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Identiv Reports Third Quarter 2022 Results

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Identiv reported record revenue of $31.0 million for Q3 2022, a 7% increase from Q3 2021. The total backlog reached $36.9 million, up 31% year-over-year. RFID units shipped grew 17% to 45.4 million despite supply constraints. Premises revenue rose 14% to $11.8 million, outpacing industry growth. However, supply shortages and customer demand shifts negatively impacted Identity revenues by nearly $5.0 million. The company remains debt-free with a cash position of $21.9 million and expects continued growth, projecting 20% to 25% year-over-year growth for 2023.

Positive
  • Record quarterly revenue of $31.0 million, up 7% year-over-year.
  • Total backlog increased to $36.9 million, up 31% year-over-year.
  • Premises revenue grew 14% year-over-year, significantly faster than industry average.
  • Debt-free status with strong cash position of $21.9 million.
  • Initial order of 25 million units from Wiliot reflects strong market demand.
Negative
  • Identity revenues were negatively impacted by nearly $5.0 million due to supply shortages and customer de-commit.

Record Quarterly Total Revenue at $31.0 Million

Total Backlog Grew to $36.9M, up 31% Year-Over-Year

RFID Units Shipped Grew 17% Year-Over-Year

Premises Up 14% Year-Over-Year, Much Faster than Industry Average Growth

FREMONT, Calif., Nov. 02, 2022 (GLOBE NEWSWIRE) --  Identiv, Inc. (NASDAQ: INVE), global digital security and identification leader in the Internet of Things (IoT), reported financial results for the third quarter ended September 30, 2022, reflecting record levels of revenue in both business segments and total backlog for future shipments.

Third Quarter 2022 and Recent Financial and Operational Highlights

  • Third quarter total revenue grew to $31.0 million, a new record for quarterly revenue.
  • Exited the third quarter of 2022 with total backlog for all future shipments of $36.9 million, up 31% year-over-year.
  • Backlog for shipments in Q4 2022 grew 42% year-over-year and 19% sequentially, to $16.6 million.
  • Premises revenue grew 14% year-over-year, nearly three times the average industry growth rate, to a record $11.8 million.
  • Revenue in the Identity segment was a record $19.2 million.
  • Supply shortages and a customer de-commit impacted Identity revenues by nearly $5.0 million in the quarter.
  • RFID units shipped grew 17% year-over-year to 45.4 million units, also constrained by supply limitations.
  • Remained debt free while supporting a strong balance sheet, with $21.9 million of cash, cash equivalents, and restricted cash at quarter end.
  • Maintained 100% customer retention in RFID while growing our total number of non-recurring engineering (NRE) contracts to a record 56 contracts.
  • Announced a 25-million-unit initial order from Internet of Things pioneer Wiliot for their breakthrough IoT Pixel tags that power the Ambient IoT ecosystem designed for the global supply chain.
  • Appointed transformational medical industry leaders Laura Angelini and Dr. Richard Kuntz to Board of Directors.
  • Amir Khoshniyati, VP and General Manager of Transponders, was appointed to the NFC Forum Board of Directors, the consortium’s governing body, to steer standards for NFC applications.
  • Awarded the prestigious 2022 Fast Company Innovation by Design Award in the Packaging category.
  • Expanded production of multi-frequency RFID devices for multi-state operators (MSOs) in the cannabis industry.

Third Quarter 2022 Financial Results
Revenue for the third quarter of 2022 was $31.0 million, an increase of 7% from $29.1 million in the third quarter of 2021.

Revenues in our Premises segment grew 14% year-over-year to $11.8 million from $10.4 million, driven primarily by product and channel strength. Revenues in our Identity segment grew 2% year-over-year to $19.2 million from $18.7 million.

GAAP gross profit margin was 36% in the third quarter of 2022, while Non-GAAP gross profit margin was 37% in the third quarter of 2022.

GAAP operating expenses, including research and development, sales, and marketing, and general and administrative were $10.6 million in the third quarter of 2022, compared to $10.5 million in the prior quarter and $9.1 million in the third quarter of 2021. Non-GAAP operating expenses were $9.5 million in the third quarter of 2022, compared to $9.2 million in the prior quarter, and $8.2 million in the third quarter of 2021.

GAAP net income was $0.5 million, or $0.01 per basic and diluted share, compared to GAAP net loss of ($0.3) million, or $(0.02) per basic and diluted share, in the prior quarter and GAAP net income of $2.5 million, or $0.10 per basic share and $0.09 per diluted share, in the third quarter of 2021.

Non-GAAP adjusted EBITDA in the third quarter of 2022 was $2.0 million, compared to $1.4 million in the prior quarter and $3.2 million in the third quarter of 2021.

Management Commentary
“In the third quarter we delivered record quarterly topline revenue and expanded our total backlog to a new high, yet our financial performance was impacted by customer demand shifts and supply chain availability,” said Identiv CEO Steven Humphreys. “We have taken corrective actions to rigorously manage our supply chain and customer order reliability. Customers are changing orders in real time and we have to remain flexible to address this reality. The outlook for customer demand for our RFID solutions remains strong, as reflected by our 25-million-unit initial order with Wiliot and record number of NRE projects for use cases ranging from medical devices to casino chips.”

