INVE - Earnings call transcript Q3 2021

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Operator

Good afternoon. Welcome to Identiv’s Presentation of its Third Quarter 2021 earnings call. My name is Katherine, and I will be your operator this afternoon.

Joining us for today’s presentation are the Company’s CEO, Steve Humphreys; and Interim CFO, Ed Kirnbauer.

Following Management’s remarks, we will open the call for questions.

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

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

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

Steve Humphreys

business Thanks, In us. in of million for led operator by record sequential the third Identity XX% all thank growth revenues and we had growth of $XX.X of joining sequential XX%. and overall you quarter, our

in us with X.X cash think retired or leadership X.X income, no and in also for EPS. our million balance generated strong gives debt, this operations, from of the debt. net industry cash as a our giving QX, to of take us flow we drive GAAP all share In XX.X also million strength a sheet $X.XX We We off. and million capital markets

for confident beyond. into underlying quarter-on-quarter, strength in than we're growth the up around stepping XX% and On the This the more side, other XXXX year, of with the for markets. outlook is in stresses demand the challenges and rest supply growth especially strong us our shows our why chain and

RFID QX progress opportunities numbers our through relevant we in growth metrics our our these though, team than more in XXXX. and I across also in In profitability. key and made of major a growth Now, backlog RFID progress to made even cash drive will that's flow growth developing which first, go couple

next metrics, those update the for year. you the opportunity after on So I'll steps and

in metrics, in XX% I our in This grew especially XXXX, of growth we For to XXX% bar. and a high grew QX our XX% for units. business. high our our growth for overall, total is XX% XXX business comparable RFID in Identity over bar, Even of addition million meaningful sequential RFID year-over-year the making since year-over-year, without we core a year-to-date had nearly mentioned, year-over-year units

also grew and As XX% solidly, year-over-year. XX% expected, up business our premises sequentially up

the sales government federal the of up last growth pace top lead Our quarter. sequentially XX% growth on XX%

show business progress metrics the our key in model. other Our

cash of of flow strong improvement of I or X.X Net QX is XXXX. million As last mentioned clearest positive X.X a to even a in by growth our margins cash quarters versus cash million stresses driving while was in the of use a and cash swing million in This flow XX% growth of probably QX reaching cash or supported X.X the was strength, seasonally in model. flow million X.X and chain QX business strength QX. also indicator business's flow from XX% supply the base a so almost shows gross XX% in non-GAAP sequential managing sequential free

strength our flow even numbers. QX, the and strong profitability. cash revenues, the in with margins, wasn't in across core that our QX metrics, So progress gross business But in biggest

RFID and world-class sales fast very In made track team we're XXXX drive double team team. more our to leadership. of months, RFID just the and already progress industry expanding on last than growth Our our strengthening couple to our

SMARTRAC, industry, team of is CCRR, is hires which on-board, joining our already including signed are the HID, few We one from Omni-ID, building months. next the and sales in best are the Some over we're part some think which up the from of Enso make technical more Stora Honeywell, best they'll more. salespeople our talent probably the where competitors competitive go toughest position money most RFID, aggressive selling because can endorsement competitors only you in others. get is by and of strongest the Attracting

Now and on more person had presence can a you go IC QX if first this detail busy especially call We LIVE! which you building schedule, Manfred RFID here. later. IoT Journal Also and they're in Amir a Biz, have see want few trade of to Khoshniyati QX, the team including show picture the in MJ at both central GSX. Mueller West led Live, IFSEC, RFID during weeks we've and World, the in into had and

in tight Our marketing expenses still and timeframe, sales teams controlling of these a quarter. while in the managed all

progress turn and of now new more cycle, new all customers These third in design through designs. quarter. in moving wins, strategies third our production quarter the and progress expanding complicated in to me Let made core the growth the

So customer launches, ramp up. starting and with expansions

eco beyond, mobile major NFC accessories. cannabis-related placed in us cloud-based emphasis NFC relevant the will which for we of and platform NFC-enabled metal they'll across increased We're orders. growing Our on attach their device Most customers tag, their and for use our cases our marketing customer result on be of meaningful XXXX, platform. one added tag, authentication and keep had for XXXX confident first also opportunities

cannabis be As started on are we single NFC and we the solutions, case, the they'll movers biggest the think market. said though might coming out from be States. Canada's RFID the industry Even first working

initial suppliers and units. to placing is order leading order purchase XX the million frame U.S. a the an million cannabis X.X market for for of units One

because this that drives speed others market just it up. share is we've weeks. this to in beginning, the next this We'll but a information about is the seen then it's of before mover more shows starting. couple the first adoption Now But relevant

