Impinj Reports Third Quarter 2022 Financial Results

Oct 26, 2022

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, 2022.

“Our third-quarter results were strong, with both endpoint IC and reader IC revenue setting new quarterly records,” said Chris Diorio, Impinj co-founder and CEO. “We entered the fourth quarter with record backlog and I expect demand to remain strong well into 2023.”

Third Quarter 2022 Financial Summary

  • Revenue of $68.3 million
  • GAAP gross margin of 54.8%; non-GAAP gross margin of 56.9%
  • GAAP net loss of $2.2 million, or loss of $(0.09) per diluted share using 25.7 million shares
  • Adjusted EBITDA of $9.8 million
  • Non-GAAP net income of $9.3 million, or income of $0.34 per diluted share using 27.7 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 2022 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 2022 (in millions, except per share data):

 

 

Three Months Ending

 

 

December 31, 2022

Revenue

 

$71.5 to $73.5

GAAP Net loss

 

($3.1) to ($1.6)

Adjusted EBITDA income

 

$9.8 to $11.3

GAAP Weighted-average shares — basic and diluted

 

25.90 to 26.10

GAAP Net loss per share — basic and diluted

 

($0.12 ) to ($0.06 )

Non-GAAP Net income

 

$9.0 to $10.5

Non-GAAP Weighted-average shares — basic

 

25.90 to 26.10

Non-GAAP Weighted-average shares — diluted

 

27.90 to 28.10

Non-GAAP Net income per share — basic

 

$0.35 to $0.40

Non-GAAP Net income per share — diluted

 

$0.32 to $0.37

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 26, 2022 at 5:00 p.m. ET / 2:00 p.m. PT to discuss its third quarter 2022 results, as well as its outlook for its fourth quarter 2022. 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 3500921.

Management’s prepared written remarks, along with quarterly financial data, will be made available on our 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 the market for RAIN RFID, our strategy, our prospects, the impact of Covid-19, the impact of silicon wafer and reader component availability and supply, and financial considerations for fourth quarter of 2022 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, 2022 (1)

 

 

December 31, 2021 (1)

 

Assets:

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

39,310

 

 

$

123,903

 

Short-term investments

 

142,541

 

 

 

69,443

 

Accounts receivable, net

 

40,667

 

 

 

35,449

 

Inventory

 

31,925

 

 

 

21,958

 

Prepaid expenses and other current assets

 

5,507

 

 

 

5,049

 

Total current assets

 

259,950

 

 

 

255,802

 

Long-term investments

 

19,200

 

 

 

14,225

 

Property and equipment, net

 

31,121

 

 

 

27,500

 

Operating lease right-of-use assets

 

11,414

 

 

 

11,667

 

Other non-current assets

 

2,223

 

 

 

2,462

 

Goodwill

 

3,881

 

 

 

3,881

 

Total assets

$

327,789

 

 

$

315,537

 

Liabilities and stockholders' equity (deficit):

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

13,249

 

 

$

11,732

 

Accrued compensation and employee related benefits

 

7,936

 

 

 

6,365

 

Accrued and other current liabilities

 

6,080

 

 

 

2,481

 

Current portion of operating lease liabilities

 

3,460

 

 

 

4,143

 

Restructuring liabilities

 

102

 

 

 

591

 

Current portion of long-term debt

 

 

 

 

9,633

 

Current portion of deferred revenue

 

2,808

 

 

 

558

 

Total current liabilities

 

33,635

 

 

 

35,503

 

Long-term debt, net of current portion

 

279,846

 

 

 

278,661

 

Operating lease liabilities, net of current portion

 

11,790

 

 

 

11,934

 

Other long-term liabilities

 

113

 

 

 

279

 

Deferred revenue, net of current portion

 

344

 

 

 

236

 

Total liabilities

 

325,728

 

 

 

326,613

 

Stockholders' equity (deficit):

 

 

 

 

 

Common stock, $0.001 par value

 

26

 

 

 

25

 

Additional paid-in capital

 

390,432

 

 

 

351,422

 

Accumulated other comprehensive loss

 

(1,730

)

 

 

(39

)

Accumulated deficit

 

(386,667

)

 

 

(362,484

)

Total stockholders' equity (deficit)

 

2,061

 

 

 

(11,076

)

Total liabilities and stockholders' equity (deficit)

$

327,789

 

 

$

315,537

 

 

 

 

 

 

 

(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 under both periods are presented under ASU 2020-06.

