$40M deal with Italy’s Gridspertise marks record contract for Lantronix

$40M Deal Inked With Gridspertise of Italy

Computer networking products maker Lantronix Inc. in Irvine says it’s received the largest contract in the company’s history and expects a major revenue impact from the deal starting in July.

The company (Nasdaq: LTRX) said Jan. 25 it entered into a $40 million contract to deliver “quantum edge units” to an existing customer, Gridspertise of Italy.

The units it is supplying reduce the cost of, and add artificial intelligence to, electrical grids.

Gridspertise, owned by a subsidiary of Italian energy giant Enel, leverages the parent company’s “expertise in testing, assessing and scaling up the best technologies to operate smart grids all over the world.”

Lantronix CEO Paul Pickle said in a statement that the contract “delivers substantial visibility into our double-digit growth expectations for the upcoming fiscal year,” which starts July 1.

Along with news of the contract, Lantronix released preliminary revenue for its second quarter of fiscal 2023 and updated its fiscal 2023 revenue guidance, reflecting a delay in the production schedule after Gridspertise requested a design change.

The company expects to report secondquarter 2023 revenue between $31 million and $32 million.

Annual Revenue Up

For the current fiscal year, ending in less than five months, the company now forecasts revenue of $135 million to $145 million, up between 4% to 12% year-over-year.

Lantronix shares have slid about 30% in the last 12 months, leaving it with a market cap of around $182 million as of Jan. 31. It is scheduled to release its latest earnings figures on Feb. 9.

“While the updated specification will push our delivery schedule and revenue recognition into fiscal 2024, it delivers substantial visibility into our double-digit growth expectations for the upcoming fiscal year,” the company says.

Lantronix said it “expects to begin shipping against this contract in its first quarter of 2024,” starting July 1.

Lantronix said on Jan. 25 that "the updated guidance implies a return to growth in the second half of fiscal 2023."

More Microsemi Ties

Lantronix products and services simplify the creation, development, deployment and management of various high-tech projects across robotics, automotive, wearables, video conferencing, industrial, medical, logistics, smart cities, security, retail, branch office, server room, and data center applications.

Lantronix specializes in the industrial Internet of Things (IoT) and the intelligent IT market, offering more than 50 IoT products.

The company is known for having several alumni of former Aliso Viejo-based chipmaker Microsemi Corp. in its top ranks including Pickle; former Microsemi CEO Jim

Peterson has a large stake in the company. Another connection to Microsemi was recently added to the team.

Eric Bass was appointed as its vice president of engineering, effective Jan. 30.

Bass served multiple roles at Microsemi from 2001 to 2018, culminating with his role as vice president of research and development from 2013 to 2018. ■