What changed in this filing

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Item 1. Financial Statements

2025-08-12 compared with 2025-05-13 · 71 added, 31 removed, 275 unchanged (27% of the section changed)

5 unchanged sentences

Cash and cash equivalents

Trade accounts receivable, net of allowance for credit losses of $ 22 and $ 22 , respectively

Trade accounts receivable, net of allowance for

credit losses of $ 31 and $ 22 , respectively

Other current assets

13 unchanged sentences

Preferred stock -

Authorized, 5,000,000 shares, including 200,000 shares of Series A Junior Participating Issued and outstanding, none

Authorized, 5,000,000 shares, including

200,000 shares of Series A Junior Participating

Issued and outstanding, none

Common stock, at stated value -

Authorized, 30,000,000 shares Issued and outstanding, 9,239,731 shares as of March 31, 2025 and 9,236,040 shares as of December 31, 2024

Authorized, 30,000,000 shares

Issued and outstanding, 9,374,698 shares as of June 30,

2025 and 9,236,040 shares as of December 31, 2024

Accumulated earnings (deficit)

7 unchanged sentences

Three Months Ended

Six Months Ended

Cost of goods sold

20 unchanged sentences

Three Months Ended

Six Months Ended

Net income (loss)

3 unchanged sentences

See notes to consolidated financial statements

DATA I/O CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

1 unchanged sentence

Comprehensive

Stockholders'

Income (Loss)

6 unchanged sentences

Balance at March 31, 2024

Stock awards issued, net of tax withholding

Issuance of stock through:

Share-based compensation

Net income (loss)

Other comprehensive income (loss)

Balance at June 30, 2024

Balance at December 31, 2024

5 unchanged sentences

Balance at March 31, 2025

Stock awards issued, net of tax withholding

Issuance of stock through:

Share-based compensation

Net income (loss)

Other comprehensive income (loss)

Balance at June 30, 2025

See notes to consolidated financial statements

2 unchanged sentences

(in thousands)

For the Three Months Ended

For the Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Adjustments to reconcile net income (loss)

to net cash provided by (used in) operating activities:

Depreciation and amortization

28 unchanged sentences

Our manufacturing operations are currently located in Redmond, Washington, United States and Shanghai, China.

We prepared the financial statements as of March 31, 2025 and March 31, 2024 according to the rules and regulations of the Securities and Exchange Commission ("SEC").

We prepared the financial statements as of June 30, 2025 and June 30, 2024 according to the rules and regulations of the Securities and Exchange Commission ("SEC").

These statements are unaudited but, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the results for the periods presented.

1 unchanged sentence

We have condensed or omitted certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America according to such SEC rules and regulations.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Operating results for the six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Significant Accounting Policies

20 unchanged sentences

Revenue is recognized on the system based on shipping terms, software based on delivery, installation and services based on completion of work, and software maintenance and extended warranty support ratably over the term of the agreement, typically one year.

Total deferred revenue which represents undelivered performance obligations for installation, service, support and extended contracts were $ 1.5 million and $ 1.8 million for March 31, 2025 and 2024, respectively, and the portion expected to be recognized within one year was $ 1.5 million and $ 1.6 million for March 31, 2025 and 2024, respectively.

Total deferred revenue which represents undelivered performance obligations for installation, service, support and extended contracts were $ 1.3 million and $ 1.5 million for June 30, 2025 and 2024, respectively.

The portion expected to be recognized within one year was $ 1.3 million and $ 1.3 million for June 30, 2025 and 2024, respectively.

When we license software separately, we recognize revenue upon the transfer of control of the software, which is generally upon shipment, provided that only inconsequential performance obligations remain on our part and substantive acceptance conditions, if any, have been met.

12 unchanged sentences

Three Months Ended

Six Months Ended

Net sales by type

9 unchanged sentences

A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized.

On July 4, 2025, the “One Big Beautiful Bill Act” (the “Act”) was enacted into law.

The Act includes changes to U.S.

tax law, including provisions to accelerate tax deductions for qualified property and research expenditures.

The legislation did not affect the Company’s income tax balances as of June 30, 2025.

We are in the process of evaluating the impact of the Act on our consolidated financial statements.

New Accounting Pronouncements – Standards Issued and Not Yet Implemented

26 unchanged sentences

Other accrued liabilities

The changes in our product warranty liability for the three months ending March 31, 2025 and year ended December 31, 2024 are as follows:

The changes in our product warranty liability at June 30, 2025 and year ended December 31, 2024 are as follows:

(in thousands)

4 unchanged sentences

NOTE 5– OPERATING LEASE COMMITMENTS

We have commitments under non-cancelable operating leases and other agreements, primarily for factory and office space, with initial or remaining terms of one year or more as of March 31, 2025 are as follows:

Lease Commitments

6 unchanged sentences

Our two subsidiary facilities in Munich, Germany and Shanghai, China provide extended worldwide sales, service, engineering and operation services.

The components of our lease expense for the three months ended March 31, 2025 and 2024 include facility related operating lease costs of $ 182,000 and $ 208,000 , respectively, and short-term lease costs of $ 9,500 and $ 9,400 , respectively.

There were no new operating leases during the three months ended March 31, 2025.

The components of our lease expense for the three months and six months ended June 30, 2025, include facility related operating lease costs of $ 184,000 and $ 366,000 , respectively, and short-term lease costs of $ 10,000 and $ 19,000 , respectively.

In the prior year, components of our lease expense for the three months and six months ended June 30, 2024, include facility related operating lease costs of $ 207,000 and $ 415,000 , respectively, and short-term lease costs of $ 9,000 and $ 19,000 , respectively.

There were no new operating leases during the six months ended June 30, 2025.

The Redmond, Washington headquarters facility lease runs to October 31, 2029, at approximately 20,460 square feet.

