INVE - Earnings call transcript Q1 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. Welcome to Identiv's presentation of its first quarter 2024 Earnings Call. My name is Matthew, and I will be your operator this afternoon.

Joining us for today's presentation are the company's CEO, Steven Humphreys; CFO, Justin Scarpulla; and President of IoT Solutions, Kirsten Newquist.Following the management's remarks, we will open the call for questions.

Before we begin, please note that during this call, management may be making references to non-GAAP financial measures or guidance, including non-GAAP adjusted EBITDA, non-GAAP gross margin, and non-GAAP operating expenses.

call, be the forward-looking during addition, management making will statements. In business projections, that pending characteristics future with and respect refers Identiv's prospects, statement transaction business plans or and asset market future opportunities, to transaction, to the Any including including is expectations, other a and statement. conditions events, of sale and the and post-closing future forward-looking from Actual expressed in differ statements. materially those may results forward-looking the

time please refer Form filed to the the discussed company's factors the documents to reports XX-K on on information, risk from Form in latest time XX-Q. more with quarterly report including SEC, For annual and

once In comments. preliminary obligation and in included to definitive the filed. proxy statement addition, April statements, will asset the the speak as with once the proxy now filed included Steven today. assumes XX-Q CEO, call the Humphreys, SEC please in our which to filed Identiv turn risks update forward-looking statement will and his XX, proceed. be I Sir, sale related of over XXXX, these are to no for quarter first

Steven Humphreys

and thank us. all Thanks, Operator, for you joining

$XXX logical an first products took year-long stakeholders XXXX quarter IoT business. of completed one most generating strategic reader cash in We're divesting to all million, well. of The very capital our our think We and history. for review to was important and will we security actions company's our invest that the in serve of extensive of price relating our assets a

of We put in Identiv some realize when for leader of value by as who the a path the of world's key take for to industries. transformation that's the remaining this new our also major business business of CEO create business, We will closes. Identiv a opportunity to to believe central increasingly growth thorough largest IoT a digital over a the on transaction investing we search completed the

into buyer. all reasons: focus and but the review go market we specifically advantages, me last deliver for our We capital We'll opportunity assets, the this a we believe highly market experienced positioning possible to and on specialty including our to business bring with creation capital our sheet deliver scope directions capital pharmaceuticals, leadership business strategic competitive enduring with our soon us the a core their in enabling assess realize maximum competitive in what the dynamics. company's focus divesting actions believe order We and is other it's to X the and to company part and the of health ultimately in month, the and business, at us a the of investment requirements and was the at our competitive I our opportunity, Capital, and each leading accurate transformations. across build We the value business, We in one adviser strong assets. digital Imperial what largest investors? particular, of enabler to competitive and transformation industries' call, the business creation big near-term on our transaction to and combination Now assess that's assess the business, invest statement, investment our that's one raised divesting consultation first, IoT on our to this that looked and an of opportunity path to on We financial for let strategic value available digital to last trajectory. In navigate opportunity. to at but taking on the current growth effect to opportunities and highest IoT In and our investor that our announced our for We care, expected the future early of and with including criterion: each critical ensure opportunity medical our of to value leadership looked throughout IoT focused around creation, join values a steps for undertook secure companies, both positions the year. ROI. for direct evaluated also starting but every outline to details devices, looked the went QX. culminated we the access business. formation, We balance place value in-market to

the launched possible to their the vision provider Kirsten companies key spent businesses. define that medical is RFID transformation sees lead the Smartrac value business Kirsten in an be of leader opportunity. best the business XX we're advantage IoT to world-class our while at the who a we for So leader transformation and our and to plans creation We take lynched-in she in to a business happen. to execute is She Newquist. She find last vision of health has the space. We're We a pragmatic business needed transaction build to to make take and across as unique She to is to also the convinced of profile for closes. understands leader rare realize business transform of deeply found also our opportunities business, process when strongest right leader the as a the digital care, industries. strategic intimately executive Identiv's and the She to then maximize specialty knowing RFID one in technology market and to Avery opportunity. influencers operations ideal year, over ability the disciplined person customers our the the search digital Dennison CEO as opportunity the their targeting. in leading years well

why will she about chose financial background to speaking review. and her more Identiv be the Kirsten after join So

