DATA I/O CORP Reports Wider Losses on Softer Revenue in Latest Interim Filing

Bottom line

- For the three months ended June 30, 2026 and the six months ended June 30, 2026, the registrant DATA I/O CORP (ticker DAIO) reported a loss on both the top and bottom lines, with all four earnings figures — diluted earnings per share and net loss attributable to parent on each window — deeper in the red than the prior-year comparable periods -$0.17 per diluted share, -$0.51 per diluted share, -$1,629,000, -$4,799,000 versus -$0.08 per diluted share, -$0.12 per diluted share, -$742,000, -$1,124,000. Each is a loss in both the current and prior window, so the year-over-year shift is a wider loss-to-loss transition rather than a swing into or out of profitability. - Revenues moved in the opposite direction, softening on both windows: current revenue is below the prior-year comparative for both the three-month and six-month periods $5,149,000 versus $5,948,000 and $8,399,000 versus $12,124,000 — a top-line decline measured on each window. - Operating income stayed negative on both windows. The six-month figure is a deeper operating loss year over year -$3,869,000 versus -$1,221,000, while the three-month figure is a smaller operating loss than the prior-year quarter -$724,000 versus -$844,000, leaving operating performance mixed across windows: worse on the year-to-date view but improving slightly on the quarter view. - Taken together, the headline story for this section is that revenue softness on both reporting windows coincided with wider bottom-line losses and a wider year-to-date operating loss, while the most recent quarter showed a narrower operating loss than a year earlier. This pattern shapes the rest of the analysis, including the revenue trend, expense structure, cash-flow bridge, and outlook discussion that follow in later sections.

- Management describes the operating environment for programming-system products as global, with customers concentrated across Asia, Europe, and the Americas and manufacturing located in Redmond, Washington, United States and Shanghai, China. - Management states that the interim statements are unaudited but reflect all normal recurring adjustments and accruals, that the December balance-sheet date caption comes from audited annual statements, and that condensed or omitted footnote detail follows general SEC interim-reporting conventions. - Management flags that interim operating results are not necessarily indicative of full-year outcomes.

- The combination of lower revenue and a wider year-to-date net loss suggests that, at minimum, the top-line decline was not absorbed by the cost structure on a six-month basis, while the narrower quarterly operating loss hints at a partial quarter-level offset that did not translate into a narrower six-month operating result.

- None identified in the filing evidence beyond what is restated above; in particular, the filing offers no peer or industry cross-check, and The filing evidence contains no peer or industry comparison..

UNKNOWN: - The filing evidence does not attribute this change to any single cause.. - The filing evidence does not disclose segment-level detail for this dimension..

Financial performance

YOY - For the three-month reporting period, Revenues decreased relative to the prior-year comparative, with the authorized transition positive to positive. Revenues for the quarter were $5,149,000 USD, against $5,948,000 USD in the prior-year quarter. The same downward direction is authorized for the six-month year-to-date window, where Revenues moved from $12,124,000 USD to $8,399,000 USD. - Operating Income (Loss) for the three-month period shows an authorized increase, with the current quarter a loss of -$724,000 USD and the prior-year quarter a loss of -$844,000 USD, framing the change as a loss remaining a loss but on different magnitudes. For the six-month year-to-date window, Operating Income (Loss) is authorized to decrease, with a current loss of -$3,869,000 USD versus a prior loss of -$1,221,000 USD. - Net Income (Loss) Attributable to Parent decreased in both windows. The three-month result is a current loss of -$1,629,000 USD against a prior-year loss of -$742,000 USD, and the six-month year-to-date result is a current loss of -$4,799,000 USD against a prior-year loss of -$1,124,000 USD. Both transitions are authorized as loss to loss. - Earnings Per Share, Diluted followed the same pattern, decreasing in both the quarter and the half year. The three-month figure is a current loss of -$0.17 per diluted share USD/SHARES against a prior-year loss of -$0.08 per diluted share USD/SHARES, and the six-month figure is a current loss of -$0.51 per diluted share USD/SHARES against a prior-year loss of -$0.12 per diluted share USD/SHARES. - The revenue line carries a footnote revision referenced in the cited note, which discloses a revision of prior-period disaggregated revenue amounts without affecting previously reported consolidated balance sheets, statements of operations, comprehensive income (loss), or statements of cash flows.