1 unchanged sentence

The lease for the facility located near Munich, Germany runs to August 2027, at approximately 4,895 square feet.

The following table presents supplemental balance sheet information related to leases as of March 31, 2025 and December 31, 2024:

The following table presents supplemental balance sheet information related to leases as of June 30, 2025, and December 31, 2024:

June 30, 2025

December 31, 2024

(in thousands)

2 unchanged sentences

Lease liability-long term (Operating lease liabilities)

At March 31, 2025, the weighted average remaining lease term is 3.9 and the weighted average discount rate used is 5 %.

At June 30, 2025, the weighted average remaining lease term is 3.7 years and the weighted average discount rate used is 5 %.

NOTE 6– OTHER COMMITMENTS

2 unchanged sentences

Most arrangements are cancelable without a significant penalty, and with short notice, typically less than 90 days.

As of March 31, 2025, we had four contracts with a commitment of approximately $ 469,000 to be paid within one year and $ 1,473,000 to be paid beyond one year.

As of June 30, 2025, we had confirmed contracts with a commitment of approximately $ 782,000 to be paid within one year and $ 480,000 to be paid beyond one year.

NOTE 7 – CONTINGENCIES

As of March 31, 2025, we were not a party to any legal proceedings or aware of any indemnification agreement claims, the adverse outcome of which in management’s opinion, individually or in aggregate, would have a material adverse effect on our results of operations or financial position.

As of June 30, 2025, we were not a party to any legal proceedings or aware of any indemnification agreement claims, the adverse outcome of which in management’s opinion, individually or in aggregate, would have a material adverse effect on our results of operations or financial position.

NOTE 8 – INCOME TAXES

Income tax expense for the first quarter of both 2025 and 2024, primarily related to foreign and minor state taxes.

Income tax expense for the second quarter of 2025 and 2024 primarily related to foreign and minor state taxes.

The effective tax rate differed from the statutory tax rate primarily due to the effect of valuation allowance, as well as foreign taxes.

We have a valuation allowance of $ 8.9 million as of both March 31, 2025 and 2024.

As of March 31, for both 2025 and 2024, our deferred tax assets and valuation allowance have been reduced by approximately $ 444,000 and $ 434,000 , respectively.

We have a valuation allowance of $ 9.1 million as of June 30, 2025.

As of June 30, 2025 and 2024, our deferred tax assets and valuation allowance have been reduced by approximately $ 447,000 and $ 437,000 , respectively.

Given the uncertainty created by our loss history, as well as the volatile and uncertain economic outlook for our industry and capital spending, we have limited the recognition of net deferred tax assets including our net operating losses and credit carryforwards and continue to maintain a valuation allowance for the full amount of the net deferred tax asset balance.

5 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands except per share data)

Numerator for basic and diluted earnings (loss) per share:

Numerator for basic and diluted

earnings (loss) per share:

Net income (loss)

Denominator for basic earnings (loss) per share:

Denominator for basic

earnings (loss) per share:

Weighted-average shares

Employee stock options and awards

Denominator for diluted earnings (loss) per share:

Adjusted weighted-average shares & assumed conversions of stock options

Basic and diluted earnings (loss) per share:

Denominator for diluted

earnings (loss) per share:

Adjusted weighted-average shares &

assumed conversions of stock options

Basic and diluted

earnings (loss) per share:

Basic earnings (loss) per share

2 unchanged sentences

Three Months Ended

Six Months Ended

Restricted Stock Units

1 unchanged sentence

Stock Options

Options to purchase 200,000 and 12,500 shares were outstanding as of March 31, 2025 and 2024, respectively, but were excluded from the computation of diluted earnings per share for the periods then ended because the options were anti-dilutive.

Options to purchase 200,000 and 12,500 shares were outstanding as of June 30, 2025 and 2024, respectively, but were excluded from the computation of diluted earnings per share for the periods then ended because the options were anti-dilutive.

NOTE 10 – SHARE-BASED COMPENSATION

1 unchanged sentence

For these awards we have recognized compensation expense using a straight-line amortization method and reduced for estimated forfeitures.

First quarter 2025 shared-based compensation of $ 174,000 , was $ 107,000 lower compared to the prior year period due to staff reductions which occurred in the fourth quarter of 2024.

The impact on our results of operations of recording share-based compensation, net of forfeitures, for the three months ended March 31, 2025 and 2024 were as follows:

Second quarter 2025 shared-based compensation of $ 250,000 , was $ 132,000 lower compared to the prior year period due to staff reductions which occurred in the fourth quarter of 2024.

The impact on our results of operations of recording share-based compensation, net of forfeitures, for the three and six months ended June 30, 2025 and 2024, were as follows:

Three Months Ended

Six Months Ended

(in thousands)

3 unchanged sentences

Total share-based compensation

Equity awards granted during the three months ended March 31, 2025 and 2024 were as follows:

Equity awards granted during the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended

Six Months Ended

Restricted Stock Units

Performance Stock Units

Employee RSUs typically vest annually over three or four years and employee Non-Qualified stock options typically vest quarterly over four years and have a six-year exercise period.

2 unchanged sentences

For 2024 awards, the performance metrics included revenue growth, EBITDA and project objective targets over the three-year period ending December 31, 2026.

The remaining unamortized expected future equity compensation expense and remaining amortization period associated with award grants of RSUs, PSUs and unvested options at March 31, 2025 and 2024 are:

There have been no Performance Stock awards granted in 2025.

The remaining unamortized expected future equity compensation expense and remaining amortization period associated with award grants of RSUs, PSUs and unvested options at June 30, 2025 and 2024 are:

Unamortized future equity compensation expense (in thousands)

12 unchanged sentences

Three Months Ended

Six Months Ended

(in thousands)

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements