INVE - Earnings call transcript Q2 2020

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Operator

Good afternoon. Welcome to Identiv's presentation of its Second Quarter 2020 Earnings Call. My name is Rochanne, and I will be the operator this afternoon.

Joining us for today's presentation are the company's CEO, Steve Humphreys; and CFO, Sandra Wallach.

Following management remarks, we will open the call for questions.

note to this including non-GAAP and cash please be management adjusted begin, free references making measures flow. we that call, during may EBITDA Before and projections,

statements. management or results projections characteristics may statement. those market of financial from be call, conditions to including other the expressed events, differ forward-looking and during that refers materially addition, making In statements. in Actual forward-looking projections Any future is statement expectations, forward-looking will these future a

the latest risk update time Identiv Steve Steve CEO, to the discussed on For in the as from his more refer for obligations these Humphreys, information, XX-K. filed factors to speak turn which is call SEC, of documents please over the to Form statements, no Humphreys, comments. floor assumes including annual today. to with forward-looking now yours. time I the company's report will

Steve Humphreys

Thanks, operator, today. and thank us you joining for all

in has and for areas backlog quarter the we an showed second carrying half us XXXX, This second strong strength a momentum and XXXX. we're into expected. in Our stronger seeing up building all third us even lined quarter

RFID into As of numbers details, our our you areas go focus RFID but growth for our shipment rates and and all backlog on federal grew will for I over the we're primary and headline XX% RFID track are business. importantly, this. are year-over-year, know, more more XXXX. that confirm XX%

that within just adoption RFID is broad discussed, our customers' takeoff. trend as Now this the see beginning shows we're of growth core major we've a long-term to products that

business grew where market, the control area, XX% Access Our is other of Federal federal course, year-over-year. our

customers, are saw largely Our these growth we smart and products year-over-year of card driven by in also federal XX%. readers

XXXX. to government, with we year experience continue into and the trends our from rest of Now the the these expect U.S.

over quarter the these a up This More revenue a grew into our from orders a record trends demonstrate we backlog during with as up quarter were a and of quarter. rates. from even $XX ago record faster and RFID the as of were strong in result the for in QX tangibly, going that XXXX coming at X% came to already is And due total sequentially. increasing XXX% second numbers our result, So the largely the QX second growth momentum, orders entered backlog What backlog XX% is the second than million. our during shipments last year quarter. of

our one So in that's thriving. tough like the it's of these, business economic ones like times looks

sales from Now the execution. and numbers, talked the came underneath the headline to going up business from year. major of the rest our Less are than core I $XXX,XXX about QX that QX came into we've clarify want ramping that programs

main driving in and work-from-home these drove driving federal All our strength factors demonstrate these need as as So government. the results our the going RFID well sudden growth technologies the QX. business, for business the our into in backlog growth, three quarter long-term the second

our from RFID million. So XX% card I Revenue Identity with the business segment, mentioned. XX% more our our look XX% second smart our our in grew year-over-year, sequentially Within already let's to year-over-year, and detail. grew Within increased by readers and RFID Identity products at in business, as that smart quarter $XX.X reader that card mind, both grew.

Now sensors that our during also core are the track quarter, prototypes wearable of which tags, temperature. we temperature launched body

And our samples, production in the financing place Singapore start and to third RFID up production that work scaling XX,XXX quarter on at put ramping range come the to of in work, the video every a of samples quarter, applications. got day. we that are the the over ramp put the for Also pilot for in we've during requests already up and our continuing in meet presentation business for tag project showing here in production the short facility. we have requests we're to We a

give I'll talk of the second and about XXXX. QX year we half when and the these on updates Now initiatives more growth into

