Thanks, Operator. And thank you all for joining us.

Our first quarter was a strong start to a pivotal year for our business. We're on track on all of our key metrics and business activities behind the numbers continue to be ahead of our plans.

Our gross margins, in particular, strengthened faster than we projected, up almost 300 basis points over last quarter with non - GAAP gross margins of 37.1%. This was a key goal that we expected to reach mid-year and we got there in Q1.

The progress on gross margins is important for three reasons. First, it reflects broad customer demand, so we can balance our mix.

Second, it reflects the strength of the market itself, because higher margin specialty RFID devices are the fastest growing segment, driving growth as well as margin expansion. Third, it reflects the strength of our financial systems.

We track gross margins on each customer order. This lets us optimize our business model while also supporting customer account development.

We'll go into more details later, but I wanted to focus on gross margin because it reflects key factors, including demand strength, customer diversity, specialty RFID growth, and internal information visibility to manage our business model as we scale. Our other metrics for Q1 were also on or ahead of plan.

Revenues in our premises business were up strongly 23% year-over-year. We again fulfilled every key customer demand despite the supply chain pressures we're all dealing with.

Our Identity segment grew 7%, led by 13% year-over-year growth in RFID, on track over a high growth comparable quarter in Q1 2021 that grew almost 60% year-over-year. Now, more importantly, our backlog at the end of Q1 for shipments in Q2 is up 32% versus the year prior, giving us confidence that we're on target for our 2022 plan.

Our unit volumes were 48 million units, up 20% versus Q1 2021. And our average unit prices in RFID expanded, up 16% sequentially.

Overall, our revenues grew to $25.1 million, a record for our first quarter and up 13% versus Q1 of 2021. Our forward indicators grew strongly with total backlog up 24% year-over-year.

Now, in addition to these growth metrics, our business model progressed while increasing gross margins, we held operating expenses tight, resulting in EBITDA and net income ahead of plan and solidly on track for the year. Behind the financial and operational aspects of our first quarter results, we continued our track record of 100% customer retention in RFID and our other growth drivers made strong progress.

These include existing customer launches and expansion, new designing often with nonrecurring engineering, or NRE, and technology launches. Among existing customers, a wide range of customer use cases are growing strongly.

These encompass several dozen customers in the $100,000 to million-dollar annual revenue range. So I'd like to highlight some of these with an additional perspective of gross margin on these products.

In the healthcare and medical device category, projects for test kits and surgical accessories shipped to six different customers, all with margins of over 55% and a couple with margins over 70%. Wine bottle, gas bottle, and other intelligent tamper proved devices sold to five more customers, all with margins ranging from 40% to 60%.

High-end authenticated consumables for robotic cleaners, printers and a couple of others with margins in the 40% to 55% range. So our wide base of smaller growing customers continue to expand with margin profiles that support our expanded margin expectations.

Turning to our transformational RFID initiatives, each made progress. Both of our cannabis initiatives progressed.

As expected, the U.S. is moving faster and we're now getting a very clear view of volume potential.

We're delivering 50,000 units to TrueGreen for their retail pilot. The pilot is now formerly set for July with all the systems at the MSOs, data flows, infrastructure deployment, and training going on over the next 68 weeks.

Our solutions expanded to include our specialized dual frequency RFID device and we're also doing all the converting and data encoding. This expands our margin by increasing our value-add and obviously expense our mode.

Despite the scope expansion we're on track for four-week delivery cycle to support the retail pilot schedule. They've also begun roll out projections that give us more specific volume visibility.

Now, you might recall that Cresco Labs bought Columbia Care, expanding our customers reached in the cannabis MSO market to 17 states. Discussions for pricing and allocations are in various stages across all 17 states and specific projected volumes in just the four states of Maryland, Virginia, Delaware, and Pennsylvania are about a 150 million units annually.

This gives us our first bottoms-up look at potential volumes overall in state-by-state detail. And these states represent about 11% of the populations of the states where marijuana is legal for medicinal or recreational use.

So that translates to a total U.S. cannabis market of about 1 to 1.5 billion units for our devices.

Our customers cover 17 of the 33 states were cannabis is legal. So our specific opportunity with this customer is around 500 to 750 million units.

Now, we know that's a lot of data, but it's the first U.S. volume data we've gotten directly from the companies in the market, talking directly to their customers, so we wanted to share it.

Now, the cannabis program in Canada also is progressing with about 2,000 of our test units delivered an in-test production programmer tuning and converting is going well, including hologram inclusion in the finished product, which is a new Canada specific requirement we've incorporated. Now, we'd go into more details in Q&A, but this billion-plus unit program is moving as we expected.

Our auto-injector project is still on track for 2022 ramp-up, with S scale volumes still projected ultimately to be in the 100 million unit range. We're continuing to work intellectual property agreements, which is fundamental for medical device companies.

Also, the critical first 25% of the 20,000 unit pilot run have been delivered and signed-off, putting us on track for a 100,000 unit production pilot mid-summer. With this deeply engaged process underway, as you can probably tell, our relationship is very strong, creating a solid margin price and volume opportunity that's also on track.

