Identiv Reports First Quarter 2024 Financial Results
Identiv, Inc. (NASDAQ: INVE) reported its financial results for Q1 2024, including a $145 million asset purchase agreement, new President, and expanding gross margins. Revenue was $22.5 million with GAAP gross margin at 37.3% and non-GAAP at 39.9%. Strategic review concluded with the sale of physical security assets to Vitaprotech. Identiv expects to close the transaction in Q3 2024, subject to approvals.
Identiv signed a transformative $145 million agreement for asset purchase, strengthening its financial position.
New President, Kirsten Newquist, joined Identiv, expected to become CEO post-close of the transaction.
Identiv achieved its highest gross margins since Q3 2021, with GAAP at 37.3% and non-GAAP at 39.9%.
Software, services, and recurring revenues grew to 27.4% of Premises segment revenues in Q1 2024, showing business diversification.
First quarter revenue decreased to $22.5 million from $29.0 million in the prior quarter and $26.0 million in Q1 2023.
GAAP net loss for Q1 2024 was ($4.6) million compared to ($1.6) million in the prior quarter, reflecting a decrease in profitability.
Non-GAAP adjusted EBITDA was ($1.4) million in Q1 2024, a decrease from $0.9 million in the prior quarter, indicating financial challenges.
Insights
Signed Transformative
New President, IoT Solutions Joins Identiv; Will Become CEO Post-Close of Transaction
Gross Margins Expand to Highest Levels since Q3 2021
Recent Financial and Operational Highlights
-
Concluded strategic review with announcement of
$145 million - Welcomed Kirsten Newquist as President, IoT Solutions; Ms. Newquist will become CEO at the close of asset sale.
-
First quarter GAAP and non-GAAP gross margins were
37.3% and39.9% , respectively, their highest levels since Q3 2021. -
Software, services, and recurring revenues grew to
27.4% of Premises segment revenues in Q1 2024. -
Ended Q1 2024 with
$22.4 million -
Continued the development of Thailand RFID production facility, reflected by
40% of Q1 RFID volume being produced inThailand . -
Shipped the majority of a previously announced
$2 million - Secured 2-year contract with IoT customer for smart home application.
- Showcased broad specialty IoT solutions portfolio at RFID Journal Live trade show.
-
Demonstrated Scramble Factor reader with multi-factor authentication at ISC West trade show in
Las Vegas . - Joined Axia Institute at Michigan State University, a research center focused on the transformation of today’s supply chains across multiple industries, including healthcare.
-
Expanded sales and pipeline of FIDO (Fast Identity Online) dual-factor security keys, with new projects in
Europe .
Asset Sale Transaction Summary
As previously announced, on April 2, 2024, Identiv entered into a definitive asset purchase agreement to sell its physical security, access card, and identity reader operations and assets to a wholly owned subsidiary of Vitaprotech, a security solutions provider. Under the terms of the agreement, Identiv will receive a cash payment of
First Quarter 2024 Financial Summary
Revenue for the first quarter 2024 was
First quarter 2024 GAAP gross margin was
GAAP operating expenses, including research and development, sales, and marketing, and general and administrative, were
GAAP net loss for the first quarter 2024 was
Non-GAAP adjusted EBITDA in the first quarter of 2024 was
Management Commentary
"In the first quarter, our total business net revenue was within our guidance range, and we delivered our highest GAAP and non-GAAP gross margins in ten quarters,” said Identiv CEO Steven Humphreys. “We also brought in a world-class business leader, Kirsten Newquist, who has the ideal profile to lead our IoT business. Our previously announced strategic review culminated in a definitive agreement signed on April 2. We believe this transaction positions Identiv with a strong balance sheet to invest in the future growth of our specialty IoT solutions business and look forward to its expected close in the third quarter.”
Financial Outlook
Identiv provides guidance based on current market conditions and expectations, including macroeconomic conditions and customer demand. For fiscal Q2 2024, management currently expects total company net revenues in the range of
Conference Call
Identiv management will hold a conference call today, May 8, 2024, at 5:00 p.m. EDT (2:00 p.m. PDT) to discuss the company’s first quarter 2024 financial results. A question-and-answer session will follow management's presentation.
