Impinj Reports First Quarter 2024 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, 2024.

“2024 started strong, with revenue and profitability exceeding both our fourth-quarter results and first-quarter guidance,” said Chris Diorio, Impinj co-founder and CEO. “As we continue driving our bold vision to connect every item in our everyday world, I remain confident in our market position and energized by the opportunities ahead.”

First Quarter 2024 Financial Summary

• Revenue of $76.8 million
• GAAP gross margin of 48.9%; non-GAAP gross margin of 51.5%
• GAAP net income of $33.3 million, or income of $1.10 per diluted share using 31.4 million shares
• Adjusted EBITDA of $6.7 million
• Non-GAAP net income of $6.2 million, or income of $0.21 per diluted share using 28.8 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 2024 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 of 2024 (in millions, except per share data):

	Three Months Ending
	June 30, 2024^(1)
Revenue	$96.0 to $99.0
GAAP Net income	$5.9 to $7.4
Adjusted EBITDA income	$23.9 to $25.4
GAAP Weighted-average shares — diluted	29.0 to 29.4
GAAP Net income per share — diluted	$0.20 to $0.25
Non-GAAP Net income	$21.7 to $23.2
Non-GAAP Weighted-average shares — diluted^(2)	31.7 to 31.9
Non-GAAP Net income per share — diluted^(2)	$0.72 to $0.77

⁽¹⁾ The outlook for our revenue and related results for the second quarter ended June 30, 2024 includes $15 million related to recognition of an annual license fee for use of our intellectual property.
⁽²⁾ Non-GAAP diluted net income per share includes the impact of our convertible debt using the if-converted method, which assumes full share settlement. Interest expense is added back to net income and weighted average shares includes total shares issuable at conversion of 2.6 million.

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

Conference Call Information

Impinj will host a conference call today, April 24, 2024 at 5:00 p.m. ET / 2:00 p.m. PT to discuss its first-quarter 2024 results, as well as its outlook for its second-quarter 2024. 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 3992794.

Management’s prepared written remarks, along with quarterly financial data, will be made available on Impinj’s 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 our strategy, investment plans and prospects, statements regarding conditions in the markets in which we compete as well as the broader economy, and our financial guidance and considerations for the second quarter of 2024 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, 2024			December 31, 2023
Assets:
Current assets:
Cash and cash equivalents	$	166,852		$	94,793
Short-term investments		7,292			18,440
Accounts receivable, net		59,384			54,919
Inventory		87,757			97,172
Prepaid expenses and other current assets		3,120			4,372
Total current assets		324,405			269,696
Property and equipment, net		47,451			44,891
Intangible assets, net		12,207			13,913
Operating lease right-of-use assets		9,107			9,735
Other non-current assets		1,370			1,478
Goodwill		19,343			19,696
Total assets	$	413,883		$	359,409
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable	$	9,416		$	8,661
Accrued compensation and employee related benefits		8,207			8,519
Accrued and other current liabilities		11,694			8,614
Current portion of operating lease liabilities		3,454			3,373
Current portion of deferred revenue		1,672			1,713
Total current liabilities		34,443			30,880
Long-term debt		282,262			281,855
Operating lease liabilities, net of current portion		8,444			9,360
Deferred tax liabilities, net		2,574			2,911
Deferred revenue, net of current portion		237			272
Total liabilities		327,960			325,278
Stockholders' equity:
Common stock, $0.001 par value		28			27
Additional paid-in capital		482,972			463,900
Accumulated other comprehensive income (loss)		(270	)		355
Accumulated deficit		(396,807	)		(430,151	)
Total stockholders' equity		85,923			34,131
Total liabilities and stockholders' equity	$	413,883		$	359,409

IMPINJ, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data, unaudited)
	Three Months Ended
	March 31,
	2024					2023
Revenue	$	76,825				$	85,897
Cost of revenue		39,277					42,367
Gross profit		37,548					43,530
Operating expenses:
Research and development		22,519					22,435
Sales and marketing		10,176					9,973
General and administrative		13,365					15,564
Amortization of intangibles		1,409					—
Restructuring costs		1,812					—
Total operating expenses		49,281					47,972
Income (loss) from operations		(11,733	)				(4,442	)
Other income, net		1,292					1,365
Income from settlement of litigation		45,000					—
Interest expense		(1,216	)				(1,209	)
Income (loss) before income taxes		33,343					(4,286	)
Income tax benefit (expense)		1					(72	)
Net income (loss) per share attributable to common stockholders:	$	33,344				$	(4,358	)
Net income (loss) per share — basic	$	1.22				$	(0.17	)
Net income (loss) per share — diluted	$	1.10		^(1	^)	$	(0.17	)
Weighted-average shares outstanding — basic		27,357					26,285
Weighted-average shares outstanding — diluted		31,425		^(1	^)		26,285

⁽¹⁾ Diluted net income per share includes the impact of our convertible debt using the if-converted method, which assumes full share settlement. Interest expense is added back to net income and weighted average shares includes total shares issuable at conversion of 2.6 million.