Turning to our devices for prescriptions for the visually impaired. Through our direct sales and partners, we've now got four pharmacy chains in various stages of pilots and deployments.

Now, nobody's as far along as CVS, but the broad adoption is underway. As for CVS specifically, they're increasing their marketing push.

I mentioned the joint award we've received and we expect another at RFID Journal Live! in a few weeks.

This gives the solution more visibility and puts more pressure on more pharmacies to adopt our solution. Lastly, our largest mobile device customer has a new design ramping right now with higher volumes than we originally expected, over 10 million units of that design over the next six months.

Most of their prior designs are continuing, resulting in more total demand than we had projected. So in addition to these transformational opportunities, we've got over two dozen nonrecurring engineering projects underway and finished about a half dozen in Q1.

I won't go into all of them, but one with major volume potential that we completed in Q1 was for the world's largest multinational closing producer and retailer. We've designed a specialty tag for asset tracking in their stores using our best in industry RFID on Metal technology.

This is now going into pilot in Austria and Germany. This also got a lot of help from our partnership with NXP.

They routed a special wafer to us for development and the pilots really giving us a boost to hit the customers’ goals. With this progress in Q1 RFID is positioned as our main growth driver in 2022 with upside volumes in just a few accounts that can transform our business.

Our premises business also had very strong results growing more than three times the industries growth rate. So what drove it and is it sustainable?

In physical and converged security, we've always been strong in the federal market. Last year, we launched actions to strengthen our commercial presence, and this really paid off with Q1 Premises growth that's entirely driven by commercial markets.

Securities become a priority for every business and institution, and our combination of high security and cost-effectiveness and complete solutions from a single vendor delivered growth and market share gains. With this strength in commercial markets established, we're in a solid position to continue to grow at a multiple of the industries rate as the seasonally strong federal cycle in the second and third calendar quarters drive growth in our federal state, local, and education markets.

This gives us high confidence in our 20% to 25% growth expectations for premises in 2022. Hitting well in this range in the first quarter, which is always the seasonally toughest quarter, clearly has us on track for 2022.

If our commercial market strength continues, on top of increasing federal budgets for security, we could see premises growth even above our initial expectations for 2022. In addition to technology leadership, our supply chain management became a real competitive advantage in Q1 across both RFID and premises.

In premises, we're taking advantage of competitors’ shortages, especially HID and companies that use Mercury hardware. In RFID, our strong supply relationships give us an advantage, like the leading clothing producer that we're going to pilot with helped a lot by NXP supply support.

Our engineering expertise also let us offer alternate solutions to customers, get them accepted, and bringing into market far faster than our competitors. The combination of these supply chain strategies lets us take share in both our segments.

Now one last area we hit hard in Q1 is our technical and thought leadership in our industry. We've kept a fast pace of industry rewards, recognition, announcements, and engaging in the main discussion forums in the industry.

In Q1 we got awards for our Eco tags, our Tag On Metal devices and I mentioned the aim joined towards the CVS. We also launched a podcast series called humans in tech.

We've already got 15 episodes up with titles like cannabis quality control from farm to fingertip, IOT connected collectibles and consumables and securing area 51. So you get the idea.

They give us a unique social media voice in our pretty technology - centric markets. And this really builds our reputation as the industry thought leader from mass adoption of RFID based IOT.

So our RFID business is on track with our transformational projects moving along ahead of plan in some cases, and volume outlook is getting clearer as the programs progress. Demand is growing fastest for our specialty RFID devices, driving up margins and unit prices also faster than we expected.

Design wins are growing with our increased technical sales and engineering teams and our marketing investments are driving even more opportunities that our expanded sales team is converting. Our production capacity continues to expand to meet the higher demand and our systems are in place to manage customer lifecycles as more and more customers and projects come into our revenue streams every month.

In premises, we've proved our ability to take market share aggressively, growing at three times the market rate and winning in the commercial market, just as Securities’ getting more focus and budget allocation than ever. And just as the seasonally strong federal, state, and local government buying cycle ramps up.

So before getting into the next quarter, and our outlook for 2022 and beyond, I'll turn the call over to Justin to review the financial highlights for the first quarter. Justin?

Thanks, Steve. As Steve mentioned, our financial results reflect our continued strength exiting the first quarter of 2022, with the delivery of year-over-year growth in revenues, sequential and year-over-year increases in gross margins and future backlog, and a sequential return to positive non-GAAP adjusted EBITDA.

We believe these results, paired with our continued investments in the RFID organization and its capabilities, position the company to achieve its growth and profitability potential in the remainder of 2022 and beyond. We closed the first quarter of 2022 at $25.1 million in revenue, which was above consensus estimates and up 13% compared to the first quarter of 2021.

The trailing 12 months’ revenue was $106.7 million, up 17% versus the comparable prior year period. The sequential change in revenue was due to normal seasonality.

