Identiv, Inc. reported significant financial changes in its 10-Q filing for the three and nine months ended September 30, 2024, primarily influenced by the recent sale of its Physical Security Business. The company completed this sale on September 6, 2024, for approximately $144.3 million in cash, which has been classified as discontinued operations. This strategic move has resulted in a shift in revenue sources, with the company now focusing solely on its IoT Business segment.

For the three months ended September 30, 2024, Identiv's net revenue was $6.5 million, a 44% decrease from $11.7 million in the same period in 2023. For the nine months, revenue fell 38% to $19.9 million from $32.1 million year-over-year. The decline in revenue is attributed to the divestiture of the Physical Security Business, which had previously accounted for approximately 63% of the company's revenue for the fiscal year ended December 31, 2023.

Despite the drop in revenue, Identiv reported a net income of $85.9 million for the three months ended September 30, 2024, compared to a net loss of $22,000 in the same period in 2023. This substantial increase is largely due to a gain of $99.5 million from the sale of the Physical Security Business. For the nine months, the company recorded a net income of $75.2 million, a significant turnaround from a net loss of $3.9 million in the prior year.

Operating expenses for the three months ended September 30, 2024, rose to $9.8 million, up 111% from $4.6 million in 2023. For the nine months, operating expenses increased 59% to $22.7 million from $14.3 million. The rise in expenses is attributed to higher general and administrative costs, including legal fees and stock-based compensation related to strategic review activities.

As of September 30, 2024, Identiv reported cash and cash equivalents of $145.4 million, a significant increase from $23.3 million at the end of 2023. Total current assets also rose to $166.0 million from $79.5 million, while total liabilities decreased to $19.0 million from $30.8 million. The company’s total stockholders' equity increased to $156.7 million from $74.3 million at the end of 2023.

The company is now concentrating on expanding its IoT Business, which focuses on specialty IoT solutions for healthcare and other high-value markets, utilizing RFID technology. However, it faces challenges such as fluctuating market adoption of RFID products, increased competition, and macroeconomic factors affecting production and sales. The successful transition to this new focus will be critical for Identiv's future performance and stock value.