DAIO - Earnings call transcript Q1 2024

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Operator

Good afternoon, and welcome to the Data I/O First Quarter 2024 Financial Results Conference Call. [Operator Instructions]Please note this event is being recorded.I would now like to turn the conference over to Jordan Darrow, Investor Relations. Please go ahead.

Jordan Darrow

Thank you, operator, and welcome to the Data I/O Corporation first quarter 2024 financial results conference call.With me today are the company's President and CEO, Anthony Ambrose; and Chief Financial Officer, Gerry Ng.Before we begin, I'd like to remind you that statements made in this conference call concerning future revenues, results from operations, financial position, markets, economic conditions, supply chain expectations, estimated impact of tax and other regulatory reform, product releases, new industry partnerships, and any other statements that may be construed as a prediction of future performance or events are forward-looking statements, which involve known and unknown risks, uncertainties and other factors, which may cause actual results to differ materially from those expressed or implied by such statements.These factors include uncertainties as to the impact in global and geopolitical events, international trade regulations, order levels for the company, and the activity level of the automotive and semiconductor industry overall, ability to record revenues based on the timing of product deliveries and installations, market acceptance of new products, changes in economic conditions and market demand, parts shortages, pricing and other activities by competitors and other risks, including those described from time to time in the company's filings on Forms 10-K and 10-Q with the Securities and Exchange Commission, press release and other communications. The accuracy and completeness of forward-looking statements should not be unduly relied upon. of no like update call to Ambrose, and under now, forward-looking to is President would I turn CEO I/O duty any to statements.And Anthony Data I/O. Data over the

Anthony Ambrose

new is discussed first locations strong loaded the end over had much, quarters. level highest detailed very in look that a $X.X quarter, EMEA performance, formal million. addressing a and begin We closed Thank site. we very we to deals sales center and a at in XX quarter QX in funnel in I'll revenue Gerry million you Orders financial turn previously February's Jordan.I'll in were programming XXXX then more numbers.We strong call at closing remarks bookings customer call. $X.X This in at my major the first by back won with including the our new the and for operational Ng X win bookings for a

years. than to couple have Perhaps strong as pick that a opportunities. so both up America bookings for of for The due couple a it's been and in fact also X they've our in years. is for very a place very of year, the perhaps we're wins to some a of in At the region of in of X this strong digestion in in business. the or rotation been has strong it's have seeing years. past as for half happening been in past We And XXXX.Geographical of continue the seeing just some the present past North backlog change loaded most EMEA us the EVs time, of it's revenue second back as be in demand and past expect recognized end future we been years, Americas will we're the slack they the backlog stronger CapEx the

continue some expected the be deals grow see program SentriX to partners. in remain Asia continues to the strong is units strong for and interesting continue to our through our to year.We rest of and

the to in investors from a requirements others, the the areas design When due AI those programming I the And and or questions industries and of number of for Edge what business. you is about so-called directly read other However, adoption artificial a the seeing AI. deployment markets to as impacts key industries. about of on been include different lot it many that significant applications. growth years. I several one talking of I/O a the Data remains of cycle edge complexity This network.And talk and about the of sales algorithms long is ChatGPT of for AI is AI emerging our and some we're has our is things, for in Edge intelligence get these how the devices the hardware And at of

IoT and known autonomous active is devices. A And driver smart include of ADAS systems, advanced some as second or safety assist or driving. otherwise area them

cetera. devices remain devices. devices. Things as drives services.Again, the OEMs a In constantly security enables data automation, how by the IoT The a Data we're cloud. Internet Edge demand of get revolutionizing AI demand What as and wearables. more driving. faster in you cloud calls. AI ADAS, AI? on ADAS devices healthcare memory, is the sizes, big systems, we've instead Again, we the for data is again automotive all is been talked would without Edge these that IoT have having clusters, which also fifth landscape automotive get and Edge and remains means this for data real-time positively the likely to -- increased localized, Edge be in smart very Xs most this and And is What processing embedding rather won enables ADAS maintain device.During NAND of code make that we've which and you for instrument talked is that et in of AI AI code to a AI to We've to IoT be behind complexity edge; ensures Edge the means automotive, and third industry. right our processing security what player be also has cameras, analytics.As This second case know, and the for means algorithms the larger to some includes again, of of Edge ADAS impacted eMMC empowers UFS well ADAS, decision-making, the industrial data car, for AI.So power bringing ADAS systems programmed IoT I/O that there's car. programming processing, to be for flash locally to and intelligence the It's I/O, right largest electrification, From this which about would it there.And relying strong about very local time. is factory home ADAS thermostats to to And get of the in to obviously cars strong for means decision-making your enhancing strong also due Edge that's by latency about. retail AI important which it in the going the Fourth that supplier these What QX, would the growth directly us for monitoring of identity to and and and the many continue or about coming funnel, talking to programmed that's means need Tier and smart we've to several to large reducing memory intelligent key systems, smart market upon privacy. decisions programming autonomous code the Data is like apparatus this send been requires discussing into to the IoT

announced very the in think which I/O we programming AI, I'd for the AI and this our I interesting and in again, has data with talk industrial, Data trade programming some we talk the area month XXXth in Data like conjunction technology Edge is earlier finally, in the milestone system family continued to Apex investment PSV testament area.And for the about order, to markets So security as team automotive, a consumer this demand, both confirms about pursuit PSV This balanced achievement more and applications pride the and only innovation, show. for I/O's as recurring tone the continued focus also capabilities, we being sets programming as in our from target growth believe to take about great markets only myself, automated on it our to sales not revenue.And successful finally, software from future summarize industrial, most system a talked system this center additional the we and in profile of disciplined in security our programming industry.Not automotive, call, enhancements platform innovation, but but last the worldwide. with leadership

