IMPINJ INC
For the period ended Mar 31, 2025. Filed Apr 23, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 23, 2025
PI$171.03+6.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-23.
0000950170-24-116665
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-23.
0000950170-25-057433
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 119 previous paragraphs and 96 current paragraphs.
70 unchanged; 22 reworded; 4 added; 21 removed; 6 previous and 0 current paragraphs rearranged.
Tables are not compared: 15 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
the impact of tariffs, trade measures and other macroeconomic conditions;
Current report
Macroeconomic Factors
Current report
We are subject to impacts from the evolving macroeconomic environment, including uncertainty and volatility in trade measures and tariffs. Because most of our revenue derives from endpoint ICs that our partners embed into or onto items, to the extent that those items are impacted, positively or negatively, by trade measure and tariffs, we are impacted as well. While the impact that recent trade measures will have on our business and financial results is difficult to predict, they could negatively affect our business and financial results. We continue to monitor the broader impacts of these measures on our business, our supply chain and our results of operations. See risk factor "Changes in global trade policies could have a material adverse effect on us." in Part II, Item 1A. of this report for further information.
Current report
Sales and marketing expense decreased $2.1 million, due primarily to a decrease of $2.1 million in stock-based compensation expense. This decrease is due primarily to forfeitures related to the company's Chief Revenue Officer retiring in the period.
Removed paragraphs (21)
Previous report
the impact of any future health outbreak or pandemic, including a potential resurgence of Covid-19 on our business, operations and financial condition as well as on macroeconomic conditions;
Previous report
Revenue and gross profit increased, due primarily to higher endpoint IC revenue partially offset by lower systems revenue. The endpoint IC revenue increase was driven primarily by licensing revenue as well as higher endpoint IC shipment volumes when compared to the prior-year period. Systems revenue decreased, due primarily to lower shipment volumes. Gross margin increased, due primarily to the high-margin licensing revenue contribution. Loss from operations decreased, due primarily to increased gross profit and a slight decrease in operating expenses. The operating expense decrease was due primarily to lower general and administrative costs, sales and marketing costs, and amortization of intangibles, partially offset by higher research and development and restructuring costs.
Previous report
Endpoint IC revenue increased $51.3 million due to a $54.5 million increase in shipment volumes and a $15.0 million increase in licensing revenue that did not occur in the prior-year period, partially offset by a $18.2 million decrease in ASP due primarily to product mix shift, and to a lesser extent, short-term pricing incentives on legacy products.
Previous report
Systems revenue decreased by $13.7 million due primarily to a decrease in shipment volumes. Reader and gateway revenues decreased $7.9 million and $8.2 million, respectively, and nonrecurring engineering revenue decreased $0.8 million. These decreases were partially offset by an increase of $3.5 million from test and measurement solutions revenue.
Previous report
Gross profit increased, due primarily to increased endpoint IC revenue partially offset by decreased systems revenue. Gross margin increased, due primarily to high-margin licensing revenue recognized in the year that did not occur in the prior year.
Previous report
Research and development expense increased $5.5 million, due primarily to increases of $6.1 million in personnel expenses from higher bonus achievement and higher headcount; $2.7 million in stock-based compensation expense primarily related to increased outstanding equity grants; and $1.0 million in infrastructure costs; partially offset by a decrease of $4.1 million in product development costs due to timing.
Previous report
Sales and marketing expense was comparable for the periods with offsetting fluctuations. Personnel expenses decreased resulting from a decrease in headcount, which was offset by higher bonus achievement and commissions.
Previous report
Sales and marketing expense decreased $0.8 million, due primarily to decreases of $0.6 million in personnel expenses resulting from a decrease in headcount, partially offset by higher bonus achievement and commissions.
Previous report
General and administrative expense decreased $6.1 million, due primarily to a decrease of $12.3 million in professional services related to legal fees and transaction expenses in the current year. This decrease was offset by an increase of $3.5 million in personnel expenses from higher bonus achievement, higher headcount and higher taxes associated with equity vesting, and an increase of $2.4 million in stock-based compensation expense, from increased outstanding equity grants.
