February 29, 2024

Impinj Reports Fourth Quarter and Full Year 2023 Financial Results

Contacts

Investor Relations

Andy Cobb, CFA

Vice President, Strategic Finance

+1-206-315-4470

[email protected]

Media Relations

Jill West

Vice President, Strategic Communications

+1 206-834-1110

[email protected]

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, 2023.

“2023 was another year of solid growth despite market headwinds, with annual revenue crossing the $300 million threshold for the first time,” said Chris Diorio, Impinj co-founder and CEO. “We delivered four quarters of positive adjusted EBITDA, successfully defended our intellectual property and introduced market-leading new products. As we continue driving our bold vision to connect every item in our everyday world, we remain confident in our market position and energized by the opportunities ahead.”

Fourth Quarter 2023 Financial Summary

  • Revenue of $70.7 million
  • GAAP gross margin of 47.9%; non-GAAP gross margin of 50.9%
  • GAAP net loss of $15.2 million, or loss of $0.56 per diluted share using 27.1 million shares
  • Adjusted EBITDA of $3.0 million
  • Non-GAAP net income of $2.5 million, or income of $0.09 per diluted share using 28.3 million shares

Full Year 2023 Financial Summary

  • Revenue of $307.5 million
  • GAAP gross margin of 49.4%; non-GAAP gross margin of 51.9%
  • GAAP net loss of $43.4 million, or loss of $1.62 per diluted share using 26.8 million shares
  • Adjusted EBITDA of $21.8 million
  • Non-GAAP net income of $19.8 million, or income of $0.70 per diluted share using 28.4 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 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 first quarter of 2024 (in millions, except per share data):

 

 

Three Months Ending

 

 

March 31, 2024

Revenue

 

$72.0 to $75.0

GAAP Net loss

 

($16.0) to ($14.5)

Adjusted EBITDA income

 

$3.0 to $4.5

GAAP Weighted-average shares — basic and diluted

 

27.20 to 27.40

GAAP Net loss per share — basic and diluted

 

($0.59) to ($0.53)

Non-GAAP Net income

 

$2.2 to $3.7

Non-GAAP Weighted-average shares — basic

 

27.20 to 27.40

Non-GAAP Weighted-average shares — diluted

 

28.40 to 28.60

Non-GAAP Net income per share — basic

 

$0.08 to $0.14

Non-GAAP Net income per share — diluted

 

$0.08 to $0.13

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, February 8, 2024 at 5:00 p.m. ET / 2:00 p.m. PT to discuss its fourth-quarter and full-year 2023 results, as well as its outlook for its first-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 4299421.

Management’s prepared written remarks, along with quarterly financial data, will be made available on the 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 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)

 

 

December 31, 2023

 

December 31, 2022

Assets:

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

94,793

 

 

$

19,597

 

Short-term investments

 

18,440

 

 

 

154,148

 

Accounts receivable, net

 

54,919

 

 

 

49,996

 

Inventory

 

97,172

 

 

 

46,397

 

Prepaid expenses and other current assets

 

4,372

 

 

 

5,032

 

Total current assets

 

269,696

 

 

 

275,170

 

Long-term investments

 

 

 

 

19,200

 

Property and equipment, net

 

44,891

 

 

 

39,027

 

Intangible assets, net

 

13,913

 

 

 

 

Operating lease right-of-use assets

 

9,735

 

 

 

10,490

 

Other non-current assets

 

1,478

 

 

 

1,969

 

Goodwill

 

19,696

 

 

 

3,881

 

Total assets

$

359,409

 

 

$

349,737

 

Liabilities and stockholders' equity:

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

8,661

 

 

$

25,024

 

Accrued compensation and employee related benefits

 

8,519

 

 

 

9,048

 

Accrued and other current liabilities

 

8,614

 

 

 

2,925

 

Current portion of operating lease liabilities

 

3,373

 

 

 

3,122

 