So the our of turning government business focus. QX, to strength in federal this Premises showed our

depends our installations was buildings impacted, be and going physical actually any Now business XX% we but federal to on business year-over-year. increased saw

more medium business part So business customers the of growth see we strong dealers trend going and and small performance and clear. forward. near-term Small is But the state local businesses access since platforms, physical our for in of government this and the slowed. have commercial federal, XX% overall are than

platform. In ability recently, overall. The the the market, XVR we restaurants interface really you time. contact multiple user real for limits. locations in Velocity system Access And health already a addition in occupancy quarter, visible complete Mexico. More launched store launched our extension creates system tracing occupancy makes bars, needs security great serve stores, system. it to talked new the for track and this others deployed to here to our in it manage federal And strength a in we on a downloadable dashboard the for based facilities the their market Last in and occupancy tracking manage physical the safety and we've see to products can about to our

tracking We also priced month per at per the door. $XXX system

for even So it's really smallest easy to the business. adopt,

launches for be I new to Now opportunities can hard know market that evaluate. product

A total only $XX similar, calibrate and do of something but the just the does they provide the early stages. of also component a just in solution, hundred Density million, they at value several counter, million of and solution. people and they're solution. called We valuation IO raised the opportunity this a company Let the me another deployment

and channel, retailer existing large Mexico. an across a have in in system stores we hundreds similar of a with already deployed We

that bring targeted fast already market solution this solution to so widely the we we of this One similar is had very reasons could deployed.

the space platform we the Prime, called To component and drive quarter, RFID subscription help the for a new our service a total our system-as-a-service video of recurring launched management although So increasing remains XVR recurring solution. key of highlights federal strategy were revenues. revenues, a video

but a so providing services refreshes, updated we're launched are XVR we response just in keep We customers as and you software we'll had hardware, economy, monthly great already our all progresses. it, Prime, a one adoption tough fee. dealing to As with

also the our and Now advantage we're optimize of aggressively to processes strengthen people, systems. economic taking and circumstances

Some long challenges good there are coming some on strengthen in and we environment, our companies this the very are having bringing the that people to in selectively business are for term. market

four And We've management. operations only did So our expenses. team while our done XX we've product in since holding January made business. sales and Sandra RFID our we X, of all adds R&D overall new in we've XX XX while mention, we've also as down will ramp-up added added total our worldwide. this to ongoing for And in And support members. production driving major this Singapore increase headcount to operating strategic

talk in technology could Q&A, in with in leaders particular, Brivo, experience and got we place been I'd And sales like other people Milestone in Mike about and our we've our to from on Taylor. our Now more to leadership, industry. new brings everything highlight always world-class leader, And AMAG, leverage products. but the Mike's competitive global advantages. we've side, of strong sales all Mike in Mike

we XX% X% overall, record federal the the XX% card and growth, sequential quarter up revenue backlog growth, was quarter the going So RFID reader second smart year-on-year had by of from year-over-year highlighted the growth, levels growth the quarter. at access already end into XX% second control year-over-year second XX%

the the near and there environment wave growth the our second Now in. we're in from economic products a certain launched advantage are very return-to-home the experiencing But base have into RFID, challenges built demand federal, of strong half take strong all in of a and going XXXX. work we're needs well in into second secular strength for home we've

we're to that will capital will with operations generate the flow ramp have exiting XXXX, EPS as return on from to our So track to debt cash from on positive production business base, profitability. working us track and GAAP discuss, to obligations Sandra clear also which

So here some year Then the second I'll acceleration in into and to and over it financial second results and events into more half quarter through go metrics I'll into Sandra? to more the detail. of Sandra the XXXX. pause walk turn driving

Sandra Wallach

As this the the are all quarter mentioned, Steve in headlines for numbers.

first February, up that XX% the in continued of XXXX in quarter The the and quarter million second Even growth. the shelter impact of quarter to the is down in $XX.X compared X% out place the compared revenue, second total closed metric with with revenue started of we XXXX to COVID-XX XXXX. and first of

orders saw and comparable increase by business which sustained demand driven quarter XX% actions XX% in were portfolio, transponder by work-from-home for Our strength XXXX our a growth across business, sequentially. in our a top XXXX results Premises verticals, shifts the QX our changes business driven impacting demand impacted line and by for shelter-in-place including in continued we quarter continuing over increase mixed temporal our and in select Identity

