Socket Mobile — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue for the three months ended September 30, 2026, was $3.4 million, a 9% increase year-over-year from $3.1 million and a 12% sequential increase from $3.0 million in the preceding quarter.
• Gross margin was 48.6% for the quarter, compared to 47.7% in the prior year's quarter and 46.4% in the preceding quarter.
• Operating expenses were $2.3 million, down from $2.5 million in the prior year period and $2.6 million in the preceding quarter.
• Operating loss was $643,000, an improvement from a $1,058,000 loss in the prior year's quarter and a $1,195,000 loss in the preceding quarter.
• Net loss for the quarter was $789,000 ($0.09 per share), compared to a net loss of $1,198,000 ($0.15 per share) in the prior year's quarter.
• For the nine months ended September 30, 2026, revenue was $10.1 million, down from $11.1 million in the prior year period.
• Gross margin for the nine-month period was 48.9%, compared to 49.5% in the prior year period.
• Operating loss for the nine months was $2.6 million, compared to $2.6 million in the prior year period.
• Net loss for the nine months was $3.0 million ($0.37 per share), compared to $3.0 million ($0.38 per share) in the prior year period.
• Cash balance as of September 30, 2026, was approximately $1.4 million, down from $1.6 million at June 30, 2026.
• Subordinated convertible notes payable decreased to $200,000 from $400,000 at the end of 2025.
• Short-term borrowings from related parties increased to $425,000 from zero at the end of 2025.
• Deferred revenue on shipments to distributors increased to $512,000 from $336,000 at the end of 2025.
• Deferred service revenue increased to $95,000 from $28,000 at the end of 2025.
• Total equity decreased to $1.8 million from $4.3 million at the end of 2025.

Guidance and Future Outlook:

• Management expects to continue cost management initiatives through the remainder of the year.
• The Company aims to expand its data capture solutions across key markets.
• Management believes disciplined expense management, stabilizing revenue, and expanding commercial opportunities will position the Company for continued operational improvement.

Business Segments and Product Lines:

• Revenue is primarily driven by the deployment of third-party barcode-enabled mobile applications integrating Socket Mobile's cordless barcode scanners and contactless readers/writers.
• Primary revenue drivers include mobile applications servicing specialty retailers, field service, digital ID, transportation, and manufacturing markets.
• The Company expanded commercial reach through strategic partnerships with 3Eye Technologies for industrial mobility solutions for Apple-based frontline workflows.
• The Company partnered with Orda to provide integrated mobile ordering and self-checkout solutions for enterprise workplace dining environments.
• The Company maintains a network of thousands of developers using its software developer tools to add sophisticated data capture to mobile applications.

Management Commentary and Tone:

• CEO Dave Holmes stated that third-quarter results reflect progress in stabilizing revenue while executing cost management initiatives.
• Management highlighted a 12% sequential revenue increase and a 9% year-over-year increase, attributing this to improved performance amid continued market uncertainty.
• Operating expenses were reduced by 12% from the prior quarter and 10% year-over-year to align the cost structure with business conditions.
• Management emphasized an ongoing focus on operational efficiency and financial discipline while maintaining the ability to support customers and pursue future growth.

Other Key Points:

• A conference call was held on November 4, 2026, at 2 P.M. Pacific to discuss results and outlook.
• The Company is headquartered in Fremont, California.
• Forward-looking statements include risks regarding new product delays, market acceptance, and the success of application partners and distribution channels.
• Total assets decreased to $11.8 million from $14.4 million at the end of 2025.
• Inventories decreased to $3.4 million from $4.2 million at the end of 2025.
• Accounts receivable decreased to $1.3 million from $1.7 million at the end of 2025.