10-Q · May 15, 2026
Data I/O Corporation reported disappointing Q1 2026 results with revenues of $3.25 million, significantly below the expected $4.09 million, marking a 47.4% decline year-over-year. EPS of -$0.34 also missed analyst…
Earnings analysis · 10-Q
DAIO earnings analysis
Filed August 14, 2026 · Our reading of the company's report
The latest report
Data I/O delivered a strong sequential recovery in Q2 2026, with revenue rising 59% to $5.149 million and gross margin expanding to 57.0%, but revenue remained 13.4% below the prior-year period. Operating performance…
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Data I/O delivered a strong sequential recovery in Q2 2026, with revenue rising 59% to $5.149 million and gross margin expanding to 57.0%, but revenue remained 13.4% below the prior-year period. Operating performance improved from Q1, yet the Company still reported a $1.629 million net loss, including $873,000 of interest expense, and adjusted EBITDA remained negative $509,000. Liquidity increased to $10.8 million and post-quarter-end debt conversion eliminated debt, while bookings improved sequentially but backlog and bookings remained below prior-year levels.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.17
What stood out
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Revenue Rebounded Sequentially
Q2 revenue was $5.149 million, up 59% sequentially from $3.3 million in Q1 2026, but down 13.4% from $5.948 million in Q2 2025. Management attributed the recovery to improved sales momentum, while trade and tariff uncertainty continued to weigh on capital-equipment demand.
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Gross Margin Expanded Sharply
Gross margin increased to 57.0% from 49.5% in Q1 2026 and 49.8% in Q2 2025. Management cited favorable mix, pricing discipline, better overhead absorption and production efficiencies.
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Operating Loss Narrowed Sequentially
Estimated operating loss was approximately $724,000, or a negative 14.1% operating margin, versus the prior quarter’s negative 96.7% margin. R&D declined 17.0% year over year to $1.380 million, partially offset by SG&A rising 6.4% to $2.279 million.
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Bookings Improved Sequentially
Bookings rose to $4.9 million from $4.2 million in Q1 2026, although they remained below $5.8 million in Q2 2025. Bookings improved as delayed customer decisions and sales-process disruptions from the ransomware incident began to ease.
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Liquidity Improved; Debt Converted
Cash was $10.8 million at June 30, 2026, up $2.9 million from December 31, 2025, primarily due to the second-quarter convertible-debt issuance. The debt was converted into preferred equity after quarter-end, eliminating the Company’s debt.
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Losses Remained Material
The Company recorded a $1.629 million Q2 net loss and $873,000 of interest expense, compared with no interest expense in the prior-year period. Adjusted EBITDA was negative $509,000 versus negative $437,000 in Q2 2025.
What to watch
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Cybersecurity Disruption Exposure
The filing states there were no material changes to the risk factors in the 2025 Form 10-K, but it highlights the August 2025 targeted cyber incident, which led the Company to shut down most global operating systems and could cause revenue loss, shipment delays and remediation costs.
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Demand, Tariff and Backlog Pressure
Capital-equipment demand remained pressured by global trade and tariff uncertainty. Backlog declined to $2.1 million at June 30, 2026 from $2.6 million at the end of Q1, while Q2 bookings of $4.9 million were below $5.8 million a year earlier.
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Financing Costs and Capital Needs
Interest expense was $873,000 in Q2 2026 versus $0 in Q2 2025, contributing to the $1.629 million net loss. Although the convertible debt was converted into preferred equity after quarter-end, the Company states that acquisitions or continued losses could require additional debt or equity financing.
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Unremediated Control Weakness
Disclosure controls and procedures remained ineffective as of June 30, 2026 because of a material weakness involving user access and segregation of duties in the financial-reporting IT system. Management stated the weakness would not be remediated until controls operated effectively for a sufficient period and testing was completed.
Management's outlook
No numeric revenue or EPS guidance was provided in the 10-Q. Management reiterated expectations for revenue growth through end-market diversification and an enhanced consultative sales process, and discussed a strategic acquisition expected to diversify customers and accelerate entry into programming and Programming-as-a-Service.
Earlier filings 4
10-K · April 30, 2026
Data I/O Corporation reported a challenging fiscal year in 2025 characterized by a strategic transformation aimed at shifting from capital-equipment reliance to a focus on recurring consumables and services. Despite a…
10-K · April 16, 2026
Data I/O (DAIO) completed a strategic transformation in 2025 centered on a rapid refresh of its programming platform (LumenX2) and a deliberate shift from capital-equipment cyclicality toward recurring consumables and…
10-Q · November 12, 2025
Data I/O reported Q3 2025 net sales of $5,393,000, essentially flat versus Q3 2024 ($5,423,000) but with material margin and profitability deterioration. Gross margin declined to $2,734,000 (50.66% of sales) while…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.