Data I/O (DAIO) investor relations material

Executive summary

• Q1 2026 net sales were $3.3 million, down from $6.2 million year-over-year, reflecting weak demand, global trade/tariff headwinds, and lower bookings.

• Bookings accelerated late in Q1, reaching $4.2 million, with backlog rising to $2.6 million; strongest growth in Europe and new customer wins in robotics and other sectors.

• Announced a transformational $23 million acquisition expected to nearly double annual revenues, expand the addressable market, and be accretive to earnings and cash flow upon closing.

• Secured a $9 million direct investment via private placement to strengthen the balance sheet and support M&A and organic growth.

• Launched Programming-as-a-Service (PaaS) and a new digital roadmap, including a new website and embedded AI across operations.

Financial highlights

• Q1 2026 net loss was $3.2 million ($0.34/share), compared to a net loss of $382,000 ($0.04/share) in Q1 2025, driven by lower revenue and one-time restructuring costs.

• Adjusted EBITDA was negative $1.75 million, versus negative $98,000 a year ago; EBITDA including all items was negative $3.1 million.

• Gross margin was 49.5%, down from 51.6% year-over-year due to lower absorption of labor and overhead.

• Operating expenses were $4.75 million, including $1.2 million in one-time items related to German operations optimization and ERP transition.

• Cash at quarter-end was $5.7 million, down from $7.9 million at year-end; net working capital was $9.3 million; no debt as of March 31, 2026.

Outlook and guidance

• Q2 2026 revenue guidance is $5.0–$5.4 million, implying at least 20% sequential growth, driven by late Q1 bookings and strong early Q2 activity.

• Organic revenue growth and recurring revenue acceleration expected for 2026, with positive operating cash flow targeted by year-end.

• Programming-as-a-Service contracts expected to begin contributing revenue by Q4 2026.

• Acquisition consolidation anticipated in the second half of 2026, expected to be accretive to profit and cash flow.

• Sufficient liquidity is expected for at least the next year, with additional capital available if needed.