Good afternoon. Welcome to Identiv's Presentation of its Third Quarter 2020 Earnings Call. My name is Karen, and I will be the operator this afternoon. Joining us for today's presentation are the company's CEO, Steve Humphreys; and CFO, Sandra Wallach. Following management 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 measures or projections, including adjusted EBITDA and free cash flow. 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 latest annual report on Form 10-K. Identiv assumes no obligations to update these forward-looking statements, which speak as of today. I will now turn the call over to CEO, Steve Humphreys, for his comments. Sir, please proceed.

Thanks, operator, and thank you all for joining us today. In our preliminary results, we said, we expected to beat the aggressive growth projections we outlined on our second quarter call, including 80% growth in RFID for the full year, 20% sequential growth and physical security from Q2 to Q3, and federal sales up 80% sequentially. With our finalized financial results, we're confirming that we beat each of those expectations. This shows both strong industry trends driving our business and our leadership within the industry. Overall, revenues grew 30% sequentially to $24.9 million, showing strength across the business. We projected our premises business, which is about two-thirds federal to grow 20% sequentially. We actually grew 26% sequentially in premises. Our RFID business grew more than 50% sequentially and over a 100% year-over-year, as on track for 80% full year growth. And our federal revenues grew nearly 90% sequentially. So this has this lined up for a strong fourth quarter and the second half of the year that will be more than 30% higher than our first half. We're seeing business momentum continuing, backlog building, and the pipeline for 2021 becoming stronger. But before we talk too much about the future, let's review the operational and financial results for the third quarter. Now our key focus areas of RFID and our federal business were particularly strong. Within our identity business, which is predominantly RFID, revenue increased sequentially by 33% to $15.4 million, and year-over-year identity in total grew 53% from 10.1 million in Q3 2019 to 15.4 million in Q3 2020. The growth was mainly driven by RFID of course, where we ramped up production volumes for a number of customers. In particular, a major customer whose production started in Q2 came through -- through in Q3 even stronger than we expected. As a result, our RFID business more than doubled the volume we produced a year ago. Even with our ramp up, there was nearly a million dollars shipments, we didn't fulfill. We balanced customer requirements to make sure the most critical deliveries recovery. As a business implication is that the industry launches we expected are well underway. The mass market adoption of RFID integrated products is happening. Our major customers are incorporated RFID devices in their healthcare products, mobility, consumer products, appliances, libraries, pharmaceuticals, and app enabling, the physical world. The point is that each of these are hundred million or billion plus unit applications. It's a huge market, that's just beginning to grow. The overall trends clearly shows in our third quarter results, as well as in the continuing backlog strength, we went into the fourth quarter with backlog for fourth quarters shipments up 68% over last year that we'll talk about the implications going forward of all these trends later on the call. Also with an identity in the third quarter, our identity readers grew strongly up 38% over last year's third quarter. And we all expected the work from home trend to plateau after the initial lockdowns in the spring. But this really shows the demand is continuing. The third quarter is always strong for smart card readers because of the February year end. So the growth comes over a normally strong year prior period reason is that the federal government and especially the DMV are adopting policy supporting work from home and work mobile for the long-term. So we do expect these trends to sustain. We'll talk more about that as we look at 2020. So turning to our Premises business in Q3, his showed the strength of our full product range, as well as of our federal government focus. As I mentioned before, premises grew 26% sequentially. The Federal business where our velocity security platform was the strongest vertical grow 90% sequentially, but we also saw activity in banking, retail, utilities and others. For example, in financial services, we quoted our first large 3VR Prime managed video services order, which has now closed. The leading banks adopting our platform across almost a hundred branches. The six years, $650,000 agreement provides video surveillance, analytics and case management on a subscription basis, spending tens of thousands of dollars in capital expense for our customer and assuring a predictable revenue stream of over a $100,000 annually for [indiscernible]. That'd be clear, we've had continuing strong business progress, within our industry some small dealers and small businesses are under pressure as our competitors who focus their as in federal state and local government customers are more than two-thirds of the business for our physical access platforms. We're seeing strong performance in premises. And our quick pivot to recurring revenues with lower cost of entry has put us in a strong position overall. These include our Velocity Cirrus products, Mobile SID, 3VR Prime, our Freedom Cloud and Freedom mobile, which we just launched this week. All of these are recurring revenue products, all launched in the last 12 months. And as we talked about in the second quarter, the broad adoption of RFID and our major customers core products is what really gives us reason to believe this growth is a long-term trend that we're just starting to see takeoff. It's building backlog for the fourth quarter and for 2021. So overall, the quarter -- the third quarter was highlighted by 30% sequential revenue growth over a 100% year over year RFID growth, a 90% sequential growth in federal sales, 38% year over year identity reader growth and Q4 backlog up 68% for last year. So certainly there are challenges in the economic environment we're all in, but the strong secular growth we're experiencing RFID are strengthened federal, work from home going into a second wave of demand and the products we've launched in the third quarter to take advantage of return to work needs and build the base for a strong fourth quarter and 2021. So let me turn it over to Sandra to go through the third quarter financial results, afterwards I'll go into more metrics and the industry wide trends that are really accelerating our business into the fourth quarter and into 2021. Sandra?

