Lantronix Inc. Files Q2 Fiscal 2025 10-Q

TL;DR

Lantronix 10-Q filed for Q2 FY25. Check financials.

AI Summary

Lantronix Inc. filed its 10-Q for the period ending December 31, 2024. The filing covers the second quarter of their fiscal year 2025. Key financial data and operational details for this period are presented, reflecting the company's performance and financial position.

Why It Matters

This 10-Q filing provides investors and analysts with a detailed look at Lantronix's financial health and operational performance for the second quarter of fiscal year 2025, enabling informed investment decisions.

Risk Assessment

Risk Level: medium — 10-Q filings are standard financial reports, but the specific risks and financial performance detailed within can vary significantly, impacting investor confidence.

Key Players & Entities

• Lantronix Inc. (company) — Filer of the 10-Q report
• 2024-12-31 (date) — End of the reporting period for the 10-Q
• 20250207 (date) — Date the 10-Q was filed

FAQ

Key Financial Figures

• $0.0001 — nge on which registered Common Stock, $0.0001 par value LTRX The Nasdaq Stock Marke

Filing Documents

• lantronix_i10q-123124.htm (10-Q) — 973KB
• lantronix_ex3101.htm (EX-31.1) — 10KB
• lantronix_ex3102.htm (EX-31.2) — 10KB
• lantronix_ex3201.htm (EX-32.1) — 7KB
• lantronixlogo.jpg (GRAPHIC) — 4KB
• 0001683168-25-000793.txt ( ) — 4759KB
• ltrx-20241231.xsd (EX-101.SCH) — 33KB
• ltrx-20241231_cal.xml (EX-101.CAL) — 57KB
• ltrx-20241231_def.xml (EX-101.DEF) — 117KB
• ltrx-20241231_lab.xml (EX-101.LAB) — 307KB
• ltrx-20241231_pre.xml (EX-101.PRE) — 267KB
• lantronix_i10q-123124_htm.xml (XML) — 656KB

Financial Statements

Financial Statements 4 Unaudited Condensed Consolidated Balance Sheets at December 31, 2024 and June 30, 2024 4 Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended December 31, 2024 and 2023 5 Unaudited Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended December 31, 2024 and 2023 6 Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2024 and 2023 7 Notes to Unaudited Condensed Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 21 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 28 Item 4.

Controls and Procedures

Controls and Procedures 28 PART II. OTHER INFORMATION 30 Item 1.

Legal Proceedings

Legal Proceedings 30 Item 1A.

Risk Factors

Risk Factors 30 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 46 Item 3. Defaults Upon Senior Securities 46 Item 4. Mine Safety Disclosures 46 Item 5. Other Information 46 Item 6. Exhibits 46 2 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q for the three months ended December 31, 2024 (the "Report") contains forward-looking statements within the meaning of the federal securities laws, which statements are subject to substantial risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report, or incorporated by reference into this Report, are forward-looking statements. Throughout this Report, we have attempted to identify forward-looking statements by using words such as "may," "believe," "will," "could," "project," "anticipate," "expect," "estimate," "should," "continue," "potential," "plan," "forecasts," "goal," "seek," "intend," other forms of these words or similar words or expressions or the negative thereof. Additionally, statements concerning future matters such as our expected earnings, revenues, expenses and financial condition, our expectations with respect to the development of new products, our expectations regarding the benefits of our acquisition of Netcomm Wireless Pty Ltd, our expected reduction in labor force, and other statements regarding matters that are not historical are forward-looking statements. We have based our forward-looking statements on management's current expectations and projections about trends affecting our business and industry and other future events. Although we do not make forward-looking

