Impinj Reports First Quarter 2022 Financial Results

SEATTLE--(BUSINESS WIRE)--Impinj, Inc. (NASDAQ: PI), a leading RAIN RFID provider and Internet of Things pioneer, today released its financial results for the first quarter ended March 31, 2022.

“Our first-quarter results were strong, with demand for our endpoint ICs, reader ICs, readers and gateways all showing extraordinary strength,” said Chris Diorio, Impinj co-founder and CEO. “We delivered record revenue and solid profitability while investing in our team, company and platform.”

First Quarter 2022 Financial Summary

• Revenue of $53.1 million
• GAAP gross margin of 54.2%; non-GAAP gross margin of 57.0%
• GAAP net loss of $10.5 million, or loss of $(0.42) per diluted share using 25.0 million shares
• Adjusted EBITDA of 3.5 million
• Non-GAAP net income of 2.4 million, or income of $0.09 per diluted share using 27.0 million shares

A reconciliation between GAAP and non-GAAP information is contained in the tables below. Additionally, descriptions of these non-GAAP financial measures are provided in the “Non-GAAP Financial Measures” sections below.

Second Quarter 2022 Financial Outlook

Impinj provides guidance based on current market conditions and expectations; actual results may differ materially. Please refer to the comments below regarding forward-looking statements. The following table presents Impinj’s financial outlook for the second quarter 2022 (in millions, except per share data):

	Three Months Ending
	June 30, 2022
Revenue	$54.0 to $56.0
GAAP Net loss	($13.5) to ($12.0)
Adjusted EBITDA income (loss)	$0.1 to $1.6
GAAP Weighted-average shares — basic and diluted	25.30 to 25.50
GAAP Net loss per share — basic and diluted	($0.54 ) to ($0.47 )
Non-GAAP net income (loss)	($1.1 ) to $0.4
Non-GAAP Weighted-average shares — basic	25.30 to 25.50
Non-GAAP Weighted-average shares — diluted	25.30 to 27.20
Non-GAAP Net income (loss) per share — basic and diluted	($0.05) to $0.01

A reconciliation between GAAP and non-GAAP is provided in the "Non-GAAP Financial Measures" section below.

Conference Call Information

Impinj will host a conference call today, April 27, 2022 at 5:00 p.m. ET / 2:00 p.m. PT to discuss its first quarter 2022 results, as well as its outlook for its second quarter 2022. Interested parties may access the call by dialing [phone]. A live webcast and replay will also be available on the company’s website at investor.impinj.com. Following the call, a telephonic replay will be available for five business days and may be accessed by dialing [phone] and entering passcode 4398646.

Management’s prepared written remarks, along with quarterly financial data, will be made available on our website at investor.impinj.com along with this release.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding the market for RAIN RFID, our strategy, our prospects, the impact of Covid-19, the impact of silicon wafer availability and supply, and financial considerations for second quarter of 2022 and future periods.

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance.

The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the U.S. Securities and Exchange Commission. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update this information unless required by law.

About Impinj

Impinj (NASDAQ: PI) helps businesses and people analyze, optimize, and innovate by wirelessly connecting billions of everyday things — such as apparel, automobile parts, luggage, and shipments — to the Internet. The Impinj platform uses RAIN RFID to deliver timely data about these everyday things to business and consumer applications, enabling a boundless Internet of Things. www.impinj.com

Impinj is a registered trademark of Impinj, Inc. All other trademarks are the property of their owners.