making the important updated can't it's cannabis progress. progress. We details, other customer on but to you disclose program, investors keep track it's major to Now for also

into even wanted into here's insight further their differentiation which us important. program why and thereby don't customers, auto inlays could programming this solution. to us So the technology Similarly, our for a mobile apply This is the more the to production the others rolling. confident stronger expanding projects we device from meaningful the and our has progress. is their revenue latest. RFID for opportunity customer Because customer process mean relationship asked changes our scale injector the syringe products, and We of timing, integrating It's give think with this especially opportunity. to we're more But like making in market this. already getting us, our I revenues

are gives approval go the product. introduction on sense million Our board customer review We recently strategic XXX a program, mid still to over think for track volumes and projected the to reach year, next relevance you received units basis. of conducted a on with we're and board annual demonstration for forward which the level still an this and

to ourselves and we've a another technology As now been this been partner of central able as application to RFID similar we've on from working customer, are key this size establish to customer. asked

Now, as we time. last did

the expanding We devices, you happening into new healthcare to focus and area use cases. our all use are Here see want and can followed adoption by is consumer medical of don't cases. customers. go some But fastest in main

and medical in always, [Siemens] others healthcare, are MINIFAB, So Medical name. Pharma and can't devices we there new Ripley include [ph], as and customers Rangers

chip customers, are technology, actually medical use Now we that radiation can't FRAM Fujitsu's several for are hardened devices for radiation using among ideal out name exposure that is sterilization. which new it turns those

dozen Now, into Cap Works, sales Collect of Group, addition Carestream, ID, Online ChemFlow, also Bullion a Schreiner these in to follow-on couple new and we others. had customers,

projects the changing through and with plus the growth, using base customers Now drive base to then XXX total. RFID of our I other XX% others many are game the that'll further that went quarter, to our wide RFID adopters last XX% adding

market, kits RFID developers did were is selective and actual Lastly, market to of we developers’ of kit, QX. launch software can several use which even serious because this increase NFC vast a being limited a majority whom our the XXXX more the time. broad because of send SDK, We We've we we kits for as most know known cases. support our initiative captures only had the at in think developers number that the we

now should our sense give in the the this for momentum growth. beginning numbers the drive That's to place in a QX XXXX accelerating you of and RFID So QX. underneath

but In a business XXXX. segment, expand and we our addition strength growth driven high to expected, normally, to RFID isn't into expect QX, growing into showed see premises is X.X signal of backlog in in the strong premises. premises This a backlog that million segment momentum with QX our we a This total we exited business XXXX. near record of we the premises

products. on our and In In XX% repeatability Our QX, customer focus attention consumable our remain software kept and third our retention revenue driven by driven customer of by predictability. over RFID. and is we of strategic recurring premises strong predictability on in which focus premises, is services XXX% revenues. revenues, predictability record track at is RFID, In

something mention discussed me factor chain. QX, is which I So a up, let before wrap supply haven't as I in

logistics, every and Now any we're supply business, fulfill but customer like demand. systems hardware we affected and managed by to

best have on. in We planning. bottlenecks safety of the of And the have one early we in chain some the industry. always room We of our got supply teams some ahead

some be perspective, our keep impacted and expect in clear tougher competes macro customers’ immune, not to to as all to a we to supply surge and we're expect We competitors but team the QX we able other QX. problems to. a share get doing in had in from as but QX, needs shipments is even Now, the will deliver demands, holiday the with job. our materially aren't great world's our We take think weren't market record to that we track

QX, in strength. QX, our growth, flow beginning cash and of in showed So the profitability

and landed cannabis of and and revenues services units as frame all that organization supporting in to a in progress finish as launch with metrics, broad medical These software in and the steps to our made XXXX strong we NFC premises our segment in great key Beyond made even category. our in healthcare, and XX our delivered launch QX, our of initial in opportunities devices expanding RFID base huge SDK use business. made progress in major order an stronger and XXXX. an recurring drive signaling growth the for strong our cases interest well XXXX customers major We million

next into for So over to me financial Ed, and getting the to the our third quarter. call over let hit you. the Wd XXXX, highlights outlook turn the to before quarter, for

Ed Kirnbauer

Steve. Thanks,

from chain, and year-over-year. reflect out backlog, and our and the RFID These exiting growth a results with XX% organization up and XX.X expansion mentioned, quarter strength in up we investments flows quarter continued of capabilities profitability. of incomparable company with operations capacity, revenues, XXXX overall our of in million in RFID sequential to growth revenue, future achieve a cash the financial the basis, closed Steve believe supply sequential its profitability We results delivery third potential. paired our third position the As with in XX% on the

of X% and was revenue trailing third total X% recurring Our stable revenue, of at XX-month our revenue. quarter

