses we identified,

we on efficiency. solutions, to intelligence focused Connect remain with while of right the their the business Compute and XXXX cash to trend that profitable are beyond. real-time focus our and mega year growth, generation we making fiscal into improve enabling and the investments continuing making our scale Edge customers help their decision on allowing operational conclusion, And In increasing

acquisitions core pending NetComm We will that look acquisition. as continue for to by demonstrated our strategy our complement

product efficiency. focusing and Overall, this pleased of line, and the portfolio our Qualcomm I'm our AI, our accomplishments IoT on product with operating very our including acquisition Edge NetComm's quarter, with improving progress in are

Brent With Stringham, that, over I the Interim CFO. call will our now to turn

will our the for some Saleel. first financial before second of results fiscal and quarter for our of I quarter outlook Thank commenting review fiscal financial highlights the XXXX. XXXX year business you, on

For the range. of revenue guidance end $XX.X was million, FQX XXXX, at lower which reported of we our

sequentially, our expected, a shipments was included down relatively Grid high basis, FQX customer revenues to revenue year-over-year Smart On up to reported which the revenue its quarter, deployments. record we from was last As support XXXX X%. initial

periods. and by conferencing Embedded the XX% from driven customer. IoT Solutions year-ago both primarily video revenue the was from increase increased large by a enterprise growth sequential Sequentially,

million respectively. our customer large not XX% IoT driven order, decrease did large which and the approximately federal shipments smart was System by sequential government by largely reduction of in and a to X% as grid originally Solutions expected. the decreased periods, year-ago $XX sequential The and materialize from agency expected

be in the to this We incrementally coming expect quarters. fulfilled

were production. sequentially Software lower from by XX% products and up services moved and into quarter the year X% ago have as

margin the XX.X% XXXX XXXX ago XX.X% for quarter the in to FQX in the quarter. and margin quarter ago was year gross XX.X% for XX% XX.X% compared XX.X% compared and GAAP quarter. prior in in year to prior FQX was Non-GAAP gross the

the charges improved experience in As similar expected, inventory-related as margin sequentially we did quarter. as previous not gross

to range. percent margin XXs remain low the gross in expect We

and million levels. $X.X million and expenses lower The decrease XXXX quarter. for compensation largely $XX.X owing revenue in sequential due compared in the the share-based to million FQX SG&A ago was year lower prior $X.X GAAP with were variable quarter to

net ago with million $X.X FQX of for the GAAP quarter ago $X.X million loss expenses million FQX prior $X R&D was XXXX GAAP quarter. net in GAAP $X.X in quarter. per compared year to loss year per compared or share XXXX, during the million were or $X.XX $X.XX the and in million $X.X share

Non-GAAP net million million ago income per $X.XX or was net XXXX, per in $X.XX the share non-GAAP of $X.X quarter. compared share during $X.X FQX to year income or

result of in and is the in million of range allowing of streamlining year. earlier, and to our mentioned $XX.XX the are balance us for portfolio our expect consolidation activities operating quarterly Saleel non-GAAP OpEx we million the $XX.XX underway, fiscal costs. product the to As reduce These site will

million For approximately our to expect reduce fiscal we expenses XXXX. non-GAAP to the by operating year, full $X.X relative

operating XXXX and flow inventories slightly with to FQX equivalents quarter. the as $XX.X $X.X cash Now as compared in turning million balance with of cash We positive to $XX.X ended million. the quarter, Net of sheet. prior relatively million, increased generated XXXX cash to million the $XX.X flat we prior and of FQX

Now turning to our outlook.

be For from and FQX, in the second the range we activity million. to $XX quarter lower slightly automotive of in revenue in volume Turkey We're million customer of $XX market. to revenue enterprise vertical in to expect fiscal lower our largest lower XXXX, sequentially primarily expecting our due

not purchase yet in for of we result, per product the FQX $X.XX This any EPS acquisition. contribution as have line a range NetComm's in from not include does we're IoT a non-GAAP to the guidance FQX. $X.XX As share of closed expecting

remarks we that, today. prepared With for complete our

to it I'll over our conduct Q&A operator So session. turn now the to

question Instructions] Hallum. Our [Operator is first Craig Christian with from Schwab

for Tyler on This Christian. is

second So push-outs large in maybe should year? from half. like potential what in or half come hopefully back some be like auto fiscal headwinds type or about the guess, QX, projects kind your bracketing customer in of first some recovery some QX, in some of and the thinking off, of the that it I maybe potentially second just federal help in any sounds growth pickup of could sounds we

here. Tyler, question. for Saleel the Thanks

and in slight. there's automotive customer. as some in our but that's guided and quarter, we consumer largest spending little slowdown, we slowdown seeing enterprise rebates of and a bit vertical specifically, this are the For slowdown they're in And Turkey market

rest rest year, year, improvements we've we next fiscal quarter. of sequentially the guide number think but to out the this as of go We start through the see of the about we don't the year, So rest for fiscal a I Tyler. got as

I great. past, are large That's the about I think tail that but on the some other normalized you I have the in Grid the States right. customer. opportunities on And it's those opportunities, in it, guess, here opportunity from update Maybe All think, any or smart grid opportunity, places, your long on talked in potentially additional tracking? Smart having we those how also United then other

Saleel again. Yes, here sure, Tyler.