Toll-Free: 877-545-0523
International Number: +1 973-528-0016
Call ID: 243006
Webcast link: Register and Join
The teleconference replay will be available through May 22, 2024, by dialing 877-481-4010 (Toll-Free Replay Number) or 919-882-2331 (International Replay Number) and entering passcode 50510.
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. 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 provision, interest expense, net foreign currency gains (losses), net stock-based compensation, amortization and depreciation, restructuring and severance, gain on investment, and strategic review-related costs. 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 management of Identiv 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 is a forward-looking statement, including statements regarding: Identiv’s expectations regarding future operating and financial outlook and performance, including 2024 second quarter guidance and outlook; Identiv’s strategy, opportunities, focus and goals; Identiv’s expectations regarding seasonality; expected benefits of Identiv’s production facility in
Additional Information and Where to Find It
On April 2, 2024, Identiv entered into a Stock and Asset Purchase Agreement with Hawk Acquisition, Inc. (“Buyer”), whereby Identiv agreed to sell its physical security business to Buyer (the “Transaction”). Identiv has filed a preliminary proxy statement on Schedule 14A with the SEC, in connection with its solicitation of proxies for approval of the Transaction (the “Proxy Statement”). The Proxy Statement is in preliminary form and Identiv intends to file a definitive proxy statement. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) FILED BY IDENTIV AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ANY SOLICITATION. Investors and security holders may obtain copies of these documents and other documents filed with the SEC by Identiv free of charge through the website maintained by the SEC at www.sec.gov. Copies of the documents filed by Identiv are also available free of charge in the “Investors—Financials” section of Identiv’s website at identiv.com/investors/financials.
Participants in the Solicitation
Identiv, its directors, director nominees, certain of its officers, and other members of management and employees (as set forth below) are or may be deemed to be “participants” (each a “Participant” and collectively, the “Participants”) in the solicitation of proxies from stockholders of Identiv in connection with the Transaction. Information about Identiv’s executive officers and directors, including compensation, is set forth in the sections entitled “Directors,” “Executive Officers,” “Compensation of Directors,” and “Executive Compensation,” of Identiv’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as amended by Amendment No. 1 to the Annual Report on Form 10-K/A filed with the SEC on April 29, 2024 (as amended, the “Annual Report”), as well as Item 5.02 of its Current Reports on Form 8-K filed with the SEC on April 3, 2024 and April 18, 2024. Information about the ownership of common stock by Identiv’s executive officers and directors is set forth in the section entitled “Security Ownership of Certain Beneficial Owners and Management” of the Annual Report. To the extent holdings by the directors and executive officers of Identiv securities reported in the Annual Report change, such changes will be reflected in Forms 3, 4 or 5 to be filed with the SEC, as well as the section entitled “Security Ownership of Certain Beneficial Owners and Management” of Identiv’s definitive proxy statement, and other materials to be filed with the SEC. All of these documents are or will be available free of charge at the SEC’s website at www.sec.gov and in the “Investors—Financials” section of Identiv’s website at identiv.com/investors/financials. Each of Hawk Acquisition, Inc. and Seven2 SAS (together, Vitaprotech) is or may be deemed to be a Participant in the solicitation of proxies from stockholders of Identiv in connection with the Transaction. Information about the ownership of securities of Vitaprotech is set forth in the Schedule 13D filed by Vitaprotech on April 12, 2024. In addition, each of Bleichroeder LP and Bleichroeder Holdings LLC (together, “Bleichroeder”) is or may be deemed to be a Participant in the solicitation of proxies from stockholders of Identiv in connection with the Transaction. Information about the ownership of securities of Bleichroeder is set forth in the section entitled “Security Ownership of Certain Beneficial Owners and Management” of the Annual Report and Amendment No. 2 to the Schedule 13D filed by Bleichroeder on April 4, 2024. Any further changes will be reflected in the section entitled “Security Ownership of Certain Beneficial Owners and Management” of Identiv’s definitive proxy statement, and other materials to be filed with the SEC.