QOQ - Inside the half-year window, a quarter-versus-preceding-quarter directional read on Revenues, Operating Income, Net Income, or Earnings Per Share, Diluted is not part of the reported comparisons for this filing. The filing evidence does not attribute this change to any single cause. - The shape of the half year, on a revenue line that is positive in both periods and an operating result that is a loss in both periods, is consistent with a cost base running ahead of top-line movement during the quarter. The filing evidence does not attribute this change to any single cause.

GUIDANCE - Management's discussion within the filing does not include a numeric forward guidance range for revenue, operating result, or earnings per share. The cited Management's Discussion and Analysis section frames revenue recognition policy, multiple performance obligation allocation, and the revision of prior-period disaggregated revenue, rather than a forward outlook. The filing evidence does not attribute this change to any single cause. - Peer benchmarking against named industry participants is not part of the filing evidence. The filing evidence contains no peer or industry comparison. - Segment-level disclosure for revenue and operating performance is not provided in the filing evidence for this dimension. The filing evidence does not disclose segment-level detail for this dimension.

EXPECTATIONS - The reported set of facts supports a reading in which top-line softness coexists with a deeper operating and bottom-line loss on a year-over-year basis, while leaving the underlying drivers unstated. The six-month revenue decline on a positive base, paired with a deeper operating loss, frames the period as one in which revenue contraction coincided with a wider loss rather than a margin recovery. The filing evidence does not attribute this change to any single cause. - For a contrast on how a different issuer presents the same direction of revenue alongside a profitability swing, see MannKind Reports Higher Revenue Alongside Profit-to-Loss Swing in Latest Filing, which sits adjacent in topic but should not be treated as a peer benchmark for this filing.

Operating drivers and segments

The issuer reports as a single segment entity, with the sole objective of designing, manufacturing, and selling programming systems, as described in the cited note. Because only one segment is presented, there is no internal disaggregation into hardware, software, services, or geographic sub-units within the segment table. The measure of segment assets equals the consolidated total assets reported on the balance sheet, and the only segment-level revenue line mirrored in the segment table is net sales, which maps to the consolidated revenue line.

For the three-month reporting period, segment net sales were $5,149,000 USD, lower than the prior-year comparative of $5,948,000 USD, consistent with the authorized year-over-year direction of decrease. For the six-month year-to-date period, segment net sales were $8,399,000 USD, lower than the prior-year comparative of $12,124,000 USD, also consistent with the authorized direction of decrease. Both windows declined, and in both windows the authorized transition for the headline revenue line is a movement from a positive revenue base to a still-positive but lower revenue base.

Operating losses also moved within segment performance. The three-month operating loss was -$724,000 USD, a smaller loss than the prior-year comparative of -$844,000 USD, matching the authorized direction of increase for that window (loss to loss, narrower). The six-month operating loss was -$3,869,000 USD, deeper than the prior-year comparative of -$1,221,000 USD, matching the authorized direction of decrease for that window (loss to loss, wider). The two windows therefore diverge in operating-income direction, even though both revenue lines moved in the same authorized direction.

Management's narrative in the cited section frames the report as a single-segment programming-systems business with customers primarily in Asia, Europe and the Americas and manufacturing in Redmond, Washington, United States, and Shanghai, China. Management identifies the revenue recognition framework as the Accounting Standards Codification Topic on revenue from contracts with customers, with performance obligations allocated across hardware, service and support, and software maintenance, and with programming equipment treated as standard, factory-tested product. Management also references a board-adopted equity-incentive framework covering performance and time-based awards, with performance metrics anchored to revenue growth, EBITDA, and project objectives over the three-year period ending in late December, and discloses remaining unamortized equity compensation expense and amortization period at the period-end reporting dates. The cited note also disclosed a recent ASU on expense disaggregation that has been issued but not yet implemented, and the cited note confirms that prior-period disaggregated revenue information was revised.

Independent analysis versus management framing: the single-segment view means segment evidence cannot be used to refute or support a specific product-line or geographic driver story, because no such disaggregation is presented in this filing's segment table. The revenue decline in both windows is consistent with the authorized direction of decrease, and the operating-loss change in each window is consistent with the authorized direction (narrower for the quarter, wider for the half-year). The filing evidence does not attribute this change to any single cause. The filing evidence contains no peer or industry comparison.

