Lantronix (LTRX) Q2 2025 earnings summary

Executive summary

• Q2/FQ2 FY2025 revenue was $31.2M, within guidance, with non-GAAP EPS of $0.04 and GAAP EPS of ($0.06), both within guidance ranges.

• Revenue declined 15.9–16% year-over-year, mainly due to lower volumes from key automotive and enterprise customers.

• NetComm/Netcomm acquisition completed for $6.5M, expanding Connect business with 4G/5G gateways and enterprise IoT offerings; integration progressing well.

• Cost reduction initiatives substantially complete, consolidating operations into four Centers of Excellence and reducing FY2025 Opex by $4.5M.

• Strategic focus on edge AI and IoT, leveraging partnerships with Qualcomm and new leadership in industrial IoT.

Financial highlights

• GAAP net loss for Q2/FQ2 FY2025 was $2.4M ($0.06/share); non-GAAP net income was $1.8M ($0.04/share).

• Gross margin improved to 42.6% GAAP and 43.2% non-GAAP, up from 40.6% and 41.6% YoY, respectively.

• Operating expenses for Q2: $15.4M (down $1.3M YoY), mainly from lower SG&A and share-based compensation.

• Cash and equivalents at quarter end: $19.2M after NetComm acquisition; positive operating cash flow of $3M for six months.

• Americas revenue: $16.4M, EMEA: $9.0M, APJ: $5.7M; Embedded IoT Solutions: $10.8M, IoT System Solutions: $18.6M, Software & Services: $1.8M.

Outlook and guidance

• Q3/FQ3 FY2025 revenue expected between $27M–$31M, reflecting slower rollout by a major smart grid customer in Europe.

• Non-GAAP EPS for Q3 projected at $0.01–$0.05.

• Gross margin expected to be slightly higher in Q3 due to favorable product mix.

• Long-term growth targeted at 12%, with potential acceleration as edge AI ramps.

• Netcomm acquisition expected to add $300K–$400K in quarterly costs going forward.