time, Now our in strategic and the go else. won't everything interest of executive through details of assessments, the recruiting, we

thorough decision description please we alternatives forward as the more assessed of a timeline review including they we business a the to the relate statement going need as the Board's we'll and information well last Today, visibility transaction the to the basis the our subsequent of in to for maximize preliminary path Investors and forward. events this going proceed IoT the into shareholder post-close We clear proxy future. and to on of put likelihood business So details, and focus on QX the value. it, for filed business of close lot as week. on

comments, So for the business and we'll the Kirsten and after focus relevant the vision I'll turn IoT And over the near-term to and I'll then business. on the to go long-term priorities through for in status those topics. discuss results Justin's for outlook call business QX transaction.

in solid as and some in the management at onboarding, CEO and was activities, ramp and our well the So in due We in the effect disclose for but both there manage QX. course, of QX, on on footing, our activity it business continues as diligence to couldn't involve and a recruiting transaction but CEO. which on as we as key going meetings QX this time, interviews well was future

our consistent with solid million margins. So revenues despite at business within distractions these range guidance our and $XX.X overall was total performance gross

Premises Our position with premises' reflecting also We've to the been and GAAP within since contend to strength, puts premises, gross non-GAAP readers. strongly QX rest with as gross budgetary pleased highest gross in margin was we of which federal strength for our XX% business XXXX, QX XX%, resolution uncertainty. identity In as government's continue our well segment non-GAAP the the margin a XXXX. had think margin and us we margin continuing into good in was

across QX, saw more of all high-interest Now our platforms revenues X and in is Vision agencies. This levels the quarter. in notably, other as federal new software recurring Velocity line. in we an reflects premises deploy interesting demo space business and video services nearly revenues trends federal our in in XX% product area in of strong opportunities to grew we premise the first Cloud of interest X

utilities, from in geographic to from continue our especially particular, K-XX in integrators smaller and transportation, newest growth also schools, across We airports. our see and regions

our Now internal includes to even leader. the continues perform business, consistently and readers recruiting our a Identity overall, addition with of to demands access IoT, in identity card which new

leader another to as presence Our IoT RFID position specialty successful at Journal. IoT with our continued team a build

also We new a next week. home customer another Wiliot X-year a we in Michigan and smart shipped shared Axia NXP STMicro and we Institute series with with QX. State, our sessions for in application, joined We another units X secured and also Institute webinar Axia to contract the with continued and million

This production produced our said lower at even we of on be all to up call, our very of to as QX facility. a least cost our advantage over products to was ability in Thailand Thailand our nearly rapidly our It for they take complicated ramp chip. batch time. we in work Now for Wiliot demonstrated there for as last expect new these their units X earnings last Gen quarters Wiliot on producing few the

a by as aggressive some large Now we've of described prior due the we've expected, companies we buildups that seen companies on couple on pricing. competitively, become to capacity calls,

Now UHF well. applications. performed our capacity it our does Then mostly can our was of complex to some logical affects this of access readers specialty IoT added HF it products, segment This but but applied standard products, devices? our affect be lower-margin Identity very for some within more lastly,

with pipeline across Our further this sales in world's orders. follow-on growth online readers drivers, and and retailers contactless expanded one keys our our the QX, Europe. deployment especially our and continue of security the are into company-wide opportunities, Americas, FIDO including in main XXXX could dual-factor largest In QX

returning to transaction. So our strategic

the terms given In on the other shortest requirements we believe moving vote possible regulatory a the close, and processes. the timeline to statutory timeline of shareholder we're process for

should stockholder date. going close for the in we're only good at we track clearance close, QX path the needed our an certainty IoT a forms smoothly, terms provided early of forward. and decent timing terms estimate In We That shot certainty. things business of these we to the We're for proceed. close are of and both on major progress have vote the on a QX approvals and, course, foundation terms of believe to

our opportunity financial path hear we'll be So focused after turn the results, her comments to and on from Kirsten Justin's over you the can call directly on. so I'll

over Justin, to you.

