Good afternoon. Welcome to Identiv's presentation of its third quarter 2022 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, Steven Humphreys, and CFO, Justin Scarpulla. 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 measures or guidance, including Adjusted EBITDA and free cash flow. 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 future plans and prospects, 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 latest annual report on Form 10-K. Identiv assumes no obligation to update these forward-looking statements which speak as of today. I will now turn the call over to CEO, Steve Humphreys, for his comments. Sir, please proceed. Thanks, operator, and thank you all for joining us. In the third quarter, we had record revenues and took strategic steps forward, but also ran into some serious challenges. We have a scale-up order for delivery in Q4 of up to 25 million units in Bluetooth-enabled IoT for Wiliot, a transformational category that we believe is now happening, going from just sample units to millions of units. Our Premises segment showed increasing strength, delivering another quarter of growth at nearly 3 x the market rate and record Premises backlog going into Q4. Now, Now, this is especially important because Premises generates a great majority of the gross margin dollars that are key to our business's strength. We delivered record quarterly top line revenue at $31 million, the first time we've been over 30 million in a quarter. Revenue was $19.2 million, and Premises was $11.8 million, both new records, and revenue for the trailing twelve months was $112.4 million. Non-GAAP gross margin was 37% on our target level, and Adjusted EBITDA for Q3 was $2 million. We grew RFID unit shipments 17% YoY to 45.4 million units. Now, this would have been higher, but we were limited by component supplies, which I'll talk about later. We also set new records for order backlog. Our total backlog at the end of Q3 was $36.9 million, up 31% YoY, and backlog for delivery in Q4 is $16.6 million, up 42% YoY and 19% sequentially. Our growth drivers are in place, but I need to start by thoroughly addressing the shortfall in our Q3 top line revenue relative to our internal expectations and the actions we're taking. Despite the strong business results in absolute levels, they're below where we planned to be. Now, the shortfall was all in our Identity segment. Our contingency planning wasn't solid enough to offset what happened, and we totally own that. I'll go into the details, but never does again. Our Identity revenues fell short for three reasons. First, a major customer decommitted almost $1.5 million of orders as they realigned their supply chain from China to India and ran into soft demand for their products. Second, we had component shortages that would have impacted over $4.5 million in revenues across Identity and Premises. We offset about $1 million of it in Premises, but couldn't produce in Identity about $3.5 million in the quarter as a result. Third, we decided not to fill in the Identity revenue gap with lower margin product. We did that in Q4 of 2021, and it hit our gross margins by more than 400 basis points. We committed that we'd never do that again, so we didn't. The result was a revenue shortfall in Q3 of almost $5 million. Now, our contingency planning clearly was poor. We missed by far more than we ever should. Customer demand shift and supply chain were the immediate cause, but we should have had the extra flexibility in demand, supply, and production built in to absorb it. It doesn't matter that we managed the supply chain the past two years. That's all undone with a miss like this. We own that, we've made changes and are taking actions to fix it. It doesn't change the disappointment I personally feel for this impact. Here are the actions we're taking. First, we have new operations and supply chain leadership. Our new global VP of supply chain in our Santa Ana headquarters started last month with experience at Flextronics and other world-class operations. In parallel, our COO, Manfred Mueller, is focused almost exclusively on RFID supply chain and operations. Second, we've sharpened our focus on supply availability and are only planning and forecasting based on reconfirmed chip supply in-house or known to be on the way. For the big program in BLE IoT, we have the chip supply already in-house or committed deliveries for the volumes that we're counting on in Q4, and we've aligned with them on an allocation schedule through 2023. In terms of customer forecasts, we've built on the books orders to offset variations in previously committed customer orders, and we're managing it weekly. Third, we've finished redesigns for two of our main products, giving us component interoperability, so the highest volume product in Premises and Identity readers each have chip alternatives, either in place already or fully online by Q1. Now, there are other actions we've taken to make sure this never happens again. We can go into more details in Q&A. As we hear later, we're also taking a hard line on base expectation setting. I wanted to take this revenue shortfall head on so it doesn't overshadow our progress right when transformational projects are driving volumes in Q4, our IoT industry leadership is growing, and our Premises business is in the best position ever and showing it in its results. Now, both BLE-enabled IoT and cannabis are transformational categories for our business. In the case of Wiliot, we're going from sample amounts to over 10 million units in a single quarter. With multi-frequency data devices for cannabis MSOs, we're going from a few tens of thousands of units to over 1 million in the quarters ahead. Similarly, our Premises growth and market share gains continued. In a market growing 5%-6%, we grew 14%. Even with this growth, we went into Q4 with a record Premises backlog of over $3 million. That plus our pipeline indicate continued above-market growth in Q4 in 2023. This is key for three reasons. Our Premises business contributes disproportionately to our gross margins. Second, our strategy always has incorporated both segments as they connect in the IoT category, so growth in each business reflects health in our strategy. Third, recent valuation proof points, like Verkada's $3 billion valuation in its recent financing, shows the asset value of Premises security businesses, contributing meaningful value to our overall company. With that context, I'll go into other trends and events in Q3 that underlie our results and that are the foundation for our projections. Now, despite the problems I went through earlier, our engineering-driven