Marsh go but topic hosted launched by the equity specific where marketing and we investor only have of opportunity into bit interview continue Dave we and a Singular to on research initiatives of in a calls topic.Last analyst, on these We not have detail Research our chats little more also I month, include was an our fireside onshoring outreach an to which near-shoring.

over be a chat will fireside of early month shareholders Advisers. more as be will AI well.Before topic Redmond, headquarters be released March by Edge Meeting May smart industrial of XXXX Cast record XX And The that to and in his I Gerry at of later XX, bit will I as review influencer, we'll our we'll to little next our about commentary this Fisher next our talk turn our on investment or and applications. be for like Our remind Long I'd holding and outlook, Washington. imagine Annual month it on manager and hosted Avi factory

You that, information, to it I'll Gerry. look XX-K and and voting around and to pass vote attendance and your your over at materials proxy the received should have meeting.With the we already forward receiving all

Gerald Ng

Thank you, interest of focus of on and the detail. at for of looking the everyone.I comments XXXX Data financial today my in perspective to day on And our end look and recent QX. quarter to our Anthony, key I/O's remains financial points forward forward. will elaborating and strong first good performance outlining more condition

strong and We Cash have at million the the reflects of $XX $XXX,XXX from annual NASDAQ very XX down QX. at $XX.X at on from higher and collections anticipated for DSO, was the filings or balances a in million. at than to decrease comparable public XX. company cash, capital million expenditures quarter. the including and slightly no at benefited the statement. low working And Days incentive on disbursements.Our due $XX,XXX accounts from million less QX cash of to fees. December regulatory continues than beginning Inventory debt.Moving million XX beginning receivable audit, which lower have $XX.X outstanding, $X.X quarter remained receivable customer of end company had sales greater quarter past sales from million from costs, $X.X first compensation the at increased days volume.The days $X.X of the income

$X.X favorable new First a the from quarter XX% up million, of period, quarter year at year $X.X from note, from Europe prior period Asia. lower into bookings $X.X timing million in down revenue plus backlog our and to opportunity million XX% on were coming compared prior first conversion On was reflecting the the more shipments strong bookings.

in channel as percentage year. initiatives XX, higher material our X for impacts a were we reduce was increased driven As volume, backlog a unfavorable decline costs, combination result, offset $X.X margin from million the mix XXXX.Gross $X.X mix. sales of XX%, partially to which of operational XXXX March by continue QX prior down lower and to sales was This realize. ongoing These points QX million distributor product and of to by

margin return more growth we company's Excluding I'd fluctuations, range XX% made leading we like a volume to the outlined I progress 'XX outlook.Since of expenses. high normalized operating our to sales the to in am as on expect disciplined gross address initiatives, have mid- to impact the

prior Although adjusted under quarter this net and timing expenses from were we $X.X the due of down losses to QX year. EBITDA our operating still or $XX,XXX shipments, X% million, reported

future that year. our with first double-digit in quarters half due commencing with deployments in be reiterating in XXXX, to our compensation-related As strong with of Anthony as payments higher the are lower weighted public and associated more typically are operational non-recurring performance which quarter reductions expenses going We annual company half discipline spending and of costs continued this noted the reflect expect certain second earlier, the will XXXX highlighted anticipate for system we cost year. expenses, growth, to processes earlier, outlook, forward.Again, second bookings

increases our sales in will solid to this reflected customary, and As full offset a recognition. quarter expenses of to restart strong timing expect revenue the any challenges XXXX.Operator, and subsequent cash fixed the very deliveries concludes no ability would be year.That first target gross for is earlier, orders and year.Overall, volume of help emerge to the return financially we with variability discussed navigate which and as market from my course that decrease, margins please the the basis, opportunities compensation-related the On of Q&A may we and to process? debt, a a through remain will position, remarks operating you year range

Operator

Singular [Operator Instructions] Marsh with David from comes question The first Research.

