Data I/O Corp (NASDAQ:DAIO) Q3 2018 Earnings Conference Call Transcript

Nov 01, 2018 • 05:00 pm ET

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Data I/O Corp (NASDAQ:DAIO) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, good afternoon, thank you for standing by. Welcome to the Data I/O Third Quarter Financial Results Conference Call. At this time, all lines are in a listen-only mode. Later there will be an opportunity for your questions and instructions will be given at that time. (Operator Instructions). And as a reminder, today's conference is being recorded.

Now, I would like to turn the conference over to your host, Investor Relations, Mr. Jordan Darrow. Please go ahead.

Executive
Jordan Darrow

Thank you, and welcome to the Data I/O Corporation third quarter 2018 financial results conference call. With me today are Anthony Ambrose, President and CEO of Data I/O Corporation; and Joel Hatlen, Chief Financial and Operating Officer of Data I/O.

(Forward-Looking Cautionary Statements)

I would now like to turn the call over to Anthony Ambrose, President and CEO of Data I/O.

Executive
Anthony Ambrose

Thank you very much, Jordan, and I'd like to welcome everyone to the call. As usual, I'll comment on 2018's third quarter results and our view of the overall market, and then I'll turn it over to Joel Hatlen, our CFO, COO for more details on the financials.

With our third quarter results, we continue to produce solid financial and operational performance in fiscal 2018 following an unprecedented 2017. We are profitable in the quarter and our quarterly bookings exceeded revenue. With today's announcement, I'm reminded of our call that we had at the end of February 2016. At that time, we're coming off some cyclical weakness, we saw automotive growth accelerating at that point, it was only 39% of our revenue. We had some great product momentum, and we are investing heavily in the future in our R&D programs. And that time, we also announced a share buyback, then as now, we chose to demonstrate our confidence in the future of Data I/O.

So how is nearly three years ago relevant to today. The investments, we made in 2014 and 2015 ultimately paid off in the strong growth in revenue, market share and profitability, we've seen in the past couple of years. Today, we are continuing to invest in the technologies necessary to help our customers win in the automotive and IoT markets. On many calls we've discussed our thesis about automotive growth. Industry forecasts from leading automotive OEMs show about a 10% to 15% CAGR for semiconductor content in cars and a larger increase of 30% to 40% compounded annual growth rate in the total market for flash memory in cars.

The flash memory content growing to about one terabytes to two terabytes in the next several years. This content growth is being driven primarily by infotainment systems and other features in autonomous and connected cars. The thesis for Data I/O is that automotive is a source of our current and future growth and that thesis remains intact. Our strategy is unchanged, and remains that we will extend our lean in automotive with ever better products, better service, global support for the Tier 1 customers and their EMS and