RFID activities were strong. Our NRE projects grew from 38 projects in Q2 to 56 in Q3. We're continuing to build more tangible opportunities through our engineering excellence. We also continued our track record of 100% customer retention in RFID. In healthcare, we made particular progress. We've added another global injector vendor, so we now have active projects with four of the top five global auto-injector companies. The one that's furthest along has placed an order for 500,000 units, and in Q3, we delivered our second and third auto-injector NRE projects. This category is part of the medical industry trend towards in-home, self-administered care because of the very high ROI versus in-clinic care. In Premises, momentum was strong across the board, continuing our growth and market share gains. We grew nearly 3x the industry's rate in our Premises segment. Now, we manage Premises combined with our access card products since it's the same end customers that buy access cards. For our Premises and access card revenues combined, which together are managed by our Premises business unit team, growth YoY was 22%. Now, the health of this business also shows in the Premises segment gross margins, which have held solidly despite supply chain challenges. Here's some other Premises metrics for Q3. Our commercial business is continuing to strengthen in addition to our federal government business, where we've always been strong. We've completed OEM and reselling agreements for our access card readers with two of the top five access control vendors, building on the market share we're winning from HID. We had supply chain challenges in Premises and were able to overcome nearly all of them. Having in-house, U.S.-based final production let us adjust right up through the final days of the quarter. Even with shortages of some of our most critical components, we were able to build substitute configurations and work with the supplies we had to fulfill nearly all our demand. Having strong demand and total production flexibility let us meet our goals and puts us in a strong backlog position, with a record Premises backlog of $3 million coming into Q4. Now, I don't wanna over-focus on our Premises business, since the challenges we've got to work on are in Identity. Our strategy's always been to have two strong businesses that cross-leverage technology and converge strategically over time. Now, the recent pressures in small cap growth equities have reached a point that any reasonable value placed on the Premises business alone, a business that's growing sustainably at 15%-20% with strong gross margins and over 15% recurring revenues, a strong balance sheet, and no debt, should support our company's entire current value. Continued growth and profitability in our Premises business, plus our RFID-based IoT business, which has shown strong market demand, we believe will drive value creation. Now we need to execute, deliver predictable core results, and build on the progress in our transformational opportunities. Now, before Justin goes into the financials, let me give one more view on our overall business. In September alone, we delivered nearly $17 million in revenues in that month. This shows that our business base can generate revenues on an annualized basis of nearly $200 million with healthy margins. To summarize, the underlying business demand is solid. Our business model's intact, and our strategy is hitting milestones. Our focus is on execution and predictability by anticipating problems in our RFID supply chain, supporting the growth and margins in our Premises business, keeping our disciplined momentum in specialty RFID devices, and planning contingencies and projections so we never again have gaps between expectations and results. With that, Justin, over to you for the financial updates. Thanks, Steve. As Steve mentioned, despite significant supply chain issues and customer demand reductions, our financial results reflect our continued strength exiting the third quarter of 2022, with the delivery of sequential and YoY growth in revenue, with total future backlog increasing 31% YoY. We remain committed to protecting our margin and maintaining tight control over our operating expenses. The trailing 12 months revenue was $112 million, up 12% versus the comparable prior year period. The sequential and YoY change in revenue was across both our Premises and Identity segments. Third quarter 2022 GAAP gross profit margin was 36%, a decrease compared to 37% in the second quarter of 2022, and a decrease compared to 38% in the third quarter of 2021, primarily due to product mix. For the third quarter of 2022, non-GAAP Adjusted gross profit margin was 37%, which was consistent and in line with our consensus estimates. A decrease compared to 38% in the second quarter of 2022, and a decrease compared to 39% in the third quarter of 2021. Non-GAAP Adjusted gross profit margin changes resulted primarily from our product mix, as well as our continued investments in technology and manufacturing processes and equipment. We remain committed to a long-term non-GAAP Adjusted gross profit margin target of 40%-45%. In the third quarter of 2022, our GAAP and non-GAAP Adjusted gross operating expenses, including research and development, sales and marketing, and general administrative costs were $10.6 million and $9.5 million respectively, compared to $10.5 million and $9.2 million in the second quarter of 2022, and $9.1 million and $8.2 million in the third quarter of 2021. Our non-GAAP Adjusted EBITDA was $2 million or 7% of EBITDA margin in Q3 2022, as compared to $1.4 million in Q2 2022. Although this was below consensus estimates, we are continuing to maintain our expected margin and operating expense profiles. We remain committed to a long-term non-GAAP Adjusted EBITDA margin of 15%-20%. Our Q3 GAAP net income was $0.5 million, or income of $0.01 per share. We have provided in the appendix today a full reconciliation of GAAP to non-GAAP information, which is also included in our earnings release. Our next slide further analyzes trends by segment. Beginning with Identity, revenue from our Identity products totaled $19.2 million or 62% of total revenue in Q3 2022, which is a 13% increase from Q2 2022, and a 2% increase from Q3 2021. The sequential and YoY increase in Identity revenue was primarily driven by higher sales of RFID transponder and access card products. The YoY increase was partially offset by a continued decrease in our legacy smart card reader revenues. Our Q3 Identity segment non-GAAP Adjusted gross margin was 24% compared to 25% in Q2 2022, and 29% in Q3 2021. The YoY decrease