XXXX. second prior XX% comparable Our revenue points the basis, standalone at software or a of and of our was our software of steady half TTM business and XX% XX% over and XX was our of the revenue, trailing standalone basis revenue On total period. XX-month, business services services for quarter up first

in XX prior half over revenue and metric, and X% trailing at of total steady reflecting This basis revenue, remains a months Our quarter improvement our longer-term for the of our stand-alone commitments consolidated services, support revenue services second total for point our period. business first X% recurring a of of X% XXXX. subset revenue, of our of XX part the software multi-period and accounted

of our GAAP and were quarter XX% profit respectively. adjusted XXXX, margins second non-GAAP the and For gross XX%,

non-GAAP For was profit margin adjusted period, trailing the XX%. XX-month gross our

for impacted across non-GAAP XXXX. our gross adjusted GAAP Our and profit within negatively and were by to XXXX mix segments QX compared QX margins

non-GAAP of we except EBITDA quarters positive XXXX. adjusted XXXX, returned last QX XX again, positive, QX XX For to with the

margin XX-month which positive was the is period, same and last year. on for X% down XX-month a basis XXX period the EBITDA adjusted trailing Our X% from trailing period points positive

to loss million QX part in QX for due loss right-of-use of income which of operating compared quarter net net the share of to has million that of a of $X.X was XXXX. charge subleased, $X.X the million The million nonpayment of XXXX a rent. of $X for and acquisition, an GAAP as related was lease into $X.XX include asset results Our XXXX restructuring with subsequently QX negative net impairment $X.X XXXX nonrecurring per default second gone a or in impact acquired

per share. share Series for dividends XXXX, QX net million With and GAAP preferred, loss attributable QX positive in per compared net loss per with XXXX. of of restructuring a per the B Adjusted $X.XX our GAAP was $X.XX in to have $X.XX share stockholders the a nonrecurring would $X a loss our been share $X.XX charge, or on the loss

in earnings release. of GAAP which is have today appendix in information, provided included the also full non-GAAP to We a our reconciliation

from of XX% PDF segment and by in driven products RFID software absolute or a our were which lower products. driven driven Premises primarily from lower of by increase products. as On video physical Reserve total solution QX, sales by security Freedom, as XX% by XX% sequential These for next QX services, Control mobile transponder X% the sales QX XXXX the The sales QX $X.X primarily as from total an QX decrease card flat of decrease in were XX% access was readers to and which signing sales in and higher sales our lower capability well U.S. products. XXXX. security reduction XXXX, our Enterphone RFID readers segment, transponders offset XXXX. the million QX QX and XX% The sales to lower in and sales to products, of compared increases XXXX access XXXX. Physical of of card as offset of related revenue products, a our sales accounted new MESH slide, from decreases of sales were Identity analyzing credentials, large and was sequential the higher XXXX, smart or deployment nonrecurring and our of The by compared revenue in with transponder access Hirsch These of technology a mobile further as impact year-over-year and increase trends products. Revenue of our as quarterly lower card year-over-year control totaled of well dollars Access million QX analytics by Navy in access of was products Thursby includes well dollars readers, declines $XX.X our

driven certain This was in XX% margin, by XXXX. of Our and non-GAAP XX% XXXX, the noncash segments of within profit excludes across second in in the items, XXXX and mix quarter compares products QX XX% with which segments. both QX gross

Our XX%, compared Premises XX%, margins and flat to at XXXX were QX relatively QX XX% respectively. XXXX and

than lower flat relatively compared margins XX% of due QX to of at XX%, lower-margin XXXX sales. higher Our to transponder were Identity QX a XXXX segment and XX%, at proportion

our Now management. expense moving operating to

of XX% the of a the with as XX% second and operating revenue the of XX% second of Our first non-GAAP in compared expenses quarter in XXXX in decreased quarter percentage to quarter XXXX. XXXX

expenses from $X.X restructuring Our $X.X quarter primarily second were $XX This GAAP up up the million XXXX QX of was million, expense. which from due operating XXXX. to and million million increase in $X.X the for was nonrecurring QX in

amortization of in This non-GAAP transaction acquisition-related items XXXX additional $X.X as as operating million XXXX. non-GAAP to the well restructuring and of million and to QX costs severance second the our and such noncash Our as in normally fair decrease certain $X.X quarter expenses of and costs in $X.X stock-based consisting compensation, depreciation a and QX totaled adjusted from exclude excluded liability million XXXX. compares value in non-GAAP items the earn-out results,