As Steve mentioned, our results show the continue delivery of what we committed with a solid trajectory for 2021. Please note that these results are all within the preliminary results announced October 29th prior to market open. The first metric is revenue growth, even with the continued impact of COVID-19; we closed out the third quarter of 2020 with $24.9 million in total revenue, up 30% compared to the second quarter of 2020, and up 8% compared to the third quarter of 2019. Our recurring revenue accounted for 6% of our third quarter revenue, and 8% of our total revenue in the first nine months of 2020. This part of our business remained steady at 8% of our total trailing 12 month revenue. For the third quarter of 2020, our GAAP and non-GAAP adjusted gross profit margins were 40% and 41%, respectively. For the trailing 12-month period, our non-GAAP adjusted gross profit margin was 42%. For the third quarter 2020, our non-GAAP adjusted EBITDA margin was positive 11% with a positive 4% for the trailing 12 month period. Our GAAP net income for the third quarter 2020 was $0.4 million, compared with a loss of $2.7 million in Q2 2020 and net income of $1.1 million in Q3 2019. With the dividends on the Series B preferred, our GAAP net income attributable to stockholders was$ 0.1 million, or net income of $0.01 per share compared with a loss of $0.17 per share in Q2 2020 and positive $0.05 per share in Q3 of 2019. We have provided in the appendix a full conciliation of GAAP to non-GAAP information, which is also included in our earnings release. On our next slide, further analyzing trends by segment, our Premises segment, which includes sales of physical access control, and video products and services accounted for $9.4 million or 38% of our total revenue in Q3, representing an increase in dollars of 26% from Q2 2020, and a decrease of 27% from Q3 2019. Revenue from our identity products, which includes sales of access credentials, smart card readers, RFID transponders, and mobile security products totaled $15.4 million or 62% of our total revenue in Q3 2020, and increase in dollars of 33% from Q2 2020, and an increase of 53% from Q3 2019. Our non-GAAP gross profit was 41% in the third quarter of 2020. This compares with 42% in Q2 2020 and 47% in Q3 2019, driven by both the mix of products across segments and within segments. Our Premises segment margins are 55% relatively flat compared to Q2 2020 and Q3 2019 at 55% and 56% respectively. Our Identity segment margins are 30%, relatively flat compared to Q2 2020 at 31% and lower than Q3 2019 at 33% due to a higher proportion of lower margin transponder sales. Now moving to our operating expense management, our GAAP operating expenses for the third quarter were $8.9 million, which was down from $10 million in Q2 2020 and down year-over-year from $9.3 million in Q3 2019. The sequential decrease was primarily due to the non-recurring $1.2 million restructuring stuff in Q2 2020. Our non-GAAP operating expenses as a percentage of revenue decreased to 30% in the third quarter of 2020, compared with 40% in the second quarter of 2020, and 34% in the third quarter of 2019. Our non-GAAP operating expenses totaled $7.5 million in the third quarter of 2020. This compares to $7.6 million in Q2 2020, and $7.9 million in Q3 of 2019. Bringing all the pieces back together, our non-GAAP adjusted EBITDA was $2.8 million in the third quarter of 2020, a sequential increase of $2.3 million over Q2 2020. Turning to the balance sheet, we'll be comparing our position at September 2020 to the position one quarter ago of June 2020 and the prior year quarter ended September 2019. We exited the third quarter with cash at $12.3 million and net decrease of $0.8 million from Q2 2020 and a $1.2 million increase from Q3 2019. Net cash activity for the quarter was driven by $2.2 million of cash provided by our net income excluding non-cash items, $3.6 million of cash used for working capital and CapEx, driven primarily by late Q3 billings that were not collectable within the quarter, and by an increase in working capital to support our Singapore growth. Under financing in foreign currency, we had a $0.6 million net cash provided, driven by a $0.9 million increase in net borrowings under a revolver, and a $0.5 million reduction through scheduled payments on the term loan facility. We believe that we have adequate capital available to fund our business growth and return to positive non-GAAP free cash flow exiting Q4 2020, as well as retiring the term and note debt on schedule in Q1 2021. In our 10-Q filings, we will be providing a full reconciliation of the year-to-date cash flows. For completeness, we have included the full balance sheet per the earnings release in the appendix. Even with the global disruption continuing, today we are confirming our guidance for the consolidated results of the company for full year 2020 and revenue between $86 million and $88 million within our original guidance entering this year. We achieved GAAP EPS profitability in Q3 2020 ahead of expectations and continues to see the benefits of our actions to optimize cost carry forward. In addition, we believe we will be non-GAAP free cash flow positive as committed during Q4 2020 and beyond. In addition, today, we're providing guidance for the full year 2021, building on the strong base of growth that we have delivered. Our full year 2021 guidance is for revenue between $96 million and $102 million, which reflects growth year-over-year from the midpoint of our 2020 guidance exceeding the market growth by a factor of two. We expect our normal seasonality to continue with our lowest quarter in Q1 2021, and building up quarter-over-quarter through the end of 2021. We will be issuing a full set of guidance at our Q4 and full year 2020 earnings release targeted for March 2021. With that, I will conclude the financial discussion and pass it back to Steve.