Recurring revenues came in at 6% of total revenue and an increase of 1% sequentially. First quarter 2022 GAAP gross profit margin was 36%, an increase compared to 33% in the fourth quarter of 2021, and 35% in the first quarter of 2021.

For the first quarter of 2022, non-GAAP adjusted gross profit was 37%, which was above consensus estimates, and an increase compared to the 34% in the fourth quarter of 2021 and 36% in the first quarter of 2021. non-GAAP adjusted gross profit margin changes resulted primarily from our product mix, as well as a focus on tracking and prioritization of higher margin products.

We remain committed to a long-term non-GAAP adjusted gross margin target of 40% to 45%. In the first quarter of 2022, our GAAP and non-GAAP adjusted operating expenses, including research and development, sales, and marketing, and general administrative costs were $10 million and $9 million respectively compared to $11.3 million and $10.5 million in the fourth quarter of 2021.

And $8.9 million and $7.6 million in the first quarter of 2021. Our non-GAAP adjusted EBITDA margin increased 4% from Q4 2021 to a positive 1% in the first quarter, which was above consensus estimates and we're continuing to deliver leverage in our operating model.

We remain committed to a long-term non-GAAP adjusted EBITDA margin of 15% to 20%. Our Q1 GAAP net loss was $1 million or a loss of $0.06 per share above consensus estimates of $0.08 per share.

This compared to a loss of $1.9 million or a loss of $0.10 per share in Q4 2021, and a loss of $1.5 million or a loss of $0.09 per share in Q1, 2021. 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 $14.6 million or 58% of our total revenue in Q1, 2022, which is a 7% increase from Q1, 2021. The year-over-year increase in Identity revenues was primarily driven by higher sales of RFID transponder products.

These increases were driven by current customer expansion, new customer wins, and our ability to deliver product versus competitors constrained supply chains. The sequential decrease in Identity revenue was due to normal seasonality.

Our Q1, 2022 Identity segment non-GAAP adjusted gross margin increased to 23% compared to 21% in Q4, 2021. The sequential increase in margins were due to a greater proportion of higher-margin specialty RFID products sold in Q1 versus Q4.

We do believe we have the systems in place to pass through our component costs increases timely, and this, combined with our ability to track and focus on higher margin customers should allow us to sustain and expand this margin going forward. 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 the move to more complex devices and relationships with our customers will further strengthen our margin profile for new opportunities. Any temporary exemption must be signed off by top management should we deem our relationship to be strategic to the future success of Identiv.

We remain committed to a long-term gross margin target of 35% to 40% in our identity business. Now turning to the premises segment.

This segment accounted for $10.5 million or 42% of our total revenue in Q1. Representing an increase of 23% from 8.5 in Q1 2021, and a 5% decrease compared to Q4 2021.

The year-over-year increase in premises segment revenue was in our commercial business, which has been a key focus area for us to expand our market share, and we did it. The sequential decrease in segment revenue was due to our normal seasonality.

Non-GAAP adjusted gross margins for premises in the first quarter of 2022 were 57% compared to 52% in Q1 2021, and 54% in Q4, 2021. The sequential and year-over-year increases were primarily due to product mix, price increases, as well as operational efficiencies, which was a key area of focus for us in Q1 and going forward.

We remain committed to a long-term gross margin target of 55% to 60% in our premises business. Moving now to our operating expense management.

Our non-GAAP operating expenses in the first 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 36% of revenue compared to 37% in Q4, 2021. This resulted in the return to positive non-GAAP adjusted EBITDA in the first quarter of 2022.

In summary, we continue to demonstrate operating leverage in our business while successfully reinvesting for growth within our current cost envelope. Now, turning to the balance sheet, we exited Q1 2022 with 28.7 million in cash and cash equivalents and restricted cash of $1.1 million decrease from Q4, 2021.

We remain debt-free and we've maintained our strong working capital position. In our 10-Q filings we will 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 second quarter, a total backlog for all future shipments was $32.4 million exiting Q1 2022, up 24% versus Q1 2021, which provides visibility into the current business momentum we anticipate continuing through 2022.

Momentum exiting the first quarter, combined with this strong backlog, give management confidence that the business is on the right track to meet the company's growth expectations for 2022 and 2023. As a result, we are reaffirming our full year 2022 guidance today with expected revenues between $130 million and $135 million reflecting year-over-year growth of approximately 25% to 30%.

We're also reaffirming our guidance for 30% to 35% year-over-year revenue growth in Fiscal 2023. Normal seasonality is expected to continue.

With that, I will conclude the financial discussion and pass the call back to Steve.

Thanks, Justin. As our Q1 financials show, our growth continues to expand and margins have strengthened fast, trending towards our long-term operating model margins.

We continue to have strong visibility into 2022, so we are reaffirming our 2022 and 2023 guidance today. This year continues to be all about execution.

With our expanded world-class sales team, the industry's best engineers to support NRE projects and other design wins, deep relationships and technical expertise engaged with a half dozen transformational programs and ongoing production capacity expansion. All of the pieces are in place to drive the vision and targets we've set.

