Socket Mobile, Inc. Q1 FY2026 earnings call

• Environment is difficult with customer caution and delayed spending carrying over from 2025 into 2026, Q1 revenue fell short of expectations. • Team executed well despite lower volumes, gross margins expanded to 51.3% due to disciplined cost structure and operational efficiencies. • Operating expenses decreased 8% year over year. • Lowered inventory by $3.9 million. • Completed a half-million-dollar secure subordinate convertible node financing. • New product SM Link extends professional scanning ecosystem to Mac OS, responds to customer demand, opens new addressable markets. • Industrial segment shows tangible results with multiple active deployments, sees demand in various sectors like warehousing, logistics, etc., with larger opportunity sizes though longer sales cycles. • New products passing test in challenging environments, large enterprise customers shifting to mobile computing platforms, especially Apple platforms, fits Socket Mobile well. • Growing demand for real-time data capture at the edge in logistics, inventory, and field operations.

Revenue in Q1 decreased 7% year-over-year to $3.7 million, down from $4 million in the same quarter last year. Gross margin for the quarter improved to 51.3% compared with 50.4% in Q1 2025 and 50.2% in Q4 2025. Operating expenses for Q1 were $2.7 million, down 8% year over year. Inventory net of reserves was $3.9 million as of March 31st, down from $4.2 million at year-end 2025. The industrial segment is expected to represent approximately 10% of revenue this quarter, with contribution building strongly through the second half of 2026.

• Environment remains difficult with customer caution and delayed spending affecting top-line. • Q1 revenue fell short of expectations. • Focus on operational efficiencies and managing costs. • Industrial segment expected to contribute more strongly through the second half of 2026.

• Risk that manufacturer of Socket's products may be delayed or not rolled out as predicted due to technological, market, or financial factors, including availability of product components and necessary working capital. • Risk that market acceptance and sales opportunities may not happen as anticipated. • Risk that Socket's application partners and current distribution channels may choose not to distribute the products or may not be successful in doing so. • Risk that acceptance of Socket's 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.