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1. Company Snapshot

1.a. Company Description

Data I/O Corporation engages in the design, manufacture, and sale of programming and security deployment systems and services for electronic device manufacturers in the United States, Europe, and internationally.The company's programming system products are used to program integrated circuits (ICs) with the specific data necessary for the ICs. It offers PSV handlers offline automated programming systems; SentriX, a security deployment system; RoadRunner and RoadRunner3 series handlers, an in-line automated programming systems; LumenX Programmer; and non-automated FlashPAK III programming systems.The company also provides hardware support, system installation and repair, and device programming services.


It markets and sells its products to original equipment manufacturers in automotive and consumer electronics, Internet of Things and their programming center partners, and electronic manufacturing service contract manufacturers through direct sales, and indirect sales representatives and distributors.Data I/O Corporation was incorporated in 1969 and is headquartered in Redmond, Washington.

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1.b. Last Insights on DAIO

Data I/O Corporation's recent performance was negatively driven by a lower-than-expected Q4 2024 earnings release. The company reported a net loss of $0.02 per share, missing analyst estimates of $0.06. Additionally, revenue of $13.2 million fell short of expectations, citing lower sales in the Asia Pacific region. The company's president, Bill Wentworth, attributed the decline to a slowdown in demand due to the industry's transition to new technologies. The disappointing results led to a decrease in the company's forward guidance, which may indicate ongoing challenges in the near term.

1.c. Company Highlights

2. Data I/O Corporation's 2025 Earnings: A Challenging Year with a Promising Outlook

Data I/O Corporation reported a challenging 2025, with net sales of $21.5 million, down from $21.8 million in 2024. The company's fourth-quarter net sales were $4 million, a decline from $5.2 million in the same period of 2024. The gross margin as a percentage of sales was 43% in the fourth quarter and 49.3% for the full year. The net loss for 2025 was $5 million, or $0.53 per share, with adjusted EBITDA being negative $3.9 million for the full year. The actual EPS came out at -$0.27, relative to estimates at -$0.09.

Publication Date: Mar -08

📋 Highlights
  • 2025 Revenue Decline:: Net sales fell to $21.5M in 2025 from $21.8M in 2024, with Q4 sales dropping 23% to $4M.
  • Gross Margin Resilience:: Full-year gross margin held at 49.3%, though Q4 dipped to 43% due to revenue pressure.
  • 2026 Growth Targets:: Aiming for organic revenue growth and $1M annual cost reductions, with positive operating cash flow expected by H2 2026.
  • AI-Driven Cost Savings:: AI-assisted software development reduced a project’s cost from $120K to $100K, enhancing efficiency.
  • Bookings Downturn:: 2025 bookings fell 17% to $18.6M, despite 75% of the pipeline being new opportunities.

Transformation Plan and Strategic Priorities

The company's transformation plan is ahead of schedule, focusing on six strategic priorities: modernizing the go-to-market, investing in the core platform, strengthening customer relationships, optimizing business operations, moving to the cloud, and deploying AI company-wide. The CEO, Bill Wentworth, highlighted the progress made in integrating AI across various departments, including bug fixing, enhancements, and new software development, which has led to substantial cost savings.

Outlook and Growth Opportunities

For 2026, Data I/O targets organic revenue growth over 2025, driven by early demand signals from Edge AI infrastructure and continued strength in its recurring revenue base. The company expects improved absorption of labor and overhead costs, driving improved gross margins. Analysts estimate next year's revenue growth at 32.6%. The company is well-positioned to support customers migrating manufacturing facilities to the Americas, and the reshoring of semiconductor manufacturing is expected to create growth opportunities.

Valuation and Cash Flow

With a P/S Ratio of 1.2 and an EV/EBITDA of -4.59, the market is pricing in a significant improvement in the company's performance. The company aims to achieve positive operating cash flow by the end of 2026, with a focus on revenue growth and cost containment. Data I/O ended the year with $8 million in cash and expects near-term positive cash flow, although it may not be until the second half of the year.

Mergers and Acquisitions

The company has an active pipeline of M&A opportunities, with a focus on strategic acquisitions that fit its growth strategy. Data I/O is looking to make day-one accretive deals and has already seen significant growth since the current leadership took over. The company is also exploring alternative sources of cash, rather than issuing shares in the near term.

