Brief Summary:
- The company’s top-line revenue predictions were exceeded, but profitability did not meet expectations.
- The earnings guidance provided by Lantronix for the upcoming fiscal year was likewise significantly lower than anticipated.
- The stock dropped due to the company’s disappointing earnings and expectations.
Lantronix (NASDAQ:LTRX)
Shares of software-as-a-service (SaaS) provider Lantronix (NASDAQ:LTRX) are down today after the firm reported results for the fiscal fourth quarter that ended June 30 that were lower than expected and offered an earnings forecast that was lower than the consensus estimate on Wall Street.
As of 11:29 a.m. Eastern Time, the SaaS stock had dropped by 19.2%.
What’s the Reason?
In comparison to last year’s period, Lantronix (NASDAQ:LTRX) sales skyrocketed by 79%, reaching $35.9 million. This surge in sales was sufficient to outpace the consensus expectation of $34 million in sales for the quarter among financial analysts.
According to a news statement issued by the firm, “although supply chain dynamics remain complex,” it is expected that Lantronix’s (NASDAQ:LTRX) fiscal 2023 sales will increase by 20%, equivalent to approximately $156 million at the midpoint of the projection range. That exceeds the consensus forecast of $151.3 million on Wall Street.
However, investors were unhappy as Lantronix’s (NASDAQ:LTRX) earnings did not meet the expectations set by Wall Street. This was even though the company’s top-line results and revenue guidance were positive.
The firm reported non-GAAP (adjusted) profits per share of $0.08 for the fourth quarter, an increase from earnings of $0.06 in the same period a year ago, but fell short of the average projection of $0.09 made by analysts.
The profits guidance provided by Lantronix (NASDAQ:LTRX) did not help matters very much either. The company’s management predicted that the non-GAAP earnings for the year 2023 would be in the range of $0.39 to $0.44, an increase of approximately 26% at the midpoint; however, this range was significantly lower than the average estimate of $0.50 that was provided by analysts.
What’s Next?
It has been simple for investors in the technology sector to look past a shortfall in results or guidance that is less than anticipated. But that is no longer the case.
When inflation remains at a level not seen in the last 40 years, and the Federal Reserve continues to raise interest rates, investors are paying close attention to the financial results of corporations.
Based on the performance of the Lantronix (NASDAQ:LTRX) stock so far today, it would appear that Lantronix is not growing its bottom line as quickly as its stockholders had anticipated it would.
Featured Image: Megapixl @Elnur
Author Shariq Khan 
