LANTRONIX INC
For the period ended Jun 30, 2026. Filed Aug 27, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Aug 27, 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-K
Period ended 2025-06-30; filed 2025-08-29.
0001683168-25-006532
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-06-30; filed 2026-08-27.
0001683168-26-006754
Item 7. 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 100 previous paragraphs and 96 current paragraphs.
68 unchanged; 17 reworded; 10 added; 14 removed; 1 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 (10)
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. We have 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 June 30, 2026, we have not recognized any amounts related to the potential recovery of such tariff-related costs.
Current report
On July 7, 2026, we entered into an asset purchase agreement to acquire the industrial IoT business of Vecima Networks Inc., including its Nero Global Tracking software-as-a-service platform, for aggregate consideration of approximately $11.7 million, excluding working capital adjustments and other customary purchase price adjustments. The acquired business provides GPS-based fleet and asset tracking solutions and serves customers across the fleet, municipal, restoration and industrial asset-tracking markets in North America. We closed the transaction on August 1, 2026. Since the transaction closed after the fiscal year ended on June 30, 2026, we have not recorded any amounts in the accompanying consolidated financial statements. We are in the process of evaluating the acquisition and, therefore, determining the preliminary allocation of the purchase price, including the identification and valuation of acquired intangible assets and any associated goodwill. Additional disclosures required byASC 805, Business Combinations, will be provided for the quarter ending September 30, 2026 following the completion of the preliminary purchase accounting assessment.
Current report
During the fourth quarter of fiscal 2026, we made a qualitative assessment of whether goodwill impairment existed. Since our assessment of the qualitative factors did not result in a determination that it was more likely than not that the fair value of our single reporting unit is less than its carrying value, we were not required to perform the quantitative goodwill impairment test.
Current report
Net revenue decreased primarily due to reduced sales to Gridspertise. We did not recognize any revenue from this customer during fiscal 2026, as compared to just over $11 million of revenue in the prior year. 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.
Current report
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.
Current report
Selling, general and administrative expenses increased primarily due to (i) higher personnel-related expenses, mostly variable compensation costs, and (ii) increased share-based compensation costs driven by new stock awards granted during the current fiscal year. These increases were partially offset by a decrease in professional fees, particularly legal expenditures, as well as the recovery of certain previously written-off receivables, the benefit of which is included in the “other” category in the table above.
Current report
Interest Income (expense), Net
Current report
On May 29, 2026, in an underwritten public offering, we sold approximately 4,800,000 shares of common stock. We received net cash proceeds from the offering of approximately $31,750,000. Refer toNote 5of Notes to Consolidated Financial Statements, included in Part II, Item 8 of this Report for additional information.
Current report
On May 8, 2026, we entered into a sales agreement with sales agents, with respect to an at-the-market offering program under which we may offer and sell, from time to time at our sole discretion, shares of our common stock, with an aggregate offering price of up to $30,000,000. During the year ended June 30, 2026, we sold approximately 1.8 million shares of our common stock under the sales agreement generating approximately $12,340,000 in net proceeds. As of June 30, 2026, we have approximately $17,000,000 remaining of the aggregate offering capacity and the sales agreement remains in effect.
Current report
Net cash provided by financing activities during fiscal 2026 resulted primarily from the net proceeds from our equity offerings of $44,090,000 partially offset by net principal payments and borrowings on our Loan Agreement, as well as from tax withholdings paid on behalf of employees for restricted shares.
Removed paragraphs (14)
Previous report
Acquisition
Previous report
In December 2024, we finalized the acquisition of Netcomm Wireless Pty Ltd (“Netcomm”), a subsidiary of DZS Inc., for $6,458,000 in cash. Netcomm operated an enterprise IoT business. The acquisition complements our focus on Enterprise and Smart City vertical markets and adds products to enhance our connectivity solutions in areas such as critical infrastructure, asset monitoring and telecommunications.
Previous report
Refer toNote 3 of Notes to Consolidated Financial Statements included in Part II, Item 8 of this Report, which is incorporated herein by reference, for additional discussion regarding the acquisition.
Previous report
Business Combinations
Previous report
We allocate the fair value of the purchase consideration of a business acquisition to the tangible assets, liabilities, and intangible assets acquired, including in-process research and development (“IPR&D”), if applicable, based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. IPR&D is initially capitalized at fair value as an intangible asset with an indefinite life and assessed for impairment thereafter. When an IPR&D project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized over the asset’s estimated useful life. The valuation of acquired assets and assumed liabilities requires significant judgment and estimates, especially with respect to intangible assets. The valuation of intangible assets, in particular, requires that we use valuation techniques such as the income approach. The income approach includes the use of a discounted cash flow model, which includes discounted cash flow scenarios and requires significant estimates such as future expected revenue, expenses, capital expenditures and other costs, and discount rates. We estimate the fair value based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from our estimates. Estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed. Acquisition-related expenses and related restructuring costs are recognized separately from the business combination and are expensed as incurred.
