Data I/O Corp 10-Q for FY2026 Q3

Data I/O Corp (DAIO)

10-Q 2026-11-13 For: 2026-09-30

Added on November 13, 2026

About this 10-Q

Data I/O Corp filed this 10-Q on November 13, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).

Data I/O reported third-quarter net sales of $4.9 million, while gross margin expanded to 58.0% from 50.7%; bookings were $5.0 million. AI summary

Headline figures

Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.87M; down 9.6% from $5.39M a year earlier
Net loss: $2.7M; compared with a net loss of $1.36M a year earlier
Diluted EPS: -$0.27; compared with -$0.15 a year earlier

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(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2026

Or

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


Commission file number: 0-10394

DATA I/O CORPORATION
(Exact name of registrant as specified in its charter)

Washington	91-0864123
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6645 185^th Ave NE, Suite 100, Redmond, Washington, 98052 425-881-6444 (Address of principal executive offices, including zip code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	DAIO	NASDAQ


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐


			Page

Part I.		Financial Information	3

	Item 1.	Financial Statements (Unaudited)	3

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

	Item 4.	Controls and Procedures	25

Part II		Other Information	26

	Item 1.	Legal Proceedings	26

	Item 1A.	Risk Factors	26

	Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	26

	Item 3.	Defaults Upon Senior Securities	26

	Item 4.	Mine Safety Disclosures	26

	Item 5.	Other Information	27

	Item 6.	Exhibits	27

Signatures			28


		September 30,			December 31,
		2026			2025
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	9,397		$	7,901
Trade accounts receivable, net of allowance for credit losses of $19 and $29, respectively			4,472			2,841
Inventories			5,951			5,710
Other current assets			975			799
TOTAL CURRENT ASSETS			20,795			17,251

Property and equipment – net			964			807
Other assets			1,612			2,118
TOTAL ASSETS		$	23,371		$	20,176

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	1,555		$	1,227
Accrued compensation			1,083			958
Deferred revenue			937			1,464
Other accrued liabilities			2,473			1,328
Income taxes payable			9			4
TOTAL CURRENT LIABILITIES			6,057			4,981

Deferred foreign income tax			250			250
Operating lease liabilities			884			1,411
Long-term other payables			21			20

STOCKHOLDERS’ EQUITY

Preferred stock - Authorized, 5,000,000 shares, including 200,000 shares designated Series A Junior Participating Preferred Stock and 8,000 shares designated Series B Convertible Preferred Stock; Series A Junior Participating Preferred Stock issued and outstanding, none			—			—
Series B Convertible Preferred Stock, $1,000 stated value - Issued and outstanding, 6,841.33 shares as of September 30, 2026 and none as of December 31, 2025			6,841			—
Common stock, at stated value - Authorized, 30,000,000 shares Issued and outstanding, 10,419,364 shares as of September 30, 2026 and 9,391,922 shares as of December 31, 2025			26,019			24,062
Additional paid in capital			1,165			—
Accumulated deficit			(18,475)			(10,974)
Accumulated other comprehensive income			609			426
TOTAL STOCKHOLDERS’ EQUITY			16,159			13,514
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	23,371		$	20,176


		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2026			2025			2026			2025
Net sales		$	4,874		$	5,393		$	13,273		$	17,516
Cost of goods sold			2,046			2,659			5,900			8,634
Gross margin			2,828			2,734			7,373			8,882
Operating expenses:
Research and development			1,596			1,709			4,267			4,886
Selling, general and administrative			3,270			2,418			9,012			6,609
Total operating expenses			4,866			4,127			13,279			11,495
Operating income (loss)			(2,038)			(1,393)			(5,906)			(2,613)
Non-operating income (loss):
Interest income			17			34			43			107
Interest expense			(624)			—			(1,497)			—
Foreign currency transaction gain (loss)			18			(3)			(66)			22
Total non-operating income (loss)			(589)			31			(1,520)			129
Income (loss) before income taxes			(2,627)			(1,362)			(7,426)			(2,484)
Income tax (expense) benefit			(75)			—			(75)			(2)
Net income (loss)		$	(2,702)		$	(1,362)		$	(7,501)		$	(2,486)


Basic earnings (loss) per share		$	(0.27)		$	(0.15)		$	(0.77)		$	(0.27)
Diluted earnings (loss) per share		$	(0.27)		$	(0.15)		$	(0.77)		$	(0.27)
Weighted-average basic shares			10,404			9,389			9,793			9,308
Weighted-average diluted shares			10,404			9,389			9,793			9,308


