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Impinj Reports Second Quarter 2023 Financial Results

2023-07-26 16:15 ET - News Release


Company Website: https://www.impinj.com
SEATTLE -- (Business Wire)

Impinj, Inc. (NASDAQ: PI), a leading RAIN RFID provider and Internet of Things pioneer, today released its financial results for the second quarter ended June 30, 2023.

“Second-quarter revenue set a new record, with strong systems revenue offsetting weak endpoint IC revenue from retail apparel inventory destocking,” said Chris Diorio, Impinj co-founder and CEO. “We expect ongoing headwinds associated with that apparel inventory destocking, as well as weakness in the overall retail macroenvironment, to more-than-offset strength in our enterprise solutions opportunities in the third quarter.”

Second Quarter 2023 Financial Summary

  • Revenue of $86.0 million
  • GAAP gross margin of 51.0%; non-GAAP gross margin of 53.3%
  • GAAP net loss of $8.1 million, or loss of $(0.30) per diluted share using 26.7 million shares
  • Adjusted EBITDA of $10.0 million
  • Non-GAAP net income of $9.3 million, or income of $0.33 per diluted share using 28.5 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.

Third 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 third quarter of 2023 (in millions, except per share data):

 

 

Three Months Ending

 

 

September 30, 2023

Revenue

 

$63.0 to $66.0

GAAP Net loss

 

($19.7) to ($18.2)

Adjusted EBITDA loss

 

($3.3) to ($1.8)

GAAP Weighted-average shares — basic and diluted

 

26.90 to 27.10

GAAP Net loss per share — basic and diluted

 

($0.73) to ($0.67)

Non-GAAP Net loss

 

($3.2) to ($1.7)

Non-GAAP Weighted-average shares — basic and diluted

 

26.90 to 27.10

Non-GAAP Net loss per share — basic and diluted

 

($0.12) to ($0.06)

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, July 26, 2023 at 5:00 p.m. ET / 2:00 p.m. PT to discuss its second-quarter 2023 results, as well as its outlook for its third-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 6963268.

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.

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 third 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)

 

 

June 30, 2023

 

December 31, 2022

Assets:

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

45,244

 

 

$

19,597

 

Short-term investments

 

63,656

 

 

 

154,148

 

Accounts receivable, net

 

58,945

 

 

 

49,996

 

Inventory

 

112,323

 

 

 

46,397

 

Prepaid expenses and other current assets

 

3,455

 

 

 

5,032

 

Total current assets

 

283,623

 

 

 

275,170

 

Long-term investments

 

5,995

 

 

 

19,200

 

Property and equipment, net

 

45,077

 

 

 

39,027

 

Intangible assets, net

 

16,587

 

 

 

 

Operating lease right-of-use assets

 

11,004

 

 

 

10,490

 

Other non-current assets

 

1,744

 

 

 

1,969

 

Goodwill

 

19,516

 

 

 

3,881

 

Total assets

$

383,546

 

 

$

349,737

 

Liabilities and stockholders' equity (deficit):

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

27,627

 

 

$

25,024

 

Accrued compensation and employee related benefits

 

7,746

 

 

 

9,048

 

Accrued and other current liabilities

 

9,681

 

 

 

2,925

 

Current portion of operating lease liabilities

 

3,301

 

 

 

3,122

 

Current portion of deferred revenue

 

2,523

 

 

 

2,250

 

Total current liabilities

 

50,878

 

 

 

42,369

 

Long-term debt, net of current portion

 

281,046

 

 

 

280,244

 

Operating lease liabilities, net of current portion

 

11,071

 

 

 

11,066

 

Deferred tax liabilities, net

 

3,415

 

 

 

118

 

Deferred revenue, net of current portion

 

341

 

 

 

349

 

Total liabilities

 

346,751

 

 

 

334,146

 

Stockholders' equity:

 

 

 

Common stock, $0.001 par value

 

27

 

 

 

26

 

Additional paid-in capital

 

436,302

 

 

 

403,599

 

Accumulated other comprehensive loss

 

(325

)

 

 

(1,249

)

Accumulated deficit

 

(399,209

)

 

 

(386,785

)

Total stockholders' equity

 

36,795

 

 

 

15,591

 

Total liabilities and stockholders' equity (deficit)

$

383,546

 

 

$

349,737

 

 

 

 

 

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

 

Revenue

 

$

85,986

 

 

$

59,796

 

 

$

171,883

 

 

$

112,940

 

 

Cost of revenue

 

 

42,172

 

 

 

28,294

 

 

 

84,539

 

 

 

52,659

 

 

Gross profit

 

 

43,814

 

 

 

31,502

 

 

 

87,344

 

 

 

60,281

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

 

23,403

 

 

 

18,369

 

 

 

45,838

 

 

 

36,358

 

 

Sales and marketing

 

 

10,632

 

 

 

9,614

 

 

 

20,605

 

 

 

18,913

 

 

General and administrative

 