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

Revenue

 

$

68,270

 

 

$

45,193

 

 

$

181,210

 

 

$

137,709

 

 

Cost of revenue

 

 

30,835

 

 

 

22,180

 

 

 

83,494

 

 

 

67,938

 

 

Gross profit

 

 

37,435

 

 

 

23,013

 

 

 

97,716

 

 

 

69,771

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

18,766

 

 

 

16,789

 

 

 

55,124

 

 

 

46,480

 

 

Sales and marketing

 

 

9,326

 

 

 

8,736

 

 

 

28,239

 

 

 

24,577

 

 

General and administrative

 

 

11,087

 

 

 

9,860

 

 

 

33,888

 

 

 

27,012

 

 

Restructuring costs

 

 

 

 

 

 

 

 

 

 

 

1,263

 

 

Total operating expenses

 

 

39,179

 

 

 

35,385

 

 

 

117,251

 

 

 

99,332

 

 

Loss from operations

 

 

(1,744

)

 

 

(12,372

)

 

 

(19,535

)

 

 

(29,561

)

 

Other income, net

 

 

774

 

 

 

2

 

 

 

1,367

 

 

 

21

 

 

Induced conversion expense

 

 

 

 

 

 

 

 

(2,232

)

 

 

 

 

Interest expense

 

 

(1,205

)

 

 

(526

)

 

 

(3,716

)

 

 

(1,576

)

 

Loss before income taxes

 

 

(2,175

)

 

 

(12,896

)

 

 

(24,116

)

 

 

(31,116

)

 

Income tax expense

 

 

(24

)

 

 

(28

)

 

 

(67

)

 

 

(130

)

 

Net loss

 

$

(2,199

)

 

$

(12,924

)

 

$

(24,183

)

 

$

(31,246

)

 

Net loss per share — basic and diluted

 

$

(0.09

)

 

$

(0.53

)

 

$

(0.95

)

 

$

(1.30

)

 

Weighted-average shares — basic and diluted

 

 

25,743

 

 

 

24,330

 

 

 

25,384

 

 

 

24,040

 

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

 

 

 

 

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2022

 

 

2021

 

Operating activities:

 

 

 

 

 

 

Net loss

 

$

(24,183

)

 

$

(31,246

)

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

 

 

 

 

 

 

Depreciation

 

 

4,456

 

 

 

3,171

 

Stock-based compensation

 

 

32,230

 

 

 

28,951

 

Accretion of discount or amortization of premium on investments

 

 

301

 

 

 

694

 

Amortization of debt issuance costs

 

 

1,203

 

 

 

283

 

Induced conversion expense related to convertible notes

 

 

2,232

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(5,218

)

 

 

(2,042

)

Inventory

 

 

(9,967

)

 

 

17,895

 

Prepaid expenses and other assets

 

 

45

 

 

 

(758

)

Accounts payable

 

 

1,107

 

 

 

(1,831

)

Accrued compensation and employee related benefits

 

 

1,571

 

 

 

754

 

Accrued and other liabilities

 

 

1,741

 

 

 

1,063

 

Operating lease right-of-use assets

 

 

2,490

 

 

 

2,218

 

Operating lease liabilities

 

 

(3,064

)

 

 

(2,772

)

Restructuring liabilities

 

 

(489

)

 

 

133

 

Deferred revenue

 

 

2,358

 

 

 

(6,106

)

Net cash provided by operating activities

 

 

6,813

 

 

 

10,407

 

Investing activities:

 

 

 

 

 

 

Purchases of investments

 

 

(159,837

)

 

 

(36,431

)

Proceeds from maturities of investments

 

 

79,508

 

 

 

70,000

 

Purchases of property and equipment

 

 

(5,975

)

 

 

(14,181

)

Net cash provided by (used in) investing activities

 

 

(86,304

)

 

 

19,388

 

Financing activities:

 

 

 

 

 

 

Principal payments on finance lease obligations

 

 

 

 

 

(2

)

Proceeds from exercise of stock options and employee stock purchase plan

 

 

12,462

 

 

 

11,761

 

Payment of 2019 Notes

 

 

(17,564

)

 

 

 

Net cash provided by (used in) financing activities

 

 

(5,102

)

 

 

11,759

 

Net increase (decrease) in cash and cash equivalents

 

 

(84,593

)

 

 

41,554

 

Cash and cash equivalents

 

 

 

 

 

 

Beginning of period

 

 

123,903

 

 

 

23,636

 

End of period

 

$

39,310

 

 

$

65,190

 

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; induced conversion expense associated with repurchases of our 2019 Notes; 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; induced conversion expense associated with repurchases of our 2019 Notes; 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, 2022 and September 30, 2021, are presented under the new standard and we no longer recorded amortization of debt discount. In fourth-quarter 2021, we revised our definition of adjusted EBITDA to exclude the expense incurred in connection with the induced conversion expense associated with repurchases of our 2019 Notes.

