Impinj Reports Fourth Quarter and Full Year 2023 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 fourth quarter and year ended December 31, 2023 . “2023 was another year of solid growth despite market headwinds, with annual revenue crossing the $300 million threshold for the first time,” said Chris Diorio , Impinj co-founder and CEO. “We delivered four quarters of positive adjusted EBITDA, successfully defended our intellectual property and introduced market-leading new products. As we continue driving our bold vision to connect every item in our everyday world, we remain confident in our market position and energized by the opportunities ahead.” Fourth Quarter 2023 Financial Summary Revenue of $70.7 million GAAP gross margin of 47.9%; non-GAAP gross margin of 50.9% GAAP net loss of $15.2 million , or loss of $0.56 per diluted share using 27.1 million shares Adjusted EBITDA of $3.0 million Non-GAAP net income of $2.5 million , or income of $0.09 per diluted share using 28.3 million shares Full Year 2023 Financial Summary Revenue of $307.5 million GAAP gross margin of 49.4%; non-GAAP gross margin of 51.9% GAAP net loss of $43.4 million , or loss of $1.62 per diluted share using 26.8 million shares Adjusted EBITDA of $21.8 million Non-GAAP net income of $19.8 million , or income of $0.70 per diluted share using 28.4 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. First 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 first quarter of 2024 (in millions, except per share data): Three Months Ending March 31, 2024 Revenue $72.0 to $75.0 GAAP Net loss ( $16.0 ) to ( $14.5 ) Adjusted EBITDA income $3.0 to $4.5 GAAP Weighted-average shares — basic and diluted 27.20 to 27.40 GAAP Net loss per share — basic and diluted ( $0.59 ) to ( $0.53 ) Non-GAAP Net income $2.2 to $3.7 Non-GAAP Weighted-average shares — basic 27.20 to 27.40 Non-GAAP Weighted-average shares — diluted 28.40 to 28.60 Non-GAAP Net income per share — basic $0.08 to $0.14 Non-GAAP Net income per share — diluted $0.08 to $0.13 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, February 8, 2024 at 5:00 p.m. ET / 2:00 p.m. PT to discuss its fourth-quarter and full-year 2023 results, as well as its outlook for its first-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 4299421. Management’s prepared written remarks, along with quarterly financial data, will be made available on the 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 first 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) December 31, 2023 December 31, 2022 Assets: Current assets: Cash and cash equivalents $ 94,793 $ 19,597 Short-term investments 18,440 154,148 Accounts receivable, net 54,919 49,996 Inventory 97,172 46,397 Prepaid expenses and other current assets 4,372 5,032 Total current assets 269,696 275,170 Long-term investments — 19,200 Property and equipment, net 44,891 39,027 Intangible assets, net 13,913 — Operating lease right-of-use assets 9,735 10,490 Other non-current assets 1,478 1,969 Goodwill 19,696 3,881 Total assets $ 359,409 $ 349,737 Liabilities and stockholders' equity: Current liabilities: Accounts payable $ 8,661 $ 25,024 Accrued compensation and employee related benefits 8,519 9,048 Accrued and other current liabilities 8,614 2,925 Current portion of operating lease liabilities 3,373 3,122 Current portion of deferred revenue 1,713 2,250 Total current liabilities 30,880 42,369 Long-term debt 281,855 280,244 Operating lease liabilities, net of current portion 9,360 11,066 Deferred tax liabilities, net 2,911 118 Deferred revenue, net of current portion 272 349 Total liabilities 325,278 334,146 Stockholders' equity: Common stock, $0.001 par value 27 26 Additional paid-in capital 463,900 403,599 Accumulated other comprehensive income (loss) 355 (1,249 ) Accumulated deficit (430,151 ) (386,785 ) Total stockholders' equity 34,131 15,591 Total liabilities and stockholders' equity $ 359,409 $ 349,737 IMPINJ, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data, unaudited) Three Months Ended Year Ended December 31 , December 31 , 2023 2022 2023 2022 Revenue $ 70,651 $ 76,590 $ 307,539 $ 257,800 Cost of revenue 36,781 36,422 155,557 119,916 Gross profit 33,870 40,168 151,982 137,884 Operating expenses: Research and development 21,136 18,982 88,562 74,106 Sales and marketing 10,445 9,655 41,123 37,894 General and administrative 15,730 11,577 60,828 45,465 Amortization of intangibles 1,398 — 4,953 — Restructuring costs — (102 ) — (102 ) Total operating expenses 48,709 40,112 195,466 157,363 Income (loss) from operations (14,839 ) 56 (43,484 ) (19,479 ) Other income, net 1,024 1,150 4,644 2,517 Induced conversion expense — — — (2,232 ) Interest expense (1,215 ) (1,207 ) (4,848 ) (4,923 ) Loss before income taxes (15,030 ) (1 ) (43,688 ) (24,117 ) Income tax benefit (expense) (150 ) (117 ) 322 (184 ) Net loss $ (15,180 ) $ (118 ) $ (43,366 ) $ (24,301 ) Net loss per share — basic and diluted $ (0.56 ) $ (0.00 ) $ (1.62 ) $ (0.95 ) Weighted-average shares — basic and diluted 27,089 26,005 26,752 25,539 IMPINJ, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited) Year Ended December 31 , 2023 2022 Operating activities: Net loss $ (43,366 ) $ (24,301 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 