 

16,002

 

 

 

11,995

 

 

 

31,566

 

 

 

22,801

 

 

Amortization of intangibles

 

 

2,146

 

 

 

 

 

 

2,146

 

 

 

 

 

Total operating expenses

 

 

52,183

 

 

 

39,978

 

 

 

100,155

 

 

 

78,072

 

 

Loss from operations

 

 

(8,369

)

 

 

(8,476

)

 

 

(12,811

)

 

 

(17,791

)

 

Other income, net

 

 

1,165

 

 

 

429

 

 

 

2,530

 

 

 

593

 

 

Induced conversion expense

 

 

 

 

 

(2,232

)

 

 

 

 

 

(2,232

)

 

Interest expense

 

 

(1,211

)

 

 

(1,250

)

 

 

(2,420

)

 

 

(2,511

)

 

Loss before income taxes

 

 

(8,415

)

 

 

(11,529

)

 

 

(12,701

)

 

 

(21,941

)

 

Income tax benefit (expense)

 

 

349

 

 

 

6

 

 

 

277

 

 

 

(43

)

 

Net loss

 

$

(8,066

)

 

$

(11,523

)

 

$

(12,424

)

 

$

(21,984

)

 

Net loss per share — basic and diluted

 

$

(0.30

)

 

$

(0.45

)

 

$

(0.47

)

 

$

(0.87

)

 

Weighted-average shares — basic and diluted

 

 

26,713

 

 

 

25,429

 

 

 

26,499

 

 

 

25,204

 

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

 

 

 

Six Months Ended

 

 

June 30,

 

 

2023

 

2022

Operating activities:

 

 

 

 

Net loss

 

$

(12,424

)

 

$

(21,984

)

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

 

 

 

 

Depreciation and amortization

 

 

6,066

 

 

 

2,973

 

Stock-based compensation

 

 

23,372

 

 

 

22,173

 

Accretion of discount or amortization of premium on investments

 

 

(1,285

)

 

 

419

 

Amortization of debt issuance costs

 

 

802

 

 

 

806

 

Induced conversion expense related to convertible notes

 

 

 

 

 

2,232

 

Deferred tax expense

 

 

(399

)

 

 

 

Changes in operating assets and liabilities, net of amounts acquired:

 

 

 

 

Accounts receivable

 

 

(7,755

)

 

 

(4,679

)

Inventory

 

 

(64,733

)

 

 

(10,089

)

Prepaid expenses and other assets

 

 

2,277

 

 

 

1,463

 

Accounts payable

 

 

6,113

 

 

 

(2,201

)

Accrued compensation and employee related benefits

 

 

(1,879

)

 

 

(437

)

Accrued and other liabilities

 

 

2,043

 

 

 

(106

)

Operating lease right-of-use assets

 

 

1,331

 

 

 

1,623

 

Operating lease liabilities

 

 

(1,661

)

 

 

(2,034

)

Deferred revenue

 

 

(972

)

 

 

2,202

 

Net cash used in operating activities

 

 

(49,104

)

 

 

(7,639

)

 

 

 

 

 

Investing activities:

 

 

 

 

Purchases of investments

 

 

 

 

 

(115,697

)

Proceeds from sales of investments

 

 

13,372

 

 

 

 

Proceeds from maturities of investments

 

 

92,424

 

 

 

46,805

 

Business acquisitions, net of cash acquired

 

 

(23,357

)

 

 

 

Purchases of intangible assets

 

 

(250

)

 

 

 

Purchases of property and equipment

 

 

(13,198

)

 

 

(3,724

)

Net cash provided by (used in) investing activities

 

 

68,991

 

 

 

(72,616

)

 

 

 

 

 

Financing activities:

 

 

 

 

Proceeds from exercise of stock options and employee stock purchase plan

 

 

5,753

 

 

 

6,496

 

Payment of 2019 Notes

 

 

 

 

 

(17,564

)

Net cash provided by (used in) financing activities

 

 

5,753

 

 

 

(11,068

)

Effect of exchange rate changes on cash and cash equivalents

 

 

7

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

25,647

 

 

 

(91,323

)

Cash and cash equivalents

 

 

 

 

Beginning of period

 

 

19,597

 

 

 

123,903

 

End of period

 

$

45,244

 

 

$

32,580

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 and related purchase accounting adjustments. During the first quarter of 2023, we revised our definition of adjusted EBITDA to exclude acquisition transaction expenses and related purchase accounting adjustments 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), adjusted for, if applicable for the periods presented, the effects of stock-based compensation; depreciation; restructuring costs; settlement and related costs; induced conversion expense; amortization of debt discount related to the equity component of our convertible notes; prepayment penalty on debt extinguishment; acquisition transaction expense; and the corresponding income tax impacts of adjustments to net income (loss). During the first quarter of 2023, we revised our definition of non-GAAP net income (loss) to adjust for acquisition transaction expenses and related purchase accounting adjustments in connection with our Voyantic Oy acquisition. Excluding acquisition transaction expenses and related purchase accounting adjustments did not impact the non-GAAP net income (loss) previously reported for periods preceding the revision.

