Data I/O Corporation reported a significant decline in financial performance for the first quarter of 2026, with net sales totaling $3.25 million, a decrease of 47.4% compared to $6.18 million in the same period last year. The company's gross margin also fell to 49.5%, down from 51.6% in the prior year, reflecting the impact of reduced sales volume on fixed costs. The company recorded a net loss of $3.17 million, or $(0.34) per share, compared to a loss of $382,000, or $(0.04) per share, in the first quarter of 2025. This decline in revenue and profitability was attributed to ongoing global trade and tariff negotiations, which have negatively affected demand for capital equipment.
In terms of operational changes, Data I/O undertook a strategic realignment of its operations in Germany, incurring approximately $1 million in employee-related costs associated with workforce reductions. This move is expected to yield material cost savings and improve operational efficiency. The company also reported a backlog of $2.6 million as of March 31, 2026, an increase from $1.6 million at the end of the previous quarter, indicating a potential recovery in demand. However, international sales represented only 46% of total net sales, a sharp decline from 88% in the prior year, highlighting challenges in global markets.
The company’s revenue breakdown showed that platform sales accounted for 19% of total revenues, down from 49% in the previous year, while adapter sales made up 47% and software and services sales contributed 34%. The decline in platform sales was particularly pronounced, dropping 79.5% year-over-year. Despite these challenges, Data I/O is focusing on expanding its market reach beyond the automotive sector and revitalizing its relationships with semiconductor companies, which may help diversify its revenue streams.
Looking ahead, Data I/O remains cautious but optimistic about future growth. The company is implementing measures to enhance operational efficiency and reduce costs while continuing to invest in product development. Management expressed confidence in the potential for revenue growth through end market diversification and an enhanced consultative sales process. Additionally, the company has entered into a definitive securities purchase agreement for approximately $9 million, which is expected to close in the second quarter of 2026, providing further financial support for its strategic initiatives.
About DATA I/O CORP
Data I/O Corporation is a global leader in device programming and security deployment solutions for electronics manufacturing. It provides automated and manual systems, software, and services to program and protect semiconductor devices used in automotive, IoT, industrial, and consumer electronics. Its offerings enable secure device provisioning, IP protection, and process automation for high-volume manufacturers worldwide, emphasizing quality, security, and technological innovation.
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