DATA I/O CORP Q1 FY2025 earnings call

• Data I/O reversed 2024 trends with revenue up 19% QoQ and bookings up 11%.
• Tariffs have impacted investments, with Asia having a slow start due to late Chinese New Year and tariff concerns. The team has developed pathways to mitigate tariff impacts.
• Upcoming product roadmap rollout and strategic relationships with semiconductor companies are in the works, with discussions expected to bear fruit by Q2.
• Strong performance at the IPC APEX show with qualified leads up 39% and new contacts up 18% compared to 2024. Consumable adapters like socket adapters are key indicators of business direction.
• Domestic manufacturing in mainland China has seen a strong EV market.

In the first quarter of 2025, Data I/O's revenue was $6.2 million, up 19% from the previous quarter. Americas and European markets saw revenue growth of 32% and 44% respectively, while Asia revenue declined 40% due to trade tariffs and economic uncertainties. Automotive electronics accounted for 66% of Q1 '25 bookings, compared to 59% for all of 2024. Consumable adapters and services made up 46% of total first-quarter revenue, providing a stable base of recurring revenue.

• Cautious about Q2 but focused on driving sales using new go-to-market and product strategies.
• Planning to mitigate tariff, trade, and inflationary pressures by shifting material sourcing, product manufacturing, and shipment logistics.
• Expecting to continue driving sales improvement through new strategies despite current trade and inflationary challenges.

• Impact of global and geopolitical events, international trade regulations, and order levels.
• Activity level of the automotive and semiconductor industry, timing of product deliveries/installations.
• Market acceptance of new products, changes in economic conditions/market demand, part shortages, pricing, and competitor activities.

Q: Could you provide color on revenue mix between capital equipment, adapters, and software in the quarter and how it compares to the prior year?

A: In 2024, recurring revenue was about 50%, made up of adapters, service contracts, software, etc. In Q1 2025, recurring revenue mix was 46%, down 4 percentage points, but overall revenue increase was driven by securing and delivering more systems. Q1 shipped about $2 million worth of sockets, up from Q1 last year.

Q: What's the trend for SG&A and where is it trending for the year?

A: SG&A was down $427,000 (11%) QoQ and $515,000 (12%) YoY. There will be a balance between cost reduction and growth investments, with staff reductions contributing to savings but also focusing on investments to drive growth.

Q: Can you provide color on progress with semiconductor companies?

A: Made great contacts at the Embedded Show in Nuremberg, Germany, with well-received conversations under NDAs. Relationships are ahead of expectations and will be reported on more specifics in Q2 and Q3.

Q: Are there improvements in orders in April and what about system utilizations?

A: Tariffs created uncertainty, with Q2 typically slower. Reoccurring revenue is steady. Systems/CapEx sales had delays as customers assess tariff impact. No tracking of customer system utilizations due to global security concerns, but socket/adapter sales are key indicators of usage.