Thanks, Sandra. As I said earlier, our RFID growth is predictable for two reasons. It's heavily backlog driven. And it's driven by major companies who have incorporated RFID devices into their products. Planning for global products is a yearlong process. So even now we're getting visibility into plans throughout 2021. First backlog, going into the fourth quarter, our total backlog stood at $10.5 million, up 68% from last year and our RFID backlog for shipment in the fourth quarter is up 125% over last year. We've now gotten in orders for about 95% of our expected shipments for the quarter in RFID. And that means, most additional orders either contribute to upside within the quarter, or drive more backlog for 2021. This is a key driver of our growth for 2021 and we expect the RFID portion of our business to grow well over 50% in the first half of 2021 versus the first half of 2020, with a full year growth in the mid 20% range for 2021. And the core driver of our RFID business is the mass market adoption of RFID integrated products. Our customers are leaders in their own industries, incorporating RFID devices into their products, each with volumes of tens or hundreds of millions of units. So this is a huge market that's just beginning to grow. In the third quarter, two strong use cases were launched in the market, one by CVS and the other, of course by Apple. Now we don't generally disclose customers. So these are just industry examples, to be clear. But both are great examples of the RFID market accelerating. They're both basic uses that establish platforms, to then drive multiple products from already big first launches. So the first, some of you saw in the demo session we had a couple of weeks back, CVS’ Spoken Rx for visually impaired people. You tap your phone to the RFID tag on the prescription bottle, and it reads up medication with dosage and all the other information, for people who can't read the label. Now about 13% of prescriptions go to people with some visual impairment. And there are about 4.5 billion prescriptions annually. So in the U.S. alone, that's over 1.5 billion RFID tags every year, just for the visually impaired sector. Now that's the current use case and the first use case, so now extrapolate. With the platform deployed, every CVS Pharmacy now is set up to program and put RFID tags on every prescription. And that's really where they should be on everyone. So when you have your prescription bottle, you tap each time you take it, you'll know if you've taken it morning or evening or whatever the prescription regimen is, it'll auto refill as you get low. There's all kinds of capabilities you can do there. You could even opt in and your doctor could get information about how consistently you're taking your meds. Because anyone who studies this area knows that the biggest issue with the prescription pharmaceuticals is people complying with taking their meds. So there's a number of things that companies like CVS are thinking about, now that they've made that additional investment, they can really expand into other categories. So ultimately, we think the opportunity is for all 4.5 billion of the prescriptions in the U.S. annually. Now, the US is about a quarter of the world prescription. So, again, you can see, for the visually impaired application as a couple of billion units worldwide, and nearly 20 billion units for all prescriptions worldwide. Now, of course, it's going to take time, but you can see the value of potential. And again, the investments really now done and, of course, the reader and the app technology is already in everybody's pockets in their phones. Now related to the mobile space in the phones, the biggest event, of course, was Apple's launch of full NFC support in iOS 14 and the iPhone 12 and especially, the new ecosystem of products around MagSafe. So Apple's made it very easy and secure to connect peripherals to the iPhone. And then through NFC, they connect them into core iPhone features. So just as a couple of examples, the first Apple branded cases, for example, if you buy an orange case, you pop it on your phone, the screen turns orange, it goes through an animation, you know you've connected it and you though it's an apple verify phone, it seems pretty trivial. But what its showing is, the peripherals are actually communicating securely with the phone, launching processes in the phone, and all secured and controlled by Apple through a secure NFC way. Now, this enables a whole world of new peripherals to connect to the phone and seamlessly but securely launch apps and experiences. So this is really the vision for this type of connected device that Apple's deploying. And with over 200 million iPhones shipped a year, connecting multiple MagSafe enabled devices each. Again, you can see the market in 2 billion units plus range annually. Now, additionally, of course, we're apple and CVS go, Samsung, Walgreens, Amazon