The preliminary financial results included in this press release are based on current expectations and are subject to adjustment. Actual results may differ from those disclosed in this press release. Financial results for the third quarter ended
Third Quarter Financial and Operational Highlights
- Total revenue grew approximately 30% sequentially to
$24.8 million to$25.0 million - Revenue in Identity grew approximately 33% sequentially to
$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, 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
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 have 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
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
GAAP net income in the third quarter of 2020 is expected to range between
Non-GAAP adjusted EBITDA in the third quarter of 2020 is expected to range between
Cash is expected to be approximately
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,” said Identiv’s CEO,
“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.”
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Non-GAAP Financial Measures
This press release includes financial information that has not been prepared in accordance with GAAP, including non-GAAP adjusted EBITDA, and non-GAAP operating expenses.
Note Regarding Forward-Looking Information
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those involving future events and future results that are based on current expectations as well as the current beliefs and assumptions of the Company’s management and can be identified by words such as “anticipates”, “believes”, “plans”, “will”, “intends”, “expects”, and similar references to the future. Any statement that is not a historical fact, including the Company’s preliminary third quarter 2020 results and related commentary, statements regarding the Company’s expectations regarding future operating and financial performance, including 2020 guidance and 2021 expectations, the Company’s beliefs regarding its ability to achieve its business and strategic objectives and expected benefits thereof, the drivers of momentum in its business, the Company’s beliefs regarding its ability to execute on its key initiatives and the potential benefits thereof, the Company’s beliefs regarding its ability to respond to market conditions, the Company’s beliefs regarding the benefits and attributes of its platform and products, and beliefs regarding future orders is a forward-looking statement. Forward-looking statements are only predictions and are subject to a number of risks and uncertainties, many of which are outside our control, which could cause actual results to differ materially and adversely from those expressed in any forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, actual results for the third quarter and full year 2020, the Company’s ability to continue the momentum in its business, its ability to successfully execute its business strategy, the level and timing of customer orders, the success of its products and partnerships, industry trends and seasonality, the impact of COVID-19, and factors discussed in its periodic reports, including its Annual Report on Form 10-K for the year ended
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