Loading...
01/11 03:38
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed sentiment. While there is optimism in sequential revenue growth, market opportunity expansion, and Gen2X technology, concerns arise from unclear management responses, Q4 weakness, and challenges in deployment timing. The Q&A reveals potential growth in food sector partnerships but lacks precise guidance. The market cap suggests a moderate reaction, leading to a neutral prediction.
Third quarter revenue $96.1 million, down 2% sequentially from $97.9 million in second quarter 2025 and up 1% year-over-year from $95.2 million in third quarter 2024. Reasons for change: Sequential decline due to licensing revenue, year-over-year increase driven by lower indirect costs.
Third quarter endpoint IC revenue $78.8 million, down 7% sequentially from $84.6 million in second quarter 2025 and down 3% year-over-year from $81 million in third quarter 2024. Reasons for change: Sequential decline due to licensing revenue, year-over-year decline not explicitly stated.
Third quarter systems revenue $17.3 million, up 30% sequentially from $13.3 million in second quarter 2025 and up 21% year-over-year from $14.2 million in third quarter 2024. Reasons for change: Driven by reader strength in supply chain and logistics.
Third quarter gross margin 53%, compared with 60.4% in second quarter 2025 and 52.4% in third quarter 2024. Reasons for change: Sequential decline driven by licensing revenue, year-over-year increase driven by lower indirect costs.
Third quarter operating expense $31.8 million, compared with $31.5 million in second quarter 2025 and $32.5 million in third quarter 2024. Reasons for change: Below expectations due to good fiscal discipline.
Third quarter adjusted EBITDA $19.1 million, compared with $27.6 million in second quarter 2025 and $17.3 million in third quarter 2024. Reasons for change: Sequential decline not explicitly stated, year-over-year increase due to strong product revenue.
Third quarter GAAP net loss $12.8 million. Reasons for change: Not explicitly stated.
Third quarter non-GAAP net income $17.7 million or $0.58 per share on a fully diluted basis. Reasons for change: Not explicitly stated.
Cash, cash equivalents, and investments $265.1 million, compared with $260.5 million in second quarter 2025 and $227.4 million in third quarter 2024. Reasons for change: Not explicitly stated.
Inventory $92.6 million, down $3.6 million from the prior quarter. Reasons for change: Not explicitly stated.
Third quarter capital expenditures $2.9 million. Reasons for change: Not explicitly stated.
Free cash flow $18 million, compared with $4.7 million in third quarter 2024. Reasons for change: Not explicitly stated.
Gen2X: Achieved record endpoint IC volumes and better-than-anticipated reader volumes, driving product revenue to a new quarterly record. Gen2X is solving challenging industry use cases, including retail loss prevention, supply chain and logistics conveyor sorting, and overhead retail reading. Enhancements are being developed for food and e-commerce.
M800 endpoint ICs: Integrated with Gen2X, creating pull for its adoption in multiple overhead reading deployments and pilots.
Food industry: Identified as the largest opportunity, with deployments for product freshness and supply chain efficiencies at pallet, case, and item levels. Pilots are underway for point of sale and assisted self-checkout.
E-commerce: Exploring opportunities leveraging Gen2X and platform capabilities.
Revenue performance: Third quarter revenue was $96.1 million, exceeding expectations. Systems revenue grew 30% sequentially, driven by reader strength in supply chain and logistics.
Cost management: Operating expenses were below expectations due to fiscal discipline. Gross margin increased year-over-year due to lower indirect costs.
Hiring and talent acquisition: Aggressively hiring technical and business talent to develop software and cloud services. Recently hired an SVP of SaaS and Cloud Services.
Convertible notes transaction: Issued $190 million of 0% convertible notes while repurchasing $190 million of 1.125% convertible notes, reducing interest expense and share dilution.
Board appointment: Welcomed Arthur Valdez to the Board, bringing over 30 years of experience in global supply chain and logistics operations.
Retailer buying patterns: Weak retailer buying patterns are impacting revenue, as partners and end users are buying into demand rather than ahead of it, leading to cautious retail volumes.
Tariff headwinds: Tariff challenges are creating additional pressure on revenue and operations.
Chinese reader IC partner ordering: Conservative ordering by Chinese reader IC partners is expected to push revenue lower in the fourth quarter.
Project phasing in Europe: Project phasing with a European retailer is expected to cause a step down in fourth-quarter systems revenue, deviating from typical seasonal growth trends.
Food endpoint IC volumes: Food endpoint IC volumes are expected to remain modest in the near term, delaying potential revenue growth in this large market opportunity.
Operating expense increase: Fourth-quarter operating expenses are expected to increase sequentially, which could impact profitability.
Convertible debt management: Managing convertible debt maturity profiles and interest expenses could pose financial risks if not handled effectively.
Fourth Quarter Revenue: Expected to be between $90 million and $93 million, representing a quarter-over-quarter decrease of 5% at the midpoint.
Fourth Quarter Adjusted EBITDA: Expected to be between $15.4 million and $16.9 million.
Fourth Quarter Non-GAAP Net Income: Expected to be between $14.7 million and $16.2 million, reflecting non-GAAP fully diluted earnings per share between $0.48 and $0.52.
Fourth Quarter Gross Margin: Expected to increase sequentially, with more than 100 basis points of sequential gross margin accretion embedded in the guidance.
Fourth Quarter Endpoint IC Revenue: Expected to decline sequentially, but on the favorable side of normal seasonality.
Fourth Quarter Systems Revenue: Expected to decline slightly sequentially, driven by project timing.
Long-Term Market Opportunities: Continued expansion in retail, supply chain and logistics, food, and other applications, with secular growth opportunities.
Food Market Opportunity: Product freshness and supply chain efficiencies are driving deployments. Endpoint IC volumes expected to be modest this year and in the first part of next year, with leading grocers expected to adopt and others to follow.
Gen2X Enhancements: Enhancements for food and e-commerce are underway, with plans to introduce differentiated endpoint ICs to address key use cases and win those markets.
Organizational Growth: Aggressively hiring technical and business talent to develop software and win recurring revenue opportunities, including a new SVP of SaaS and Cloud Services.
dividends: In closing, our solutions and Gen2X focus continue paying dividends in revenue, adjusted EBITDA, recurring endpoint IC volumes, and market leadership.
share repurchase: In September, we issued $190 million of 0% convertible notes while simultaneously repurchasing $190 million of our 1.125% convertible notes. This transaction reduces our interest expense, lowers our underlying share dilution, and breaks our maturity profile into smaller tranches, the latter increasing our ability to leverage our balance sheet in managing that convertible debt.
The earnings call presents a mixed sentiment. While there is optimism in sequential revenue growth, market opportunity expansion, and Gen2X technology, concerns arise from unclear management responses, Q4 weakness, and challenges in deployment timing. The Q&A reveals potential growth in food sector partnerships but lacks precise guidance. The market cap suggests a moderate reaction, leading to a neutral prediction.
The earnings call shows a positive sentiment with record EBITDA margins and improved gross margins driven by the M800 ramp and wafer cost reductions. While management avoided specifics in some areas, the outlook remains optimistic with strong partnerships and growth in logistics. The market cap suggests moderate reaction, so a 2% to 8% stock price increase is likely.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