sheet. partially $X.X loss impact non-GAAP net quarter. received term the PPP had of to driven cash million cash for of Net We'll the a up loan East $X.X $X.X $X.X was by we $X proceeds primarily ago support We million in and used million. to flow. increase XXXX flows. at RSU invested providing [indiscernible] facility, driven at XX-Q increase $X.X increase project free comparing GAAP loan year and $XX.X to $X generated $X.X million financing $X.X from revolver Bank million payments Singapore, provided, driven driven our capital there our releases. of million net be term foreign fluctuation a million currency use by an reconciliation expenditures operating of and the ramping West from $X flow in was position offset million filings, repayments XXXX a second position of $X.X our June prior from our XXXX. negative of XXXX cash reconcile our program, for our by related Now cash the a we proceeds activities, cash, of assets million liabilities, XXXX one quarter growth turning and capital quarter quarter March noncash second quarter QX in was June cash XXXX. QX a of with over net exited items; be by the under In by will offset And the a million Singapore the to working to during at With over million, full lastly, tax million loan, cash balance cash ended our net Under $X.X the million by to year-to-date activity excluding

have balance the release per we appendix. completeness, sheet For in the earnings included the full

we the our a XXXX, mentioned, business increased QX, look are delivered As of and second we and balance operate quarter solid into the to visibility Steve as continue third to seeing forward half.

XXXX. general the guidance as for still of We again pandemic, with severity regarding regarding the our duration share However, current uncertainty will we million, and much prior on second to the as the have we is $XX year. deliver information the thinking current confidence in to more guidance, half range have $XX on visibility our million that around track to of which of the we with revenue believe

our addition, with consistent on lower-margin In versus additional there to margin the growth in due actuals. guidance our higher projected segment, we and Identity QX will mix pressure rate rates our with be original downward shift gross believe

adjusting discussion and it With have be our to we pass I'll provide will we full we'll update that, financial a when unknowns, and trends back Steve. these the clarity. recognizing and addition, In operating conclude expenses, more

Steve Humphreys

Thanks, Sandra.

the growth opening said section, Now as expect is it's RFID because driven. in second heavily half the in predictable I we backlog the

we've for means I with entering with quarter update additional of or a quarter an all QX XXXX. for and either So for third backlog That the into within backlog RFID received orders to quarter. mentioned, more there. expected drive contribute upside record our the let even start shipments now Since me the orders any

to environment continuing But backlog be Our in on are of tell, orders that's built expected an tangible to that aggressive. as come. continuing you it's and over RFID growth XX% this especially year, can uncertain, sounds in

practice. the said can. as in, as economic been in hasn't we're give data reporting environment before, as unpredictable we normal Now to trying our much But backlog I've we're

a visibility in of So let mind, bit backlog. you further that little into with me our give

exceeds about we backlog For course, shipments fourth already total quarter, it's already backlog quarter, above from XXXX, XX% moving the the the still above quarter for And but that fourth our we into the the building year backlog quarter. the had we the fourth fourth backlog and that ago. had we're of the of a had going

almost side, is Premises business the the federal year-end. on So federal always with strengthened our

in turn quarter, track, me in benefits XX% as month expecting This little federal. led detail. the the growth the that the and as the to have brought – Premises let on the launched of little we A federal into on. roughly products more leadership that a year-end new by we a year, well So sales also bit we've sequential we're

