Record Quarterly Revenues of $31.8 million
Premises Revenues Grew 15% Year-over-Year; RFID
Units Shipped Increased 18% Year-over-Year
Gross Margins and Non-GAAP Adjusted EBITDA
Expand to Highest Levels since Q3 2021
Identiv, Inc. (NASDAQ: INVE), a global digital
security and identification leader in the Internet of Things (IoT),
today reported its financial results for the third quarter ended
September 30, 2023.
Recent Financial and Operational Highlights
- Third quarter revenue was $31.8 million, up 3% year-over-year,
record quarterly revenues.
- Q3 2023 GAAP gross margin grew to 37.5%, up 140bps
year-over-year; non-GAAP gross margin grew to 39.1%, up 178bps
year-over-year.
- Non-GAAP adjusted EBITDA was $2.2 million, up 6%
year-over-year, highest level in eight quarters.
- Record quarterly sales for Premises, growing 15% year-over-year
to $13.6 million.
- Federal billings increased 16% year-over-year; sales to
Premises commercial customers grew 14% year-over-year.
- Sales of video software doubled year-over-year, bringing
software, services, and recurring revenues to over 20% of Premises
segment revenues in Q3 2023.
- RFID units shipped grew 18% year-over-year to 54 million
units.
- Ended Q3 2023 with $20.9 million in cash, cash equivalents and
restricted cash. Maintained a strong working capital position of
$49.8 million exiting the third quarter.
- Strengthened leadership in high-value, specialty complex
RF-enabled IoT solutions (SCRI) category, with over 50 customers
who have deployed pilots of their innovative SCRI products.
- Healthcare-focused IoT applications now account for more than
half of NFC-based revenue.
- Launched Vision AI, our high-performance video analytics
offering that enables real-time situational awareness and
data-driven decision-making in complex security environments.
- Expanded manufacturing capacity at RFID production facility
near Bangkok, Thailand, enhancing our cost-competitiveness and
supporting gross margin expansion.
- Continued production of Wiliot IoT Pixels orders, supporting
ongoing development of BLE-enabled RFID category.
- Expanded design and prototyping capabilities at our top-tier
IoT engineering center in Germany, accelerating turnaround times
for customer prototypes.
- Introduced Enterphone Mobile, a key feature in the revitalized
Enterphone product suite that brings real-time audio capabilities
to multi-tenant facilities.
Third Quarter 2023 Financial Summary
Revenue for the third quarter 2023 was $31.8 million, compared
to $29.6 million in the prior quarter and $31.0 million in the
third quarter of 2022. By segment, Identity revenues were $18.3
million and Premises revenues totaled $13.6 million.
Third quarter 2023 GAAP gross margin was 37.5% and non-GAAP
gross margin was 39.1%.
GAAP operating expenses, including research and development,
sales, and marketing, and general and administrative were $11.6
million in the third quarter of 2023, compared to $11.9 million in
the prior quarter and $10.6 million in the third quarter of 2022.
Non-GAAP operating expenses were $10.3 million in the third quarter
of 2023, compared to $10.6 million in the prior quarter and $9.5
million in the third quarter of 2022.
GAAP net loss was ($0.02) million, or ($0.01) per basic and
diluted share, compared to GAAP net loss of ($1.1) million, or
($0.06) per basic and diluted share, in the prior quarter and GAAP
net income of $0.5 million, or $0.01 per basic and diluted share,
in the third quarter of 2022.
Non-GAAP adjusted EBITDA in the third quarter of 2023 was $2.2
million, compared to $0.7 million in the prior quarter and $2.0
million in the third quarter of 2022.
Management Commentary
“We delivered record quarterly topline revenue in the third
quarter, with particular strength in our Premises segment. We fell
short of our revenue expectations due to order push-outs among
mostly low-margin RFID products. We continued our focus on
disciplined growth, reflected in the highest gross margins and
non-GAAP adjusted EBITDA in eight quarters,” said Identiv CEO
Steven Humphreys. “Our high-margin Premises segment grew at more
than double the industry’s growth rate, with sales to Federal
customers up 16% year-over-year and to commercial customers up 14%
year-over-year. RFID shipments increased 18% year-over-year to 54
million units, although as early-stage IoT applications progress
through pilots toward full-scale production, demand may fluctuate
quarter-to-quarter.”