Previous report
Significant management judgment is required in estimating the reporting unit’s fair value and in the creation of the forecasts of future operating results that are used in the discounted cash flow method of valuation. These include (i) estimation of future cash flows, which is dependent on internal forecasts, (ii) estimation of the long-term rate of growth of our business, (iii) estimation of the period during which cash flows will be generated and (iv) the determination of our weighted-average cost of capital, which is a factor in determining the discount rate. Our estimate of the reporting unit’s fair value would also generally include the consideration of a control premium, which is the amount that a buyer is willing to pay over the current market price of a company as indicated by the traded price per share (i.e., market capitalization) to acquire a controlling interest. If our actual financial results are not consistent with our assumptions and judgments used in estimating the fair value of our reporting unit, we may be exposed to goodwill impairment losses.
Previous report
We performed our annual goodwill impairment test as of May 31, 2025, using a quantitative assessment for our single reporting unit. The fair value of the reporting unit was estimated using a combination of the income approach (discounted cash flow method) and the market approach (guideline public companies and guideline transactions methods). Key assumptions included revenue growth, EBITDA margins, a long-term growth rate, and a discount rate. These assumptions reflect management’s best estimates of future financial performance, current market conditions, and a market participant perspective. The results of the impairment test indicated that the estimated fair value exceeded the carrying amount by approximately 9%. No impairment of goodwill was recognized for the year ended June 30, 2025.
Previous report
The decrease in net revenue was substantially driven by our custom solution to our European smart energy grid customer. In fiscal 2024, this customer represented just over 25% of our net revenue. By comparison, in fiscal 2025, we recognized approximately $11 million from this customer in the first half of the year. Separately, compared to the prior year, we experienced (i) decreased unit sales of our network switches in the Americas region, and (ii) decreased unit sales of our OOB products across all regions, as revenues from these products can be dependent on project-based capital spending. These decreases were partially offset by higher unit sales of (i) our gateways, routers, and modems products, which was largely driven by contributions from our Netcomm acquisition, and (ii) our telematic gateways in the Americas region.
Previous report
Net revenue decreased primarily due to lower engineering services revenue in the EMEA region as two of our large design services projects transitioned in the prior year from the design phase to full production. We also saw a moderate decrease in our extended warranty services in the Americas region, primarily related to lower service volumes in our OOB products.
Previous report
Selling, general and administrative expenses decreased primarily due to (i) reduced share-based compensation costs based on the value of new and outstanding awards, (ii) lower spending on various sales conferences, IT infrastructure and related facilities costs, and (iii) lower personnel-related expenses resulting from less variable compensation and restructuring activities during the current fiscal year.
Previous report
In addition, during fiscal 2025 we downsized the usage of certain sites, resulting in a charge of approximately $379,000, which is included in the total restructuring charges above.
Previous report
Interest Expense, Net
Previous report
Accounts receivable decreased by $6,187,000, or 19.8%, from June 30, 2024 to June 30, 2025. The decrease was primarily due to lower net revenue levels in the current fiscal year, as well as the timing of payments from certain customers.
Previous report
Net cash used in financing activities during fiscal 2024 resulted primarily from $2,853,000 of principal payments on our term debt as well as $1,027,000 tax withholdings paid on behalf of employees for restricted shares. Additionally, we used cash of $1,262,000 to pay the contingent consideration earned related to the Uplogix acquisition.
Reworded paragraphs (17)
Previous wording
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, we enable customers to optimize operations and accelerate digital transformation. Our 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, we help organizations achieve efficiency, security, and a competitive edge in today’s AI-driven world.
Current wording
Lantronix, Inc. is a global leader in Edge AI and Industrial IoT solutions that power NDAA-compliant unmanned systems, critical infrastructure and resilient enterprise networks. We deliver intelligent computing, secure connectivity, and remote management for mission-critical applications, enabling customers to optimize operations, enhance security and accelerate digital transformation. Our comprehensive portfolio of hardware, software, and services, powers applications ranging from mission-critical autonomous platforms and edge analytics for critical infrastructure to intelligent surveillance and secure network management. By bringing intelligence to the network edge, we help organizations achieve efficiency, security, and a competitive edge in today’s AI-driven world.