pharmacy, and others have to match. So, you can see the scale of the markets we're going after, and the volumes that already are happening. So, RFID is gaining traction right now. We've been the trusted co-developer and supplier for some of the most advanced applications and the most demanding companies. This is where the growth is, and it's where our competitive advantage is strongest. So, how are we going to keep our advantage? We're expanding our technical capabilities. And for 2021, we're launching services to help companies put RFID into their products that were unique in our ability to go from concept to optimize design to early production, scaling, production, and then to immediately start back into the next generation of devices. And this is exactly the cycle that customers need. We're also innovating with new products, answering needs we know from our own customers. An example is a new product we've launched, but we think is the industry's lowest carbon footprint, RFID tag, our eco tag. Instead of being an etched antenna on a plastic substrate, we've developed a unique laser cutting process and is on recyclable paper substrate, we even use recycled aluminum for the antenna. So, there's no etching chemicals, no lost metal, no plastic layers, no chemical runoff. So, why do we do all this? Well, the biggest users of high end RFID are consumer-facing companies and sustainability matters to them. Companies like Amazon and Apple have a public commitment to being carbon neutral and RFID tags are consumer visible devices. So, our eco tag shows their eco commitment, and eliminates what otherwise would be a negative on their carbon footprint. Our customers told us this is what they want. It's very tricky technology, but we developed it. And fundamentally, this is exactly why we're going to keep our lead in the fast growing RFID market. So, that's RFID. Now let's look at premises, which has some similarly exciting opportunities. And remember, the core technology in our RFID tag is shared with our access cards, dual readers, identity readers, and other parts of our physical and data security solutions. So, one growth driver really supports the other. So, with the premises industry overall, growing about 6%, we grew 26% sequentially and we're expecting premises to grow about 25% year-over-year this quarter. For 2021, we expect growth in the mid-teens more than double the industry rates. Now, the fundamental drivers are recurring revenue growth to shift to IT-driven buyers and federal grant. So, why would we be growing faster than the market with these dynamics? Just like an RFID, we're both the trusted provider and we've got some of the most advanced technology and broadest product range. As customers move to software-defined platforms, they need to migrate their entire platform, across readers, credentials, controllers, access video, and audio. And it's all got to be integrated with their active directory or other sensitive data repositories. Now, we're the only company that delivers all of this and we think total solutions and IP centric recurring revenue platforms will be the fastest growth sector and physical security and strategic position of provide access video and audio management is the key for anyone trying to win. A great example of this is our Freedom Cloud platform that we just launched this week. It's the lightest weight implementation in the industry, totally web and mobile-based and especially on the hardware side, our Freedom Bridges are extremely compact and cost effective IoT devices. A bridge that can control two doors is the size of a pack of playing cards. And this is what customers are looking for, hardly noticeable, really intuitive to deploy and manage, and a platform that the IT department is totally comfortable owning and managing. The software is browser based, and the hardware is managed just like a network switch. So we've described the growth in each segment. So to put it together, in the fourth quarter, we're expecting overall revenues to grow in the 25% to 30% year-over-year range. So looking at the business drivers for next year, we have RFID use cases that each can be hundreds of millions of units over time, and give us clear line of sight into 2021. The strong federal government demand for our physical security, identity readers and mobility apps and our complete range of recurring revenue products is now in place. Now with all these growth drivers, we could see faster growth in any given quarter, so to keep our predictability; we’ve given a strong base growth outlook. And we'll update as we get further into the markets take off. So 2020 has been a challenging year, but we're in markets that are taking off. And we've been able to strengthen our leadership even as they're accelerating. The result is we're looking forward to a strong finish to the year and an exciting 2021. So with that, let me open the discussion to questions. Operator?