											Accumulated
	Series B Convertible								Additional		and Other		Total
	Preferred Stock			Common Stock			Accumulated		Paid in		Comprehensive		Stockholders’
	Shares	Amount		Shares	Amount		Deficit		Capital		Income (Loss)		Equity
Balance at December 31, 2024	—	$	—	9,236,040	$	23,475	$	(5,738)		—	$	(111)	$	17,626
Stock awards issued, net of tax withholding	—		—	1,759		(3)		—		—		—		(3)
Issuance of stock through: ESPP	—		—	1,932		6		—		—		—		6
Share-based compensation	—		—	—		174		—		—		—		174
Net income (loss)	—		—	—		—		(382)		—		—		(382)
Other comprehensive income	—		—	—		—		—		—		126		126
Balance at March 31, 2025	—	$	—	9,239,731	$	23,652	$	(6,120)		—	$	15	$	17,547
Stock awards issued, net of tax withholding	—		—	134,967		(98)		—		—		—		(98)
Share-based compensation	—		—	—		250		—		—		—		250
Net income (loss)	—		—	—		—		(742)		—		—		(742)
Other comprehensive income	—		—	—		—		—		—		289		289
Balance at June 30, 2025	—	$	—	9,374,698	$	23,804	$	(6,862)		—	$	304	$	17,246
Stock awards issued, net of tax withholding	—		—	13,714		(19)		—		—		—		(19)
Issuance of stock through: ESPP	—		—	2,318		7		—		—		—		7
Share-based compensation	—		—	—		115		—		—		—		115
Net income (loss)	—		—	—		—		(1,362)		—		—		(1,362)
Other comprehensive income	—		—	—		—		—		—		23		23
Balance at September 30, 2025	—	$	—	9,390,730	$	23,907	$	(8,224)		—	$	327	$	16,010
Balance at December 31, 2025	—	$	—	9,391,922	$	24,062	$	(10,974)		—	$	426	$	13,514
Stock awards issued, net of tax withholding	—		—	2,500		(13)		—		—		—		(13)
Share-based compensation	—		—	—		77		—		—		—		77
Net income (loss)	—		—	—		—		(3,170)		—		—		(3,170)
Other comprehensive income	—		—	—		—		—		—		54		54
Balance at March 31, 2026	—	$	—	9,394,422	$	24,126	$	(14,144)		—	$	480	$	10,462
Stock awards issued, net of tax withholding	—		—	131,365		(55)		—		—		—		(55)
Share-based compensation	—		—	—		156		—		—		—		156
Common stock issued in private placement	—		—	869,840		1,689		—		—		—		1,689
Warrants	—		—	—		—		—		1,165		—		1,165
Net income (loss)	—		—	—		—		(1,629)		—		—		(1,629)
Other comprehensive income	—		—	—		—		—		—		64		64
Balance at June 30, 2026	—	$	—	10,395,627	$	25,916	$	(15,773)	$	1,165	$	544	$	11,852
Stock awards issued, net of tax withholding	—		—	23,737		(31)		—		—		—		(31)
Share-based compensation	—		—	—		134		—		—		—		134
Conversion of convertible notes into Series B preferred stock	6,841.33		6,841	—		—		—		—		—		6,841
Net income (loss)	—		—	—		—		(2,702)		—		—		(2,702)
Other comprehensive income	—		—	—		—		—		—		65		65
Balance at September 30, 2026	6,841.33	$	6,841	10,419,364	$	26,019	$	(18,475)	$	1,165	$	609	$	16,159


	For the Nine Months Ended
	September 30,
	2026		2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(7,501)	$	(2,486)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization		598		369
Equipment transferred to inventory		(356)		59
Interest expense		1,497		—
Share-based compensation		367		539
Net change in:
Trade accounts receivable		(1,631)		681
Inventories		(241)		471
Other current assets		(176)		7
Accounts payable and accrued liabilities		1,572		125
Deferred revenue		(527)		(336)
Other long-term liabilities		(526)		(581)
Deposits and other long-term assets		506		576
Net cash provided by (used in) operating activities		(6,418)		(576)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(399)		(352)
Cash provided by (used in) investing activities		(399)		(352)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible debt		5,867		—
Proceeds from issuance of common stock and warrants		3,133		—
Payment of issuance costs - private placement		(800)		—
Net proceeds from issuance of common stock, less payments
for shares withheld to cover tax		(68)		(107)
Cash provided by (used in) financing activities		8,132		(107)
Increase (decrease) in cash and cash equivalents		1,315		(1,035)

Effects of exchange rate changes on cash		181		373
Cash and cash equivalents at beginning of period		7,901		10,326
Cash and cash equivalents at end of period	$	9,397	$	9,664

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes	$	—	$	9

Supplemental disclosure of noncash financing activities:
Conversion of convertible notes and accrued interest into Series B Convertible Preferred Stock	$	6,841	$	—


		Balance at			Balance at
		September 30,			December 31,
		2026			2025
(in thousands)
Right-of-use assets (Long-term other assets)		$	1,498		$	2,005
Lease liability-short term (Other accrued liabilities)		$	710		$	690
Lease liability-long term (Operating lease liabilities)		$	884		$	1,411


Holder		Issuance date		Warrant Shares		Exercise price			Expiration date
Lytton-Kambara Foundation		6/17/2026		720,000		$	3.00		6/16/2031
Alice W Lytton Family LLC		6/17/2026		360,000		$	3.00		6/16/2031
Total				1,080,000


