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Impinj Reports Third Quarter 2022 Financial Results

2022-10-26 16:15 ET - News Release


SEATTLE -- (Business Wire)

Impinj, Inc. (NASDAQ: PI), a leading RAIN RFID provider and Internet of Things pioneer, today released its financial results for the third quarter ended September 30, 2022.

"Our third-quarter results were strong, with both endpoint IC and reader IC revenue setting new quarterly records," said Chris Diorio, Impinj co-founder and CEO. "We entered the fourth quarter with record backlog and I expect demand to remain strong well into 2023."

Third Quarter 2022 Financial Summary

  • Revenue of $68.3 million
  • GAAP gross margin of 54.8%; non-GAAP gross margin of 56.9%
  • GAAP net loss of $2.2 million, or loss of $(0.09) per diluted share using 25.7 million shares
  • Adjusted EBITDA of $9.8 million
  • Non-GAAP net income of $9.3 million, or income of $0.34 per diluted share using 27.7 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.

Fourth Quarter 2022 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 fourth quarter 2022 (in millions, except per share data):

Three Months Ending

December 31, 2022

Revenue

$71.5 to $73.5

GAAP Net loss

($3.1) to ($1.6)

Adjusted EBITDA income

$9.8 to $11.3

GAAP Weighted-average shares - basic and diluted

25.90 to 26.10

GAAP Net loss per share - basic and diluted

($0.12 ) to ($0.06 )

Non-GAAP Net income

$9.0 to $10.5

Non-GAAP Weighted-average shares - basic

25.90 to 26.10

Non-GAAP Weighted-average shares - diluted

27.90 to 28.10

Non-GAAP Net income per share - basic

$0.35 to $0.40

Non-GAAP Net income per share - diluted

$0.32 to $0.37

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, October 26, 2022 at 5:00 p.m. ET / 2:00 p.m. PT to discuss its third quarter 2022 results, as well as its outlook for its fourth quarter 2022. 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 3500921.

Management's prepared written remarks, along with quarterly financial data, will be made available on our 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 the market for RAIN RFID, our strategy, our prospects, the impact of Covid-19, the impact of silicon wafer and reader component availability and supply, and financial considerations for fourth quarter of 2022 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)

September 30, 2022 (1)

December 31, 2021 (1)

Assets:

Current assets:

Cash and cash equivalents

$

39,310

$

123,903

Short-term investments

142,541

69,443

Accounts receivable, net

40,667

35,449

Inventory

31,925

21,958

Prepaid expenses and other current assets

5,507

5,049

Total current assets

259,950

255,802

Long-term investments

19,200

14,225

Property and equipment, net

31,121

27,500

Operating lease right-of-use assets

11,414

11,667

Other non-current assets

2,223

2,462

Goodwill

3,881

3,881

Total assets

$

327,789

$

315,537

Liabilities and stockholders' equity (deficit):

Current liabilities:

Accounts payable

$

13,249

$

11,732

Accrued compensation and employee related benefits

7,936

6,365

Accrued and other current liabilities

6,080

2,481

Current portion of operating lease liabilities

3,460

4,143

Restructuring liabilities

102

591

Current portion of long-term debt

-

9,633

Current portion of deferred revenue

2,808

558

Total current liabilities

33,635

35,503

Long-term debt, net of current portion

279,846

278,661

Operating lease liabilities, net of current portion

11,790

11,934

Other long-term liabilities

113

279

Deferred revenue, net of current portion

344

236

Total liabilities

325,728

326,613

Stockholders' equity (deficit):

Common stock, $0.001 par value

26

25

Additional paid-in capital

390,432

351,422

Accumulated other comprehensive loss

(1,730

)

(39

)

Accumulated deficit

(386,667

)

(362,484

)

Total stockholders' equity (deficit)

2,061

(11,076

)

Total liabilities and stockholders' equity (deficit)

$

327,789

$

315,537

(1) We adopted ASU 2020-06 on January 1, 2021 using modified retrospective transition method and accounted for our convertible notes due 2026, or the 2019 Notes, on a whole-instrument basis. Upon adoption, we no longer had unamortized debt discount related to the equity component of the 2019 Notes. The condensed consolidated financial statements under both periods are presented under ASU 2020-06.

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2022

2021

2022

2021

Revenue

$

68,270

$

45,193

$

181,210

$

137,709

Cost of revenue

30,835

22,180

83,494

67,938

Gross profit

37,435

23,013

97,716

69,771

Operating expenses:

Research and development

18,766

16,789

55,124

46,480

Sales and marketing

9,326

8,736

28,239

24,577

General and administrative

11,087

9,860

33,888

27,012

Restructuring costs

-

-

-

1,263

Total operating expenses

39,179

35,385

117,251

99,332

Loss from operations

(1,744

)

(12,372

)

(19,535

)

(29,561

)

Other income, net

774

2

1,367

21

Induced conversion expense

-

-

(2,232

)

-

Interest expense

(1,205

)

(526

)

(3,716

)

(1,576

)

Loss before income taxes

(2,175

)

(12,896

)

(24,116

)

(31,116

)

Income tax expense

(24

)

(28

)

(67

)

(130

)

Net loss

$

(2,199

)

$

(12,924

)

$

(24,183

)

$

(31,246

)

Net loss per share - basic and diluted

$

(0.09

)

$

(0.53

)

$

(0.95

)

$

(1.30

)

Weighted-average shares - basic and diluted

25,743

24,330

25,384

24,040

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

Nine Months Ended

September 30,

2022

2021

Operating activities:

Net loss

$

(24,183

)

$

(31,246

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation

4,456

3,171

Stock-based compensation

32,230

28,951

Accretion of discount or amortization of premium on investments

301

694

Amortization of debt issuance costs

1,203

283

Induced conversion expense related to convertible notes

2,232

-

Changes in operating assets and liabilities:

Accounts receivable

(5,218

)

(2,042

)

Inventory

(9,967

)

17,895

Prepaid expenses and other assets

45

(758

)

Accounts payable

1,107

(1,831

)

Accrued compensation and employee related benefits

1,571

754

Accrued and other liabilities

1,741

1,063

Operating lease right-of-use assets

2,490

2,218

Operating lease liabilities

(3,064

)

(2,772

)

Restructuring liabilities

(489

)

133

Deferred revenue

2,358

(6,106

)

Net cash provided by operating activities

6,813

10,407

Investing activities:

Purchases of investments

(159,837

)

(36,431

)

Proceeds from maturities of investments

79,508

70,000

Purchases of property and equipment

(5,975

)

(14,181

)

Net cash provided by (used in) investing activities

(86,304

)

19,388

Financing activities:

Principal payments on finance lease obligations

-

(2

)

Proceeds from exercise of stock options and employee stock purchase plan

12,462

11,761

Payment of 2019 Notes

(17,564

)

-

Net cash provided by (used in) financing activities

(5,102

)

11,759

Net increase (decrease) in cash and cash equivalents

(84,593

)

41,554

Cash and cash equivalents

Beginning of period

123,903

23,636

End of period

$

39,310

$

65,190

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; investigation costs; restructuring costs; settlement and related costs; other income, net; interest expense; loss on debt extinguishment; induced conversion expense associated with repurchases of our 2019 Notes; and income tax benefit (expense).

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; investigation costs; restructuring costs; settlement and related costs; amortization of debt discount related to the equity component of our convertible notes prior to the adoption of ASU 2020-06; induced conversion expense associated with repurchases of our 2019 Notes; and prepayment penalty on debt extinguishment.

On January 1, 2021, we adopted ASU 2020-06 using the modified retrospective transition method, accounting for the 2019 Notes on a whole-instrument basis. Upon adoption, the condensed consolidated financial statements for the three and nine months ended September 30, 2022 and September 30, 2021, are presented under the new standard and we no longer recorded amortization of debt discount. In fourth-quarter 2021, we revised our definition of adjusted EBITDA to exclude the expense incurred in connection with the induced conversion expense associated with repurchases of our 2019 Notes.

IMPINJ, INC.

RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

(in thousands, except percentages, unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2022

2021

2022

2021

GAAP Gross margin

54.8

%

50.9

%

53.9

%

50.7

%

Adjustments:

Depreciation

1.4

%

1.3

%

1.5

%

1.1

%

Stock-based compensation

0.7

%

1.1

%

0.8

%

0.9

%

Non-GAAP Gross margin

56.9

%

53.3

%

56.2

%

52.7

%

GAAP Net loss

$

(2,199

)

$

(12,924

)

$

(24,183

)

$

(31,246

)

Adjustments:

Depreciation

1,483

1,095

4,456

3,171

Stock-based compensation

10,057

10,920

32,230

28,951

Other income, net

(774

)

(2

)

(1,367

)

(21

)

Interest expense

1,205

526

3,716

1,576

Income tax expense

24

28

67

130

Restructuring costs

-

-

-

1,263

Induced conversion expense

-

-

2,232

-

Adjusted EBITDA

$

9,796

$

(357

)

$

17,151

$

3,824

GAAP Net loss

$

(2,199

)

$

(12,924

)

$

(24,183

)

$

(31,246

)

Adjustments:

Depreciation

1,483

1,095

4,456

3,171

Stock-based compensation

10,057

10,920

32,230

28,951

Restructuring costs

-

-

-

1,263

Induced conversion expense

-

-

2,232

-

Non-GAAP Net income (loss)

$

9,341

$

(909

)

$

14,735

$

2,139

Non-GAAP Net income per share:

Basic

$

0.36

$

(0.04

)

$

0.58

$

0.09

Diluted

$

0.34

$

(0.04

)

$

0.54

$

0.08

GAAP and non-GAAP Weighted-average shares - basic

25,743

24,330

25,384

24,040

GAAP Weighted-average shares - diluted

25,743

24,330

25,384

24,040

Dilutive shares from stock plans

1,930

-

1,699

1,626

Non-GAAP Weighted-average shares - diluted

27,673

24,330

27,083

25,666

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

December 31,

2022

GAAP Net loss

$

(2,350

)

Adjustments:

Forecasted Depreciation

1,600

Forecasted Stock-based compensation

10,500

Forecasted Interest expense

1,270

Forecasted Other income, net

(500

)

Forecasted Income tax expense

30

Adjusted EBITDA

$

10,550

GAAP Net loss

$

(2,350

)

Adjustments:

Forecasted Depreciation

1,600

Forecasted Stock-based compensation

10,500

Non-GAAP Net income

$

9,750

GAAP Net loss per share - basic and diluted

$

(0.09

)

Non-GAAP Net income per share

Basic

$

0.38

Diluted

$

0.35

GAAP weighted-average shares - basic and diluted

26,000

Non-GAAP weighted-average shares - basic

26,000

Dilutive shares from stock plans

2,000

Non-GAAP weighted-average shares - diluted

28,000

Contacts:

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

Source: Impinj, Inc.

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