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Identiv Reports Fourth Quarter and Full Year 2023 Financial Results

Record Fiscal Year Revenues of $116.4 million

Delivered $4.8 million in Cash Flow from Operations in Fourth Quarter 2023

Secured Second Facility in Thailand for Future RFID Production

Identiv, Inc. (NASDAQ: INVE), a global digital security and identification leader in the Internet of Things (IoT), today released its financial results for the fourth quarter and fiscal year ended December 31, 2023.

Recent Financial and Operational Highlights

  • FY 2023 revenue was $116.4 million, up 3% year-over-year.
  • Ended Q4 2023 with $24.4 million in cash, cash equivalents and restricted cash. Maintained a strong working capital position of $48.7 million exiting the fourth quarter.
  • Federal billings in FY 2023 increased 9% year-over-year.
  • Software, services, and recurring revenues grew to a record 24% of Premises segment revenues in Q4 2023.
  • FY 2023 RFID units shipped increased to just under 200 million units.
  • Continued to scale production in Thailand, the facility’s first year in operation, and exited 2023 with a capacity for primary processes of 200 million units.
  • Signed lease for adjacent building in Thailand, securing our ability to expand production as needed.
  • Collaborated with Energous and Wiliot on a real-time tracking solution for temperature-sensitive assets; currently in pilot with several logistics companies in Europe.
  • Commenced engagement with retail data platform company Nexite to support further growth of BLE-enabled RFID category.
  • Launched ScrambleFactor reader with biometrics and multi-factor authentication for Federal market customers.
  • Partnered with Mazars USA LLP Consulting Group on a new AI-enabled retail operations solution that integrates Microsoft Dynamics 365 with our bitse.io platform.
  • Opened the IoT Excellence Center in Germany, showcasing the breadth of our complete IoT portfolio for current and prospective customers.
  • Secured a $2 million contract from a global electronics retailer for a secure employee login application.
  • Released bitse.io 3.0, the latest version of our global IoT connecting cloud platform, which includes advanced features for supply chain monitoring and customer engagement.
  • Showed continued strength in OEM reader sales, doubling category revenues quarter-over-quarter.
  • Board-led strategic review continued to be a major focus and activity in Q4 2023.

Fiscal Year 2023 Financial Results

Revenue for fiscal year 2023 was $116.4 million, a 3% increase from $112.9 million in fiscal year 2022. By segment, Identity revenues were $68.1 million and Premises revenues were $48.3 million.

Fiscal year 2023 GAAP gross margin was 36.2% and non-GAAP gross margin was 37.9%.

GAAP operating expenses, including research and development, sales, and marketing, and general and administrative, totaled $47.2 million in fiscal year 2023, compared to $41.3 million in fiscal year 2022. Non-GAAP operating expenses totaled $41.3 million in fiscal year 2023, compared to $37.1 million in fiscal year 2022.

GAAP net loss in fiscal year 2023 was ($5.5) million, or ($0.29) per basic and diluted share, compared to GAAP net loss of ($0.4) million, or ($0.07) per basic and diluted share, in fiscal year 2022.

Non-GAAP adjusted EBITDA for fiscal year 2023 was $2.8 million, compared to $5.4 million in fiscal year 2022.

Fourth Quarter 2023 Financial Summary

Revenue for the fourth quarter 2023 was $29.0 million, compared to $31.8 million in the prior quarter and $29.0 million in the fourth quarter of 2022. By segment, Identity revenues were $17.5 million and Premises revenues totaled $11.5 million.

Fourth quarter 2023 GAAP gross margin was 35.1% and non-GAAP gross margin was 37.0%.

GAAP operating expenses, including research and development, sales, and marketing, and general and administrative, totaled $11.8 million in the fourth quarter of 2023, compared to $11.6 million in the prior quarter and $10.2 million in the fourth quarter of 2022. Non-GAAP operating expenses were $9.8 million in the fourth quarter of 2023, compared to $10.3 million in the prior quarter and $9.3 million in the fourth quarter of 2022. Excluded from our fourth quarter 2023 non-GAAP operating expenses were $0.4 million in costs related to the ongoing Board-led strategic review.

GAAP net loss for the fourth quarter 2023 was ($1.6) million, or ($0.08) per basic and diluted share, compared to GAAP net loss of ($0.02) million, or ($0.01) per basic and diluted share, in the prior quarter and GAAP net income of $0.3 million, or $0.00 per basic and diluted share, in the fourth quarter of 2022.

Non-GAAP adjusted EBITDA in the fourth quarter of 2023 was $0.9 million, compared to $2.2 million in the prior quarter and $1.7 million in the fourth quarter of 2022.

