Release Date: April 24, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Data I/O Corp (NASDAQ:DAIO) reported a 19% increase in revenue to $6.2 million compared to the previous quarter.
• The company saw a significant improvement in bookings, up 11% from the previous quarter.
• DAIO is making strategic investments in new product development and has a detailed product roadmap to be rolled out in the next quarters.
• The company is forging strategic relationships with semiconductor companies, which are expected to drive future growth.
• DAIO's participation in trade shows has resulted in increased qualified leads and new contacts, indicating strong market interest.

Negative Points

• Economic headwinds, including tariffs and trade uncertainties, have impacted business performance.
• Bookings slowed at the end of the first quarter due to delayed customer purchase decisions, particularly in Asia.
• The company's backlog decreased by $600,000 from the end of the previous year.
• DAIO reported a net loss of $382,000 for the first quarter, although this was an improvement from previous periods.
• The recurring revenue mix decreased by 4 percentage points compared to the prior year, indicating a shift in revenue composition.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Signs with DAIO.

Q: Can you provide some color on the revenue mix between capital equipment, adapters, and software for the quarter compared to the prior year? A: Unidentified_4 (CFO): In 2024, our recurring revenue, which includes adapters, service contracts, and software, was about 50%. In Q1 2025, it decreased to 46%, which is positive as it indicates an increase in system deliveries. Despite the shift, we are pleased with our stable recurring revenue base.

Q: Given the significant reduction in SG&A expenses year-over-year, do you anticipate similar reductions throughout the current year? A: Unidentified_4 (CFO): While we continue to seek cost reduction opportunities, particularly in IT and automation, we also plan to invest in growth. Therefore, we do not expect similar year-over-year expense reductions as in the past two years, but we aim for investments that enhance overall company performance.

Q: How are your efforts progressing in diversifying into the semiconductor sector? A: Unidentified_3 (CEO): Our efforts are progressing well. We've made significant contacts at trade shows and are forming relationships with semiconductor companies. While these relationships don't translate into immediate business, they position us well for future growth, especially as we engage with new product groups in the semiconductor industry.

Q: Is there a technological reason for semiconductor companies to prefer a specific programmer vendor? A: Unidentified_3 (CEO): Yes, modern memory technologies like UFS and VME require specific protocols and complex programming algorithms. Our investments in technology and partnerships with semiconductor companies are crucial to staying ahead in this evolving landscape.

Q: Have you seen any improvement in orders in April, or are customers still hesitant due to tariff uncertainties? A: Unidentified_3 (CEO): Tariff uncertainties have caused some delays, but our recurring revenue remains steady. While system sales have seen some pushouts, we are closely working with customers to navigate these challenges and expect cautious progress in the coming months.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.