Premises showed our target growth rates already in Q1 and the seasonal nature of RFID programs, like mobile devices and consumer products also show our projections are aligned with our results. Now, another metric that we track is our backlog and committed customer buying forecast in RFID.

Now, committed forecasts come in industries like mobile devices. They don't issue purchase orders until they're ready to load their supply chain, but they give very firm forecasts several months out.

Combining our backlog with these firm forecasts, the balance of our RFID revenues for this year are over 85% covered. That means we only have to close new business of about 15% of our year's budget in order to reach our targets, and that's a pretty good position to be in with 2/3 of the year still to go.

In fact, about 95% of our next six months RFID plan is covered by this metric. We of course plan to do a lot better and drive much more into 2022 and 2023.

But in terms of near-term goals, it reinforces that 2022 is all about executing our plan. The key parts of our strategy and our resources are solidly in place.

Backlog and pipeline are building and our customer demand is in a great position to reach our targets. So with that framework, I'll focus the rest of the call on how we're executing against our plan.

As an overview of our plans, we hosted an investor webinar a few weeks back. If you were unable to attend, it's on our website and it lays out how we're enabling RFID based IoT growth.

What that means, how we fit in, and how it gets us to our target business model and scale. So design wins are at the corporate all.

If we lead in design wins, customers will always go to the company that's proven they can deliver. That brings more scale, more experience in IP, more reputational leadership, and more of a moat around our lead in the market.

It's a classic first-mover advantage that expands as the market grows, which we've already established and we think we're expanding. So turning to some design wins.

In addition to the ones I've mentioned before, like [indiscernible], seller and [indiscernible], we've also got entry project going for eBay, Life Fitness through Promate, iRobot, a medical device for orthopedic surgery, the world's largest provider of casino chips, several industrial applications, several different million-dollar-plus medical testing products across both humans and animals, high-end consumables for general appliances, spending everything from coffee buds to high-end refrigerator systems, and a lot more. So as you can tell from these descriptions, our growth drivers, are in high-margin, high ASP devices for IOT applications.

From a vertical perspective, our focus is medical devices in healthcare, specialty retail, and industrial applications. These categories with their higher-margins and high switching barriers are becoming our main growth drivers.

Turning to our other strategic lever, our partnerships are delivering growth opportunities beyond what we expected at the beginning of the year. Our chip partnerships are important, but this time I'd like to focus on a category that can transform RFID IOT devices.

This is ultra-low-power passive and even active Bluetooth RFID devices. Now it can't disclose specifics, but we've done some very interesting joint development in this space.

And there will be announcements at RFID journal live in Las Vegas in a few weeks that we think will be game-changing. Embedded devices like ours do take a while to get designed in and deployed.

But getting in on the ground floor with technology that's got lots of uses and that nobody else has is a key way we cement and expand our long-term leadership in the industry. Now, interesting programs are also launching with partners like CollectID, Wise Key, [indiscernible], AmTrust Link, and others.

And we can go into those in Q&A if there's interest. The third leg of our execution is our growing profile as the industry got bigger, I mentioned some of our awards in our podcast, but that's just a sample.

At RFID journal live, we're chairing three different sessions will be accepting the Aim Award for spoken RX together with the CVS team, and we're up for two more awards there. We're also expanding our NFC developers’ community with direct support from our expanded design team.

Now, I'm not going to go into detail about capacity and the build-out of our sales and engineering teams. We've covered that before and hopefully we've proven our ability to build best-in-class teams fast and to add technically cutting-edge prototyping and production capacity.

But we can go into either of those areas in the Q&A if we want some more details to be covered. And one thing I do want to address is supply chain, because this top-of-mind for every business and investor, we continue to meet demand.

And I mentioned earlier that we're taking share from competitors who can't get supply or can't design and implement alternative technologies fast enough. We expect this environment to go on throughout next year.

It's actually been an advantage for us. With the proactive RFID orders we placed and the fact that we have our own hardware and own production means we have much more flexibility than anybody who outsources, which most of our competitors do.

When we do have to pay premiums, we have the systems in place to pass-through costs, including an appropriate margin, so our overall margins sustain or expand. Customers these days are very willing to cover the costs and appreciate our ability to supply even if it costs more or if they have to accept alternate designs.

We did this in Q1 and expect it'll remain part of our business model for the foreseeable future really. And one benefit of the supply chain challenges is that if inflation becomes part of our macroeconomic reality, we're set with the systems and the customer relationships to sustain and expand our margins even in an inflationary environment.

So that's the execution picture for our RFID business. We're confident that our execution is best-in-class across our design wins, partnerships, industry leadership, capacity scaling, team expansion, and supply chain.

This gives us confidence in our plans for gross margins and operating margins through 2022 and 2023. Turning to premises, we covered most of the growth drivers in the opening comments.

With our strength in commercial markets established in Q1 as the seasonal buying cycles in government hit in the middle of the year, we're seeing signs that budgets for security will continue to grow in particular for highly secure end-to-end platforms. In this category we're the clear leader.