Justin Scarpulla

Thanks, Steve.

of deliver the operating continued our and over businesses, achieved identity XXXX, guidance both our focusing Steve build-out results able As in with increased premises range, our Thailand our of were to well operational margins, cutting-edge premises continued while first line on facility. as including mentioned, our company control these in our products quarter We revenue as and we expenses.

an was the wasn't XXXX primarily million in that Identity from part our from offset decrease $X.X to related RFID-enabled resolution Wiliot, products. resolved revenue First in primarily The segment related our to by our our until a and decrease of million million, million segment versus decrease identity was remaining was continuing in increase Premises IoT March. products, quarter breeder $X.X $X.X QX of XXXX. government this federal was $XX.X

respectively, XX%, included and quarter compared and both First XX% QX Identity as non-GAAP and margins XXXX our XXXX, adjusted gross in increases which respectively, to segment GAAP margins. in and XX% were XX%, Premises

on reflect includes expenses equipment. Our adjusted GAAP adjusted gross manufacturing while focus our for development, QX XXXX. the marketing, increase costs processes and and XXXX, which operating sales to totaled margins million QX and our and first million and profile research continuing $XX.X margin our general $XX.X compared investments and administrative respectively, in $XX.X quarter and non-GAAP to $XX.X technology in and non-GAAP continued of GAAP as XXXX, and and million million,

GAAP XXXX expenses million $X costs. in review-related quarter operating also strategic First included

QX appendix $X.X in revenues, Singapore information, presentation, result loss $X.XX million $X.X compared period. our Thailand we for GAAP today's of of reconciliation net have million of attributable the $X.X a or in a operations. change and in our GAAP impacted prior which net also year-over-year shareholders identity to QX This non-GAAP non-GAAP GAAP XXXX $X included adjusted release. our year full negative earnings quarter to to was financial XXXX negative common utilization the million EBITDA is the XXXX. compared adjusted of primarily share EBITDA of which to million Non-GAAP loss was in is In provided per First lower

$XX.X million Identity GAAP next further $XX.X the revenue XX% XXXX. revenue analyzes segment revenues, in million overhead Our net XXXX. QX net totaled identity, our QX of increased XXXX respectively, and trends respectively, our Thailand an margins primarily slide from increase for non-GAAP identity, or XXXX, that attributable or QX in year-over-year compared XX% identity by reader gross with revenue of and part products in company's QX in and online offset by beginning QX adjusted to gross were in margins, The to XX%, from in XX% as in XX%, compared to margin came expenses operations XXXX. increase and XX% segment, was

company's Now X% QX $X.X margin XX% turning segment. XX% of revenues expense Premises segment products an revenue net Premises XXXX was XXXX. segment XX% XXXX. increase accounted of million, was QX our or compared gross of revenue costs.Moving to Premises segment GAAP XX%, for Premises in now QX QX QX to services XXXX. million, to XX% our margin in the gross for operating and In increase net adjusted logistics XXXX the compared and or for freight, non-GAAP $XX.X in decreases compared premises is QX related XXXX, from management. to The in to our to inventory,

amortization first Our consisting to of expenses stock-based The quarter GAAP of QX of a of primarily operating our as The strategic XXXX. the were certain flat. and costs. as increase revenue of quarter revenue percentage and is compared expenses noncash XXXX percentage XX% was to in Non-GAAP revenue QX expenses restructuring, in operating and operating compensation operating exclude to non-GAAP XX% to the related review first as year-over-year strategic adjusted XX% the operating was a percentage XXXX severance a costs, review, in XX% increase as in XXXX. decrease compared in is expenses of primarily GAAP revenue depreciation charges, to in revenue expenses and of related in relatively

activities. and from exited $X from to activities, activities, We the cash, of QX of result in from in XXXX the equivalents, $XX.X decrease million investing million million million decrease turning sheet. QX, a $X.X $X.X QX from cash, In XXXX. with $X.X balance a cash was cash million and financing Now operating restricted

QX from XXXX. decrease Our million, working a million was $XX.X $X.X of capital of exiting QX

filing, reconciliation our cumulative previously, full costs QX strategic will our noted providing are million a flows. year-to-date XX-K exiting XXXX. $X.X review we the In be As of cash

concludes of the release. back us we This For earnings call completeness, the to This million an expected now $XX QX in appendix sheet million. I'll discussion. range leads full have financial included $XX to of the balance revenue Steve. today's the pass to

