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Impinj Reports Third Quarter 2021 Financial Results

Oct 27, 2021

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, 2021.

“Our third-quarter results were strong, with revenue and profitability exceeding our guidance,” said Chris Diorio, Impinj co-founder and CEO. “We accelerated Impinj M700 endpoint IC production, navigated unprecedented supply challenges and see strong, long-term demand from enterprise digital transformation.”

Third Quarter 2021 Financial Summary

  • Revenue of $45.2 million
  • GAAP gross margin of 50.9%; non-GAAP gross margin of 53.3%
  • GAAP net loss of $12.9 million, or loss of $(0.53) per diluted share using 24.3 million shares
  • Adjusted EBITDA loss of $0.4 million
  • Non-GAAP net loss of $0.9 million, or loss of $(0.04) per diluted share using 24.3 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 2021 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 2021 (in millions, except per share data):

 

 

Three Months Ending

 

 

December 31, 2021

Revenue

 

$46.0 to $48.0

Adjusted EBITDA income (loss)

 

($0.5) to $1.0

GAAP Net loss

 

($13.8) to ($12.8)

GAAP Weighted-average shares — basic and diluted

 

24.33 to 25.00

GAAP Net loss per share — basic and diluted

 

($0.57) to ($0.51)

Non-GAAP net income (loss)

 

($1.1) to $0.4

Non-GAAP Weighted-average shares — basic

 

24.33 to 25.00

Non-GAAP Weighted-average shares — diluted

 

24.33 to 26.50

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

 

($0.04) to $0.02

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

 

($0.04) to $0.02

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, Oct. 27, 2021 at 5:00 p.m. ET / 2:00 p.m. PT for analysts and investors to ask questions on its third quarter 2021 results, as well as its outlook for its fourth quarter 2021. Open to the public, investors may access the call by dialing +1-412-317-5196. A live webcast of the conference call will also be accessible on our website at investor.impinj.com. Following the webcast, an archived version will be available on the website for one year. A telephonic replay of the call will be available after the call and will run for five business days and may be accessed by dialing +1-412-317-0088 and entering passcode 10160731.

Management’s prepared written remarks, along with quarterly financial data, will be made available on our website at investor.impinj.com commensurate 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, prospects, the impact of Covid-19, and financial considerations for fourth quarter of 2021 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, 2021 (1)

 

December 31, 2020

Assets:

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

65,190

 

 

$

23,636

 

Short-term investments

 

48,153

 

 

 

82,453

 

Accounts receivable, net

 

27,045

 

 

 

25,003

 

Inventory

 

18,434

 

 

 

36,329

 

Prepaid expenses and other current assets

 

4,238

 

 

 

3,943

 

Total current assets

 

163,060

 

 

 

171,364

 

Property and equipment, net

 

28,638

 

 

 

16,531

 

Operating lease right-of-use assets

 

12,241

 

 

 

13,761

 

Other non-current assets

 

2,573

 

 

 

2,079

 

Goodwill

 

3,881

 

 

 

3,881

 

Total assets

$

210,393

 

 

$

207,616

 

Liabilities and stockholders' equity:

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

8,439

 

 

$

10,144

 

Accrued compensation and employee related benefits

 

6,283

 

 

 

5,529

 

Accrued and other current liabilities

 

3,634

 

 

 

1,468

 

Current portion of operating lease liabilities

 

3,990

 

 

 

3,641

 

Current portion of long-term debt

 

84,140

 

 

 

 

Current portion of deferred revenue

 

729

 

 

 

6,811

 

Total current liabilities

 

107,215

 

 

 

27,593

 

Long-term debt, net of current portion

 

 

 

 

54,556

 

Operating lease liabilities, net of current portion

 

12,843

 

 

 

15,266

 

Other long-term liabilities

 

804

 

 

 

805

 

Deferred revenue, net of current portion

 

253

 

 

 

277

 

Total liabilities

 

121,115

 

 

 

98,497

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Common stock, $0.001 par value

 

24

 

 

 

23

 

Additional paid-in capital

 

431,727

 

 

 

423,759

 

Accumulated other comprehensive income

 

(3

)

 

 

3

 

Accumulated deficit

 

(342,470

)

 

 

(314,666

)

Total stockholders' equity

 

89,278

 

 

 

109,119

 

Total liabilities and stockholders' equity

$

210,393

 

 

$

207,616

 

 

(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 as of March 31, 2021, June 30, 2021, and September 30, 2021 are presented under ASU 2020-06, while comparative prior reporting period presented is not adjusted and continue to be reported in accordance with our historical accounting policy.