“We remain confident in our strategic growth plan and the
strength of our two business segments. In IoT, we are focused on
building a wide pipeline of specialty complex RF-enabled IoT (SCRI)
applications. We currently have 50-plus customers with SCRI
products in pilot stage, many of which have the potential for
higher volumes. Further, medical and healthcare use cases, which
have higher average gross margins, continue to expand and now
account for more than half our NFC-based revenue. In Physical
Security, demand for our tightly integrated, end-to-end system is
growing. New offerings such as Vision AI, our high-security video
analytics solution, augment our value proposition, while new
products designed for the SMB market, like Primis and Enterphone
Mobile, expand the funnel of potential customers, leveraging our
high-security brand and technology. With a strong focus on
execution, we believe we are well-positioned to make continued
progress towards our long-term financial and operational
objectives. To ensure we maximize the value potential in both our
business lines, our board-led strategic review process was a major
activity in Q3 and continues to be in Q4.”
Identiv CFO Justin Scarpulla added, “Delivering disciplined
growth remains a top priority for Identiv. We expanded our gross
margins and adjusted EBITDA despite lower-than-anticipated third
quarter net revenue. We continued to strengthen our balance sheet
and improve our working capital position as we worked through our
strategic inventory balance. Furthermore, we expect to capitalize
on the multiple advantages of producing IoT devices in Thailand as
that facility’s manufacturing capacity ramps up to full
utilization.”
Financial Outlook
Identiv provides guidance based on current market conditions and
expectations, including macroeconomic conditions and customer
demand. Management has decided to move to quarterly revenue
guidance going forward, and currently expects fiscal Q4 2023
revenues in the range of $29 million to $31 million. Normal
seasonality is expected to continue.
Conference Call
Identiv management will hold a conference call today, November
7, 2023, at 5:00 p.m. EST (2:00 p.m. PST) to discuss the company’s
third quarter 2023 financial results. A question-and-answer session
will follow management's presentation.
Toll-Free: 888-506-0062 International Number: 973-528-0011 Call
ID: 749170 Webcast link: Register and Join
The teleconference replay will be available through November 21,
2023, by dialing 877-481-4010 (Toll-Free Replay Number) or
919-882-2331 (International Replay Number) and entering passcode
49262.
If you have any difficulty connecting with the teleconference,
please contact Identiv Investor Relations at IR@identiv.com.
About Identiv
Identiv, Inc. is a global leader in digitally securing the
physical world. Identiv's platform encompasses RFID and NFC,
cybersecurity, and the full spectrum of physical access, video, and
audio security. Identiv is a publicly traded company, and its
common stock is listed on the NASDAQ Stock Market LLC in the U.S.
under the symbol “INVE.” For more information, visit
identiv.com.
Non-GAAP Financial Measures
This press release includes financial information that has not
been prepared in accordance with GAAP, including non-GAAP adjusted
EBITDA, non-GAAP gross margin, and non-GAAP operating expenses.
Identiv uses non-GAAP financial measures internally in analyzing
its financial results and believes they are useful to investors, as
a supplement to GAAP measures, in evaluating ongoing operational
performance. Identiv believes that the use of these non-GAAP
financial measures provides an additional tool for investors to use
in evaluating ongoing operating results and trends. Non-GAAP gross
margin excludes stock-based compensation and amortization and
depreciation. Non-GAAP adjusted EBITDA excludes items that are
included in GAAP net income (loss), GAAP operating expenses, and
GAAP gross margin, and excludes income tax benefit (provision),
interest expense, net foreign currency gains (losses), net
stock-based compensation, amortization and depreciation,
restructuring and severance, and gain on investment. Non-GAAP
operating expenses exclude stock-based compensation, amortization
and depreciation, and restructuring and severance. For historical
periods, the exclusions are detailed in the reconciliation table
included in this press release. Non-GAAP financial measures should
not be considered in isolation from, or as a substitute for,
financial information prepared in accordance with GAAP. Investors
are encouraged to review the reconciliation of these non-GAAP
measures to their most directly comparable GAAP financial measures
as detailed in this press release.
