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1. Company Snapshot

1.a. Company Description

Data I/O Corporation engages in the design, manufacture, and sale of programming and security deployment systems and services for electronic device manufacturers in the United States, Europe, and internationally.The company's programming system products are used to program integrated circuits (ICs) with the specific data necessary for the ICs. It offers PSV handlers offline automated programming systems; SentriX, a security deployment system; RoadRunner and RoadRunner3 series handlers, an in-line automated programming systems; LumenX Programmer; and non-automated FlashPAK III programming systems.The company also provides hardware support, system installation and repair, and device programming services.


It markets and sells its products to original equipment manufacturers in automotive and consumer electronics, Internet of Things and their programming center partners, and electronic manufacturing service contract manufacturers through direct sales, and indirect sales representatives and distributors.Data I/O Corporation was incorporated in 1969 and is headquartered in Redmond, Washington.

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1.b. Last Insights on DAIO

Data I/O Corporation's recent performance was negatively driven by a lower-than-expected Q4 2024 earnings release. The company reported a net loss of $0.02 per share, missing analyst estimates of $0.06. Additionally, revenue of $13.2 million fell short of expectations, citing lower sales in the Asia Pacific region. The company's president, Bill Wentworth, attributed the decline to a slowdown in demand due to the industry's transition to new technologies. The disappointing results led to a decrease in the company's forward guidance, which may indicate ongoing challenges in the near term.

1.c. Company Highlights

2. Data I/O's Q3 2025 Earnings: A Mixed Bag

Data I/O reported net sales of $5.4 million in Q3 2025, down from $5.9 million in Q2 '25 and flat from the prior year period. The gross margin was 50.7% in Q3 2025, up from 49.8% in Q2 '25, but down from 53.9% in the prior year period. The company's EPS came in at -$0.15, wider than the estimated loss of -$0.095. The revenue decline was partly due to a high concentration in the automotive business, which has been a challenge for the company. As Charles DiBona mentioned, "We expect to achieve higher sustainable gross margins in the longer term through pricing modifications, labor and costing efficiencies, supply chain optimization, and direct sales engagements."

Publication Date: Nov -12

📋 Highlights
  • Q3 2025 Net Sales: Declined to $5.4M compared to $5.9M in Q2 '25, but remained flat YoY.
  • Gross Margin Improvement: Rose to 50.7% in Q3 '25 from 49.8% in Q2 '25, though below 53.9% in Q3 '24.
  • Product Roadmap: Focus on 7000 system refresh targeting microcontrollers and PSV line expansion, with 1TB flash adoption expected in 2027.
  • Acquisition Targets: Identified 25 potential acquisition targets to expand services and embed technology in third-party solutions.
  • Services Margins: Projected to sustain 52-58% margins, with consumables offering higher margins (60-70%) than systems.

Operational Highlights

The company has been investing in new products, including the reskinned LumenX, and is starting to drive some ramp in its manual systems. Data I/O is also starting the refresh cycle of its automation and is focusing on providing and generating newer handler technology that is faster, more functional, and economical. The company's new platform is expected to last for 10 years and will be designed for embedded opportunities with large test companies.

Growth Prospects

Data I/O is expecting growth through the introduction of new technologies, partnerships, and services offerings. The company is targeting specific gaps in the industry, particularly in the services space for OEMs and services providers. The introduction of new technologies like 1 terabyte flash in 2027 is expected to drive demand for the company's solutions. Analysts estimate next year's revenue growth at -0.9%, indicating a continued decline.

Valuation

With a P/S Ratio of 1.17 and an EV/EBITDA of -8.36, the stock appears to be reasonably valued. However, the ROE and ROIC are both negative, indicating that the company is struggling to generate returns on its investments. The Net Debt / EBITDA ratio is 3.32, which may be a concern. Overall, the valuation metrics suggest that the market is pricing in some level of distress, but the company's efforts to refresh its product portfolio and expand its services capabilities could potentially lead to improved financial performance in the future.