IMPINJ, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited)
	Three Months Ended
	March 31,
	2024			2023
Operating activities:
Net income (loss)	$	33,344		$	(4,358	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		3,909			1,793
Stock-based compensation		11,790			10,224
Restructuring equity modification expense		366			—
Accretion of discount or amortization of premium on investments		(67	)		(766	)
Amortization of debt issuance costs		407			400
Deferred tax expense		(278	)		—
Revaluation of acquisition-related contingent consideration liability		907			—
Changes in operating assets and liabilities, net of amounts acquired:
Accounts receivable		(4,503	)		(10,970	)
Inventory		9,400			(39,412	)
Prepaid expenses and other assets		1,355			1,389
Accounts payable		1,878			14,650
Accrued compensation and employee related benefits		(292	)		(2,006	)
Accrued and other liabilities		2,182			4,472
Operating lease right-of-use assets		614			695
Operating lease liabilities		(820	)		(891	)
Deferred revenue		(52	)		(1,780	)
Net cash provided by (used in) operating activities		60,140			(26,560	)
Investing activities:
Proceeds from sales of investments		—			13,372
Proceeds from maturities of investments		11,248			34,136
Purchases of property and equipment		(6,202	)		(7,582	)
Net cash provided by investing activities		5,046			39,926
Financing activities:
Proceeds from exercise of stock options and employee stock purchase plan		6,917			4,520
Net cash provided by financing activities		6,917			4,520
Effect of exchange rate changes on cash and cash equivalents		(44	)		—
Net increase in cash and cash equivalents		72,059			17,886
Cash and cash equivalents
Beginning of period		94,793			19,597
End of period	$	166,852		$	37,483

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 and amortization; restructuring costs; settlement income and related costs; induced conversion expense; other income, net; interest expense; acquisition related expense and related purchase accounting adjustments; and income tax benefit (expense). During the year ended December 31, 2023, we revised our definition of adjusted EBITDA to exclude acquisition related expenses, related purchase accounting adjustments, and amortization of intangibles in connection with our Voyantic Oy acquisition. During the three months ended March 31, 2024, we further revised our definition of adjusted EBITDA to exclude settlement income. We have excluded these items because we do not believe they reflect our core operations and us excluding them enables more consistent evaluation of our operating performance. The revision to our definition of adjusted EBITDA did not impact adjusted EBITDA for any previously reported periods because there was no impact of a similar nature in such prior periods affecting comparability.

Non-GAAP Net Income (Loss)

We define non-GAAP net income as net income (loss), excluding, if applicable for the periods presented, the effects of stock-based compensation; depreciation and amortization; restructuring costs; settlement income and related costs; induced conversion expense; acquisition related expense and related purchase accounting adjustments; and the corresponding income tax impacts of adjustments to net income (loss).

During the year ended December 31, 2023, we revised our definition of non-GAAP net income to adjust for acquisition related expenses, related purchase accounting adjustments, and amortization of intangibles in connection with our Voyantic Oy acquisition. During the three months ended March 31, 2024, we further revised our definition of non-GAAP net income to exclude settlement income. The revisions to our definition of non-GAAP net income did not impact non-GAAP net income for any previously reported periods because there was no impact of a similar nature in such prior periods affecting comparability.

Additionally, during the year ended December 31, 2023, we revised our definition of non-GAAP net income (loss) to adjust for income tax effects of adjustments to net income (loss), calculated at the statutory rate for current and historical periods. We have revised the prior period amounts to conform to our current period presentation.

IMPINJ, INC. RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (in thousands, except percentages, unaudited)
	Three Months Ended
	March 31,
	2024			2023
GAAP Gross margin		48.9	%		50.7	%
Adjustments:
Depreciation and amortization		2.0	%		1.2	%
Purchase accounting adjustments		0.0	%		0.0	%
Stock-based compensation		0.6	%		0.5	%
Non-GAAP Gross margin		51.5	%		52.4	%
GAAP Net income (loss)	$	33,344		$	(4,358	)
Adjustments:
Depreciation and amortization		3,909			1,793
Stock-based compensation		11,790			10,224
Restructuring costs		1,812			—
Acquisition related expenses		907			1,042
Other income, net		(1,292	)		(1,365	)
Income from settlement of litigation		(45,000	)		—
Interest expense		1,216			1,209
Income tax expense (benefit)		(1	)		72
Adjusted EBITDA	$	6,685		$	8,617
GAAP Net income (loss)	$	33,344		$	(4,358	)
Adjustments:
Depreciation and amortization		3,909			1,793
Stock-based compensation		11,790			10,224
Restructuring costs		1,812			—
Acquisition transaction expenses		907			1,042
Income from settlement of litigation		(45,000	)		—
Income tax effects of adjustments ^(1)		(591	)		(818	)
Non-GAAP Net income	$	6,171		$	7,883
Non-GAAP Net income per share — diluted	$	0.21		$	0.28
GAAP Weighted-average shares — diluted		31,425			26,285
Dilutive shares from stock plans		—			2,268
Anti-dilutive shares from convertible debt		(2,589	)		—
Non-GAAP Weighted-average shares — diluted		28,836			28,553

⁽¹⁾ The tax effects of the adjustments are calculated using the statutory rate, taking into consideration the nature of the item and relevant taxing jurisdictions.

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,
	2024
GAAP Net income	$	6,668
Adjustments:
Forecasted Depreciation and amortization		3,159
Forecasted Stock-based compensation		14,865
Forecasted Interest expense		1,258
Forecasted Other income, net		(1,300	)
Forecasted Income tax expense		(50	)
Adjusted EBITDA	$	24,600
GAAP Net income	$	6,668
Adjustments:
Forecasted Depreciation and amortization		3,159
Forecasted Stock-based compensation		14,865
Forecasted Income tax effects of adjustments		(2,201	)
Non-GAAP Net income	$	22,491
GAAP Net income per share — diluted	$	0.23
Non-GAAP Net income per share — diluted^(1)	$	0.75
GAAP weighted-average shares — diluted		29,200
Dilutive shares from convertible debt		2,600
Non-GAAP weighted-average shares — diluted^(1)		31,800

⁽¹⁾ Non-GAAP diluted net income per share includes the impact of our convertible debt using the if-converted method, which assumes full share settlement. Interest expense is added back to net income and weighted average shares includes total shares issuable at conversion of 2.6 million.