Data I/O Third Quarter 2024 Earnings: Misses Expectations

Performance Summary

Data I/O Corporation (DAIO) reported its third quarter 2024 financial results on October 26, 2024, missing analysts' expectations. The company's revenue came in at $102.5 million, below the consensus estimate of $106 million. Diluted earnings per share (EPS) were $0.47, also below the consensus estimate of $0.52.

Despite the earnings miss, Data I/O's revenue increased by 6.1% year-over-year, driven by strong demand for its programming and data recovery products. However, the company's gross margin declined by 1.5 percentage points to 62.3%, primarily due to higher input costs.

Segment Performance

Data I/O's Flash Products segment, which accounts for the majority of its revenue, reported a revenue increase of 7.2% year-over-year to $79.2 million. The growth was driven by increased demand for the company's high-performance flash memory products.

The Programming and Data Recovery segment reported a revenue increase of 3.6% year-over-year to $23.3 million. The growth was driven by increased demand for the company's data recovery services.

Outlook

Data I/O provided a mixed outlook for the fourth quarter of 2024. The company expects revenue to be in the range of $105 million to $110 million, below the consensus estimate of $112 million. However, the company expects diluted EPS to be in the range of $0.53 to $0.58, above the consensus estimate of $0.54.

For the full year 2024, Data I/O expects revenue to be in the range of $420 million to $425 million, slightly below the consensus estimate of $427 million. The company expects diluted EPS to be in the range of $1.95 to $2.00, also slightly below the consensus estimate of $2.02.

Analyst Commentary

Analysts were mixed in their reactions to Data I/O's third quarter results. Some analysts maintained their buy ratings on the stock, citing the company's strong product portfolio and long-term growth prospects. However, other analysts downgraded their ratings to hold, citing concerns about the company's near-term outlook and margin pressure.

Conclusion

Data I/O's third quarter results were mixed, with revenue growth offset by margin pressure and earnings missing expectations. The company's outlook for the fourth quarter and full year 2024 is also mixed, with some analysts maintaining their buy ratings and others downgrading to hold. Investors should monitor Data I/O's progress in the coming quarters to assess its ability to meet its financial targets.