Current portion of deferred revenue

 

1,713

 

 

 

2,250

 

Total current liabilities

 

30,880

 

 

 

42,369

 

Long-term debt

 

281,855

 

 

 

280,244

 

Operating lease liabilities, net of current portion

 

9,360

 

 

 

11,066

 

Deferred tax liabilities, net

 

2,911

 

 

 

118

 

Deferred revenue, net of current portion

 

272

 

 

 

349

 

Total liabilities

 

325,278

 

 

 

334,146

 

Stockholders' equity:

 

 

 

Common stock, $0.001 par value

 

27

 

 

 

26

 

Additional paid-in capital

 

463,900

 

 

 

403,599

 

Accumulated other comprehensive income (loss)

 

355

 

 

 

(1,249

)

Accumulated deficit

 

(430,151

)

 

 

(386,785

)

Total stockholders' equity

 

34,131

 

 

 

15,591

 

Total liabilities and stockholders' equity

$

359,409

 

 

$

349,737

 

 

 

 

 

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)

 

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

December 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

Revenue

 

$

70,651

 

 

$

76,590

 

 

$

307,539

 

 

$

257,800

 

 

Cost of revenue

 

 

36,781

 

 

 

36,422

 

 

 

155,557

 

 

 

119,916

 

 

Gross profit

 

 

33,870

 

 

 

40,168

 

 

 

151,982

 

 

 

137,884

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

 

21,136

 

 

 

18,982

 

 

 

88,562

 

 

 

74,106

 

 

Sales and marketing

 

 

10,445

 

 

 

9,655

 

 

 

41,123

 

 

 

37,894

 

 

General and administrative

 

 

15,730

 

 

 

11,577

 

 

 

60,828

 

 

 

45,465

 

 

Amortization of intangibles

 

 

1,398

 

 

 

 

 

 

4,953

 

 

 

 

 

Restructuring costs

 

 

 

 

 

(102

)

 

 

 

 

 

(102

)

 

Total operating expenses

 

 

48,709

 

 

 

40,112

 

 

 

195,466

 

 

 

157,363

 

 

Income (loss) from operations

 

 

(14,839

)

 

 

56

 

 

 

(43,484

)

 

 

(19,479

)

 

Other income, net

 

 

1,024

 

 

 

1,150

 

 

 

4,644

 

 

 

2,517

 

 

Induced conversion expense

 

 

 

 

 

 

 

 

 

 

 

(2,232

)

 

Interest expense

 

 

(1,215

)

 

 

(1,207

)

 

 

(4,848

)

 

 

(4,923

)

 

Loss before income taxes

 

 

(15,030

)

 

 

(1

)

 

 

(43,688

)

 

 

(24,117

)

 

Income tax benefit (expense)

 

 

(150

)

 

 

(117

)

 

 

322

 

 

 

(184

)

 

Net loss

 

$

(15,180

)

 

$

(118

)

 

$

(43,366

)

 

$

(24,301

)

 

Net loss per share — basic and diluted

 

$

(0.56

)

 

$

(0.00

)

 

$

(1.62

)

 

$

(0.95

)

 

Weighted-average shares — basic and diluted

 

 

27,089

 

 

 

26,005

 

 

 

26,752

 

 

 

25,539

 

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

 

 

 

Year Ended

 

 

December 31,

 

 

2023

 

 

2022

 

Operating activities:

 

 

 

 

Net loss

 

$

(43,366

)

 

$

(24,301

)

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

 

 

 

 

Depreciation and amortization

 

 

13,623

 

 

 

6,044

 

Stock-based compensation

 

 

47,986

 

 

 

42,443

 

Accretion of discount or amortization of premium on investments

 

 

(1,637

)

 

 

(233

)

Amortization of debt issuance costs

 

 

1,611

 

 

 

1,601

 

Loss on fixed asset disposal

 

 

 

 

 

57

 

Induced conversion expense related to convertible notes

 