Previous report
Non-GAAP Financial Measures
Previous report
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.
Previous report
Adjusted EBITDA
Previous report
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.
Previous report
The following table presents a reconciliation of net loss to adjusted EBITDA:
Previous report
Non-GAAP Net Income (Loss)
Previous report
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).
Previous report
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.
Previous report
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.
Previous report
The following table presents a reconciliation of net loss to non-GAAP net income (loss):
Previous report
For the nine months ended September 30, 2024, we generated $115.7 million of net cash from operating activities. These net cash proceeds were due primarily to $96.9 million of net income adjusted for non-cash items and $18.8 million in working capital due primarily to higher accounts payable, accrued compensation and lower inventory, partially offset by higher accounts receivable.
Previous report
For the nine months ended September 30, 2023, we generated $101.5 million of net cash from investing activities. These net cash proceeds were due primarily to investment maturities of $127.5 million and investment sales of $13.4 million, partially offset by cash paid for the Voyantic Oy acquisition of $23.4 million and net property and equipment purchases of $16.0 million.
Reworded paragraphs (22)
Previous wording
our future financial performance, including our average selling prices, or ASPs, gross margins and the dependency of our future financial performance on macroeconomic conditions;
Current wording
our future financial performance, including our average selling prices, or ASPs, gross margins and the dependency of our future financial performance on macroeconomic conditions or industry trends, including tariffs;
Previous wording
Our vision is a world in which every item that enterprises manufacture, transport and sell, and that people own, use and recycle, is wirelessly and ubiquitously connected to the cloud. And a world in which the ownership, history and linked information for every one of those items is seamlessly available to enterprises and people. We call our expansive vision a Boundless Internet of Things, or IoT. We design and sell a platform that enables that wireless item-to-cloud connectivity and with which we and our partners innovate Internet of Things, or IoT, solutions.
Current wording
Our vision is a world in which every item that enterprises manufacture, transport and sell, and that people own, use and recycle, is wirelessly and ubiquitously connected to the cloud. And a world in which the ownership, history and linked information for every one of those items is seamlessly available to enterprises and people. We call our expansive vision a Boundless Internet of Things, or IoT. We design and sell a platform that enables that wireless item-to-cloud connectivity and with which we and our partners innovate IoT solutions.
Previous wording
We have enabled connectivity for more than 100 billion items to date, delivering item visibility and improving operational efficiencies for retailers, supply chain and logistics, or SC&L providers, restaurants and food-service providers, airlines, automobile manufacturers, healthcare companies and many more. We are today focused on extending item connectivity from tens of billions to trillions of items, and delivering item data not just to enterprises but to people, so they too can derive value from their connected items. We believe the Boundless IoT we are enabling will, in the not-too-distant future, give people ubiquitous access to cloud-based digital twins of every item, each storing the item’s history and linked information and helping people explore and learn about the item. We believe that that connectivity will transform the world.
Current wording
Our mission is to connect every thing. We have enabled connectivity for more than 120 billion items to date, delivering item visibility and improving operational efficiencies for retailers, supply chain and logistics, or SC&L providers, restaurants and food-service providers, airlines, automobile manufacturers, healthcare companies and many more. We are today focused on extending item connectivity from tens of billions to trillions of items, and delivering item data not just to enterprises but to people, so they too can derive value from their connected items. We believe the Boundless IoT we are enabling will, in the not-too-distant future, give people ubiquitous access to cloud-based digital twins of every item, each storing the item’s history and linked information and helping people explore and learn about the item. We believe that that connectivity will transform the world.
Previous wording
Our silicon radios follow the RAIN industry’s air-interface standard for their core functionality. We create partner and enterprise preference for our radios and solutions by adding differentiated features into our products, and supporting or licensing those features across our platform, to deliver solutions capabilities and performance that surpasses mix-and-match solutions built from competitor products.