Note Regarding Forward-Looking Information
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are those involving future events
and future results that are based on current expectations as well
as the current beliefs and assumptions of the Company’s management
and can be identified by words such as “anticipate,” “believe,”
“continue,” “plan,” “will,” “intend,” “expect,” “outlook,” and
similar references to the future. Any statement that is not a
historical fact, including statements regarding: the Company’s
expectations regarding future operating and financial outlook and
performance, including 2023 fourth quarter guidance and outlook;
the Company’s strategy, focus and plans to accelerate growth; the
Company’s beliefs regarding its ability to deliver on its current
2023 outlook and execute on its growth strategy; the Company’s
confidence in its strategic growth plan and the strength of its two
business segments; the Company’s expectation regarding seasonality;
expected benefits of the Company’s Thailand production facility,
including production capacity and ramp up to full utilization;
expectations regarding the Company’s board-led strategic review
process; the Company’s expectations with respect to demand and
customer orders, including potential for higher volumes; and the
Company’s belief that it is well-positioned to make continued
progress towards its long-term financial and operational
objectives, are forward-looking statements. Forward-looking
statements are only predictions and are subject to a number of
risks and uncertainties, many of which are outside our control,
which could cause actual results to differ materially and adversely
from those expressed in any forward-looking statements. Factors
that could cause actual results to differ materially from those in
the forward-looking statements include, but are not limited to the
Company’s ability to continue the momentum in its business, its
ability to successfully execute its business strategy, its ability
to capitalize on trends in its business, its ability to satisfy
customer demand and expectations, the level and timing of customer
orders and changes/cancellations, the success of its products and
strategic partnerships, industry trends and seasonality, the impact
of macroeconomic conditions and customer demand, inflation and
increases in prices, the effects of shortages of semiconductors and
other components, and the other factors discussed in its periodic
reports, including its Annual Report on Form 10-K for the year
ended December 31, 2022, and subsequent reports filed with the U.S.
Securities and Exchange Commission. All forward-looking statements
are based on information available to us on the date hereof, and we
assume no obligation to update such statements.
Identiv, Inc. Condensed Consolidated Statements of
Operations (in thousands, except per share data) (unaudited)
Three Months Ended Nine Months Ended
September 30, June 30, September 30,
September 30, September 30,
2023
2023
2022
2023
2022
Net revenue
$
31,846
$
29,555
$
30,996
$
87,398
$
83,914
Cost of revenue
19,905
18,707
19,808
55,398
53,550
Gross profit
11,941
10,848
11,188
32,000
30,364
Operating expenses: Research and development
2,916
3,015
2,625
8,638
7,633
Selling and marketing
5,641
5,879
5,326
17,617
15,709
General and administrative
2,939
2,903
2,639
8,790
7,623
Restructuring and severance
104
81
49
376
132
Total operating expenses
11,600
11,878
10,639
35,421
31,097
Income (loss) from operations
341
(1,030
)
549
(3,421
)
(733
)
Non-operating income (expense): Interest expense, net
(211
)
(90
)
(39
)
(351
)
(101
)
Gain on investment
132
—
—
132
30
Foreign currency gains (losses), net
(264
)
(9
)
(3
)
(184
)
111
Income (loss) before income tax benefit (provision)
(2
)
(1,129
)
507
(3,824
)
(693
)
Income tax benefit (provision)
(20
)
(15
)
12
(61
)
(38
)
Net income (loss)
(22
)
(1,144
)
519
(3,885
)
(731
)
Cumulative dividends on Series B convertible preferred stock
(319
)
(315
)
(304
)
(947
)
(902
)
Net income (loss) available to common stockholders
$
