Data I/O Corporation

Good afternoon, everyone, and welcome to Data.io's fourth quarter 2025 Financial Results Conference Call. Please note, today's event is being recorded. At this time, I'd like to turn the conference over to Mr. Jordan Darrow, Investor Relations. Please go ahead, sir.

Thank you, Operator, and welcome to the Data.io Corporation fourth quarter 2025 Financial Results Conference Call. With me today are the company's President and CEO, Bill Wentworth, and Chief Financial Officer, Charlie DeBona. Before we begin, I'd like to remind you that statements made in this conference call concerning future events, results from operations, financial position, markets, economic conditions, supply chain expectations, estimated impact of tax and other regulatory reform, product releases, new industry participants and any other statements that may be construed as a prediction of future performance or events are forward-looking statements which involve known and unknown risks, uncertainties, and other factors which may cause actual results to differ materially from those expressed or implied in such statements. These factors also include uncertainties as to the impact of global and geopolitical events, international tariff and trade regulations, order level of the company, and the activity level of the automotive and semiconductor industry overall, ability to record revenues based on the timing of product deliveries and installations, market acceptance of new products, changes in economic conditions and market demand, part shortages, pricing, and other activities by competitors, and other risks, including those described from time to time in the company's filings on Form 10-K and 10-Q with the Securities Exchange Commission, in our press releases, and other communications. The company may also reference GAAP and non-GAAP financial performance measures, including one-time items, which are intended to provide listeners with a means to better understand the company's performance. is referred to reconciliations in our earnings press release issued today after market close. Finally, the accuracy and completeness of all discussions on this call, including forward-looking statements, should not be unduly relied upon. Data.io was under no duty to update any forward-looking statements. And now I'll turn the call over to Bill Wehrmuth, President and CEO of Data.io.

Thank you, Jordan, very much. Thank you for everybody dialing in to the call. And I want to start off, obviously this is a Q4 earnings call, but Obviously, there's a lot that transpired over 2025. It was certainly a little more difficult of a quarter than we planned. You know, there were a lot of things and headwinds that still continue with tariffs. But I want to assure everyone that that did not waver us from the continuation of our transformation. You have to get through these tough times, and you can't stop the transformation that this company needed. You know, DataRail had some transformation work that was fairly heavy. We did invest a lot of money into the business license, specifically our platform. And I'm pretty proud of the team, very proud of the team, and how we ended the year and how we've teed up this year, which I'll talk a little bit about shortly. The setup. Our mission throughout 25 was to transform Data.io for long-term growth. That plan proving to be approximately one year ahead of schedule. I've been through personally quite a few transformations in my own business and with other companies, so this is something I'm fairly good at measuring. I'm very confident that we are ahead of schedule. There are things that could even speed that up through our 26. We executed against six strategic priorities, modernizing the go-to-market, which you'll hear about a little bit later, investing in our core platform. That was number one. Then we started that early in 25. strengthening customer relationships. We have really, you know, got out in front of customers. Myself personally probably really extended more of our employees into talking customers, which is so important in order for transformation to really occur because our team needs to hear from all of our customers and suppliers in order for those transformations to really take hold and for everybody to get energized around those. Optimizing business operations, IT infrastructure. You know, we went through a fairly sizable cyber attack. We made it through that. I felt extremely well. We were up and running within 11 working days. So we found out a lot about our infrastructure, too, and some of those things that we needed to button up. And that also continues as part of the transformation. We've made great strides there. Moving to the cloud, you know, that offers obviously additional security. Getting things off-prem into the cloud. Moving data into more secure applications that are also in the cloud. And, again, that continues. Improving operational processes and deploying AI company-wide. And you'll definitely hear more about that later in this conversation. Over the past 18 months, we have made deliberate changes to the board and executive suite to ensure that we have the right team in place. Boards, you know, we've had a board member and the executive team obviously has been, you know, you have some pivots here and there. I think we for sure have the right team on the field to execute the plan this year and return data out to revenue growth and cash flow neutral deposit throughout the year. Again, transformations take time. And I've been through these and they're not easy. I can tell you that the team has put in a ton of time. They've really stepped up and really have positioned DataRail for a great 2026. Our new direction, we're expanding our addressable market. DataRail is shifting from our traditional programming CapEx market to servicing a broader data provisioning market, a significantly larger opportunity for the company. We're leveraging our platform to reach into two adjacent markets, programming services and programming attests. with activity building for both. Yesterday, if you've seen the press release with IAR, this is one of the what we feel is going to be a significant opportunity this year and going forward. I've been a big believer in partnerships ever since I've been in the business and been in this business in particular. It's really important. We're a small company. You can't just go it alone. Being able to forge a relationship and a really strong collaboration with IR really combines their security expertise with our provisioning expertise to create a very comprehensive device support model for security provisioning in the industry. They have a significant ALGO library aligned with our ALGO library. We feel this solution is frictionless, fairly easy, and I won't get into the details of how complicated security provisioning can be, but it's very difficult. We presented at a few of their conferences. It's gone really well, and we have business opportunities that we're now talking through with them and our collective customers. I would say, you know, the interesting opportunity I've had from shareholders and other meetings and podcasts, conversations around, well, hey, how does AI help Data.io? Well, you know, I would say during the year, and you've heard me make this comment many times, it doesn't really help us now. That has changed. If you remember back in the mid-'90s, the Internet boom, and obviously that went through its change, but it continued even through that pause, and it continued to grow our industry. AI with the build-out with the hypervisors, that continues and will continue. But what it's doing is these AI models are starting to really gain traction, and I'm sure we all see it in the news. What this does is now create the need for the build-out of the edge AI, which is the edge of the network. You can't have autonomous cars and robotics and, you know, IoT devices that are fairly, you know, have a high level of technical capability without expanding the edge of the network. It's just not possible. We have had conversations with new customers this year already, which was not part of our revenue plan coming into the year, of significant build-outs around this edge AI. This is something that, look, I've been in the technology industry for almost 40 years, and this build-out is something that I think is going to dwarf what the internet build-out was back in the late 90s. And I don't see this pausing, because AI is changing things so fast. There's just, to keep up with it, I can see that edge of the network continuing to grow. So we're very excited about the setup, the tailwinds, the new drive and demand for semiconductors as we see things start to pick up across the board. I expect this to be a multi-year growth cycle and new revenue opportunities for Data.io. New and existing customers are confirming that Edge AI build-ups are real. Early customer alignment and interest validates our strategy. and the framework for the company. As we enter 2026, we are poised to deliver organic revenue growth this year with very encouraging customer activity in Q4 and into 2026. And now I'd like to hand the rest of the conversation to Charlie DeBoer, our CFO.