Lantronix (NASDAQ:LTRX) CEO Saleel Awsare told investors at the 38th Annual Roth Conference that the company has undergone a significant shift over the past two years, repositioning from a predominantly hardware-focused business into what he described as a “systems and solution player” aimed at enabling “Edge Intelligence with Compute & Connect.”
In a fireside chat hosted by Roth analyst Scott Searle, Awsare emphasized both operational execution and new growth vectors, highlighting progress in cash generation and non-GAAP profitability alongside an expanding presence in aerospace and defense, critical infrastructure monitoring, and edge AI use cases.
From hardware supplier to “full stack” solutions
He framed the company’s current focus around several verticals:
- Aerospace and defense, particularly drones, which he said has become a meaningful part of the business over the last 8 to 18 months
- Critical infrastructure monitoring, supported by recurring revenue and customer “stickiness” due to embedded hardware and software
- Core networking products such as switches, media converters, device servers, and out-of-band management
Drone momentum and “Physical AI” positioning
Awsare repeatedly characterized drones as a practical example of “Physical AI,” arguing that many drone deployments require intelligence at the edge because they operate in GPS-denied environments without reliable cloud connectivity. He said Lantronix plays a central role in these systems by providing what he called the “brains” that integrate and aggregate multiple cameras and sensors, add a software layer, and enable customers to run their own onboard applications.
He cited an early partnership with Teledyne FLIR for thermal imaging cameras and said Lantronix’s solution approach sits at the intersection of payload, communications, and compute. He also highlighted the company’s EdgeFabric.ai platform as a way for customers to incorporate their own IP into a common design framework.
On customer activity, Awsare said Lantronix is engaged with “well over 15” drone vendors and expects revenue with “at least 15” customers in the current fiscal year. He attributed demand in part to Department of Defense bidding activity and customer urgency to get to market quickly.
Awsare also referenced a recent partnership announcement with Unusual Machines, describing it as an example of drone ecosystem building. In addition, he discussed Red Cat Holdings, stating Lantronix is single-sourced on Red Cat’s Black Widow Short-Range Reconnaissance Program and is included in every gimbal in that program.
Revenue outlook for drones and product tiering
Awsare provided a timeline for the drone business ramp. He said drone revenue was “near zero” in the prior fiscal year ending June 30, 2025. The company initially discussed roughly $5 million in drone revenue, then increased its expectation to $8 million to $12 million. Looking ahead, he said the company expects the drone business to “probably double” next fiscal year, “if not more.”
He described average selling prices (ASPs) in the range of $500 to $700, with plans to address lower-cost first-person-view drones at roughly $300 to $400 and higher-end configurations at $700 to $800 depending on processing and edge AI needs. Awsare said the company’s strategy is to work with many customers and provide a “cut and paste” design approach to ensure exposure to eventual market winners.
MediaTek, robotics, and other edge AI opportunities
Awsare said Lantronix recently added MediaTek as a silicon partner, moving from a single-source compute strategy to a “multi-silicon strategy.” He said the company announced the relationship at Embedded World in Germany and intends to use MediaTek’s Genio product line to target industrial and commercial applications that require interfaces such as Ethernet and USB. Qualcomm remains part of the strategy, he said, but MediaTek expands the company’s reach.
Robotics was highlighted as a potential next leg. Awsare said robots, like drones, rely on cameras and edge intelligence, aligning with Lantronix’s experience in camera integration and video analytics. He said the company is seeing early interest and is considering proof-of-concept work with customers, with expectations for initial activity in the second half of fiscal 2027 and “meaningful revenue” in fiscal 2028.
Beyond drones and robotics, Awsare pointed to security and surveillance as another large opportunity, noting that many deployed cameras remain “dumb” and could be upgraded with edge AI and analytics.
ARR focus in critical infrastructure and “device as a service”
In critical infrastructure monitoring, Awsare discussed deployments with a top-three mobile network operator (MNO) using a 4G connectivity box, with 5G planned, to monitor diesel generators at cell sites. He said Lantronix has shipped 50,000 units and uses its Percepxion software platform to support visibility and customer expansion. He added that the company is beginning proof-of-concept efforts related to monitoring power banks at cell sites and cited fuel theft concerns as part of the use case.
On recurring revenue, Awsare said Lantronix reports a “software and services” category that historically represented around 5% of revenue but has recently increased to roughly 7% to 8%. He said the company’s longer-term goal is for software and services to reach 10% to 12% of revenue within about 24 months.
He also discussed a Vodafone relationship tied to remote monitoring of compressors under a “device as a service” model branded Kompress.ai. Awsare said the company has begun a proof of concept in the U.S. Midwest with a multi-state compressor rental and installation vendor and expects early revenue contributions in the second half of the calendar year, while also pursuing opportunities in Europe with Vodafone.
On M&A, Awsare said the company completed a small acquisition roughly 14 months ago to add 5G capabilities. Looking ahead, he said Lantronix is focused on potential acquisitions in two areas: drones (while noting valuations are high) and ARR-oriented critical infrastructure opportunities.
Asked what investors may be missing, Awsare said Lantronix is still often viewed primarily as a networking hardware company, while he believes the company is increasingly positioned around edge compute, edge AI, and secure connectivity in targeted “Physical AI” applications.
About Lantronix (NASDAQ:LTRX)
Lantronix, Inc is a provider of secure data access and management solutions designed to simplify the deployment, monitoring and control of devices and equipment across a wide range of industries. Headquartered in Irvine, California, the company develops hardware and software products that enable connectivity for smart devices, industrial machinery, IT infrastructure and other systems in the Internet of Things (IoT) ecosystem.
Founded in 1989, Lantronix was among the early innovators in serial-to-Ethernet device networking and has since expanded its portfolio to include secure console servers, device servers, gateways and embedded modules.