Previous wording
We organize our portfolio services and products into the following product lines: Embedded IoT Solutions, IoT Systems Solutions, and Software and Engineering Services. Refer to “Products and Solutions” included in Part I, Item 1 of this Report, which is incorporated herein by reference, for further discussion.
Current wording
We organize our portfolio services and products into the following product lines: Embedded IoT Solutions, IoT Systems Solutions, and Software and Services. Refer to “Products and Solutions” included in Part I, Item 1 of this Report, which is incorporated herein by reference, for further discussion.
Previous wording
For fiscal 2025, our net revenue decreased by $37,404,000, or 23.3%, compared to fiscal 2024. The decrease in net revenue was driven by a 34.2% decrease in net revenue in our IoT System Solutions product line, as well as decreases in net revenue in our Embedded IoT Solutions product line of 1.2% and our Software and Services product line of 12.5%. We had a net loss of $11,373,000 for fiscal 2025, compared to a net loss of $4,516,000 for fiscal 2024. The increase in net loss was primarily driven by the decrease in revenues partially offset by a reduction in operating expenses of $4,516,000 for fiscal 2025 compared to fiscal 2024.
Current wording
For fiscal 2026, our net revenue decreased by $2,024,000, or 1.6%, compared to fiscal 2025. The decrease in net revenue was driven by a 15.2% decrease in net revenue in our IoT System Solutions product line partially offset by a 15.6% increase in net revenue in our Embedded IoT Solutions product line and a 15.5% increase in our Software and Services product line. We had a net loss of $4,181,000 for fiscal 2026 compared to a net loss of $11,373,000 for fiscal 2025. The decrease in net loss was primarily driven by the reduction in operating expenses of $5,656,000 combined with the increase in gross profit for fiscal 2026 compared to fiscal 2025.
Previous wording
Net revenue decreased primarily due to lower unit sales in some of our legacy embedded ethernet connectivity products across all regions and lower volume sales of our network interface cards in the Americas and APJ regions. These decreases were largely offset by higher unit sales of our embedded compute product line driven by a video conferencing customer in the APJ region.
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
Gross profit as a percentage of revenue (referred to as “gross margin”) increased primarily as a result of lower overhead costs and our product sales mix.
Current wording
Gross profit as a percentage of revenue (referred to as “gross margin”) increased primarily because of our product sales mix. This was primarily driven by the absence of lower-margin revenue from Gridspertise in fiscal 2026, and also a slightly higher percentage of our current year revenue derived from software and services.
Previous wording
Research and development expenses consists of personnel-related expenses, share-based compensation, and expenditures to third-party vendors for research and development activities and product certification costs. Our costs from period-to-period related to outside services and product certifications vary depending on our level and timing of development activities.
Current wording
Research and development expenses consist of personnel-related expenses, share-based compensation, and expenditures to third-party vendors for research and development activities and product certification costs. Our costs from period-to-period related to outside services and product certifications vary depending on our level and timing of development activities.
Previous 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 fiscal year and (ii) reduced share-based compensation costs based on the value of new and outstanding awards. These decreases were partially offset by (i) higher facilities-related equipment and software costs, (ii) increased costs for third party contract labor, which are included in the “outside services” category in the table above, and (iii) increased spending on certain prototype and materials costs, which are included in the “other” 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. These decreases were partially offset by higher spending on outside services, primarily related to outsourced product development and contractor costs.
Previous wording
During fiscal 2025 and 2024, we incurred restructuring, severance and related charges of $3,535,000 and $1,423,000, respectively, due to various headcount reduction efforts during these years. The most significant of these actions occurred in January 2025, in which we reduced our headcount by approximately 12% worldwide, primarily in the U.S. and India. The severance and related charges resulting from this action totaled approximately $1,400,000.
Current wording
During fiscal 2026 and 2025, we incurred restructuring, severance and related charges of $566,000 and $3,535,000, respectively, due to various headcount reduction efforts during these years. The most significant of these actions occurred in January 2025, in which we reduced our headcount by approximately 12% worldwide, primarily in the U.S. and India. The severance and related charges resulting from this action totaled approximately $1,400,000.
Previous wording
We acquired certain intangible assets through our recent acquisitions, which we recorded at fair-value as of the acquisition dates. These assets are generally amortized on a straight-line basis over their estimated useful lives and resulted in charges of $3,951,000 and $5,314,000 during fiscal 2025 and 2024, respectively.
Current wording
We acquired certain intangible assets through our prior acquisitions, which we recorded at fair value as of the acquisition dates. These assets are generally amortized on a straight-line basis over their estimated useful lives and resulted in charges of $1,561,000 and $3,951,000 during fiscal 2026 and 2025, respectively.