is due to product mix with lower sales of our legacy smart card readers. Quarter-to-quarter margins can fluctuate, but we expect long-term margins to trend upwards from current levels as we expand and deepen our existing customer and technology partnerships. We believe our focus on more complex devices and strategic NRE relationships with our customers will further strengthen our margin profile. We remain committed to a long-term gross margin target of 35%-40% in our Identity business. Now turning to the Premises segment. This segment accounted for $11.8 million or 38% of our total revenue in Q3, representing an increase of 8% from $10.9 million in Q2, 2022, and a 14% increase compared to Q3, 2021. The sequential and YoY increase in Premises segment revenue was across both federal and commercial businesses, as well as continued focus on expanding our market share and offering a total platform solution. Non-GAAP Adjusted gross margins for Premises in the third quarter of 2022 were 59% compared to 58% in Q2 2022, and 58% in Q3 2021. The sequential and YoY changes were primarily due to product mix. We remain committed to a long-term gross margin target of 55%-60% in our Premises business. Moving now to our operating expense management. Our non-GAAP operating expenses in the third quarter of 2022, adjusted to exclude restructuring and severance costs and certain non-cash charges consisting of stock-based compensation and depreciation and amortization, was 31% of revenue compared to 33% in Q2 2022, and 28% in Q3 2021. This resulted in our third consecutive quarter of positive non-GAAP Adjusted EBITDA. In summary, we continue to deliver a consistent gross margin profile and tight controls over operating expenses in our business while reinvesting for growth within our current cost structure. Now turning to the balance sheet. We exited Q3 2022 with $21.9 million in cash and cash equivalents and restricted cash. We spent $2.9 million in strategic inventory purchases and $1.4 million in capital expenditures. We remain debt-free, and we have maintained strong working capital position. In our Form 10-Q filings, we'll be providing a full reconciliation of the year-to-date cash flows. For completeness, we have included the full balance sheet in the appendix of this earnings release. As we move to the fourth quarter, our total backlog for all future shipments was $36.9 million exiting Q3 2022, up 31% versus Q3 2021, which provides visibility into the current business momentum we anticipate coming through 2022. Even though we delivered record quarterly revenues, built a strong backlog, and reported positive momentum in our transformational categories, the current environment we outlined, delayed customer orders, shifting supply chain availability, and production-related challenges, combined with today's difficult macroeconomic condition impacted our results. Therefore, we are updating our full year 2022 guidance range today with expected revenue between $112 million and $118 million. We are updating our 2023 guidance to 20%-25% YoY revenue growth. Normal seasonality is expected to continue. With that, I will conclude the financial discussion and pass the call back to Steve. Thanks, Justin. As we look to Q4, 2023 and beyond, the clearest indicator of future business is backlog. Total backlog is up 31% YoY, and backlog for delivery in the fourth quarter is up 42% YoY. Behind this backlog, our RFID business is driven by NREs and transformational projects, and our Premises business is driven by our product and channel strength, already reflected in our growth, market share gains, and gross margins. To support these strengths so our business can grow and lead our markets, we have to do a much better job anticipating supply shortages and economic cycles. In a few minutes, I'll go into the pressures we see and exactly how we'll contingency plan so shortfalls like Q3 never happen again. Let me first update our transformational opportunities, then I'll go into our contingency planning. As I mentioned in the opening comments, we now have key projects starting to ramp in Q4. Wiliot has placed an initial 25 million unit order, of which we expect to deliver about 10 million units in Q4, carrying the rest into Q1. Wiliot's projections for 2023 are above that 25 million unit per quarter run rate, and the price points are in the high $0.20 range. Our mobile customer has resumed volumes in Q4, though we know they could be affected by the economy, so we're watching their indicators closely and forecasting volumes carefully. In specialty retail, our project for smart casino chips is confirmed with the vendor and has made progress. In consumer engagement, we're continuing to work with collectID on new applications. We delivered an NFC-enabled immersive fan experience for a German football club, where our NFC tags were embedded in the special team scarves, letting fans get into the stadium without a printed ticket, and then during the match, users got real-time digital content, offers, and rewards. Our tags authenticated and gave each fan a personalized experience, and we're working with collectID to bring this to other football clubs across Europe. As I mentioned earlier, for the cannabis market, we're gonna produce over 1 million units of our multi-frequency RFID devices, supporting the largest MSOs in the U.S., as well as potentially CBN in Canada. We worked with leaders in the cannabis industry to develop three multi-use smart tamper seal designs that were deployed into the market this year. We and our partners think they'll become standard across the cannabis supply chain and core to the user experience for cannabis customers. Last, but still the most important long-term category, in healthcare, and particularly auto-injectors, I mentioned that we now have active projects with four of the top five global auto-injector companies, and one has placed an order for 500,000 units for 2022. Based on market analysis from our customers, we're still convinced this will develop into a multi-hundred million unit category for RFID-enabled IoT medical devices. The prescription pill bottle category now is consolidated under one of our partners, En-Vision America, resulting in four of the top six pharmacy chains in the U.S. now active with Spoken Rx projects supported by our RFID devices. We're prioritizing this category for shipments in Q4 to make up about $600,000 that we didn't manage to ship in Q3. Now, our commitments to the healthcare market also is reflected in our two most recent board appointments. I won't restate the profiles of Laura Angelini and Richard Kuntz, but they're both highly experienced