Now access security to commercial are, to clear, course, physical slow like space. in there be cards of the and to Industries pressure to be on be continues retail recover. going

certainly just the environment. strengths in for as an it's the number, federal But earlier tough on overall Premises track built the again, market. have in we've the sequential a us So not year growth

the wave half demand. The second is second growth quarter third third of driving factor the our and work-from-home in

the lockdown, products. our It Now we in for saw next less then of couple the first but demand of growth rates, couple for in above a stayed initial normal months. of months spike work-from-home dramatically

products with there work-from-home federal and year-end these comes of for from the for into second A federal many card market products. from up seeing again drive of the of weeks combination of readers smart also. we're home to year coming a work strength and going XX for a on higher other organizations, demand also with our demand us from wave Now lot lot next the work-from-home and clearly

in third. the Now beginning already for to tag, launch in XVR the of for mentioned second the these demand products, tracking and we've addition businesses, our and and I core Prime. range temperature now to a launched securities. the especially continued targeted the for market We've products of federal quarter occupancy growing touchless

me It's also government aligned security just couple American the the next and that security already just highly we on Appropriation with over the this three In therefore, our couple in two some product federal Chinese, the becoming several sourcing, to major launched prohibition includes communication have onshoring FICAM positions of authentication The the on avoid a and plans preferences in of secured insertion buy to under aspect government every to evaluation government. of much thousand who our federal that's focus government. our It's reader those. product the federal the Let China-sourced agencies. is take advantage with business, any to factor we're products default bill government for technology. passed very This deploy ensure to us of with U.S. requirements for strong agencies, a this for the aligned years. Defense trend the of product readers very or brings is

with gates locations line or launched from touchless to entry away the XX entirely UHF secure. great also authenticate an in and solutions you for creates other This again, also while large carparks, So touchless, identity more. we're convenient highly experience It's allows card. and being deploying, we a feet

we implications. others, around Q&A a these a to desire, mentioned them go lot customers, in all of what's multiple ecosystems billions products. Growth so RFID discuss of brands, case. an there's for and range selling we're them We've in but now mobility, is luxury which the showing RFID medical the even the numbers The a and second talked especially of if main numbers the there's we're about seeing and across more of are our hundreds dramatically, nearly and factors that not our This But into millions among I'm is they're tag, of now; the the that two just beginnings tracking talk not just expanding are and before But product underneath wider applications the to launches, for is we Now NFC, means units, the applications about testing again deploying understand: in today. single-use in temperature our RFID. point trials. can right first is going of

what us they're this doing market. they're So there's that in in products indication gives really an bringing RFID the sustainability to

those initiatives volumes, customer large have major So going multiple around when we because happen each to is expectation we talk greater they're about them. driving

of this products. So recurring the now last physical of a position to on and range world. XVR focus digital on have With of revenue our launch we subscription our is like our growth products security Prime, to I'd range driver deliver creates now the vision a complete of complete

Prime intelligence Our provide governments. mobile control large Cloud identities, and SID and Freedom and XVR Cirrus access together, systems. for video credentials, and analytics enterprises they And mobile for video SMBs, Access subscription-based

place. Our deploy premises and mobile on-premise, now is convenience ability and software-enabled cloud, to in security completely

and thereafter, federal return year. products this to of we flow growth the result fourth XXXX our market our recurring all end physical us for range mentioned, place. So premises we've half the rest of together, sequential and profitability more products year products. The federal initiatives. our RFID of from our it Financially, products as hundreds deliver clear a across for Avoid is XXXX, of this and and trends got business smart moat with range, the even core growth units of XX%, with of that in well to in a the and expect and all cases visibility we a give by RFID work-from-home revenue now these backlog-driven growth complete card The strong and in full opportunities, security, that cash over after second government I positive of and have going quarter defensive strong as of market RFID products operations expect the can put each The immediate of and in Chinese use to millions and both growth as beyond. tertiary drivers growth, into XX% RFID several American Buy reader XXXX

capital to the areas project financing a retire now. lockdown, we caused brought businesses, fortunate. all provide the COVID by we for Like right economic and that's impacted happening we the we're this result, debt working are to by but the environment ramp expect tough that on quarter production As comfortably have

growth of from them. transcend benefit to either where Our are scale the main near-term actually drivers a problems they

gives around you the into good hopefully, and some some metrics fourth going this third the our trajectory clarity and So XXXX. around quarter growth

into felt economic go of around we're of key long-term second trends. we the everything our measures certainly the in our us. of parts As the half growth strategy but in good effects internal We've and XXXX, the about operations happening realistic impact visibility of our everyone, our give core business near-term and these us like drivers into

let Operator? to with So that, discussion the open me questions.