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

For GAAP the resulted gross XX% primarily from profit our were respectively. trailing segments. across Gross and non-GAAP profit and margin our the changes within mix XX-month XX% adjusted and period, margins

or XXXX. Our of the non-GAAP was margin quarter EBITDA XX% X% million, XX% XXXX with in third QX X.X and adjusted compared in

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

of QX common $X.XX share on income X.X per attributable QX X.X compares a X.X in XXXX, $X.XX $X.XX or PPP stockholders forgiveness QX or Our net XXXX, gain This GAAP share. of which one-time income an per to the included share per million loan. in with million of or our million income was

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

segment, QX due Our our QX products a next slide additional XXXX. ability total Identity of our constraints driven across XX% with from XX.X to from all by further our in QX Identity, XXXX, with and beginning totaled growth analyzes on chains. million supply a compared trends increase increases XX% or deliver revenue XX% expansion sequential Identity year-to-year to revenue increase to by products were versus competitors The customer XXXX

due decrease margins QX. in a were compared faster margins Identity sales XX% versus this product to The XX% QX the in margins lower margin XXXX due of products with to RFID XX% XXXX greater QX QX XXXX. a higher and category. segment The QX sequential in were proportion rates due in were in higher to increase product to year-over-year of proportion growth of Our mix, margin transponder GAAP

margins representing increase segment, an year-over-year premises the million retail change seasonality. total banking to and XX% compared to Turning from due sales due an for federal XXXX. revenue to products. increase to third consumers the a QX, revenue were reflects our along XX% video XX.X to analytics GAAP Velocity of QX technology revenues rebound segment sales within select of The the in verticals primarily like segment growth higher and of premises of and recovery to QX commercial and commercial Hirsch for of segment. sequential XX% of The the of government, higher in sales comparable XXXX, products XX% in quarter Software XX% the accounted was normal in and with and to XXXX the continued products the in to in or this compared increase QX QX from the premises XXXX in mix software

Moving now expense to management. our operating

expenses the and totaled XXXX quarter the third both QX XXXX which XXXX. X.X of for quarter were operating consistent GAAP third Our of million, with

third depreciation the and X X.X revenue and quarter in certain our XXXX XX% XXXX. Our totaled QX of non-GAAP in severance charges This adjusted or compares XX% or of of million and of stock-based XX% consisting of X.X to revenue and costs restructuring and in compensation revenue. amortization, XXXX or to million QX non-cash operating million expenses, exclude

EBITDA adjusted the X.X compared XXXX. non-GAAP of to A XXXX. XXXX, million Our increase was compared QX X.X X.X QX to million a increase third and million quarter in

X.X expenditures the operating investing offset from a capital with Turning from X.X for activity X.X activities proceeds QX related in to the sale million a cash by investment XX-Q amounts free exit in continued the XX.X the activities The we our quarter in manufacturing in exited under from driven million cash X.X million cash QX net of for drivers we to Singapore million, providing and were million revolver sheet, our activities, in will key used decrease of from by leaving XX.X and primarily of our of QX. X.X of repayment R&D filing, by cash, of received investment our our we increase us provided million facility our generated XXXX XXXX. balance principal the by financing million million of driven XX.X all million sources were year-to-date These our Germany cash a debt plants. full offset flows. outstanding EWB quarter as XX of of be of In reconciliation by QX

earnings sheet the release completeness full we've the included the balance For in in appendix.

some QX, the and As we XXX million year, metrics remainder today, fourth we XXX full backlog million. continued our up through QX into XX% XXXX. of are as XXXX QX the year versus to XX.X a progress guidance the move million we between with refining revenue our Sharing was exiting quarter,

Our QX all XXXX. and business total was backlog shipments momentum into same the provide total for first future the over period the the up fourth the through And orders XXXX. visibility also These versus weeks trends quarter million booked up to prior going new XX% year. balance of XXXX of three X.X XX% of the into was

As base providing are full a strong guidance delivered revenue the to result, today, this the we on for XXXX of initial that we have building growth point. year

revenue for million, growth XX% to reflecting XXX XX%, of approximately guidance year-over-year. XXXX million initial year is full between XXX Our and

guidance call refining our and when We in conclude pass XXXX March earnings initial back we and financial full that, will the report that QX I With discussion to year will XXXX. be Steve. the