| Identiv, Inc. | |||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||
| (in thousands, except per share data) | |||||||||||
| (unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
|
2024 |
|
|
2023 |
|
|
2023 |
|
|||
| Net revenue | $ |
22,494 |
|
$ |
28,985 |
|
$ |
25,997 |
|
||
| Cost of revenue |
|
14,102 |
|
|
18,821 |
|
|
16,786 |
|
||
| Gross profit |
|
8,392 |
|
|
10,164 |
|
|
9,211 |
|
||
| Operating expenses: | |||||||||||
| Research and development |
|
3,011 |
|
|
2,952 |
|
|
2,707 |
|
||
| Selling and marketing |
|
5,302 |
|
|
4,938 |
|
|
6,097 |
|
||
| General and administrative |
|
4,252 |
|
|
3,570 |
|
|
2,948 |
|
||
| Restructuring and severance |
|
22 |
|
|
338 |
|
|
191 |
|
||
| Total operating expenses |
|
12,587 |
|
|
11,798 |
|
|
11,943 |
|
||
| Loss from operations |
|
(4,195 |
) |
|
(1,634 |
) |
|
(2,732 |
) |
||
| Non-operating income (expense): | |||||||||||
| Interest expense, net |
|
(87 |
) |
|
(76 |
) |
|
(50 |
) |
||
| Foreign currency gains (losses), net |
|
(256 |
) |
|
209 |
|
|
89 |
|
||
| Loss before income tax provision |
|
(4,538 |
) |
|
(1,501 |
) |
|
(2,693 |
) |
||
| Income tax provision |
|
(20 |
) |
|
(103 |
) |
|
(26 |
) |
||
| Net loss |
|
(4,558 |
) |
|
(1,604 |
) |
|
(2,719 |
) |
||
| Cumulative dividends on Series B convertible preferred stock |
|
(248 |
) |
|
(319 |
) |
|
(313 |
) |
||
| Net loss available to common stockholders | $ |
(4,806 |
) |
$ |
(1,923 |
) |
$ |
(3,032 |
) |
||
| Net loss per common share: | |||||||||||
| Basic | $ |
(0.21 |
) |
$ |
(0.08 |
) |
$ |
(0.13 |
) |
||
| Diluted | $ |
(0.21 |
) |
$ |
(0.08 |
) |
$ |
(0.13 |
) |
||
| Weighted average shares used in computing net loss per common share: | |||||||||||
| Basic |
|
23,368 |
|
|
23,248 |
|
|
22,794 |
|
||
| Diluted |
|
23,368 |
|
|
23,248 |
|
|
22,794 |
|
||
| Identiv, Inc. | |||||
| Condensed Consolidated Balance Sheets | |||||
| (in thousands) | |||||
| (unaudited) | |||||
| March 31, | December 31, | ||||
|
2024 |
|
2023 |
||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ |
21,623 |
$ |
23,312 |
|
| Restricted cash |
|
811 |
|
1,072 |
|
| Accounts receivable, net of allowances |
|
17,811 |
|
21,969 |
|
| Inventories |
|
28,460 |
|
28,712 |
|
| Prepaid expenses and other current assets |
|
4,159 |
|
4,421 |
|
| Total current assets |
|
72,864 |
|
79,486 |
|
| Property and equipment, net |
|
8,832 |
|
9,320 |
|
| Operating lease right-of-use assets |
|
4,756 |
|
5,214 |
|
| Intangible assets, net |
|
3,995 |
|
4,251 |
|
| Goodwill |
|
10,192 |
|
10,218 |
|
| Other assets |
|
1,150 |
|
1,234 |
|
| Total assets | $ |
101,789 |
$ |
109,723 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | $ |
9,564 |
$ |
12,250 |
|
| Financial liabilities |
|
9,894 |
|
9,949 |
|
| Operating lease liabilities |
|
1,655 |
|
1,714 |
|
| Deferred revenue |
|
1,744 |
|
2,341 |
|
| Accrued compensation and related benefits |
|
2,099 |
|
2,334 |
|
| Other accrued expenses and liabilities |
|
2,351 |
|
2,194 |
|
| Total current liabilities |
|
27,307 |
|
30,782 |
|
| Long-term operating lease liabilities |
|
3,309 |
|
3,716 |
|
| Long-term deferred revenue |