IMPINJ, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except par value, unaudited)
	March 31, 2022 ^(1)			December 31, 2021 ^(1)
Assets:
Current assets:
Cash and cash equivalents	$	63,543		$	123,903
Short-term investments		101,724			69,443
Accounts receivable, net		38,533			35,449
Inventory		31,561			21,958
Prepaid expenses and other current assets		7,195			5,049
Total current assets		242,556			255,802
Long-term investments		28,144			14,225
Property and equipment, net		29,133			27,500
Operating lease right-of-use assets		10,863			11,667
Other non-current assets		2,365			2,462
Goodwill		3,881			3,881
Total assets	$	316,942		$	315,537
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable	$	9,103		$	11,732
Accrued compensation and employee related benefits		4,590			6,365
Accrued and other current liabilities		3,878			2,481
Current portion of operating lease liabilities		3,967			4,143
Restructuring liabilities		554			591
Current portion of long-term debt		9,643			9,633
Current portion of deferred revenue		907			558
Total current liabilities		32,642			35,503
Long-term debt, net of current portion		279,054			278,661
Operating lease liabilities, net of current portion		11,102			11,934
Other long-term liabilities		113			279
Deferred revenue, net of current portion		320			236
Total liabilities		323,231			326,613
Stockholders' equity:
Common stock, $0.001 par value		25			25
Additional paid-in capital		367,347			351,422
Accumulated other comprehensive (loss) income		(716	)		(39	)
Accumulated deficit		(372,945	)		(362,484	)
Total stockholders' equity		(6,289	)		(11,076	)
Total liabilities and stockholders' equity	$	316,942		$	315,537
(1) We adopted ASU 2020-06 on January 1, 2021 using modified retrospective transition method and accounted for our convertible notes due 2026, or the 2019 Notes, on a whole-instrument basis. Upon adoption, we no longer had unamortized debt discount related to the equity component of the 2019 Notes. The condensed consolidated financial statements under both periods are presented under ASU 2020-06.

IMPINJ, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data, unaudited)
	Three Months Ended
	March 31,
	2022			2021
Revenue	$	53,144		$	45,248
Cost of revenue		24,365			23,267
Gross profit		28,779			21,981
Operating expenses:
Research and development		17,989			13,791
Sales and marketing		9,299			7,645
General and administrative		10,806			8,154
Restructuring costs		—			1,263
Total operating expenses		38,094			30,853
Loss from operations		(9,315	)		(8,872	)
Other income, net		164			23
Interest expense		(1,261	)		(525	)
Loss before income taxes		(10,412	)		(9,374	)
Income tax expense		(49	)		(42	)
Net loss	$	(10,461	)	$	(9,416	)
Net loss per share — basic and diluted	$	(0.42	)	$	(0.40	)
Weighted-average shares — basic and diluted		24,980			23,671

IMPINJ, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited)
	Three Months Ended
	March 31,
	2022			2021
Operating activities:
Net loss	$	(10,461	)	$	(9,416	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		1,508			1,040
Stock-based compensation		11,314			7,449
Accretion of discount or amortization of premium on investments		301			218
Amortization of debt issuance costs		403			94
Changes in operating assets and liabilities:
Accounts receivable		(3,084	)		1,498
Inventory		(9,603	)		8,262
Prepaid expenses and other assets		(2,142	)		880
Accounts payable		(2,768	)		(2,137	)
Accrued compensation and employee related benefits		(1,775	)		345
Accrued and other liabilities		1,279			722
Operating lease right-of-use assets		804			723
Operating lease liabilities		(1,008	)		(911	)
Restructuring liabilities		(37	)		1,235
Deferred revenue		433			(633	)
Net cash provided by (used in) operating activities		(14,836	)		9,369
Investing activities:
Purchases of investments		(67,085	)		(12,333	)
Proceeds from maturities of investments		20,000			25,000
Purchases of property and equipment		(3,050	)		(4,398	)
Net cash provided by (used in) investing activities		(50,135	)		8,269
Financing activities:
Principal payments on finance lease obligations		—			(2	)
Proceeds from exercise of stock options and employee stock purchase plan		4,611			8,524
Net cash provided by financing activities		4,611			8,522
Net increase (decrease) in cash and cash equivalents		(60,360	)		26,160
Cash and cash equivalents
Beginning of period		123,903			23,636
End of period	$	63,543		$	49,796

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements prepared and presented in accordance with U.S. generally accepted accounting principles, or GAAP, our key non-GAAP performance measures include adjusted EBITDA and non-GAAP net income (loss), as defined below. We use adjusted EBITDA and non-GAAP net income (loss) as key measures to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operating plans. We believe these measures provide useful information for period-to-period comparisons of our business to allow investors and others to understand and evaluate our operating results in the same manner as our management and board of directors. Our presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from similarly termed non-GAAP measures used by other companies.

