Data IO 2025 Q1 Earnings Beats Expectations as Net Income Improves 55.6%

Data I/O (DAIO) reported its fiscal Q1 2025 earnings on May 13th, 2025, with results exceeding market expectations. The company posted a narrower net loss of $0.04 per share, surpassing the anticipated $0.09 per share loss. Data I/O also presented a positive outlook with top-line growth projections, fueled by backlog recovery in the Americas and Europe. Despite challenges in global trade, the company is confident in sustaining growth through operational efficiencies and strategic positioning.

Revenue

Data I/O's total revenue rose 1.3% to $6.18 million in Q1 2025, compared to $6.10 million in Q1 2024. The automated programming systems segment generated $4.35 million, while the non-automated programming systems segment contributed $1.83 million, collectively making up the total programming systems revenue.

Earnings/Net Income

The company reduced its net loss to $382,000 in Q1 2025, a 52.7% improvement from the $807,000 loss in Q1 2024. This narrowed loss per share to $0.04 indicates a positive quarterly performance.

Price Action

The stock price of Data I/O has shown a modest increase of 0.24% on the latest trading day. Over the past week, it climbed 7.98%, and month-to-date, the stock has surged by 19.53%.

Post-Earnings Price Action Review

The strategy of acquiring Data I/O shares after a quarter-over-quarter revenue decline has yielded inconsistent results over the past five years. Although some returns were positive, they were not consistently significant, particularly within the volatile technology sector. The strategy averaged a 3.5% return over five years, underscoring the impact of market conditions on outcomes. For instance, 2020 saw a 15% gain, whereas 2021 experienced a 2% loss. The strategy struggled notably in 2021 and 2023, correlating with broader market downturns and company-specific challenges. Importantly, the analysis did not incorporate broader market factors like interest rates or economic cycles, which heavily affect tech stocks known for volatility. While the strategy holds promise, optimizing it by evaluating company financial health, market position, and growth potential could enhance results. Investors should consider market context and individual company factors, adjusting strategies to fit risk tolerance and investment timelines.

CEO Commentary

William Wentworth, President and CEO of Data I/O Corporation, expressed satisfaction with the first quarter results, highlighting progress in operational areas despite a challenging economic environment. He noted a sequential increase in revenue, operating income, and cash balance, driven by efficiency improvements and a lower cost basis. Wentworth acknowledged ongoing global trade tensions impacting the business but emphasized the company's resilience and strategic positioning, particularly in expanding market reach and enhancing product innovation. He indicated that customer engagement is rising, particularly for high-margin consumable adapters, setting the stage for sustainable growth as they navigate current uncertainties.

Guidance

Data I/O anticipates continued top-line growth, projecting a 19% increase in revenue to $6.2 million in Q1 2025 compared to Q4 2024, supported by recovery in backlog deliveries in the Americas and Europe. Although bookings rose to $4.6 million from the previous quarter, they fell from $8.1 million year-over-year due to delays in customer decisions amidst trade concerns. The company expects improved operational efficiency to bolster margins, aiming for stable revenue streams from consumables and services, while remaining cautious of short-term economic headwinds.

Additional News

Recently, Data I/O announced that multiple insiders, including board members and senior management, have purchased company stock in open-market transactions, demonstrating confidence in the company's strategic goals and growth prospects. Additionally, the company secured its largest adapter order in history, valued at nearly $1 million, from a major electronics distributor in Europe. This order supports their automated programming systems, contributing to their strategic market expansion efforts.