LANTRONIX INC
For the period ended Mar 31, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
LTRX$5.17+3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-05.
0001683168-26-000774
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001683168-26-003564
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 93 previous paragraphs and 97 current paragraphs.
63 unchanged; 21 reworded; 12 added; 6 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Recent Developments
Current report
In March 2026, the U.S. Court of International Trade issued a ruling indicating that importers that paid tariffs under the International Emergency Economic Powers Act (“IEEPA”) may be entitled to refunds. The Company has paid tariffs on certain imported products and materials that were subject to IEEPA-based duties. The nature, timing, and extent of any such refunds remain uncertain. As of March 31, 2026, the Company has not recognized any amounts related to the potential recovery of such tariff-related costs.
Current report
Net revenue decreased mainly due to (i) reduced unit sales in our media converters product family across all regions, (ii) decreased unit sales of our gateways, routers, and modems, particularly in the APJ region, and (iii) decreased unit sales of our telematics gateways in the Americas region, as revenues from these products can be dependent on project-based capital spending and customer deployment schedules. These decreases were partially offset by higher unit sales of our network switches across all regions.
Current report
Gross profit as a percentage of revenue (referred to as “gross margin”) decreased primarily as a result of our sales mix, and certain inventory and overhead costs that were higher than the prior year.
Current report
Selling, general and administrative expenses increased primarily due to (i) higher personnel-related expenses, mostly variable compensation accruals, (ii) increased share-based compensation costs driven by new stock awards granted during the current fiscal year, and (iii) higher advertising and marketing related to promotional and trade show spending. These increases were partially offset by a decrease in professional fees, particularly legal expenditures.
Current report
Results of Operations – Nine Months Ended March 31, 2026 Compared to the Nine Months Ended March 31, 2025
Current report
Software & Services
Current report
Acquisition-Related Costs
Current report
During the three and nine months ended March 31, 2026, we incurred approximately $48,000 and $131,000 of acquisition costs. These costs were mainly comprised of legal and other professional fees.
Current report
During the three and nine months ended March 31, 2025, we incurred approximately $100,000 and $337,000 of costs primarily in connection with the acquisition of Netcomm Wireless Pty Ltd (“Netcomm”). These costs were mainly comprised of banking, legal and other professional fees.
Current report
Bank Loan Agreements
Current report
Contract manufacturers’ receivables decreased by $2,187,000, primarily related to timing differences between inventory purchases and payments to suppliers.
Removed paragraphs (6)
Previous report
Software and Services
Previous report
Results of Operations – Six Months Ended December 31, 2025 Compared to the Six Months Ended December 31, 2024
Previous report
Selling, general and administrative expenses in total remained relatively consistent year-over-year. In the current year, we saw decreases in (i) legal fees and certain other professional and outside services costs and (ii) the benefit from recovering certain receivables as described above. These were largely offset by increases in share-based compensation costs driven by stock award activity in the current fiscal year, and slightly higher headcount and insurance costs.
Previous report
Our future working capital requirements will depend on many factors, including the following: timing and amount of our net revenue; our product mix and the resulting gross margins; research and development expenses; selling, general and administrative expenses; and expenses associated with any strategic partnerships, acquisitions or infrastructure investments.
Previous report
Bank Loan Agreement
Previous report
Contract manufacturers’ receivables decreased by $1,957,000, or 63.7%, from June 30, 2025 to December 31, 2025. The decrease is primarily due to timing of shipments of components to contract manufacturers during the fiscal period.
Reworded paragraphs (21)
Previous wording
The accounting policies that have the greatest impact on our financial condition and results of operations and that require the most judgments are those relating to revenue recognition, sales returns and allowances, inventory valuation, valuation of deferred income taxes, valuation of goodwill and long-lived and intangible assets. These policies are described in further detail in our Annual Report on Form 10-K for the ficsal year ended June 30, 2025 and filed with the SEC on August 29, 2025 (the “Form 10-K”) and have not changed significantly during the six months ended December 31, 2025 as compared to what was previously disclosed in the Form 10-K.
Current wording
The accounting policies that have the greatest impact on our financial condition and results of operations and that require the most judgments are those relating to revenue recognition, sales returns and allowances, inventory valuation, valuation of deferred income taxes, and valuation of goodwill and long-lived and intangible assets. These policies are described in further detail in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 and filed with the SEC on August 29, 2025 (the “Form 10-K”) and have not changed significantly during the nine months ended March 31, 2026 as compared to what was previously disclosed in the Form 10-K.