Adjusted EBITDA

We define adjusted EBITDA as net income (loss) determined in accordance with GAAP, excluding, if applicable for the periods presented, the effects of stock-based compensation; depreciation; investigation costs; restructuring costs; settlement and related costs; other income, net; interest expense; loss on debt extinguishment; and income tax benefit (expense).

Non-GAAP Net Income (Loss)

We define non-GAAP net income (loss) as net income (loss), excluding, if applicable for the periods presented, the effects of stock-based compensation; depreciation; investigation costs; restructuring costs; settlement and related costs; amortization of debt discount related to the equity component of our convertible notes prior to the adoption of ASU 2020-06; and prepayment penalty on debt extinguishment.

On January 1, 2021, we adopted ASU 2020-06 using the modified retrospective transition method, accounting for the 2019 Notes on a whole-instrument basis. Upon adoption, the condensed consolidated financial statements for the three months ended March 31, 2022 and March 31, 2021, are presented under the new standard and we no longer recorded amortization of debt discount.

IMPINJ, INC. RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (in thousands, except percentages, unaudited)
	Three Months Ended
	March 31,
	2022			2021
GAAP Gross margin		54.2	%		48.6	%
Adjustments:
Depreciation		1.7	%		1.1	%
Stock-based compensation		1.1	%		0.6	%
Non-GAAP Gross margin		57.0	%		50.3	%
GAAP Net loss	$	(10,461	)	$	(9,416	)
Adjustments:
Depreciation		1,508			1,040
Stock-based compensation		11,314			7,449
Other income, net		(164	)		(23	)
Interest expense		1,261			525
Income tax expense		49			42
Restructuring costs		—			1,263
Adjusted EBITDA	$	3,507		$	880
GAAP Net loss	$	(10,461	)	$	(9,416	)
Adjustments:
Depreciation		1,508			1,040
Stock-based compensation		11,314			7,449
Restructuring costs		—			1,263
Non-GAAP Net income	$	2,361		$	336
Non-GAAP Net income per share:
Basic	$	0.09		$	0.01
Diluted	$	0.09		$	0.01
GAAP and non-GAAP Weighted-average shares — basic		24,980			23,671
GAAP Weighted-average shares — diluted		24,980			23,671
Dilutive shares from stock plans		2,001			1,983
Non-GAAP Weighted-average shares — diluted		26,981			25,654

IMPINJ, INC. RECONCILIATIONS OF GAAP FINANCIAL OUTLOOK TO NON-GAAP FINANCIAL OUTLOOK (in thousands, except per share data, unaudited – calculated at the midpoint of the outlook range)
	Three Months Ending
	June 30,
	2022
GAAP Net loss	$	(12,790	)
Adjustments:
Forecasted Depreciation		1,620
Forecasted Stock-based compensation		10,750
Forecasted Interest expense		1,260
Forecasted Other income, net		(30	)
Forecasted Income tax expense		30
Adjusted EBITDA	$	840
GAAP Net loss	$	(12,790	)
Adjustments:
Forecasted Depreciation		1,620
Forecasted Stock-based compensation		10,750
Non-GAAP Net loss	$	(420	)
GAAP Net loss per share — basic and diluted	$	(0.50	)
Non-GAAP Net loss per share — basic and diluted	$	(0.02	)
GAAP and Non-GAAP weighted-average shares — basic and diluted		25,400