in managing disciplined global operations for multinational healthcare companies and integrating new technology into medical products and healthcare operational processes. Their expertise will be very valuable to our growth plans in this important market. I'd also like to take a moment to thank our former directors, Nina Shapiro and Admiral Robin Braun, whose contributions over the past several years helped us build our business strengths in our key markets. Transformational categories are making progress, and a couple are starting production scale volumes. We're also in the process of finalizing and launching our IoT solutions platform that'll provide our customers with a bundled solution for devices and software. This SaaS platform includes device management services, consumer experiences, data and analytics, and APIs building on our encoding services. This manages IoT devices and their data, not only as digital triggers, but as intelligent monitoring and sensing devices throughout their life cycles. With this progress, we're confident that these categories will happen, and the market scale opportunity is there. Now, there are also three headwinds related to timing. There's supply chain, the economy, and customer adoption time for complex technology like our specialty RFID devices. Now I've talked enough about supply. We're being far more careful in our projections and in our contingency planning. Even with orders on the books for over 300 million RFID chips, we're still seeing some decommits and inconsistent allocation from component suppliers, so we're projecting based on committed deliveries or in-house inventory. The economy is another reality we had been resilient to, but it caught us in Q3, so we have to factor it in. Our customers are getting more cautious, and some are seeing lower demand, as happened with one in Q3. Even in recession-resistant categories, we have to plan for customers to be more conservative in their ordering and forecasting. The third reality is that our specialty devices are a big step in our customers' products. We've done well with a very wide technical project pipeline shown in our NREs, but the adoption time can be long, and in uncertain economies, new product launches delay and ramp-up is less aggressive, especially because they usually need capital, which gets tight in tough economic times. Our leadership position is solid, and the categories are intact, but we have to be realistic that some companies are gonna be slower to deploy and ramp. As a result, despite growing pipeline backlog and industry leadership, we now expect base predictable shippable RFID growth of about 20%-25% in 2023, as Justin mentioned. Now to be clear, this is risk-adjusted for the issues above. For example, it includes only about 10% of the demand we know Wiliot expects. At full scale, Wiliot would add 15-20 percentage points to this growth rate, pushing it above 40%. We're not going to project that until we know demand and supply chain is certain. Similarly, we assume economic slowdowns could impact customers, even if only in their planning. In a recessionary and supply constrained environment, we're still expecting 20%-25% growth. Now, we realize that with our miss last quarter, even this will be doubted. We're confident we'll make it happen, and then we'll deliver on the things we're excluding from our core base, but we know we'll have to prove it first. Now turning to Premises. It's also a picture of strong demand, and in this case, a supply chain that we can manage reasonably well. We expect growth to continue well above the industry's growth rate. We've managed supply chains, even though partway through the quarter we had shortages that could have impacted shipments of over $1 million. We worked every line item and ultimately had less than $500,000 that wasn't shippable. Combined with strong demand, that kept us solidly on plan and Premises. Now, one key difference between Premises and RFID is that in Premises, we're dealing in thousands of units, not millions. By sourcing chunks of hundreds of units of parts on the spot market, we're able to close the gaps on most shortages. This is also much better than our competitors. HID is still telling the market that their multi-month lead time will continue far into next year. We are shipping in a few weeks lead time and usually within a few days. As a result, we're taking share from HID and others. This gives us confidence in Premises growth this year and continuing throughout 2023. The other reason is the strength of our Premises products, our support, and our selling channels. Just as physical security demand is becoming top of mind for every business and institution, we've built out what we think is the most complete platform in the industry, as well as one of the most secure. With great reference customers from the U.S. Secret Service to San Diego Airport, we're positioned as the secure, trusted, complete, and cost-effective solution. Combine this with much of our final production being done in the U.S. and being available immediately, plus our investment in our sales and channel, and you can see why we expect continued solid growth around 20% for 2023. We've got solid demand in both parts of our business. We expect to manage supply chain and Premises such that revenues grow with demand, essentially unconstrained by supplier production, and ability to plan realistically for supplies matched to our expected shipments. With RFID shipments growing more than 25% YoY in 2022, Premises growing in the mid-teens, both partly offset by our legacy Identity readers declining this year, as we discussed last quarter. For 2022 for Identiv overall, we're expecting around 10%-12% growth. With RFID growth continuing at the same rate in 2023, with continuing supply constraints, and with Premises growing 20%-25%, we expect 20%-25% growth overall for Identiv in 2023, with solid gross margins. This 2023 growth doesn't incorporate some end user demand growth in RFID, like Wiliot and others, which would add well over $20 million in 2023 in addition to our current projections, if we can get supply and if the demand all comes through even as the economy softens. Despite our disappointing miss in Q3, our strategy and business is solid. We're in major markets where we can be a clear leader. We're committed to much better predictability, so we build investor confidence while we continue to build our business and serve strategic customers who are the engines driving our long-term success and business value. With that, I'll ask the operator to open the lines for questions. Operator? Thank you. We will now take your questions. If