Thank you. Ladies and gentlemen, we will now take questions. [Operator Instructions] We'll take our first question from Jaeson Schmidt with Lake Street Capital Markets. Please go ahead.

Hey, guys, thanks for taking my questions, Steve, appreciate all the color and sort of why you're feeling so confident in 2021. But curious, if you could talk about sort of the backlog coverage to 2021, and some of this confidence is really just driven by some sizable orders already in hand, or if it's just general confidence, especially on the RFID side that you are just seeing, going to see this big general adoption?

Yeah, thanks for the question, Jaeson. And yes, backlog has been growing nicely. I think we earlier indicated that at the time that was up. It just doubled from what it had been just a couple of months earlier. And I mentioned that we've already got over 95% of our Q4 shipments already covered in backlog. So all the orders coming in are 2021 orders. We actually have orders that go throughout all in 2021. So we've got good visibility, both front ended, you know as I said, we expected the first half of the year already to be 50% growth over the year prior. And obviously, we wouldn't be saying that’s clear numbers. We didn't have a fair amount of visibility in it. And that's really driven by our backlog.

Okay, that's helpful. And in your prepared remarks, you noted about $1 million in business not being able to shift in Q3. Could you just comment on what sort of constraints you're seeing there, and if those constraints have ease now in Q4?

Yeah, also, thanks for picking up on that one. Yes, as I mentioned, in the second quarter call, we've been expanding our capacity rapidly. But when you -- when you look at doubling your capacity and then we talked about in Q4, we've got a backlog day, 125% of that you acquire, that that's indicating, more than double where you were a year ago. We're building out space, and we're putting in more equipment. And some of the devices that we're producing are particularly complicated and high-end, which is great for us, because it's a more differentiated. But they take more machine capacity, because there's multiple processes, multiple passes, versus some of their more straightforward products. And that -- those of course, the more complicated products often go to the more sensitive and high-end customers. So we always want to favor those. And so we did have some that we couldn't ship. We're catching up in this quarter. And we'll have the capacity built out by the end of this quarter. Again, we talked about building capacity you're talking, $100,000 and $150,000 in facilities, build out -- and a few hundred thousand dollars in equipment. It's not a major capital absorption. But we have been catching up through the third quarter, and we'll be all caught up in a good shape going into 2021.

Okay. And then just the last one and I'll jump back in a queue. Obviously, the school and education market could be a little challenging with budgetary pressures and whatnot. But just curious, if you could comment on what your expectations in that market are going forward?

