Company Summary: Data I/O Corporation

Business Overview

• Nature of Business:
  Data I/O designs, manufactures, and sells advanced electronic device programming and security deployment systems used in electronics manufacturing. Their solutions support secure IP protection, device provisioning, and security authentication in a variety of electronic products.

• Core Market:

  • Used in the programming of semiconductor devices such as flash memory, microcontrollers, secure elements, secure microcontrollers, and authentication chips.
  • Focused on high-growth sectors including automotive electronics, Internet of Things (IoT), industrial, consumer electronics, and mobile devices.

• Products & Services:

  • Automated programming systems (e.g., PSV family, PSV2800, PSV7000, PSV5000, PSV3500) with features like high throughput, multi-media support, and security deployment.
  • Manual programmers such as the LumenX and FlashPAK systems.
  • Security deployment system: SentriX®, a software license and pay-per-use solution to securely add keys, certificates, and security information into devices.

Customer & Market Data

• Major Customers (2024):

  • Approximately 197 customers worldwide.
  • Two customers account for about 34% of net sales each (totaling 68%).
  • Significant customer industries: automotive electronics, OEMs, EMS, IoT, industrial, consumer electronics, and wireless.

• Top Customers' Sales & Receivables (2024):

  • Sales from top two customers: ~34% of total sales.
  • Over 10% of accounts receivable are held by 2 customers, representing 43% of total receivables.

• Market Focus:

  • Automotive electronics (representing 59% of bookings in 2024, down from 63% in 2023).
  • Growing markets include IoT, industrial, and consumer electronics.

Employees & Operations

• Number of Employees:

  • Total: 95 employees (as of December 31, 2024).
  • Outside the U.S.: 45 employees.
  • Part-time employees: 7.

• Locations:

  • U.S. headquarters in Redmond, Washington (20,460 sq ft lease until October 2029).
  • Subsidiaries in Munich, Germany (lease until August 2027).
  • Subsidiaries in Shanghai, China (lease until October 2027).

Revenue & Financials

• 2024 Revenue:

  • Total net sales: $21.8 million (decreased from $28.1 million in 2023).
  • Main product sales:
    • Automated programming systems: $16.9 million (down 25.7%)
    • Non-automated programming systems: $4.8 million (down 8.2%)

• Sales Breakdown:

  • Equipment sales: 51% of total sales in 2024.
  • Adapter sales: 33%.
  • Software and maintenance: 16%.

• Profitability:

  • Operating loss in 2024: $3.0 million (vs. operating income of $0.45 million in 2023).
  • Gross margin: 53.3% in 2024 (down from 57.7% in 2023).
  • Net loss in 2024: $3.1 million (vs. net income of $0.49 million in 2023).

Key Executive & Governance

• CEO & President: William Wentworth (joined as CEO on October 1, 2024; President since September 2024).
• CFO: Gerald Y. Ng (joined in July 2023, CFO since August 16, 2023).
• Board: Includes the CEO and four independent directors.
• Employees: Many are highly skilled; relations are favorable, and no employees are in collective bargaining units.

Additional Notes

• Growth Drivers:
  • Increasing complexity, density, and security requirements in semiconductor devices.
  • Growing demand in automotive, IoT, and consumer electronics sectors.
• Supply Chain:
  • Manufacturing in the U.S. and China, with risks relating to geopolitical issues and supplier dependencies.
• Market & Competition:
  • Largest supplier in the programming systems market, competing primarily on price, with increasing importance of security solutions.
  • Customers include prominent companies like Borg Warner, Bosch, LG, Sony, Tesla, and others.
• Stock & Market Data:
  • Listed on NASDAQ under symbol DAIO.
  • As of March 18, 2025, approximately 350 shareholders of record.
  • Stock price: $2.77 (as of December 31, 2024).
  • No dividends paid; no share repurchase programs in 2024.