As a result, our velocity vision product is getting traction in both government and commercial customers with a couple of real lighthouse customers likely to deploy in this quarter and next. Additionally, our latest update to velocity enables true AI in converged security, implementing network global integrated operations which creates holistic data centricity across the system.

And this is really the key to machine-learning enabled predictive and proactive security. So with all these growth drivers and already seeing the momentum we've expected, we're confident of the 20% to 25% growth in premises and see signs that it could be even more in 2022 and 2023.

Now before wrapping up, I'd like to comment on a couple of macroeconomic trends and why we think we're well-positioned to continue on or above our plan, even if some macroeconomic risks happen around us. One risk, of course, is recession.

We think we're well-positioned to grow through a recession. Our growth drivers are very resistant to recession.

Medical devices of course, but also cannabis, which just like tobacco, tends to sustain demand even in recessions. Federal government budgets also are very recession-resistant.

So our core growth drivers in the sectors that are an increasing part of our highest growth business are actually very strong verticals if recession does hit. The other issue we think we're positioned to do well in is the semiconductor cycle.

We've all seen the boom and bust cycles in semiconductors, and there could be another bust. We would actually benefit from that.

If chip prices drop, our costs decline, which in the past has supported faster RFID adoption and margin expansion. I already explained why we think demand will stay strong in our key verticals.

It's also possible that some of the chip vendor support for us now is because they see the same trend, that we'll be growing in these solid demand verticals right when they need demand, so they're supporting us now to be better positioned if a bust comes. So at least for those two macroeconomic risks, recession or a semiconductor downturn, we believe we'll be very resilient and if anything, we'll benefit in growth, gross margins, and strategic importance.

So to wrap up, we've detailed how we're executing against our plans. Our industry position and our base execution give us clear line-of-sight to our 2022 goals and position us for 2023.

We expect some of the revenue multiplying projects to ramp later in 2022. As we've done today, we'll keep updating on tangible progress milestones to confirm the solid position we have in each opportunity, as well as confirming and refining the scale of each.

Our first-quarter set the pace we wanted. And in some areas is moving faster than we expected.

We'll keep updating our outlook and guidance as the business progresses, but the progress on growth, gross margins, strategic initiatives, and the favorable industry conditions for us are very encouraging as we go into the rest of 2022. So with that, we'll open the discussion for questions.

And again, we're joined for the Q&A by Dr. Manfred Mueller, our COO, and GM of Identity, and Amir Khoshniyati, VP and GM of our transponder business.

So if there are RFID related questions we can cover them directly with the leaders driving the business. I will now ask the Operator to open the lines for questions, Operator.

Q1 results. I know you mentioned prioritizing some products in Q1, but was there any demand you actually couldn't fulfill?

No, there wasn't unfulfilled demand. We -- frankly, there were some orders we held back because crisis are going up in Q2.

So there was some that -- but nothing that was the supply chain-related, if that's what you're asking.

Okay. That's helpful.

And just looking at the clothing opportunity, there seems to be sort of an application you guys haven't really played in, in a big way in the past. Just curious so if this was a customer using a competing technology or competitors’ product or if this is a new initiative.

And I guess relatedly, how should we think about the potential size?

Yeah, I'll turn that went over to Amir because he's been working at that from the transit.

Thanks, Steve. And this particular retailer they are not new to RFID, but they are new to custom RFID for specialized application.

So specifically this is for asset management within their stores. And they needed to specialize tag for adherence to basically on metal.

And that was why they turned to us. And they are right now looking at a -- at a pretty rapid ramp to 10 million units, and we're just basically looking at when that strike time is going to come, 10 million in start and it could be even much more upside.

Okay. And then, just the last one for me and I'll jump back into queue.

Gross margin had a nice snapback here in Q1. I know you said you achieved that mid-year target earlier than expected, but should we expect gross margin to at least remains stable here in Q2?

Yes. We feel strong -- we feel that gross margins should remain stable throughout the rest of the year.

Okay. Perfect.

Thanks a lot, guys.

Thanks, Jason.

Hi, guys. I'll echo my congrats on the impressive snapback in gross margins.

Really nice to see.

Thanks, Tony.

Steve, it sure sounds like you continue to have a ton of design momentum. I'm curious if you have the figures in front of you, i.e.

number of new customers, perhaps, that you entered into design wins in the current quarter. Also, I'm just curious if you could share any thoughts on just the complexity of some of these new designs, especially in -- slated for 2023.

Your thoughts on ASPs maybe in 2023 or '22. Any additional detail will be definitely helpful.

Thank you.

Yeah. I'll take a crack at that and then I'll pass it over to Amir and Manfred to comment.

On the first thing of specific designs we get between one and two dozen new design coming into the pipeline, and as we see more we'll start to expand the engineering team. But we don't report the specific number because it is going fluctuate quarter-to-quarter and one design might be for a million unit opportunity another design might be for a 50 million unit opportunity, so it's -- we want to be careful with anchoring too much on that specific number.