Steve Humphreys

Ed. Thanks,

our As guidance show, our expanding. growth our results for is and initial XXXX

growth expect to of business our major XX% could much strong XX% by margins We to to growth premises, increasing we drive services the overall RFID XX% RFID recurring with In with and XX% our revenues. programs for in expecting growth XXXX, and XX% are that software possibility XX% growth, driven higher.

the range, RFID we higher a rates. XXXX, see driven XXXX, again, XX% minimum overall at XX% growth in to growth in Beyond increasing by

project our of predictable projecting becoming in wide In this. revenue The we've of more. reach. into better. we We about both scale, industry in we different $XX some we're assumes growth got than and growth. transformational be easily of of RFID to base and six our about how paths revenue too. reason is how projects on market take-off talk and have core assumes drivers I'll can a so a customers; sight later or past, the has XX% depend by opportunities. the the base the growth we're Right it the very and over see, the projections should points that's a our that able think be though, manage strong and to core how basis can But This shows any we XX% leverage industry, need Let that couple to we've million of At the it timing what growth line opportunities months doesn't mitigating to of move XXXX markets our opportunities. thinking around is in base for we measured seen transformational now project growth me go XX% each timing. XX% this had we're

each also the in an market leadership be likely the most use winner hits point. means we'll Our case when inflection

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best a and expand some and with We've volumes. programs both we've pipeline are solid customers our there and offerings, QX, pipeline also backlog about into perspective. and designs before. dozen our continuing with technology staying the to from expanding We're more talked for a in wins visibility XXXX QX got So XXX% with design XXXX technology this in us of continuing platform, industry the in current and

SoftBank. industry partnership investment device could is So passive a This an changer. and highlight RF recently that one, the company company Bluetooth just game Wiliot new our Israeli-based gotten from $XXX I'll be million that one with

for earlier, to as in both well technology the enable Our Also, the front, innovation customer engagement as and mentioned experience our engineers. success then up authentication to and accessible we've a SDK applications, enabled our range includes software cloud-based engagement. setting platform We're we're labs include device any to partnership and RFID I personalize server with customer extending devices product technology validate, To deployed. really also centers. product make and

projects a We're competitive that has center Germany and Southern in headquarters, great equipment to planning draw Singapore. similar engineering advantage our talent. people, proven Now first great California be capabilities, with and eventually all in our in exciting

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transitions Now financial executives of are sensitive. always

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growth path As and on I financial is process. company and important as now, world-class systems update clear wanted where enough could the very but side, He's just is phase company revenues a a a a which the more critical growth who experienced couple we as billion-dollar to been four is well as in He This comparables up public financial million in that career leader towards. years, operated a so give are in I XXX to big driving started well to the private million the to also is are wish, finance He's teams deep million, RFID over at our and best planning of semiconductor systems on which businesses, and deeply business exactly XX few we're background several points. public exactly has I with through as semiconductor this just he's operational rigor. very XXX from right in say businesses. the built accounting environments. implemented in intense accountancy, his

few up, So some growth from the here's to indicators weeks. last just wrap

first beginning at backlog fourth we a last versus As program, into orders XXXX, order million of new major a year. time mentioned, year, cannabis three over time the fourth shipments we up the last of have as the all the is XX-million-unit Ed same gotten in order. of weeks just look almost frame same up booked for our million the total the part X XX% units our first versus quarter in of XX% future purchase for X.X quarter, We've

as level their go syringe approval increasing on auto mobile got to program. forward accessory board device the Our with of platform. their NFC customer our customer focus And is part

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line XXXX. of opportunities as So strengthened we other of as later and and these advanced the we'll see of the open some on Manfred of further, also. the rest major XXXX, leadership, rebuilding and even I'll we questions I and We're some developer’s in find revenue with our application the XXXX the more accelerate XXXX to growth takes our confident expect our leadership and trends. multiplying have it off. Amir as With industry technology team, like before, that, into projects aspects we also continuing mentioned In And to these programs our these fully ramp in kits, RFID discussion. XXXX

are So RFID related them if there we we depth questions, can in need. cover whatever

So the open lines for the operator, please discussion.

Operator

you. Thank

Craig take from question now will Riley. Ellis is Instructions] coming with first Your B. questions. We [Operator

Your line is live.

Craig Ellis

we dig just the that start the on if more a business by field. Thanks bit I to the Team in you want for the seeing frame progress question. could order taking performance financial cannabis. in little in congratulations to the in about And talked

be milestones not with of high the Since What that type certainly agreement? volume. type So that are some I'm of of familiar that about development, exciting thinking and with investors an order. should

Steve Humphreys

course, the design first is step and a as the for than plan the larger start that ramp be of go that of then, So order. finalization the substantially forward just pilots some itself. with have it'll And we -- go finalization and It's usual that of it's to there's volumes finalized launch the -- they'll through product actually be production relatively that process to that it. prototypes, of And it logjam. the beginning should should break that But up.