Steven Humphreys

Justin. Thanks,

position we're Once As to of I close expect key healthcare specialty Kirsten team, to value player a come be that our industries mentioned high-value in our infusion singularly will transaction. IoT her from and leadership of opening on balance into track focused markets. in very other and and opportunity that we our the support Newquist's fortify strategic will we to under major in creation the end to capital comments, business With transform the our believe confident sheet leadership. what we're the industry our business establishing a closed, growth

and for go-to-market with Now business. as and health to clear, our weeks, resources. build into and transforming plan, creation time, X.X be you'll allocation business Kirsten a Welcome. board deeply takes of to to laser-focused position. she bringing diving deliberate particularly regulated hear, investment strategic and value resources our Kirsten. has But a out in from industries been IoT there detailed a vision plan. the already industry of get path She's like current has care, requires on all strategic the a execution, she's clear been

Kirsten Newquist

Thank happy you the in history. take and us be IoT in some moment very all about of and you, with why joined today Steve, to we I'd provide myself pivotal the speak background and good first, like But with this I about front moment at to a have Identiv afternoon, company's of the you opportunity business. everyone. to for I'm

in disciplined out growth Manager, joined and with years I first, led approach. ultimately with to division, Identiv As Dennison a I and and for as which came Avery after nearly Dennison, RFID. I corporate started Development; as I Business focused ultimately President years where Avery including platforms, Vice new analyzing Medical Steve XX General Vice President, mentioned, strategy, the X

has along to a strategy exciting decision company an the surgical primary and Dennison year monitors, with lead and Dennison glucose IoT finishing and portfolio including I of solutions an and the requiring I driven a market innovative and rise leadership the home, that shift development led technologies, space. in containing regulatory $XXX personalized required can and the wearable Institute such and IMF, healthcare, trends There of role. all My avoidable products the important that capabilities management are opportunity my years in sets billion understood with the EBITDA particularly Identiv the I familiar focus During IoT costs produce components frequency, the which the of from to ranging to the such of medication alone initial the in for quality healthcare create where able and and and entrepreneurial-oriented RFID ingredients position space. involvement devices. finished growth manufacturing industry. and molecule sales appreciated medication with in needs, to join multi-component apart was and healthcare who coding, new background major in The this and nonadherence unmet sector the monitoring the medicine at nonadherence as that I complex healthcare estimates team. the the for strong large public an high-volume pharmaceutical strict and in to built collectively many Having efforts Avery primarily care utilizing this was large was last many drugs double traction dressings the industry. Identiv and NFC, to Smartrac, My opportunity with capabilities was by significantly UHF-based is UHS, launch medical are industry, and Its Avery converting, within company products, compelling moisture RFID players Informatics business. careful at in there the wound the Its applications. continuous I counterfeiting, product the on HS, Healthcare where growing specialty my It increase serve standards given of an RFID involved from mix-ups my led location for to as worked healthcare the from it BOE, division, point. competitors growing specialty drug interesting utilizing spent further in in tenure, active play area up dual devices films medical and U.S. hospital to least temperature, was under to its costs device focus provided

industry we critical RFID-enabled authentication RFID its proposition monitoring become Incorporating increasing enhancing diagnostic this opportunities solutions authentication, in condition and transformation asset including medication, for transformation, see persuasive digital sample and the adherence, safety. and and errors, bag provides many test embarks journey, reducing a medical to by As into healthcare drugs. on blood value patient critical tracking, engagement, smart a labels processes and these auto-injectors products patient of for ultimately

Let me order XX share market are There for a over annually to in prescriptions space. worldwide used opportunity each of with areas billion opportunity you give over billion Initial year. these in penetration magnitude U.S. an the X today X syringes metrics you and on Identiv. substantial billed the represents

industry the We have already pipeline excess command interest NRE of from XX%. higher the have and margins, across applications. these up gross in projects often built impressive experienced of Furthermore, an Solutions customer-driven Specialty

opportunities healthcare healthcare the regulated the to they industry. term nature While of compelling, be vast given in are longer and tend the

