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Impinj Reports Third Quarter 2023 Financial Results

2023-10-25 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 third quarter ended September 30, 2023.

“Third-quarter results were solid, with profitability exceeding our expectations,” said Chris Diorio, Impinj co-founder and CEO. “While macroeconomic pressures continue to impact our fourth-quarter outlook, we believe our long-term opportunity remains intact. We see early signs of retail demand improvement, strong ongoing endpoint IC unit-volume growth despite the downturn and remain optimistic for the future.”

Third Quarter 2023 Financial Summary

  • Revenue of $65.0 million
  • GAAP gross margin of 47.3%; non-GAAP gross margin of 50.5%
  • GAAP net loss of $15.8 million, or loss of $(0.59) per diluted share using 26.9 million shares
  • Adjusted EBITDA of $0.3 million
  • Non-GAAP net income of $0.1 million, or income of $0.00 per diluted share using 28.1 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 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 fourth quarter of 2023 (in millions, except per share data):

 

 

Three Months Ending

 

 

December 31, 2023

Revenue

 

$65.5 to $68.5

GAAP Net loss

 

($17.0) to ($15.5)

Adjusted EBITDA income (loss)

 

($0.9 ) to $0.7

GAAP Weighted-average shares — basic and diluted

 

27.00 to 27.20

GAAP Net loss per share — basic and diluted

 

($0.63 ) to ($0.57 )

Non-GAAP Net income (loss)

 

($1.2 ) to $0.3

Non-GAAP Weighted-average shares — basic

 

27.00 to 27.20

Non-GAAP Weighted-average shares — diluted

 

27.00 to 28.10

Non-GAAP Net income (loss) per share — basic and diluted

 

($0.04) to $0.01

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 25, 2023 at 5:00 p.m. ET / 2:00 p.m. PT to discuss its third-quarter 2023 results, as well as its outlook for its fourth-quarter 2023. Interested parties may access the call by dialing +1-412-317-6789. 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 8377826.

Management’s prepared written remarks, along with quarterly financial data, will be made available on Impinj’s website at investor.impinj.comalong 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 fourth 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)

 

 

 

 

 

 

 

September 30, 2023

 

 

December 31, 2022

 

Assets:

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

78,100

 

 

$

19,597

 

Short-term investments

 

35,129

 

 

 

154,148

 

Accounts receivable, net

 

48,482

 

 

 

49,996

 

Inventory

 

106,806

 

 

 

46,397

 

Prepaid expenses and other current assets

 

4,446

 

 

 

5,032

 

Total current assets

 

272,963

 

 

 

275,170

 

Long-term investments

 

 

 

 

19,200

 

Property and equipment, net

 

44,923

 

 

 

39,027

 

Intangible assets, net

 

14,727

 

 

 

 

Operating lease right-of-use assets

 

10,326

 

 

 

10,490

 

Other non-current assets

 

1,613

 

 

 

1,969

 

Goodwill

 

19,049

 

 

 

3,881

 

Total assets

$

363,601

 

 

$

349,737

 

Liabilities and stockholders' equity:

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

11,017

 

 

$

25,024

 

Accrued compensation and employee related benefits

 

7,702

 

 

 

9,048

 

Accrued and other current liabilities

 

9,306

 

 

 

2,925

 

Current portion of operating lease liabilities

 

3,308

 

 

 

3,122

 

Current portion of deferred revenue

 

2,425

 

 

 

2,250

 

Total current liabilities

 

33,758

 

 

 

42,369

 

Long-term debt

 

281,449

 

 

 

280,244

 

Operating lease liabilities, net of current portion

 

10,205

 

 

 

11,066

 

Deferred tax liabilities, net

 

3,062

 

 

 

118

 

Deferred revenue, net of current portion

 

327

 

 

 

349

 

Total liabilities

 

328,801

 

 

 

334,146

 

Stockholders' equity:

 

 

 

 

 

Common stock, $0.001 par value

 

27

 

 

 

26

 

Additional paid-in capital

 

450,746

 

 

 

403,599

 

Accumulated other comprehensive loss

 

(1,002

)

 

 

(1,249

)

Accumulated deficit

 

(414,971

)

 

 

(386,785

)

Total stockholders' equity

 

34,800

 

 

 

15,591

 

Total liabilities and stockholders' equity

$

363,601

 

 

$

349,737

 

 

 

 

 

 

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

Revenue

 

$

65,005

 

 

$

68,270

 

 

$

236,888

 

 

$

181,210

 

