INVE

• Strategic Pillar 1: Perform (Core Business & Operational Efficiency)

  • Completed the 2-year full manufacturing transition from Singapore to the new Thailand facility, which has delivered lower production costs, higher efficiency, improved delivery speed, expanded margins, and consistent product quality that has received positive customer feedback.
  • Implemented new integrated CRM and MRP enterprise systems, and added quarterly sales and operations planning processes to align cross-functional teams, improve demand response speed and accuracy, and increase visibility across operations and inventory.
  • Two of the company's three top customers extended their supply agreements during the quarter, demonstrating customer confidence in Identiv's performance.
  • Launched a new corporate website that has driven increased site traffic, higher click-through rates, and more information requests; published 20 industry thought leadership articles and participated in an IoT/smart packaging industry webinar.

• Strategic Pillar 2: Accelerate (Innovation & High-Value Growth)

  • Final development work is ongoing for the long-term exclusive BLE smart label supply agreement with IFCO, including production site renovations for custom manufacturing equipment. Pilot production of over half a million units will start shortly, with mass production planned for Q4 2026.
  • Development of the IDBlue BLE smart label portfolio for logistics, cold chain, and asset tracking is on track for commercial launch later in 2026, with strong early interest from global logistics, pharmaceutical, and food distribution industries.
  • Successfully completed the BLE ambientchat.ai demonstration showcasing connected physical AI capabilities, and won the 2026 IoT Connected Retail Application of the Year Award from IoT Breakthrough.
  • Launched the expanded ID Safe inlay product portfolio for product authentication, tamper detection, and end-to-end traceability, addressing growing demand across pharmaceuticals, healthcare, retail, food and beverage, and smart packaging.

• Strategic Pillar 3: Transform (Strategic Alternatives & M&A)

  • The board of directors continues working with financial advisor Raymond James and legal advisors to evaluate strategic alternatives focused on accelerating progress to EBITDA break-even, broadening the product portfolio, and expanding technical capabilities.

• Key Performance Metrics

  • New customer opportunity pipeline grew to 124 opportunities by the end of Q1 2026, already near the full-year 2026 target of 125; 8 new opportunities were converted to sales in Q1, against a full-year target of 35 conversions.
  • 18 active new product development (NPD) projects were underway at quarter-end, with 3 projects completed in Q1, putting the company well ahead of its full-year 2026 target of 7 completed NPD projects.

• Q2 2026 sales guidance is set at $5.4 million to $6.0 million, which reflects the pull-forward of a full-year 2026 customer order into Q1 2026, and incorporates uncertainty from softening demand among consumer-facing customers.
• Full-year 2026 cash usage is expected to total $14 million to $16 million, excluding strategic review-related costs. This includes $3.5 million for IFCO-related capital expenditures, a $1 million working capital increase to support growth, and $1.5 million to pre-purchase semiconductors at favorable pricing for future customer orders.
• Management expects overall gross margins to improve through 2026 due to permanent cost structure improvements from the Thailand manufacturing transition, but margin variability is expected due to upfront production scale-up costs for the IFCO program that will offset some efficiency gains.
• Management maintains the 2026 targets of building a 125-opportunity new customer pipeline, converting at least 35 new opportunities to sales, and completing 7 new product development projects by year-end.

The transcript does not break out financial performance for separate product segments in absolute or percentage terms. All revenue is reported on a consolidated company level: Q1 2026 consolidated revenue was $7.4 million, compared to $5.3 million in Q1 2025.

• Macroeconomic uncertainty has driven softening demand for higher-end consumer-facing products, which represent ~25% of Identiv's total customer base; the company is seeing customers push out order volumes rather than outright cancellations.
• Some suppliers have implemented input price increases, which the company will offset with targeted pricing actions to protect margins.
• The large-scale IFCO production ramp is currently consuming a significant share of the company's engineering resources, though capacity is expected to free up as product design and manufacturing processes are finalized ahead of mass production.

Q: What share of Identiv's new opportunity and new product pipelines are healthcare-related, and does the company have sufficient engineering and operational resources to handle new customers alongside the IFCO ramp? / A: Approximately one-third of the NPD pipeline and 20% of the new sales opportunity pipeline are healthcare-related, equal to roughly one-quarter of total opportunities across both pipelines. IFCO currently consumes significant engineering resources for design and manufacturing setup, but engineering capacity will free up as development concludes, and all required non-labor resources are already in-house. Additional production operators will be hired for the IFCO ramp to meet demand.

Q: Why did Q1 2026 revenue exceed expectations, and what is the scope of the observed softening in consumer-facing demand? / A: Revenue beat guidance due to the previously announced early full-year order from a large customer, plus broad stronger-than-forecast demand from multiple other customers in the quarter. Softening is concentrated in higher-end consumer-facing products, driven by low consumer confidence, inflation uncertainty, and geopolitical risk, and makes up roughly 25% of the company's total customer base.

Q: What is the visibility for converting the 124 existing pipeline opportunities to the 35 full-year target, and what are the revenue expectations for converted opportunities? / A: The pipeline of new customers (or customers inactive for over two years) fluctuates as opportunities are won or lost. Opportunity sizes vary widely from $5,000-$10,000 for standard off-the-shelf products up to $500,000-$1 million in annual revenue for large global custom deals. Overall, new converted opportunities are expected to contribute 10%-15% of total annual sales (excluding IFCO, which is counted separately). Most large pipeline opportunities are on the IDBlue BLE platform, which will not commercialize until later in 2026, so closing timelines are tied to that launch.

Q: With macro-driven softer demand and IFCO ramp costs, what is the expected trend for operating expenses (OPEX) in 2026? / A: OPEX is expected to stay relatively flat compared to 2025, with no significant increases expected for the remainder of the year with the company's current cost structure.