But the expansion of the designs -- the number of designs going through the team is definitely the relevant part. So let me -- actually also on ASPS, we do expect that those will be expanding over the course of the year.

But on a quarter-by-quarter basis, again, I think they'll generally expand. But it can be -- can fluctuate quite a bit as one big customer or another has demand moving along.

So I think as it turns out this year, it'll probably be generally expanding. But that won't always be the case as you go quarter-to-quarter.

Amir and Manfred, do you want to talk a little bit more about the design wins and AVs if you want to comment at all.

Sure, Steve, maybe I'll take it first. I'll start on the ASG side.

Having a standard ASG going up is probably not a fair assessment because the ratio it is, it's really all depend depends on the complexity of antenna design, how we're designing in and definitely the chip capabilities that we're using. So as you move up to chip capability matric, the ASG is going to go up and then it's going to be a higher-priced finished pack.

Looking at the NRE projects overall, we've been prioritizing the Q of REs based upon what's going to move first and then also dependent on when availability for certain chips are going to be. So sometimes the NRE designs that we're working on, are focused more on a complex chip that may not be rolled out and really didn't matured enough in the market.

For example, we have one that we took on this last quarter and it's not going to be ready until Q1 2023. So what we're doing we're working really closely with the supplier to make sure that when they do launch, that we have the first access to the prototype and then we can be the first to really translate the best technology.

So NRE and the quantities just echoing what Steve is saying, they're vast and wide from the volume standpoint, but also there in the priority queue based on when the demand is going to pick up. And then also when we're going to really be able to deliver for optimal results for the customers.

Yes. Just one sentence with regard to the questions related to the complexity of the design-in wins.

I would say they are decently complex, but that's what we're living and breathing, so from that point of view, there's not that many out there that can do it. And most of these guys know where to go to.

Most of these kind of opportunities also are directed to us by some of the chip vendors because we can deliver accordingly. And there is one there particularly element that is adding complexity more and more going forward, which is the programming and coding requirements for some will be higher end ICs that are very popular in the meantime.

Then if I could sneak in one more for Steve, or maybe Amir, on your 30% to 35% revenue growth goals for next year. Working closely with NXP, as you have, are you confident that you're going to have ample supply to kind of hit those targets for what you see right now?

Yeah. We are also because there is the diversity, certainly NXP, is core to it.

And we ordered well ahead. But this year and we're doing the same thing, in fact were already ordering through most of 2023.

But also you get a diversity of chips and some of these designs that sometimes it's in the thing sometimes zesty, sometimes it's other specialized. So we've got both that give us some confidence that we can fulfill the demand with the growth on it because of the diversity of supply as well as ordering ahead as well as pretty supportive partners.

Because it's an allocation games right now. Question of how much they're going to route to you.

And we're getting a pretty favorable allocation treatment and we sure think that's going to keep going into '23.

Really want to add anything to that? Just the line that we have our Tier-2 and Tier-3 behind NXP as well.

And what we've done as for are really our macro customers, we've honed in and made sure that they're starting to cross-qualify other IT as a backup. So if there is an unforeseen situation where we don't get the right level of allocation, we have a back of in place and then they're ready to go with that antenna design that's already been stepping.

Thanks for all the color, guys.

Thanks. Thanks, Tony.

Yes. Thanks.

Steve, I think you gave a number of -- you have 95% of the RFID revenue covered and backlogged and committed. Is that the number -- is that the right number, and is that a new number?

I don't recall that in the past.

Yes. No, that's a new number.

And that's over the next couple of quarters. I said six months specifically.

And yes, it's a new number to give some visibility because backlogged represents some of it, but a lot of it is both good and challenging sometimes. With the forecast, is we'll get the forecast and then, like some of these mobile device companies, if they up their forecast, they still expect to you to deliver to it.

So that's the part that could go from there. But yes, the point is that it really is doing the production, doing the designs, doing the engineering.

The team that Amir's built is really filling the pipeline quite nicely.

Has that number improved year-over-year? Did you track that number last year?

We haven't. We've just started tracking it partly with the supply situations to make sure that we're looking actually at six to eight quarters out to make sure we got coverage, it's not just for backlog and -- because we need to cover backlog, firm forecasts and the new deals that they're hunting and bringing in.

So we've been focusing on that much more in the last couple of quarters.

Yeah. And then the backlog growth of 24%, that's a little slower than last few quarters.

I guess any just sort of general color on that change?

I think just as I said, a number of our customers do firm forecast versus backlog. You can do the math of backing into it that with the growth that we've got, if there's that much in forecast and backlog, then the forecast must have gone up a fair bit.

So that's another reason for giving to combined number because we get the visibility, but some of the customers that are more forecast driven than backlog driven are giving it to us that way. But our experience has been that the forecast numbers tend to be the baseline that we get, and then they ramp it up from there.

And then I think you mentioned sort of normal seasonality which would imply I think a second half growing well over 30%, I guess. One, am I interpreting that correctly?

