Deswell Industries reports $28.1 million H2 sales

• Net sales for the second half of fiscal 2026 reached $28.1 million, a 13.4% decline compared to the same period in 2025.
• The company reported net income of $3.1 million for the period, down from $5 million in the previous year.
• Management attributes electronics segment performance to higher-margin offerings, while the plastic segment faced headwinds from rising labor costs.

Deswell Industries (NASDAQ:DSWL) reported net sales of $28.1 million for the six months ended March 31, 2026, representing a 13.4% decrease compared to $32.4 million in the prior year.

This revenue decline follows a $32.4 million result in the same period last year, driven by a 27% drop in the plastic segment and a 10.6% decline in the electronics segment.

Gross profit margin in the electronics segment increased to 22.4% in the second half of fiscal 2026, as compared to 20.6% in the second half of fiscal 2025.

The plastic segment gross profit margin decreased to 13.2% from 22.6% last year, primarily due to lower sales volumes and increased labor costs resulting from higher minimum hourly wages.

The company maintains a solid financial position with $23.1 million in cash and cash equivalents and no outstanding long-term or short-term borrowings as of March 31, 2026.

Deswell Industries operates through diversified manufacturing segments, focusing heavily on electronic and plastic products.

The company has maintained a strategy of continuous cost control measures in raw materials and labor to offset broader market volatility.