DAIO · Data I/O Corporation

Data I/O's Q1 2026 results showed revenue of $3.3 million, down significantly from $6.2 million in Q1 2025, driven by lower bookings and backlog amid industry realignment in technology spending, particularly AI investments and EV capacity reassessment impacting automotive electronics, the company's largest end market. Bookings improved to $4.2 million from $3.1 million in Q4 2025 but remained below prior year levels, with strength in Europe and Asia offsetting North American declines. Consumables and services provided stability at 81% of revenue, while capital equipment was 19%. Gross margin dipped to 49.5% due to lower revenue absorption of fixed costs, though material costs were managed against tariffs. Operating expenses rose to $4.75 million including $1.2 million in one-time items tied to German operations optimization and IT investments, leading to a net loss of $3.2 million. Adjusted EBITDA was negative $1.75 million. CEO Wentworth highlighted organic traction with customer engagement in Edge AI and security, cost reductions lowering break-even, and AI integration accelerating transformation. Guidance points to Q2 revenue of $5.0-5.4 million, implying 20% sequential growth including delayed Q1 sales. The $23 million acquisition of a semiconductor handling firm, funded by cash/equity with 15% seller stock rollover, targets revenue doubling, IP enhancement, and PaaS entry, accretive to profit/cash flow post-Q3 close. A $9 million private placement with two institutions--issuing shares, $6.8 million convertibles (4% interest, convertible at $2.50/share post-approval), and warrants--bolsters the balance sheet ahead of closing, validating strategy without immediate debt.