PI - Impinj Reports First Quarter 2024 Financial Results

April, 24 2024 04:15 PM Impinj Inc.

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
ir@impinj.com

Media Relations
Jill West
Vice President, Strategic Communications
+1 206-834-1110
jwest@impinj.com

Company Name:	Impinj Inc.
Stock Symbol:	PI
Market:	NASDAQ
Website:	impinj.com

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