IMPINJ INC
For the period ended Sep 30, 2025. Filed Oct 29, 2025.
View on SEC.govAbout this filing
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.
Sep 30, 2025 · Filed Oct 29, 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 2025-06-30; filed 2025-07-30.
0000950170-25-100302
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-29.
0001193125-25-256386
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 109 previous paragraphs and 117 current paragraphs.
80 unchanged; 26 reworded; 9 added; 3 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 13 previous and 14 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 (9)
Current report
Systems revenue increased $1.0 million due primarily to an increase in shipment volumes. Reader revenue increased by $5.5 million. This increase was partially offset by decreases of $3.2 million in reader IC revenue, $0.9 million in gateway revenue and $0.7 million in test and measurement solutions revenue.
Current report
Gross profit increased, due primarily to increased systems revenue. Gross margin increased, due primarily to lower indirect costs in the current year compared to the prior-year period.
Current report
Induced Conversion Expense
Current report
Three and nine months ended September 30, 2025 compared with three and nine months ended September 30, 2024
Current report
In September 2025, we completed a privately negotiated exchange of $190.0 million principal amount of the 2021 Convertible Notes, or the 2021 Note Exchange. The 2021 Note Exchange transaction was accounted for as an induced conversion in accordance with Accounting Standards Codification 470-20, Debt with Conversion and Other Options (ASC 470-20), as amended for ASU 2024-04. As a result of the induced conversion, we recorded $15.0 million in induced conversion expense which is included in the Consolidated Statements of Operations for the three and nine months ended September 30, 2025. The induced conversion expense represents the fair value of the consideration issued upon conversion in excess of the fair value of the securities issuable under the original terms of the 2021 Convertible Notes. See Note 7 Long-term Debt for further information.
Current report
On July 4, 2025, President Trump signed H.R. 1, the “One Big Beautiful Bill Act”, into law. One key provision, applicable to us, is the treatment of domestic research and experimental expenditures, which can now be capitalized or expensed currently. We are currently evaluating the available implementation options and expect to finalize our approach in the fourth quarter of calendar year 2025. In accordance with U.S. GAAP, we have also assessed the impact of the OBBBA on our annual consolidated financial statements and related disclosures and do not expect a material impact given we have a full valuation allowance on our U.S. deferred tax assets.
Current report
In September 2025, we completed a privately negotiated exchange of $190.0 million principal amount of the 2021 Convertible Notes, or the 2021 Note Exchange. The 2021 Note Exchange was accounted for as an induced conversion in accordance with Accounting Standards Codification 470-20, Debt with Conversion and Other Options (ASC 470-20) and in accordance with ASU 2024-04: Debt—Debt with Conversion and Other Options (Subtopic 470-20) - Induced Conversions of Convertible Debt Instruments, which we early adopted as of January 1, 2025. In connection with the induced conversion, we paid $190.0 million in cash, representing the principal amount exchanged, issued approximately 811,000 shares of our common stock, representing the exchange value in excess thereof, and also paid accrued and unpaid interest thereon.
Current report
2025 Notes
Current report
The net proceeds from the 2025 Notes were approximately $183.6 million after initial debt issuance costs, fees and expenses. We used the net proceeds and cash on hand to exchange $190.0 million aggregate principal amount of the 2021 Notes for approximately $190.0 million in cash, representing the principal amount exchanged, and approximately 811,000 shares of our common stock, representing the exchange value in excess thereof, and also paid accrued and unpaid interest thereon, in individual privately negotiated transactions concurrent with the 2025 Notes offering. In addition, we used approximately $11.2 million of cash on hand to pay the cost of the capped call transactions entered into in connection with the issuance of the 2025 Notes.
Removed paragraphs (3)
Previous report
Systems revenue decreased $2.1 million due primarily to a decrease in shipment volumes. Gateway revenue decreased $1.8 million, reader IC revenue decreased $1.6 million, and test and measurement solutions revenue decreased by $0.5 million. These decreases were partially offset by an increase of $2.0 million in reader revenue.
Previous report
Gross profit decreased, due primarily to decreased endpoint IC revenue. Gross margin increased, due primarily to endpoint IC product mix, specifically a higher contribution from M800 and an increase in high-margin licensing revenue compared to the prior-year period.
Previous report
On July 4, 2025, President Trump signed H.R. 1, the “One Big Beautiful Bill Act,” into law. In accordance with GAAP, the Company will account for the tax effects of changes in tax law in the period of enactment, which is third-quarter of calendar year 2025. The Company is currently in the process of analyzing the tax impacts of the law change, but we do not expect a material impact on our financial statements.
Reworded paragraphs (26)
Previous wording
We and our partner ecosystem build item-visibility solutions using products that we design and either sell or license, including silicon RAIN radios; manufacturing, test, encoding and reading systems; software and cloud services that encapsulate our solutions know-how; and intellectual property. We sell two types of silicon integrated circuit, or IC, radios. The first are endpoint ICs that store a serialized number to wirelessly identify an item. Our partners embed endpoint ICs into an item or its packaging. The ICs may also contain a cryptographic key to authenticate the item. The second are reader ICs that our partners use in finished readers to wirelessly discover, inventory and engage the endpoint ICs. Those readers may also protect an item or consumer, for example by authenticating the item as genuine or privatizing the item by rendering the endpoint IC unresponsive without the consumer first providing a password. Our manufacturing, test and encoding systems enable partner products and facilitate enterprise deployments. Our reading systems comprise high-performance finished readers and gateways for autonomous reading solutions. Our software and cloud services focus on solutions enablement.