of are there. Europe was this partner And ongoing. I in year, as shipped calendar in company weeks the our met with we we of deployments X So Italy The a products. just largest said, lot about back, quite leadership

going to they're them. deploy So

along moving expected. as that's So

I've be that been term X in Now Massachusetts. of got longer There's -- state the for another America. excites the me going we've we a said starting told the POC to now in that's North is thing

that's second into are So market. Then them American the seeing Latin one. we going the also

areas some So and other into Europe. there also traction is getting in

there. shown Now time. these the good been device folks Europe. the ready, shows, is But it's It Gridspertise all -- shown was and at you Enlit might showed the The take some is news that.

for product, showed SmartLV is in the lower addition, the grid own at that show. In collaboration voltage even our Qualcomm we low -- same with the

we that in and term. going the area long-term a longer is this are to believe growth in we So see good invest

then making maybe hear X here. partnership progress with you're the AI, right And with last Edge to Good some of Qualcomm. your

of those of things agreements how Or monetary them? guess, so, these to them we Just And these with signed wondering any or going about degree? connection if development have to forward? should you I could, any if any any quantify those think

Yes.

products specific development So talk collaborative we put us -- we that don't they develop X upon about yes, with things we providing We it's have signed -- that any with dollar not and faster. but allowing amounts to specific we're But sharing assured, that with -- did we're developed enable their hub have AI Qualcomm. services agreement -- amount, them, be dollar rest going that them. customers this we on a and improve end to to are

portion doing that we but a we're for them. of So their hub, AI doing whole small uniquely are

Ryan Needham. question with next from Koontz The is

do they your that? kind how how with synergies about the you with synergistic? through the relationships business? I product that both you see your terms walk doing of as of already your think they the structure do When here, that you can me about you in business what the folding the acquired Are additive? Are partnership? come kind And of think what NetComm ask structure Qualcomm you're into channel of and business about And

for you thank and asking question, that. great Ryan,

really routers our And to well. had. we've IoT adds bought addition, and in we XG what gateways believe The So we brand-new acquisition it portfolio. complements

to ready that's add us now. a So to and XG great us, it gives go

goes great as customers. They we that not enterprise you time engaged details. give some and we'll they blue-chip were have customers And more are on, with,

enterprise of a brings right? cross-selling. great we to for stuff you us. in there, our some they have a opportunity products products, an network just put large sell the this for our mobile we opportunity So that us going great some sell perspective. example, operator. other it acquired, lot a to there out-of-band there's like MNO, we And NetComm there's believe our Not could Giving but So that only to of products be in

in into rate I We the said and we that to 'XX. the Secondly, this calendar this revenue $X million expect $X beyond. 'XX really calendar there. to was for million see grow XX%

And cost which was on a side, asked. the question you great

small a support very once NetComm is can own are absorbing capability since team leverage accretive. We it's integrated, our the growth. to we And

crisp not our to not in and So clear this something very be is that's I want portfolio. that

have We space. augments it. Does good It customers a us product. stronger lot in This you a It and revenue. perspective? few makes adds that this adds give a

channel guess I channel perspective, a their you use Are on bringing from What's there? your will channels? they own Yes. existing relationships? going

Yes, great question.

also over. they're And which bringing bringing are completely. which by channel I us relationships They market will is for taking and address pretty relationships a those Australia, didn't be we some that. is, channel decent what underserved IoT, is to add I'll So

So from that perspective. us helps that also

the So them channel. bringing right? they help And already. the is They're structure, also We we other of then suppliers. cost bring there on in work the with can thing some

squeezed that's get out of it. allow some going So us to to costs

wavelength expertise. with kind fruit could 'XX, of is can are applications this a here big your longer at like to development. Edge of what AI project, not we if fit that sorts in impact kind of of new pretty back verticals sounds looking low-hanging It maybe and so And and you're like your that your kind but click a

longer-term and thing. Yes. With you're a it's really it's focused -- our right, strategy,

grid 'XX industrial are having goes improving which vertical, then, because example. the beyond, we portion certified. quality, where We Ryan, all I and frankly, the really making part you this audio Western-based is and both mentioned, you is cities perfect I applications on that a of expected think not is gives are both important also sure applications, very have the a know a But you after about robotics, at, if enterprise the long. that area, which is it again, our low-voltage of smart where a videoconferencing, drones, spoken model, And video TAA and that. you In and before, fiscal being us and area, NDAA and supplier we this,

When you're thinking of you stuff? floor say like kind factory robotics,

we on shoots a start few That's have to products. right. right. some That's Automation. I we believe 'XX, see And frankly, introduced green will this.

away. into But work it. and So effort a feeling really it's with I'm of Qualcomm. we're not too putting long that And good -- lot our we're doing with

And grid Did if your what smart a we kind looks clarification, the mention quarters? Okay. on outlook just over Europe. few that for in next you big like customer of could, your

to we which that December, for track we of We ship 'XX, fiscal would are on as mentioned $XX first half is the end of and million, around do of that.

and are we same their an deployments device, need that they I But in forward, be the on to other into answered finish Moving Italy. projects not as -- getting earlier going they granularity, working are question, with Ryan. to

the tail it. I a think as this, long I said, way partnership, So is about

largely before. sounds on talked track It you about Yes. what

Okay.

nothing Yes, there. to report

you slowdown, that were feeling Great. you on some said? pushouts, federal? more mentioned the you And was enterprise Where

It was where that's customers a would slowdown. quarter. around we moving -- bit insurance federal last the on they Yes. But of talking also careful was mainly little just side, think and The government it's our I specifically for one a forward. been saw future. with the maybe as banking spend but our say -- about about the the I'm government the have some little

to our concludes conference to any turn closing Saleel question-and-answer for remarks. session. like over Awsare would the This I back

and next to everyone, quarter. you, you Thank talk

presentation. now you Thank for attending today's conference The concluded. has

now may disconnect. You