13,623 6,044 Stock-based compensation 47,986 42,443 Accretion of discount or amortization of premium on investments (1,637 ) (233 ) Amortization of debt issuance costs 1,611 1,601 Loss on fixed asset disposal — 57 Induced conversion expense related to convertible notes — 2,232 Deferred tax expense (931 ) — Revaluation of acquisition-related contingent consideration liability 1,570 — Changes in operating assets and liabilities, net of amounts acquired: Accounts receivable (3,713 ) (14,547 ) Inventory (49,577 ) (24,439 ) Prepaid expenses and other assets 1,625 852 Accounts payable (12,303 ) 7,371 Accrued compensation and employee related benefits (1,119 ) 2,683 Accrued and other liabilities (591 ) (215 ) Operating lease right-of-use assets 2,607 3,414 Operating lease liabilities (3,308 ) (4,126 ) Deferred revenue (1,859 ) 1,805 Net cash provided by (used in) operating activities (49,382 ) 641 Investing activities: Purchases of investments — (205,749 ) Proceeds from sales of investments 13,372 — Proceeds from maturities of investments 144,401 114,750 Proceeds from sale of property and equipment 234 279 Purchases of intangible assets (250 ) — Purchases of property and equipment (18,592 ) (12,079 ) Business acquisitions, net of cash acquired (23,357 ) — Net cash provided by (used in) investing activities 115,808 (102,799 ) Financing activities: Proceeds from exercise of stock options and employee stock purchase plan 8,736 15,416 Payment of 2019 Notes — (17,564 ) Net cash provided by (used in) financing activities 8,736 (2,148 ) Effect of exchange rate changes on cash and cash equivalents 34 — Net increase (decrease) in cash and cash equivalents 75,196 (104,306 ) Cash and cash equivalents Beginning of period 19,597 123,903 End of period $ 94,793 $ 19,597 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, as defined below. We use adjusted EBITDA and non-GAAP net income 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 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. 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 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 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. The revision 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. During the year ended December 31, 2023 , we further revised our definition of non-GAAP net income 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 Year Ended December 31 , December 31 , 2023 2022 2023 2022 GAAP Gross margin 47.9 % 52.4 % 49.4 % 53.5 % Adjustments: Depreciation and amortization 2.3 % 1.2 % 1.8 % 1.4 % Purchase accounting adjustments 0.0 % 0.0 % 0.1 % 0.0 % Stock-based compensation 0.7 % 0.2 % 0.6 % 0.6 % Non-GAAP Gross margin 50.9 % 53.8 % 51.9 % 55.5 % GAAP Net loss $ (15,180 ) $ (118 ) $ (43,366 ) $ (24,301 ) Adjustments: Depreciation and amortization 3,889 1,588 13,623 6,044 Induced conversion expense — — — 2,232 Stock-based compensation 12,307 10,213 47,986 42,443 Restructuring costs — (102 ) — (102 ) Acquisition related expenses 1,596 — 3,272 — Purchase accounting adjustments — — 388 — Other income, net (1,024 ) (1,150 ) (4,644 ) (2,517 ) Interest expense 1,215 1,207 4,848 4,923 Income tax expense (benefit) 150 117 (322 ) 184 Adjusted EBITDA $ 2,953 $ 11,755 $ 21,785 $ 28,906 GAAP Net loss $ (15,180 ) $ (118 ) $ (43,366 ) $ (24,301 ) Adjustments: Depreciation and amortization 3,889 1,588 13,623 6,044 Induced conversion expense — — — 2,232 Stock-based compensation 12,307 10,213 47,986 42,443 Restructuring costs — (102 ) — (102 ) Acquisition related expenses 1,596 — 3,272 — Purchase accounting adjustments — — 388 — Income tax effects of adjustments (1) (110 ) (1,089 ) (2,100 ) (2,474 ) Non-GAAP Net income $ 2,502 $ 10,492 $ 19,803 $ 23,842 Non-GAAP Net income per share: Basic $ 0.09 $ 0.40 $ 0.74 $ 0.93 Diluted $ 0.09 $ 0.37 $ 0.70 $ 0.87 GAAP and non-GAAP Weighted-average shares — basic 27,089 26,005 26,752 25,539 GAAP Weighted-average shares — diluted 27,089 26,005 26,752 25,539 Dilutive shares from stock plans 1,255 2,147 1,632 1,811 Dilutive shares from 2021 Notes — — — 127 Non-GAAP Weighted-average shares — diluted 28,344 28,152 28,384 27,477 (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 March 31 , 2024 GAAP Net loss $ (15,201 ) Adjustments: Forecasted Depreciation and amortization 4,152 Forecasted Stock-based compensation 12,691 Forecasted Restructuring costs 1,850 Forecasted Interest expense 1,258 Forecasted Other income, net (850 ) Forecasted Income tax expense (200 ) Adjusted EBITDA $ 3,700 GAAP Net loss $ (15,201 ) Adjustments: Forecasted Depreciation and amortization 4,152 Forecasted Stock-based compensation 12,691 Forecasted Restructuring costs 1,850 Forecasted Income tax effects of adjustments (509 ) Non-GAAP Net income $ 2,983 GAAP Net loss per share — basic and diluted $ (0.56 ) Non-GAAP Net income per share Basic $ 0.11 Diluted $ 0.10 GAAP weighted-average shares — basic and diluted 27,300 Non-GAAP weighted-average shares — basic 27,300 Dilutive shares from stock plans 1,200 Non-GAAP weighted-average shares — diluted 28,500 View source version on businesswire.com : https://www.businesswire.com/news/home/20240208580333/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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