Previous wording
For fiscal 2025 and 2024, we incurred net interest expense from interest incurred on borrowings on our credit facilities.*** ***We also earn interest on our domestic cash balances.
Current wording
For fiscal 2026 and 2025, we earned interest income on our domestic cash balances and incurred interest expense on borrowings on our credit facilities.*** ***
Previous wording
We record net deferred tax assets to the extent we believe these assets are more likely than not to be realized. Aside from a net deferred tax liability of $172,000 and $179,000 that we recorded as of June 30, 2025 and 2024, respectively, based on our cumulative losses and uncertainty of generating future taxable income, we provided a full valuation allowance against our net deferred tax assets at June 30, 2025 and 2024. Refer toNote 8 of Notes to Consolidated Financial Statements, included in Part II, Item 8 of this Report, for additional information.
Current wording
We record net deferred tax assets to the extent we believe these assets are more likely than not to be realized. Aside from a net deferred tax liability of $219,000 and $172,000 that we recorded as of June 30, 2026 and 2025, respectively, based on our cumulative losses and uncertainty of generating future taxable income, we provided a full valuation allowance against our net deferred tax assets at June 30, 2026 and 2025. Refer toNote 7 of Notes to Consolidated Financial Statements, included in Part II, Item 8 of this Report, for additional information.
Previous wording
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 current borrowing agreement. Refer toNote 5 of Notes to Consolidated Financial Statements, including in Part II, Item 8 of this Report, for additional information. We anticipate that the primary factors affecting our cash and liquidity are net revenue, working capital requirements and capital expenditures.
Current wording
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 current borrowing agreement. Refer toNote 4 of Notes to Consolidated Financial Statements, including in Part II, Item 8 of this Report, for additional information. We anticipate that the primary factors affecting our cash and liquidity are net revenue, working capital requirements and capital expenditures.
Previous wording
Cash provided by operating activities during fiscal 2025 decreased compared to fiscal 2024. Cash from operations increased in the prior fiscal year due to (i) reduction of our inventories and higher net revenues and (ii) the receipt of customer deposits. In the current fiscal year, we made payments against previously accrued variable compensation balances, as discussed further below. For fiscal 2025, our net loss included $12,306,000 of non-cash charges, while the changes in operating assets and liabilities provided net cash of $6,352,000.
Current wording
Cash provided by operating activities during fiscal 2026 increased compared to fiscal 2025 primarily as a result of a reduction in our net loss in the current period. For fiscal 2026, our net loss included $9,535,000 of non-cash charges, while the changes in operating assets and liabilities provided net cash of $4,523,000.
Previous wording
Accounts payable increased by $2,912,000, or 28.1%, from June 30, 2024 to June 30, 2025 primarily due to the timing of inventory receipts and payments made to our vendors.
Current wording
Accounts payable increased by $3,712,000, or 28.0%, from June 30, 2025 to June 30, 2026 primarily due to the timing of inventory receipts and payments made to our vendors.
Previous wording
Accrued payroll and related expenses decreased by $2,365,000 or 40.5% from June 30, 2024 to June 30, 2025. The decrease was primarily due to accrued variable compensation paid out during the current fiscal year.
Current wording
Accrued payroll and related expenses increased by $1,349,000 or 38.9% from June 30, 2025 to June 30, 2026. The increase was primarily due to the accrual of variable compensation in the current fiscal year.
Previous wording
Net cash used in investing activities for fiscal 2025 consisted primarily of the acquisition of Netcomm, which used cash of $6,458,000. We also paid for property and equipment totaling $505,000, primarily for tooling at our contract manufacturers as well as certain research and development projects.
Current wording
Net cash used in investing activities for fiscal 2026 and fiscal 2025 consisted of purchases of equipment totaling $612,000 and $505,000, 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 fiscal 2025 also includes the acquisition of Netcomm, which used cash of $6,458,000.
Previous wording
Net cash used in financing activities during fiscal 2025 resulted primarily from principal payments of $4,512,000 on our term debt, as well as tax withholdings paid on behalf of employees for restricted shares of $2,093,000.
Current wording
Net cash used in financing activities during fiscal 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 current paragraphs (1)
Current report — wording carried from elsewhere
During fiscal 2026 we incurred approximately $315,000 of acquisition costs. These costs were mainly comprised of legal and other professional fees.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Net cash used in investing activities for fiscal 2024 consisted of purchases of equipment amounting to $1,479,000, primarily for research and development and certain business analysis tools.