Lantronix (LTRX) Q3 2026 earnings summary

Executive summary

• Q3 2026 revenue reached $30.2 million, up 5.9% year-over-year, driven by 22% growth in Embedded IoT Solutions and strong unmanned systems demand.

• Non-GAAP EPS was $0.04, GAAP net loss narrowed to $1.2 million, reflecting improved profitability.

• Expanding customer base and international shipments, including to the UK and Ukraine, supported by favorable regulatory trends.

• Software & Services revenue increased, while IoT System Solutions declined due to slower federal spending and APJ weakness.

• Management targets double-digit revenue growth in fiscal 2027, with drone revenue expected to double and represent 15%-20% of total revenue.

Financial highlights

• Q3 2026 net revenue: $30.2 million; gross margin: 43.1% GAAP, 43.6% non-GAAP.

• GAAP net loss: $1.2 million ($0.03/share); non-GAAP net income: $1.5 million ($0.04/share).

• Cash and equivalents: $23.5 million, up from $20.1 million at June 30, 2025.

• Operating expenses: $14.1 million, down 12% year-over-year.

• Debt reduced to $8.7 million as of March 31, 2026.

Outlook and guidance

• Q4 FY2026 revenue expected between $29 million and $33 million; non-GAAP EPS guidance: $0.03–$0.05.

• FY26 drone revenue outlook raised to $10–$14 million, targeting $12 million midpoint.

• Drone revenue expected to double in FY27, representing 15%-20% of total revenue; double-digit overall growth targeted.

• Gross margin expected to fluctuate due to product mix and manufacturing costs.

• Liquidity and cash flow expected sufficient for at least 12 months.