Identiv(INVE) - 2025 Q2 - Quarterly Results

Company Overview & Highlights Identiv reported Q2 2025 financial results with an expected revenue decrease, while making significant progress on its P-A-T strategy and strategic partnerships Q2 2025 Key Highlights Identiv announced its Q2 2025 financial results, reporting a revenue decrease as expected due to exiting lower-margin business and reduced sales to a major customer, despite making important progress across its Perform-Accelerate-Transform (P-A-T) strategy Q2 2025 Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :------------------------------------ | :------ | :------ | :----------- | | Revenue | $5.0M | $6.7M | -25.37% | | GAAP Gross Margin | (9.4%) | 9.1% | -18.5 pp | | Non-GAAP Gross Margin | (0.8%) | 14.6% | -15.4 pp | | GAAP Net Loss from Continuing Operations | ($6.0)M | ($6.9)M | +13.04% | | GAAP EPS (Basic & Diluted) - Continuing Operations | ($0.26) | ($0.31) | +16.13% | | Non-GAAP Adjusted EBITDA Loss | ($4.6)M | ($3.7)M | -24.32% | - Revenue decrease was expected due to lower sales from exiting lower-margin business and reduced sales to the largest customer working through safety stock[3] - Gross margin decrease was primarily driven by incremental costs related to the Thailand production transition, dual manufacturing sites, lower utilization, and obsolete inventory adjustments[4] Strategic Initiatives Identiv made significant progress on its Perform-Accelerate-Transform (P-A-T) strategy, reinforcing core strengths, expanding through new strategic partnerships, and completing a key production transfer - Made important progress across all three pillars of the Perform-Accelerate-Transform (P-A-T) strategy[2] - Announced a strategic partnership with grocery logistics leader IFCO to digitize their global RPC pool[1] - Completed the transfer of production from Singapore to a state-of-the-art Thailand facility[1] - Launched a partnership with Narravero to accelerate digital product passport adoption and compliance[1] Financial Performance - Second Quarter 2025 Identiv's Q2 2025 financial performance showed expected revenue and gross margin declines, a reduced GAAP net loss, and an increased non-GAAP adjusted EBITDA loss Revenue Analysis Net revenue for Q2 2025 decreased by 25.38% year-over-year, primarily due to the strategic exit from lower-margin businesses and reduced sales to a major customer who was working through safety stock Net Revenue and Cost of Revenue (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :---------------- | :--------------------- | :--------------------- | :----------- | | Net Revenue | $5,040 | $6,741 | -25.38% | | Cost of Revenue | $5,514 | $6,127 | -9.99% | - Year-over-year decrease was expected due to lower sales as the company continues to exit lower-margin business[3] - Reduced sales to the largest customer, who is working through safety stock built up in 2024 in anticipation of transitioning production to Thailand[3] Gross Margin Analysis Both GAAP and non-GAAP gross margins saw significant year-over-year declines in Q2 2025, primarily driven by costs associated with the production transition to Thailand, operating dual manufacturing sites, lower facility utilization, and obsolete inventory adjustments Gross Margin Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------- | :------ | :------ | :----------- | | GAAP Gross Margin | (9.4%) | 9.1% | -18.5 pp | | Non-GAAP Gross Margin | (0.8%) | 14.6% | -15.4 pp | - Decrease primarily driven by incremental costs related to the transition of production to Thailand and dual manufacturing sites[4] - Lower utilization of production facilities and adjustments of obsolete inventory at the Singapore facility also contributed to the decrease[4] Operating Expenses Analysis GAAP operating expenses decreased by 19.37% year-over-year in Q2 2025, mainly due to a reduction in one-time strategic review-related costs, while non-GAAP operating expenses also slightly decreased, reflecting targeted resource allocation Operating Expenses (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :---------------------- | :--------------------- | :--------------------- | :----------- | | GAAP Operating Expenses | $5,913 | $7,334 | -19.37% | | Non-GAAP Operating Expenses | $4,530 | $4,673 | -3.06% | - Decrease in GAAP operating expenses was driven primarily by a reduction in one-time strategic review-related costs[5] - Decrease in non-GAAP operating expenses reflects management's targeted resource allocation to support organic growth initiatives[5] Net Loss and EPS Analysis Identiv reported a reduced GAAP net loss from continuing operations of ($6.0) million, or ($0.26) per share, in Q2 2025 compared to the prior year, primarily due to the non-recurrence of strategic review-related costs Net Loss and EPS from Continuing Operations | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :------------------------------------ | :------ | :------ | :----------- | | GAAP Net Loss from Continuing Operations | ($6.0)M | ($6.9)M | +13.04% | | GAAP EPS (Basic & Diluted) - Continuing Operations | ($0.26) | ($0.31) | +16.13% | - Reduction in net loss was primarily due to strategic review-related costs of $1.6 million incurred in Q2 2024 that did not recur in Q2 2025[6] Non-GAAP Adjusted EBITDA Analysis Non-GAAP adjusted EBITDA loss increased to ($4.6) million in Q2 2025, primarily driven by the costs associated with the Thailand production transition and adjustments for obsolete inventory at the Singapore facility Non-GAAP Adjusted EBITDA (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :------------------------ | :--------------------- | :--------------------- | :----------- | | Non-GAAP Adjusted EBITDA | ($4,571) | ($3,689) | -23.91% | - Increase in loss was primarily due to Thailand transition costs and adjustments for obsolete inventory at the Singapore facility[7] Corporate Updates & Outlook Identiv announced a new CFO appointment and provided financial guidance for Q3 2025, reflecting anticipated revenue based on market conditions Chief Financial Officer Transition Identiv announced the appointment of Ed