It is choppy as you say, but it's also highly motivated for security. We put out a white paper on remote schooling cyber security, for example, with our FIDO keys that we just launched. One of the dirty secrets that a lot of people haven't focused on is, we've taken all the kids in our country and put them online to go to school. And if anyone thinks that we've actually properly secured their data pipes for their learning, they're being a little optimistic. And so there's opportunities there for example, to cybersecure more of the distance learning environment. And there's also as we go back to school, physical security is as important as ever, and especially physical security infrastructure is now being integrated with health and safety infrastructure. So there's opportunities there. We're seeing a lot of interest in kids. But also, schools are in financial challenges and so some of them are going ahead fast. And some of them are really, frankly, hunkered down. So, I don't know on a month-by-month basis, how it's going to emerge. But from a market opportunity, over the course of the next year, I actually think schools and universities are going to be a very good segment for us, both on the cybersecurity side and on the health and safety physical security side.

Okay. That's really helpful. Thanks a lot.

[Operator Instructions] We'll take our next question from Mike Latimore with Northland Capital Markets. Please go ahead.

Great. Thanks a lot. Great quarter there.

Thanks.

Steve, I couldn't tell -- did you give some guidance on what you thought premises would grow in the fourth quarter? I couldn't tell, if you said that or not.

Specifically, for premises in the fourth quarter, I don’t know that we -- I’m trying to go back and look at that. I know it -- no leave it. I'm sorry. I'm looking at my notes here; we’ve said about 25%, year-over-year for the fourth quarter.

All right. So that's like up sequentially. And is that -- is that driven by non-government or is that government driving that sequential pattern then?

Yeah. Good question. It's across the board. And -- and I -- yeah, both government and non-government that's on the growth, that we think about underneath the numbers, it's probably more commercial than government in terms of increases sequentially.

Okay. Okay. Very good.

We’ve seen -- we have seen a rebound in activity in -- on the premises side, you know you can only defer these things so long. And now a lot of the installers and users are getting out there. They're getting back in line, also customers you know things like videos systems where Microsoft stopped supporting Windows 7 or something, they have to do something. So there's a built-in migration, the growth pattern that we're starting to see come back.

Yes. Okay, got it. And then on the identity, just seems like a ton of opportunity there. I guess how would they verse these, do you see that revenue stream being in terms of customer base over the next year? Is it going to be very diverse or is it going to be a couple big customers really driving the growth?

Are you asking primarily about RFID and Identity?

Yes.

Yeah. So actually I think it's going to be quite diverse. Certainly when some of these global corporations launched, their numbers are big, but there's several of them that are either already launching or in pilots and building in the launch for 2021. And you might've noticed we didn't have any 10% concentration customers disclosed, so -- but certainly some gorillas but a range of them. And the other interesting thing is a range of applications that are not just in one vertical either there's several different use cases that are getting momentum.

Yeah. Okay. And then you have a number of cloud offerings now, I'm sure you're going to be promoting that even more aggressively next year. I mean, what would be -- you know, when you book a cloud deal it doesn't always show up within the quarter or year obviously, but like what would be sort of a good amount of cloud booking for next year, if you're successful? Is it a $1 million, is it $5 million? Like what would be a successful cloud bookings year?

Well I think we're just learning what the profile looks like. But I think you know, that that 6 years, $650,000 VA bank installation that we did is on the high end, but its characters to how those things work. So if you mean, how much would be recognized within the year, probably a couple of few million dollars incremental to the 6% to 8% we're already at. But that would represent this course 5 to 6 times that much in terms of books business.

Yeah. I guess that's more what I was referring to. Okay, great. Yeah. Good. Thanks a lot.

Thanks.

At this time, this concludes our company's question and answer session. If your question was not taken you may contact, Identiv's investor relations team@inveatgatewayir.com. I now like to turn the call back over to Mr. Humphreys for his closing remarks.

All right. And operator, just want to confirm you don't have any other questions in there. That's right.

No further questions in the queue at this time.

Terrific. All right. Thank you very much. Well thank you all for joining us. Very much appreciate it, also please join us at some of the virtual investor events coming up this quarter that we've got Imperial Capital, the first week in December and a Northland the week after that. So look forward to continuing to update you on the business and until then best wishes. Be well and be safe and have a good evening. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. We thank you again for your participation. You may disconnect your lines at this time. Have a great day.