the segments, into due optimize their the the solution run design and fact, quality the beginning technology sticky In In industry of are several at journeys Identiv's and high. We the ROI. and multiple as it this to fully RFID, and see we evaluating digital to when rollout. once would has customers go packaging, to other proven manufacturing specialty out, benefits devices. switching be be That very to processes most through to it business costs is the driver and requirements, typically integrate X long-term home will a are the the iterations regulatory opportunities relatively sustainable smart and with pilots in comes need the retail, usually a these launched, nascent time it takes smart technology Once their a launched that of and also is of as understand industry growth. said, high-value parallel, phased

health Many adopt not technical and and these these in the versa, markets regulatory care applications the of those we prototyping, and design than can custom requirements same Healthcare often also leveraged that for the rapid have quicker industries processes. in ability manufacturing features new we design, do expect to we be segment. complex will and the quality As hurdles, be see solutions require develop vice their and

and and for garment enhance that for interest opportunities These and tags the optimize proactively we our consumer the devices, summary, the the and We and for that potential have are go cases seeing and we there will tags for higher-margin same consumables predictable our our support are a smart to smart authentication these dry home where for where secure packaging of our and revenue. profile. growing after for of footwear, continue to recurring we labels customers experience. opportunity highly the a to life stringent use margin business specific of we at and volume we sustainable requirements is applications know already and developed In our time, products wash core include realistic NFC-enabled strong that embedded structure withstand and garments cycle segments. today see will industries At cost

that, our effort the Singapore who operation support most our of end expect require by to facility a customers Thailand largely smaller the After that and time requalify R&D Thailand. and majority in of to any structure, will X, production development manufacturing short-term primary and in its Thailand complete our with more of capitalize to to product be lower we XXXX. initiatives transition quarter of cost critical much on One the new accelerate RFID occur to our engineering-focused in is to

maintaining and transitioned. The this doesn't to to process, very first exit coupled margins financial the justify impact the some exiting of of by next the and transition, has that to continue during expense into overhead revenue low-margin of we've we've begun our Thailand dual sustain with relocating to will sense sites business, business nor year. As once this incurred manufacturing half low-margin make of part our

dedicated low-margin the a week However, and and on products date, long-term capitalize more business fourth into specialized streamlined delving result That reduction team's in within margins. the its limited streamline position in move in in that and said, company's my accomplish business' the I've opportunities commendable. efficient team its specialty able we're both fully an development. struggled product fueled are now significantly to direct terms sustainable realizing The this has I passion team, team of opportunity evident ultimately to and I necessary business an am also and the our our sphere, with we very of its been with This operation know is getting the to the will array improved to goals. with to engineering true strong enjoyed profitability. see Identiv. Thailand has developing confident a are business. in the toward high-margin a the business opportunity by this capabilities, that to a technology products on disciplined for Identiv strategic potential, strategic potential. wide me absorbing business revenue I clarity and perspective what breadth crucial of and building long-term and To IoT will why to It's reasons drive with pipeline compelling and that portfolio, processes be resources a have joined of the the growth.

I'm detailed build our to and provide growth and It our X in drive and business next worked a outside will and perspective we focused, strategic months, consultants dives is to industry-specific strategic to the our resource appropriately imperative the solid to the respective are excellence with their bringing develop are upon business and a that business to with and my excellence topics: core longer-term start, drive important Over past process. build bring extensively go-to-market business talent foundation complete clarity industries. in priorities the in disciplined, in To is an plan and I focus, plan. be resources complement several address so have initiatives can it and standouts my deep along a onboarding pursuing. internal opportunities whom These

Medtronic trailblazing one cardiologist, companies members, Rietzler, and RFID with them. be Officer Harvard-trained Angelini, was and of the development Adviser, to of against and previously senior Smartrac, who who will these founder Rick of Medical in updates Kuntz, Laura as was forward milestones you timely our Dr. X and key look our Scientific & our Healthcare in Johnson.I addition, well Johnson as board executive space In faculty previously plans with a process medtech the we strategic for and Chief Board providing on the the Baxter growth the participating execute as a Manfred

Finally, I want to we to plans at emphasize no M&A. immediate present, pursue have that

over my aligns to Street with fully ahead drive to primary future meet Wall Our gain immerse to myself back and the and in the objective opportunities business and strong business Steve. the the built coming so community call be that, excellence, to in strategic business with role months. forward With any is I'll the upon will strategic foundation turn M&A clarity looking a to In and I'm toward and closely our objectives. closing,

