Good afternoon. Welcome to Identiv's presentation of its fourth quarter and fiscal year 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 the SEC, including the company's 2024 annual report on Form 10-K and second quarter 2025 Form 10-Q and the 2025 annual report on Form 10-K, which will be filed with the SEC in the future. 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.

Thank you, operator, and thank you all for joining our quarter 4 and fiscal year 2025 earnings call. During the fourth quarter, we made meaningful progress across each pillar of our Perform, Accelerate and Transform strategy. Of particular note, we made significant advancements in the development of the specialized Bluetooth Low Energy, BLE, smart label in collaboration with IFCO, a leading global provider of reusable packaging solutions for fresh food. As announced on Tuesday, we signed a multiyear agreement with IFCO to manufacture and supply the specialized next-generation BLE smart label. This agreement represents a major milestone in our high-growth BLE strategy and reinforces Identiv's leadership in scalable BLE-enabled solutions for complex global industries. Our BLE smart label will be a key component of IFCO's digital platform designed to transform the global fresh grocery supply chain by delivering enhanced visibility, reducing waste and supporting a more sustainable circular food system. Under the multiyear agreement, Identiv will serve as exclusive supplier for committed manufacturing volumes. Following the development phase, IFCO will maintain exclusivity for these customized BLE labels as they are deployed across its global network of more than 400 million reusable packaging containers. Full-scale mass production is expected to begin later this year, subject to achieving final development milestones. Turning to our quarter 4 financial performance. I'm pleased to report that fourth quarter sales of $6.2 million exceeded our guidance with all other key financial metrics also coming in ahead of expectations. We saw continued strength in gross profit margin, reflecting the successful completion of our 2-year transition of production from Singapore to our new state-of-the-art manufacturing facility in Thailand. With the Singapore shutdown now complete, we have completed our second full quarter of operations entirely out of Thailand, which has structurally reduced our cost profile while increasing manufacturing efficiency and scalability. Our CFO, Ed Kirnbauer, will now provide a detailed review of our quarter 4 financial performance, and I'll return afterwards to share more on how we're progressing across our strategic initiatives.

Thanks, Kirsten. In the fourth quarter of 2025, we delivered $6.2 million in revenue, which exceeded our previously announced guidance range compared to $6.7 million in Q4 2024. The year-over-year decrease was as expected and due to the exit of lower-margin business, which we did not transfer to Thailand. Fourth quarter GAAP and non-GAAP gross margins were 18.1% and 25.6%, respectively, compared to GAAP and non-GAAP gross margins of negative 14.9% and negative 5.2%, respectively, in Q4 2024. Factors driving the expansion of gross margin included the elimination of direct labor and fixed manufacturing overhead costs associated with our discontinued Singapore operations and improved utilization of our manufacturing production facility in Thailand. As we mentioned on our November call, we stopped production of RFID inlays and labels in Singapore at the end of Q2 2025. Singapore facility shutdown activities continued through the fourth quarter of 2025. And as of December 31, 2025, it's now complete. GAAP and non-GAAP operating expenses for the fourth quarter of 2025, including research and development, sales and marketing, general and administrative and restructuring and severance totaled $5.8 million and $4.1 million, respectively, as compared to $5.6 million and $4.1 million, respectively, in Q4 2024. The year-over-year increase in GAAP operating expenses was driven primarily by higher strategic review-related costs incurred in Q4 2025 compared to the fourth quarter of 2024. Non-GAAP operating expenses in Q4 2025 were comparable to the prior year period as we continue a careful allocation of operating expenses as we execute on our P-A-T strategic initiatives. Fourth quarter GAAP net loss from continuing operations was $3.7 million or $0.16 per basic and diluted share compared to GAAP net loss from continuing operations of $4.3 million or $0.19 per basic and diluted share in the fourth quarter of 2024. This reduction in…

Thanks, Ed. As you just heard, we delivered results that exceeded our guidance and expectations, a solid step forward as we continued executing against our Perform, Accelerate and Transform strategy. Our mission is clear. We provide digital identities for billions of fiscal objects, enabling real-time intelligence for the world's most demanding industries. While there is more work ahead to reach our long-term financial goals, we are encouraged by the tangible progress we made in 2025. Perform. Under the Perform pillar, our focus is on strengthening and growing our core business while driving operational efficiency, scalability and margin expansion to create stronger long-term value for both our customers and our shareholders. In 2025, we achieved several important milestones that directly enhance the value we deliver. First, we completed a major 2-year manufacturing transformation. We moved production of all RFID tags, inlays and labels to our Thailand facility and fully shut down the Singapore site. This transition has lower costs and improved efficiency, increased margins and is enabling faster, more reliable product delivery. We also implemented new enterprise software systems, including a CRM platform and an MRP system to better integrate sales, demand planning and operations. These enhanced capabilities will increase visibility across the business and enable faster responses to customer needs, produce more accurate demand forecasting and generate higher product availability. As a result, we expect more efficient planning of raw materials and production, driving lower operating costs and supporting continued margin expansion. In addition, we completed our transition to a pure-play IoT company, fully separating from the physical security business sold to Vitaprotech after a 12-month transition period. This strategic focus allows us to concentrate all of our resources, innovation and capital on high-value IoT opportunities where we see the strongest long-term growth potential. On the commercial side, we completed…

[Operator Instructions] The first question comes from Jaeson Schmidt with Lake Street.