Previous wording
In the three months ended December 31, 2025, our net revenue decreased by $1,387,000 or 4.5%, compared to the three months ended December 31, 2024. The decrease in net revenue was driven by a 28.6% decrease in net revenue in our IoT System Solutions product line, partially offset by increases in net revenue in our Embedded IoT Solutions product line of 28.6% and our Software and Services product line of 47.2%. We had a net loss of $1,330,000 for the three months ended December 31, 2025 compared to a net loss of $2,372,000 for the three months ended December 31, 2024. The improvement in net loss was primarily driven by a decrease in operating expenses of $1,403,000 for the three months ended December 31, 2025 compared to the three months ended December 31, 2024.
Current wording
In the three months ended March 31, 2026, our net revenue increased by $1,677,000 or 5.9%, compared to the three months ended March 31, 2025. The increase in net revenue was driven by a 21.9% increase in net revenue in our Embedded IoT Solutions product line and a 31.0% increase in our Software and Services product line, and was partially offset by a 10.2% decrease in net revenue in our IoT System Solutions product line. We had a net loss of $1,181,000 for the three months ended March 31, 2026 compared to a net loss of $3,868,000 for the three months ended March 31, 2025. The decrease in net loss was primarily driven by the increase in revenues and reduction in operating expenses of $1,849,000 for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.******
Previous wording
Net revenue increased primarily due to (i) higher unit sales of our embedded compute products, which includes our drone and aerospace and defense programs, in the Americas and EMEA regions and (ii) higher unit sales of our embedded ethernet connectivity and wireless communication products in the Americas and APJ regions.
Current wording
Net revenue increased primarily due to (i) higher unit sales of our embedded compute products, which includes our drone and aerospace and defense products, in the Americas and EMEA regions, and (ii) higher unit sales of our embedded wired connectivity products across all regions, reflecting continued customer demand for embedded ethernet and compute solutions. These increases were partially offset by lower unit sales of certain legacy products, including our network interface cards and optics, primarily in the Americas and EMEA regions.
Previous wording
Net revenue increased primarily due to higher SaaS solutions revenue in the Americas and increased engineering services in EMEA..
Current wording
Net revenue increased primarily due to higher SaaS solutions revenue in the Americas and increased engineering services in the EMEA region.
Previous wording
Research and development expenses decreased due to (i) lower personnel-related expenses in our engineering groups driven by restructuring activities during the previous fiscal year, (ii) lower facilities-related equipment and software costs, (iii) reduced share-based compensation costs based on the value of new and outstanding awards. These decreases were partially offset by increased spending on outsourced product development, which is included in the “outside services” category in the table above.
Current wording
Research and development expenses decreased primarily due to (i) lower personnel-related expenses in our engineering team resulting from restructuring activities during the current and prior fiscal years, (ii) reduced share-based compensation costs based on the value of new and outstanding awards, and (iii) lower facilities-related equipment and software costs.
Previous wording
In the six months ended December 31, 2025, our net revenue decreased by $6,016,000 or 9.2%, compared to the six months ended December 31, 2024. The decrease in net revenue was driven by an 20.4% decrease in net revenue in our IoT System Solutions product line. These decreases were partially offset by a 4.8% increase in net revenue in our Embedded IoT Solutions product line and as well as a 10.7% increase in our Software and Services product line. We had a net loss of $2,731,000 for the six months ended December 31, 2025 compared to a net loss of $4,874,000 for the six months ended December 31, 2024. The decrease in net loss was primarily driven by a reduction in operating expenses of $3,133,000 for the six months ended December 31, 2025 compared to the six months ended December 31, 2024.
Current wording
In the nine months ended March 31, 2026, our net revenue decreased by $4,339,000, or 4.6%, compared to the nine months ended March 31, 2025. The decrease in net revenue was driven by a 17.5% decrease in our IoT System Solutions product line, partially offset by a 10.5% increase in net revenue in our Embedded IoT Solutions product line and a 16.9% increase in our Software and Services product line. We had a net loss of $3,912,000 for the nine months ended March 31, 2026, compared to a net loss of $8,742,000 for the nine months ended March 31, 2025. The improvement in net loss was primarily driven by a decrease in operating expenses of $4,982,000 for the nine months ended March 31, 2026 compared to the nine months ended March 31, 2025, partially offset by the decrease in gross profit over the same period.
Previous wording
Net revenue increased primarily due to higher unit sales of (i) our embedded compute product line in the Americas and EMEA regions, (ii) our legacy embedded ethernet connectivity products in the Americas and APJ regions, and (iii) our wireless communications products in the Americas and APJ regions. This increase was partially offset by lower unit sales of (i) our network interface card products in the Americas and EMEA regions and (ii) our OOB products in the Americas and EMEA regions.
Current wording
Net revenue increased primarily due to higher unit sales of (i) our embedded compute product line in the Americas and EMEA regions and (ii) our legacy embedded ethernet connectivity products across all regions. This increase was partially offset by lower unit sales of (i) our network interface cards and optics products in the Americas and EMEA regions and (ii) our embedded GNSS modules in the EMEA region.