you have a question or comment, please indicate so by pressing star one on your touch tone phone. Pressing star two will remove you from the queue should your question be answered. Lastly, while posing your question, please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. Okay, the first question is coming from Michael Latimore with Northland Capital Markets. Your line is live. All right, great. Thank you. Yeah, Steve, understanding the supply chain comments and, you know, remedy there. On the sort of the customer order reliability, can you dig into that a little bit more? Are there particular verticals? Are there customers that are canceling outright? Are they just, you know, lowering volume? A little more clarity there would be great. Yes, I'll give you as much clarity as I can, as I tried to communicate also. I wish we had more clarity of what's going on. It was a push out, nominally. They've, you know, they told us that we just have to be careful about any projections going forward, just as I communicated here. I wanna be careful about identifying any individual customers there. Ultimately, it's a consumer-related product, you know, from one of our larger customers. They're usually very reliable, and they usually ride through things like recessions. When we see them get soft on a short-term basis, they attributed it to moving supply chains, as I said in there, moving some things to India versus China. We're skeptical that some of it is actually end use demand. I'm happy to fill in any more of that than you want, but the main thing that told us is we just have to be careful in end use demand, 'cause even if people aren't seeing softer demand, they might just soften their orders, you know, draw down inventories of their own, and that affects us as well. That's why we're taking a cautious step on the cautious approach to, you know, economics and forecasts from really any of our major customers. How much of the change in- Yeah, I think. How much of the change in growth rates, say, in fiscal 2023, I think you went to 20%-25% from 30%-35%. How much of that change is demand concerned versus supply chain concerned? Okay. Fair, yeah, fair clarification. Honestly, I'd say it's 90% supply chain, you know, 80%-90% versus 20% economics. It's more heavily the ability to get the supply. The demand. I mean, if you just look at our backlog growth, you can see the demand is there, you know, right in the backlog growth. I think that is valid demand. That's how I'd weigh it. I'd weigh it more heavily towards supply chain. Frankly, as you know, we were fairly confident about supply chain up through the middle of the year. We've been. You know, we didn't plan well enough for supply chain continuing to be very surprising. That's what's given the most pause here. That's also why I tried to break out. You know, if we could fulfill the Wiliot demand and some other demand, growth would be substantially higher. We don't wanna project that, until we're certain that we can fulfill it from a supply perspective. Got it. Just how should we think about cash flow from operations in the fourth quarter? Positive or negative? Let me hand that over to Justin for that. Okay. Hey, Mike, we do have some CapEx coming through Q4 for some of our larger projects, but I would anticipate cash relatively flat to down a little bit. Okay. Got it. All right. Thanks very much. Yep. Thank you, Mike. Thanks. Okay. The next question is coming from Craig Ellis with B. Riley. Your line is live. Hi, this is Michael Mani on behalf of Craig Ellis. Thanks for letting us ask a few questions. My first question is just to characterize the sort of maybe demand side risks that we could see in the next few quarters. You mentioned the potential weakness in consumers, but how would you characterize the risks across your other verticals like healthcare, specialty retail, et cetera, for decommits, ramp push outs, and potential volume reductions? Anything you'd wanna call out there? What kind of levers or protections you have in place to offer downside mitigation in that case? Yeah. Yes. The best downside mitigation, let me hit that first, is we do have strong demand. You know, Amir Khoshniyati, our Vice President and General Manager for that business, has built a really very effective sales team. I wanna be clear, the demand side has been fairly strong in terms of broad base as we've talked about the NREs and everything else. Large customers, you know, making single choices are the things that can affect us. What we're now doing is weekly, we're holding meetings to look at all the alternatives we could do to fill in. If we have a big gap happening, we might have to fill it with five or six smaller orders. I'll actually ask Amir to comment on that in a minute. Just to fill you know fill in for you, that's how we're mitigating the demand side. To your first part of your question on verticals and others, our verticals, and the companies themselves, we think are pretty recession resistant and economic cycle resistant. What we're worried about is if they just get more conservative. You know, medical devices, you would think you still have to have injections and, you know, and fill prescriptions and everything else. If they get more conservative in their ordering because, from a corporate perspective, they're told to, you know, tighten expenses and beef up the balance sheet, we're worried about that. For new projects, when they launch, which would also be on the demand side, and especially on the growth demand side, it takes investment for a new product to launch and sometimes capital investment if you have it in your supply chain. Again, they haven't been telling us this is happening. We are anticipating it because we have to stay ahead of it, that they may get into mandates coming from, you know, a large med tech company getting a mandate coming down saying, "Hey, we're gonna tighten up on capital expenses. We're gonna delay some product launches," and then that hits us. We just can't have that happen anymore. We have to set a base that we can absorb all that with all the rest of our base demand, and then make sure if we are being more conservative than is the case that then we can build to the upside on that. Amir, do you wanna add anything on the demand side? Sure. Just building on that is our strategy has always stayed in line, and it continues to stay in line, that we've been building a global team that's not only regionally split out, but they're really split on winning new business and new logos across the board. What that does is it diminishes our risk in having one elephant customer that really pulls the demand, and