Lantronix (LTRX) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 revenue was $34.4 million, up 4–4.2% year-over-year, driven by Embedded IoT Solutions, but offset by declines in IoT System Solutions and Software & Services.

• GAAP net loss widened to $2.5 million (EPS $(0.07)), primarily due to higher operating expenses, including $900,000 in restructuring and severance charges.

• Non-GAAP net income was $2.3 million (EPS $0.06), compared to $2.5 million (EPS $0.07) in the prior year.

• Announced acquisition of NetComm's IoT product line for $6.5 million, expected to be immediately accretive to EPS and generate $6–$7 million in revenue in 2024.

• Progressed strategic collaboration with Qualcomm, including development agreements and new AI-enabled edge compute products.

Financial highlights

• Embedded IoT Solutions revenue grew 17.7–18% year-over-year to $13.4 million; IoT System Solutions declined 1–1.5% to $18.8 million; Software & Services fell 13–13.2% to $2.3 million.

• Americas revenue dropped 24% to $17.4 million, EMEA rose 59% to $10.5 million, and APJ surged 86% to $6.5 million.

• GAAP gross margin was 42.1%, up from 38.1% in the prior quarter and slightly down from 42.7% a year ago; non-GAAP gross margin was 42.6%.

• GAAP SG&A expenses were $9.5 million; GAAP R&D expenses were $5 million.

• Ended Q1 with $26.4 million in cash and generated $2.7 million in positive operating cash flow.

Outlook and guidance

• Q2 FY2025 revenue expected between $29–$33 million, with non-GAAP EPS of $0.01–$0.05; guidance excludes any contribution from the pending NetComm acquisition.

• Sequential revenue decline anticipated due to lower volumes from the largest automotive customer and softer enterprise market activity.

• Full-year non-GAAP operating expenses expected to be reduced by $4.5 million compared to FY2024.

• Management expects to recognize substantially all non-current deferred revenue over the next 2 to 5 years.

• Current cash holdings and access to credit facilities are sufficient to fund operations for at least the next 12 months.