Craig Ellis

see. to nice Great,

The second outlook around think nice to 'XXs the of XXX question, that XXX most I million. calendar to million points I and significant got growth see

make on 'XX, on missed. think comments I you to I calendar went which some

what said So just 'XXs could recap potential you about growth? you

Steve Humphreys

think into Yes, that growth We into out the base XXXX be we growing XXXX. for go that of platform off absolutely. will

growth. have So projects developing then we timeframe. really said, the but should by that to in in I some And million XX driving transformational be we be in of to range. the expect growth coming in the that think as they XX% not again, And year, the XXXX, XX have really plus base 'XX we the be will XX% we

why to we the that. to expect then, overall growth in And of that fill that's on premises gaps? accelerated business model. the the rates we Does back well continue expect see so And growth in the as underpinning

Craig Ellis

then is team. if could Guys, question Yes, it that sales had I flip Manfred for I does. to you the the And over regarding and Amir.

manufacturing and to productive it capabilities The in that take expect competitor, the in to from and has timing for there have does has revenues. to we different of mentioned potential the Identiv number solutions a become engagement I through way the their And of with all from the you're that competitors. fulfillment? added contribution been direct Identiv terms question is, a when which salespeople Steve So to that from how folks them very long bringing

Manfred Mueller

question, Craig. great Yes,

with curve, product we to zero that XX let's portfolio general, them industry means veterans board have are, like which So plus, bringing it ramp on plus say familiar are XX make relevant up folks that experience, in years is there. when the comes there basically industry of the all

So as UHF as all them are well specialists. of HF,

road, sure expect basically beginning on So to ton and of X.X.XX. wanted very IP up. know more Maybe training are we have view, bring from this we week, respectful other general and really and the really But bunch of them following all a they sessions we very, accelerated we are of a that the ramp to hit of basically, fast. of technologies them hard and most very, to other comment, we issues the of December, that starting of people the these month point in related right the hand, business. course, of be hitting them road a have of are things. some all with because also A them, sophisticated XXXX, into them very really And to things respective in other from

basically So fast. from to Amir, view, really from end? them that contribute point expect your more I any comments of

Amir Khoshniyati

that, day, lot would just rigorous of for on do up to that channel Yes, ramp then XX, to get in them them that XX, deep add have have And I board. expertise. addition a XX plans they

they with So well that and they are competing nice relationships products is, are And then that with can the into they have, step really up familiar very there. similar. the thing from ramp

mentor can into also to experience. level excited. layer as that good very, that of standpoint, come and running. from foundational add, They in, built, we a we're that for it's So new get XXXX, And talent their we new very in and layer senior them we any grow up the this because groups really also bring

Craig Ellis

you've a the is geographic added? that particular folks profile And there to

Manfred Mueller

comment was that. just I Yes. on Absolutely. about to Craig,

more remainder where bringing that And we EMEA America, Pac needs some, hand, the of So Southeast are There's Asia Asia filling on the in Japan is here in on say perfectly region. gaps in then a for, we fine board are of basically let's North people hand, on two blend board see already. into say the immediate is the and some they team between another one other America area and we on the let's couple folks we're coverage. of Latin adding. the where

So doubling year. the the of end force we're the truly through

Craig Ellis

the for guys. help, Thanks good. Very

queue. hop the I'll into back So

Steve Humphreys

in to additional Because let the these industry's add the little me a just in put accelerated couple you supported making that, just actually faster. board And it. how We hear last process, more Manfred on color best months. investments of as the our and really Hey, hiring Amir have moved. and worldwide Craig, can of guys some brought fast some

XXXX. the day though by the gives And have confidence get And lay ground some that's make that of and them, So front yes, the having we plans the industry it and we we've our wanted end products, really that with running. is, sure XX, the that investors us a confidence that's time substantially now processes, now, even understand we what hitting encouraging. backing you team the fast. that experts, said, they and leadership, XX is really very have hear really we going the got position expertise each it'll strong know all sheet, invest into from then load in have XX, the be right think the and land, ahead of the build by we growth for the all aggressive to And can in us with place larger go that from really is board execution team they're for the right the going balance as got, because Amir, to you've we're enabled XXXX,

to but question, want So the Craig. thanks for add I context, just that

Craig Ellis

Yes, very helpful. Thank you.

Operator

Mike question next from [Operator Instructions] is Latimore. Your coming

is line Your live.