For cross-filing context on a contrasting revenue and profit pattern, see REINSURANCE GROUP OF AMERICA INC Posts Higher Revenue and Net Income in period-ended-2026-06-30 Filing.

Cash flow and capital

The six-month year-to-date period captured by this period-ended-2026-06-30 filing on 10-Q (accession 0001654954-26-007670, CIK 0000351998, ticker DAIO) for DATA I/O CORP shows operating activities consuming cash in both comparative windows. Net Cash Provided by (Used in) Operating Activities was a use of cash for the current half-year and also a use of cash for the prior-year half-year, with the authorized comparison recording a decrease (that is, a larger cash outflow) versus the prior period. The absolute figures appear in -$5,166,000 and -$233,000.

Investing activities also remained a net use of cash in both the current and prior-year six-month periods. Net Cash Provided by (Used in) Investing Activities was negative for the current half-year and negative for the prior-year half-year, with the authorized comparison noting an increase (a smaller outflow, or a less negative result, relative to the prior period). The corresponding values are -$221,000 and -$347,000. Inside investing, capital spending in the form of Payments to Acquire Property, Plant, and Equipment was positive in both the current and prior-year six-month windows, and the authorized comparison records a decrease in those payments year over year, with the reported amounts in $229,000 and $347,000.

Financing activities produced the most notable directional shift. Net Cash Provided by (Used in) Financing Activities was positive for the current half-year but negative for the prior-year half-year, and the authorized comparison registers an increase, signifying a swing from a cash outflow to a cash inflow. The reported values are $8,211,000 and -$95,000. The MD&A discussion in Section 1 and the accompanying explanatory notes provide the framing for those movements.

On the balance sheet, two working-capital lines are highlighted at the the balance sheet date of June 30, 2026 date. Accounts Payable, Current stood at $1,350,000, and Accounts Receivable, after Allowance for Credit Loss, Current stood at $4,302,000. The filing does not separately quantify net working capital, the cash position, or total liquidity in the FACT catalog available to this section, and the filing evidence provides no peer or industry reference points against which to benchmark those working-capital balances. The filing evidence contains no peer or industry comparison.

Capital allocation during the period appears centered on ordinary investing outlays rather than on equity returns, with the drop in capital expenditures noted above and a financing-side swing that moved from a net outflow to a net inflow. The filing references ongoing tax-law developments, including the One Big Beautiful Bill Act signed into law on July (omitted) of the current year, and notes that the Company is evaluating the impact of provisions taking effect in future periods; it also discusses the adoption of a new expense-disaggregation ASU effective for annual reporting periods beginning January (omitted), per the cited note.

Finally, the filing clarifies that a prior-period revenue disaggregation revision recorded in Note 12 did not affect the consolidated balance sheets, statements of operations, comprehensive income (loss), or statements of cash flows. As a result, the cash-flow movements summarized above reflect continuing operations rather than the correction described in the cited note. The filing evidence does not attribute this change to any single cause.

Peer and historical context

- The only historical contrast this draft can responsibly draw is internal, comparing the current interim and quarterly results with the prior-year comparative periods in this same filing; any read-across to external peers would rest on data that this filing does not contain. - Looking at the half-year window, revenue moved lower year over year, while operating income, net income, and cash flow from operations were each more negative than the prior-year six-month period; on the three-month window, revenue was lower, net income was more negative, but operating income swung from a loss in the prior-year quarter to a less-negative loss this quarter. - Cash flow from operations in the prior-year six-month period was a use of cash, and the current six-month period is also a use of cash that is larger in magnitude; the directional change is therefore one of a wider operating outflow, not a swing from inflow to outflow.

- The directional authorization for investing and financing flows shows movement in opposite directions to operating flow over the half-year window — financing swung from a use to a source while the operating outflow widened — so any narrative that reads the period as a uniform deterioration in cash generation would be at odds with the authorized directional read. - Within the quarter itself, operating income narrowing its loss while revenue fell and net income widened its loss is a mixed pattern: gross-margin and overhead dynamics in the quarter cannot be inferred from the top-line decline alone.

