Impinj Reports First Quarter 2024 Financial Results

About this update from Impinj, Inc.

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 +1-412-317-1863. 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 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. View source version on businesswire.com : https://www.businesswire.com/news/home/20240424296191/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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