Aditya Dagaonkar

Mike on has give color analytics? Hi. demand how This is Aditya on Could the been behalf for you Latimore. of some video

Steve Humphreys

million, Sure, absolutely. business tightly We the in product it's percentage $X of Velocity terms launched it, Velocity I rate, physical growth platform. we think magnitude. $X Vision, but on which in a north security It fastest from of at the standing the that is million has something growing -- our rate. area video Velocity probably of is really could or million of Vision. is start a $X launched got order percentage pipeline And called integrated part The with that premises we've May, of when a

moving gross analytics, think heavily a growth but integrated really partly margin which also of broadly is and and embraced, is differentiation platform of for and the it the that's very the in driver We video, be will nicely. it both access So for our XXXX. the being expansion

Aditya Dagaonkar

All much revenue? how you did as right. largest could customer right, your a percentage tell contribute And all of also me

Steve Humphreys

have XX. have to customers. Ed XX% any customer We Largest have didn't for concentration. turn XX% we top any customer, I'd didn't I know to

of probably get was to it in So the order detail. of X%-ish, can I but that

Ed Kirnbauer

Yes. total or XX% of segment one revenue exceeded No revenue. customer

Aditya Dagaonkar

Thank all All you. right, fine. right,

Steve Humphreys

you. course, Of thank

Operator

Your next with Jaeson Schmidt Lake is question from coming Street.

is live. Your line

Jaeson Schmidt

know as could the provide sector some if well Steve, sort the pharmacies? second guys, Hey from curious you my healthcare just more at you've customer? a interest highlighted questions. lot, I other you And for if as ramp any then seen detail on thanks taking CVS inbound going how is that but of increasing

Steve Humphreys

Yes.

So the CVS at going ramp nicely. is

going and press notification will it. any -- on where they and some up expect with that it's them, of now a release day, to do We week themselves they're course,

to don't other discussions sector to to looking CVS them, now. the looking we're should But of turn speaking to we use want in use pilots the say, such of speak profiles five methodical, the a as they many the another at with. in you'd is because and don't tags. And It's proactively players the that -- I interest, we're are be industry, they're is that and for but insurance market But top it on in expect, it. talked capability bringing combined. long. very I Aetna and pharmacy actually let's terms deploying before pretty it's they are company a themselves really most others So well of in for they're as want about too chain give and forward going as that when and And readers, well, up business itself as case then drive marketing to small pharmacy major

Jaeson Schmidt

does of ASP continue in want guidance one RFID specifics, your when continued ASP been in assume big to business at guys' give Not that's to RFID we no, this see look you then growth Okay, sure to if but XXXX, expansion. business? the has your the the for helpful. year that And ability themes

Steve Humphreys

with Good getting need not applications. as And to at will oscillate $X.XX. question. force, that going where as the can we're be a long The the them, expanded of ASPs or margins necessarily they at sales short range be answer are especially is the we around $X.XX and

So setting expectations granular little are careful bit about too I different. want to a and be things then

think driven times to I actually around one that project or but can also. going be move skew another, heavily can so by it big they're they and

the timeline, you other long those and syringe see, some the certainly of use substantially up. on ASPs the auto are cases, -- as things long have moving higher Now And are ASPs. like

as a so moving the on basis year, be plus, half And half and of versus it first that's year second But will to of a the a that quarter-by-quarter of certain year certain even the over I'm course Does ASPs up. fill the will sorry, what wishy-washy, I'm possible. trend-line I can't I'm little be. bit be -- Does responsive but as in? that trying be

Jaeson Schmidt

jump It for just sense. into does, makes and a I'll last me that queue. and And question back

a that guidance, at some opportunities, of transformational XXXX than it meet you indicated the very could of at in you but significant opportunities of some sort a Looking assume know take least these it if these I faster doesn't had you the off from standpoint? supply ramp anticipated,

Steve Humphreys

But it, concern want glib So but plenty to got answer got good supply any upside want lot is unlimited to forward of of ability not but of a shape, this visibility deliver that just case. we're our as there's capability, for work of because here very if can and that that good multi-sensor trouble there's certainly of that's unlimited be we've We're -- plenty of, everything upside. we I we've the don't I supply possibilities we'll in and year, we'll high-end don't in supply also plan upside. be got always to and relationships, think advance up units and some guiding also we can in about we to plenty it's aggressively. if we've that ramping particularly then it. someone as for create of There's possible a suddenly chain, have needs as that XX of we million buying not want we room the when there's think But the said so have

rate. of accelerated think don't our any at customers' to ramp an we'll we constraining be So certainly abilities

Jaeson Schmidt

lot Okay. Appreciate a color. guys. Thanks the

Steve Humphreys

Thanks, Jaeson.

