8-K
LANTRONIX INC (LTRX)
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 4, 2026
LANTRONIX,
INC.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 1-16027 | 33-0362767 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission File Number) | (IRS Employer<br><br>Identification No.) |
| 48 Discovery, Suite 250<br> Irvine, California 92618 | ||
| (Address of Principal Executive Offices, including zip code) | ||
| Registrant’s telephone number, including area code: (949) 453-3990 | ||
| Not Applicable | ||
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securitiesregistered pursuant to Section 12(b) of the Act:
| Title of each Class | Trading Symbol | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $0.0001 par value | LTRX | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
|---|
On February 4, 2026, Lantronix, Inc., a Delaware corporation (the “Company”), issued a press release setting forth the Company’s financial results for its second fiscal quarter ended December 31, 2025. A copy of the press release is attached hereto as Exhibit 99.1. In addition, a transcript of management’s prepared remarks for the Company’s second quarter fiscal 2026 investor conference call and audio webcast, scheduled for 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) on February 4, 2026, is attached hereto as Exhibit 99.2.
Following the conference call, a replay of the webcast will be available on the Company’s website at www.lantronix.com for one year from the date of the call.
The information furnished under this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 7.01. | Regulation FD Disclosure. |
|---|
The information disclosed in Item 2.02 of this Current Report on Form 8-K is incorporated by reference into this Item 7.01.
The information furnished pursuant to this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
|---|
The following exhibits are filed with this Current Report on Form 8-K:
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release, dated February 4, 2026, reporting the Company’s financial results for the second fiscal quarter ended December 31, 2025 |
| 99.2 | Transcript of management’s prepared remarks for second quarter fiscal 2026 investor conference call and audio webcast, scheduled for February 4, 2026. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LANTRONIX, INC. | |
|---|---|
| By: | /s/ Brent Stringham |
| Brent Stringham<br><br>Chief Financial Officer |
Date: February 4, 2026
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Exhibit 99.1
Lantronix Reports Fiscal Second Quarter 2026Financial Results
| · | Net Revenue of $29.8 Million |
|---|---|
| · | GAAP EPS of ($0.03) |
| · | Non-GAAP EPS of $0.04 |
| · | Increases FY26 Drone Revenue Expectation to a range of $8 Million-$12 Million, up from the prior range of $5 Million-$10 Million |
IRVINE, Calif., Feb. 4, 2026 — Lantronix Inc. (Nasdaq: LTRX), a global leader in compute and connectivity IoT solutions powering Edge AI applications, today reported results for the fiscal second quarter ended Dec. 31, 2025.
Management Commentary
“We continued our momentum into the second quarter through disciplined execution, delivering financial results within our guidance range,” said Saleel Awsare, president and CEO of Lantronix. “Execution across our Edge AI strategy continued to strengthen during Q2, with several customer programs advancing from development and pilot phases into initial production and deployment.”
Lantronix experienced particularly strong momentum in the unmanned systems industry where sequential growth in drones reflected deeper customer engagement and expansion in program scope as OEMs increased reliance on Lantronix technology across defense and autonomous applications. As these programs move further into execution, Lantronix’s position increasingly operates as a platform partner rather than a component supplier, supporting longer-duration engagements with attractive lifetime value. Additionally, the Company is encouraged to see many of its partners and customers included in the Department of War’s recently announced initial slate of vendors for its Drone Dominance initiative, underscoring the relevance of its platform within the evolving defense ecosystem.
“Convergence around our Edge AI platform is enabling us to scale efficiently across drones, critical infrastructure monitoring and enterprise connectivity while simultaneously strengthening customer relationships and improving operating leverage,” added Awsare**. “**We remain disciplined and well-positioned to meet accelerating demand in our core markets and are confident that our platform-led strategy and growing execution cadence will continue to drive profitable growth.”
