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SOCKET MOBILE, INC. (SCKT)·Q2 2025 Earnings Summary

Executive Summary

  • Socket Mobile’s Q2 2025 revenue declined 20% year over year to $4.04M, modestly up 2% sequentially; gross margin held at 49.9% while operating loss improved sequentially to $(0.68)M as OpEx fell to $2.70M .
  • Management flagged tariff concerns and slower run-rate activity as key headwinds driving reduced distributor purchases and lower bookings; they now expect to be EBITDA neutral rather than profitable in 2H 2025, effectively lowering outlook .
  • New industrial XtremeScan products showed initial traction (including POs from multiple Fortune 50 customers), but one large deployment was pushed to 2026, tempering near-term revenue visibility .
  • Liquidity improved with Q2-end cash at ~$2.6M aided by a $1.5M secured subordinated convertible note completed in May, though leverage via related-party notes increased; inventory management tightened amid softer demand .

What Went Well and What Went Wrong

  • What Went Well

    • Sequential stabilization with revenue up ~2% q/q and operating loss narrowing vs Q1, supported by expense discipline (OpEx $2.7M vs $2.9M in Q1) .
    • Early XtremeScan traction: “initial customers…gaining broader interest” and first deliveries reported as “flawless,” expanding addressable market into ruggedized industrial use cases .
    • Balance sheet flexibility: cash rose to ~$2.6M at 6/30/25, supported by $1.5M convertible note financing to bolster working capital .

  • What Went Wrong

    • Demand weakness: “weaker revenue trends…slower run rate” and “significantly reduced purchases” by distributors due to tariff concerns; bookings declined and shipments were impacted .
    • Outlook cut: management now expects to be “EBITDA neutral rather than profitable” in 2H 2025, implying lower near-term earnings power .
    • Large industrial deployment delay: a significant portion of a customer’s XtremeScan rollout was deferred to 2026, extending the timeline to monetization .

Financial Results

All figures GAAP.

MetricQ2 2024Q1 2025Q2 2025
Revenue ($M)$5.081 $3.966 $4.042
Gross Margin (%)50.9% 50.4% 49.9%
Total Operating Expenses ($M)$3.119 $2.892 $2.695
Operating Income (Loss) ($M)$(0.535) $(0.894) $(0.677)
Net Income (Loss) ($M)$(0.608) $(0.994) $(0.792)
Diluted EPS ($)$(0.08) $(0.13) $(0.10)
  • Management highlighted adjusted EBITDA loss of ~$0.10M in Q2 (vs loss of ~$0.48M in Q1), reflecting sequential improvement despite top-line softness .

KPIs and Balance Sheet (period-end):

KPIDec 31, 2024Mar 31, 2025Jun 30, 2025
Cash & Equivalents ($M)$2.492 $1.707 $2.605
Accounts Receivable ($M)$1.588 $2.061 $1.772
Inventory ($M)$4.942 $5.281 $4.844
Subordinated Convertible Notes – Related Party ($M)$3.818 $3.822 $5.076

Contextual updates:

  • $1.5M secured subordinated convertible note financing completed in May to support working capital .
  • Management cited reduced distributor purchases tied to tariff concerns and softer run-rate activity .

Estimates vs. Actuals:

  • S&P Global consensus estimates for Q2 2025 revenue and EPS were not available; no estimate counts were returned. Therefore, versus-estimate comparisons cannot be made for this quarter (consensus unavailable via S&P Global).

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
EBITDA2H 2025Profitable (management’s prior expectation)EBITDA neutralLowered
Revenue/BookingsRemainder of 2025Not previously quantifiedHeadwinds expected to persist; bookings/shipments pressured by tariffs and slower run-rateCautious tone maintained
OpExOngoing—Cost-saving measures implemented; OpEx reductions to align with revenueTightening costs