 

 

 

 

2,232

 

Deferred tax expense

 

 

(931

)

 

 

 

Revaluation of acquisition-related contingent consideration liability

 

 

1,570

 

 

 

 

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

 

 

 

 

Accounts receivable

 

 

(3,713

)

 

 

(14,547

)

Inventory

 

 

(49,577

)

 

 

(24,439

)

Prepaid expenses and other assets

 

 

1,625

 

 

 

852

 

Accounts payable

 

 

(12,303

)

 

 

7,371

 

Accrued compensation and employee related benefits

 

 

(1,119

)

 

 

2,683

 

Accrued and other liabilities

 

 

(591

)

 

 

(215

)

Operating lease right-of-use assets

 

 

2,607

 

 

 

3,414

 

Operating lease liabilities

 

 

(3,308

)

 

 

(4,126

)

Deferred revenue

 

 

(1,859

)

 

 

1,805

 

Net cash provided by (used in) operating activities

 

 

(49,382

)

 

 

641

 

Investing activities:

 

 

 

 

Purchases of investments

 

 

 

 

 

(205,749

)

Proceeds from sales of investments

 

 

13,372

 

 

 

 

Proceeds from maturities of investments

 

 

144,401

 

 

 

114,750

 

Proceeds from sale of property and equipment

 

 

234

 

 

 

279

 

Purchases of intangible assets

 

 

(250

)

 

 

 

Purchases of property and equipment

 

 

(18,592

)

 

 

(12,079

)

Business acquisitions, net of cash acquired

 

 

(23,357

)

 

 

 

Net cash provided by (used in) investing activities

 

 

115,808

 

 

 

(102,799

)

Financing activities:

 

 

 

 

Proceeds from exercise of stock options and employee stock purchase plan

 

 

8,736

 

 

 

15,416

 

Payment of 2019 Notes

 

 

 

 

 

(17,564

)

Net cash provided by (used in) financing activities

 

 

8,736

 

 

 

(2,148

)

Effect of exchange rate changes on cash and cash equivalents

 

 

34

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

75,196

 

 

 

(104,306

)

Cash and cash equivalents

 

 

 

 

Beginning of period

 

 

19,597

 

 

 

123,903

 

End of period

 

$

94,793

 

 

$

19,597

 

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, as defined below. We use adjusted EBITDA and non-GAAP net income 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 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. 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

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 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. The revision 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. During the year ended December 31, 2023, we further revised our definition of non-GAAP net income 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

 

Year Ended

 

 

December 31,

 

December 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

GAAP Gross margin

 

 

47.9

%

 

 

52.4

%

 

 

49.4

%

 

 

53.5

%

Adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

2.3

%

 

 

1.2

%

 

 

1.8

%

 

 

1.4

%

Purchase accounting adjustments

 

 

0.0

%

 

 

0.0

%

 

 

0.1

%

 

 

0.0

%

Stock-based compensation

 

 

0.7

%

 

 

0.2

%

 

 

0.6

%

 

 

0.6

%

Non-GAAP Gross margin

 

 

50.9

%

 

 

53.8

%

 

 

51.9

%

 

 

55.5

%

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(15,180

)

 

$

(118

)

 

$

(43,366

)

 

$

(24,301

)

Adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,889

 

 

 

1,588

 

 

 

13,623

 

 

 

6,044

 

Induced conversion expense

 

 

 

 

 

 

 

 

 

 

 

2,232

 

Stock-based compensation

 

 

12,307

 

 

 

10,213

 

 

 

47,986

 

 

 

42,443

 

Restructuring costs

 

 

 

 

 

(102

)

 

 

 

 

 

(102

)

Acquisition related expenses

 

 

1,596

 

 

 

 

 

 

3,272

 

 

 

 

Purchase accounting adjustments

 

 

 

 

 

 

 

 

388

 

 

 

 

Other income, net

 

 