if they end up slowing something down, it has ultimate downstream effects as a result of it. The team is building. The NREs show the right progression, 38 to now 56 through Q3. They're starting to get smaller engagements. Our product mix is at an all-time high as well. As we accelerate through this quarter and into next year, the strategy is really to grow deeper into these accounts. It helps take away a lot of the pressure from the bigger customers, and if we do start to see slowdowns from them, we can offset it with these growing customer bases that we're putting into the mix here. That strategy has stayed strong, and we're continuously putting more pressure there so those smaller engagements can pick up much faster. I just also wanted to calibrate a little bit, you know, Amir mentioned, you know, elephant accounts. To be clear, we don't have any 10% customers, you know, or even terribly close to that. But for us, you know, $1.5 million, which whatever that is a percentage of $30 million, is a lot to cover when you have expectations set, and we're expecting to grow as aggressively as we are. We need to be sure that every chunk of $1.5 million or something of that nature, we can fill in. Which, as I said, on the Premises side, we had a $1 million pressure on supply chain, and we were able to fill it in half with supply, scrambling for parts and half with excess demand and then to fill it in. We've got to be positioned in all aspects of our business to fill in any, you know, any turbulence that happens in any of the accounts. Got it. Thank you for all the color. For my next question, I just wanna turn to gross margin. When you think about the trajectory for Identity segment gross margin expansion over the next few quarters with these both supply side and demand cross currents, how should we think about that pace of expansion or maybe potential delays there and when we could start to see maybe more of an upturn towards the kinda higher 20% segment levels that we'd hope to see? Excuse me. Yeah. We are projecting margins to stay roughly flat right now. I think in today's environment, you know, it's the right call for us to make and we have to, like, to your point, with supply chain and all of the unknowns here in the macroeconomic environment that we're talking about today, we are projecting those to stay flat for now. Got it. That's helpful. Thank you. For my final question, on the Wiliot deal and the potential for upside next year, well aware that you're not building that into your forecast at all. Could you just call out to investors and us what the potential milestones and kind of catalyst would be for you to see that upside and how that might play out throughout the year, so to capture the full, I think you mentioned 15 excess points of growth. Yes, Wiliot themselves have been very open about this, so we can talk openly as well, you can diligence it all on their own website. They placed an order for 25 million units, which they would love right in the fourth quarter. Ramping up from a standing start, both from a process perspective and a supply perspective, is gonna be, we're not gonna get to 25 million. As I said, we're aiming for 10 million in the fourth quarter. They have publicly said that that first order, 25 million quarterly run rate, is below the run rate that they expect given the demand that they're seeing. It would happen relatively quickly, and frankly, the proof points would be in the results as we deliver, because the demand is clearly gonna be there. We're gonna build both from a process development perspective and a supply perspective as fast as we can on it. You know, we're aiming for those deliveries in the fourth quarter. As I said again very explicitly, what they'd like is we take whatever we don't produce in the fourth quarter, sorry, and roll that on top of what would be a similar volume in the first quarter. As I mentioned, those are high $0.20 unit items. If we're talking about $10 million in the fourth quarter and $25 million+ in the first quarter, you can see the scale that means for us. Again, given our scale, it's not responsible to us to project that into our base until we know that we're delivering and that we have the supply in order to deliver it, otherwise it totally skews our expectations even for the near term. In this case, it's certainly not up to us to name the customer behind it. That's entirely up to Wiliot. It's a customer who can very easily support that kind of volume and that kind of growth. We certainly believe the business is gonna happen. We'd refer you over to Wiliot to talk to them about confidence in you know in timing and volumes. Certainly they are very confident in it. We just need to be careful about what we put in our numbers. The next question is coming from Jaeson Schmidt with Lake Street Capital Markets. Your line is live. Thanks, guys, for taking my questions. Just wanna follow up on gross margin. I know you mentioned sort of the revenue shortfall was due to Identity. Obviously the percentage of the revenue composition was flattish. Just curious if you could quantify the impact from the supply chain on gross margin. I guess as it ties into this, I mean, did you expect Premises to have a stronger sequential growth in Q3? Premises is in Q3 their federal government fiscal year end. We anticipate that Premises goes up in Q3 normal seasonality YoY. As far as your comment on Identity and gross margins there, we typically don't try to go to that level of detail, but gross margin was relatively flat QoQ. It went down a little bit in Identity, but that was what we were expecting. We came in right at our margin guide for Q3 was really $37 and the consensus estimate total company was $37.3, and that's right where we landed. We're really happy from a margin perspective. Okay. Just looking at the Wiliot, just to clarify, sort of this $25 million or 25 million unit order that relates to a single customer and program, and then any potential upside, would that still be coming from a single customer program, or are you anticipating the potential for additional customers and programs? Wiliot, of course, is our customer, and I would defer to them to talk about which customer is behind that. It certainly is predominantly driven by a single major customer, but I really don't wanna speak to their business, you know, overly much. They've shared what's behind it and given us some confidence in that. Yeah. They're very accessible. I'm sure they'll be happy to answer any questions you got about their originating demand. Okay. Just moving to the auto injector market, can you provide some clarity on how we should think about the ramp there? Yes, the main, you know, ramp thinking I would put there is, again, when I talk about new products and time to launch, that things like that can take time. We've always tried to be careful about, you know, the auto injector timing and time to market. There are now, you know, as we pointed out, five different projects across four different companies, and some of them might happen sooner rather than later, and some of them are less, you know, intrusive technology and so they can be adopted more easily. We're certainly not gonna specifically call a ramp time on auto injectors per se. Over the next few quarters, I think you'll see more and more. We already have the first 500,000, and I think you'll see growth over time, but I am cautious about setting a specific quarter on that. Amir, you wanna give some more color on auto injector timing? 