Management Commentary

“In 2023, we delivered record fiscal year revenue while keeping margins healthy with a consistent focus on delivering disciplined growth,” said Identiv CEO Steven Humphreys. “Our commitment to maintaining a strong balance sheet enabled us to deliver a record quarter for cash flow from operations, while investing to build our foundation for strategic growth.”

Financial Outlook

Identiv provides guidance based on current market conditions and expectations, including macroeconomic conditions and customer demand. For fiscal Q1 2024, management currently expects net revenues in the range of $22 million to $24 million, with normal seasonality expected to continue.

Conference Call

Identiv management will hold a conference call today, March 12, 2024, at 5:00 p.m. EDT (2:00 p.m. PDT) to discuss the company’s fourth quarter and fiscal year 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: 107746

Webcast link: Register and Join

The teleconference replay will be available through March 26, 2024, by dialing 877-481-4010 (Toll-Free Replay Number) or 919-882-2331 (International Replay Number) and entering passcode 49814.

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 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 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 2024 first quarter guidance and outlook; the Company’s strategy, focus and its foundation for growth; the Company’s expectations regarding seasonality; expected benefits of the Company’s Thailand production facilities, including the Company’s ability to expand production capacity; and the Company’s expectations with respect to demand and customer orders. 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 completion of the 2023 audit and any related adjustments; 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 the strategic review on the Company’s business, 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

 

Year Ended

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

 

2023

 

2023

 

2022

 

2023

 

2022

Net revenue

$

28,985

 

$

31,846

 

$

29,001

 

$

116,383

 

$

112,915

 

Cost of revenue

 

18,821

 

 

19,905

 

 

18,421

 

 

74,219

 

 

71,971

 

Gross profit

 

10,164

 

 

11,941

 

 

10,580

 

 

42,164

 

 

40,944

 

Operating expenses:
Research and development

 

2,952

 

 

2,916

 

 

2,283

 

 

11,590

 

 

9,916

 

Selling and marketing

 

4,938

 

 

5,641

 

 

5,021

 

 

22,555

 

 

20,730

 

General and administrative

 

3,570

 

 

2,939

 

 

2,806

 

 

12,360

 

 

10,429

 

Restructuring and severance

 

338

 

 

104

 

 

70

 

 

714

 

 

202

 

Total operating expenses

 

11,798

 

 

11,600

 

 

10,180

 

 

47,219

 

 

41,277

 

Income (loss) from operations

 

(1,634

)

 

341

 

 

400

 

 

(5,055

)

 

(333

)

Non-operating income (expense):
Interest expense, net

 

(76

)

 

(211

)

 

(42

)

 

(427

)

 

(143

)

Gain on investment

 

 

 

132

 

 

 

 

132

 

 

30

 

Foreign currency gains (losses), net

 

209

 

 

(264

)

 

44

 

 

25

 

 

155

 

Income (loss) before income tax provision

 

(1,501

)

 

(2

)

 

402

 

 

(5,325

)

 

(291

)

Income tax provision

 

(103

)

 

(20

)

 

(63

)

 

(164

)

 

(101

)

Net income (loss)

 

(1,604

)

 

(22

)

 

339

 

 

(5,489

)

 

(392

)

Cumulative dividends on Series B convertible preferred stock

 

(319

)

 

(319

)

 

(304

)

 

(1,266

)

 

(1,206

)

Net income (loss) available to common stockholders

$

(1,923

)

$

(341

)

$

35

 

$

(6,755

)

$

(1,598

)

 
Net income (loss) per common share:
Basic

$

(0.08

)

$

(0.01

)

$

0.00

 

$

(0.29

)

$

(0.07

)

Diluted

$

(0.08

)

$

(0.01

)

$

0.00

 

$

(0.29

)

$

(0.07

)

 
Weighted average shares used in computing net income (loss) per common share:
Basic

 

23,248

 

 

23,174

 

 

22,737

 

 

23,068

 

 

22,659

 

Diluted

 

23,248

 

 

23,174

 

 

23,160

 

 

23,068

 

 

22,659

 

Identiv, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 

December 31,

September 30,

December 31,

2023

2023

2022

 
ASSETS
Current assets:
Cash and cash equivalents

$

23,312

$

19,674

$

16,650

Restricted cash

 

1,072

 

1,254

 

487

Accounts receivable, net of allowances

 

21,969

 

25,892

 

24,826

Inventories

 

28,712

 

29,423

 

28,958

Prepaid expenses and other current assets

 

4,421

 

5,238

 

4,177

Total current assets

 

79,486

 

81,481

 

75,098

Property and equipment, net

 

9,320

 

8,518

 

6,719

Operating lease right-of-use assets

 