During the second quarter of 2023, we further 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

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2023

 

2022

 

2023

 

2022

GAAP Gross margin

 

 

51.0

%

 

 

52.7

%

 

 

50.8

%

 

 

53.4

%

Adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1.5

%

 

 

1.5

%

 

 

1.3

%

 

 

1.6

%

Purchase accounting adjustments

 

 

0.3

%

 

 

0.0

%

 

 

0.2

%

 

 

0.0

%

Stock-based compensation

 

 

0.5

%

 

 

0.5

%

 

 

0.5

%

 

 

0.8

%

Non-GAAP Gross margin

 

 

53.3

%

 

 

54.7

%

 

 

52.8

%

 

 

55.8

%

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(8,066

)

 

$

(11,523

)

 

$

(12,424

)

 

$

(21,984

)

Adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

4,273

 

 

 

1,465

 

 

 

6,066

 

 

 

2,973

 

Purchase accounting adjustments

 

 

276

 

 

 

 

 

 

276

 

 

 

 

Stock-based compensation

 

 

13,148

 

 

 

10,859

 

 

 

23,372

 

 

 

22,173

 

Other income, net

 

 

(1,165

)

 

 

(429

)

 

 

(2,530

)

 

 

(593

)

Interest expense

 

 

1,211

 

 

 

1,250

 

 

 

2,420

 

 

 

2,511

 

Income tax expense (benefit)

 

 

(349

)

 

 

(6

)

 

 

(277

)

 

 

43

 

Induced conversion expense

 

 

 

 

 

2,232

 

 

 

 

 

 

2,232

 

Acquisition transaction expense

 

 

630

 

 

 

 

 

 

1,672

 

 

 

 

Adjusted EBITDA

 

$

9,958

 

 

$

3,848

 

 

$

18,575

 

 

$

7,355

 

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(8,066

)

 

$

(11,523

)

 

$

(12,424

)

 

$

(21,984

)

Adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

4,273

 

 

 

1,465

 

 

 

6,066

 

 

 

2,973

 

Purchase accounting adjustments

 

 

276

 

 

 

 

 

 

276

 

 

 

 

Stock-based compensation

 

 

13,148

 

 

 

10,859

 

 

 

23,372

 

 

 

22,173

 

Induced conversion expense

 

 

 

 

 

2,232

 

 

 

 

 

 

2,232

 

Acquisition transaction expense

 

 

630

 

 

 

 

 

 

1,672

 

 

 

 

Income tax effects of adjustments (1)

 

 

(965

)

 

 

(285

)

 

 

(1,783

)

 

 

(507

)

Non-GAAP Net income

 

$

9,296

 

 

$

2,748

 

 

$

17,179

 

 

$

4,887

 

Non-GAAP Net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.35

 

 

$

0.11

 

 

$

0.65

 

 

$

0.19

 

Diluted

 

$

0.33

 

 

$

0.10

 

 

$

0.60

 

 

$

0.18

 

 

 

 

 

 

 

 

 

 

GAAP Weighted-average shares — diluted

 

 

26,713

 

 

 

25,429

 

 

 

26,499

 

 

 

25,204

 

Dilutive shares from stock plans

 

 

1,809

 

 

 

1,167

 

 

 

2,039

 

 

 

1,584

 

Non-GAAP Weighted-average shares — diluted

 

 

28,522

 

 

 

26,596

 

 

 

28,538

 

 

 

26,788

 

(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

 

 

September 30,

 

 

2023

GAAP Net loss

 

$

(18,950

)

Adjustments:

 

 

Forecasted Depreciation and amortization

 

 

3,550

 

Forecasted Stock-based compensation

 

 

12,600

 

Forecasted Interest expense

 

 

1,260

 

Forecasted Purchase accounting adjustments

 

 

110

 

Forecasted Other income, net

 

 

(850

)

Forecasted Income tax benefit

 

 

(220

)

Adjusted EBITDA

 

$

(2,500

)

 

 

 

GAAP Net loss

 

$

(18,950

)

Adjustments:

 

 

Forecasted Depreciation and amortization

 

 

3,550

 

Forecasted Stock-based compensation

 

 

12,600

 

Forecasted Purchase accounting adjustments

 

 

110

 

Forecasted Income tax benefit

 

 

236

 

Non-GAAP Net loss

 

$

(2,454

)

 

 

 

GAAP Net loss per share — basic and diluted

 

$

(0.70

)

Non-GAAP Net loss per share — basic and diluted

 

$

(0.09

)

 

 

 

GAAP weighted-average shares — basic and diluted

 

 

27,000

 

 

 

 

Non-GAAP weighted-average shares — basic and diluted

 

 

27,000

 

 

Contacts:

For more information, contact:
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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