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)

 

 

Three Months Ended

Nine Months Ended

 

September 30,

September 30,

 

2021

2020

2021

2020

Revenue

$

45,193

 

$

28,196

 

$

137,709

 

$

102,475

 

Cost of revenue

 

22,180

 

 

14,824

 

 

67,938

 

 

54,749

 

Gross profit

 

23,013

 

 

13,372

 

 

69,771

 

 

47,726

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

16,789

 

 

11,901

 

 

46,480

 

 

33,619

 

Sales and marketing

 

8,736

 

 

6,964

 

 

24,577

 

 

20,577

 

General and administrative

 

9,860

 

 

7,527

 

 

27,012

 

 

26,215

 

Restructuring costs

 

 

 

 

 

1,263

 

 

-

 

Total operating expenses

 

35,385

 

 

26,392

 

 

99,332

 

 

80,411

 

Loss from operations

 

(12,372

)

 

(13,020

)

 

(29,561

)

 

(32,685

)

Other income, net

 

2

 

 

49

 

 

21

 

 

584

 

Interest expense

 

(526

)

 

(1,360

)

 

(1,576

)

 

(4,021

)

Loss before income taxes

 

(12,896

)

 

(14,331

)

 

(31,116

)

 

(36,122

)

Income tax expense

 

(28

)

 

(15

)

 

(130

)

 

(84

)

Net loss

$

(12,924

)

$

(14,346

)

$

(31,246

)

$

(36,206

)

Net loss per share — basic and diluted

$

(0.53

)

$

(0.63

)

$

(1.30

)

$

(1.60

)

Weighted-average shares — basic and diluted

 

24,330

 

 

22,931

 

 

24,040

 

 

22,686

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

 

 

 

Nine Months Ended

 

 

September 30,

 

 

2021

 

2020

Operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(31,246

)

 

$

(36,206

)

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

 

 

 

 

 

 

 

 

Depreciation

 

 

3,171

 

 

 

3,402

 

Stock-based compensation

 

 

28,951

 

 

 

15,501

 

Accretion of discount or amortization of premium on short-term investments

 

 

694

 

 

 

85

 

Amortization of debt issuance costs and debt discount

 

 

283

 

 

 

2,719

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(2,042

)

 

 

6,005

 

Inventory

 

 

17,895

 

 

 

(3,829

)

Prepaid expenses and other assets

 

 

(758

)

 

 

(1,637

)

Deferred revenue

 

 

(6,106

)

 

 

449

 

Accounts payable

 

 

(1,831

)

 

 

2,608

 

Accrued compensation and employee related benefits

 

 

754

 

 

 

(1,797

)

Operating lease right-of-use assets

 

 

2,218

 

 

 

2,029

 

Operating lease liabilities

 

 

(2,772

)

 

 

(2,509

)

Accrued and other liabilities

 

 

1,196

 

 

 

(372

)

Net cash provided by (used in) operating activities

 

 

10,407

 

 

 

(13,552

)

Investing activities:

 

 

 

 

 

 

 

 

Purchases of investments

 

 

(36,431

)

 

 

(57,298

)

Proceeds from maturities of investments

 

 

70,000

 

 

 

41,675

 

Purchases of property and equipment

 

 

(14,181

)

 

 

(2,336

)

Net cash provided by (used in) investing activities

 

 

19,388

 

 

 

(17,959

)

Financing activities:

 

 

 

 

 

 

 

 

Principal payments on finance lease obligations

 

 

(2

)

 

 

(240

)

Proceeds from exercise of stock options and employee stock purchase plan

 

 

11,761

 

 

 

4,916

 

Net cash provided by financing activities

 

 

11,759

 

 

 

4,676

 

Net increase (decrease) in cash and cash equivalents

 

 

41,554

 

 

 

(26,835

)

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

23,636

 

 

 

66,898

 

End of period

 

$

65,190

 

 

$

40,063

 

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; 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; 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, 2021, are presented under the new standard and we no longer recorded amortization of debt discount, and comparative prior reporting period presented is not adjusted.

