Lantronix — Fiscal First Quarter 2027 Earnings Summary

Financial Performance:

• Net revenue increased 8% year-over-year to $32.4 million for the quarter ended September 30, 2026, compared to $29.8 million in the prior year period.
• GAAP net loss improved to $463 thousand, or ($0.01) per share, compared to a net loss of $1.4 million, or ($0.04) per share, in the prior year period.
• Non-GAAP net income increased 50% year-over-year to $2.2 million, or $0.05 per share, compared to $1.5 million, or $0.04 per share, in the prior year period.
• Non-GAAP gross margin was 45.3% for the quarter, compared to 45.3% in the prior year period.
• Cash and cash equivalents were $37.6 million as of September 30, 2026, down from $60.5 million as of June 30, 2026.
• Total debt increased to $4.8 million (current portion of $250 thousand and long-term portion of $4.5 million) as of September 30, 2026, compared to no debt as of June 30, 2026.
• Inventories increased to $31.2 million as of September 30, 2026, from $25.8 million as of June 30, 2026.

Guidance and Future Outlook:

• The company reaffirmed its expectation for double-digit revenue growth for the full fiscal year 2027.
• Q2 FY2027 net revenue guidance is set between $32.5 million and $34.5 million.
• Q2 FY2027 non-GAAP net income guidance is set between $1.8 million and $2.7 million, or $0.04 to $0.06 per share.
• Management expects to continue leveraging edge computing and computer vision expertise across a broader range of commercial and industrial applications.
• Growing interest is noted in out-of-band management solutions from customers deploying AI and data center infrastructure.

Business Segments and Product Lines:

• Embedded IoT Solutions revenue increased 37% year-over-year, driven by momentum in unmanned systems.
• Software and services revenue grew to $2.6 million, bringing the pro forma software and services mix above 10% of total revenue following the Nero Global Tracking acquisition.
• IoT System Solutions revenue was $14.1 million for the quarter.
• New product launches include the Open-Q 8550CS SOM, added to the U.S. Department of War's Blue UAS Framework.
• The Spotter robotics platform with onboard AI and vision was introduced at AUSA 2026, with availability expected in Q4 2026.
• MediaTek-based system-on-modules were launched, positioning Lantronix as the only North American supplier of such modules, delivering 10 TOPS of AI performance at less than 4 watts.
• The FOX5 Edge-to-Cloud intelligent serial gateway was launched to pair with Percepxion for real-time monitoring.
• Two design wins were secured for edge compute solutions in commercial and industrial computer vision: one with Trimble Inc. for advanced surveying equipment and another with a jobsite security provider for smart security cameras.

Market and Competitive Landscape:

• The company operates in the Edge Intelligence and Industrial IoT sectors, powering NDAA-compliant unmanned systems, critical infrastructure, and resilient enterprise networks.
• Recent design wins demonstrate expansion beyond drones and defense into advanced surveying and smart security monitoring for jobsite safety.
• The company highlights its position as the only North American supplier of MediaTek-based SOMs for high-volume commercial drone, industrial, and robotics programs.

Risks and Challenges:

• Risks include negative or worsening regional and worldwide economic conditions affecting customer purchasing decisions.
• Supply chain disruptions may occur due to U.S. trade policy changes, tariffs, pandemics, or geopolitical conflicts in Europe, Asia, the Middle East, and the Red Sea.
• Challenges exist in successfully converting backlog, integrating acquired companies, and realizing accretion from acquisitions.
• Potential risks include inventory obsolescence, cybersecurity threats, and delays in product qualification or supply from contract manufacturers.
• Intense industry competition could lead to downward price pressure.
• Uncertainty regarding the future profitability of acquired businesses and potential delays in realizing benefits from collaborations.

Management Commentary and Tone:

• Saleel Awsare, President and CEO, stated the company entered fiscal 2027 from a position of strength, delivering 8% revenue growth and a 50% increase in non-GAAP net income.
• Management expressed confidence in delivering double-digit revenue growth in fiscal 2027, citing the strategic acquisition of Nero Global Tracking and success in unmanned systems.
• The tone emphasized translating defense success into broader commercial and industrial opportunities through edge computing and computer vision expertise.

Other Key Points:

• The strategic tuck-in acquisition of Nero Global Tracking expanded the software and services mix above 10% of total revenue.
• Jason Lamb, a former U.S. Navy SEAL officer and defense technology executive, was welcomed as an independent director.
• The company's Open-Q 8550CS SOM was added to the U.S. Department of War's Blue UAS Framework, allowing drone OEMs to reduce component-level qualification effort.
• The company hosts an investor conference call and webcast on November 9, 2026, at 1:30 p.m. Pacific Time.