Aug 26, 2026 earnings call — Unmanned systems growth and strategic updates
Revenue grew 8% year-over-year to $31.2 million, and non-GAAP EPS rose 300% to $0.04.
Revenue $0.0B (est $0.0B) · EPS $0.04 (est $0.03) · Next-quarter revenue outlook $0.0B–$0.0B
Key quotes
"Fiscal 2026 was the year our drone opportunity progressed from early validation to a meaningful growth engine for Lantronix."
"Moving to our critical infrastructure monitoring vertical, just over a month ago, we took another step forward in our platform strategy by acquiring Vecima Networks' Industrial IoT business, including its Nero Global Tracking platform for $11.7 million, which closed this month."
"We also repaid the remaining $8.7 million of debt and ended the fiscal year debt-free."
Analyst Q&A 6
Drone guide visibility and tariffs
Q (Austin Bohlig · Needham): The analyst asked how visible the new fiscal '27 drone guide is and whether it assumes current engagements. He also asked about the impact of the new drone tariffs announced recently.
A: Management said the guide is based on the visibility and engagements they have today and that they are working with over 30 vendors and have shipped to over a dozen. They expect the unmanned revenue to be "around the $25 million-plus range for fiscal '27". They view the tariff move as a structural tailwind because they are an NDAA and TAA compliant provider and do not expect a meaningful tariff impact on current component imports.
"Being an NDAA and TAA compliant solutions provider, we believe that this tariff policy could support additional design win opportunities for us." — Brent Stringham (CFO)
Ukraine exposure and gross margins
Q (Scott Buck · Titan Partners): The analyst asked what share of unmanned revenue is tied to Ukraine and how a ceasefire would affect that revenue. He also asked whether unmanned scaling will pressure gross margin or be offset by software and services.
A: They said fiscal '26 drone revenue was mainly U.S.-based and that for fiscal '27 the Ukraine portion is "not a meaningful portion" tied to the one customer discussed, so they do not see a measurable concern if a ceasefire happens. Management said module margins for unmanned are slightly below corporate average in the "low to mid-40s" and could create pressure, but growth in higher-margin ARR and other businesses should offset that and keep company-wide margins in a similar range.
"Fiscal '27, the Ukraine portion is not a meaningful portion specifically with the one customer that we talked about and we mentioned." — Saleel Awsare (CEO)
232 impact, Nero deal, SLC 9000 rollout
Q (Joshua Sullivan · JonesTrading): He asked if customer behavior changed since the 232 decision and whether customers reacted about NDAA/TAA. He also asked what markets the Nero acquisition enables and asked for details and TAM on the SLC 9000 rollout.
A: Management said a few customers quickly asked about NDAA and TAA certification and were happy to hear about manufacturing in Plymouth, Minnesota. On Nero, they said Nero has "125,000 tags" and brings software and fleet/restoration tracking that fits Lantronix hardware and should drive upsell; Nero gross margins are "60% plus" and the deal helped push software and services to "over 10%" ARR. For the SLC 9000, they said it is an out-of-band product, won a design with SambaNova, is already shipping, and they believe the TAM "could be over $500 million."
"For those on the call, it is our out-of-band product, and I mentioned in my prepared remarks that we won a design with a company called SambaNova Systems out of Silicon Valley." — Saleel Awsare (CEO)
Drone sales hires and memory costs
Q (Jaeson Schmidt · Lake Street): The analyst asked if Lantronix is expanding sales and infrastructure for the drone market. He also asked whether memory price increases will be passed through to customers.
A: They said they are expanding go-to-market: they held a drone summit and added resources in North America and Europe, plus advocacy in Washington, D.C. On memory, they are working closely with customers, will be careful on cost pass-through, but see most parties expecting those costs to be passed through.
"So from a cost pass-through standpoint, we're obviously trying to be careful, but working with customers on what's most reasonable for both parties." — Brent Stringham (CFO)
Cash, IoT growth, margins, M&A plans
Q (Christian Schwab · Craig-Hallum Capital Group): He asked whether the cash at quarter end reflected the recent tuck-in acquisition. He also asked how the remaining IoT systems business might grow next year, whether gross margins could improve, and if there are M&A targets.
A: Brent said the cash at June 30 did not include any disbursements for the acquisition because it had not closed by year-end. Saleel said they saw a 16% quarter-over-quarter growth and expect the company to grow double digit, are cautious in guidance, and that they have a list of companies they are looking at and are engaged with for tuck-in deals focused on unmanned systems and recurring revenue. Brent added there is opportunity to grow gross margin in fiscal '27 as higher-margin ARR and other businesses ramp, though unmanned module growth is a partial headwind.
"And we have a list of companies we are looking at and some even we are engaged with." — Saleel Awsare (CEO)
Europe margins and global drone markets
Q (Austin Moeller · Canaccord): First, how would gross margins in Eastern Europe compare for songs versus higher-build drone programs? Second, does the AVT Australia win open TAM in Asia Pacific and the Middle East for SOMs and tactical drones?
A: Brent said gross margins on potential European business could be "slightly more challenged" than the growth seen recently in the U.S. Saleel said the AVT (a CACI company) opportunity covers Asia Pacific, Europe, some America and some in the Middle East, and they are engaging customers in Japan and adding international go-to-market resources.
"So right now, our understanding is it's Asia Pacific, it's Europe, some America and some in the Middle East." — Saleel Awsare (CEO)