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements LANTRONIX, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December 31, June 30, 2024 2024 Assets Current assets: Cash and cash equivalents $ 19,210 $ 26,237 Accounts receivable, net 30,472 31,279 Inventories, net 29,070 27,698 Contract manufacturers' receivables 3,473 1,401 Prepaid expenses and other current assets 3,329 2,335 Total current assets 85,554 88,950 Property and equipment, net 3,155 4,016 Goodwill 30,491 27,824 Intangible assets, net 4,910 5,251 Lease right-of-use assets 9,430 9,567 Other assets 683 600 Total assets $ 134,223 $ 136,208 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 15,975 $ 10,347 Accrued payroll and related expenses 2,968 5,836 Current portion of long-term debt, net 3,056 3,002 Other current liabilities 11,436 10,971 Total current liabilities 33,435 30,156 Long-term debt, net 11,630 13,219 Other non-current liabilities 11,245 11,478 Total liabilities 56,310 54,853 Commitments and contingencies (Note 9) – Stockholders' equity: Common stock 4 4 Additional paid-in capital 305,433 304,001 Accumulated deficit ( 227,895 ) ( 223,021 ) Accumulated other comprehensive income 371 371 Total stockholders' equity 77,913 81,355 Total liabilities and stockholders' equity $ 134,223 $ 136,208 See accompanying notes to unaudited condensed consolidated

financial statements

financial statements. 4 LANTRONIX, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended December 31, Six Months Ended December 31, 2024 2023 2024 2023 Net revenue $ 31,161 $ 37,038 $ 65,584 $ 70,069 Cost of revenue 17,877 22,007 37,825 40,941 Gross profit 13,284 15,031 27,759 29,128 Operating expenses: Selling, general and administrative 8,811 10,224 18,278 19,394 Research and development 4,984 4,725 9,940 9,831 Restructuring, severance and related charges 193 530 1,093 550 Acquisition-related costs 208 – 237 – Fair value remeasurement of earnout consideration – – – ( 9 ) Amortization of intangible assets 1,248 1,310 2,499 2,694 Total operating expenses 15,444 16,789 32,047 32,460 Loss from operations ( 2,160 ) ( 1,758 ) ( 4,288 ) ( 3,332 ) Interest expense, net ( 126 ) ( 232 ) ( 245 ) ( 570 ) Other income (expense), net 8 ( 23 ) ( 29 ) ( 4 ) Loss before income taxes ( 2,278 ) ( 2,013 ) ( 4,562 ) ( 3,906 ) Provision for income taxes 94 580 312 573 Net loss $ ( 2,372 ) $ ( 2,593 ) $ ( 4,874 ) $ ( 4,479 ) Net loss per share - basic and diluted $ ( 0.06 ) $ ( 0.07 ) $ ( 0.13 ) $ ( 0.12 ) Weighted-average common shares - basic and diluted 38,631 37,354 38,330 37,170 See accompanying notes to unaudited condensed consolidated

financial statements

financial statements. 5 LANTRONIX, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In thousands) Three Months Ended December 31, 2024 Accumulated Additional Other Total Common Stock Paid-In Accumulated Comprehensive Stockholders' Shares Amount Capital Deficit Income Equity Balance at September 30, 2024 38,474 $ 4 $ 304,078 $ ( 225,523 ) $ 371 $ 78,930 Shares issued pursuant to stock awards, net 314 – 201 – – 201 Tax withholding paid on behalf of employees for restricted shares – – ( 359 ) – – ( 359 ) Share-based compensation – – 1,513 – – 1,513 Net loss – – – ( 2,372 ) – ( 2,372 ) Balance at December 31, 2024 38,788 $ 4 $ 305,433 $ ( 227,895 ) $ 371 $ 77,913 Three Months Ended December 31, 2023 Accumulated Additional Other Total Common Stock Paid-In Accumulated Comprehensive Stockholders' Shares Amount Capital Deficit Income Equity Balance at September 30, 2023 37,260 $ 4 $ 297,007 $ ( 220,391 ) $ 371 $ 76,991 Shares issued pursuant to stock awards, net 216 – 406 – – 406 Tax withholding paid on behalf of employees for restricted shares – – ( 204 ) – – ( 204 ) Share-based compensation – – 2,176 – – 2,176 Net loss – – – ( 2,593 ) – ( 2,593 ) Balance at December 31, 2023 37,476 $ 4 $ 299,385 $ ( 222,984 ) $ 371 $ 76,776 Six Months Ended December 31, 2024 Accumulated Additional Other Total Common Stock Paid-In Accumulated Comprehensive Stockholders' Shares Amount Capital Deficit Income Equity Balance at June 30, 2024 37,872 $ 4 $ 304,001 $ ( 223,021 ) $ 371 $ 81,355 Shares issued pursuant to stock awards, net 916 – 220 – – 220 Tax withholding paid on behalf of employees for restricted shares – – ( 1,901 ) – – ( 1,901 ) Share-based compensation – – 3,113 – – 3,113 Net loss – – – ( 4,874 ) – ( 4,874 ) Balance at December 31, 2024 38,788