Current wording
Our radios follow the RAIN industry’s air-interface standard for their core reading functionality. We create partner and enterprise preference for our radios and solutions by adding differentiated features into them, supporting those features across our platform and licensing them where appropriate, to deliver solutions capabilities and performance that surpasses mix-and-match solutions built from competitor products. We have also introduced a set of compatible extensions to the RAIN industry’s air-interface standard, which we call Gen2X, that enhance the performance and protection of our solutions. The RAIN industry, on the reader and solutions side, has broadly embraced Gen2X.
Previous wording
Most of our revenue derives from endpoint ICs that our partners embed into or onto enterprise items and is therefore affected by macroeconomic trends. Further, we sell most of our products, both endpoint ICs and systems, through partners and distributors, limiting our visibility to enterprise demand. We work closely with those partners and distributors to gain as accurate a view as possible, however, correctly forecasting demand for our products and identifying market shifts in a timely manner remains a challenge. As a result, we sometimes experience inventory overages or shortages. Inventory overages can increase expenses, expose us to product obsolescence and/or increased reserves and negatively affect our business. Inventory shortages can cause long lead times, missed opportunities, market-share losses and/or damaged customer relationships, also negatively affecting our business.
Current wording
We sell most of our products, both endpoint ICs and systems, through partners and distributors, limiting our visibility to actual enterprise demand. We work closely with those partners and distributors to gain as accurate a view as possible, however, correctly forecasting demand for our products and identifying market shifts in a timely manner remains a challenge. As a result, we sometimes experience inventory overages or shortages. Inventory overages can increase expenses, expose us to product obsolescence and/or increased reserves and negatively affect our business. Inventory shortages can cause long lead times, missed opportunities, market-share losses and/or damaged customer relationships, also negatively affecting our business.
Previous wording
Enterprises have significantly adopted RAIN in retail apparel, our largest market, and SC&L, but the rate of adoption and unit growth rates have been uneven and unpredictable. From 2010 to 2023, our overall endpoint IC sales volumes increased at a 26% compounded annual growth rate; however, we have experienced uneven growth rates in various periods.
Current wording
Enterprises have significantly adopted RAIN in retail apparel, our largest market, and SC&L, but the rate of adoption and unit growth rates have been uneven and unpredictable. From 2010 to 2024, our overall endpoint IC sales volumes increased at a 27% compounded annual growth rate; however, we have experienced declines in endpoint IC sales volumes during various periods.
Previous wording
Our systems business, at least for readers and gateways, depends significantly on large-scale deployments at discrete end users, and deployment timing causes large yearly variability in our systems revenue. For example, we generated 14% of total 2019 revenue from a gateway deployment at a large North American SC&L provider. We did not have comparable project-based revenue in 2020. Similarly, in second-quarter 2021, we generated 13% of our revenue from a project-based gateway deployment for RAIN-based self-checkout and loss prevention at a large Europe-based global retailer. We did not have comparable project-based revenue in 2022, 2023 or in the first three quarters of 2024.
Current wording
Our systems business, at least for readers and gateways, depends significantly on large-scale deployments at discrete end users, and deployment timing causes large yearly variability in our systems revenue. For example, we generated 14% of total 2019 revenue from a gateway deployment at a large North American SC&L provider. We did not have comparable project-based revenue in 2020. Similarly, in second-quarter 2021, we generated 13% of our revenue from a project-based gateway deployment for RAIN-based self-checkout and loss prevention at a large Europe-based global retailer. While we continue generating project-based revenue, we have not seen it at a comparable scale in 2022 to 2024, or in first-quarter 2025.
Previous wording
We did not see these seasonal trends in 2023. We do expect continued quarter-to-quarter revenue variability due to changing macroeconomic conditions and timing of program launches that could impact seasonal trends in the future.
Current wording
Quarter-to-quarter revenue variability due to macroeconomic conditions and program-launch timing may impact these seasonal trends in the future. In light of the 2025 macroeconomic environment, we are uncertain whether we will see these trends in 2025.