“We also continue to make progress with our transformational opportunities in medical devices, cannabis, mobile devices, and specialty retail. In medical devices we’re now engaged with 4 of the top 5 autoinjector companies, have our first ½ million unit order and delivered two autoinjector NRE projects in Q3. We continue to expect RFID IoT-enabled medical devices to be a multi-hundred-million unit market opportunity and are committed to being a leader in it. In Premises, we maintained our track record of growth much faster than the market. We’re expanding our market share, with ongoing demand from commercial and Federal customers for our platform. As both businesses continue to scale, we are focused on maintaining our margin profile.   We remain confident in our long-term growth strategy and ability to build on the progress in our transformational opportunities to deliver shareholder value.”

Identiv CFO Justin Scarpulla added, “Our third quarter financial performance reflects the underlying demand for our product portfolio as we work toward our long-term operating model. We set a new record for quarterly revenues at $31.0 million, and our total backlog for all future shipments grew 31% year-over-year to a record $36.9 million, reflecting strong market demand for our IoT-enabling solutions. Our balance sheet remains debt-free with a robust cash position to meet our working capital needs. With our team’s focus on execution, we expect to maintain our positive operating momentum.”

Financial Outlook
Identiv provides guidance based on current market conditions and expectations, including macroeconomic conditions. Management is updating its guidance range for fiscal year 2022, with expected revenues of $112 million to $118 million. Normal seasonality is expected to continue. Management is updating its guidance to 20% to 25% year-over-year revenue growth in fiscal year 2023.

Conference Call
Identiv management will hold a conference call today, November 2, 2022, at 5:00 p.m. ET (2:00 p.m. PT) to discuss the company’s third quarter 2022 financial results. A question-and-answer session will follow management's presentation.

Toll-Free Number: +1 877-545-0523
International Number: +1 973-528-0016
Call ID: 108005
Webcast link: Register and Join

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at +1 949-574-3860.

The conference call will be broadcast simultaneously and available for replay here.

The replay of the call will be available after 8:00 PM ET on the same day through November 16, 2022 under +1 877-481-4010 (Toll-Free Replay Number) and +1 919-882-2331 (International Replay Number) with Replay ID: 46811.

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 profit and gross profit margins, 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 profit and gross profit margin exclude 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 profit margin, and excludes income tax benefit (provision), interest expense, foreign currency (gains) losses, 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 “anticipates”, “believes”, “plans”, “will”, “intends”, “expects”, 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 statements regarding 2022 expectations and 2022 and 2023 guidance and the Company’s ability to meet such guidance, the Company’s beliefs regarding its ability to achieve its business and strategic objectives and growth trajectory and expected benefits thereof, its business strategy and the drivers of momentum in its business, the Company’s beliefs regarding its capital and the sufficiency and uses thereof, the Company’s beliefs regarding its supply chain, the Company’s beliefs regarding customer demand, customer production and design wins and the associated benefits, the Company’s beliefs regarding its ability to execute on its key initiatives and the potential benefits thereof, the Company’s beliefs regarding its competitive position, and the Company’s beliefs regarding design wins, backlog and future orders is a forward-looking statement. 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, inflation and increases in prices, the impact of COVID-19, 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, 2021, 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.

Investor Relations Contact:
Matt Glover and Sophie Pearson
Gateway Investor Relations
+1 949-574-3860
IR@identiv.com

Media Contact:
arose@identiv.com

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,
  2022   2022   2021   2022   2021 
Net revenue$30,996  $27,857  $29,097  $83,914  $75,252 
Cost of revenue 19,808   17,647   17,979   53,550   47,602 
Gross profit 11,188   10,210   11,118   30,364   27,650 
Operating expenses:         
Research and development 2,625   2,479   2,088   7,633   6,556 
Selling and marketing 5,326   5,273   4,471   15,709   12,682 
General and administrative 2,639   2,496   2,400   7,623   7,120 
Restructuring and severance 49   223   99   132   761 
Total operating expenses 10,639   10,471   9,058   31,097   27,119 
Income (loss) from operations 549   (261)  2,060   (733)  531 
Non-operating income (expense):         
Interest expense, net (39)  (37)  (62)  (101)  (451)
Gain on forgiveness of Paycheck Protection Program note             2,946 
Gain on investment    6   611   30   611 
Foreign currency gains (losses), net (3)  95   (48)  111   (2)
Income (loss) before income tax benefit (provision) 507   (197)  2,561   (693)  3,635 
Income tax benefit (provision) 12   (54)  (21)  (38)  (94)
Net income (loss) 519   (251)  2,540   (731)  3,541 
Cumulative dividends on Series B convertible preferred stock (304)  (300)  (289)  (902)  (859)
Net income (loss) available to common stockholders$215  $(551) $2,251  $(1,633) $2,682 
          
Net income (loss) per common share:         
Basic$0.01  $(0.02) $0.10  $(0.07) $0.13 
Diluted$0.01  $(0.02) $0.09  $(0.07) $0.12 
          
