Good afternoon. Welcome to Identiv's presentation of its Third Quarter 2025 Earnings Call. My name is John, and I will be your operator this afternoon. Joining us for today's presentation are the company's CEO, Kirsten Newquist; and CFO, Ed Kirnbauer. Following management's remarks, we will open the call for questions. Before we begin, please note that during this call, management may be making references to non-GAAP financial measures or guidance, including non-GAAP adjusted EBITDA, non-GAAP gross profit, non-GAAP gross margin and non-GAAP operating expenses. 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 future financial results, future business and market conditions and opportunities, strategic partnerships and collaborations and any related benefits and attributes and future plans, strategies, opportunities and goals 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 SEC including the company's latest annual report on Form 10-K as well as our third quarter 10-Q once filed. Identiv assumes no obligation to update these forward-looking statements. I will now turn the call over to CEO, Kirsten Newquist, for her comments. Ms. Newquist, please proceed.

Thanks, operator, and thank you all for joining our Quarter 3 2025 Earnings Call. As we review this quarter's results, I want to highlight that our Perform, Accelerate and Transform strategy continues to guide everything we do, from serving our customers and building our pipeline to driving innovation and commercial momentum in our high-value segments and delivering on our financial commitments. This strategy remains central to transforming the organization and creating lasting value for our shareholders. I'm pleased to report that in quarter 3, sales were in line with guidance with all other key financial metrics exceeding expectations. This quarter is particularly notable for our improved gross profit margin, which reflects the initial benefits of completing our 2-year transition of production from Singapore to our new state-of-the-art manufacturing facility in Thailand. This is the first quarter in which all of our productions have been done in Thailand. A significant milestone that has meaningfully lowered our cost structure, enhanced efficiency and scalability and positions us well for continued margin growth. We expect further margin expansion over the next few quarters as we complete the Singapore site shutdown by year-end, and the Thailand team reaches full productivity. Our CFO, Ed Kirnbauer, will now provide a detailed review of our quarter 3 financial performance, and I'll return afterwards to share more on how we're progressing across our strategic initiatives.

Thanks, Kirsten. In the third quarter of 2025, we delivered $5.0 million in revenue, which was within our previously announced guidance range compared to $6.5 million in Q3 2024. This year-over-year decrease was as expected and due to lower sales as we exited lower-margin business earlier in the year. Third quarter GAAP and non-GAAP gross margins were 10.7% and 19.1%, respectively, compared to GAAP and non-GAAP gross margins of 3.6% and 9.3%, respectively, in Q3 2024. Factors impacting the increase in gross margin included the reduction in fixed manufacturing overhead costs and direct labor costs at our discontinued Singapore operation, improved utilization of our manufacturing production facility in Thailand, and sales of fully reserved inventory of $0.2 million. As we mentioned in our August call, we completed production of RFID inlays and labels in Singapore and the requalification of our customers at our Thailand production facility at the end of Q2 2025. Facility shutdown activities in Singapore continued to progress as planned and are expected to be substantially completed by year-end. GAAP and non-GAAP operating expenses for the third quarter of 2025, including research and development, sales and marketing, and general and administrative expenses totaled $6.1 million and $4.5 million, respectively, compared to $9.8 million and $5.1 million, respectively, in Q3 2024. The year-over-year decrease in GAAP operating expenses was driven primarily by a reduction in strategic review-related costs incurred in 2024. The decrease in non-GAAP operating expenses reflects management's targeted resource allocation to support the company's organic growth initiatives as outlined in our P-A-T strategic framework. Third quarter GAAP net loss from continuing operations was $3.5 million or $0.15 per basic and diluted share compared to GAAP net loss from continuing operations of $9.3 million or $0.40 per basic and diluted share in the third quarter of 2024. This decrease in net loss was primarily due to strategic review-related costs of $3.6 million incurred in the third quarter of 2024 compared to $0.4 million in the third quarter of 2025, higher year-over-year interest income of $1.1 million and an income tax benefit of $0.8 million in the third quarter of 2025 compared to an income tax provision of $0.4 million in the comparable quarter of 2024. Non-GAAP adjusted EBITDA loss for Q3 2025 was $3.6 million compared to $4.5 million in the third quarter of 2024. The decrease in the loss was primarily due to the reduction in fixed manufacturing costs at our Singapore facility, improved utilization of our manufacturing production facility in Thailand, as well as management's continued careful allocation of operating expenses as we execute on our P-A-T strategic initiatives. In the appendix of today's presentation, we have provided a full reconciliation of GAAP to non-GAAP financial information, which is also included in our earnings release. Moving now to the balance sheet. We exited Q3 2025 with $126.6 million in cash, cash equivalents and restricted cash. In the third quarter of 2025, we used $3.1 million in cash. This brings our total net operating cash use for the 12 months following September 30, 2024, the end of Q3 2024, to $13.4 million, well within our previously announced guidance range of $13 million to $15 million. Our working capital exited Q3 was $135.4 million. Our balance sheet position remains strong. In our 10-Q filing, we will be providing a full reconciliation of year-to-date cash flows. For completeness, we have included the full balance sheet in the appendix of today's earnings release. Lastly, our financial outlook, which is based on current market conditions and expectations, including macroeconomic conditions and customer demand. As of today's call, for Q4 2025, we currently expect net revenue in the range of $5.4 million to $5.9 million. This concludes the financial discussion. I'll now pass the call back to Kirsten.