(341
)
$
(1,459
)
$
215
$
(4,832
)
$
(1,633
)
Net income (loss) per common share: Basic
$
(0.01
)
$
(0.06
)
$
0.01
$
(0.21
)
$
(0.07
)
Diluted
$
(0.01
)
$
(0.06
)
$
0.01
$
(0.21
)
$
(0.07
)
Weighted average shares used in computing net income (loss)
per common share: Basic
23,174
23,051
22,682
23,008
22,632
Diluted
23,174
23,051
23,315
23,008
22,632
Identiv, Inc. Condensed Consolidated Balance Sheets
(in thousands) (unaudited)
September 30, June
30, March 31, December 31,
2023
2023
2023
2022
ASSETS Current assets: Cash and cash equivalents
$
19,674
$
21,905
$
20,804
$
16,650
Restricted cash
1,254
300
363
487
Accounts receivable, net of allowances
25,892
22,911
21,136
24,826
Inventories
29,423
31,092
30,609
28,958
Prepaid expenses and other current assets
5,238
5,136
4,361
4,177
Total current assets
81,481
81,344
77,273
75,098
Property and equipment, net
8,518
8,237
7,595
6,719
Operating lease right-of-use assets
5,525
5,952
4,344
4,373
Intangible assets, net
4,483
4,760
4,999
5,265
Goodwill
10,189
10,218
10,192
10,190
Other assets
1,261
1,186
1,148
1,120
Total assets
$
111,457
$
111,697
$
105,551
$
102,765
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable
$
12,099
$
12,827
$
9,926
$
14,760
Financial liabilities
9,939
9,951
9,941
—
Operating lease liabilities
1,708
1,695
1,199
1,190
Deferred revenue
2,474
2,428
1,798
2,068
Accrued compensation and related benefits
2,580
2,538
2,395
2,757
Other accrued expenses and liabilities
2,872
2,746
2,648
2,618
Total current liabilities
31,672
32,185
27,907
23,393
Long-term operating lease liabilities
4,037
4,481
3,371
3,366
Long-term deferred revenue
904
711
647
587
Other long-term liabilities
25
25
25
25
Total liabilities
36,638
37,402
31,950
27,371
Total stockholders' equity
74,819
74,295
73,601
75,394
Total liabilities and stockholders' equity
$
111,457
$
111,697
$
105,551
$
102,765
Identiv, Inc. Reconciliation of GAAP to Non-GAAP
Financial Information (in thousands) (unaudited)
Three Months Ended Nine Months Ended September
30, June 30, September 30, September 30,
September 30,
2023
2023
2022
2023
2022
Reconciliation of GAAP gross margin to non-GAAP gross margin
GAAP gross profit
$
11,941
$
10,848
$
11,188
$
32,000
$
30,364
Reconciling items included in GAAP gross profit: Stock-based
compensation
45
45
38
135
138
Amortization and depreciation
458
403
335
1,246
949
Total reconciling items included in GAAP gross profit
503
448
373
1,381
1,087
Non-GAAP gross profit
$
12,444
$
11,296
$
11,561
$
33,381
$
31,451
Non-GAAP gross margin
39
%
38
%
37
%
38
%
37
%
Reconciliation of GAAP operating expenses to non-GAAP
operating expenses GAAP operating expenses
$
11,600
$
11,878
$
10,639
$
35,421
$
31,097
Reconciling items included in GAAP operating expenses: Stock-based
compensation
(944
)
(949
)
(814
)
(2,838
)
(2,427
)
Amortization and depreciation
(274
)
(242
)
(253
)
(754
)
(724
)
Restructuring and severance
(104
)
(81
)
(49
)
(376
)
(132
)
Total reconciling items included in GAAP operating expenses
(1,322
)
(1,272
)
(1,116
)
(3,968
)
(3,283
)
Non-GAAP operating expenses
$
10,278
$
10,606
$
9,523
$
31,453
$
27,814
Reconciliation of GAAP net income (loss) to non-GAAP
adjusted EBITDA GAAP net income (loss)
$
(22
)
$
(1,144
)
$
519
$
(3,885
)
$
(731
)
Reconciling items included in GAAP net income (loss): Income tax
provision (benefit)
20
15
(12
)
61
38
Interest expense, net
211
90
39
351
101
Gain on investment
(132
)
—
—
(132
)
(30
)
Foreign currency gains (losses), net
264
9
3
184
(111
)
Stock-based compensation
989
994
852
2,973
2,565
Amortization and depreciation
732
645
588
2,000
1,673
Restructuring and severance
104
81
49
376
132
Total reconciling items included in GAAP net income (loss)
2,188
1,834
1,519
5,813
4,368
Non-GAAP adjusted EBITDA
$
2,166
$
690
$
2,038
$
1,928
$
3,637
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version on businesswire.com: https://www.businesswire.com/news/home/20231107964340/en/
Investor Relations Contact: IR@identiv.com
Media Contact: press@identiv.com
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