Previous wording
Net revenue decreased primarily due to reduced sales to Gridspertise. We did not have any shipments to this customer in the in the six months ended December 31, 2025, as compared to just over $11 million of revenue during the six months ended December 31, 2024. The year-over-year decrease in revenue from this customer was partially offset by (i) increased unit sales of our network switches in the Americas and APJ regions and (ii) increased unit sales of our telematic gateways in the Americas, APJ and EMEA regions.
Current wording
Net revenue decreased primarily due to reduced sales to Gridspertise. We did not recognize any revenue from this customer during the nine months ended March 31, 2026, as compared to just over $11 million of revenue in the prior-year period. The year-over-year decrease in net revenue from this customer was partially offset by (i) increased unit sales of our network switches in the Americas and APJ regions and (ii) higher unit sales of our gateways in the Americas and EMEA regions.
Previous wording
Net revenue increased primarily due to higher SaaS solutions in the Americas and EMEA regions. This increase was partially offset by a decrease in our extended warranty services in the Americas region.
Current wording
Net revenue increased primarily due to higher SaaS solutions in the Americas and EMEA regions, as well as higher design services revenue in the EMEA region. This increase was partially offset by a decrease in our extended warranty services in the Americas region.
Previous wording
Gross margin increased primarily as a result of our product sales mix. This was primarily driven by the absence of revenue from Gridspertise in the current period, and also a slightly higher percentage of our current period revenue derived from software and services.
Current wording
Gross margin increased primarily because of lower overhead costs and our product sales mix. This was primarily driven by the absence of lower-margin revenue from Gridspertise in the current period, and also a slightly higher percentage of our current period revenue derived from software and services.
Previous wording
Selling, general and administrative expenses decreased slightly due to lower legal fees and various professional and outside services costs. We recovered certain previously written-off receivables, the benefit of which is included in the “other” category in the table above. This was partially offset by (i) increased share-based compensation costs driven by new stock awards granted during the current fiscal year, and (ii) slightly higher personal-related expenses.
Current wording
Selling, general and administrative expenses increased primarily due to (i) higher share-based compensation costs, primarily based on the value of new and outstanding awards, (ii) higher personnel-related expenses due to an increase in variable compensation costs, and (iii) increased spending on advertising and marketing activities. These increases were partially offset by (i) lower professional fees and outside services related to legal and accounting activities, and (ii) the recovery of certain previously written-off receivables, the benefit of which is included in the “other” category in the table above.
Previous wording
Research and development expenses decreased due to (i) lower personnel-related expenses in our engineering groups resulting from restructuring activities in the previous fiscal year, (ii) lower facilities-related equipment and software costs, and (iii) reduced share-based compensation costs based on stock award activity in the current fiscal year. These decreases were partially offset by increased spending on outsourced product development, which is included in the “outside services” category in the table above.
Current wording
Research and development expenses decreased primarily due to (i) lower personnel-related expenses in our engineering groups resulting from restructuring activities during the current and prior fiscal years, (ii) reduced share-based compensation costs based on stock award activity in the current fiscal year, and (iii) lower facilities-related equipment and software costs. These decreases were partially offset by (i) higher spending on outside services, primarily related to outsourced product development and contractor costs.
Previous wording
During the three and six months ended December 31, 2025, we incurred charges of $43,000 and $136,000, respectively, related to headcount reductions. During the three and six months ended December 31, 2024, we incurred $193,000 and $1,093,000, respectively, of restructuring, severance and related charges.
Current wording
During the three and nine months ended March 31, 2026, we incurred charges of $288,000 and $424,000, respectively, related to headcount reductions. During the three and nine months ended March 31, 2025, we incurred $1,581,000 and $2,674,000, respectively, of restructuring, severance and related charges.
Previous wording
For the three and six months ended December 31, 2025 and December 31, 2024, we incurred net interest expense due to borrowings on our credit facilities. We also earn interest income on our domestic cash balance.
Current wording
For the three and nine months ended March 31, 2026 and March 31, 2025, we incurred net interest expense related to borrowings on our credit facilities. We also earn interest income on our domestic cash balance.
Previous wording
Our other income (expense), net, is comprised primarily of foreign currency remeasurement and transaction adjustments related to our foreign subsidiaries whose functional currencies are the U.S. dollar.
Current wording
Our other income (expense), net, is comprised primarily of foreign currency remeasurement and transaction adjustments related to our foreign subsidiaries whose functional currency is the U.S. dollar.