Thanks, Ed. As you just heard, we delivered results that met or exceeded our guidance, a solid step forward as we continue executing against our Perform, Accelerate and Transform strategy. While we know there is more work ahead to reach our overall financial goals, we're encouraged by the tangible progress we're making across each pillar, performing with focus, accelerating across our high-value segments and ultimately transforming our business. We're building a stronger foundation for sustained and profitable growth. Let me now share how this progress is unfolding across our organization. Perform, deliver exceptional results for customers and drive operational excellence. Our first pillar, Perform, is focused on strengthening and growing our core channel business. To achieve this, we are prioritizing higher margin opportunities, expanding gross margins through our Thailand transition and executing our new product development pipeline with greater discipline. Our goal is to consistently exceed customer expectations through exceptional support, reliable performance, and on-time delivery. As I mentioned in my opening comments, we reached a major milestone in our manufacturing transformation this quarter. 100% of our RFID tags, inlays and labels are now produced at our new state-of-the-art Thailand facility. The Singapore site shutdown is on track for completion by year-end marking the end of a successful 2-year transition. The Thailand facility has lowered manufacturing costs, improved efficiency and enhanced scalability, laying a stronger foundation for continued margin growth. To further advance operational excellence, we launched CRM and MRP automation initiatives earlier this year to streamline key sales and operations planning processes. We've made steady progress and expect to have these systems largely implemented by year-end, strengthening our operational foundation and ensuring availability as we grow. On the commercial front, our new opportunity pipeline continues to expand, driven by new sales team members ramping up across their territories and channel partners. So far this year, we've converted 18% of our new opportunity pipeline, representing almost 10% of quarter 3 sales, with additional growth expected as this new business scales. In marketing, following the completion of the transition services agreement with Vitaprotech, we are rebuilding key capabilities, implementing Hubspot to enhance lead generation and visibility and preparing to launch our new corporate website by year-end. We also maintained a strong presence at major industry events, including WIoT Tomorrow in Wiesbaden in Germany and Labelexpo in Barcelona, Spain. Both generating meaningful customer engagement and reinforcing strategic partnerships. At Labelexpo, our own VP of Business Development, Klaus Simonmeyer; and Narravero CEO, Thomas Rödding, shared insights on DPP compliance during a dynamic NFC RFID panel at the smart labeling seminar 2025, further strengthening Identiv's position as an innovation leader. Finally, the TSA transition with Vitaprotech is now substantially complete, and we are fully separated from the physical security business we sold a year ago. A key milestone marking our strategic focus and transition to being a pure play in IoT and RFID technology. Accelerate. Accelerate growth in high-value segments and through technology innovation. Moving to the second pillar of our P-A-T framework, we are advancing three specific growth initiatives to build our pipeline and drive long-term revenue and margin expansion. One, expanding our BLE technology platform and multi-component manufacturing capabilities. Two, targeting growth in three health care high-value applications. And three, further driving growth in three consumer and logistics high-value applications. This quarter, we made notable progress in R&D and new product development, particularly in our Bluetooth Low Energy, BLE programs. BLE represents the next generation of IoT technology offering real-time traceability and condition monitoring capabilities that are difficult to achieve with traditional RFID. We believe the technical complexity of BLE's smart label design and manufacturability aligns well with our engineering expertise and gives us a clear competitive advantage. We successfully completed the first production runs of the IFCO BLE prototypes and Wiliot's next-generation pixels. Key milestones in the development and commercialization of two important customer-driven BLE programs. These achievements, along with the internal development of our BLE shipping label, expand our product portfolio and further strengthen our expertise in next-generation RFID technology and multi-component manufacturing. We also formalized a partnership agreement and a manufacturing agreement with Wiliot to scale up and commercialize next-generation pixels. Wiliot IoT pixels are small battery-free Bluetooth sensors powered by harvesting ambient radio frequency energy, enabling continuous transmission of data like temperature, motion and location for smart supply chain and IoT applications. In health care innovation, our R&D work with Lilly was recently