Impinj Reports Fourth Quarter and Full Year 2024 Financial Results

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, 2024. “In 2024, we delivered strong financial results, successfully resolved our patent litigation and delivered market-leading products and innovations,” said Chris Diorio, Impinj co-founder and CEO. “Looking forward, we see first-quarter headwinds but intend to press our competitive advantages and emerge a stronger company.” Fourth Quarter 2024 Financial Summary Revenue of $91.6 million GAAP gross margin of 50.5%; non-GAAP gross margin of 53.1% GAAP net loss of $2.7 million, or loss of $0.09 per diluted share using 28.4 million shares Adjusted EBITDA of $15.0 million Non-GAAP net income of $14.5 million, or income of $0.48 per diluted share using 32.5 million shares Full Year 2024 Financial Summary Revenue of $366.1 million GAAP gross margin of 51.6%; non-GAAP gross margin of 54.0% GAAP net income of $40.8 million, or income of $1.39 per diluted share using 29.5 million shares Adjusted EBITDA of $65.9 million Non-GAAP net income of $62.9 million, or income of $2.11 per diluted share using 32.1 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. First Quarter 2025 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 2025 (in millions, except per share data): Three Months Ending March 31, 2025 Revenue $70.0 to $73.0 GAAP Net loss ($16.8) to ($15.3) Adjusted EBITDA income $1.1 to $2.6 GAAP Weighted-average shares — basic and diluted 28.6 to 28.8 GAAP Net loss per share — basic and diluted ($0.59) to ($0.53) Non-GAAP Net income $1.7 to $3.2 Non-GAAP Weighted-average shares — diluted 30.1 to 30.3 Non-GAAP Net income per share — diluted $0.06 to $0.11 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 and webcast to discuss its fourth-quarter and full-year 2024 results and first-quarter 2025 outlook today, February 5, 2025 at 5:00 p.m. ET / 2:00 p.m. PT. 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 4138753. 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 first quarter of 2025 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, 2024 December 31, 2023 Assets: Current assets: Cash and cash equivalents $ 46,053 $ 94,793 Short-term investments 118,661 18,440 Accounts receivable, net 56,802 54,919 Inventory 99,346 97,172 Prepaid expenses and other current assets 5,536 4,372 Total current assets 326,398 269,696 Long-term investments 74,871 — Property and equipment, net 50,610 44,891 Intangible assets, net 10,291 13,913 Operating lease right-of-use assets 7,142 9,735 Other non-current assets 1,045 1,478 Goodwill 18,723 19,696 Total assets $ 489,080 $ 359,409 Liabilities and stockholders' equity: Current liabilities: Accounts payable $ 17,254 $ 8,661 Accrued compensation and employee related benefits 22,309 8,519 Accrued and other current liabilities 2,684 8,614 Current portion of operating lease liabilities 3,589 3,373 Current portion of long-term debt 283,493 — Current portion of deferred revenue 1,848 1,713 Total current liabilities 331,177 30,880 Long-term debt — 281,855 Operating lease liabilities, net of current portion 5,719 9,360 Deferred tax liabilities, net 2,200 2,911 Deferred revenue, net of current portion 120 272 Total liabilities 339,216 325,278 Stockholders' equity: Common stock, $0.001 par value 29 27 Additional paid-in capital 541,090 463,900 Accumulated other comprehensive income (loss) (1,942 ) 355 Accumulated deficit (389,313 ) (430,151 ) Total stockholders' equity 149,864 34,131 Total liabilities and stockholders' equity $ 489,080 $ 359,409 IMPINJ, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data, unaudited) Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 Revenue $ 91,569 $ 70,651 $ 366,087 $ 307,539 Cost of revenue 45,347 36,781 177,232 155,557 Gross profit 46,222 33,870 188,855 151,982 Operating expenses: Research and development 25,894 21,136 98,829 88,562 Sales and marketing 10,688 10,445 40,579 41,123 General and administrative 12,762 15,730 51,802 60,828 Amortization of intangibles 491 1,398 2,902 4,953 Restructuring costs — — 1,812 — Total operating expenses 49,835 48,709 195,924 195,466 Income (loss) from operations (3,613 ) (14,839 ) (7,069 ) (43,484 ) Other income, net 2,107 1,024 7,937 4,644 Income from settlement of litigation — — 45,000 — Interest expense (1,221 ) (1,215 ) (4,873 ) (4,848 ) Income (loss) before income taxes (2,727 ) (15,030 ) 40,995 (43,688 ) Income tax benefit (expense) 37 (150 ) (157 ) 322 Net income (loss) per share attributable to common stockholders: $ (2,690 ) $ (15,180 ) $ 40,838 $ (43,366 ) Net income (loss) per share — basic $ (0.09 ) $ (0.56 ) $ 1.46 $ (1.62 ) Net income (loss) per share — diluted $ (0.09 ) $ (0.56 ) $ 1.39 $ (1.62 ) Weighted-average shares outstanding — basic 28,398 27,089 27,953 26,752 Weighted-average shares outstanding — diluted 28,398 27,089 29,471 26,752 IMPINJ, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited) Year Ended December 31, 2024 2023 Operating activities: Net income (loss) $ 40,838 $ (43,366 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 13,588 13,623 Stock-based compensation 56,546 47,986 Restructuring equity modification expense 366 — Accretion of discount or amortization of premium on investments (1,122 ) (1,637 ) Amortization of debt issuance costs 1,638 1,611 Deferred tax expense (567 ) (931 ) Revaluation of acquisition-related contingent consideration liability 986 1,570 Changes in operating