Previous wording
Revenue and gross profit increased, due primarily to higher endpoint IC revenue partially offset by lower systems revenue. The endpoint IC revenue increase was driven primarily by higher endpoint IC shipment volumes when compared to the prior-year period. Systems revenue decreased, due primarily to lower shipment volumes. Gross margin increased, due primarily to lower excess and obsolescence charges in the current-year period compared to the prior-year period. Loss from operations decreased, due primarily to increased gross profit, partially offset by increased operating expenses. The operating expense increase was due to higher research and development costs, partially offset by lower general and administrative costs, sales and marketing costs and amortization of intangibles.
Current wording
Revenue and gross profit decreased, due primarily to lower systems revenue on lower shipment volumes compared to the prior-year period. Gross margin increased, due primarily to lower indirect costs in the current-year period, partially offset by a decrease in direct product margin. Loss from operations decreased, due primarily to decreased operating expenses, partially offset by decreased gross profit. The operating expense decrease was due to lower sales and marketing costs, restructuring costs, general and administrative costs and amortization of intangibles, partially offset by increased research and development costs.
Previous wording
Endpoint IC revenue increased $32.4 million, due to a $38.2 million increase in shipment volumes, partially offset by a $5.8 million decrease from lower ASP due primarily to product mix, and to a lesser extent, short-term pricing incentives on legacy products.
Current wording
Endpoint IC revenue decreased $0.3 million, due to a $9.3 million decrease from lower ASP due to product mix and new customer pricing that went into effect at the beginning of the year, offset by a $9.0 million increase in shipment volumes.
Previous wording
Systems revenue decreased $2.2 million, due primarily to a decrease in shipment volumes. Reader and gateway revenues decreased $1.0 million and $2.9 million, respectively and nonrecurring engineering revenue decreased by $0.4 million. These decreases were partially offset by increases of $1.5 million and $0.6 million in reader IC and test and measurement solution revenue, respectively.
Current wording
Systems revenue decreased $2.3 million due primarily to a decrease in shipment volumes. Gateway revenue decreased $2.8 million and test and measurement solution revenue decreased by $1.0 million. These decreases were partially offset by increases of $1.1 million and $0.6 million in reader and reader IC revenue, respectively.
Previous wording
Gross profit increased, due primarily to increased endpoint IC revenue, partially offset by decreased systems revenue. Gross margin increased, due primarily to lower excess and obsolescence charges compared to the prior-year period.
Current wording
Gross profit decreased, due primarily to decreased systems revenue. Gross margin increased, due primarily to lower indirect costs in the current-year period, partially offset by a decrease in direct product margin, due to mix of endpoint IC and systems as well as product mix within endpoint IC.
Previous wording
Research and development expense increased $3.9 million, due primarily to increases of $2.8 million in personnel expenses related to higher bonus achievement; $1.4 million in stock-based compensation expense primarily related to increased outstanding equity grants; and $0.3 million in infrastructure costs; partially offset by a decrease of $0.6 million in product development costs due to timing.
Current wording
Research and development expense increased $2.8 million, due primarily to increases of $1.8 million in stock-based compensation expense, primarily related to increased outstanding equity grants; $0.6 million in product development costs due to timing; and $0.5 million in infrastructure costs.
Previous wording
General and administrative expense decreased $1.1 million, due primarily to a decrease of $3.8 million in professional services related to legal fees. This decrease was partially offset by increases of $1.5 million in personnel expenses related to higher bonus achievement and $1.0 million in stock compensation expense related to increased outstanding equity grants.
Current wording
General and administrative expense decreased $1.0 million, due primarily to a decrease of $2.2 million in professional services related to legal fees. This decrease was partially offset by increases of $1.0 million in stock compensation expense related to increased outstanding equity grants.
Previous wording
The increase in restructuring costs relates to the restructuring we initiated on February 7, 2024. See Note 12, Restructuring for further details.
Current wording
The decrease in restructuring costs relates to the restructuring we initiated on February 7, 2024. There were no restructuring costs for the three months ended March 31, 2025. See note 11 Restructuring for further information.
Previous wording
The increase in income from settlement of litigation relates to the Settlement Agreement with NXP on March 13, 2024. See Note 6, Commitments and Contingencies for further details.
