Impinj Reports First Quarter 2023 Financial Results

About this update from Impinj, Inc.

SEATTLE --(BUSINESS WIRE)-- Impinj, Inc. (NASDAQ: PI), a leading provider and pioneer of RAIN RFID solutions, today released its financial results for the first quarter ended March 31, 2023 . “Our first-quarter results were solid, with record revenue and a very strong multi-quarter endpoint IC backlog,” said Chris Diorio , Impinj co-founder and CEO. “With confidence in our platform solutions and the secular market growth, we are well positioned to capitalize on our opportunity.” First Quarter 2023 Financial Summary Revenue of $85.9 million GAAP gross margin of 50.7%; non-GAAP gross margin of 52.4% GAAP net loss of $4.4 million , or loss of $(0.17) per diluted share using 26.3 million shares Adjusted EBITDA of $8.6 million Non-GAAP net income of $8.7 million , or income of $0.30 per diluted share using 28.6 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 2023 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 2023 (in millions, except per share data): Three Months Ending June 30, 2023 Revenue $84.0 to $87.0 GAAP Net loss ( $6.8 ) to ( $5.3 ) Adjusted EBITDA income $8.8 to $10.3 GAAP Weighted-average shares — basic and diluted 26.60 to 26.80 GAAP Net loss per share — basic and diluted ( $0.25 ) to ( $0.20 ) Non-GAAP Net income $8.2 to $9.7 Non-GAAP Weighted-average shares — basic 26.60 to 26.80 Non-GAAP Weighted-average shares — diluted 28.80 to 29.00 Non-GAAP Net income per share — basic $0.31 to $0.36 Non-GAAP Net income per share — diluted $0.28 to $0.33 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 26, 2023 at 5:00 p.m. ET / 2:00 p.m. PT to discuss its first-quarter 2023 results, as well as its outlook for its second-quarter 2023. Interested parties may access the call by dialing +1-412-317-5196. 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 +1-412-317-0088 and entering passcode 1025662. Management’s prepared written remarks, along with quarterly financial data, will be made available on the company’s website at investor.impinj.com along with this release. Impinj Investor Day 2023 Impinj will host an Investor Day on June 13, 2023 , beginning at 4:30 p.m. ET / 1:30 p.m. PT . A live audio webcast and replay of the presentations with slides will be available on the company’s website at investor.impinj.com . Due to limited space, in-person attendance is by invitation only. 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, as well as financial considerations for the second quarter of 2023 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, 2023 December 31, 2022 Assets: Current assets: Cash and cash equivalents $ 37,483 $ 19,597 Short-term investments 117,061 154,148 Accounts receivable, net 60,966 49,996 Inventory 85,809 46,397 Prepaid expenses and other current assets 3,835 5,032 Total current assets 305,154 275,170 Long-term investments 10,177 19,200 Property and equipment, net 41,800 39,027 Operating lease right-of-use assets 9,795 10,490 Other non-current assets 1,844 1,969 Goodwill 3,881 3,881 Total assets $ 372,651 $ 349,737 Liabilities and stockholders' equity (deficit): Current liabilities: Accounts payable $ 36,713 $ 25,024 Accrued compensation and employee related benefits 7,042 9,048 Accrued and other current liabilities 7,381 2,925 Current portion of operating lease liabilities 2,966 3,122 Current portion of deferred revenue 502 2,250 Total current liabilities 54,604 42,369 Long-term debt, net of current portion 280,644 280,244 Operating lease liabilities, net of current portion 10,331 11,066 Other long-term liabilities 134 118 Deferred revenue, net of current portion 317 349 Total liabilities 346,030 334,146 Stockholders' equity: Common stock, $0.001 par value 27 26 Additional paid-in capital 418,342 403,599 Accumulated other comprehensive loss (605 ) (1,249 ) Accumulated deficit (391,143 ) (386,785 ) Total stockholders' equity 26,621 15,591 Total liabilities and stockholders' equity (deficit) $ 372,651 $ 349,737 IMPINJ, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data, unaudited) Three Months Ended March 31 , 2023 2022 Revenue $ 85,897 $ 53,144 Cost of revenue 42,367 24,365 Gross profit 43,530 28,779 Operating expenses: Research and development 22,435 17,989 Sales and marketing 9,973 9,299 General and administrative 15,564 10,806 Total operating expenses 47,972 38,094 Income (loss) from operations (4,442 ) (9,315 ) Other income, net 1,365 164 Interest expense (1,209 ) (1,261 ) Loss before income taxes (4,286 ) (10,412 ) Income tax expense (72 ) (49 ) Net loss $ (4,358 ) $ (10,461 ) Net loss per share — basic and diluted $ (0.17 ) $ (0.42 ) Weighted-average shares — basic and diluted 26,285 24,980 IMPINJ, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited) Three Months Ended March 31 , 2023 2022 Operating activities: Net loss $ (4,358 ) $ (10,461 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 1,793 1,508 Stock-based compensation 10,224 11,314 Accretion of discount or amortization of