Identiv Reports Fourth Quarter, Fiscal Year 2018 Results

Identiv, Inc. reported financial results for the fiscal year and fourth quarter ended Dec. 31, 2018.
 
Revenue for the fourth quarter of 2018 was $21.3 million, an increase of 6% from $20 million achieved in the third quarter of 2018 and increase of 29% from $16.6 million in the fourth quarter of 2017.
 
Revenue in the Premises segment, which includes the company’s physical access control solutions on the Hirsch Velocity and Cisco ICPAM platforms, as well as the 3VR-branded video and analytics solutions, decreased 5% from the prior quarter and increased 25% from the fourth quarter of 2017 to $8.9 million.
 
Revenue in the Identity segment, which includes the company’s transponder, smart card reader and Thursby software products and solutions, increased 16% from the prior quarter and increased 31% from the fourth quarter of 2017 to $12.4 million.
 
GAAP gross margin was 48% in the fourth quarter of 2018, an increase compared to 42% in the third quarter of 2018 and 30% in the fourth quarter of 2017. The year-over-year gross margin improvement mainly reflects a transponder-related inventory obsolescence reserve adjustment in the Identity segment taken in the fourth quarter of 2017, as well as the higher-margin contribution of Thursby-related revenue in the fourth quarter of 2018.
 
Non-GAAP adjusted EBITDA in the fourth quarter of 2018 totaled $3.1 million, an increase of 86% compared with $1.7 million in the third quarter of 2018 and $1.3 million in the fourth quarter of 2017.
 
Revenue for the fiscal year 2018 was $78.1 million, an increase of 30% from $60.2 million in the fiscal year 2017. The increase in revenue reflects both organic and inorganic double-digit revenue growth.
 
Revenue growth of 43% in the Premises segment reflects the contribution from 3VR video and analytics solutions, as well as growth in the company’s core physical access solutions, which was predominantly driven by increased access reader and software sales.
 
Revenue in the Identity segment increased 21%, driven primarily by record sales of access cards as well as the contribution of revenue from the acquisition of Thursby Software in the fourth quarter of 2018.
 
GAAP gross margin was 43% in the fiscal year 2018, an improvement compared to 37% in the fiscal year 2017. Gross margin in the Premises segment was 56%, compared to 57% in 2017. Gross margin in the Identity segment was 32%, compared to 24% in 2017.
 
GAAP net loss attributable to Identiv, Inc. in the fiscal year 2018 totaled $4.7 million, compared with GAAP net loss to the company of $8.1 million in the fiscal year 2017.GAAP net loss attributable to common stockholders per share was $(0.30), compared to net loss of $(0.61) per share in the fiscal year 2017.
 
Non-GAAP adjusted EBITDA in the fiscal year 2018 totaled $5.7 million, compared with a non-GAAP adjusted EBITDA of $2.7 million in full-year 2017, predominantly reflecting the revenue growth and expanded gross margin provided by the 3VR and Thursby operations.
 
For the fiscal year ending Dec. 31, 2019, the Company expects revenue to be between $92 million and $95 million, non-GAAP adjusted EBITDA to be between $7.0 million and $9.0 million, and non-GAAP adjusted net income to be between $(0.5) million and $1.0 million.
 
“2018 was a pivotal year for Identiv. We continued to generate improving financial performance and executed actions to accelerate our growth, scale the business, drive higher margins and improve profitability,” said Steven Humphreys, Identiv CEO.
 
“Our 30% annual revenue growth was driven by both double-digit organic and inorganic growth, as we continued to gain market share,” Humphreys continued. “We’ve significantly increased our software and services revenues, increasing margins and predictability. The acquisitions of 3VR, Thursby and the business lines of Viscount complete the core components of our platform to digitize the physical world, bringing us much closer to our vision of cloud, software-centric and mobile-enabled digital access. We believe we have the most complete platform in the industry, encompassing RFID devices, a software platform available as client/server, web or cloud, IoT bridges & readers, identities, logical and converged access, mobility, and the services to tie it all together. With this superior solution and clear growth drivers within our target markets, we believe we’re positioned to deliver additional scale and operating leverage, driving higher investor returns over time.”
 
“Our strong financial results for the quarter and year enabled us to achieve, and even exceed in some cases, our guidance for revenue and adjusted EBITDA,” Sandra Wallach, Identiv CFO, added. “In addition, based on the revenue growth, margin improvement and our operational discipline, we were able to achieve the ranges for non-GAAP gross margin and adjusted EBITDA margin in our mid-term target business model during the year, reflecting our meaningful progress toward driving scale and margin expansion in the business. During Q4, we also achieved our 10th consecutive quarter of positive adjusted EBITDA and our first quarter of positive GAAP net income attributable to the company since 2010, while making further progress on closing the gap to net income profitability on an annual basis.”