highlighted in a new white paper that we published in September, demonstrating our leadership in RFID innovation for drug adherence and delivery. This is a compelling example of how our technology is enabling smarter, safer patient experiences. We're also advancing collaborations launched earlier this year, including our strategic partnerships with Novanta for medical device applications and Tag-N-Trac for pharmaceutical cold chain management. Additionally, we announced a new commercial partnership with TUK, bringing our secure NFC technology to children's books. Each book integrates seamlessly with TUK's speakers through customizable NFC tags, activating guided audio without a screen, Wi-Fi or extra devices. Designed for durability and security, this solution is built to scale across classrooms, libraries and homes, empowering the next generation of young readers. These new interactive books are available for purchase now in Scandinavia with expansion plans into the rest of Europe. We were also honored as a winner of the World Beverage Innovation Awards in 2025, together with our partners, ZATAP by collectID and Genuine Analytics AG for our NFC-powered smart packaging solution that safeguards luxury wine producers and collectors from counterfeiting. This recognition in the best technology innovation category underscores our engineering excellence and collaborative approach to smart packaging. Finally, within our accelerate initiatives, we completed detailed product roadmaps aligned with our high-value market segments, which is intended to ensure that our innovation and go-to-market efforts are tightly connected to customer needs and strategic priorities. Several of these NPD programs will begin in the next quarter. Transform, create significant business expansion and capability growth through M&A for long-term success. Our third pillar, transform, focuses on expanding the business through strategic M&A that accelerates EBITDA breakeven and broadens our product portfolio and enhances our technical capabilities. We continue to work with our financial adviser to assess our strategic alternatives. Metrics. This year, we began reporting several new metrics to monitor our progress against strategic objectives. We're continuing to refine these metrics and plan to establish formal targets in 2026. The quarter 3 results are for the first metric, new sales pipeline and conversion rate. This metric tracks the number of opportunities with new customers or customers we haven't sold to in over 2 years. At the end of quarter 3, we had 118 new opportunities in our pipeline. We added 46, closed 28 and converted 7 to sales, leading to a net increase of 18% over quarter 2. We had 100 new opportunities in our pipeline at the end of quarter 2 and 75 in quarter 1, showing a steady increase over time. So far this year, we have converted 18% of our new opportunities to sales. The second metric, NPD projects, tracks the number of active NPD initiatives. As of the end of quarter 3, there were 17 active NPD projects, 11 customer-driven and 6 internally driven. Four of the customer-driven projects target health care applications and four utilized BLE technology. This represents the largest share of potential volume and steady state revenue. Our third metric, NPD project completion. This metric captures the number of NPD projects completed within the quarter. In quarter 3, we completed three customer-driven projects, two of which are moving into commercialization. Both projects were for anti-counterfeiting initiatives in the high-end spirits and wine market, which will be scaling up in 2026. In closing, this was a quarter of steady financial performance and meaningful operational milestones. We met or exceeded guidance, achieved 100% production of tags, inlays and labels in Thailand, advanced key R&D and commercialization initiatives and made continued progress across our Perform, Accelerate and Transform strategy. We reaffirm Identiv's commitment to advancing specialized IoT solutions, expanding our BLE capabilities and fully leveraging the strategic advantages of our Thailand-based production. By continuing to execute against our Perform, Accelerate and Transform strategy, we believe we are well positioned to capture future growth opportunities within the rapidly evolving global IoT market. As we look ahead, our priorities are clear: complete the Singapore site shutdown by year-end; ensure excellent service to our customers while driving productivity and efficiency in Thailand; execute our key new product development initiatives with excellence; expand our commercial and business development pipeline across high-value segments; and position the company for sustained growth and stronger financial performance in 2026 and beyond. I want to take a moment to thank our employees, customers, partners and shareholders for their continued trust and support. We're encouraged by our progress, confident in our strategy, and excited about the opportunities ahead as we continue to lead in the fast-growing RFID and BLE markets. With that, I'd like to open the call for your questions. Operator, please open the question queue.