Q2 FY2026 Financial Results
| • | NetRevenue: $29.8 million |
|---|---|
| • | GAAPEPS: ($0.03) |
| • | Non-GAAPEPS: $0.04 |
| • | Cashand Cash Equivalents: $23.0 million |
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Q2 FY2026 and Recent Business Highlights
Lantronix Q2 FY2026 new partnerships and product highlights include:
| · | Partneredwith Trillium Engineering to power gimbaled imaging systems deployed across intelligence, surveillance and reconnaissance (ISR),<br>infrastructure inspection and wildfire operations, which further validates the performance, security and reliability of Lantronix’s<br>Edge AI architecture for mission-critical applications. |
|---|---|
| · | Secured first design win with Flock Safety in the Drone-as-First Responder<br>(DFR) category, extending Edge AI capabilities into public safety applications and demonstrating growing demand for real-time, AI-enabled<br>situational awareness beyond defense. |
| · | Announced collaboration with Safe Pro Group (Nasdaq: SPAI), expanding<br>Lantronix’s role in AI-enabled threat detection by integrating SPAI’s object threat detection models with Lantronix compute<br>modules for real-time, on-device identification of landmines and other ground hazards without cloud dependency. |
| · | Launchedbreakthrough Edge AI solutions during CES 2026, reinforcing Lantronix’s transition from component supplier to platform provider: |
| o | Drone Reference Platform: Introduced a turnkey, NDAA- and TAA-compliant development kit enabling OEMs to accelerate UAV prototyping,<br>deploy AI models in real-world flight conditions and reduce integration timelines from months to weeks. |
| --- | --- |
| o | SmartEdge.ai and SmartSwitch.ai: Debuted an integrated Edge AI surveillance and connectivity ecosystem with onboard AI inference,<br>5G-ready networking and PoE+ aggregation, enabling real-time video analytics, intelligent automation and scalable management across enterprise<br>and industrial environments. |
Lantronix Q2 FY2026 industry awards and recognition for innovation and execution in Edge AI and IoT include:
| · | Recognized as a Top 100 Edge Computing Leader by CRN for 2025, reflecting<br>Lantronix’s momentum in delivering AI-enabled, real-time edge intelligence across defense, smart infrastructure and security applications. |
|---|---|
| · | Won the 2025 IoT Edge Computing Excellence Award for the Open-Q™<br>System-on-Module (SoM) portfolio, highlighting innovation and customer traction in distributed, mission-critical Edge AI deployments. |
| · | CEO Saleel Awsare named to the OC500 Directory of Influence, recognizing<br>Lantronix’s strategic execution and growing impact across high-value markets. |
Q3 FY2026 Financial Outlook
| · | Revenue:<br>$28.5 million to $32.5 million, or $30.5 million at the midpoint |
|---|---|
| · | Non-GAAPEPS: $0.03 to $0.06 |
Conference Call and Webcast
Management will host an investor conference call and audio webcast today (Wednesday, Feb. 4, 2026) at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss its results for the fiscal second quarter of 2026 and financial outlook. To access the live conference call, investors should dial 1-844-802-2442 (U.S.) or 1-412-317-5135 (international) and indicate they are participating in the Lantronix fiscal 2026 second-quarter call. The webcast will also be available simultaneously via the investor relations section of the Company’s website.
Investors can access a conference call replay starting at approximately 4:00 p.m. Pacific Time on Feb. 4, 2026, on the Lantronix website. A telephonic replay will also be available through Feb. 11, 2026, by dialing 1-855-669-9658 (US & Canada Toll-Free) or 1-412-317-0088 (international) and entering passcode 3380465.
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About Lantronix
Lantronix Inc. (Nasdaq: LTRX) is a global leader in Edge AI and Industrial IoT solutions, delivering intelligent computing, secure connectivity, and remote management for mission-critical applications. Serving high-growth markets, including smart cities, enterprise IT, and commercial and defense unmanned systems (including drones), Lantronix enables customers to optimize operations and accelerate digital transformation. Its comprehensive portfolio of hardware, software, and services powers applications from secure video surveillance and intelligent utility infrastructure to resilient out-of-band network management. By bringing intelligence to the network edge, Lantronix helps organizations achieve efficiency, security, and a competitive edge in today’s AI-driven world.
For more information, visit the Lantronix website.
Discussion of Non-GAAP Financial Measures
Lantronix believes that the presentation of non-GAAP financial information, when presented in conjunction with the corresponding GAAP measures, provides important supplemental information to management and investors regarding financial and business trends relating to the company’s financial condition and results of operations. Management uses the aforementioned non-GAAP measures to monitor and evaluate ongoing operating results and trends to gain an understanding of our comparative operating performance. The non-GAAP financial measures disclosed by the company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations of the non-GAAP financial measures to the financial measures calculated in accordance with GAAP should be carefully evaluated. The non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. The company has provided reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Non-GAAP net loss consists of net loss excluding (i) share-based compensation and the employer portion of withholding taxes on stock grants, (ii) depreciation and amortization, (iii) interest income (expense), (iv) other income (expense), (v) income tax provision (benefit), (vi) restructuring, severance and related charges, (vii) acquisition related costs, (viii) impairment of long-lived assets, (ix) amortization of purchased intangibles, (x) amortization of manufacturing profit in acquired inventory, (xi) fair value remeasurement of earnout consideration, and (xii) loss on extinguishment of debt.