'Cause you can be a little more proactive with it than I can because I don't wanna step on any of your customers' toes. Sure. Just keeping confidentiality in place here. We've had very good progress on the first one. We finished Q2 with a joint IP that had two work streams with that leading medical device pharma company. What we also had in Q2 was we secured the first NRE with the second customer that's their competitor. During Q3, we were able to produce two different designs for them and actually deliver them. We're in a very strong position now going into the following quarter with the actual prototypes in their hand for them to test it, get some results, and then give that tangible data back to us so we can go into the next run. With the first customer, very good progression on the IP side. We are gonna go into an applicator test with 500,000 units. They're going to be solidifying that into their production run so that they can get the kinks out and make it more efficient. Then with the second and third streams, we're also going with this new NRE design, and we're gonna get some feedback during the following quarter. Very good progress, but again, to Steve's point, we're really at their timing on how quickly they want to ramp and what the next phase looks like. Okay. Thanks a lot. Thanks, Jaeson. The next question is coming from Anthony Stoss with Craig-Hallum. Please proceed. Hi, Steve. I just wanted to also follow up on Wiliot. If I understand this correctly, they want 25 million units in Q4. You're gonna ship maybe 10 million, so roughly 40%. When you reduced your guide for next year of roughly $30 million less revenues, did I hear you correctly that you're gonna only assume roughly 10% for Wiliot? If they needed 25 million units per quarter, 100 million units, high 20s, almost $30 million in revenue, but you're assuming 10%. Am I understanding correctly? That is correct. That's exactly correct. That's how we've projected it. Okay. The rest of the business, you know, must be down quite a bit, or you expect it to be down YoY if you're only assuming 10% from Wiliot. No, because we're talking about 20%-25% growth in the overall business. Wiliot will contribute, as you said, at about 10% of $30 million will contribute about $3 million. The rest is indeed growing, you know, pretty well. Frankly, as you would expect with something like that, if somehow something happens in that one big order, you know, one big customer, we can't be exposed to that. We have resilience in Amir's pipeline to offset that three as well. Is there a risk that this customer gets upset if they're only getting 40% of what they need or less than 40%? Yeah, very fair question. Amir can answer that as well more directly because he's got very closely related. No, we've talked with them, you know, very openly about, you know, this order just came in, you know, right at the end of the quarter, and they're asking for that kind of step up, and you've gotta get process going, and you've gotta get supply going. It was clear we weren't gonna get to 25, and we talked to them about, "Hey, are you gonna be disappointed if we do this or that or the other thing?" They said, "No, we fully get it. We just want you to get running. We want you to have the magnitude of the scale of what we're trying to get done here. Just, you know, ramp up and go, but we're gonna be satisfied if you fulfill a portion of it in Q4." Amir, you wanna talk a little bit more about that topic in particular that we're saying we're not gonna get all the way to 25 million units, and say is that going to jeopardize the future, you know, relationship? No, absolutely. The partnership is very strong, and it's been transparent from day one that as we're producing that, expectation on the production is gonna be rolling through to the end customer here. It is a very notable retailer, so they are gonna. They have the same understanding that as it ramps and as we get the process, they're gonna work with us. We also have been very transparent with them that it's not just the production side and the ramp, it's also the supply chain and the other materials that go into the complexity of this product, because it is not just a commoditized product that we're delivering. If there's any other supply chain issues hindering this, Wiliot has been very open with us, and we've been open with them on those risks. The ramp is very sequential, and then it has a lot of upside, but we've been very conservative in what we're delivering right now and then what the next phase looks like. Steve, as a follow-up, you know, I think in the past you've been using three different primary component suppliers to you. Are all three falling down or? 'Cause, you know, clearly before this order came in from Wiliot, you were having supply chain issues. If you've got this great visibility on this potential 100 million unit annual order, is there no way you can iron things out over the next quarter or two? Is this gonna go on, as it seems you would suggest, all throughout 2023, the shortages? You know, I thought it would be ironing out more, and it's gotten you know, crazier. It is to go to your first part of the question. It is mostly coming from one supplier, and I'm not going to name them because that doesn't help anybody. As you'd expect, I talk to you know, your friends, you know, even competitors in the industry about this, and they're all running into the same thing. You know, we have it factored into our numbers, but they'll just call on the drop of a hat and say, "You know what? 10 million units aren't gonna arrive because we're having some problem with 12-inch wafers in a fab over here, and you'll see them in March." That's just the and I've got four or five colleagues in the industry who are experiencing the same