Identiv, Inc. (NASDAQ:INVE) Q3 2023 Earnings Call Transcript

Q – Anthony Stoss: Got it. If I could throw another one for Steven, healthcare definitely becoming a great category for you guys. I think it’s definitely the right place to be. Of the pilots that you have in healthcare, I’m guessing it’s a small number. But how many of those or percentage or ballpark, just any more color, would require FDA approval before they would move forward?

Steven Humphreys: Very few are FDA approval folks. In fact, it was just that one which we highlighted from the beginning when we knew we’d have to go through approval. Typically, we’re on the device side of things. So if you’re just doing a peripheral aspect of the technology on the device, you can typically get, I don’t know all the details of the FDA structure, but apparently there’s umbrellas in which they can slide it in and carry it under their FDA approval for the overall device. That just wasn’t the case for the auto injector, partly because of the volumes and I think the medication that they’re thinking about for it that they were being very careful that it was FDA-approved top to bottom. But typically, not nearly as much. In fact, we’ve got a Amir Khoshniyati on the line. Amir, you want to add a little bit more color to that in terms of what you’re seeing directly from the customers related to FDA approvals or not?

Amir Khoshniyati: Yes, very much aligns to the points that were made. If it’s not hindering how the product works, it doesn’t strive a requirement to hit the FDA mark. The auto injectors that we’re working on and where we make progress, that one had to do with the label adjusting a physician because RFID tag was going right behind that label. That’s the reason that one was submitted to FDA. But in summary, the majority of them are not going that compliance route. So, that’s to our advantage from the time cycle.

Q – Anthony Stoss: Got it. Thanks. And since you’re in the line of here, I’m just curious, are you getting any pushback with the slowing economy on ASP or any pricing pressure from your prospective customers?

Amir Khoshniyati: No pressure, as Steve mentioned, because of the health care focus, it’s pretty recession-proof. The only challenge we have is this is a slow-moving segment, just getting the approvals through these organizations. And specifically, when the product does get speced and it goes to from an NRE to a small pilot run to a controlled run, these processes typically move pretty slow because they don’t want the product to become a bottleneck in the supply chain. And once we get through that phase, the ramps typically pick up exponentially, but that’s our challenge working in health care. It’s having the patients to really work through their approval cycle.

Q – Anthony Stoss: Got it Thanks for all the color guys. Best of luck.

Steven Humphreys : Thanks Tony.

Operator: Thank you. [Operator Instructions] Our next question is coming from Craig Ellis from B. Riley Securities. Craig, your line is live, please go ahead.

Craig Ellis: Yes, thanks for taking the question and team, nice job on the adjusted EBITDA in the quarter, nice to see it moving up. Steve, I also like the change in the guidance period from annual to quarterly. I think that makes a lot of sense in a macro that is this volatile. But I wanted to make sure I understood what was really changing as we go from where we were, which is annual guidance, which shaded up to $127 million and now calendar 2023, which is $117 million. It looks like from the comments, about 60% of that is the low-margin RFID IoT pushouts in another $15 million was some of the one-offs that you had in premises in the quarter that you detailed. Is that right? And then what would make up the other, call it, 25% to the variance.