Non-GAAP EPS is calculated by dividing non-GAAP net income by non-GAAP weighted-average shares outstanding (diluted). For purposes of calculating non-GAAP EPS, the calculation of GAAP weighted-average shares outstanding (diluted) is adjusted to exclude share-based compensation, which, for GAAP purposes, is treated as proceeds assumed to be used to repurchase shares under the GAAP treasury stock method.
Guidance on earnings per share growth is provided only on a non-GAAP basis due to the inherent difficulty of forecasting the timing or amount of certain items that have been excluded from the forward-looking non-GAAP measures, and a reconciliation to the comparable GAAP guidance has not been provided because certain factors that are materially significant to Lantronix’s ability to estimate the excluded items are not accessible or estimable on a forward-looking basis without unreasonable effort.
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Forward-Looking Statements
This news release contains forward-looking statements, including statements concerning our revenue and earnings expectations for the second fiscal quarter of 2026, our positioning for sustainable, profitable growth and to capture multi-year, high-margin opportunities as a result of the strategic transformation executed during fiscal 2025, and our expectations regarding the short- and long-term benefits of our recent design wins and strategic hires. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. We have based our forward-looking statements on our current expectations and projections about trends affecting our business and industry, and other future events. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. Forward-looking statements are subject to substantial risks and uncertainties that could cause our results or experiences, or future business, financial condition, results of operations or performance, to differ materially from our historical results or those expressed or implied in any forward-looking statement contained in this news release. Other factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to: the effects of negative or worsening regional and worldwide economic conditions or market instability on our business, including effects on purchasing decisions by our customers; our ability to mitigate any disruption in our and our suppliers’ and vendors’ supply chains due to changes in U.S. trade policy, including recently increased or future tariffs, a pandemic or similar outbreak, wars and recent conflicts in Europe, Asia and the Middle East, hostilities in the Red Sea, or other causes; our ability to successfully convert our backlog and current demand; the impact of a pandemic or similar outbreak on our business, employees, customers, supply and distribution chains and the global economy; our ability to successfully implement our acquisition strategy or integrate acquired companies; uncertainty as to the future profitability of acquired businesses, and delays in the realization of, or the failure to realize, any accretion from acquisition transactions; acquiring, managing and integrating new operations, businesses or assets, and the associated diversion of management attention or other related costs or difficulties; our ability to continue to generate revenue from products sold into mature markets; our ability to develop, market, and sell new products; our ability to succeed with our new software offerings; our use of AI may result in reputational, competitive or financial harm and liability; fluctuations in our revenue due to the project-based timing of orders from certain customers; unpredictable timing of our revenues due to the lengthy sales cycle for our products and services and potential delays in customer completion of projects; our ability to accurately forecast future demand for our products; delays in qualifying revisions of existing products; constraints or delays in the supply of, or quality control issues with, certain materials or components; difficulties associated with the delivery, quality or cost of our products from our contract manufacturers or suppliers; risks related to the outsourcing of manufacturing and international operations; difficulties associated with our distributors or resellers; intense competition in our industry and resultant downward price pressure; rises in inventory levels and inventory obsolescence; undetected software or hardware errors or defects in our products; cybersecurity risks; our ability to obtain appropriate industry certifications or approvals from governmental regulatory bodies; changes in applicable U.S. and foreign government laws, regulations, and tariffs; our ability to protect patents and other proprietary rights and avoid infringement of others’ proprietary technology rights; issues relating to the stability of our financial and banking institutions and relationships; the level of our indebtedness, our ability to service our indebtedness and the restrictions in our debt agreements; the impact of rising interest rates; our ability to attract and retain qualified management; and any additional factors included in our Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the Securities and Exchange Commission (the “SEC”) on Aug. 29, 2025, including in the section entitled “Risk Factors” in Item 1A of Part I of that report; and in our other public filings with the SEC. In addition, actual results may differ as a result of additional risks and uncertainties of which we are currently unaware or which we do not currently view as material to our business. For these reasons, investors are cautioned not to place undue reliance on any forward-looking statements. The forward-looking statements we make speak only as of the date on which they are made. We expressly disclaim any intent or obligation to update any forward-looking statements after the date hereof to conform such statements to actual results or to changes in our opinions or expectations, except as required by applicable law or the rules of the Nasdaq Stock Market LLC. If we do update or correct any forward-looking statements, investors should not conclude that we will make additional updates or corrections.
©2026 Lantronix, Inc. All rights reserved. Lantronix is a registered trademark. Other trademarks and trade names are those of their respective owners.