Operator

Okay. [Operator question first Latimore. our state comes Mike, from please Mike question. your Instructions] Okay,

Mike Latimore

solid in on third fourth there. is you quarter? Sandra, think when you that Steve specific Or talk prem third a mentioned the lot. thanks Congratulations – guess, to quarter and that about the quarter sequential I your I growth, Yes, or XX% business? was

Steve Humphreys

the zeroed we that have that That because that's stand and where frankly. – we was specifically the into quarter third month already have we know quarter, on where

Mike Latimore

Okay.

You there. that know going you're already

Steve Humphreys

You bet.

We have to.

we're that the business. make based give projections trying With sure trajectory there, on to solidly we

Mike Latimore

quarters? sure next in to being interpret about how expense And it the the roughly of Great. couple we then operating Okay. flat comments, think I wasn't should as

Steve Humphreys

Sandra, go ahead that. with

Sandra Wallach

Yes.

So reallocation resources of that around mentioned. we're to at areas the look and key actually redeployment Steve focus continuing

step that a actions are of continue see see into down so some plans operating our we'll and expenses. rolling early, of to we'll additional QX think those I that

Mike Latimore

chain getting didn't you need it but Okay, of about all that? hear And I be time got supply the I on it. kind sort all of supplies supply then may and mean, the sounds like anything chain, are you –

Steve Humphreys

And we seem fact, question. be companies. yes. than doing to good Yes, some better answer The in is

better. smart some coming is supply Some and us card are customers transponder, our we're our competitors actually supply of coming of But that that – can't for sources, reader and it too, same able putting to passenger a because said, flights and growth logistics, is combat it's of on cargo bellies of last out up. the the the said has commercial I planes bunch hand-to-hand used in figuring call, dried were as to

logistics. costs a higher So to are find little you a our got shipping result. And as

that cargo, just United reconfigure their that. to of government I fact, they're dozen of planes so couple gotten was reading a to has be In from pure passenger approval shifting over the

not from a and lot some chain. we're us margins. going not. to supplying creating let in on going it there's So our stop customers on Identiv's supply is pressure gross But It

Mike Latimore

And you large those pipeline? of of orders in periodically, the it. order. Got a software have Thursby types any Are

Steve Humphreys

ones, going fall of the yes, works. as ordering it second in They're get pipeline. work individual predict and wave terms that big to of quarter, part it is to that, so lot with they're they're of people longer course, take back. But But this or never been that's lumpy, of and imply whether one home if you the there's hard assumed readers, in taking But people from or challenge, of But a as course, of quarter comes predictable. they're are next realizing to it's in Thursby in quarter – going another. or service to

Mike Latimore

a thanks lot. Okay,

Steve Humphreys

were the the there. samples. end from actually got past. XX,XXX about June. of number just for of a And got the the tag we've at I up tag XX,XXX here. ping just temp samples was I now person. things you temp follow-up it I My the that that I curious requests July, two wanted noticed from marketing my end XX,XXX We're was actually, to tag. on that on temp mentioned And to slide samples I Mike, in And And of different know,

in I So wanted bit that correct the to my just in – comments. that I had

Mike Latimore

Thanks. Great.

Operator

Okay.

Kessler. state Jeff, please have we question. line the your on Next Jeff

Jeff Kessler

not or quarter. being interested and your whether in manufactured Thank a doors factory purposes? little the I'm what's bit up for to and you, congratulations us tell on and solid can you what open Singapore a

Steve Humphreys

Sure. Happy to.

transponders the it's But designed all RFID all out majority. managed planned and that's vast for some. and outsource do of Singapore. So our We of

going the company that's COVID into of tubes devices the that do to so tags that in into a longer-term goods. going ones. And right in some there, the talked for everything from tube are that authentication space, RFID There's about luxury tags is test the go mobile some some sure some breathing pills. We these in some pharmaceutical are make then equipment, on going we go that respirator, right kits that

XXX visually in XXX a So you just could pill of and those sense Singapore. it we to out come the phone that read give million it you're million mostly device with the tap about all of I impaired, content on. But if to And applications, year, prescription go do RFID bottle. And scale. can your units NFC-based it's will a

