INVE Technologies (NASDAQ:INVE) reported third-quarter revenue of $3.1 million and said it currently has no commercial operating revenue following the September sale of its Internet of Things business to Trackonomy.
The company, formerly known as Identiv, is shifting its focus toward acquiring enterprise software businesses and integrating them with Trackonomy’s physical artificial intelligence technology. CFO Ed Kirnbauer said INVE plans to allocate approximately $30 million toward targeted software-as-a-service acquisitions and is not providing revenue guidance.
“Completing our first transaction remains a top priority,” interim CEO James Greenwell said on the earnings call.
Revenue fell as asset sale reshaped operations
Third-quarter revenue declined from $5 million a year earlier. Kirnbauer said the decrease was expected and reflected lower sales of RFID transponder products. Revenue for the latest quarter included activity only through Sept. 15, when the Trackonomy asset sale closed, making it incomparable with the full prior-year period.
GAAP gross margin improved to 18.3% from 10.7%, while non-GAAP gross margin rose to 31.6% from 19.1%. Kirnbauer attributed the improvement primarily to the transition of production to a facility in Thailand, which reduced costs and eliminated manufacturing expenses associated with the discontinued Singapore operation.
GAAP operating expenses increased to $8.8 million from $6.1 million, primarily because of costs associated with the asset sale. Non-GAAP operating expenses declined to $4 million from $4.5 million.
INVE posted GAAP net income of $0.6 million, or 2 cents per basic and diluted share, compared with a net loss of $3.5 million, or 15 cents per share, a year earlier. Kirnbauer said the improvement reflected factors including a $6.1 million gain on the Trackonomy sale, higher transaction-related costs and higher stock-based compensation expense. The company also recorded a $1.8 million net gain from dissolving a foreign subsidiary after its preliminary results, resulting in quarterly net income.
The non-GAAP adjusted EBITDA loss narrowed to $3 million from $3.6 million, which Kirnbauer attributed to operating expense controls.
Trackonomy partnership supports acquisition strategy
INVE closed the sale of its IoT business to Trackonomy on Sept. 15 in exchange for $50 million in Trackonomy preferred equity. Greenwell said a transition services agreement remains on track to support the operational handoff through the end of 2026.
The companies also entered a definitive strategic partnership under which Trackonomy will provide physical AI technology, site infrastructure and hardware deployment for software businesses INVE acquires. Greenwell said those businesses will be able to integrate Trackonomy’s Sentient platform, smart Bluetooth Low Energy labels and sensors into their applications.
INVE is evaluating acquisition targets with recurring revenue, healthy gross margins, customer retention and a reliance on physical-world verification, Greenwell said. Areas under consideration include worker safety, food safety, pharmaceutical logistics and environmental monitoring.
Acquired businesses are expected to retain their brands, product roadmaps and customer relationships, while INVE plans to centralize functions such as finance, legal, human resources, IT and public-company reporting. Greenwell said acquisitions are expected to be funded through a mix of cash and equity.
Cash and shareholder returns
INVE ended the quarter with $87.1 million in cash, equivalents and restricted cash, after using $32.6 million during the period. That included $23.4 million in cash paid in the asset sale, subject to fourth-quarter working capital and other post-closing adjustments, as well as $2.2 million in transaction-related payments and $1.8 million in open-market share purchases.
Kirnbauer said the company’s plan beginning in 2027 allocates approximately $12 million to $15 million for operating expenses and public-company compliance costs over an estimated three-year period. INVE ended the quarter with $81.4 million in working capital.
Greenwell said the company repurchased approximately 1.07 million shares for $3.7 million from the start of its repurchase program in the fourth quarter of 2024 through the end of the third quarter of 2026. The board increased the program’s authorization to $40 million in June.
On Oct. 21, INVE launched a $20 million modified Dutch auction tender offer at a price range of $2.85 to $3.40 per share. The offer is scheduled to expire at 5 p.m. Eastern time on Nov. 19. Greenwell said the board could consider further open-market repurchases, special dividends, distributions or strategic options after the tender closes.
About INVE Technologies (NASDAQ:INVE)
INVE Technologies is a technology company that develops solutions for digital identity, physical security and connected devices. Its products and services are designed to help organizations authenticate people and objects, control access and protect information across physical and digital environments. The company has historically offered RFID and NFC products, smart cards and credentials, contactless readers, inlays, embedded security components and Internet of Things solutions. INVE has also provided access-control and video-management technologies for applications such as enterprise security, government identification, healthcare, transportation, education and consumer products.
