Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Identiv Inc (INVE, Financial) completed the sale of its physical security business, netting approximately $135 million, which strengthens its financial position.
- The company is focusing on building its IoT business, particularly in specialty RFID and Bluetooth Low Energy solutions.
- Identiv Inc (INVE) has a robust new product development pipeline, with projects in logistics, pharma, medical devices, and aviation.
- The transition of production from Singapore to Thailand is on track, expected to improve gross margins significantly.
- A strategic partnership with Inlay for BLE-based solutions is expected to enhance Identiv Inc (INVE)'s market position in cold chain monitoring and potentially other sectors like healthcare and industrial automation.
Negative Points
- Third quarter revenue decreased by $5.2 million compared to the prior year, primarily due to lower sales of BLE transponder and mobile products.
- Gross margins have been under pressure due to dual manufacturing overhead costs during the transition from Singapore to Thailand.
- The company reported a GAAP net loss from continuing operations of $9.3 million, an increase from the previous year's loss.
- Non-GAAP adjusted EBITDA loss increased to $4.5 million, primarily due to lower year-over-year IoT revenues.
- The transition of production to Thailand is not yet complete, with some customers' production expected to continue in Singapore into the first half of 2025.
Q & A Highlights
Q: Can you provide an update on the progress of transitioning production from Singapore to Thailand and its impact on achieving the 26-28% non-GAAP gross margin target?
A: Kirsten Newquist, CEO: We are making great progress with the transition, expecting 75% of production to be moved by year-end. The remaining customers will transition in the first half of 2025. We are confident in achieving the 26-28% non-GAAP gross margin once full productivity is reached.
Q: What is the expected cash burn over the next 12 months, and how does it compare to previous guidance?
A: Justin Scarpulla, CFO: We expect a cash burn of $14-16 million over the next 12 months, consistent with previous guidance. We do not anticipate a $25 million cash burn in the following year.
Q: Is there a timeline for potential acquisitions to help reach the $65 million revenue target?
A: Kirsten Newquist, CEO: We are actively assessing acquisition targets as part of our strategic pillars. While there is no specific timeline, it remains a priority for us.
Q: Can you discuss Identiv's penetration in the pharmaceutical sector and any ongoing projects?
A: Kirsten Newquist, CEO: Pharmaceutical is a key area for us, with active new product development projects underway. We are building a business development team to explore additional opportunities in this sector.
Q: What are the company's plans for investor outreach in the coming months?
A: Kirsten Newquist, CEO: We will prioritize investor outreach, attending the Craig Hallum Alpha Select Conference in November and the Imperial Capital Security Investors Conference in December, aiming to engage with our investors.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