# # #
Lantronix Investor Contact:
Matt Glover and Greg Robles
Gateway Group, Inc.
investors@lantronix.com
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LANTRONIX, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| December 31, | June 30, | |||||
|---|---|---|---|---|---|---|
| 2025 | 2025 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 22,964 | $ | 20,098 | ||
| Accounts receivable, net | 23,261 | 25,092 | ||||
| Inventories, net | 27,074 | 26,371 | ||||
| Contract manufacturers’ receivable | 1,114 | 3,071 | ||||
| Prepaid expenses and other current assets | 3,488 | 2,761 | ||||
| Total current assets | 77,901 | 77,393 | ||||
| Property and equipment, net | 1,818 | 2,456 | ||||
| Goodwill | 31,089 | 31,089 | ||||
| Intangible assets, net | 2,543 | 3,738 | ||||
| Lease right-of-use assets | 7,713 | 8,422 | ||||
| Other assets | 667 | 624 | ||||
| Total assets | $ | 121,731 | $ | 123,722 | ||
| Liabilities and stockholders’ equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 12,669 | $ | 13,259 | ||
| Accrued payroll and related expenses | 4,163 | 3,471 | ||||
| Current portion of long-term debt, net | – | 3,070 | ||||
| Other current liabilities | 11,536 | 10,622 | ||||
| Total current liabilities | 28,368 | 30,422 | ||||
| Long-term debt, net | 9,677 | 8,684 | ||||
| Other non-current liabilities | 9,265 | 10,238 | ||||
| Total liabilities | 47,310 | 49,344 | ||||
| Commitments and contingencies | ||||||
| Stockholders’ equity: | ||||||
| Common stock | 4 | 4 | ||||
| Additional paid-in capital | 311,171 | 308,397 | ||||
| Accumulated deficit | (237,125 | ) | (234,394 | ) | ||
| Accumulated other comprehensive income | 371 | 371 | ||||
| Total stockholders’ equity | 74,421 | 74,378 | ||||
| Total liabilities and stockholders’ equity | $ | 121,731 | $ | 123,722 |
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LANTRONIX, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
| Three Months Ended | Six Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | September 30, | December 31, | December 31, | ||||||||||||
| 2025 | 2025 | 2024 | 2025 | 2024 | |||||||||||
| Net revenue | $ | 29,774 | $ | 29,794 | $ | 31,161 | $ | 59,568 | $ | 65,584 | |||||
| Cost of revenue | 16,807 | 16,448 | 17,877 | 33,255 | 37,825 | ||||||||||
| Gross profit | 12,967 | 13,346 | 13,284 | 26,313 | 27,759 | ||||||||||
| Operating expenses: | |||||||||||||||
| Selling, general and administrative | 8,740 | 9,542 | 8,811 | 18,282 | 18,278 | ||||||||||
| Research and development | 4,620 | 4,598 | 4,984 | 9,218 | 9,940 | ||||||||||
| Restructuring, severance and related charges | 43 | 93 | 193 | 136 | 1,093 | ||||||||||
| Acquisition-related costs | 40 | 43 | 208 | 83 | 237 | ||||||||||
| Amortization of intangible assets | 598 | 597 | 1,248 | 1,195 | 2,499 | ||||||||||
| Total operating expenses | 14,041 | 14,873 | 15,444 | 28,914 | 32,047 | ||||||||||
| Loss from operations | (1,074 | ) | (1,527 | ) | (2,160 | ) | (2,601 | ) | (4,288 | ) | |||||
| Interest expense, net | (9 | ) | (15 | ) | (126 | ) | (24 | ) | (245 | ) | |||||
| Other income (loss), net | (4 | ) | 183 | 8 | 179 | (29 | ) | ||||||||
| Loss before income taxes | (1,087 | ) | (1,359 | ) | (2,278 | ) | (2,446 | ) | (4,562 | ) | |||||
| Provision for income taxes | 243 | 42 | 94 | 285 | 312 | ||||||||||
| Net loss | $ | (1,330 | ) | $ | (1,401 | ) | $ | (2,372 | ) | $ | (2,731 | ) | $ | (4,874 | ) |
| Net loss per share - basic and diluted | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.07 | ) | $ | (0.13 | ) |
| Weighted-average common shares - basic and diluted | 39,496 | 39,188 | 38,631 | 39,343 | 38,330 |
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LANTRONIX, INC.