Just want to dig in a bit more on the IFCO opportunity. Obviously, it's noted that they have over 400 million units out there, and you guys are obviously scaling in anticipation to support a large number. But how should we think about this revenue opportunity from an ASP and gross margin profile standpoint?

Yes, sure. So we're very excited about the IFCO project. We've been working on development for the past year, and so very thrilled that we were able to announce the signing of the agreement. We are scaling up to 100 million units of capacity per year and they do want to tag their full 400 million and growing plus of reusable plastic containers. They also have to replace approximately 10% of those per year. So there's the ongoing opportunity to continue to support their full pool of plastic containers. So we aren't talking specifically about the pricing or specific gross margin, but it is a higher price point than our average price per product, which I think we've previously told around $0.15. And it's also a lower price than we anticipate our standard BLE label, which we've publicly announced is going to be less than $1. So somewhere in that range. And obviously, gross margins, it is a true partnership with IFCO. They are investing CapEx along with us to scale up. They are committing to a certain volume. And so with that, we are -- the gross margin will be less than our target gross margin of 30%, but still a very, very great opportunity for us.

Got you. That's helpful. And just to clarify, are you guys sole sourced here? How many potential suppliers are there?

It's an exclusive agreement. So this is an exclusive agreement. We will be developing this product exclusively for them, and then we will be the exclusive supplier for them over the term of the agreement.

Okay. Perfect. And then just the last one for me, and I'll jump back in the queue. When you think about your new opportunity pipeline, can you give us a rough sense of, sort of, how that breaks down by end market?

Yes. So kind of in our current pipeline, so the customer-driven opportunities that we have in our pipeline, it's roughly 25% of them are for health care. I would say another probably 25% for logistics, probably another 25% for food and beverage and then the rest is a variety of applications.

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

It's Rian on for Tony Stoss. Just following up on the last question about your pipeline. I think last quarter, you said about 2/3 is at or above your 30% gross margin target. Any changes there? And if you could, what percentage of revenue in the December quarter were from these new opportunities?

So anything that's in our NPD pipeline, those are being developed. So there would be nothing in our quarter 4 that is in our NPD pipeline. Those are new product development, they're in process. And I would still say that roughly 2/3 of the opportunities in the NPD pipeline would be in higher margin targets because these are more specialized, highly engineered products that we're developing. They're not from our standard product portfolio. So in order to accept them into the pipeline, we would want to see that margins would be slightly higher than average.

Okay. Got it. And then one more on the IFCO deal. It was nice to see that supply agreement come in. It said there was a development phase that needed completion. I'm curious what kind of that looks like throughout the year. And it seems like the plan is still to ramp towards the end of the year towards the larger volumes.

Yes. So we will be -- we are still in product development. We are still making final design changes to it. We will continue to be producing in lower volumes throughout the year for pilots and testing and so on. But the significant ramp-up will be at the end of the year, quarter 4.

The next question comes from [ Rebecca Zamsky ] with B. Riley Securities.

I'm on for Craig Ellis. Could you provide some color on the relative contribution and the visibility of the gross margin drivers in 2026, whether that be the Singapore cost elimination, Thailand yield improvements, NPD mix shift and the IFCO ramp?

I'm sorry. So just trying to clarify the question. So are you asking just about our kind of gross margin expectations as we go into 2026?

Yes. Like could you just like provide some color on the relative contribution of the gross margin drivers?

So you're asking about what we're expecting from a gross margin perspective as we move into 2026 as compared to...

Yes.

Okay. Thank you. Okay. Yes. So as we mentioned earlier on the call, we did finish the year at a non-GAAP 25.6% margin. But as we move into 2026, we do anticipate near-term variability as we start scaling for the IFCO project and as well as we have a -- we're onboarding a new customer in Q1. So that will -- in the near term, we're expecting some variability. But if you look at our current customer base, we're definitely seeing strength and improvement, and we expect expansion of the margin as we progress through 2026 with our current customer base.

I'd like to turn the floor back to Kirsten Newquist for closing remarks.

Okay. Well, thank you. Thank you, everyone, for joining. We are pleased to share our fourth quarter results and summarize our full year 2025. So thank you for joining us today, and we'll talk to you next quarter.

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