things. We call each other and say, "What are you seeing?" So, it is happening, and it's sounding like at least through first and second quarter of next year, it's you know. There are things that seem to be affecting their supply chain and their ability to supply. So we just have to take that risk you know, risk out. In case of Wiliot, they have their own supply and their own chips, and so they can be much more reliable on that supply. That said, we still have to, you know, confirm because that's coming up a big ramp for them as well. Got it. One for Justin on the OpEx side of things. You know, clearly you've got demand, you've got the supply side issues. Are you planning to ratchet down or keep OpEx relatively flat, or are you just gonna still go full throttle when the logjam breaks in supply? Yeah. We're gonna ratchet it down a little bit in 2023. You know, if you're looking at it's relatively flat when I say that, right? We had a pretty strong growth there in 2022 in OpEx, right? Exiting Q4, having the full year impact of 2023, you might see a little bit of an increase. No, I think we're set on any significant or material OpEx increases from headcount or anywhere else. I think we're in pretty good shape there, Tony. Got it. That's all my questions. Thanks, guys. Perfect. Thank you. Thanks, Tony. Once again, if you have a question or a comment, please indicate so by pressing star one. Up next, we have Brian Ruttenbur with Imperial Capital. Your line is live. Yeah. Thank you very much. A couple quick questions to dig down into cash generation a little bit in 2023. Everybody's been kinda asking around the edges, trying to understand where cash flow is gonna, you know, what you're looking at in 2023. Maybe you can help fill in some of the blanks then. Generally, should cash flow be, you know, up from 2022 levels? That should be number one. Number two, is there anything that cash generation should mimic, like net income in 2023, or should it be something less than net income? Yeah. To answer the first question, you know, we have spoke previously about our upcoming build-out in Batam, Indonesia, and we're taking a look at that. That's gonna be planned for 2023, and we do have some pretty significant machinery purchases that we're going to be doing on some machinery equipment, some Mühlbauer machines. You've already seen a little bit in Q3 where we did a couple of the down payments for those. Those are coming. With 2023 being kind of an operational build-out for us, we do anticipate cash coming down slightly in 2023. But I think that, like we've stated in the past that the cash we have on hand, we're very comfortable with and we're supporting. Still have over $50 million working capital exiting Q3. I think hopefully that answers your question. Yeah. That we expect it to come up a bit in Q3 in 2023 but, not too significant. Okay, perfect. No, that's helpful. Second question real quick. In terms of personnel changes, you mentioned several. Can you maybe give us a little bit, just numbers? Did you actually terminate anyone during this process, or was just moving positions? No, we had some people leave the company, if that's, you know, to be direct about it. You know, we're growing and skill sets change. As no critique of one person or another, but the skills you need at $200 million are different from the skills at $100 and below. Great. Thank you very much. Thanks, Brian. Okay, we have a follow-up coming from Michael Latimore with Northland Capital Markets. Mike, your line is live. Great, thanks. Yeah, Steve, did you give the backlog tied to Premises? I think you did, but I just didn't get it. The backlog going into Q4 was about $3 million. I think the portion of total backlog was probably pretty close to that because Premises tends to not have extremely long backlog. There was maybe another $1 million in the longer tail backlog. The $36.9, which is total backlog, you know, probably 4-4.5 of that is Premises. Now I'm just estimating that. Yeah, yeah. The Q4 backlog was definitely $3 million was promised in the Q4 backlog for the $16.6 million. As you think about I mean, you kinda gave some guidance for next year on Premises, 20%-25%, just an acceleration. How are you thinking about the visibility there and factoring in sort of economic uncertainty in that category? Yes, really good question. I don't wanna overstate confidence, but we've got quite good visibility in that category, both from channel awareness and customer awareness, the way we built out the sales team and are continuing to build it out, and some of the product launches we have. Then also the federal base gives us good predictability as well. They're continuing their investment in physical security, so we know what those budget growth areas are gonna be. Commercial, as we get into bigger customers, you know, when you talk about EI, San Diego Airport is actually in our commercial category versus federal because it's a Mm-hmm. regional airport. Customers like that plan, you know, we're going through all of their their terminals, and they're building a new Terminal 3, and they're building a new administration building, and that'll go all the way through 2023. We get good visibility into that. The other part is we have, in 2022, we launched our video product line, and that is growing as increased share of wallet for existing customers as well when you go from access control into access plus video. We've got a fair bit of visibility into the growth drivers for that business for 2023. Mm-hmm. Okay. Thanks. Sure, Mike. At this time, this concludes the company's question and answer session. If you have a question and it was not taken, you may contact Identiv's Investor Relations team at INVE@gatewayir.com. I'd now like to turn the call back over to Mr. Humphreys for his closing remarks. All right. Thank you, operator, and thank you all for joining us. As you can tell, we're really focusing everything we have on building our business for the long term, and especially on delivering on our near-term commitments, regardless of any of the external factors. You know, we've talked a lot about how we're trying to mitigate all of that. For sure, out of all this, in addition to supporting our customers, predictability is our top priority. We'll keep updating our investors either in individual calls or we'll be at Craig-Hallum in New York on November 17th, B. Riley Fireside Chat on December 6th, the Imperial Capital Conference in New York on December 15th, and other investor events, of course, coming up in the new year. Thank you all again, and have a good evening. Thank you for joining us today. You may now disconnect.