Steven Humphreys

Kirsten. Thanks,

forward job, a has for all of you weeks after a vision As very understanding and the you a our to vision, excited I'm very clear Identiv few take our found have. have leader operations. thankful have we're so business Kirsten her realize With this just heard, to business why tremendous an the excellent leading and we clear opportunity see personally going forward. can such to firm on the

business, Now we've of investors, before to last the to, be found the like for very we all to business. of aspire needed path support couple our reach with truly you, thrive I'd their and physical exciting found to make and for security forward to culture, meet our thank for a looking to security for and XX exceptional the to excited the partners and the passion, I'll and Vitaprotech after people also people security that I'd with the balance leader. and is invest built Identiv be business may with of case our team amazing schedule with and out businesses Kirsten vision, case, and terrific confident of part closing goal. and both it we'll IoT for turns with business to best created forward business the Identiv our If work like a If capital together. aligned business. futures. for that happen, vision of we path commitment I'd opening personal realize Both comments. and In and build expand we her make I'm physical capital very world-leading who our sheet the your this miss partners and all a to focus the believe businesses IoT. an logical with our the confident discussion, call especially approach to our thank With the the but disciplined earnings our to Identiv. being call values working achieve on everything that and vision, I'm are him we of I'm we've grow to and customers I work to our of and there, potential, business. our resources grow my great continue like with to expected

the to questions. So open I'd the question with please Operator, call your queue. for like open that,

Operator

[Operator Instructions].

Steven Humphreys

of Khoshniyati, here, like to on Jim line. I, add Kirsten, Ousley in have Justin, And also the Amir to and and also, addition that Manfred Mueller, Matthew, our Dr. Chairman I'd the the we Board, speakers

to any them, So everybody appropriate for here are we have that questions answer.

So thank again. you

Operator

Your is Ellis coming first Riley B. from question from Craig Securities.

Craig Ellis

you public move and the and with pleasure like was it you for to Kirsten. over forum, on Steve, question a it And duration with say event be your interacting then does prove the I'd in start Justin coverage. to call last if I'll a to a of

XQ trends So in low got higher were revenues, look teens looking down teens. the I the think I in be at the in were inside range we'll I quarter, at but of XQ think When year-on-year that to revenues closer XQ, and the down, we've seasonal.

the shift here So was do inside can maybe you come? to are happening just think still to some or it impacting cyclical premises talk whether in about some impacts of that in the or recurring might of more revenues? that that might things that the of quarter revenues, effects cyclical a you And lingering the mix-out or second happening items be bottom of be even be

Steven Humphreys

Yes.

you side bit is an recurring. resolution will like main some We little team revert back the there company of said, you shift of you're us on there. to the rotation executive But and then as that the small trends premises as half a playing focus -- continuing lower mentioned top, the some out I on norm. did very the business. as premises think the when the the from have those a margin you field, attention taking well the off And effect That's So take have underlying underlying shift to side, one. the

the transitions On her the that are there the going Kirsten mentioned of is identity update to poor that forward. some in how are business side,

Craig Ellis

Okay.

XQ? what XQ, Were to inflated on Moving since at any question mix of there in and we saw XX-quarter think Justin, that do some costs deal impressive how in Really items in more margin were of financial intermediate we for one-time OpEx GAAP least numbers, of segment numbers And about quarter. those a in on for just OpEx the there the do gross trends high Justin. beyond the the in XQ? out either

Justin Scarpulla

Sure. is in I'll there continue. margin to top see one-timer did margins. to my healthy a one margin either identity within expected we well. commentary as returning it year-over-year, our that were was perspective, noted that We From the segment -- that from and a well that to readers not a as boosted pretty start take

proxy touched have review Those you a on not then largest strategic is as item on think And have we government I there. administration from one-time and the to And the approvals vote that's costs. the that need things. continue that margin. definitive we of we're proxy that are Those statement, for stockholder ongoing amount side, as into the through the getting drivers that and here that will shortly, of ongoing one through doing get So are we our the up hopefully, QX filed OpEx well. filings,

forward, some throughout We mentioned, million would a as outside a a I on in that your going OpEx couple perspective. consultants here upward was expenses with pressure have Kirsten gross last going quarters. of and the of asked she you forward new of was included is question. in included next are that do about not that non-GAAP.From a one-timer leader of that the our slight think the put So part margin non-GAAP operating from $X Those