3. NewsRoom

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Data I/O Announces Strengthening of Board of Directors

Dec -04

Source: businesswire.com

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Data I/O (NASDAQ:DAIO) & Infinite Graphi (OTCMKTS:INFG) Head-To-Head Contrast

Oct -31

Source: defenseworld.net

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Data I/O Corporation (DAIO) Q3 2025 Earnings Call Transcript

Oct -31

Source: seekingalpha.com

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Data I/O Reports Third Quarter 2025 Results

Oct -30

Source: businesswire.com

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Data I/O Adds Step-by-Step Excellence Award to Growing List of Industry Recognition for LumenX-M8

Oct -29

Source: businesswire.com

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Data I/O to Unveil Reimagined Preprogramming Solutions at productronica 2025

Oct -23

Source: businesswire.com

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Data I/O to Announce Third Quarter 2025 Financial Results on October 30, 2025

Oct -16

Source: newsfilecorp.com

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Data I/O Wins 2025 Mexico Technology Award for Reimagined LumenX-M8 Manual Programming Solution

Sep -18

Source: newsfilecorp.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.32%)

6. Segments

Automated Programming Systems

Expected Growth: 6.5%

Data I/O Corporation's Automated Programming Systems growth is driven by increasing demand for IoT devices, autonomous vehicles, and industrial automation, which rely on high-volume, high-reliability programming solutions. Additionally, the trend towards Industry 4.0 and smart manufacturing fuels growth, as companies seek to optimize production efficiency and reduce costs.

Non-automated Programming Systems

Expected Growth: 5.5%

The 5.5% growth of Non-automated Programming Systems from Data I/O Corporation is driven by increasing demand for secure and reliable programming solutions, growing adoption of IoT devices, and rising need for efficient data management. Additionally, advancements in programming technology and strategic partnerships are contributing to the segment's growth.

7. Detailed Products

PSV7000

A high-speed, automated programming system for flash memory devices

FLX508

A high-speed, automated programming system for microcontrollers and flash memory devices

LumenX

A programming and testing system for automotive electronics

Sentinel-CSP

A secure provisioning and authentication system for IoT devices

TaskLink

A task management and automation system for programming and testing

ConneX

A software platform for secure provisioning and management of IoT devices

8. Data I/O Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Data I/O Corporation faces moderate threat from substitutes due to the availability of alternative data storage solutions.

Bargaining Power Of Customers

Data I/O Corporation has a diverse customer base, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Data I/O Corporation relies on a few key suppliers for components, giving them moderate bargaining power.

Threat Of New Entrants

The data storage industry is highly competitive, and new entrants can easily disrupt the market with innovative solutions.

Intensity Of Rivalry

The data storage industry is highly competitive, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 6.87%
Debt Cost 3.95%
Equity Weight 93.13%
Equity Cost 9.25%
WACC 8.88%
Leverage 7.38%

11. Quality Control: Data I/O Corporation passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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FARO Technologies

A-Score: 4.8/10

Value: 3.9

Growth: 4.8

Quality: 5.1

Yield: 0.0

Momentum: 10.0

Volatility: 5.0

1-Year Total Return ->

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Data I/O

A-Score: 4.6/10

Value: 8.4

Growth: 1.4

Quality: 4.7

Yield: 0.0

Momentum: 8.0

Volatility: 5.0

1-Year Total Return ->

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Wrap Tech

A-Score: 4.2/10

Value: 6.0

Growth: 5.1

Quality: 4.2

Yield: 0.0

Momentum: 9.0

Volatility: 1.0

1-Year Total Return ->

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LightPath Technologies

A-Score: 3.6/10

Value: 6.0

Growth: 0.6

Quality: 3.9

Yield: 0.0

Momentum: 10.0

Volatility: 1.0

1-Year Total Return ->

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LGL Group

A-Score: 3.4/10

Value: 3.8

Growth: 2.3

Quality: 6.1

Yield: 0.0

Momentum: 3.5

Volatility: 4.7

1-Year Total Return ->

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Rogers

A-Score: 3.2/10

Value: 6.5

Growth: 2.7

Quality: 3.3

Yield: 0.0

Momentum: 1.0

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.97$

Current Price

2.97$

Potential

-0.00%

Expected Cash-Flows