Kirnbauer as Chief Financial Officer, effective August 4, 2025, following his tenure as Global Corporate Controller and Acting CFO - Ed Kirnbauer appointed Chief Financial Officer, effective August 4, 2025[8] - Mr. Kirnbauer previously served as Global Corporate Controller since November 2015 and Acting CFO since July 11, 2025[8] Financial Outlook Identiv provided guidance for the third quarter of fiscal 2025, expecting net revenue to be within a specific range based on current market conditions and customer demand - Management expects net revenue for the third quarter of fiscal 2025 to be in the range of $4.8 million to $5.2 million[9] Supplemental Information This section provides essential background on Identiv, details on non-GAAP measures, forward-looking statements, and investor contact information About Identiv Identiv is a global leader in RFID- and BLE-enabled Internet of Things (IoT) solutions, providing digital identities for physical objects and driving innovation across various industries with over 1.5 billion applications worldwide - Identiv is a global leader in RFID- and BLE-enabled Internet of Things (IoT) solutions[12] - Solutions create digital identities for physical objects, enhancing global connectivity[12] - Solutions are integrated into over 1.5 billion applications worldwide across healthcare, consumer electronics, luxury goods, smart packaging, and more[12] Conference Call Information Identiv held a conference call on August 7, 2025, to discuss its second quarter 2025 financial results, with a replay available for two weeks - Conference call held on August 7, 2025, at 5:00 p.m. EDT to discuss Q2 2025 financial results[10] - Teleconference replay available through August 21, 2025[10] Non-GAAP Financial Measures This section defines Identiv's non-GAAP financial measures, including adjusted EBITDA, gross profit, gross margin, and operating expenses, explaining their exclusions and purpose as a supplement to GAAP measures for evaluating operational performance - Non-GAAP financial measures include adjusted EBITDA, gross profit, gross margin, and operating expenses[13] - Used internally and as a supplement to GAAP measures for investors to evaluate ongoing operational performance and trends[13] - Non-GAAP gross margin excludes stock-based compensation, amortization, and depreciation[13] - Non-GAAP adjusted EBITDA excludes income tax, interest, foreign currency, stock-based compensation, amortization, depreciation, restructuring, and strategic review-related costs[13] Note Regarding Forward-Looking Information This section serves as a disclaimer, stating that the press release contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially from expectations - Contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995[15] - Forward-looking statements are predictions subject to numerous risks and uncertainties, many outside Identiv's control[15] - Factors that could cause actual results to differ include ability to execute business strategy, capitalize on trends, management changes, customer demand, and macroeconomic conditions[15] Investor Relations Contact Contact information for investor relations and media inquiries is provided for stakeholders - Investor Relations Contact: IR@identiv.com[16] - Media Contact: press@identiv.com[16] Condensed Consolidated Financial Statements This section presents Identiv's unaudited condensed consolidated statements of operations, balance sheets, and GAAP to non-GAAP financial reconciliations Condensed Consolidated Statements of Operations This section presents the unaudited condensed consolidated statements of operations, detailing GAAP financial performance for the three and six months ended June 30, 2025, and 2024, including revenue, gross profit/loss, operating expenses, and net loss Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------ | :------ | :------ | :------- | :------- | | Net revenue | $5,040 | $6,741 | $10,309 | $13,399 | | Cost of revenue | $5,514 | $6,127 | $10,651 | $12,302 | | Gross profit (loss) | ($474) | $614 | ($342) | $1,097 | | Total operating expenses | $5,913 | $7,334 | $11,513 | $12,880 | | Loss from continuing operations | ($6,387) | ($6,720) | ($11,855) | ($11,783) | | Net loss from continuing operations | ($6,042) | ($6,923) | ($10,831) | ($12,305) | | Net loss available to common stockholders | ($6,247) | ($6,449) | ($11,241) | ($11,255) | | Basic and diluted EPS - continuing operations | ($0.26) | ($0.31) | ($0.47) | ($0.55) | Condensed Consolidated Balance Sheets This section provides the unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, detailing the company's assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------ | :---------------- | :----- | | Cash and cash equivalents | $129,339 | $135,646 | -$6,307 | | Total current assets | $144,112 | $152,845 | -$8,733 | | Total assets | $153,876 | $163,225 | -$9,349 | | Total current liabilities | $6,642 | $7,960 | -$1,318 | | Total liabilities | $7,461 | $9,156 | -$1,695 | | Total stockholders' equity | $146,415 | $154,069 | -$7,654 | - Accounts receivable, net of allowances, decreased from $4,214 thousand (Dec 31, 2024) to $3,466 thousand (June 30, 2025)[20] - Inventories decreased from $7,475 thousand (Dec 31, 2024) to $6,133 thousand (June 30, 2025)[20] Reconciliation of GAAP to Non-GAAP Financial Information This section provides a detailed reconciliation of GAAP financial measures to their corresponding non-GAAP counterparts for gross profit/loss, operating expenses, and adjusted EBITDA for the three and six months ended June 30, 2025, and 2024 Reconciliation of GAAP to Non-GAAP Financial Information (in thousands) | Metric (in thousands) | Q2 2025 (GAAP) | Q2 2025 (Non-GAAP) | Q2 2024 (GAAP) | Q2 2024 (Non-GAAP) | | :------------------------------------ | :------------- | :--------------- | :------------- | :--------------- | | Gross profit (loss) | ($474) | ($41) | $614 | $983 | | Gross margin | (9.4%) | (0.8%) | 9.1% | 14.6% | | Operating expenses | $5,913 | $4,530 | $7,334 | $4,673 | | Adjusted EBITDA (from Net Loss) | ($6,042) | ($4,571) | ($6,923) | ($3,689) |