5,214

 

5,525

 

4,373

Intangible assets, net

 

4,251

 

4,483

 

5,265

Goodwill

 

10,218

 

10,189

 

10,190

Other assets

 

1,234

 

1,261

 

1,120

Total assets

$

109,723

$

111,457

$

102,765

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable

$

12,250

$

12,099

$

15,231

Financial liabilities

 

9,949

 

9,939

 

Operating lease liabilities

 

1,714

 

1,708

 

1,190

Deferred revenue

 

2,341

 

2,474

 

2,068

Accrued compensation and related benefits

 

2,334

 

2,580

 

2,757

Other accrued expenses and liabilities

 

2,194

 

2,872

 

2,147

Total current liabilities

 

30,782

 

31,672

 

23,393

Long-term operating lease liabilities

 

3,716

 

4,037

 

3,366

Long-term deferred revenue

 

927

 

904

 

587

Other long-term liabilities

 

26

 

25

 

25

Total liabilities

 

35,451

 

36,638

 

27,371

Total stockholders' equity

 

74,272

 

74,819

 

75,394

Total liabilities and stockholders' equity

$

109,723

$

111,457

$

102,765

 

Identiv, Inc.

Reconciliation of GAAP to Non-GAAP Financial Information

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

 

2023

 

2023

 

2022

 

2023

 

2022

Reconciliation of GAAP gross margin to non-GAAP gross margin
GAAP gross profit

$

10,164

 

$

11,941

 

$

10,580

 

$

42,164

 

$

40,944

 

Reconciling items included in GAAP gross profit:
Stock-based compensation

 

60

 

 

45

 

 

53

 

 

195

 

 

191

 

Amortization and depreciation

 

491

 

 

458

 

 

363

 

 

1,737

 

 

1,312

 

Total reconciling items included in GAAP gross profit

 

551

 

 

503

 

 

416

 

 

1,932

 

 

1,503

 

Non-GAAP gross profit

$

10,715

 

$

12,444

 

$

10,996

 

$

44,096

 

$

42,447

 

Non-GAAP gross margin

 

37

%

 

39

%

 

38

%

 

38

%

 

38

%

 
Reconciliation of GAAP operating expenses to non-GAAP operating expenses
GAAP operating expenses

$

11,798

 

$

11,600

 

$

10,180

 

$

47,219

 

$

41,277

 

Reconciling items included in GAAP operating expenses:
Stock-based compensation

 

(938

)

 

(944

)

 

(543

)

 

(3,776

)

 

(2,970

)

Amortization and depreciation

 

(241

)

 

(274

)

 

(236

)

 

(995

)

 

(960

)

Loss on disposal of property and equipment

 

 

 

 

 

(68

)

 

 

 

(68

)

Strategic review-related costs

 

(435

)

 

 

 

 

 

(435

)

 

 

Restructuring and severance

 

(338

)

 

(104

)

 

(70

)

 

(714

)

 

(202

)

Total reconciling items included in GAAP operating expenses

 

(1,952

)

 

(1,322

)

 

(917

)

 

(5,920

)

 

(4,200

)

Non-GAAP operating expenses

$

9,846

 

$

10,278

 

$

9,263

 

$

41,299

 

$

37,077

 

 
Reconciliation of GAAP net income (loss) to non-GAAP adjusted EBITDA
GAAP net income (loss)

$

(1,604

)

$

(22

)

$

339

 

$

(5,489

)

$

(392

)

Reconciling items included in GAAP net income (loss):
Income tax provision

 

103

 

 

20

 

 

63

 

 

164

 

 

101

 

Interest expense, net

 

76

 

 

211

 

 

42

 

 

427

 

 

143

 

Gain on investment

 

 

 

(132

)

 

 

 

(132

)

 

(30

)

Loss on disposal of property and equipment

 

 

 

 

 

68

 

 

 

 

68

 

Foreign currency gains (losses), net

 

(209

)

 

264

 

 

(44

)

 

(25

)

 

(155

)

Stock-based compensation

 

998

 

 

989

 

 

596

 

 

3,971

 

 

3,161

 

Amortization and depreciation

 

732

 

 

732

 

 

599

 

 

2,732

 

 

2,272

 

Strategic review-related costs

 

435

 

 

 

 

 

 

435

 

 

 

Restructuring and severance

 

338

 

 

104

 

 

70

 

 

714

 

 

202

 

Total reconciling items included in GAAP net income (loss)

 

2,473

 

 

2,188

 

 

1,394

 

 

8,286

 

 

5,762

 

Non-GAAP adjusted EBITDA

$

869

 

$

2,166

 

$

1,733

 

$

2,797

 

$

5,370

 

 

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