Current wording
The decrease in income from settlement of litigation is related to the litigation settlement we reached with NXP on March 13, 2024. There was no income from litigation for the three months ended March 31, 2025. See note 6 Commitments and Contingencies for further information.
Previous wording
We are subject to federal and state income taxes in the United States and foreign jurisdictions. Income tax expense increased $0.4 million and $0.7 million for the three and nine months ended September 30, 2024, respectively, compared to the prior-year periods due to changes in our estimated effective tax rate.
Current wording
We are subject to federal and state income taxes in the United States and foreign jurisdictions. Income tax benefit increased $0.3 million for the three months ended March 31, 2025, compared to the prior-year period due to changes in income (loss).
Previous wording
As of September 30, 2024, we had cash, cash equivalents and short-term investments of $170.3 million, comprising cash deposits held at major financial institutions and short-term investments in a variety of securities, including U.S. government securities, treasury bills, corporate notes and bonds, commercial paper, and money market funds. As of September 30, 2024, we had working capital of $(2.0) million, down from $39.4 million as of June 30, 2024. The decrease was driven by purchases of long-term investments in third-quarter 2024.
Current wording
As of March 31, 2025, we had cash, cash equivalents and short-term investments of $147.9 million, comprising cash deposits held at major financial institutions and short-term investments in a variety of securities, including U.S. government securities, treasury bills, corporate notes and bonds, commercial paper and money market funds. As of March 31, 2025, we had working capital of $280.4 million.
Previous wording
For the nine months ended September 30, 2023, we used $50.8 million of net cash from operating activities. This net cash usage was due primarily to $67.0 million in working capital due primarily to higher inventory and lower accounts payable and $16.2 million of net loss adjusted for non-cash items.
Current wording
For the three months ended March 31, 2025, we used $11.1 million of net cash in operating activities. This net cash usage was due primarily to $18.5 million in working capital due primarily to lower accrued compensation and accounts payable. The usage was partially offset by $7.3 million of net income adjusted for non-cash items.
Previous wording
For the nine months ended September 30, 2024, we used $148.7 million of net cash from investing activities. This net cash usage was due to purchases of investments of $154.3 million, cash paid for equipment purchases of $13.0 million, partially offset by cash generated by investment maturities of $18.6 million.
Current wording
For the three months ended March 31, 2025, we generated $21.2 million of net cash proceeds from investing activities. These net cash proceeds were due to investment maturities of $49.0 million, partially offset by purchases of investments of $25.9 million and cash paid for equipment purchases of $1.9 million.
Previous wording
For the nine months ended September 30, 2023, we generated $7.9 million of net cash from financing activities. These net cash proceeds were due primarily to $7.9 million from stock-option exercises and our employee stock purchase plan.
Current wording
For the three months ended March 31, 2025, we generated $5.1 million of net cash from financing activities. These net cash proceeds were due to stock-option exercises and our employee stock purchase plan, offset by $0.8 million taxes paid to cover RSU vesting.
Previous wording
Purchase Commitments – Purchase commitments as of September 30, 2024 total $32.9 million and comprise noncancelable commitments to purchase inventory.
Current wording
Purchase Commitments – Purchase commitments as of March 31, 2025 total $31.3 million and comprise noncancelable commitments to purchase inventory.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Amortization of intangibles decreased $1.1 million. The decrease relates to the intangibles acquired as part of our April 3, 2023 acquisition of Voyantic Oy. Certain intangible assets acquired had a useful life of less than 1 year, resulting in a higher amortization expense in the prior-year period.
Previous report — wording carried elsewhere
There were no restructuring costs for the three months ended September 30, 2024 and 2023.
Previous report — wording carried elsewhere
Other income, net increased from the prior period due to increased interest income given higher invested balances and higher interest rates.
Previous report — wording carried elsewhere
There was no income from litigation for the three months ended September 30, 2024 and 2023.
Previous report — wording carried elsewhere
Interest expense was comparable for the periods.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, we generated $11.9 million of net cash from financing activities. These net cash proceeds were due to stock-option exercises and our employee stock purchase plan, offset by $4.6 million of cash paid for the earnout payment related to the Voyantic Oy acquisition.