UNAUDITED RECONCILIATION OF NON-GAAP ADJUSTMENTS
(In thousands, except per share data)
| Three Months Ended | Six Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | September 30, | December 31, | December 31, | ||||||||||||
| 2025 | 2025 | 2024 | 2025 | 2024 | |||||||||||
| GAAP net loss | $ | (1,330 | ) | $ | (1,401 | ) | $ | (2,372 | ) | $ | (2,731 | ) | $ | (4,874 | ) |
| Non-GAAP adjustments: | |||||||||||||||
| Cost of revenue: | |||||||||||||||
| Share-based compensation | 29 | 35 | 48 | 64 | 112 | ||||||||||
| Employer portion of withholding taxes on stock grants | 4 | 2 | 2 | 6 | 7 | ||||||||||
| Amortization of manufacturing profit in acquired inventory | – | 18 | – | 18 | – | ||||||||||
| Depreciation and amortization | 106 | 106 | 114 | 212 | 237 | ||||||||||
| Total adjustments to cost of revenue | 139 | 161 | 164 | 300 | 356 | ||||||||||
| Selling, general and administrative: | |||||||||||||||
| Share-based compensation | 1,354 | 1,454 | 1,044 | 2,808 | 2,170 | ||||||||||
| Employer portion of withholding taxes on stock grants | 38 | 27 | 20 | 65 | 98 | ||||||||||
| Depreciation and amortization | 252 | 290 | 348 | 542 | 699 | ||||||||||
| Total adjustments to selling, general and administrative | 1,644 | 1,771 | 1,412 | 3,415 | 2,967 | ||||||||||
| Research and development: | |||||||||||||||
| Share-based compensation | 197 | 284 | 421 | 481 | 831 | ||||||||||
| Employer portion of withholding taxes on stock grants | 12 | 6 | 2 | 18 | 21 | ||||||||||
| Depreciation and amortization | 49 | 50 | 111 | 99 | 180 | ||||||||||
| Total adjustments to research and development | 258 | 340 | 534 | 598 | 1,032 | ||||||||||
| Restructuring, severance and related charges | 43 | 93 | 193 | 136 | 1,093 | ||||||||||
| Acquisition related costs | 40 | 43 | 208 | 83 | 237 | ||||||||||
| Amortization of purchased intangible assets | 598 | 597 | 1,248 | 1,195 | 2,499 | ||||||||||
| Litigation settlement cost | – | – | 158 | – | 198 | ||||||||||
| Total non-GAAP adjustments to operating expenses | 2,583 | 2,844 | 3,753 | 5,427 | 8,026 | ||||||||||
| Interest expense, net | 9 | 15 | 126 | 24 | 245 | ||||||||||
| Other (income) expense, net | 4 | (183 | ) | (8 | ) | (179 | ) | 29 | |||||||
| Provision for income taxes | 243 | 42 | 94 | 285 | 312 | ||||||||||
| Total non-GAAP adjustments | 2,978 | 2,879 | 4,129 | 5,857 | 8,968 | ||||||||||
| Non-GAAP net income | $ | 1,648 | $ | 1,478 | $ | 1,757 | $ | 3,126 | $ | 4,094 | |||||
| Non-GAAP net income per share - diluted | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | 0.07 | $ | 0.10 | |||||
| Denominator for GAAP net income (loss) per share - diluted | 39,496 | 39,188 | 38,631 | 39,343 | 38,330 | ||||||||||
| Non-GAAP adjustment | 2,209 | 2,214 | 953 | 2,368 | 901 | ||||||||||
| Denominator for non-GAAP net income per share - diluted | 41,705 | 41,402 | 39,584 | 41,711 | 39,231 | ||||||||||
| GAAP cost of revenue | $ | 16,807 | $ | 16,448 | $ | 17,877 | $ | 33,255 | $ | 37,825 | |||||
| Non-GAAP adjustments to cost of revenue | (139 | ) | (161 | ) | (164 | ) | (300 | ) | (356 | ) | |||||
| Non-GAAP cost of revenue | 16,668 | 16,287 | 17,713 | 32,955 | 37,469 | ||||||||||
| Non-GAAP gross profit | $ | 13,106 | $ | 13,507 | $ | 13,448 | $ | 26,613 | $ | 28,115 | |||||
| Non-GAAP gross margin | 44.0 | % | 45.3 | % | 43.2 | % | 44.7 | % | 42.9 | % |
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LANTRONIX, INC.
