Identiv, Inc. Q4 FY2024 earnings call

• Quarter four marked the first full quarter after selling the physical security business, allowing focus on specialty IoT solutions. Proceeds from the sale strengthened financial position. - Kim Macaulay joined as head of commercial organization to drive sales expansion and business development. - RFID production transition from Singapore to Thailand is progressing well; 75% of volume transitioned to Thailand in December, with remaining customers to be transferred by end of quarter two. - New product development pipeline includes various projects like smart labels for consumables, rugged BLE devices, etc. - Partnership with Novanta announced, combining Novanta's reader modules and APIs with Identiv's inlay portfolio for medical device solutions.

Fourth quarter 2024 revenue was $6.7 million. Fiscal year 2024 revenue was $26.6 million, a decrease of $16.8 million compared to the prior year period, primarily due to lower sales of BLE transponder and mobile products. Q4 2024 GAAP gross margin was negative 14.9% and non-GAAP gross margin was negative 5.2%. Fiscal year 2024 GAAP gross margin was 1.3% and non-GAAP gross margin was 8%. The decline in gross margins was largely due to the production transition to Thailand.

• Q1 2025 net revenue expected in the range of $4.8 million to $5.1 million. - Target non-GAAP gross margin of 26% to 28% once full production is in Thailand. - Focus on organic growth and M&A-driven growth within the PAT framework.

• Potential delays in the production transition from Singapore to Thailand. - Impact of legacy low-margin customers on margins. - Tariff risks related to manufacturing in Thailand (though currently assessed as manageable).

Q: Expand on when first revenues from Novanta partnership and gross margin targets for partnerships.

A: Partnership with Novanta is technology and business development focused, not directly on revenue. For commercial partnerships, there are revenue and gross margin targets, with medical partnerships typically having higher margins.

Q: When will the grocery store device opportunity impact and ASP details.

A: Hopes to have early volumes by end of this year or early next year. It's a higher price point than typical portfolio products, iterative development due to harsh environment.

Q: Quantify pull-in order in Q4 and cadence of gross margin throughout 2025.

A: Pull-in order was largely responsible for Q4 beat by ~$600,000. Cadence of gross margin beyond one quarter not formally guided, but directionally in ballpark.

Q: EBITDA breakeven timeline and tariff risk.

A: No formal EBITDA breakeven timeline. Assessed as in good spot for tariffs related to manufacturing in Thailand.