- Against the prior-year six-month window, DATA I/O CORP (DAIO) reports revenue of $8,399,000 USD for the six months ended June 30, 2026, down from $12,124,000 USD in the six months ended June 30, 2025; operating income was -$3,869,000 USD, a wider loss than the -$1,221,000 USD reported in the prior year; net income attributable to parent was -$4,799,000 USD, a larger loss than the -$1,124,000 USD loss a year earlier; and cash used in operations was -$5,166,000 USD, a deeper outflow than the -$233,000 USD used in the prior-year six-month period. The authorized direction for each of these four lines over the half-year window is decrease, and in every case the current period sits below the prior-year comparative in either revenue (positive figures, lower) or loss magnitude (negative figures, wider). - On the three-month view, the three months ended June 30, 2026 revenue of $5,149,000 USD trails the $5,948,000 USD recorded in the three months ended June 30, 2025, and net income attributable to parent of -$1,629,000 USD is a wider loss than the -$742,000 USD loss reported a year earlier — both moving in the authorized decreasing direction. Operating income for the quarter, at -$724,000 USD, is still a loss but is a narrower loss than the -$844,000 USD loss reported in the three months ended June 30, 2025; that is the authorized direction of decrease in loss magnitude over the quarter, while net income moved in the opposite authorized direction, leaving the quarter's profitability picture internally inconsistent and not reducible to a single driver. The filing evidence does not attribute this change to any single cause.. - For external benchmarking, the filing is silent: no peer set, no industry index, and no same-sector revenue or margin comparison is presented in the cited items Item 1, Item 1A, Item 2, Item 3, Item 4, Item 5, Item 6, Section 1, or in Note 12. The filing evidence contains no peer or industry comparison.; any read-across to comparable semiconductor-programming or capital-equipment issuers is therefore outside this evidence base and is left to the reader's separate diligence.

Scenario analysis

- The current picture sketched by this 10-Q for period-ended-2026-06-30 shows revenues still positive on both reporting windows, but trending lower than the prior-year comparison, paired with a wider net loss attributable to parent on both the three-month and six-month year-to-date windows. The base case is that this pattern holds in the near term: revenue softness persists, the bottom line stays in the red, and the company funds the shortfall primarily through financing activity rather than operations, consistent with the cited convertible-note and warrant disclosure in the cited note.

- Revenues re-accelerate back toward the prior-year level on the back of stronger demand for programming systems from the Redmond, Shanghai, and Munich operations that management describes in the cited segment note. - Cost discipline narrows the operating loss and pulls net loss attributable to parent back closer to break-even, without requiring another equity- or debt-linked financing event. - The convertible-note overhang referenced in the cited note is absorbed gradually through operating cash generation rather than dilution, and the anti-dilutive share count tapers as the company returns to profitability. The MannKind filing profile — higher revenue alongside a profit-to-loss swing — illustrates the kind of revenue-led inflection the upside case would mirror here.

- Revenue compression deepens versus the prior year, extending the decline already visible on both the quarter and the half-year windows. - The net loss attributable to parent widens further from the loss already booked in the current periods, and operating cash use intensifies, forcing heavier reliance on the financing line and on the convertible-note and warrant instruments described in the cited note. - Working-capital strain and covenant pressure rise, raising the probability of additional dilutive issuance before the share-based compensation amortization tail referenced in the cited note runs off.

<prose> The base case treats the current print as the anchor: revenues are still being recognized across the quarter and the six-month year-to-date windows, but the year-over-year direction on the top line is negative on both, while the bottom line remains a loss in both the three-month and the six-month comparisons and the loss is deeper than the prior year. The filing evidence does not attribute this change to any single cause. Operating cash use is also worse than the prior year on the six-month view, while financing activity has flipped to a positive inflow versus a prior-year outflow, which is consistent with the convertible-note and warrant structure disclosed in the cited note and with management's stated reliance on those instruments to bridge the funding gap.

The upside case requires two things to happen together: a recovery in revenue toward the prior-year base, and a measurable narrowing of the operating loss. Because the company operates as a single programming-systems segment spread across three locations, any revenue re-acceleration would need to flow through that integrated structure rather than a separate business line. The cited share-based compensation note, which sets out an unamortized future equity compensation balance and a remaining weighted-average amortization period, suggests that equity comp will continue to weigh on the reported loss even if operating performance improves, so the path back to break-even is not automatic.

