05.09.24
Identiv, Inc. released its financial results for the first quarter ended March 31, 2024.
• Welcomed Kirsten Newquist as president, IoT Solutions; Newquist will become CEO at the close of asset sale.
• First quarter GAAP and non-GAAP gross margins were 37.3% and 39.9%, respectively, their highest levels since Q3 2021.
• Software, services, and recurring revenues grew to 27.4% of Premises segment revenues in Q1 2024.
• Continued the development of Thailand RFID production facility, reflected by 40% of Q1 RFID volume being produced in Thailand.
• Shipped the majority of a previously announced $2 million reader application order for a global online retailer.
• Secured two-year contract with IoT customer for smart home application.
The transaction is expected to close in the third quarter of 2024, subject to stockholder approval and other customary closing conditions. The transaction is also subject to review and approval by the Committee on Foreign Investment in the United States (CFIUS) and the Federal Trade Commission under the Hart-Scott-Rodino (HSR) Act. The proceeds from the sale will significantly strengthen Identiv’s financial position, generating capital to fund the future growth of its specialty IoT solutions business.
First quarter 2024 GAAP gross margin was 37.3% and non-GAAP gross margin was 39.9%.
GAAP operating expenses, including research and development, sales, and marketing, and general and administrative, were $12.6 million in the first quarter of 2024, compared to $11.8 million in the prior quarter and $11.9 million in the first quarter of 2023.
GAAP net loss for the first quarter 2024 was ($4.6) million, or ($0.21) per basic and diluted share, compared to GAAP net loss of ($1.6) million, or ($0.08) per basic and diluted share, in the prior quarter and GAAP net loss of ($2.7) million, or ($0.13) per basic and diluted share, in the first quarter of 2023.
"In the first quarter, our total business net revenue was within our guidance range, and we delivered our highest GAAP and non-GAAP gross margins in ten quarters,” said Identiv CEO Steven Humphreys. “We also brought in a world-class business leader, Kirsten Newquist, who has the ideal profile to lead our IoT business. Our previously announced strategic review culminated in a definitive agreement signed on April 2. We believe this transaction positions Identiv with a strong balance sheet to invest in the future growth of our specialty IoT solutions business and look forward to its expected close in the third quarter.”
Recent Financial and Operational Highlights
• Concluded strategic review with announcement of $145 million asset purchase agreement (APA) transaction with security solutions provider Vitaprotech; transaction expected to close in Q3 2024, subject to regulatory and stockholder approvals and other customary closing conditions.• Welcomed Kirsten Newquist as president, IoT Solutions; Newquist will become CEO at the close of asset sale.
• First quarter GAAP and non-GAAP gross margins were 37.3% and 39.9%, respectively, their highest levels since Q3 2021.
• Software, services, and recurring revenues grew to 27.4% of Premises segment revenues in Q1 2024.
• Continued the development of Thailand RFID production facility, reflected by 40% of Q1 RFID volume being produced in Thailand.
• Shipped the majority of a previously announced $2 million reader application order for a global online retailer.
• Secured two-year contract with IoT customer for smart home application.
Asset Sale Transaction Summary
As previously announced, on April 2, 2024, Identiv entered into a definitive asset purchase agreement to sell its physical security, access card, and identity reader operations and assets to a wholly owned subsidiary of Vitaprotech, a security solutions provider. Under the terms of the agreement, Identiv will receive a cash payment of $145 million upon closing of the transaction, subject to customary adjustments.The transaction is expected to close in the third quarter of 2024, subject to stockholder approval and other customary closing conditions. The transaction is also subject to review and approval by the Committee on Foreign Investment in the United States (CFIUS) and the Federal Trade Commission under the Hart-Scott-Rodino (HSR) Act. The proceeds from the sale will significantly strengthen Identiv’s financial position, generating capital to fund the future growth of its specialty IoT solutions business.
First Quarter 2024 Financial Summary
Revenue for the first quarter 2024 was $22.5 million, compared to $29.0 million in the prior quarter and $26.0 million in the first quarter of 2023. By segment, Identity revenues were $12.8 million and Premises revenues totaled $9.7 million.First quarter 2024 GAAP gross margin was 37.3% and non-GAAP gross margin was 39.9%.
GAAP operating expenses, including research and development, sales, and marketing, and general and administrative, were $12.6 million in the first quarter of 2024, compared to $11.8 million in the prior quarter and $11.9 million in the first quarter of 2023.
GAAP net loss for the first quarter 2024 was ($4.6) million, or ($0.21) per basic and diluted share, compared to GAAP net loss of ($1.6) million, or ($0.08) per basic and diluted share, in the prior quarter and GAAP net loss of ($2.7) million, or ($0.13) per basic and diluted share, in the first quarter of 2023.
"In the first quarter, our total business net revenue was within our guidance range, and we delivered our highest GAAP and non-GAAP gross margins in ten quarters,” said Identiv CEO Steven Humphreys. “We also brought in a world-class business leader, Kirsten Newquist, who has the ideal profile to lead our IoT business. Our previously announced strategic review culminated in a definitive agreement signed on April 2. We believe this transaction positions Identiv with a strong balance sheet to invest in the future growth of our specialty IoT solutions business and look forward to its expected close in the third quarter.”