premium on investments (766 ) 301 Amortization of debt issuance costs 400 403 Changes in operating assets and liabilities: Accounts receivable (10,970 ) (3,084 ) Inventory (39,412 ) (9,603 ) Prepaid expenses and other assets 1,389 (2,142 ) Accounts payable 14,650 (2,768 ) Accrued compensation and employee related benefits (2,006 ) (1,775 ) Accrued and other liabilities 4,472 1,242 Operating lease right-of-use assets 695 804 Operating lease liabilities (891 ) (1,008 ) Deferred revenue (1,780 ) 433 Net cash used in operating activities (26,560 ) (14,836 ) Investing activities: Purchases of investments — (67,085 ) Proceeds from sales of investments 13,372 — Proceeds from maturities of investments 34,136 20,000 Purchases of property and equipment (7,582 ) (3,050 ) Net cash provided by (used in) investing activities 39,926 (50,135 ) Financing activities: Proceeds from exercise of stock options and employee stock purchase plan 4,520 4,611 Net cash provided by financing activities 4,520 4,611 Net increase (decrease) in cash and cash equivalents 17,886 (60,360 ) Cash and cash equivalents Beginning of period 19,597 123,903 End of period $ 37,483 $ 63,543 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; restructuring costs; settlement and related costs; induced conversion expense; other income, net; interest expense; loss on debt extinguishment; income tax benefit (expense); and acquisition transaction expense. During the first quarter of 2023, we revised our definition of adjusted EBITDA to exclude acquisition transaction expenses in connection with our Voyantic Oy acquisition. We have excluded these costs and expenses 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 (loss) as net income (loss), excluding, if applicable for the periods presented, the effects of stock-based compensation; depreciation; restructuring costs; settlement and related costs; amortization of debt discount related to the equity component of our convertible notes; and prepayment penalty on debt extinguishment. During the first quarter of 2023, we revised our definition of non-GAAP net income (loss) to exclude acquisition transaction expenses in connection with our Voyantic Oy acquisition. GAAP requires that certain convertible debt instruments that may be settled in cash on conversion be accounted for as separate liability and equity components in a manner that reflects our non-convertible debt borrowing rate. This accounting results in the debt component being treated as though it was issued at a discount, with the debt discount being amortized as additional non-cash interest expense over the debt instrument term using the effective interest method. As a result, we believe that excluding this non-cash interest expense attributable to the debt discount in calculating our non-GAAP net income (loss) is useful because this interest expense is not indicative of our ongoing operational performance. IMPINJ, INC. RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (in thousands, except percentages, unaudited) Three Months Ended March 31 , 2023 2022 GAAP Gross margin 50.7 % 54.2 % Adjustments: Depreciation 1.2 % 1.7 % Stock-based compensation 0.5 % 1.1 % Non-GAAP Gross margin 52.4 % 57.0 % GAAP Net loss $ (4,358 ) $ (10,461 ) Adjustments: Depreciation 1,793 1,508 Stock-based compensation 10,224 11,314 Other income, net (1,365 ) (164 ) Interest expense 1,209 1,261 Income tax expense 72 49 Acquisition transaction expense 1,042 — Adjusted EBITDA $ 8,617 $ 3,507 GAAP Net loss $ (4,358 ) $ (10,461 ) Adjustments: Depreciation 1,793 1,508 Stock-based compensation 10,224 11,314 Acquisition transaction expense 1,042 — Non-GAAP Net income $ 8,701 $ 2,361 Non-GAAP Net income per share: Basic $ 0.33 $ 0.09 Diluted $ 0.30 $ 0.09 GAAP Weighted-average shares — diluted 26,285 24,980 Dilutive shares from stock plans 2,268 2,001 Non-GAAP Weighted-average shares — diluted 28,553 26,981 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 , 2023 GAAP Net loss $ (6,010 ) Adjustments: Forecasted Depreciation 1,930 Forecasted Stock-based compensation 13,060 Forecasted Interest expense 1,260 Forecasted Other income, net (750 ) Forecasted Income tax expense 60 Adjusted EBITDA $ 9,550 GAAP Net loss $ (6,010 ) Adjustments: Forecasted Depreciation 1,930 Forecasted Stock-based compensation 13,060 Non-GAAP Net income $ 8,980 GAAP Net loss per share — basic and diluted $ (0.23 ) Non-GAAP Net income per share Basic $ 0.34 Diluted $ 0.31 GAAP weighted-average shares — basic and diluted 26,700 Non-GAAP weighted-average shares — basic 26,700 Dilutive shares from stock plans 2,200 Non-GAAP weighted-average shares — diluted 28,900 View source version on businesswire.com : https://www.businesswire.com/news/home/20230426005796/en/ Investor Relations Andy Cobb , CFA Vice President, Strategic Finance +1-206-315-4470 [email protected] Media Relations Jill West Vice President, Strategic Communications +1 206-834-1110 [email protected] Source: Impinj, Inc.

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