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q-2)Previous Mentions (Q1 2025, Q-1)Current Period (Q2 2025)Trend
Industrial expansion (XtremeScan)Launch progress; compatibility with iOS 18 and iPhone 16; building presence in ruggedized markets Began shipping XtremeScan; entering $27B handheld computing market Initial deliveries “flawless”; POs from multiple Fortune 50; one major rollout delayed to 2026 Positive product validation, elongated revenue timing
Demand/Run-rateQ3 2024 softness; rebuilding pipeline Lower-than-projected Q1 revenue; softer domestic/international demand Weaker run-rate; reduced distributor purchases; bookings declined Deteriorated in Q2
Tariffs/Supply chainNoted macro factors previously Monitoring tariff landscape and supply costs Tariff concerns explicitly reduced distributor purchases Headwind intensified
Cost disciplineOperating loss improvement in Q4 2024 OpEx steady; watchful spending OpEx reduced sequentially; adjusted EBITDA loss narrowed Tightening continues
Outlook/ProfitabilityImproved in Q4; no explicit profitability timeline No explicit guide; product ramp expected Guide cut to EBITDA neutral in 2H 2025 Outlook lowered
Apple ecosystem & developer toolsiOS 18 compatibility; developer portal “Alfred” launched iOS 18.3 devices and ecosystem advantages highlighted Maintaining investments in R&D and Apple-related opportunities Continued strategic focus

Management Commentary

  • “We continued to experience weaker revenue trends throughout Q2…concerns around potential tariffs led to significantly reduced purchases from our distributors…decline in bookings…impacted our gross shipments.”
  • “We now expect to be EBITDA neutral rather than profitable in the second half of 2025.”
  • “Despite the broader market challenges, our new XtremeScan products have been well received by initial customers and are gaining broader interest.”
  • “We did deliver our first XtremeScan products to a large industrial customer…deployment has been flawless…they have delayed a significant portion of the deployment to 2026.”
  • “Operating expenses for Q2 were $2.7 million…The reduction was primarily driven by the cost control measures…Adjusted EBITDA for Q2 was a loss of $100,000…a loss of $480,000 in Q1.”

Q&A Highlights

  • No analyst Q&A was recorded on the call; the operator indicated no questions in queue, and management concluded remarks without further discussion .

Estimates Context

  • S&P Global consensus was unavailable for Q2 2025 (no EPS or revenue consensus returned; no estimate counts available). As such, we cannot provide a vs-consensus comparison for the quarter (consensus unavailable via S&P Global).
  • Management’s reduced 2H 2025 outlook (EBITDA neutral vs prior expectation of profitability) suggests that, where estimates exist, they may need to adjust lower for the back half given ongoing demand and tariff-related headwinds .

Key Takeaways for Investors

  • Near-term demand headwinds persist, driven by tariff-related distributor caution and weaker run-rate activity; bookings/shipments were impacted in Q2, and management expects challenges to continue through 2025 .
  • Outlook reset: management now targets EBITDA neutrality in 2H 2025 rather than profitability, implying lowered near-term earnings expectations and a focus on cost control .
  • Sequential stabilization with OpEx reductions and improved adjusted EBITDA loss indicate operating discipline, partially offsetting revenue pressure .
  • Strategic pivot to industrial ruggedized markets (XtremeScan) is gaining initial traction—including POs from multiple Fortune 50 firms—but timelines are extended (notably a 2026 deployment delay) .
  • Liquidity bolstered by $1.5M secured subordinated convertible notes; however, related-party note balances increased, and prudent working capital management (inventory reduction) remains critical in a soft demand environment .
  • For trading, the narrative is dominated by tariff overhang and a lowered 2H EBITDA outlook; incremental positive catalysts likely hinge on visible XtremeScan wins moving from evaluation to deployment and any easing in tariff uncertainty .

Additional Primary Sources (Q2 2025 and Surrounding)

  • Q2 2025 8-K and press release with full financial tables and commentary ; duplicate PR distribution copy .
  • Q2 2025 earnings call transcript (prepared remarks and no Q&A) .
  • Financing update (June 2, 2025): $1.5M secured subordinated convertible notes .
  • Prior quarters for trend: Q1 2025 8-K/press with tables ; Q4 2024 and FY 2024 results ; Q3 2024 8-K (context) .