financial statements

financial statements. 6 LANTRONIX, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Six Months Ended December 31, 2024 2023 Operating activities Net loss $ ( 4,874 ) $ ( 4,479 ) Adjustments to reconcile net loss to net cash provided by operating activities: Share-based compensation 3,113 3,918 Depreciation and amortization 1,116 1,027 Amortization of intangible assets 2,499 2,694 Amortization of manufacturing profit in acquired inventory associated with acquisitions – 506 Amortization of deferred debt issuance costs 21 55 Fair value remeasurement of earnout consideration – ( 9 ) Changes in operating assets and liabilities, net of assets and liabilities acquired: Accounts receivable 1,711 ( 2,699 ) Inventories ( 400 ) 6,456 Contract manufacturers' receivables ( 2,072 ) 1,252 Prepaid expenses and other current assets ( 994 ) ( 177 ) Lease right-of-use assets 933 966 Other assets ( 83 ) ( 117 ) Accounts payable 5,413 ( 2,830 ) Accrued payroll and related expenses ( 2,910 ) 872 Other liabilities ( 470 ) 5,317 Net cash provided by operating activities 3,003 12,752 Investing activities Purchases of property and equipment ( 241 ) ( 1,189 ) Cash payment for acquisition ( 6,458 ) – Net cash used in investing activities ( 6,699 ) ( 1,189 ) Financing activities Net proceeds from issuances of common stock 220 500 Tax withholding paid on behalf of employees for restricted shares ( 1,901 ) ( 719 ) Earnout consideration paid for acquisition – ( 1,262 ) Payment of borrowings on term loan ( 1,556 ) ( 1,297 ) Payment of lease liabilities ( 94 ) ( 91 ) Net cash used in financing activities ( 3,331 ) ( 2,869 ) Increase (decrease) in cash and cash equivalents ( 7,027 ) 8,694 Cash and cash equivalents at beginning of period 26,237 13,452 Cash and cash equivalents at end of period $ 19,210 $ 22,146 See accompanying notes

financial statements

financial statements. 7 LANTRONIX, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL December 31, 2024 1. Company and Significant Accounting Policies Company Lantronix, Inc., which we refer to herein as the Company, Lantronix, we, our, or us, is a global leader of compute and connectivity solutions, targeting high-growth markets such as Smart Cities, Automotive, and Enterprise markets. Our products and services empower companies to succeed in the growing internet of things ("IoT") market by delivering customizable solutions that enable artificial intelligence ("AI") edge intelligence. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Lantronix have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Securities and Exchange Commission ("SEC") Regulation S-X. Accordingly, they should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2024, included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, which was filed with the SEC on September 9, 2024. The unaudited condensed consolidated financial statements contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the consolidated financial position of Lantronix at December 31, 2024, the consolidated results of our operations for the three and six months ended December 31, 2024 and our consolidated cash flows for the six months ended December 31, 2024. All intercompany accounts and transactions have been eliminated. Significant Accounting Policies Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the

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