Identiv(US:INVE)2023-05-06 14:10Financial Data and Key Metrics Changes - In Q1 2023, the company reported net revenue of $26 million, a 4% increase compared to the same period in 2022, slightly above consensus estimates [81][82] - Non-GAAP adjusted EBITDA was a loss of $0.9 million in Q1 2023, compared to a gain of $0.2 million in Q1 2022, reflecting increased operating expenses [13] - GAAP net loss for Q1 2023 was $2.7 million or $0.13 per share, compared to a net loss of $1 million or $0.06 per share in Q1 2022 [13] - Non-GAAP adjusted gross profit margin was 37.1% in Q1 2023, consistent with the same period in 2022, while GAAP gross profit margin was 35.4% [82] Business Line Data and Key Metrics Changes - The Identity segment generated $14.7 million in revenue, accounting for 56% of total revenue, slightly up from $14.6 million in Q1 2022 [85] - The Premises segment revenue was $11.3 million, a year-over-year increase of 8% from $10.5 million in Q1 2022, with federal sales up 16% [86][91] - Non-GAAP adjusted gross margin for the Premises segment was 55% in Q1 2023, down from 57% in Q1 2022, primarily due to product mix [67] Market Data and Key Metrics Changes - The company shipped nearly 43 million IoT units in Q1 2023, with non-recurring engineering projects at 54%, primarily in medical and healthcare [60] - Demand for end-to-end security solutions increased, evidenced by a 30% rise in demos at the ISC West Trade Show [79] - The company maintained 100% customer retention in RFID in Q1, despite suspending business with one lower-margin customer as planned [76] Company Strategy and Development Direction - The company aims for disciplined growth in 2023 while strengthening its strategic position in both IoT and physical security sectors [3] - A long-term gross margin target of 35% to 40% in the Identity business and 55% to 60% in the Premises business has been set [5][67] - The company is focusing on expanding its competitive advantage in both IoT and physical security markets, which are critical solutions for customers [89] Management's Comments on Operating Environment and Future Outlook - Management noted that supply chain conditions have improved, with semiconductor prices dropping and availability increasing [41][93] - The company expects to work through its inventory and pay off its revolver in the second half of 2023 [15] - Management expressed confidence in the 2023 outlook, maintaining guidance with potential for accelerated growth and improved EBITDA margins [27] Other Important Information - The company is on track to begin production at its Thailand facility in July 2023, which is expected to reduce production costs [94] - The company is diversifying its supplier base to reduce dependence on a single chip supplier, enhancing its supply chain resilience [77] Q&A Session Summary Question: Any meaningful changes to the macro environment affecting guidance? - Management indicated that supply conditions have improved significantly, with semiconductor prices dropping and availability increasing [41] Question: Expectations for Premises segment growth in the next quarter? - Management anticipates sequential growth in the Premises segment, supported by federal government demand and the full solution ecosystem [32] Question: Discussion on the revolver debt taken out? - Management confirmed it is a revolver used as needed for working capital, with expectations to be unnecessary within the next three quarters [33][36]