Lantronix 2025 Q4 Earnings Record Low Net Income Amid Declining Revenue

Lantronix reported a significant earnings decline in Q4 2025, with a net loss of $-2.63 million, representing a 781.6% drop from its net income of $386,000 in Q4 2024. The results missed expectations, and the company did not raise its guidance. Revenue also fell sharply to $28.84 million, a 41.2% decrease from the prior year period, underscoring the challenging operating environment.

Revenue
Lantronix's total revenue for Q4 2025 declined by 41.2% year-over-year to $28.84 million. The drop reflects a broader contraction in demand, particularly in the Gridspertise segment, which was excluded from the core business growth highlighted by the CEO. While the company remains within its revenue guidance range, the sharp decline underscores ongoing challenges in stabilizing its top-line performance.

Earnings/Net Income
The company's net income turned negative in Q4 2025, with a loss of $-2.63 million, a deterioration of 781.6% from the $386,000 net profit in the same period a year earlier. On a per-share basis, the loss came to $0.07, a dramatic shift from the prior year’s profit of $0.01. This represents a significant decline in earnings performance, which has likely raised concerns among investors about the company’s financial health and operational efficiency.

Price Action
Following the earnings report, Lantronix's stock experienced notable price swings, with the stock rising 8.88% on the day of the report, 43.08% over the subsequent full trading week, and 56.62% month-to-date. The sharp rise in share price contrasts with the weak earnings performance, highlighting the market’s optimism or potential speculative trading.

Post-Earnings Price Action Review
The strategy of buying LTRX following a revenue miss and holding for 30 days has proven highly unsuccessful, returning -48.46%—a performance that underperformed the benchmark by 124.61%. The strategy also displayed a Sharpe ratio of -0.21, indicating poor risk-adjusted returns, and a maximum drawdown of 0.00%, signaling the limited downside in this case. These figures highlight the high level of risk associated with such a strategy and question its viability for investors seeking reliable post-earnings returns.

CEO Commentary
Saleel Awsare, CEO, described fiscal 2025 as a pivotal year marked by disciplined execution and foundational progress for sustainable growth. He emphasized the importance of the $28.8 million in Q4 revenue, noting it aligned with guidance and reflected core business growth excluding the Gridspertise segment. He also highlighted the Red Cat Teal drone win as a key achievement, leveraging the company’s camera expertise and compliance. Additionally, he expressed optimism about the momentum in Edge AI partnerships and strategic wins, such as the mobile carrier contract for backup power systems. The CEO remains confident in the company’s trajectory for fiscal 2026, driven by multiyear growth cycles in defense and infrastructure modernization.

Guidance
Brent Stringham, CFO, provided Q1 2026 guidance, projecting revenue in the range of $28.5 million to $30.5 million, with non-GAAP EPS estimated between $0.02 and $0.04 per share. The leadership team reiterated confidence in fiscal 2026, citing improved visibility from recent design wins in Edge IoT and out-of-band management. They also anticipate that gross margins will return to around 44% as supply chain optimizations take effect.

Additional News
In the three weeks following Lantronix’s Q4 2025 earnings report, several notable non-earnings related news items emerged. First, the company announced a strategic partnership with Aerora to advance Edge AI solutions. This move is seen as a key step toward diversifying revenue streams and leveraging high-margin technology opportunities. Second, Lantronix disclosed plans to streamline its Gridspertise business, which is expected to result in cost reductions and a sharper focus on core operations. Lastly, the company outlined a share repurchase program, signaling its commitment to returning value to shareholders amid the challenging earnings environment.