assets and liabilities, net of amounts acquired: Accounts receivable (1,999 ) (3,713 ) Inventory (2,220 ) (49,577 ) Prepaid expenses and other assets 227 1,625 Accounts payable 9,270 (12,303 ) Accrued compensation and employee related benefits 13,855 (1,119 ) Accrued and other liabilities 244 (591 ) Acquisition-related contingent consideration liability (2,556 ) — Operating lease right-of-use assets 2,560 2,607 Operating lease liabilities (3,392 ) (3,308 ) Deferred revenue 48 (1,859 ) Net cash provided by (used in) operating activities 128,310 (49,382 ) Investing activities: Purchases of investments (202,063 ) — Proceeds from sales of investments — 13,372 Proceeds from maturities of investments 26,605 144,401 Business acquisitions, net of cash acquired — (23,357 ) Purchases of intangible assets — (250 ) Proceeds from sale of property and equipment — 234 Purchases of property and equipment (17,112 ) (18,592 ) Net cash provided by (used in) investing activities (192,570 ) 115,808 Financing activities: Proceeds from exercise of stock options and employee stock purchase plan 20,281 8,736 Payment of acquisition-related contingent consideration (4,602 ) — Net cash provided by financing activities 15,679 8,736 Effect of exchange rate changes on cash and cash equivalents (159 ) 34 Net increase (decrease) in cash and cash equivalents (48,740 ) 75,196 Cash and cash equivalents Beginning of period 94,793 19,597 End of period $ 46,053 $ 94,793 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, non-GAAP net income (loss), free cash flow and adjusted free cash flow 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 use free cash flow and adjusted free cash flow as key measures when assessing our sources of liquidity, capital resources, and quality of earnings. 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. Free cash flow We define free cash flow as net cash provided by (used in) operating activities, determined in accordance with GAAP, less purchases of property and equipment. We define adjusted free cash flow as free cash flow less cash received from gain on litigation settlement. 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, 2024 2023 2024 2023 GAAP Gross margin 50.5 % 47.9 % 51.6 % 49.4 % Adjustments: Depreciation and amortization 2.1 % 2.3 % 1.9 % 1.8 % Purchase accounting adjustments 0.0 % 0.0 % 0.0 % 0.1 % Stock-based compensation 0.6 % 0.7 % 0.6 % 0.6 % Non-GAAP Gross margin 53.1 % 50.9 % 54.0 % 51.9 % Certain amounts may be off due to rounding GAAP Net income (loss) $ (2,690 ) $ (15,180 ) $ 40,838 $ (43,366 ) Adjustments: Depreciation and amortization 3,433 3,889 13,588 13,623 Stock-based compensation 15,210 12,307 56,546 47,986 Restructuring costs — — 1,812 — Acquisition related expenses — 1,596 986 3,272 Purchase accounting adjustments — — — 388 Other income, net (2,107 ) (1,024 ) (7,937 ) (4,644 ) Income from settlement of litigation — — (45,000 ) — Interest expense 1,221 1,215 4,873 4,848 Income tax expense (benefit) (37 ) 150 157 (322 ) Adjusted EBITDA $ 15,030 $ 2,953 $ 65,863 $ 21,785 GAAP Net income (loss) $ (2,690 ) $ (15,180 ) $ 40,838 $ (43,366 ) Adjustments: Depreciation and amortization 3,433 3,889 13,588 13,623 Stock-based compensation 15,210 12,307 56,546 47,986 Restructuring costs — — 1,812 — Acquisition transaction expenses — 1,596 986 3,272 Purchase accounting adjustments — — — 388 Income from settlement of litigation — — (45,000 ) — Income tax effects of adjustments (1) (1,426 ) (110 ) (5,860 ) (2,100 ) Non-GAAP Net income $ 14,527 $ 2,502 $ 62,910 $ 19,803 Non-GAAP Net income per share — diluted $ 0.48 (2 ) $ 0.09 $ 2.11 (2 ) $ 0.70 GAAP Weighted-average shares — diluted 28,398 27,089 29,471 (3 ) 26,752 Dilutive shares from stock plans 1,500 1,255 — 1,632 Dilutive shares from convertible debt 2,589 — 2,589 — Non-GAAP Weighted-average shares — diluted 32,487 (2 ) 28,344 32,060 (2 ) 28,384 (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. (2) 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. (3) GAAP weighted average shares — diluted includes the impact of dilutive shares from stock plans. 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, 2024 2023 2024 2023 GAAP Net cash provided by (used in) operating activities $ 12,623 $ 1,427 $ 128,310 $ (49,382 ) Adjustments: Purchases of property and equipment (4,133 ) (2,624 ) (17,112 ) (18,592 ) Free cash flow $ 8,490 $ (1,197 ) $ 111,198 $ (67,974 ) Adjustments: Income from settlement of litigation — — (45,000 ) — Adjusted free cash flow $ 8,490 $ (1,197 ) $ 66,198 $ (67,974 ) 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, 2025 GAAP Net loss $ (16,055 ) Adjustments: Forecasted Depreciation and amortization 3,660 Forecasted Stock-based compensation 15,180 Forecasted Interest expense 1,215 Forecasted Other income, net (2,100 ) Forecasted Income tax expense (benefit) (100 ) Adjusted EBITDA $ 1,800 GAAP Net loss $ (16,055 ) Adjustments: Forecasted Depreciation and amortization 3,660 Forecasted Stock-based compensation 15,180 Forecasted Income tax effects of adjustments (334 ) Non-GAAP Net income $ 2,451 GAAP Net loss per share — basic and diluted $ (0.56 ) Non-GAAP Net income per share — diluted $ 0.08 GAAP weighted-average shares — basic and diluted 28,700 Dilutive shares 1,500 Non-GAAP weighted-average shares — diluted 30,200

Impinj Reports Fourth Quarter and Full Year 2024 Financial Results

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