Lantronix Non-GAAP Profit Rises 50% Alongside Embedded IoT

The Tip Desk · November 9, 2026 · 3 min read

Net revenue reached $32.4 million in the fiscal first quarter as Embedded IoT Solutions hit $15.7 million and the company reaffirmed double-digit growth for fiscal 2027.

Lantronix Inc. (LTRX), a provider of Edge Intelligence and Industrial IoT solutions, reported net revenue of $32.4 million for the fiscal first quarter ended September 30, 2026, up 8% from a year earlier, matching the year-over-year pace of the prior quarter.

Embedded IoT Solutions was the growth engine. That line reached $15.7 million, up 37% from $11.5 million a year earlier and from $13.7 million in the fiscal fourth quarter. President and CEO Saleel Awsare said the increase was driven by continued momentum across unmanned systems. The company said it remains on track for unmanned systems to comprise approximately 15% to 20% of total revenue this fiscal year.

IoT System Solutions moved the other way, declining sequentially to $14.1 million from $15.3 million in the prior quarter and remaining below $16.5 million a year earlier. Management said IoT Systems was softer sequentially, although it continues to see encouraging demand indicators around networking and enterprise AI, and is expecting sequential revenue growth in that line driven by strength in networking products. Last year’s IoT Systems comparison, the company said, benefited primarily from meaningful shipments to a lead Tier-1 mobile network operator customer, with those volume shipments substantially completed several quarters ago.

Software and Services rose to $2.6 million from $2.2 million in the prior quarter and $1.9 million a year earlier. The company closed the Nero Global Tracking acquisition during the quarter and said Nero’s high-margin recurring revenue has increased the software and services mix to more than 10% of total company revenue on a pro forma basis. Cash and cash equivalents were $37.6 million at September 30, 2026, down from $60.5 million at June 30, 2026, after the company outlaid about $10.3 million for Nero and moved some proceeds into $13.8 million of marketable securities.

GAAP gross margin was 44.8%, up from 43.7% in the prior quarter and flat with the year-ago period. Non-GAAP gross margin was 45.3%, up from 44.1% sequentially and consistent with a year earlier. The company said the sequential improvement reflected higher-margin recurring revenue from Nero, operational initiatives and disciplined cost management, even as product mix was more heavily weighted toward embedded solutions and compute products.

GAAP net loss narrowed to $463 thousand, or ($0.01) a share, from a $1.4 million loss, or ($0.04) a share, in the year-ago quarter. Non-GAAP net income rose 50% year-over-year to $2.2 million, or $0.05 a share, from $1.5 million, or $0.04 a share, a year earlier and from $1.8 million, or $0.04 a share, in the prior quarter. GAAP operating expenses were $15.1 million, up from $14.0 million in the prior quarter and nearly flat versus the year-ago quarter, on higher stock-based compensation, Nero-related amortization and acquisition costs, and modest go-to-market and R&D increases.

Americas revenue was $23.3 million, EMEA $5.6 million, and Asia Pacific Japan $3.5 million, with Asia Pacific Japan down from $4.1 million a year earlier.

The company reaffirmed an expectation for double-digit revenue growth in fiscal 2027. For the fiscal second quarter ending December 31, 2026, it guided net revenue of $32.5 million to $34.5 million and non-GAAP net income of $1.8 million to $2.7 million, or $0.04 to $0.06 a share.