Previous wording
The following table presents our working capital and cash and cash equivalents balances:
Current wording
The following table presents details of our working capital and cash and cash equivalents:
Previous wording
Our principal sources of cash and liquidity include our existing cash and cash equivalents, borrowings and amounts available under our Loan Agreement (as defined inNote 5 of Notes to Unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Report), and cash generated from operations. We are subject to a variable amount of interest on the principal balance of our borrowings and could be adversely impacted by rising interest rates in the future. We believe that our current cash holdings, net cash provided by operating activities, and expected availability under our Loan Agreement will be sufficient to fund our material requirements for working capital, capital expenditures and other financial commitments for at least the next 12 months and beyond. We continue to monitor our existing banking relationships and the availability of potential alternate sources of credit based on market conditions and our ongoing capital requirements. There can be no guarantee that we would be able to obtain any needed alternate financing on acceptable terms, or at all, or that such a financing would not result in a default under the Loan Agreement. We anticipate that the primary factors affecting our cash and liquidity are net revenue, working capital requirements and capital expenditures.
Current wording
Our principal sources of cash and liquidity include our existing cash and cash equivalents, borrowings and amounts available under our Loan Agreement (as defined inNote 5 of Notes to Unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Report), and cash generated from operations. We are subject to a variable amount of interest on the principal balance of our borrowings and could be adversely impacted by rising interest rates in the future. We believe that our current cash holdings, net cash provided by operating activities, and expected availability under our Loan Agreement will be sufficient to fund our material requirements for working capital, capital expenditures and other financial commitments for at least the next 12 months and beyond. We anticipate that the primary factors affecting our cash and liquidity are net revenue, working capital requirements, payments of principal and interest on our borrowings, payments to satisfy employees’ tax withholding obligations for restricted shares, and capital expenditures.
Previous wording
Cash provided by operating activities during the six months ended December 31, 2025 increased compared to the prior year period primarily as a result of strong collections on accounts receivable, and a reduction in net loss in the current period. For the six months ended December 31, 2025, our net loss included $5,448,000 of non-cash charges, while the changes in operating assets and liabilities provided net cash of $3,066,000.
Current wording
Cash provided by operating activities during the nine months ended March 31, 2026 increased compared to the prior year period primarily as a result of the timing of our collections on accounts receivable, payments on accounts payable, and a reduction in our net loss in the current period. For the nine months ended March 31, 2026, our net loss included $7,647,000 of non-cash charges, while the changes in operating assets and liabilities provided net cash of $4,215,000.
Previous wording
Accounts receivable decreased by $1,831,000, or 7.3%, from June 30, 2025 to December 31, 2025. The decrease was primarily due to the timing of payments from certain customers.
Current wording
Accounts receivable decreased by $1,582,000 from June 30, 2025 to March 31, 2026, primarily due to the timing of customer collections.
Previous wording
Net cash used in investing activities for the six months ended December 31, 2025 and 2024 consisted of purchases of equipment totaling $166,000 and $241,000, respectively, primarily for computer hardware and tooling at our contract manufacturers and certain research and development projects. Net cash used in investing activities for the six months ended December 31, 2024 also includes the acquisition of Netcomm, which used cash of $6,458,000.
Current wording
Net cash used in investing activities for the nine months ended March 31, 2026 and 2025 consisted of purchases of equipment totaling $403,000 and $362,000, respectively, primarily for computer hardware and tooling at our contract manufacturers, business analysis tools, and certain research and development equipment. Net cash used in investing activities for the nine months ended March 31, 2025 also includes the acquisition of Netcomm, which used cash of $6,458,000.
Previous wording
Net cash used in financing activities during the six months ended December 31, 2025 resulted primarily from net principal payments and borrowings on our Loan Agreement, as well as from tax withholdings paid on behalf of employees for restricted shares. Net cash used in financing activities during the six months ended December 31, 2024 resulted primarily from tax withholdings paid on behalf of employees for restricted shares as well as principal payments on our previous term loan borrowings.
Current wording
Net cash used in financing activities during the nine months ended March 31, 2026 resulted primarily from net principal payments and borrowings on our Loan Agreement, as well as from tax withholdings paid on behalf of employees for restricted shares.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net cash used in financing activities during the nine months ended March 31, 2025 resulted primarily from tax withholdings paid on behalf of employees for restricted shares as well as principal payments on our previous term loan borrowings.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Net revenue decreased primarily due to reduced sales to Gridspertise. We did not have any shipments to this customer in the current quarter, as compared to approximately $5.8 million the prior year quarter. The year-over-year decrease in revenue from this customer was partially offset by (i) increased unit sales of our network switches in the Americas and APJ regions and (ii) increased unit sales of our routers and modems products across all regions.
Previous report — wording carried elsewhere
Gross profit as a percentage of revenue (referred to as “gross margin”) increased primarily as a result of our product sales mix. This was primarily driven by the absence of revenue from Gridspertise in the current period, and a slightly higher percentage of our current period revenue derived from software and services.
Previous report — wording carried elsewhere
We currently expect that gross margin will fluctuate in the future, from period-to-period, based on changes in our product mix, average selling prices, and average manufacturing costs.