Weighted average shares used in computing net income (loss) per common share:         
Basic 22,682   22,639   22,448   22,632   20,948 
Diluted 23,315   22,639   29,330   22,632   21,861 
          


Identiv, Inc. 
Condensed Consolidated Balance Sheets 
(in thousands) 
(unaudited) 
         
 September 30, June 30, March 31, December 31, 
  2022  2022  2022  2021 
         
ASSETS        
Current assets:        
Cash and cash equivalents$21,202 $25,016 $27,614 $28,553 
Restricted cash 698  905  1,074  1,254 
Accounts receivable, net of allowances 23,588  20,951  19,452  19,963 
Inventories 25,060  22,235  20,493  19,924 
Prepaid expenses and other current assets 3,908  3,495  2,673  3,032 
Total current assets 74,456  72,602  71,306  72,726 
Property and equipment, net 6,189  5,153  4,341  4,066 
Operating lease right-of-use assets 3,997  1,498  1,780  2,088 
Intangible assets, net 5,533  5,869  6,182  6,445 
Goodwill 10,179  10,250  10,288  10,268 
Other assets 1,046  1,055  1,012  1,070 
Total assets$101,400 $96,427 $94,909 $96,663 
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities:        
Accounts payable$15,074 $13,809 $11,335 $10,502 
Operating lease liabilities 941  949  1,143  1,269 
Deferred revenue 2,072  2,035  1,489  2,153 
Accrued compensation and related benefits 2,753  2,671  2,675  3,150 
Other accrued expenses and liabilities 2,917  2,343  3,316  3,774 
Total current liabilities 23,757  21,807  19,958  20,848 
Long-term operating lease liabilities 3,185  645  748  938 
Long-term deferred revenue 474  444  295  280 
Other long-term liabilities 24  25  74  85 
Total liabilities 27,440  22,921  21,075  22,151 
Total stockholders' equity 73,960  73,506  73,834  74,512 
Total liabilities and stockholders' equity$101,400 $96,427 $94,909 $96,663 
         


Identiv, Inc.
Reconciliation of GAAP and Non-GAAP Financial Information
(in thousands)
(unaudited)
          
 Three Months Ended Nine Months Ended
 September 30, June 30, September 30, September 30, September 30,
  2022   2022   2021   2022   2021 
Reconciliation of GAAP gross profit margin and non-GAAP gross profit margin         
GAAP gross profit$11,188  $10,210  $11,118  $30,364  $27,650 
Reconciling items included in GAAP gross profit:         
Stock-based compensation 38   44   49   138   130 
Amortization and depreciation 335   344   259   949   740 
Total reconciling items included in GAAP gross profit 373   388   308   1,087   870 
Non-GAAP gross profit$11,561  $10,598  $11,426  $31,451  $28,520 
Non-GAAP gross profit margin 37%  38%  39%  37%  38%
          
Reconciliation of GAAP operating expenses to non-GAAP operating expenses         
GAAP operating expenses$10,639  $10,471  $9,058  $31,097  $27,119 
Reconciling items included in GAAP operating expenses:         
Stock-based compensation (814)  (774)  (523)  (2,427)  (1,897)
Amortization and depreciation (253)  (232)  (243)  (724)  (720)
Restructuring and severance (49)  (223)  (99)  (132)  (761)
Total reconciling items included in GAAP operating expenses (1,116)  (1,229)  (865)  (3,283)  (3,378)
Non-GAAP operating expenses$9,523  $9,242  $8,193  $27,814  $23,741 
          
Reconciliation of GAAP net income (loss) to non-GAAP adjusted EBITDA         
GAAP net income (loss)$519  $(251) $2,540  $(731) $3,541 
Reconciling items included in GAAP net income (loss):         
Income tax provision (benefit) (12)  54   21   38   94 
Interest expense, net 39   37   62   101   451 
Gain on forgiveness of Paycheck Protection Program note             (2,946)
Gain on investment    (6)  (611)  (30)  (611)
Foreign currency gains (losses), net 3   (95)  48   (111)  2 
Stock-based compensation 852   818   572   2,565   2,027 
Amortization and depreciation 588   576   502   1,673   1,460 
Restructuring and severance 49   223   99   132   761 
Total reconciling items included in GAAP net income (loss) 1,519   1,607   693   4,368   1,238 
Non-GAAP adjusted EBITDA$2,038  $1,356  $3,233  $3,637  $4,779 
          

 


FAQ

What was Identiv's total revenue for Q3 2022?

Identiv reported a total revenue of $31.0 million for Q3 2022.

How much did the backlog grow in Q3 2022 for Identiv?

The total backlog for Identiv grew to $36.9 million, up 31% year-over-year.

What percentage increase did RFID units shipped experience in Q3 2022?

RFID units shipped grew 17% year-over-year to 45.4 million units.

Did Identiv maintain a debt-free status in Q3 2022?

Yes, Identiv remained debt-free with a cash position of $21.9 million.

What is the revenue growth projection for Identiv in fiscal year 2023?

Identiv projects year-over-year revenue growth of 20% to 25% for fiscal year 2023.

Identive, Inc.

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