UNAUDITED NET REVENUES BY PRODUCT LINE AND REGION
(In thousands)
| Three Months Ended | Six Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2025 | September 30, 2025 | December 31, 2024 | December 31, 2025 | December 31, 2024 | ||||||
| Embedded IoT Solutions | $ | 13,865 | $ | 11,467 | $ | 10,784 | $ | 25,332 | $ | 24,171 |
| IoT System Solutions | 13,281 | 16,459 | 18,592 | 29,740 | 37,351 | |||||
| Software & Services | 2,628 | 1,868 | 1,785 | 4,496 | 4,062 | |||||
| $ | 29,774 | $ | 29,794 | $ | 31,161 | $ | 59,568 | $ | 65,584 | |
| Three Months Ended | Six Months Ended | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| December 31, 2025 | September 30, 2025 | December 31, 2024 | December 31, 2025 | December 31, 2024 | ||||||
| Americas | $ | 20,481 | $ | 20,651 | $ | 16,386 | $ | 41,132 | $ | 33,806 |
| EMEA | 5,138 | 5,087 | 9,036 | 10,225 | 19,520 | |||||
| Asia Pacific Japan | 4,155 | 4,056 | 5,739 | 8,211 | 12,258 | |||||
| $ | 29,774 | $ | 29,794 | $ | 31,161 | $ | 59,568 | $ | 65,584 |
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Exhibit 99.2
FYQ2’26 Combined Script
Intro: Brent Stringham
Good afternoon, and thank you for joining our fiscal second quarter earnings call. Joining me today is our President and Chief Executive Officer Saleel Awsare.
A “live” and archived webcast of today’s call will be available on the Company’s website. In addition, you can find the call-in details for the phone replay in today’s earnings release.
During this call, we may make forward-looking statements which involve risks and uncertainties that could cause our results to differ materially from current expectations.
We encourage you to review the cautionary statements and risk factors contained in today’s earnings release, which was furnished to the SEC and is available on our website, and other SEC filings such as our 10-K and 10-Qs. Lantronix undertakes no obligation to revise or update publicly any forward-looking statements to reflect future events or circumstances.
Additionally, during the call, we will discuss non-GAAP financial measures. Today's earnings release, which is posted in the Investor Relations section of our website, describes the differences between our non-GAAP and GAAP reporting and presents reconciliations for the non-GAAP financial measures that we use.
With that, I will now turn the call over to Saleel.
Saleel Awsare (Section 1):
Thanks, Brent, and thank you, everyone, for joining today’s call.
We continued our momentum into the second quarter through disciplined execution, delivering revenue of $29.8 million and non-GAAP EPS of $0.04, both well within our guidance range. As expected, we experienced double digit growth year-over-year when excluding our EMEA smart grid customer, Gridspertise.
Profitability remained strong, driven by continued year-over-year gross margin expansion and the operating leverage created by last year’s cost optimization initiatives. Overall, Q2 was another step forward in aligning financial execution with our long-term Edge AI strategy. More importantly, we’re now seeing that strategy translate into tangible customer adoption across multiple end markets, as several customer engagements are moving from development and pilots into broader deployment.
As we discuss our end markets, it’s worth noting that the government shutdown last quarter created a short-term slowdown in purchasing activity from certain federal agency customers. Despite this disruption, our teams executed well and delivered solid results.
Diving into the markets we operate in, beginning with drones and unmanned systems, calendar 2026 is widely expected to mark the start of an unmanned aerial systems super cycle, reflecting accelerating adoption of autonomous platforms across defense and commercial applications.
This view is increasingly supported by the broader defense funding environment. The signed fiscal 2026 U.S. defense budget already includes over $13 billion in enacted funding allocated across unmanned systems, autonomy, ISR, and counter-UAS programs, including reconnaissance drone initiatives across the full range of mission profiles.
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While portions of this funding have yet to be released, the scale and breadth of these allocations suggest meaningful capacity to support more advanced unmanned platforms as programs move from development into execution.
Looking ahead, we believe unmanned, autonomous, and AI-enabled platforms are well-positioned to capture a growing share of future defense modernization spending.
We’re also seeing a broader shift in how the Department of War engages with the domestic drone supply chain, with a more commercial and partnership-oriented mindset focused on accelerating readiness and scaling production across trusted suppliers.
Against this backdrop, our evolution within unmanned systems positions Lantronix squarely in the value-creation layer of the ecosystem. Since entering this market, we’ve moved up the stack—from initially providing general purpose compute modules, to delivering intelligent imaging platforms, and now to enabling integrated system-level workflows that combine sensing, processing, and secure connectivity.
In many deployments, our AI edge compute modules serve as the ‘brains’ of the drone, enabling autonomous operation and real-time decision-making independent of a network connection. As a result, Lantronix operates at the intersection of payload, compute, and connectivity—three of the highest-value and least easily substituted layers in modern unmanned systems—where we believe value creation and customer relationships compound over time.
We currently focus on group 1 and 2, short-range reconnaissance drones, which aligns well with where a significant portion of current unmanned funding is directed. These programs typically represent multi-year engagements with strong lifetime value, supporting applications ranging from surveillance to advanced payloads.