Operator

is Your next with coming question from Capital. Imperial Brian Ruttenbur

is live. line Your

Brian Ruttenbur

very much. you Thank

expenses? side. revenue operating to going XXXX a be the you're understand to a those doing how trying something give Can as operating on bit of fast or or just ramp So and XXXX on grounding as this you little kind increasing on expenses us either some percentage you're of

Steve Humphreys

any excited and consistent, growth growth a time, been given much investment opportunity, been great and absorb you we've so has our on Board And the Yes. about consistent, can we're we're only path. and at but

to half line projects, margin and that's gross the half it in to on framework. we goes business. growth want probably line line. of But more gross will and we'll a margin good margin about to up it you the bottom And, to the So of gap is pretty and the half the of half that course, in invest bottom framework dollars if if applying these the throw of incremental of driving we're think about gross we bottom of of growth, dollars fall about incremental general, is some of

Brian Ruttenbur

million behind then And hopefully, 'XX with cannabis, question another another going on be in assuming is order it, that to $X.X Okay. your $XX percentage cannabis-related? business what million of

Steve Humphreys

So just not dollars. one clarification units, is X.X million there. The

Brian Ruttenbur

units. Right,

Steve Humphreys

we're thinking $X.XX yes, in so of for units sub thinking -- we're terms And these and things.

a So just little bit. to characterize

trajectory -- there? -- but your question So the so about was what

Brian Ruttenbur

units all by million the answered going X.X just be of XXXX? cannabis. giving Are by for ASPs it You units the those end on me in the the shipped to

Steve Humphreys

that going customer million believe that on would worried and events MJBiz, discussions trajectory units his one sales -- overly and off, be show. to be XXXX, 'XX. from a which Amir of you what's of total I not in been think in in, the there seeing with business -- varies, to a units it forecast there, I that that number and activity cannabis and terms be in end That if starts take mentioned that for of talking a it if XX I want they've about. the be will But was be that to from of I That's going was category, it But -- I that's the as very multiple of the lot trade in will team marijuana and the associated by customers, of certainly. asked a careful. the there's Oh, multiple a both industry, belief want to

Brian Ruttenbur

Great, thank you.

Operator

Jay next is coming Instructions] Chung question from Your [Operator [Ph].

live. line Your is

Unidentified Analyst

side? expect quarter, year it and the give great the be your latest guidance. of where you -- you by your capacity nice on to guys, next year Again, in great. Yes, and update end Can for very RFID the

Steve Humphreys

Manfred we've I well to absolutely. source Yes, the Maybe line, as there. Manfred straight off-guard. we got talk Since the might on to go

Manfred Mueller

hear you me? Can

Steve Humphreys

Yes, can, yes. now, we Super.

Manfred Mueller

Can now? you hear me

Steve Humphreys

Now you, we yes. got

Manfred Mueller

go. we there Okay,

I and again. Sorry, to dropped, my dial in had just line

heading are we about this year. million capacity-wise, towards XXX So

million, cover We as outsourcing speak, units the peak of XXX-ish shy have have as some above about basically XXX at partners million -- million units we QX we with XXX just have we a and are of option capacity plus to always demand.

XXXX, equipment For in on route in bunch do units. And of a we already. are have planning to XXX we so, million order

by And So we in at month requested the Bavaria of there is next another close then already in manufacturer flip signed chip the that. and here off shipping machine on of December. top two the basically growth have for

growth really in terms the cover order are point that to planning we the steam capacity, to coming for basically of from in So full year. scenarios view of

Unidentified Analyst

more Thank or that has allowed there working and you to how discuss, revenue you the few earlier project there are with you comparable mentioned you. Manfred, million And opportunities company for Steve $XXX another be are has extent can, to Great. other potential? that, think the might that to that but like that, other, many the the you're to that extent them? transformational on auto-injector can you're then discuss I

Manfred Mueller

There verticals. is various and in they are

start where projects that tens working millions but handful, area, I of there hundreds you is in smart to on we're of than and So a health, with certainly then more also have packaging millions the thereafter. have

certainly projects. is there [ph] of a will couple So

in the conservative of the I then and about for we But assured, business. for to need pipeline is requirements necessary and already basically say, volume just other that the to try projections Xx Xx transponder or one are, alone would those because XXXX of us, In be be rest let's delivering the the please revenue beyond. meet hit we terms to the