Our first question comes from Craig Ellis with B. Riley.

Nice job on the gross margins in the quarter. I wanted to start, though, on the top line. So for the fourth quarter, it looks like we're expecting sales up about 11%. So the question is, as we look across the different vectors of the business, whether it's channel or NPD conversion. What's driving the growth sequentially? And what are some of the gives and takes as we think about tailwinds and headwinds as we exit the year?

Yes. No, thank you. So definitely, we are seeing some growth from our existing channel customers. But I do think we're also seeing some uptick that's related to some of our BLE projects that we're seeing some additional traction for in the fourth quarter. So it's a nice combination of both kind of our perform customers as well as some of the accelerate initiatives that we're starting to see some traction quarter-over-quarter.

And just speaking of BLE, in the prepared remarks, you talked about progress with IFCO and Wiliot. Can we conclude that IFCO is on track for volume shipments in the second half of next year? And Wiliot had previously been talked about as a potential high-volume customer, certainly not the size of IFCO, but high volume, how do we think about what's possible with Wiliot next year?

Yes, to start with the IFCO question, we are making progress. Product development is well underway, and we have shipped out production-made prototypes that are currently being used in field proof of concept tests. We expect to gain valuable insights from this, which will help us continue to optimize the design. That's progressing well. Regarding Wiliot, we've been working diligently over the last six months to qualify their next-generation product, and this is in progress. This quarter, and even last quarter, we began shipping those next-generation products to the field. Both represent promising opportunities. We are excited about them and are putting in a lot of effort to ensure the completion of the IFCO product development, while also supporting various Wiliot customers as they aim to commercialize the Wiliot solution.

Great. And if I could sneak one in for Ed. Ed, real nice job by the team with gross margin in the third quarter. With the business getting the benefit of the full Singapore shutdown in the fourth quarter and with higher revenues and with some of that coming from that higher-quality revenue basket that the company has been prioritizing. Can you talk a little bit about what we could expect for gross margins in the fourth quarter? And if there are any headwinds we need to comprehend.

Thanks, Craig. In our Q3 results, we experienced notable advantages from lowering fixed costs due to the cessation of our Singapore operations, impacting both overhead and direct labor expenses. We anticipate this trend to persist, and we aim to complete all shutdown activities in Q4. We are still finalizing some of those efforts. However, I do not expect to see a full effect on gross margin until we reach Q1 of next year.

Okay. And then what about other potential benefits such as sales mix and the move to higher margin products as the mix goes more towards NPD?

I'll let Kirsten talk about that. But I do want to say, in addition, we will continue to improve margins with the improving utilization of our Thailand facility. But as far as mix?

Yes, yes. So I think what we'll see in quarter 4, there's certainly some slight increase in utilization in the Thailand plant that will help. As Ed mentioned, we still have some Singapore-related costs in quarter 4. In terms of the mix, we definitely have some of our new product development projects starting to ramp. Those are still a little bit in the ramp-up phase. So we still have a little bit of ramp-up costs until we get the full productivity of those projects, but we do see kind of a slight increase in mix overall going into quarter 4.

The next question comes from Anthony Stoss with Craig-Hallum.

Congrats on the move to Thailand, getting it complete. Kirsten, I'll leave roughly 21 opportunities that converted to customers, when will they show up in the P&L? And if you could just ballpark guess what percentage of those are above your 28% gross margin goal?

I'm not sure where the 21 conversion figure is coming from, but we've converted about 18% of our new opportunity pipeline year-to-date, which accounted for roughly 10% of our sales in the third quarter. We expect this to continue to scale and grow as we move into 2026. Year-to-date, we've indeed converted approximately 18% of our total new opportunity pipeline.

Roughly what percentage are at your 28% gross margin goal?

Yes. So of the new opportunities that converted, I think roughly two-thirds of them were on the higher-value side, so higher than 30% gross margin and probably one-third of them were slightly lower than that. But two-thirds of them were what we would consider on the high-value side.

Got it. Good to hear. And then if you could frame the size of the new opportunity with Wiliot and also a similar question, what kind of gross margins would you expect to generate?

Yes. So I mean we're not talking about kind of ultimate sales volume potential with Wiliot, and that's still progressing. Margins, the opportunity is large. We're scaling up the next generation, and we definitely anticipate margins to be significantly higher than where they were two years ago, but we're still working to increase those over the next probably three to four quarters and definitely higher than where they were back in 2023 and early 2024.

Got it. And the last question for me, Kirsten, with your background in this industry in the health care side. I know in quarters past, you spoke a lot about your health care opportunities. I didn't hear a lot on this call. Maybe you can just refresh us where you stand and what you think the opportunity set is on the health care side?

Yes. We certainly still see a nice opportunity in health care, and we see kind of the interest from some of the medical device and the pharmaceutical companies and really engaging in evaluating these types of solutions, but these are also longer-term opportunities. So of our current new product development pipeline, I think roughly one-third of them are health care related; they just take longer to get to the commercialization side. So we remain positive about the opportunity space. We remain positive about the projects that we have, but we definitely see some of the ones that are on the logistics side and the consumer product side getting to market faster than we do with some of the health care projects that we're working on.

We have reached the end of the question-and-answer session, and I will now turn the call over to Kirsten for closing remarks.

Thanks, operator, and thank you all again for joining us today, and we look forward to speaking with you next quarter. Have a good afternoon. Bye-bye.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.