Today, we’re working with over 15 OEMs, and these customers are increasingly looking to deepen their engagement with us. In response to customer demand, we introduced our Drone Reference kit at CES last month, designed to accelerate time-to-market for defense and commercial UAV developers. This platform reinforces our strategic shift from a component supplier to a platform partner by reducing integration complexity and development risk in regulated environments.
Red Cat, with their Teal drones, continues to expand their work with us beyond hardware, into software and next-generation platform development. As their production needs increase, we’re expanding our support accordingly, including higher-volume builds for the Teal platform and follow-on commitments that reinforce Red Cat’s confidence in our capabilities. We’re also partnering in their next-generation drone platform, strengthening our position as a long-term partner. Additionally, we were selected by FlightWave, a Red Cat company, to incorporate our Open-Q system-on-module into their new drone – another example of the deepening trust in our technology across their ecosystem.
Importantly, these engagements are not limited to design wins or early development. We have demonstrated the operational capability to support higher-volume production today, and we believe we are well positioned to scale alongside our customers as U.S. and allied governments accelerate deployments of unmanned systems.
In December, our Edge AI solution was selected by Trillium Engineering to power gimbaled imaging systems deployed across ISR, infrastructure inspection, and wildfire operations, validating the performance, security, and reliability of our Edge AI architecture for mission-critical deployments.
We also recently secured our first design win with Flock Safety in the Drone-as-First-Responder category, extending our Edge AI capabilities into public safety applications. While early, this win reflects growing interest beyond defense in real-time, AI-enabled situational awareness at the edge.
Lastly, we expanded our engagement into AI-enabled threat detection through a new collaboration with Safe Pro Group. Together, we are helping build an integrated edge-intelligence ecosystem by combining Safe Pro’s Object Threat Detection models with our compute modules to enable real-time, on-device detection of landmines and other ground hazards—without reliance on cloud connectivity. By allowing drones and autonomous platforms to identify threats that endanger soldiers, vehicles and civilians on the ground, this collaboration meaningfully strengthens our role at the center of a growing network of defense and autonomous systems standardizing on our AI compute technology.
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We are seeing clear and accelerating momentum in our drone business through the first half of fiscal 2026. Drone revenue grew meaningfully from Q1 to Q2, driven by deeper customer engagement and the early benefits of our platform-led approach, positioning us to realize operating leverage as programs scale over time.
As customer programs expand and move further into execution, we see continued growth through the remainder of the fiscal year and into fiscal 2027. Reflecting the strength and pace of our momentum since entering the drone market approximately a year ago, we’re raising our expectation to a range of $8 million to $12 million in drone revenue this fiscal year, an increase from the prior range of $5 million to $10 million, with drones becoming an increasingly meaningful contributor as programs scale.
Turning to Critical Infrastructure Monitoring, an important long-term pillar of our Industrial IoT strategy, where our intelligent edge hardware, secure connectivity, and Percepxion software come together to deliver end-to-end solutions.
Moving to our Tier-1 U.S. Mobile Network Operator customer, the rollout continues to progress as expected. We recognized revenue over the last two quarters, and this deployment remains an important foundation for our recurring revenue strategy.
Looking ahead, our focus is on expanding beyond monitoring generators into additional high-value applications within the tower, including backup power banks and rectifiers. Each tower includes these systems, and the opportunity is comparable in size to the generator deployment we support today.
This program represents a step forward in building recurring revenue and is scaling into a repeatable, multi-year deployment model. Over the last 12 months, software and services accounted for approximately 6% of total revenue, which we view as the early innings. As we replicate this model across additional sites and applications, we see a clear and achievable path to more than doubling that mix over the mid-term by layering software, analytics, and AI pipeline orchestration onto hardware deployments already in the field.
At CES, we debuted SmartEdge.ai and SmartSwitch.ai, our new Edge AI gateway and AI-powered fiber switch. Together, these solutions create a unified platform for real-time video analytics, intelligent connectivity, and multi-camera orchestration across enterprise and industrial environments.
A key advantage of this platform is its ability to upgrade existing infrastructure. There are millions of deployed, non-intelligent cameras and devices already in the field, and our solutions enable customers to bring AI capabilities to those environments without requiring hardware replacement. This significantly expands our addressable market and supports scalable brownfield upgrade opportunities across surveillance, smart buildings, and critical infrastructure.
In summary, I’m encouraged by our performance through the first half of fiscal 2026. We’re executing with discipline as we scale higher-growth verticals, expand software-enabled recurring revenue, and deliver continued operating leverage from a leaner cost structure.
