LANTRONIX INC

Brent Stringham:

Thanks, Saleel.

I’ll begin with our fourth quarter and fiscal 2026 financial results and some of the key drivers behind our performance. After which I’ll provide our outlook for our first fiscal quarter ending September 30, 2026.

For fiscal 2026, revenue was nearly $121 million, representing 8% growth over fiscal 2025 revenue of just over $111 million, excluding Gridspertise. Our growth was driven by more than 15% annual growth in Embedded IoT Solutions, led by Unmanned Systems. As Saleel mentioned, Unmanned Systems revenue reached $12.6 million, above the midpoint of the $10 million to $14 million range we provided last quarter.

Revenue for the fourth quarter was $31.2 million, representing both sequential and year-over-year growth. IoT Systems Solutions rebounded in the quarter, contributing more than $15 million of revenue after slower ordering patterns in the prior two quarters related to the government shutdowns in late calendar 2025 and early 2026. As we’ve said over the past several quarters, we viewed those federal headwinds as timing-related rather than reflective of underlying demand. The 16% sequential growth we delivered in the fourth quarter reinforces that view.

Turning to our gross margins…

In the fourth quarter, GAAP gross margin was 43.7%, up from 43.1% in the prior quarter and 40% a year ago. On a non-GAAP basis, gross margin was 44.1%, compared with 43.6% in the prior quarter and 40.6% a year ago. The year-ago period was impacted by aged inventory charges and higher duties and tariffs.

The sequential improvement reflects a combination of favorable revenue mix, including stronger performance in Systems Solutions, and the continued focus of our operations team on supply-chain efficiency and execution. Looking ahead, we believe these efforts, together with our disciplined approach to cost management, should support gross margins at or near current levels in fiscal 2027.

Let me also briefly address the broader supply environment, which we continue to monitor closely. Memory availability has tightened and prices have increased as AI infrastructure and hyperscaler data centers consume a growing share of industry supply. This is an industry-wide dynamic affecting the embedded-compute market broadly and is not unique to Lantronix.

We believe our early preparation has positioned us well in this constrained environment. Leveraging our fabless operating model and diversified manufacturing partners, we identified these trends early and proactively secured supply.

Looking at our expenses and profitability…

GAAP operating expenses in the fourth quarter of fiscal 2026 were $14 million, slightly down from the $14.1 million in the prior quarter, and down approximately 5% from $14.7 million in the year-ago period. We continue to observe the leverage in our Opex model based on the actions we took last year, and the ongoing cost discipline that we are executing on.

GAAP net loss for the fourth quarter of fiscal 2026 improved to $269 thousand, or 1 cent per share, compared to GAAP net loss of $2.6 million, or 7 cents per share, in the year-ago quarter. On a non-GAAP basis, net income of $1.8 million, or 4 cents per share, compares to $1.5 million, or 4 cents per share in the prior quarter, and was an improvement from the $0.01 per share in the year ago quarter.

Moving to the balance sheet…

We raised just over $44 million in net proceeds during the quarter through our public and ATM offerings, bringing our year-end cash balance to more than $60 million. We also repaid the remaining $8.7 million of debt and ended the fiscal year debt-free.

Lastly, our outlook for the first quarter of our fiscal 2027, which ends September 30, 2026, is as follows:

With that, I’ll turn it back to Saleel for closing remarks.