And then two, what would be like is that broad-based acceleration or is there a couple of key projects are really has in the second-half?

It's actually broad-based. There's seasonality that comes in to.

We got the consumer products and we talked about closing earlier and mobile devices, of course, there's well, [indiscernible] launches that happened in the second half of the year. So there's a lot of things that drive that seasonality.

Plus, we doubled that sales team over the course of the last few months of last year. And so that sales team is building a pipeline and that pipeline takes two to three quarters to convert.

So you've got that driving it as well. And then lastly, you've got seasonality in federal government, the government buying cycle.

And that's driving it too. So there's a number of backorders that you always drive our seasonality.

But if anything there, it's increased purely by the increase in the sales team and a sales cycle. Amir, you want to add anything to that as well because I'm talking a lot about your sales team.

Sure Steve just to add color from Q4, we had our highest level of NRE projects. And those NRE projects typically in our cycles, they usually take nine to 12 months to really see some level of from designs of prototype to some level of delivery to the customer.

What we're seeing from a lot of the design feedbacks through this last quarter is that we're approaching the right level of the second half of the year. Some of these actually hit some true volume.

And are multiple work streams. So it's not one or two eggs in the basket that was going to be banking on.

It's really a broad scope hitting our main segment focuses, but there's going through the standard cycles from really true design all the way through to volume.

Okay. Sounds good.

Thank you.

Thanks, Mike.

Thank you very much. Two quick questions.

First of all, back to the gross margin real quick. We should see a seasonal drop in the fourth quarter.

Is that correct on the gross margin side?

No. Well, versus Q3 or are you talking about?

Yes, versus Q3. So if we're holding things, let's say a ballpark is 36% for first, second and third quarter, will there be a drop, a little bit in Q4?

I don't think so. Not at this time.

Okay.

It will hold as relative. We don't usually give quarterly guidance, but flat I think would best.

Okay. No.

No. That's a great deal color.

Thank you. Next question is on the access control side, maybe Steve, when we spoke, I think of IFC West, you're launching some new card readers that were comparable with some of the larger competitors out there.

Can you talk a little bit about traction that you've gotten in that area and what you see happening?

Yeah. In the reader area, in particular, there has been a lot of traction and it's coming, of course, out of the gorillas hide for the most part, which I did for three different reasons.

One is supply. They've had a real challenge supplying and we've been filling that in the very aggressively.

Number two is their proprietary technology, which customers are just getting more and more sensitive to being locked in to proprietary technology. And ours, obviously, inter-operate with theirs is both everything else.

And then number three is the fact that the interoperability with the back-ends with all of the panels is a lot stronger with us. And then the other thing is we're actually starting to OEM our readers.

And two out of the top three non-harsh access control companies will be OEM in our readers. One already is.

Another, it will be bringing them on and a couple of months. And so we'll be selling readers through three out of the top four access control companies.

And obviously, the most competitive reader to the biggest provider out there right now.

Will you talk a little bit more about that in the future and future calls on what kind of traction you're getting specifically in that access control area, because I don't believe you've historically talked about that?

Yes, we've talked about it, but less so. But yes, we certainly will keep updating.

And as you heard in this update, we focused on it a little more. We want to keep our focus on RFID and the growth driver there.

But there's really interesting stuff going on in the physical security side, on our product side, and on the -- the market is really very receptive to exactly the way we're positioned. So we'll keep updating.

And this access control offering here with the card readers, that's growing what kind of percent, 20%, 30%, 40%? It sounds like it's going from a small base to significant or at least a dramatic increase.

Yes, we've actually always had a good position in readers, and the -- but I think you'll see growth across the product line because that's what we're seeing. So we now are the only company that has readers, access, video, and credentials all across, and you can buy the whole thing from one vendor, but they're also interoperable, so you're not tied in.

And that, we're finding is a very effective selling value preposition. I mentioned in the comments that we're going to have a couple of lighthouse accounts, some major airports and some others that we'll be reporting on and I'm sure will let us be doing case studies on it.

And in those cases, it'll be the whole platform that I'm talking about and the integrated capability and a step-up in level of security, as well as very cost-effective. So we'll have a lot to say about that.

Great. Thank you.

Thanks Brian.

Yes, thanks for taking the question and congratulations on that nice execution and appreciate some of the additional information that you provided, especially around those customer confirmed orders. I wanted to start by just inquiring about one of the projects that you mentioned, the mobile customer 10 million unit project.

Can you provide some further color on what's different about that project versus some of the others? And is there other activity at that customer that is possible beyond this incremental one that you're working on?

So I'll touch on it and then I'll turn it over to Manfred to comment as well. And so this is design number nine I think for this customer, and Manfred can correct me.

And so what I was just highlighting was a new design and the ramp up of that and that the projections look more than we expected, while I think several of the other designs are still running as well. So we expect to continue to do more designs and more growth.

And it seems like the devices these are going into our getting pretty good traction. So it's -- it seemed like it was worth highlighting and particularly that second and third quarter, you tend to see seasonal growth cycles with them as well and this are particularly strong ones.