(1,024

)

 

 

(1,150

)

 

 

(4,644

)

 

 

(2,517

)

Interest expense

 

 

1,215

 

 

 

1,207

 

 

 

4,848

 

 

 

4,923

 

Income tax expense (benefit)

 

 

150

 

 

 

117

 

 

 

(322

)

 

 

184

 

Adjusted EBITDA

 

$

2,953

 

 

$

11,755

 

 

$

21,785

 

 

$

28,906

 

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(15,180

)

 

$

(118

)

 

$

(43,366

)

 

$

(24,301

)

Adjustments:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,889

 

 

 

1,588

 

 

 

13,623

 

 

 

6,044

 

Induced conversion expense

 

 

 

 

 

 

 

 

 

 

 

2,232

 

Stock-based compensation

 

 

12,307

 

 

 

10,213

 

 

 

47,986

 

 

 

42,443

 

Restructuring costs

 

 

 

 

 

(102

)

 

 

 

 

 

(102

)

Acquisition related expenses

 

 

1,596

 

 

 

 

 

 

3,272

 

 

 

 

Purchase accounting adjustments

 

 

 

 

 

 

 

 

388

 

 

 

 

Income tax effects of adjustments (1)

 

 

(110

)

 

 

(1,089

)

 

 

(2,100

)

 

 

(2,474

)

Non-GAAP Net income

 

$

2,502

 

 

$

10,492

 

 

$

19,803

 

 

$

23,842

 

 

 

 

 

 

 

 

 

 

Non-GAAP Net income per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.09

 

 

$

0.40

 

 

$

0.74

 

 

$

0.93

 

Diluted

 

$

0.09

 

 

$

0.37

 

 

$

0.70

 

 

$

0.87

 

GAAP and non-GAAP Weighted-average shares — basic

 

 

27,089

 

 

 

26,005

 

 

 

26,752

 

 

 

25,539

 

 

 

 

 

 

 

 

 

 

GAAP Weighted-average shares — diluted

 

 

27,089

 

 

 

26,005

 

 

 

26,752

 

 

 

25,539

 

Dilutive shares from stock plans

 

 

1,255

 

 

 

2,147

 

 

 

1,632

 

 

 

1,811

 

Dilutive shares from 2021 Notes

 

 

 

 

 

 

 

 

 

 

 

127

 

Non-GAAP Weighted-average shares — diluted

 

 

28,344

 

 

 

28,152

 

 

 

28,384

 

 

 

27,477

 

(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

 

 

March 31,

 

 

2024

 

GAAP Net loss

 

$

(15,201

)

Adjustments:

 

 

Forecasted Depreciation and amortization

 

 

4,152

 

Forecasted Stock-based compensation

 

 

12,691

 

Forecasted Restructuring costs

 

 

1,850

 

Forecasted Interest expense

 

 

1,258

 

Forecasted Other income, net

 

 

(850

)

Forecasted Income tax expense

 

 

(200

)

Adjusted EBITDA

 

$

3,700

 

 

 

 

GAAP Net loss

 

$

(15,201

)

Adjustments:

 

 

Forecasted Depreciation and amortization

 

 

4,152

 

Forecasted Stock-based compensation

 

 

12,691

 

Forecasted Restructuring costs

 

 

1,850

 

Forecasted Income tax effects of adjustments

 

 

(509

)

Non-GAAP Net income

 

$

2,983

 

 

 

 

GAAP Net loss per share — basic and diluted

 

$

(0.56

)

Non-GAAP Net income per share

 

 

Basic

 

$

0.11

 

Diluted

 

$

0.10

 

 

 

 

GAAP weighted-average shares — basic and diluted

 

 

27,300

 

 

 

 

Non-GAAP weighted-average shares — basic

 

 

27,300

 

Dilutive shares from stock plans

 

 

1,200

 

Non-GAAP weighted-average shares — diluted

 

 

28,500

 

 

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