3. NewsRoom

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Comparing Axion Power International (OTCMKTS:AXPWQ) & Data I/O (NASDAQ:DAIO)

Apr -02

Source: defenseworld.net

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Data I/O (NASDAQ:DAIO) vs. Microwave Filter (OTCMKTS:MFCO) Head to Head Analysis

Mar -14

Source: defenseworld.net

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Data I/O Corporation (DAIO) Q4 2025 Earnings Call Transcript

Feb -27

Source: seekingalpha.com

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Data I/O and IAR Announce Collaboration to Simplify and Unify Security Provisioning from Embedded Design to Manufacturing

Feb -25

Source: globenewswire.com

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Financial Contrast: LightPath Technologies (NASDAQ:LPTH) versus Data I/O (NASDAQ:DAIO)

Feb -20

Source: defenseworld.net

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Critical Contrast: CPS Technologies (NASDAQ:CPSH) versus Data I/O (NASDAQ:DAIO)

Feb -20

Source: defenseworld.net

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Uni-Pixel (OTCMKTS:UNXLQ) versus Data I/O (NASDAQ:DAIO) Financial Review

Jan -26

Source: defenseworld.net

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Data I/O (NASDAQ:DAIO) and Universal Display (NASDAQ:OLED) Critical Comparison

Jan -12

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.32%)

6. Segments

Automated Programming Systems

Expected Growth: 6.5%

Data I/O Corporation's Automated Programming Systems growth is driven by increasing demand for IoT devices, autonomous vehicles, and industrial automation, which rely on high-volume, high-reliability programming solutions. Additionally, the trend towards Industry 4.0 and smart manufacturing fuels growth, as companies seek to optimize production efficiency and reduce costs.

Non-automated Programming Systems

Expected Growth: 5.5%

The 5.5% growth of Non-automated Programming Systems from Data I/O Corporation is driven by increasing demand for secure and reliable programming solutions, growing adoption of IoT devices, and rising need for efficient data management. Additionally, advancements in programming technology and strategic partnerships are contributing to the segment's growth.

7. Detailed Products

PSV7000

A high-speed, automated programming system for flash memory devices

FLX508

A high-speed, automated programming system for microcontrollers and flash memory devices

LumenX

A programming and testing system for automotive electronics

Sentinel-CSP

A secure provisioning and authentication system for IoT devices

TaskLink

A task management and automation system for programming and testing

ConneX

A software platform for secure provisioning and management of IoT devices

8. Data I/O Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Data I/O Corporation faces moderate threat from substitutes due to the availability of alternative data storage solutions.

Bargaining Power Of Customers

Data I/O Corporation has a diverse customer base, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Data I/O Corporation relies on a few key suppliers for components, giving them moderate bargaining power.

Threat Of New Entrants

The data storage industry is highly competitive, and new entrants can easily disrupt the market with innovative solutions.

Intensity Of Rivalry

The data storage industry is highly competitive, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 6.87%
Debt Cost 3.95%
Equity Weight 93.13%
Equity Cost 9.25%
WACC 8.88%
Leverage 7.38%

11. Quality Control: Data I/O Corporation passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
FARO Technologies

A-Score: 4.7/10

Value: 4.0

Growth: 4.8

Quality: 5.1

Yield: 0.0

Momentum: 9.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Data I/O

A-Score: 4.4/10

Value: 8.5

Growth: 1.4

Quality: 4.6

Yield: 0.0

Momentum: 7.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
LGL Group

A-Score: 4.3/10

Value: 4.5

Growth: 2.3

Quality: 5.6

Yield: 0.0

Momentum: 8.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Wrap Tech

A-Score: 3.9/10

Value: 6.2

Growth: 5.1

Quality: 4.2

Yield: 0.0

Momentum: 7.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
LightPath Technologies

A-Score: 3.7/10

Value: 6.4

Growth: 0.6

Quality: 4.5

Yield: 0.0

Momentum: 10.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Rogers

A-Score: 3.0/10

Value: 5.1

Growth: 2.7

Quality: 4.1

Yield: 0.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.36$

Current Price

2.36$

Potential

-0.00%

Expected Cash-Flows