Craig Ellis

couple a Kirsten, you. then questions just Got it. of And for

to a So one, to you in Nice public again. forum, aboard. welcome talk

the up I near big just other next not your about next presently it's you to that so? that could to of it the other not follow for item and X-year of think you the half is In year things by year. just out would wanted markets a medical be or the in the a more vision into do what if and business? Can end near-term is medical mentioned the a term, You on. of some to size business whether the in half is about business qualitatively how One item. period? of related the impacts and first mix year Can next longer-term X- you or then first that talk And X to business intent in business the or any become, if talk or of what quantitatively, lower-margin

Kirsten Newquist

Yes.

certainly. So

So very exiting I market sustain And think into about And the a some statements, term, in I even very the the this business, of low-margin at low-margin business it previous justify move is Thailand truly my in the nor it all. we talked business. is said long-term. medical as it in not doesn't short as

actually very not to practice. We're really the it's So we're very, I've frankly, team money. as that here here And low-margin quite told make to business. here,

makes and sure. any business for And does that the medical of our certainly resources it sense term. not no us take the But to so to don't long and continue include budgets for move want we business into our

said think statement definitely medical companies, to I I the opportunities. space. is companies terms as the of medical my explore in term, lot starting And major see so of definitely there's a a We different a device the space. longer in in of players pharmaceutical major earlier nascent It major opportunity, the lot

are small Some them R&D of projects.

so are bigger they a it really experience work trying into of to can that pilots that gain they're Some them launch.

significant and So But we get large. the we different today. volumes that. deep months potential. clarity We'll some you really, definitely be the a the X over that certainly in We quantify the and from to to a are opportunity it And the X more medical see categories for where work X definitely doing really a Identiv interest just little next lot think of quantify go exist next they the device the interest. We pharmaceutical years. on bit exactly it see see some work, of see in be because a X to can that hard it's it company when to lot could we're contemplating,

Operator

next Michael from Instructions] [Operator Piccolo Your question Capital. from is Imperial coming

Michael Piccolo

a wanted team. again joining Congrats just on IoT more to Kirsten the get clarity little business. on the I transaction bit and the

guys as increases lower time? you understand gross proxy, XX%. that about smoother gross XX% target. talk you to is project-based I But saying we spoke from could in in it about you the Is a call, potential Kirsten margin in over a be can cited going there exit long-term And excess the you get was On lumpy projects. of margin then more shorter-term also We how or there? be impacts margin it understand

Steven Humphreys

be there's going a combination Yes, there. to

as as far product we those to on cycle. we infancy to healthcare where as life are in about, their next As cycle. out move increasing play start in today their their They talked and our are focus

feel we production we that go us of feel the will projects that new need our initiatives product NREs to our level So where we we have within healthcare get base to and and a strong be. to

today, I as today, in although I to a smaller in health care and range. QX, percentage Our of to, XX% our that XX% care our business noted alluded health is

health commodity lower-margin there a over shift of get mix we'll care feel ones. our out kind we So to with of and

into to from it talked shift her Kirsten has talking while. And about It's a to that when time, have try the been noted that significant and We've Singapore the margin we sorry, But of quarters. some here going we're points being here a is when take bumps Thailand in early that out X% accelerate and piece running longer-term through long-term of second there. about because could think out as that overhead quite of The only. we'll we'll be going be in city through basis Thailand. some said both Previously, for well X%, through short-term today, -- in facility, the savings couple to it see be north well. Singapore Thailand get we to of are next to labor, adequate analysis Between should Thailand. our going and we XXXX I a the on numbers but our in production of as XXXX we we'll

hit give X those our us we'll target. that So long-term confidence

be short are the a of term, to a it will I contributing As those XX%. factors longer how in are but the said, bumpy, think we couple that to I up little get term,

Michael Piccolo

of Got both, it. more And That's organic of one about, in the the you discussed expectations you what just cash business guess, a and very IoT to Can in bit helpful deployment little that about going guys follow-up the how guess, and the talk terms the kind I guess a areas. color. I what be can I terms M&A talk where in Kirsten how of call But plan -- it's we mentioned cash priority on deployed? proxy is to is think isn't I and now. you a right main investment