Jeff Kessler

Okay.

companies wondering level. being One FLIR, at looking that temperature. different, call temp half $X,XXX the and the high of they infrared a elevated to skin questions now they're different let's I've of a are these I'm be seems being case is high-end me use for they because spend about may their it, if about that to for, right I that plateauing is you're a having thermal commercial little being little at enterprise very It a time the readers bit talking tags got security? and that cover spend – thermal used end reader had nature you're used bit – the than

Steve Humphreys

Yes.

them. because these you that's think point use read your very phone Android are and sub-$X a iPhone temp your I good to or tags

cloud. the that's the rest The in all So is entire infrastructure. data

and throw use XX And another so course. unpowered our then one. they're are days, tags they last these consumables, and strategy of Though away them on it is about you

of our very that's low-cost So is strategy, adoption.

this a low assisted and easy to hospital them passes hard for a even need of theme they if And bunch want, it's deploy around there's a or cost. haven't investment can it. multi facility park the case tens use of – living or them made with then they thousands a deploy else, or infrastructure anything very an with different hotel or So dollar they if or of

So we yes, we're that's is and this reasons long-term a – realize, it major so seeing and I of in it's one try it, people because much can not interest take the just think commitment. we're maybe

Jeff Kessler

Right.

business, to more NFC for And are than about? of what percentage marketing just it Is could larger about arms of call, going a because use future company in it that that kind you growth use, you're having total you're here standardized your it's of NFC are a NFC to a new of you if it get proportion its of up some that one Now become the with and going of that RFID your backlog one is XX% that is part wondering for expecting cases bit, larger been talk I'm around up? – forward? are I'll has talking they the kind people, has, – able opened

Steve Humphreys

Yes.

where that's I Most I the is. applications the more becoming think, the cases and NFC, of are absolutely. capable. NFC growth use are And that mentioned

Apple take iOS tag. not reads the are and app. was Apple XX with getting with was won't you an use much And of it, more with I to capable. it one it the with that case now Some tap alluded time gotten chips not the the that XX still – properly tags, opens one iOS too tap iPhone app especially, has having see there Android this. NFC as temp on the just open you to, XX. Apple, automatically An has But you it, deployed on and you phone,

so – open or you and reader that, a of if general. app, meter QR be really can the two trying the just tag Clip, a better a figure has QR it pay can case go App minutes Clips, instead thing, use your called an there you thing NFC this But go all parking the your thing parking is the downloading through it App meter, case you that immediately use you there's into for download Pay And meter like of to can a instead an do drops spending Apple a think, parking to or uses card. code whole where launching tag. Apple NFC up is you become the the and Also, you and and you camera tap automatically out credit app, your enroll just

part bicycles company the from the lot to Clips, of broad a that we're use everything to seeing it's platform from it, into the platform, it App especially drives I which that cases and we the mean of of of cars really about handbags. addition yes, that shows more it. So go talked their becoming support the

of categories. out in So going these and get any it's really pretty large into you volumes broadening when

Jeff Kessler

to One side, it what there let's let's revenues growth – seem quite is and and in inflection and in be question by the become yet, financial it becomes – for which growth operating what the point – but level say, is actually overcome income. slower a lot maybe the than is – margins final on revenue the doesn't Sandra. at revenue at At level

Sandra Wallach

year on that mid-XXs nicely question. a at gross margins. non-GAAP our that's quarter really EBITDA, to talked us and always Jeff. the positive EPS when non-GAAP – long-term So XX% the we're million And $XXX XX% a about line. a or a The with adjusted to we're about profit on model, We've gets great

So non-GAAP that evenly mid-XXs our talking million – to that parts the gross business revenue it of so that to back getting we're again, get is, the breaking we about number. grow $XXX can really our through in And different margins.

Jeff Kessler

very Okay, great. Thank you much.

Steve Humphreys

Jeff. Thanks,

Operator

questions. [Operator comes your Jaeson, Our please next Jaeson Schmidt. state question Instructions] from

Jaeson Schmidt

my Hey, guys. Thanks for taking questions.