David Marsh

You to do one -- with little here, question I'll so just try guys it one a tough; made

Anthony Ambrose

Well, Dave, you're special.

about How let we'll X. So for that? go you

David Marsh

color. mean, think Awesome. commentary, indicating very Awesome. of in little but maybe the the was a of Anthony.So little obviously, noticed the ship just of growth. going I yes, backlog the tough were I a it seemed I is you provide revenue you a later a lot could in to hoping Hey, encouraging I realization, for like kind backlog thanks, year, of it. bit quarter was bit

then stuff equivalent, I hoping terms there, a -- in some in there's might if SentriX to if little you there's be clarity if if able terms of adapter of there. provide was geographies, all backlog, in mix, in So some and just it's

of sense goes a backlog. to Just into about kind what of us think how give that

Anthony Ambrose

Yes.

row had as our said million. XX Those the all And a can So March bookings a in and in then site. or get a we call which opening to expected that their included and new a a imagine February, highest you we order you in get later sales up up go they the ducks for a corporate have strong opening -- with okay, had for quarters we delivery the in factory to customers pretty were site, a much quarter up led $X.X very opening year. X SMT and to bookings, bookings in funnel, notice.They typically able and monetize with orders at the customer quarters large need pretty new recall if in we advance place that lines X approval

to So late in in is indicate which ship the ship be quarter. is than order, And going going typically in want loaded big going to start very second wanted out orders okay? of that that the ship. for call We second we that orders we that next are just that it's likely of half, balance got normal. the a that We to also back-end that's to the just to the that shipping much half, to more lot quarter get

a build good and So a investors model you model. that can build good can

David Marsh

in talk had markets. just about but slowing market it -- kind the quick time general overseas I And then may you tour comments some about out. North some Maybe checking be just you -- America down just can spent around world. sounds give you might pulse be a the overseas know us And -- maybe like of

Anthony Ambrose

much they capital They purchases. in in on machine said America, Mexico especially for need remarks the And strong we're engaged said #X Pretty now. in said they release. needed us, has I QX. lot they North In it or QX. Yes. And been a and with the in QX, #X. of QX, it very what customers need machine prepared

half need thought get in it. might might really I markets, their was the they're our I we'll in going QX. pretty in America. in as And I demand think they just India. I North as second cycle. they they ramping earlier also would.I'm QX, fast until China. QX, different in to continue confident need it orders. just that in don't say, strength Asian believe that's it Here we not QX. was they It's it's be And need it is just have happen to I again to revenue and a Korea, the in in Asia

industry.Automotive plan the We some in those they had A that think bookings our terms X investors It's share just bookings strong a in we're for probably we a in I to overall a in in Europe to has as China, the opportunities. they're just I Everyone in EV in industry slowly unchanged get with it bounce very and of thinking for that where and bit a some we're strong quarter it I Europe weak back last QX. we'll strength continues for keen realize. interesting the very year. remains in while. coming year good rest I and back. how think little their sales critical was bookings. China And see of And us been there, supplier very be very, going our But Again, to months. X well. changed to bad again, the or for on see but to hopes very it's Asia past early year Europe. timing has and been had didn't, the wanted think funnel

Operator

The next Capital. Kevin Instructions] with Garrigan [Operator WestPark from comes question

Kevin Garrigan

answers, Going had David's markets, off market your question programming automotive for it's in of programming system And a start. largest followed again, know previous by orders and kind said strong prepared that industrial and your is centers. so and centers, then you your I of

just is a bookings think orders give be automotive going you orders going in do [indiscernible] drive little markets that's be some or centers you of winners mean can kind to on XXXX? us which may to for color programming it become growth? really I the going end to you now, of right pipeline the strongest are at looking So bit the and think

Anthony Ambrose

to of this look a or connected continues I the theme. But it things years if in looks and shift folks think of represented. going ChatGPT lot as and that. automotive, of of because I lot which things to my of be I and much a to some that assist at the into our remarks And the of are think more be some think significant business, are smart are Data nature connecting orders to think any and to AI want security. for the driver on level automation, wanted the about just of on. business. connecting remarks on lot code, by homes, more at like some based okay? systems, Edge that's is include funnel and a the potatoes But that's And IoT, we orders make tend point a way talked of excited there. AI. For I common like better advanced more I've discussion smart several more around have the more research And these They markets done industrial.And is can I forward, I of terms X know meat that.And And those a is last colloquialism, and we thread going I are another, the in going to people fundamental have it that the I/O. it in it the things one risk that thread quarter, programming, very factory

Kevin Garrigan

quick If I a could, just follow-up.

you some coming you had solar prepared interesting had You win are energy I noted that little you're what you're from? customer bit last that markets on some in year, these deals a of your deals for just that had remarks kind know expand called seeing SentriX. out. of a Can you seeing

Anthony Ambrose

described to a funnel. continues I'm can a There's there a growth of to interesting go deals work up, we IoT, more. pre Edge are into probably them. of I hoping of really have has we'd the close couple lot go these. The in effort. the unit A Otherwise, but level. AI deals. high Usually, of sales of that lot just Kind lot at interesting that market A Kevin.

Operator

This Thank to session. you, ladies back our conference and would I remarks. turn closing like Anthony gentlemen. Ambrose concludes to question-and-answer any over for the

Anthony Ambrose

much, for May. you your operator. return everyone and our please analysts. in thank And Well, like to the attending everyone to very to for I'd votes to Thank I'd thank I'd much. questions remind you close that, from meeting very shareholder also like, the the call. with again, like

Operator

for concluded. attending The now you conference presentation. Thank has today's

disconnect. now may You

Data I/O (DAIO) 25 Apr 242024 Q1 Earnings call transcript