The downside case layers further revenue compression on top of an already wider loss and worse operating cash use. In that path, the company leans harder on financing, which under the convertible-note and warrant terms disclosed in the cited note translates into a larger pool of potential common shares that may ultimately dilute existing holders if and when those instruments convert or are exercised. Because the cited note frames those potential shares as anti-dilutive at present, the dilution risk is conditional on the equity value of the company rising enough to make them dilutive, which is itself a function of the scenario that materializes. The cited revision note on prior-period disaggregated revenue is a reminder that reported revenue categories can themselves be redefined, so any base, upside, or downside comparison should be read against the current disaggregation rather than the original presentation. The filing evidence contains no peer or industry comparison.

Across all three scenarios the qualitative shape of the income statement is the same — positive revenue, negative bottom line — and the swing factor is the depth of the loss and the durability of the top line, not the sign of either line. Investors weighing the scenarios should focus on the trajectory of revenue relative to the prior year and on the rate at which the loss widens or narrows, since those are the dimensions the filing speaks to directly; deeper causal attribution, peer benchmarking, and forward guidance are not contained in the filing evidence for this period.

Risks and what to watch

- Persistent loss profile on both windows: The reporting entity, DATA I/O CORP (ticker DAIO), filed an 10-Q for period-ended-2026-06-30 (accession 0001654954-26-007670, CIK 0000351998) showing that Net Income (Loss) Attributable to Parent remained negative both for the three-month reporting period, where the current loss deepened relative to the prior-year comparable loss -$742,000, and for the six-month year-to-date period, where the current loss also deepened relative to the prior-year comparable loss -$1,124,000.

The current three-month result is captured in -$1,629,000 and the current six-month result in -$4,799,000. Two consecutive widening losses are the headline risk and the principal reason a turnaround thesis is not yet supported by the filing. - Top-line softening: Revenues declined year over year on both windows.

The three-month reporting period revenue of $5,149,000 is lower than the prior-year comparable revenue $5,948,000, and the six-month year-to-date revenue of $8,399,000 is lower than the prior-year comparable revenue $12,124,000. Falling revenue alongside widening losses suggests operating leverage is working against the company, but The filing evidence does not attribute this change to any single cause.. - Counter-evidence readers should weigh: The segment disclosure in the cited note states that DATA I/O CORP operates as a single segment entity focused on programming systems, which means geographic or product-mix diversification cannot offset weakness in any one region.

At the same time, the per-share note confirms that conversion of the convertible notes and exercise of the related warrants were excluded from diluted EPS as anti-dilutive for the three and six months, indicating potential dilution overhang remains even as losses deepen. The filing evidence does not attribute this change to any single cause. for the revenue decline.

- Unknowns not resolvable from the filing: No peer comparison, margin walk, backlog figure, customer concentration, or end-market split is provided in the filing evidence, so any cross-company benchmarking would be unsupported. The filing evidence contains no peer or industry comparison.. The revision of prior-period disaggregated revenue referenced in the cited note (see Note 12) is flagged but not quantified in the available text.

Legal proceedings status under Item 1 and risk-factor updates under Item 1A are present in the document outline but their substantive content is not reproduced in the quoted narrative. - Metrics to watch in the next period: First, whether the year-over-year decline in three-month revenue reverses or narrows, since revenue is the leading indicator for both operating leverage and any path back to break-even. Second, whether Net Income (Loss) Attributable to Parent on the three-month window stabilizes rather than continuing to deepen relative to the prior-year comparable loss, given that two consecutive widening losses have now been recorded.

Third, cash usage from operations and the financing-activity swing already visible on a year-over-year basis, since sustained losses combined with capital-raising reliance heighten dilution and going-concern sensitivity. Fourth, any update to anti-dilutive share counts, because a sustained share-count build-up would amplify per-share loss impact even if absolute losses narrow. For perspective on how other issuers have handled similar revenue-and-profitability dynamics, see MannKind Reports Higher Revenue Alongside Profit-to-Loss Swing in Filing.