Data I/O Corp (DAIO) Q1 2024 Earnings Call Transcript Highlights: Record Bookings and Strategic ...

• Bookings: $8.1 million, highest in 11 quarters.

• New Customer Locations: Won five, including a major programming center in AMEA.

• Revenue: $6.1 million, with a strong backlog expected to convert in H2 2024.

• Backlog: Increased by $1.7 million to $4.5 million as of March 31, 2024.

• Gross Margin: 53%, down from previous year, impacted by sales mix and distributor channel sales.

• Cash Position: $12 million, slightly down by $342,000 from the beginning of the quarter.

• Working Capital: $18.1 million, decreased from $18.4 million as of December 31.

• Inventory: Increased to $6.4 million from $5.9 million at the beginning of the quarter.

• Days Sales Outstanding (DSO): 59 days, with past due receivables under $30,000.

• Net and Adjusted EBITDA: Reported losses due to timing of shipments.

• Operating Expenses: $4.1 million, slightly down by $53,000 or 1% from the prior year.

Release Date: April 25, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q & A Highlights

Q: Can you provide some clarity on the backlog in terms of geographies and the mix, and how it shifts? A: Anthony Ambrose, President and CEO of Data I/O, explained that the strong sales funnel from February converted into high bookings in March, leading to the highest bookings quarter in 11 quarters. He noted that large orders for new sites typically have a delayed shipping schedule, contributing to a back-end loaded year. He emphasized the geographical diversity in the backlog, with significant contributions expected from various regions in the second half of the year.

Q: Could you give us a general market pulse around the world? A: Anthony Ambrose mentioned that North America, particularly Mexico, has seen a lot of capital purchases but is experiencing a slowdown in demand ramp-up. Asia, especially China, is recovering slowly with strong interest in the EV industry. Europe, previously weak, showed strong bookings in Q1. Overall, the global market presents mixed signals with varying strengths across regions.

Q: Which end markets do you think will be the strongest for orders in 2024? A: Anthony Ambrose indicated that the business's fundamental nature continues to be driven by automotive and industrial sectors. He highlighted the importance of HAI (Hardware AI) as a connecting thread across various sectors, emphasizing that more programming and security needs translate into better prospects for Data I/O.

Q: Can you expand on the interesting deals for SentriX and the markets they are coming from? A: Anthony Ambrose pointed out that most of the interesting deals for SentriX are coming from the IoT sector. He mentioned that these deals require significant pre-sales effort and are part of a growing funnel of opportunities that could potentially close soon.

Q: What are the expectations for automotive and programming center markets in terms of growth and order volume? A: Anthony Ambrose reiterated the company's focus on disciplined growth targeting automotive, industrial, and programming center markets worldwide. He expressed confidence in the continued demand and growth in these sectors, supported by ongoing investor outreach and marketing initiatives.

Q: How does the company view its financial health and outlook for 2024? A: Gerry Ng, VP & CFO of Data I/O, reported a strong cash position with no debt, highlighting the company's ability to navigate market opportunities and challenges. He projected double-digit bookings growth with system deployments expected to be more weighted in the second half of the year, maintaining a positive outlook for the company's financial performance in 2024.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.