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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

GAAP Gross margin

 

 

54.8

%

 

 

50.9

%

 

 

53.9

%

 

 

50.7

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

1.4

%

 

 

1.3

%

 

 

1.5

%

 

 

1.1

%

Stock-based compensation

 

 

0.7

%

 

 

1.1

%

 

 

0.8

%

 

 

0.9

%

Non-GAAP Gross margin

 

 

56.9

%

 

 

53.3

%

 

 

56.2

%

 

 

52.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(2,199

)

 

$

(12,924

)

 

$

(24,183

)

 

$

(31,246

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

1,483

 

 

 

1,095

 

 

 

4,456

 

 

 

3,171

 

Stock-based compensation

 

 

10,057

 

 

 

10,920

 

 

 

32,230

 

 

 

28,951

 

Other income, net

 

 

(774

)

 

 

(2

)

 

 

(1,367

)

 

 

(21

)

Interest expense

 

 

1,205

 

 

 

526

 

 

 

3,716

 

 

 

1,576

 

Income tax expense

 

 

24

 

 

 

28

 

 

 

67

 

 

 

130

 

Restructuring costs

 

 

 

 

 

 

 

 

 

 

 

1,263

 

Induced conversion expense

 

 

 

 

 

 

 

 

2,232

 

 

 

 

Adjusted EBITDA

 

$

9,796

 

 

$

(357

)

 

$

17,151

 

 

$

3,824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(2,199

)

 

$

(12,924

)

 

$

(24,183

)

 

$

(31,246

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

1,483

 

 

 

1,095

 

 

 

4,456

 

 

 

3,171

 

Stock-based compensation

 

 

10,057

 

 

 

10,920

 

 

 

32,230

 

 

 

28,951

 

Restructuring costs

 

 

 

 

 

 

 

 

 

 

 

1,263

 

Induced conversion expense

 

 

 

 

 

 

 

 

2,232

 

 

 

 

Non-GAAP Net income (loss)

 

$

9,341

 

 

$

(909

)

 

$

14,735

 

 

$

2,139

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.36

 

 

$

(0.04

)

 

$

0.58

 

 

$

0.09

 

Diluted

 

$

0.34

 

 

$

(0.04

)

 

$

0.54

 

 

$

0.08

 

GAAP and non-GAAP Weighted-average shares — basic

 

 

25,743

 

 

 

24,330

 

 

 

25,384

 

 

 

24,040

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Weighted-average shares — diluted

 

 

25,743

 

 

 

24,330

 

 

 

25,384

 

 

 

24,040

 

Dilutive shares from stock plans

 

 

1,930

 

 

 

 

 

 

1,699

 

 

 

1,626

 

Non-GAAP Weighted-average shares — diluted

 

 

27,673

 

 

 

24,330

 

 

 

27,083

 

 

 

25,666

 

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,

 

 

 

2022

 

GAAP Net loss

 

$

(2,350

)

Adjustments:

 

 

 

Forecasted Depreciation

 

 

1,600

 

Forecasted Stock-based compensation

 

 

10,500

 

Forecasted Interest expense

 

 

1,270

 

Forecasted Other income, net

 

 

(500

)

Forecasted Income tax expense

 

 

30

 

Adjusted EBITDA

 

$

10,550

 

 

 

 

 

GAAP Net loss

 

$

(2,350

)

Adjustments:

 

 

 

Forecasted Depreciation

 

 

1,600

 

Forecasted Stock-based compensation

 

 

10,500

 

Non-GAAP Net income

 

$

9,750

 

 

 

 

 

GAAP Net loss per share — basic and diluted

 

$

(0.09

)

Non-GAAP Net income per share

 

 

 

Basic

 

$

0.38

 

Diluted

 

$

0.35

 

 

 

 

 

GAAP weighted-average shares — basic and diluted

 

 

26,000

 

 

 

 

 

Non-GAAP weighted-average shares — basic

 

 

26,000

 

Dilutive shares from stock plans

 

 

2,000

 

Non-GAAP weighted-average shares — diluted

 

 

28,000

 

 

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.