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,

 

 

2021

 

2020

 

2021

 

2020

GAAP Gross margin

 

 

50.9

%

 

 

47.4

%

 

 

50.7

%

 

 

46.6

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

1.3

%

 

 

1.9

%

 

 

1.1

%

 

 

1.3

%

Stock-based compensation

 

 

1.1

%

 

 

0.8

%

 

 

0.9

%

 

 

0.6

%

Non-GAAP Gross margin

 

 

53.3

%

 

 

50.1

%

 

 

52.7

%

 

 

48.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(12,924

)

 

$

(14,346

)

 

$

(31,246

)

 

$

(36,206

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

1,095

 

 

 

1,108

 

 

 

3,171

 

 

 

3,402

 

Stock-based compensation

 

 

10,920

 

 

 

5,683

 

 

 

28,951

 

 

 

15,501

 

Other income, net

 

 

(2

)

 

 

(49

)

 

 

(21

)

 

 

(584

)

Interest expense

 

 

526

 

 

 

1,360

 

 

 

1,576

 

 

 

4,021

 

Income tax expense

 

 

28

 

 

 

15

 

 

 

130

 

 

 

84

 

Settlement and related costs

 

 

 

 

 

 

 

 

 

 

 

5,359

 

Adjusted EBITDA income (loss)

 

$

(357

)

 

$

(6,229

)

 

$

3,824

 

 

$

(8,423

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(12,924

)

 

$

(14,346

)

 

$

(31,246

)

 

$

(36,206

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

1,095

 

 

 

1,108

 

 

 

3,171

 

 

 

3,402

 

Stock-based compensation

 

 

10,920

 

 

 

5,683

 

 

 

28,951

 

 

 

15,501

 

Amortization of debt discount

 

 

 

 

 

897

 

 

 

 

 

 

2,637

 

Settlement and related costs

 

 

 

 

 

 

 

 

 

 

 

5,359

 

Non-GAAP Net income (loss)

 

$

(909

)

 

$

(6,658

)

 

$

2,139

 

 

$

(9,307

)

Non-GAAP Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.04

)

 

$

(0.29

)

 

$

0.09

 

 

$

(0.41

)

Diluted

 

$

(0.04

)

 

$

(0.29

)

 

$

0.08

 

 

$

(0.41

)

GAAP and non-GAAP Weighted-average shares — basic

 

 

24,330

 

 

 

22,931

 

 

 

24,040

 

 

 

22,686

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Weighted-average shares — diluted

 

 

24,330

 

 

 

22,931

 

 

 

24,040

 

 

 

22,686

 

Dilutive shares from stock plans

 

 

 

 

 

 

 

 

1,626

 

 

 

 

Non-GAAP Weighted-average shares — diluted

 

 

24,330

 

 

 

22,931

 

 

 

25,666

 

 

 

22,686

 

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,

 

 

2021

GAAP Net loss

 

$

(13,300

)

Adjustments:

 

 

 

 

Forecasted Depreciation

 

 

1,800

 

Forecasted Stock-based compensation

 

 

11,150

 

Forecasted Interest expense

 

 

550

 

Forecasted Other income, net

 

 

0

 

Forecasted Income tax expense

 

 

50

 

Adjusted EBITDA income

 

$

250

 

 

 

 

 

 

GAAP Net loss

 

$

(13,300

)

Adjustments:

 

 

 

 

Forecasted Depreciation

 

 

1,800

 

Forecasted Stock-based compensation

 

 

11,150

 

Non-GAAP Net loss

 

$

(350

)

 

 

 

 

 

GAAP Net loss per share — basic and diluted

 

 

 

 

Basic

 

$

(0.54

)

Diluted

 

$

(0.54

)

Non-GAAP Net loss per share — basic and diluted

 

 

 

 

Basic

 

$

(0.01

)

Diluted

 

$

(0.01

)

 

 

 

 

 

GAAP and non-GAAP weighted-average shares — basic and diluted

 

 

24,500

 

 

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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