Unidentified Analyst

whether XX% just to And segment awesome. the if from quarter it's sustainable my forward? in margin it maybe past that what right, this That's this two, you math should term, can if I'm going ID almost XX%, noticed or on coming about grow first, immediate I drove moved more talk gross -- given that? -- then doing quarter side the QX? then Is And or that

Steve Humphreys

caught that, I all Jay, sure wasn't bit. I of a breaking just were you up

Unidentified Analyst

is I'm if it business could a like pretty I XX% in what ID looks margins doing that repeat math nice be I'm upon? If or sustainable was improved or that QX, of actually improvement the level if gross that, the -- from what sorry, this was side XX% drove I'll almost it. and I it QX. wondering so, did that's right, my and

Steve Humphreys

as in that mixed always, always it's So almost case.

as some fluctuate, going trend but overall. margin there had depending is to Identity again about, and we we've products those move talked gap margin, If generally if so Manfred kick margin, they'll it higher they're lower when will some going in, it in it higher gross And up. they're projects, about upwards It's gross to to in as mix, on closer talked of these they'll that.

us around see think of end upper higher then see you'll in gross much we XX% will the through mid-XXs. have you the some going, and of as next move year sustainably breaking then it margin. and So continuing go I the And larger you going to projects these and into margin gross XX% towards

Unidentified Analyst

your the are out laid you obviously, you've industry, hired how responding? then how opportunities like a or HID And great. in Okay, SMARTRAC, people of about lot RFID, competitors the they from

Steve Humphreys

with are right Amir, it to that street. on they defer dealing since well I'll the as Manfred

Manfred Mueller

be is precise because by they anymore were Avery SMARTRAC not here. So very first, responding acquired to

Unidentified Analyst

Yes, yes.

Manfred Mueller

are respectful we very very, there when non-compete And in is clauses. general,

Many So not for the be, former breaking meantime. try the other of in law we they just any these say, SMARTRAC will people, not we with -- let's in of have try the been players we to, to regards. example,

point acquiring there with them They view, leave And another voluntarily and both have there, people go is up. good example. same an which talent is there. They're with thing of out even HID indeed, employed as that can pick them was is a we where for them. basically also and heavily which lot you employed So very on, the to good other have very very, of organization that's imagine, leave or from people acquisitions endeavors going whenever and

the it's in easy to people, openings were So fill on say regard. the that of I right an how you our point we find be order but that we giving -- put it's from wouldn't all idea in should basically to sheer the view, speed successful table to

Unidentified Analyst

just that is around sustained where then future Do physical growth XX%-plus going or or you for growth be side see then the XX% see XXXX for will the on for you big something the for foreseeable bump mentioned to And for to that's so, single-digits? high whole now the the or it physical a great. but it of Okay, kind a up -- and is peer the you company. around

Steve Humphreys

good in can if make everybody's Jay, of spirit And Yes, question. last this time, we the question. respecting the also

Unidentified Analyst

it will be. Yes, Thank you.

Steve Humphreys

is a we Great, XX% great. XX% growth year That certainly pattern. to no, expect But it see growth actually, sustain. we several to secular

walk. in cyber government are just become as to to really every well. Our applications, have as is securities total not And a fundamental, physical illustrious well these solution. business going security federal And Everybody consolidate trying especially as vendors we spending, which days is stop uncontroversial. good for very

in So well we spot. pretty think we're the sweet

expect market we for several the above to growing to next be years. few So

Unidentified Analyst

much. so you Thank Great.

Steve Humphreys

right. Jay. Thanks, All

Operator

company's question-and-answer Thank you. This session. concludes the

may Identiv's would closing was back to If Relations to Mr. contact question inve@gatewayir.com. Humphreys for call like I not the you his your taken, at Investor remarks. team turn now

Steve Humphreys

for and joining All evening. this us thank again all you right. Thanks

As things excited certainly us. are in about ahead company our and you industry path the developing quickly tell, very and we're can our very of itself,

well in Conference to December Imperial welcome our and investor have as week, at that, in continuing be the which try communicate doing we'll sure some mid-December will and a investors community the are to make of possibly talk the be week. We Xth, to these New of on And all to to some next engineers. Open then we're in couple Ladenburg, of Conference following Also, customers, the And as we DC we'll with House virtual, course, Washington, of our York as others. come our Stifel Capital of opportunities develop. at

as focus to communication forward, the keep we're forward. driving keep also but the going on we and direct flowing business aligned So as going everybody primarily try we're

a So evening. joining again, thanks and and good us, thank very have you for

Operator

for today. Thank you us joining

You may now disconnect.

Identiv (INVE) 3 Nov 212021 Q3 Earnings call transcript