So that was the context there. Manfred, do you want to add some commentary on there?

Yes, it's basically two-folds Craig. First is the continuation of the relationship with the fourth program that we are ramping right now.

And again, as Steve rightfully a stated, we're hitting 10 designs very soon with them. And then with some of the, let's say previous ones which typically has a lifetime of like two to three years still in production.

We are basically adding all the new ones on top. So it's a very, very nice run rate growing at steady-state.

That's really helpful guys. The next question I have is for Justin, so I wanted to come back to gross margin, maybe push on it a little bit so great to see the strong progress quarter-on-quarter.

And I think equally impressive with the result was the details, Steve, that you provided and Justin you provided around the various initiatives that are driving gross merchant improvement. So the question really relates to that with the company having a number of different levers and with it so focused on gross margin expansion.

Why would gross margin speak flat sequentially? From here why wouldn't the initiatives that the company's working on, result in rising gross margin through the year?

I think if you're looking at premises in Q1 as a percentage of total revenue, it came in around 42% of total revenues. We expect that will go to its more historic levels of the 39%, 38% and it has this overall higher margin associated with it.

So as we start to balance that out, as Identity takes off, as we expect it to being in a lower-margin, we're saying overall total company margins are going to be relatively stable and flat. So hopefully that gives you the color you need.

Got it. And I did notice the premises was entered a very strong 57%.

So good for the team on that front. The second question that I had that's more -- the middle of the income statement may still be with you.

There may be and mare PC or but the increase in operating expense quarter-on-quarter. Can you just help us with the degree to which -- and this is excluding the charge in the prior quarter, but organically, how much of the increase would've been increased sales for some of the global opportunity pursuit that's underway, versus things like fica or typical annual comp increases, et cetera.

And what we've asking out with OPEX as we go through the rest of the year, flattish from here or would there be upward pressure in any area?

So the vast majority of it is in sales, SAEs, sales engineers that categories you would expect. And do we do that hiring in the fourth quarter of last year?

So you would expect that tend to be normalized through the year. And so there will still be a little trending up as you go quarter-to-quarter-to-quarter, as we continue to add in some of your customer-facing areas.

But at a, percentage-wise, lower rate. I think that's the right way to say it.

And talking about numbers, I should be turning it over to Justin to coming on that to please clarify any I got. Yeah.

I think, in Q1, if we're talking about Q4 to Q1, Steve really hit on it. It's a full quarter impact of Q4 hires.

We did have a few Q1 hires as well. That will be reflected in it as a full quarter impact in Q2, particularly in R&D and SG&A.

Travel is up, so COVID restrictions are coming down. So just looking in line by line and some of our APEX.

We're seeing an increase in travel and we're getting back on to the trades upfront and seeing some pressure on APEX as the latter area as well. And we expect that to [indiscernible]

Sure. Got it.

And then if I could -- Steve, you did a great job going into detail on the opportunity that you have in Canada, both in talking about all the different ways that you're engaging both in the U.S. and in Canada and really scoping that opportunity.

My question is this, as you're engaged with U.S. entities and in Canada, does it look to you like RFID is going to be the only way they implement their tracking and some of their assurance and security and control, or would there be other technologies that they're also looking at from which RFID would have some than remaining percentage of solution?

Yeah, let me turn that over to Amir because he's been working the closest with them, so might as well get it straight from him since he's on the phone.

Sure. The indication and trends are really that they're all-in on RFID.

And the reason why is the existing legacy technologies with bar codes, they require line of sight. And what they've seen is its volume ramps, and as they start to burden the supply chain more and more, these readers that they have in place right now, they have to require that each package or each vial as they go through the supply chain, they're basically positioned right so they're reading the bar codes in a proper format.

With RFID, they eliminate all of that because it doesn't require line of sight, and even if it's embedded, no matter what positioning the package [indiscernible] they'll be able to have that traceability behind it. And then, they're also getting the second half of the value, which is really the consumer side of it, with the authentication, knowing who the consumer is, and all of the post-purchase benefits of it.

So the indication is that really that they're all in our RFID and it really touches on both sides, supply chain and the consumer side.

Got it. Thanks, team.

Thanks, Craig.

Alright. Thanks, Operator.

And thank you all for joining us this evening. To keep connected with our progress, we've actually got several events coming up in the next couple of months.

Well of course be a major presence at RFID journal live in Las Vegas in a couple of weeks. And anyone who can make it out there really is a good way to get it since the industry and how it's moving it also our position in the industry.

Also among an investor events will be at the B. Riley conference on May 25th in LA.

The Craig Hallum Institutional Investor Conference is June 1st, which is virtual. And then that's difficult cross the sector insight conference on June 7th, is in Boston.

So we are trying to get our business opportunity message out there fairly proactively. And we will also probably do some other investor outreach and events and we'll certainly keep you posted as we implement those.

And of course, please reach out to the Investor Relations or Justin if you have any other questions. Thanks everybody for joining us and have a good evening.