 

Cost of revenue

 

 

34,237

 

 

 

30,835

 

 

 

118,776

 

 

 

83,494

 

 

Gross profit

 

 

30,768

 

 

 

37,435

 

 

 

118,112

 

 

 

97,716

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

21,588

 

 

 

18,766

 

 

 

67,426

 

 

 

55,124

 

 

Sales and marketing

 

 

10,073

 

 

 

9,326

 

 

 

30,678

 

 

 

28,239

 

 

General and administrative

 

 

13,532

 

 

 

11,087

 

 

 

45,098

 

 

 

33,888

 

 

Amortization of intangibles

 

 

1,409

 

 

 

 

 

 

3,555

 

 

 

 

 

Total operating expenses

 

 

46,602

 

 

 

39,179

 

 

 

146,757

 

 

 

117,251

 

 

Loss from operations

 

 

(15,834

)

 

 

(1,744

)

 

 

(28,645

)

 

 

(19,535

)

 

Other income, net

 

 

1,090

 

 

 

774

 

 

 

3,620

 

 

 

1,367

 

 

Induced conversion expense

 

 

 

 

 

 

 

 

 

 

 

(2,232

)

 

Interest expense

 

 

(1,213

)

 

 

(1,205

)

 

 

(3,633

)

 

 

(3,716

)

 

Loss before income taxes

 

 

(15,957

)

 

 

(2,175

)

 

 

(28,658

)

 

 

(24,116

)

 

Income tax benefit (expense)

 

 

195

 

 

 

(24

)

 

 

472

 

 

 

(67

)

 

Net loss

 

$

(15,762

)

 

$

(2,199

)

 

$

(28,186

)

 

$

(24,183

)

 

Net loss per share — basic and diluted

 

$

(0.59

)

 

$

(0.09

)

 

$

(1.06

)

 

$

(0.95

)

 

Weighted-average shares — basic and diluted

 

 

26,920

 

 

 

25,743

 

 

 

26,639

 

 

 

25,384

 

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

 

 

 

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2023

 

 

2022

 

Operating activities:

 

 

 

 

 

 

Net loss

 

$

(28,186

)

 

$

(24,183

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

9,733

 

 

 

4,456

 

Stock-based compensation

 

 

35,679

 

 

 

32,230

 

Accretion of discount or amortization of premium on investments

 

 

(1,600

)

 

 

301

 

Amortization of debt issuance costs

 

 

1,206

 

 

 

1,203

 

Induced conversion expense related to convertible notes

 

 

 

 

 

2,232

 

Deferred tax expense

 

 

(662

)

 

 

 

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

 

 

 

 

 

 

Accounts receivable

 

 

2,683

 

 

 

(5,218

)

Inventory

 

 

(59,239

)

 

 

(9,967

)

Prepaid expenses and other assets

 

 

1,407

 

 

 

45

 

Accounts payable

 

 

(10,054

)

 

 

1,107

 

Accrued compensation and employee related benefits

 

 

(1,904

)

 

 

1,571

 

Accrued and other liabilities

 

 

1,677

 

 

 

1,252

 

Operating lease right-of-use assets

 

 

1,990

 

 

 

2,490

 

Operating lease liabilities

 

 

(2,501

)

 

 

(3,064

)

Deferred revenue

 

 

(1,038

)

 

 

2,358

 

Net cash provided by (used in) operating activities

 

 

(50,809

)

 

 

6,813

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

Purchases of investments

 

 

 

 

 

(159,837

)

Proceeds from sales of investments

 

 

13,372

 

 

 

 

Proceeds from maturities of investments

 

 

127,449

 

 

 

79,508

 

Purchases of intangible assets

 

 

(250

)

 

 

 

Proceeds from sale of property and equipment

 

 

234

 

 

 

 

Purchases of property and equipment

 

 

(15,968

)

 

 

(5,975

)

Business acquisitions, net of cash acquired

 

 

(23,357

)

 

 

 

Net cash provided by (used in) investing activities

 

 

124,837

 

 

 

(86,304

)

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

Proceeds from exercise of stock options and employee stock purchase plan

 

 

7,890

 

 

 

12,462

 

Payment of 2019 Notes

 

 

 

 

 

(17,564

)

Net cash provided by (used in) financing activities

 

 

7,890

 

 

 

(5,102

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(58

)

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

81,860

 

 

 

(84,593

)

Cash and cash equivalents

 

 

 

 

 

 

Beginning of period

 

 

19,597

 

 

 

