$DAIO came across my radar after they signed an acquisition that nearly doubles its revenue and could push them towards profitability.
The target is a semiconductor handling and packaging maker, ~$23M total consideration, accretive to earnings and cash flow, and it adds the at-test and on-site Programming-as-a-Service (PaaS) capability that turns one time equipment sales into recurring revenue. It also came alongside a $9M direct investment from a single institutional investor who becomes the largest shareholder, real outside validation of the strategic plan. Q2 is guided to $5.0-5.4M, implying roughly 50% sequential growth, which management says puts profitability within reach. Acquisition is targeted to close before end of Q3.
Data I/O is the leading global provider of data programming and security provisioning solutions for microcontrollers, security ICs and memory devices. The largest supplier in the programming systems market. It makes the machines that load firmware and cryptographic keys into chips before they go into a product, and in security ICs that has to be controlled and traceable. Founded in 1972, FIPS 140-2 Level 3 hardware, largest installed base of provisioning systems in the industry. Their LumenX2 platform programs eMMC, UFS and NOR flash, and UFS densities are climbing toward 1TB for automotive and on-device AI. More data to write at the provisioning step is more throughput they sell.
Customers are the people who actually build things.
In automotive there are players like $TSLA, Bosch and BYD. In industrial/medical/consumer there are $GOOG $HON $AMZN. In service providers players like $FLEX $JBL and Foxconn. Management flagged Edge AI infrastructure buildout as a key demand driver the past two quarters and going forward.
President and CEO William Wentworth presents at Planet MicroCap in Las Vegas on June 17 and takes questions after. He is expected to discuss the acquisition here so this will be interesting to listen to.
Disclaimer: I may hold positions, NFA
Finally, want to thank @KakashiCapital_ for putting this on my timeline. He did some good research on it.