Kirsten Newquist

Yes.

we as have certainly, my I priorities, right strong team, have earlier, really that we said first for ensure the So have bit excellence do little the some foundation in so X to build that processes, work the we the resources strong to and to we I business right a right place think a got future. that

plan be that we'll spending So time developing and forward. moving that

segment on as is very a great our different can sure different care Secondly, that make health next We going where advantage over to segment X with very can play. we competitive talk we about compete to be super work, a we and applications we I clear gain true want those deep focus. ways deep being a have think use the we margins. X with said, really the that many We're dive us, doing and as lot and big effectively strategic for to that cases we're that really going a months, but of

really, be know we and ourselves want for some we're to won't go. to going focus. to but as we're driving where after other well, want applications, to we really going proactively but where looking where the very time market, mean look to segments So we our clear at give clear to It Obviously, we're we're that. business, we with want going to looking be nonhealthcare-related doesn't get going that be do want with at we to and

that a beyond value management strategic on continue of do part to that. the is plan strategic where looking of the expand be need a be to clear want platform, to we expedite As great, think for of it lag. very, to and I always with process, lot very know continue to data kind building work we'll we build which I obviously, and been there's opportunities also but

And clear out so And the that's how want part work. a we it. more of money to coming where that and with strategic to invest lot will the strategic we want invest be of work

Operator

next Instructions] is from [Operator question Your Schmidt Lake coming Street. Jaeson from

Jaeson Schmidt

forward. going on to higher-margin sort business up on commentary the on want within focus follow the Identity the Just of segment

to to new gross it? So you look on going a look hurdle at forward for clear assume certain any a on fair that even take go-forward program it basis, margin is at or you to has guys

Kirsten Newquist

be X looking at to going We're things. Yes.

I and we'll think it at of lenses. looking with X kind hurdle different margin be a gross

be one if industry will gross That obviously, a it's that's So that's product in already margin for competitive. developed a target. mature more

that at As a them, ourselves that will quite also look will be the require margin develop high-value bit obviously, and targets those significant to investing be customization opportunities we higher.

and So is on customize criteria of initial we types products. effort it different have to investment will what the product. really different the for depending and

Jaeson Schmidt

then Got as it. follow-up. just a And

specialty retail, of and devices. those build already in-house do those in think do out you sales but scale you Or a Obviously, have exposure infrastructure in to have you you out smart each significant early everything way? You need called packaging, within today? the today, markets, home smart

Kirsten Newquist

No. Yes.

on is focus. initial getting priority I think again, really our strategic why, definitely, clarity and that's once my

already got definitely really we've So intriguing some those projects spaces. in

some directly as we care can as proactively have we some the able itself. definitely timeline be be applications to And to business balance and specifically segments obviously, think build but go looking there, want we a of so vertical development at of those efforts to health tied And the to pursue to the out We and well, other into really effort. care it. those to have business Those we're health development segments. for different

really on into on going to take there many business careful go with investment will deep specific to be as it have because development we to want of the side segments. an how So we're obviously, be we

Operator

Thank the concludes for Q&A closing I'll our session. ahead. you. That CEO, remarks. now Humphreys, hand Steven to Please back go conference

Steven Humphreys

you all thank and again operator, Thanks, right. joining All for us.

We in transaction, will the her discussion and timeline of laid all on our out of Kirsten continue and to as update progress the closure KPIs you and for course. on business our progress

our For details going of forward, transaction the preliminary business the review please proxy already and do that's file on SEC. the with

annual point, transaction. proxy and the on weeks. At announce stockholder our expect date the upcoming to vote the in file that our We for definitive we'll meeting

is team. you any updates And please be to set we'll B. reach vote, Relations chat business shareholder course, on And have and the AGM. share investor of also out we'll early terms in of Sofie outreach, Investor our Riley session and our XX. questions, to In don't following hesitate if to fireside up a on the June. attending Hallum Craig And track May Conference

thank you So all a evening. very again, have and good

Operator

Thank concludes you, event. This everyone. today's

wonderful have this You may and you for a at Thank day. time, disconnect your participation.

Identiv (INVE) 8 May 242024 Q1 Earnings call transcript