123,903

 

End of period

 

$

101,457

 

 

$

39,310

 

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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

GAAP Gross margin

 

 

47.3

%

 

 

54.8

%

 

 

49.9

%

 

 

53.9

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

2.2

%

 

 

1.4

%

 

 

1.5

%

 

 

1.5

%

Purchase accounting adjustments

 

 

0.2

%

 

 

0.0

%

 

 

0.2

%

 

 

0.0

%

Stock-based compensation

 

 

0.8

%

 

 

0.7

%

 

 

0.6

%

 

 

0.8

%

Non-GAAP Gross margin

 

 

50.5

%

 

 

56.9

%

 

 

52.2

%

 

 

56.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(15,762

)

 

$

(2,199

)

 

$

(28,186

)

 

$

(24,183

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,668

 

 

 

1,483

 

 

 

9,734

 

 

 

4,456

 

Purchase accounting adjustments

 

 

112

 

 

 

 

 

 

388

 

 

 

 

Stock-based compensation

 

 

12,307

 

 

 

10,057

 

 

 

35,679

 

 

 

32,230

 

Other income, net

 

 

(1,090

)

 

 

(774

)

 

 

(3,620

)

 

 

(1,367

)

Interest expense

 

 

1,213

 

 

 

1,205

 

 

 

3,633

 

 

 

3,716

 

Income tax expense (benefit)

 

 

(195

)

 

 

24

 

 

 

(472

)

 

 

67

 

Induced conversion expense

 

 

 

 

 

 

 

 

 

 

 

2,232

 

Acquisition transaction expense

 

 

4

 

 

 

 

 

 

1,676

 

 

 

 

Adjusted EBITDA

 

$

257

 

 

$

9,796

 

 

$

18,832

 

 

$

17,151

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(15,762

)

 

$

(2,199

)

 

$

(28,186

)

 

$

(24,183

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,668

 

 

 

1,483

 

 

 

9,734

 

 

 

4,456

 

Purchase accounting adjustments

 

 

112

 

 

 

 

 

 

388

 

 

 

 

Stock-based compensation

 

 

12,307

 

 

 

10,057

 

 

 

35,679

 

 

 

32,230

 

Induced conversion expense

 

 

 

 

 

 

 

 

 

 

 

2,232

 

Acquisition transaction expense

 

 

4

 

 

 

 

 

 

1,676

 

 

 

 

Income tax effects of adjustments (1)

 

 

(207

)

 

 

(878

)

 

 

(1,990

)

 

 

(1,385

)

Non-GAAP Net income

 

$

122

 

 

$

8,463

 

 

$

17,301

 

 

$

13,350

 

Non-GAAP Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.00

 

 

$

0.33

 

 

$

0.65

 

 

$

0.53

 

Diluted

 

$

0.00

 

 

$

0.31

 

 

$

0.61

 

 

$

0.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Weighted-average shares — diluted

 

 

26,920

 

 

 

25,743

 

 

 

26,639

 

 

 

25,384

 

Dilutive shares from stock plans

 

 

1,196

 

 

 

1,930

 

 

 

1,758

 

 

 

1,699

 

Dilutive shares from 2021 Notes

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Weighted-average shares — diluted

 

 

28,116

 

 

 

27,673

 

 

 

28,397

 

 

 

27,083

 

(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

 

 

 

December 31,

 

 

 

2023

 

GAAP Net loss

 

$

(16,250

)

Adjustments:

 

 

 

Forecasted Depreciation and amortization

 

 

3,607

 

Forecasted Stock-based compensation

 

 

12,355

 

Forecasted Interest expense

 

 

1,258

 

Forecasted Other income, net

 

 

(850

)

Forecasted Income tax benefit

 

 

(220

)

Adjusted EBITDA

 

$

(100

)

 

 

 

 

GAAP Net loss

 

$

(16,250

)

Adjustments:

 

 

 

Forecasted Depreciation and amortization

 

 

3,607

 

Forecasted Stock-based compensation

 

 

12,355

 

Forecasted Income tax effects of adjustments

 

 

(172

)

Non-GAAP Net loss

 

$

(460

)

 

 

 

 

GAAP Net loss per share — basic and diluted

 

$

(0.60

)

Non-GAAP Net loss per share — basic and diluted

 

$

(0.02

)

 

 

 

 

GAAP weighted-average shares — basic and diluted

 

 

27,100

 

 

 

 

 

Non-GAAP weighted-average shares — basic and diluted

 

 

27,100

 

 

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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