		Three Months Ended								Nine Months Ended
Net sales by location		September 30, 2026			Change		September 30, 2025			September 30, 2026			Change		September 30, 2025
(in thousands)
United States		$	1,317		N/M		$	7		$	4,397		320.0	%	$	1,047
% of total			27.0	%				0.1	%		33.1	%				6.0	%

International		$	3,557		(34.0)	%	$	5,386		$	8,876		(46.1)	%	$	16,469
% of total			73.0	%				99.9	%		66.9	%				94.0	%


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
(in thousands)
Net Income (loss)	$	(2,702)	$	(1,362)	$	(7,501)	$	(2,486)
Interest (income)		(17)		(34)		(43)		(107)
Interest expense		624		—		1,497		—
Taxes		75		—		75		2
Depreciation and amortization		381		133		598		369
EBITDA	$	(1,639)	$	(1,263)	$	(5,374)	$	(2,222)
Equity compensation		134		115		367		539
Adjusted EBITDA, excluding equity compensation	$	(1,505)	$	(1,148)	$	(5,007)	$	(1,683)


3.4		Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 of the registrant’s Current Report on Form 8-K, filed with the SEC on June 23, 2026).
3.5	Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (Incorporated by reference to Exhibit 3.1 of the registrant’s Current Report on Form 8-K, filed with the SEC on October 22, 2026).

10 Material Contracts:
		10.31		Data I/O Corporation 2023 Omnibus Incentive Compensation Plan, approved May 18, 2023, as amended July 8, 2026 (incorporated by reference to Exhibit 99.1 of the registrant’s Current Report on Form 8-K, filed with the SEC on July 13, 2026).
		10.41		Form of Convertible Note (incorporated by reference to Exhibit 10.1 of the registrant’s Current Report on Form 8-K, filed with the SEC on June 23, 2026).
		10.42		Form of Warrant (incorporated by reference to Exhibit 10.2 of the registrant’s Current Report on Form 8-K, filed with the SEC on June 23, 2026).
		10.43		Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.3 of the registrant’s Current Report on Form 8-K, filed with the SEC on June 23, 2026).
	10.44		Stock Purchase Agreement dated October 18, 2026 (Incorporated by reference to Exhibit 2.1 of the registrant’s Current Report on Form 8-K filed with the SEC on October 22, 2026).
	10.45		Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 of the registrant’s Current Report on Form 8-K filed with the SEC on October 22, 2026).
	10.46		Form of Registration Rights Agreement (Incorporated by reference to Exhibit 10.4 of the registrant’s Current Report on Form 8-K filed with the SEC on October 22, 2026).
	10.47		Form of Convertible Debenture for Common Stock (Incorporated by reference to Exhibit 10.2 of the registrant’s Current Report on Form 8-K filed with the SEC on October 22, 2026).
	10.48		Form of Convertible Debenture for Preferred Stock (Incorporated by reference to Exhibit 10.3 of the registrant’s Current Report on Form 8-K filed with the SEC on October 22, 2026).
	10.49		Loan and Security Agreement dated October 26, 2026 (Incorporated by reference to Exhibit 10.1 of the registrant’s Current Report on Form 8-K filed with the SEC on October 29, 2026).

31 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002:
		31.1		Chief Executive Officer Certification
		31.2		Chief Financial Officer Certification

32 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002:
		32.1		Chief Executive Officer Certification
		32.2		Chief Financial Officer Certification

101 Interactive Data Files Pursuant to Rule 405 of Regulation S-T


By:	/s/William Wentworth
	William Wentworth
	President and Chief Executive Officer
	(Principal Executive Officer and Duly Authorized Officer)


		September 30,			December 31,
		2026			2025
(in thousands)
Product warranty liability, beginning balance		$	517		$	350
Net expenses			494			576
Warranty claims			(494)			(576)
Accrual revisions			(163)			167
Product warranty liability, ending balance		$	354		$	517


		September 30,
		2026
		Operating
		Lease
		Commitments
(in thousands)
2026 (remaining)		$	195
2027			707
2028			433
2029			369
2030			—
2031 and thereafter			—
Total			1,704
Less imputed interest			(110)
Total operating lease liabilities		$	1,594


		Three Months Ended									Nine Months Ended
		September 30,									September 30,
		2025						September 30,			2025						September 30,
		As						2025			As						2025
		Previously			Effect of			As			Previously			Effect of			As
Net sales by type		Reported			Revision			Revised			Reported			Revision			Revised
(in thousands)
Platform sales		$	2,774		$	(475)		$	2,299		$	9,087		$	(1,302)		$	7,785
Adapter sales			1,750			76			1,826			6,044			186			6,230
Software and services sales*			869			399			1,268			2,385			1,116			3,501
Total		$	5,393		$	—		$	5,393		$	17,516		$	—		$	17,516


By:	/s/Charles J. DiBona
	Charles J. DiBona
	Chief Financial Officer,
	Secretary and Treasurer
	(Principal Financial Officer and Duly Authorized Officer)


DATED: November 13, 2026

/s/ William Wentworth
William Wentworth
Chief Executive Officer
(Principal Executive Officer)