Data I/O's Q2 2025: Exploring Key Contradictions in Revenue Mix, Margins, and Automotive Strategy

Recurring revenue and sales mix, gross margin expectations, automotive market expansion strategy, focus on automotive sector and market expansion, and product and market growth strategy are the key contradictions discussed in Data I/O Corporation's latest 2025Q2 earnings call.



Bookings and Revenue Growth:
- Data I/O Corporation reported bookings up sequentially from Q4 401, Q2 406, and Q2 508, with Q2 bookings reaching $5.8 million, up from $4.6 million in Q1 2025 and $5.6 million in Q2 2024.
- The increase in bookings was driven by a focus on enhancing the core programming platform and securing a large order for UFS flash memory systems.

Tariff and Trade Uncertainty:
- The company faced challenges due to tariff and trade uncertainties, particularly in Asia and Europe, impacting customer capital spending plans.
- Despite these headwinds, the second quarter saw an improvement in bookings, especially in June, driven by a large order in Asia.

Gross Margin and Product Mix:
- Data I/O's gross margin for Q2 2025 was 49.8%, down from 51.6% in Q1 and 54.5% in Q2 2024.
- The decline was due to a lower margin product mix and the configuration of automated systems driven by a large customer order, affecting manufacturing efficiency.

Investment in Core Platform and IT Infrastructure:
- The company spent approximately $480,000 in onetime expenses in Q2 2025, focusing on core programming platform enhancements and IT infrastructure upgrades.
- These investments aim to improve the platform's capability to handle complex technologies and enhance operational efficiency, better positioning Data I/O for future growth.