Identiv, Inc. reported preliminary results for the third quarter ended Sept. 30, 2020.
The preliminary financial results included in this press release are based on current expectations and are subject to adjustment.
Financial results for the third quarter ended Sept. 30, 2020, will be released on Nov. 10, 2020.
Third Quarter Financial and Operational Highlights
- Total revenue grew approximately 30% sequentially from $24.8 million to $25 million;
- Revenue in Identity grew approximately 33% sequentially from $15.3 million to $15.5 million;
- RFID grew over 100% year-over-year;
- Revenue in Premises grew approximately 26% sequentially, predominantly due to demand from federal customers;
- Recurring revenue was approximately 6% of total revenue, or $1.4 million to $1.5 million;
- Total backlog for orders requested to ship in the fourth quarter 2020 grew approximately 68% year-over-year, with RFID backlog up approximately 125%;
- Within the last quarter, the backlog for fiscal year 2021 doubled;
- GAAP net income to range from $0.3 million to $0.4 million. Non-GAAP adjusted EBITDA increased to between $2.7 million and $2.8 million, with positive GAAP earnings per share (EPS);
- Net income adjusted for non-cash items to be a source of cash of approximately $2.2 million;
- RFID on track for full-year 80% growth;
- Identity readers up 38% year-over-year, driven by sustained work-from-home and work-mobile;
- Launched FIDO keys for extremely secure, easy-to-use, made in USA cybersecurity
Preliminary Third Quarter 2020 Financial Results
The company expects revenue for the third quarter of 2020 to range between $24.8 million and $25 million, an increase of 30% at the midpoint of the range from $19.1 million in the prior quarter.
Revenues in the Identity segment grew sequentially and year-over-year due to higher sales of RFID transponder products and Identity readers, partially offset by lower access card sales.
Revenues in the Premises segment rebounded sequentially as the initial market impact of lockdowns has subsided. Premises revenues grew overall, while Hirsch Velocity Cirrus orders and 3VR Prime’s pipeline also grew, reflecting preferences for recurring revenue pricing in both access control and video analytics. Federal sales grew approximately 90% sequentially, reflecting strength in the federal market.
GAAP gross margin is expected to range between 39% and 40%, compared to 40% in the prior quarter and 46% in the third quarter of 2019.
GAAP operating expenses, including research and development, sales and marketing, and general and administrative are expected to range between $8.9 million and $9 million in the third quarter of 2020, compared to $10 million in the prior quarter and $9.3 million in the third quarter of 2019.
Non-GAAP operating expenses (adjusted to exclude restructuring and severance costs and certain non-cash charges, such as stock-based compensation, depreciation and amortization, as well as other non-GAAP items consisting of acquisition-related transaction costs) for the third quarter of 2020 are expected to range between $7.4 million and $7.5 million, compared to $7.6 million in the prior quarter and $7.9 million in the third quarter of 2019.
GAAP net income in the third quarter of 2020 is expected to range between $0.3 million and $0.4 million, or $0.00 and $0.01 per basic and diluted share, based on preliminary results. This compares to GAAP net loss of $2.7 million, or $(0.17) per basic and diluted share, in the prior quarter.
Non-GAAP adjusted EBITDA in the third quarter of 2020 is expected to range between $2.7 million and $2.8 million, which compares to $0.5 million in the prior quarter.
Cash is expected to be approximately $12.3 million on Sept. 30, 2020, which compares to $13.1 million on June 30, 2020, and $11.1 million on Sept. 30, 2019.
Management Commentary Based on Preliminary Results
“At the beginning of the third quarter, we projected several growth metrics around RFID, our federal business, and Premises overall, and we’ve exceeded each of them,” Identiv CEO, Steven Humphreys said. “The third quarter’s 30% sequential revenue growth is a result of the long-term, secular growth trend we’ve been expecting in the RFID business, supported further by strength in our federal business and a rebound in the physical security market as deployments have resumed in several regions.
“Our Identity business grew 33% sequentially, driven by our RFID products, which grew over 100% year-over-year, and by continuing strong demand for our Identity readers for work-from-home cybersecurity. Federal government sales, which grew 90% sequentially, continue to drive physical security investments, and most agencies have announced long-term policies to support work-from-home and work-mobile. This growth also is coming while we’re driving recurring revenues to support our customers’ preferences and to strengthen the consistency of our business model. We believe our current backlog, our new product launches – including, FIDO keys, 3VR Prime, Velocity Cirrus and others – our sales and marketing programs, the broad adoption of RFID, federal budgetary strength, and work-from-home going into a sustained level of demand have built the base for a very strong second half of 2020 and 2021.”
Added Sandra Wallach, Identiv CFO: “Based on our preliminary results, we believe the third quarter was another proof point of the growth potential of our business as our revenues and profitability were in-line with our projections. Revenues are expected to range between $24.8 million and $25 million, which at the midpoint of the range, would be a 30% sequential increase from last quarter, and we also expect to earn positive GAAP net income.
“To avoid conflicting with the U.S. elections, we determined it was important to publish our preliminary financial results promptly and to move the discussion of our fully-detailed and final results to the week after the election. Our earnings call will now be on Tuesday, November 10 at 5 p.m. EST. It is our hope that this extra time, combined with these detailed preliminary results, will encourage a more focused discussion for investors.”
