Identiv Inc. (NASDAQ:INVE)
Q3 2017 Results Earnings Conference Call
November 09, 2017, 05:00 PM ET
Steven Humphreys – CEO
Sandra Wallach – CFO
Mike Latimore – Northland Capital Markets
Saliq Khan – Imperial Capital
Good afternoon. Welcome to Identiv’s Third Quarter 2017 Earnings Conference Call. My name is Melissa, and I will be operator this afternoon. Joining us for today’s presentation are the Company’s CEO, Steven Humphreys; and CFO, Sandra Wallach. Following their remarks we will open the call for questions.
Before we begin, please note that during this call management will be making references to non-GAAP measures or projections, including adjusted EBITDA.
In addition, during the call, management will be making forward-looking statements. Any statement that refers to expectations, projections or other characteristics of future events, including financial projections and future market conditions, is a forward-looking statement.
Actual results may differ materially from those expressed in these forward-looking statements. For more information, please refer to the risk factors discussed in documents filed from time to time with the SEC, including the company’s annual report on Form 10-K for fiscal year 2016. Identiv assumes no obligation to update these forward-looking statements, which speak as of today.
I will now turn the conference over to CEO, Steven Humphreys, for his comments. Sir, please proceed.
All right. Thanks, Melissa. Good afternoon, everyone, and thanks for joining us today.
The progress we made during the third quarter had its challenges but also marked key steps in our three year growth plan of significantly scaling the company and in getting better predictability in our near-term results.
Our Identity and Credentials businesses are performing particularly well, but our physical access revenues have grown more slowly.
As we discussed on our call a few weeks ago, we didn’t see the usual seasonal acceleration from the government fiscal year-end, which impacted our results for the quarter. And [ph] in our scale, one quarter’s variance can alter a year’s results even though it doesn’t reflect the overall market nor our opportunity within the market.
We’re still encouraged by the balance in our business and our competitive advantages within each segment as we build towards optimal scale. Whether it’s growth in our transponder or smart card reader businesses, our expanding channel relationship with Cisco, our strong core government business, or our recently launched Mx-1 controller, we continue to strengthen our position.
Looking specifically at our PACS segment. This segment encountered some hurdles during the quarter despite growing 10% sequentially. On our business update call on October 23, we talked about why we reduced our revenue guidance for 2017, but let me explain why we adjusted it down by $5 million instead of a lower amount.
This was because of a few factors: First, as we talked about a few weeks ago, we received more than $1 million of government orders either late in the quarter or just after it ended and we didn’t get the seasonal government fiscal year-end boost we usually do.
To add to that the launch of our Mx-1 single-door edge controller was behind schedule and came at the end of the quarter.
However, the additional reason we adjusted our top line guidance was to make sure we’re setting near-term expectations that are clearly visible. We believe in our long-term growth and the great market position we’re building, but at our scale, a few events can move results a lot.
We’ve seen this in both transponders and smart card readers, too, where we’ve seen 30% to 40% year-over-year upticks in individual quarters despite long-term growth rates to the teens.
Source: Seeking Alpha