Socket Mobile (NASDAQ:SCKT) executives highlighted a difficult operating backdrop in fiscal 2025 while pointing to product launches, enterprise engagement, and international approvals as key building blocks for longer-term growth. On the company’s Q4 2025 earnings call, CEO Kevin Mills said the company worked through “a very challenging macroeconomic and distribution environment” that pressured sales volumes, while CFO Lynn Zhao detailed year-over-year revenue declines alongside improved sequential results in the fourth quarter.
Management cites macro headwinds, margin resilience
Mills said 2025 performance was impacted by external headwinds, but emphasized that the company continued to strengthen its product portfolio and expand technology capabilities. Despite lower volumes, he said gross margins “remained resilient,” attributing that result to cost discipline and operational efficiency. Mills added that the company took steps during the year to reinforce its financial position and preserve resources for innovation and service priorities.
New products and developer tools introduced in 2025
Mills also cited several hardware introductions, including:
- SocketScan S721 with Bluetooth Low Energy, which he said enables faster pairing and lower power usage
- XtremeScan v16e, expanding the company’s ruggedized line
- DuraScan D751 NFC and RFID reader
- DuraScan D764, a compact model intended for direct part marking applications
Enterprise visibility from Apple webinar and early logistics deployment
Mills described a December 18 enterprise-focused milestone when the company’s XtremeScan product was featured in the Apple Connected Worker Series, an invitation-only webinar series hosted by Apple for major companies considering a transition to iOS-based devices. Mills said more than 50 large companies attended and showed “significant interest” in XtremeScan solutions. While noting that enterprise projects take time to develop, he said the company expects to spend “a significant portion of 2026” pursuing opportunities stemming from the event.
In the Q&A, Mills addressed progress in warehousing and logistics, a market the company has targeted. He said Socket Mobile has deployed with one large customer—described as roughly a “Fortune…10 or thereabouts” company—with about 150 units being used daily. He also discussed lessons learned from the initial XtremeScan rollout, including an issue where the camera was covered. Mills said the company underestimated how integral the camera is to many applications and that it had incorrectly assumed scanning would supersede camera usage.
According to Mills, the second-generation product—focused on the 16e—addresses that issue by making the camera “fully available to the user” and incorporates other improvements based on customer feedback and testing. He said the updated version, which the company is “in the process of now starting to ship,” represents “a large step forward” in overall performance and end-user benefit.
International expansion: Japan certification milestone
Mills also highlighted international progress, particularly in the Asia-Pacific region. He said the company received official approval in Japan for the S370 and S550 as certified My Number Card readers, which he said enables broader use in government services and digital identity authentication. Mills said the milestone is contributing to growing engagement across retail, industrial, and enterprise markets.
Financial results: Q4 down year-over-year, up sequentially; valuation allowance impacts EPS
Zhao reported fourth-quarter revenue of $4.0 million, down 18% from $4.8 million in the prior-year quarter, but up 28% sequentially from $3.1 million in Q3 2025. Q4 gross margin was 50%, compared with 51% in Q4 2024 and 48% in Q3 2025.
Operating expenses in Q4 were $2.6 million, down 10% year-over-year and up 2% sequentially. The company recorded a Q4 operating loss of $737,000, compared with an operating loss of $513,000 in Q4 2024 and a $1.2 million loss in the preceding quarter.
Zhao said that, driven by cumulative losses in recent years, the company recognized a one-time adjustment in Q4 to establish a full valuation allowance of $10.7 million against deferred tax assets under ASC 740. Net loss per share for Q4 was $1.43, compared with $0.00 per share in Q4 2024 and a loss of $0.15 per share in Q3 2025. Adjusted EBITDA for Q4 was a loss of $94,000, compared with an EBITDA gain of $147 in Q4 2024 and a $540,000 loss in Q3 2025.
For the full year, Zhao reported revenue of $50 million, which she said represented a 20% year-over-year decrease compared with $19 million in 2024. Full-year gross margin was 49.7%, compared with 50.4% in 2024. Operating expenses totaled $10.7 million, down 10% from $11.9 million, which Zhao attributed primarily to employee cost management initiatives. The company reported a full-year operating loss of $3.7 million versus a $2.8 million operating loss in 2024. Net loss per share was $1.81 in 2025, compared with $0.30 in 2024, and adjusted EBITDA was -$1.2 million, compared with -$327 in 2024.
On the balance sheet, Zhao said Socket Mobile ended 2025 with $2.0 million in cash. During the year, the company used $1.4 million in operating activities, invested $5.5 million in capital expenditures, and raised $1.5 million through the reissuance of subordinate convertible notes. Inventory net of reserves was $4.2 million as of December 31, 2025, down from $4.9 million at the end of the prior year.
Looking ahead, Mills said the company got off to a “reasonably good start” in January and described significant follow-up activity related to the Apple event. He said the company felt “on track for a reasonable Q1,” adding that conditions were largely “as expected” to begin 2026.
About Socket Mobile (NASDAQ:SCKT)
Socket Mobile, Inc (NASDAQ:SCKT) is a provider of mobile data capture and wireless connectivity solutions, designing products that enable smartphones, tablets and PCs to collect and transmit information in a variety of business environments. The company specializes in Bluetooth-enabled barcode scanners, RFID readers and image-based data capture devices that streamline point-of-sale, inventory management and field-service workflows.
Its product portfolio includes handheld scanners that support 1D and 2D barcodes, near-field communication (NFC) readers and ultra-compact mobile scanners engineered for retail, hospitality, healthcare, transportation and warehousing applications.