|
981 |
|
927 |
|
| Other long-term liabilities |
|
26 |
|
26 |
|
| Total liabilities |
|
31,623 |
|
35,451 |
|
| Total stockholders' equity |
|
70,166 |
|
74,272 |
|
| Total liabilities and stockholders' equity | $ |
101,789 |
$ |
109,723 |
|
| Identiv, Inc. | |||||||||||
| Reconciliation of GAAP to Non-GAAP Financial Information | |||||||||||
| (in thousands) | |||||||||||
| (unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
|
| Reconciliation of GAAP gross margin to non-GAAP gross margin | |||||||||||
| GAAP gross profit | $ |
8,392 |
|
$ |
10,164 |
|
$ |
9,211 |
|
||
| Reconciling items included in GAAP gross profit: | |||||||||||
| Stock-based compensation |
|
47 |
|
|
60 |
|
|
45 |
|
||
| Amortization and depreciation |
|
547 |
|
|
491 |
|
|
385 |
|
||
| Total reconciling items included in GAAP gross profit |
|
594 |
|
|
551 |
|
|
430 |
|
||
| Non-GAAP gross profit | $ |
8,986 |
|
$ |
10,715 |
|
$ |
9,641 |
|
||
| Non-GAAP gross margin |
|
40 |
% |
|
37 |
% |
|
37 |
% |
||
| Reconciliation of GAAP operating expenses to non-GAAP operating expenses | |||||||||||
| GAAP operating expenses | $ |
12,587 |
|
$ |
11,798 |
|
$ |
11,943 |
|
||
| Reconciling items included in GAAP operating expenses: | |||||||||||
| Stock-based compensation |
|
(972 |
) |
|
(938 |
) |
|
(945 |
) |
||
| Amortization and depreciation |
|
(238 |
) |
|
(241 |
) |
|
(238 |
) |
||
| Strategic review-related costs |
|
(953 |
) |
|
(435 |
) |
|
— |
|
||
| Restructuring and severance |
|
(22 |
) |
|
(338 |
) |
|
(191 |
) |
||
| Total reconciling items included in GAAP operating expenses |
|
(2,185 |
) |
|
(1,952 |
) |
|
(1,374 |
) |
||
| Non-GAAP operating expenses | $ |
10,402 |
|
$ |
9,846 |
|
$ |
10,569 |
|
||
| Reconciliation of GAAP net income (loss) to non-GAAP adjusted EBITDA | |||||||||||
| GAAP net loss | $ |
(4,558 |
) |
$ |
(1,604 |
) |
$ |
(2,719 |
) |
||
| Reconciling items included in GAAP net loss: | |||||||||||
| Income tax provision |
|
20 |
|
|
103 |
|
|
26 |
|
||
| Interest expense, net |
|
87 |
|
|
76 |
|
|
50 |
|
||
| Foreign currency gains (losses), net |
|
256 |
|
|
(209 |
) |
|
(89 |
) |
||
| Stock-based compensation |
|
1,019 |
|
|
998 |
|
|
990 |
|
||
| Amortization and depreciation |
|
785 |
|
|
732 |
|
|
623 |
|
||
| Strategic review-related costs |
|
953 |
|
|
435 |
|
|
— |
|
||
| Restructuring and severance |
|
22 |
|
|
338 |
|
|
191 |
|
||
| Total reconciling items included in GAAP net loss |
|
3,142 |
|
|
2,473 |
|
|
1,791 |
|
||
| Non-GAAP adjusted EBITDA | $ |
(1,416 |
) |
$ |
869 |
|
$ |
(928 |
) |
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240508389254/en/
Investor Relations Contact:
IR@identiv.com
Media Contact:
press@identiv.com
Source: Identiv, Inc.
FAQ
What was Identiv's revenue for the first quarter of 2024?
What were the GAAP and non-GAAP gross margins for Identiv in the first quarter of 2024?
Who is the new President of IoT Solutions at Identiv?
What was the amount of the asset purchase agreement signed by Identiv?
What percentage of Premises segment revenues did software, services, and recurring revenues represent in Q1 2024?
