Socket Mobile (NASDAQ:SCKT) reported higher third-quarter revenue and a narrower operating loss, while outlining plans to move its stock listing from Nasdaq to the OTCID market as it seeks to reduce costs.
Revenue rose 9% from a year earlier to $3.4 million in the third quarter of 2026 and increased 12% from the second quarter, President and CEO Dave Holmes said on the company’s earnings call. Gross margin improved to 48.6%, compared with 47.7% a year earlier and 46.4% in the preceding quarter.
Holmes said the results reflected progress in stabilizing revenue while reducing inventory and managing costs. He added that he was not satisfied with the revenue outcome, despite the improvement in an uncertain market.
Losses narrow as company manages cash
Chief Financial Officer Lynn Zhao said Socket Mobile’s adjusted EBITDA loss was $262,000, compared with losses of $540,000 a year earlier and $745,000 in the second quarter. Loss per share was $0.09, compared with $0.15 in the third quarter of 2025 and $0.16 in the preceding quarter.
Cash totaled $1.4 million at Sept. 30, down from $2 million at the end of 2025. Inventory, net of reserves, was $3.4 million at the end of the third quarter.
During the quarter, the company repaid $575,000 of convertible notes and converted another $50,000 into equity. In August, it received $425,000 in secured subordinated bridge financing from board Chairman Charlie Bass, an existing note holder, Zhao said.
The loan carries a 10% interest rate and was used for working capital. Zhao said its principal will convert into subordinated convertible promissory notes upon the closing of convertible note financing, on the same terms as other notes issued in that financing.
OTCID transition expected in November
Zhao said Socket Mobile received a Nasdaq notification in August that its stockholders’ equity was below the exchange’s $2.5 million minimum requirement. After reviewing alternatives, market capitalization and operating costs, the board concluded that the expenses of maintaining a Nasdaq listing were no longer an optimal use of capital relative to the benefits, she said.
The company expects its shares to begin quoting on OTCID under the existing SCKT symbol on or about Nov. 19, 2026, following the filing and effectiveness of Form 25. Zhao said OTC Markets Group had confirmed that Socket Mobile satisfied the onboarding qualifications for quotation.
The company expects the move to reduce administrative and regulatory costs and allow it to redirect resources toward product development and operations. Zhao said the transition would not affect day-to-day operations, customer commitments or product delivery schedules. Socket Mobile also intends to continue filing periodic reports with the Securities and Exchange Commission and to continue holding earnings calls, she said.
Industrial opportunities and partnerships
Holmes said Socket Mobile had won business with a major construction equipment manufacturer and was in discussions with a flooring company. He also cited engagement in the automotive industry but did not identify customers by name.
Some opportunities are expected to be fulfilled in 2026, while others previously expected this year have slipped into the first half of 2027, Holmes said. Newer opportunities span both halves of 2027. He described revenue from the company’s industrial efforts as “lumpy” and said he expected it to become more consistent as wins accumulate.
Asked whether the company’s recent financial issues had made prospective customers hesitant, Holmes said no such concerns had been communicated to Socket Mobile.
The company also expanded its commercial reach through partnerships with 3Eye Technologies, which supports industrial mobility solutions for Apple-based frontline workflows, and Orda, which provides mobile ordering and self-checkout for enterprise workplace dining, Holmes said. He identified expense management, revenue stabilization and enterprise opportunities as the company’s priorities for the remainder of the year.
About Socket Mobile (NASDAQ:SCKT)
Socket Mobile, Inc develops and sells data capture solutions designed to help businesses collect and transmit information using mobile devices. Its products include cordless barcode scanners, contactless and NFC readers, and related accessories used with smartphones, tablets, computers, and point-of-sale systems.
The company also provides software development tools and integration services, including its CaptureSDK and SocketCam solutions, which enable developers and business applications to incorporate barcode scanning and other data capture capabilities.