You're in really sort seeing macro broader even some macro. of a tailwinds of the or from spite broader nice

you're concerned or Just this XXXX demand of pulling all curious from if in at is that beyond? sort

Steve Humphreys

chain of our because of Very quickly have from do the away – delivery at about good the some beginning working quarter, are were some we they pretty schedules – pulling and second that some demand And demonstrated fine, kind we and had we companies that worried it in is we still supply talked backed through. question. then

increasing. had talk have demand – with because are very actually is pulling closely. demand them we we in where them Now some There

has pull to So but of first medical orders placing order half much pulled that started demand, XXXX replace of their companies device in. our in they of one

to their tough across sure seems seeing So lead just it's orders environment. I environment. taking it demand see by not The a we world this world already is of But the point. advantage be driven good regardless it they it, it some some had we're also but environment, on the where But shorten want that. adding of of a isn't of to to as to economic definitely changing. really the then assuming we're continue to in, come seems of be top coming still they're be and times,

to of very to it doing to be that companies taking are customer be So seem bigger of drive seem advantage our they of some business. their well, ours and

So are we weakening demand going artificially pull-ins that don't see forward.

Jaeson Schmidt

supply Okay. on That's helpful. And just previous to the clarify, the one chain. questions of

So in improvement are that assuming no in you supply chain QX? the significant there's here

Steve Humphreys

Yes. It's question. good a

slowed it we us expenses, had down, has everything else. logistic it but – expenses, So hasn't

a on as assume as clear, not getting we didn't give margin, drive between if we're that in improvement want So if are good on – to economic battles can better, or things COVID that some other some but that we're and baseline a and soon margins. then in the not have kind us be to revenues. normalize the start things is to world. that's to great. going it's assume to better. think going because little of going substantial ability and And to you're supply we're And will doing wars with we trade But second of right, that assuming lockdowns live to way start and that to relief And waves puts getting next of again, pressure things, a bit, we quarter not

Jaeson Schmidt

about sense. makes going queue. and education That if but school I one And this, last me, forward? I jump how are back market into the missed apologize Okay. I'll and the for you thinking

Steve Humphreys

trying was said that sure support well follow so across that answer XX% the same back-to-school which said works. and thing the there for of we're and teachers, organizations And colleges whom customers. the districts, just this They at and short in we're XX% that their survey – them. have it's back thought school They our just them Yes, to environments aren't going XX% a just of to is – are their know. how schools, public they plans understand that school, out seeing means don't they still is

because are overoccupied, one them of occupancy trying of make each looking things, are some to looking the and want different of to that. of are Some some at the classroom do some sure tracking them that some at things things that's isn't you piloting colleges maybe

be to on But there because that halls. is to limitations now, set So we're figure lecture assuming they might soft having lecture an to it out. going all are in still trying that's halls, right they're stay area

Fed's on, strategy. of parts led So or discussions that – that the got recovery we're we're – expecting going business we lot not but we've not in lots our out factored of we're a of Ed of

Jaeson Schmidt

Thanks guys. makes That sense. lot Okay. a

Steve Humphreys

Thanks, Jaeson.

Operator

back to it further I'd There like turn are now no to you. questions. Humphrey, Steve

Steve Humphreys

Okay. joining thank operator, Thanks, you all us and today. for

a just do us, XX. August events at number you Growth please virtual investor also be next if coming please, is Global So have join through time, XX we'll week, Canaccord's Conference of up.

the through middle we'll in The I And through presenting XX. XXth. XX. the X Gateway coming think, up actually Ninth in is be on XX H.C. Annual September of Conference September, Wainwright

So best be safe, good please be of join have some And until please, you us. We and look well then, wishes, seeing again. and evening. a virtually forward Thanks to then.

Operator

this conclude and gentlemen, teleconference. today's Ladies does

lines, enjoy and your rest may now disconnect You the day. of your

Steve Humphreys	Chief Executive Officer
Sandra Wallach	Chief Financial Officer
Mike Latimore	Northland Securities
Jeff Kessler	Imperial Capital
Jaeson Schmidt	Lake Street Capital

Identiv (INVE) 8 Aug 202020 Q2 Earnings call transcript