PI at Needham - 1/17/24

PI at Needham - 1/17/24

Fireside chat with CEO and CFO. They provided some excellent overviews on working with lighthouse opportunities in logistics, general merchandise, and loss prevention. I won’t try to summarize those. I’ll just highlight some new nuggets of information.

  • As reported, Q4 revenue and Adj. EBITDA will be higher than forecast. Endpoint ICs grew at a greater rate than expected, and systems revenue grew in Q4.

  • At the NRF retail trade show, RAIN RFID was everywhere. Chris considers it the feature topic at the show, specifically for general merchandise.

  • Highlighted a new topic - Loss detection. I expect to hear a lot about this in the future. Unlike loss prevention, loss detection does not require 100% tagging.

  • On the European retailer doing loss prevention, they have been working with them about a decade. It got serious in 2018 and took about 2 years to develop a solution. After Phase 3 this retailer will be about 50% deployed across their brands.

  • Worked on cryptography for about 10 years before they were able to develop a solution and integrate into the IC. The opportunity is massive. The breadth of the pilots is way more than expected, they’ll have more to report when they move beyond pilots.

  • Retail apparel about 30% penetrated and represents 2/3-3/4 of 2022 endpoint IC volume.

  • Think the M800 migration will be faster than prior generations allowing them to get the next 300 BP in GM faster than normal.

  • Good overview of the NXP litigation, where they have won at every level. They tried to resolve for over 2 years and were never even able to get a meeting with NXP.