UBS Global Technology and AI Conference
Notes below try and stick to the conversation closely and be factually correct. If you can listen, I would be interested to hear what you think of the CAGR conversation, is Cary tipping a return to impressive CAGR growth in 2026?
Cary Baker
- RFID 28% CAGR since 2010, largely on apparel
- the platform is capable of delivering that CAGR and is now based on the four verticals apparel, general merch, logistics, and food - the latter 3 are still foundation building (my note all are potentially, significantly larger too)
- auto and pharmaceuticals are future opportunities, use cases exist but industries have not started adoption
- software is being used to make reading easier and machine learning at the edge, software controls the reading environment, 0 touch, self adjusts, goal is to make it easier and faster to deploy
- explained how they monitor channel inventory, monthly reports from channel partners, feedback from lighthouse customers, track some companies to get the macro
- Food is at the 0-20% ramp so is slow
- 8 global food retailers looking at RAIN (host said this not Cary)
- size of food opportunity that people are putting out there is reasonable
- labeling the middle isles of the store requires getting the cpg companies to participate (like general merchandise)
- logistics pilots ongoing, depending on speed there could be impact in 2026
- Kroger could add meats and deli
- Walmart is just getting started
- Apparel going forward, 40% penetrated (2024), 90% by brand, lot of expansion left for customers adding categories (Old Navy and American Apparel new for 2025)
- Walmart general merchandise has been lengthy, working with suppliers was slow and has been moving well. Tariff impacts changed location and impacted deployments
- Expects a phase 3 for Walmart in 2026, have been working on categories and tags
- Logistics UPS is out front and vocal about the ROI, seeing a real sense of urgency to catch up, see it in the pipeline and the pilots. Depends on how early the pilots shift to deployment will determine impact on 2026 business
- convertible debt, 190M 0% convert, reduced coupon and reduced dilution. Split up the maturities of the balance, this is the path off the debt and to retire notes in a dilutive friendly way
- more advanced process node to remove cost still out there, still some cost advantages at 65nm also
- not seeing the SAS or cloud software yet, building the team now and they will be charged with building the product, it will have recurring revenue and SAS like margins
- endpoint ICs will always be lions share, systems will be lumpy, few years out from software providing meaningful revenue
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