Data I/O (DAIO) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined 32% year-over-year to $5.1 million, mainly due to weakness in automotive electronics and delayed customer orders, particularly in the Americas, while Asia and EMEA outperformed expectations.

• Bookings for Q2 were $5.7 million, with a quarter-end backlog of $5.4 million, and eight new customer/location wins in Q2, totaling 13 year-to-date, mainly in IoT, industrial, and EMS for edge AI applications.

• Significant reductions in operating expenses and improvements in direct product costs contributed to improved operating leverage.

• Strength observed in programming centers, industrial, IoT, and EMS; automotive sector was weak.

• The company remains focused on growth in automotive, industrial, and programming center markets, with disciplined spending and operational leverage as priorities.

Financial highlights

• Q2 2024 net sales were $5.1 million, down from $7.4 million in Q2 2023; gross margin was 54.5%, down from 59.1% in Q2 2023 but up 170 basis points sequentially from Q1 2024.

• Net loss for Q2 2024 was $797,000, compared to net income of $300,000 in Q2 2023.

• Adjusted EBITDA for Q2 2024 was $3,000, down from $870,000 in Q2 2023.

• Cash and cash equivalents were $11.4 million as of June 30, 2024, with no debt.

• Operating expenses were $3.3 million, down 21% year-over-year and 19% sequentially.

Outlook and guidance

• Significant portion of contractual backlog expected to ship and be recognized as revenue in the second half of 2024.

• Management expects to benefit from operating leverage and improved profitability as demand returns, especially in automotive.

• The company believes it has sufficient liquidity to fund operations and capital requirements for at least the next year.

• Ongoing cost control and efficiency initiatives are expected to yield further improvements.