What’s most compelling is that our diversified growth vectors—unmanned systems, critical infrastructure monitoring, and enterprise connectivity—are increasingly converging around a common Edge AI platform. This convergence enables efficient scaling, deeper customer relationships, and positions Lantronix to capture long-term secular tailwinds across aerospace, defense, and intelligent infrastructure.
With that, I’ll turn the call back to Brent to cover the financial results. Brent?
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Brent Stringham:
Thank you, Saleel.
Let me begin by going through the financial results for our fiscal second quarter, including some of the key drivers behind our performance. I’ll then provide our outlook for the third quarter ending March 31, 2026.
As Saleel noted, for the current quarter, we delivered revenue of $29.8 million. Excluding Gridspertise, we experienced year-over-year growth driven by strength in embedded compute, including our A&D and Drone programs, along with solid contributions from our Network Infrastructure switch products. We also delivered higher SaaS-based ARR, supported by the ongoing ramp of our critical infrastructure monitoring deployment with the Tier-1 MNO we’ve discussed.
Turning to gross margins…
In the second quarter, GAAP gross margin was 43.6%, compared to over a three-year high of 44.8% last quarter, and was up from 42.6% a year ago. On a non-GAAP basis, gross margin was 44.0%, compared to 45.3% last quarter and 43.2% in the prior year quarter. As we mentioned previously, the prior quarter’s margin partially benefited from certain inventory recoveries and royalty benefits that came in slightly above plan.
Overall, our continued underlying margin performance is supported by a higher mix of premium products and the disciplined cost management that we’ve been speaking to.
Turning to expenses and profitability...
GAAP operating expenses in the second quarter of fiscal 2026 were $14.0 million, down just under 6% from the prior quarter and also down approximately 9% from $15.4 million in the year-ago period, as our P&L continues to benefit from the actions we took last year.
GAAP net loss for the second quarter of fiscal 2026 improved to $1.3 million, or 3 cents per share, compared to GAAP net loss of $2.4 million, or 6 cents per share, in the year-ago quarter. On a non-GAAP basis, net income improved to $1.6 million, or 4 cents per share, compared to non-GAAP net income of $1.5 million, or 4 cents per share, in the prior quarter.
Turning to the balance sheet...
| · | Net inventories were $27.1 million as of December 31, 2025, compared to $26.8<br>million in the prior quarter and $29.1 million in the year-ago quarter. |
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| · | We ended the quarter with cash and cash equivalents of $23 million, an increase<br>of approximately $800 thousand from the prior quarter. During the second quarter, we also generated positive operating cash flow of nearly<br>$2.2 million. |
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| · | During the quarter, we paid down about another $1 million of our outstanding<br>debt, leaving a remaining balance of approximately $9.7 million as of December 31, 2025, which compares to $14.7 million a year ago. Our<br>corresponding net cash position currently is approximately $13.3 million. |
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Now, moving to our outlook for the third quarter of fiscal 2026, which ends March 31, 2026:
| · | We expect revenue to be in the range of $28.5 million to $32.5 million. |
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| · | Non-GAAP EPS is expected to be in the range of 3 to 6 cents per share. |
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I’ll now turn the call back to Saleel for closing remarks.
Saleel Awsare (Section 2):
Thanks, Brent.
As we move through the second half of fiscal 2026, I’m energized by the momentum across our business and the clarity we now have around our path forward. Our Edge AI strategy is driving real adoption across our growth vectors, and we are increasingly operating from a position of strength.
There are three key takeaways I want to leave you with today.
First, drones are scaling faster than we initially expected. We are seeing strong execution, expanding customer engagement, and clear momentum as programs move into broader deployment. Reflecting this progress, we increased our fiscal 2026 drone revenue outlook to $8 million to $12 million, a meaningful step-up from our prior expectations.
Second, we see drones becoming a material contributor to our business as we look ahead. Based on the trajectory of current programs and customer demand, we expect drone revenue to represent approximately 15% to 20% of total revenue in fiscal 2027, reinforcing our confidence in the durability and scale of this opportunity.
Third, our platform-led approach is creating leverage. We are combining Edge AI, embedded compute, and connectivity across drones, critical infrastructure, and enterprise markets—while maintaining a disciplined cost structure and expanding recurring revenue. This positions us to scale efficiently as demand accelerates.
We are disciplined, well positioned, and entering our next phase of growth with momentum. We believe Lantronix is building a differentiated Edge AI platform with expanding end markets, increasing mix of higher-value revenue, and a clear runway ahead.
With that, we’ll now open the call for questions.
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