Socket Mobile, Inc. Q4 FY2025 earnings call

• In 2025, operated in challenging macroeconomic and distribution environment, but strengthened product portfolio, expanded technology capabilities. - Launched CaptureSDK 2.0, SocketScan S721, XtremeScan v16e, DuraScan D751 NFC and RFID reader, DuraScan D764. - XtremeScan product featured in Apple Connected Worker series, saw significant interest from large companies, expecting to pursue high-value opportunities in 2026. - Strengthened international presence, particularly in APAC region, S370 and S550 in Japan certified as My Number Card readers. - Continued to invest in product development and global reach to drive long-term value.

Q4 revenue was $4 million, down 18% year-over-year from $4.8 million in the prior year quarter but up 28% sequentially from $3.1 million in Q3 2025. Annual revenue was $50 million, a 20% year-over-year decrease from $19 million in 2024. Q4 gross margin was 50% compared to 51% in Q4 2024 and 48% in Q3 2025. Annual gross margin was 49.7% compared to 50.4% in 2024. Q4 operating expenses were $2.6 million, a 10% year-over-year decrease and a 2% sequential increase. Annual operating expenses totaled $10.7 million, down 10% from $11.9 million in 2024. Q4 net loss per share was $1.43 compared to $0.00 per share in Q4 2024 and a loss of $0.15 per share in Q3 2025. Annual net loss per share was $1.81 compared to $0.30 in 2024.

• Kevin said they got off to a reasonably good start in January and are on track for a reasonable Q1. - Regarding warehousing and logistics business, second generation of XtremeScan product, which focuses on 16e, is being shipped and is a large step forward in performance and benefit to end user.

• Risk that manufacture of products may be delayed or not rolled out as predicted due to technological, market or financial factors. - Risk that market acceptance and sales opportunities may not happen as anticipated. - Risk that application partners and current distribution channels may choose not to distribute products or may not be successful in doing so. - Risk that acceptance of products in vertical application markets may not happen as anticipated as well as other risks described in Socket's most recent Form 10-K and 10-Q reports filed with the Securities and Exchange Commission.

Q: Can you comment a little bit, we're 7 weeks into 2026. How are you feeling about the business right now?

A: I think we got off to a reasonably good start in January. So we're feeling okay. We have a lot of activity subject to the follow-up we did for the Apple event in December. So we've been extremely busy. Overall, I would say we're on track for a reasonable Q1. So I wouldn't say we're overly optimistic or pessimistic. I think things are kind of as expected as we started the year.

Q: We've been trying to get into the warehousing and logistics business for a while now. Have we had any successes yet?

A: Yes. We have one large customer who is, I suppose, a Fortune, I don't know, 10 or thereabout company that we have deployed with. We have something in the region of 150 units being used on a daily basis. I think based on the feedback we've gotten, we've been able to update the units, and we feel that the second generation, which we announced in December, is substantially stronger. I think with the benefit of hindsight, we covered the camera in the initial rollout of our XtremeScan. And I think that we didn't realize how integral to many applications the camera is and that we incorrectly determined that the scanning would supersede the camera, which turned out to be not the case. In our second generation, which we focused on the 16e, we have corrected that and the camera is now fully available to the user. And we've also been able to improve a number of other, let's say, shortcomings in the product based on the feedback we've got and the tests we've done. So I really feel that the V2 product, which we're in the process of now starting to ship is a large step forward in terms of the overall performance and benefit to the end user. So we feel particularly good about that.