Current wording
We and our partner ecosystem build item-visibility solutions using products that we design and either sell or license, including silicon RAIN radios; manufacturing, test, encoding and reading systems; software and services that encapsulate our solutions know-how; and intellectual property. We sell two types of silicon integrated circuit, or IC, radios. The first are endpoint ICs that store a serialized number to wirelessly identify an item. Our partners embed endpoint ICs into an item or its packaging. The ICs may also contain a cryptographic key to authenticate the item. The second are reader ICs that our partners use in finished readers to wirelessly discover, inventory and engage the endpoint ICs. Those readers may also protect an item or consumer, for example by authenticating the item as genuine or privatizing the item by rendering the endpoint IC unresponsive without the consumer first providing a password. Our manufacturing, test and encoding systems enable partner products and facilitate enterprise deployments. Our reading systems comprise high-performance finished readers and gateways for autonomous reading solutions. Our software and services focus on solutions enablement.
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. While we continue generating project-based revenue, we have not seen it at a comparable scale in 2022 to 2024, or in the first half of 2025.
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 the first three quarters of fiscal year 2025.
Previous wording
Quarter-to-quarter revenue and gross margin variability due to macroeconomic conditions, program-launch timing and our ability to migrate OEMs and end users to newer, lower cost products 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.
Current wording
We did not see these seasonal trends in 2023 but began to see them in second half 2024 and into 2025. We do expect continued quarter-to-quarter revenue and gross margin variability due to macroeconomic conditions, program-launch timing and our ability to migrate OEMs and end users to newer, lower cost products. These variables, among others, may impact seasonal trends in the near term, given current retail uncertainty and other market dynamics, and in the future.
Previous wording
Revenue and gross profit decreased, due primarily to lower endpoint IC revenue partially offset by higher systems revenue. The endpoint IC revenue decrease was driven primarily by lower ASP when compared to the prior-year period. Gross margin increased, due primarily to product mix within endpoint IC and an increase in high-margin licensing revenue compared to the prior-year period. Income from operations increased, due primarily to decreased operating expenses, partially offset by decreased gross profit. The operating expense decrease was due to lower general and administrative and sales and marketing costs.
Current wording
Revenue and gross profit increased, due primarily to increased systems revenue partially offset by lower endpoint IC revenue. The systems revenue increase was driven primarily by increased shipment volumes while the endpoint IC revenue decrease was driven primarily by lower ASP when compared to the prior-year period. Gross margin was comparable to the prior-year period. Income from operations increased, due primarily to increased revenue and decreased operating expenses. The operating expense decrease was due to lower general and administrative and sales and marketing costs.
Previous wording
Revenue and gross profit decreased, due primarily to lower endpoint IC and systems revenue. The endpoint IC revenue decrease was driven primarily by lower ASP when compared to the prior-year period and the systems revenue decrease was driven primarily by decreased shipment volumes when compared to the prior-year period. Gross margin increased, due primarily to product mix within endpoint IC and an increase in high-margin licensing revenue compared to the prior-year period. Income from operations increased, due primarily to decreased operating expenses, partially offset by decreased gross profit. The operating expense decrease was due to lower sales and marketing costs, general and administrative costs, restructuring costs and amortization of intangibles, partially offset by increased research and development costs.
Current wording
Revenue and gross profit decreased, due primarily to lower endpoint IC revenue, partially offset by higher systems revenue. The endpoint IC revenue decrease was driven primarily by lower ASP when compared to the prior-year period and the systems revenue increase was driven primarily by increased shipment volumes when compared to the prior-year period. Gross margin increased, due primarily to lower indirect costs in the current year compared to the prior-year period. Income from operations increased, due primarily to decreased operating expenses, partially offset by decreased gross profit. The operating expense decrease was due to lower sales and marketing costs, general and administrative costs, restructuring costs and amortization of intangibles, partially offset by increased research and development costs.
Previous wording
Endpoint IC revenue decreased $5.1 million, due to a $17.1 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 $11.0 million increase in shipment volumes and a $1.0 million increase in licensing revenue.
Current wording
Endpoint IC revenue decreased $2.2 million, due to a $7.5 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 $5.3 million increase in shipment volumes.
Previous wording
Systems revenue increased $0.2 million due primarily to an increase in shipment volumes. Gateway revenue increased $1.1 million, reader revenue increased by $0.9 million, and test and measurement solutions revenue increased by $0.5 million. These increases were partially offset by a decrease of $2.2 million in reader IC revenue.
Current wording
Systems revenue increased $3.0 million due primarily to an increase in shipment volumes. Reader revenue increased by $3.5 million and gateway revenue increased $0.9 million. These increases were partially offset by a decrease of $1.6 million in reader IC revenue.
Previous wording
Endpoint IC revenue decreased $4.8 million, due to a $8.1 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 $2.2 million increase in shipment volumes and a $1.0 million increase in licensing revenue.
Current wording
Endpoint IC revenue decreased $7.2 million, due to a $24.6 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 $16.3 million increase in shipment volumes and a $1.0 million increase in licensing revenue.
Previous wording
Gross profit decreased, due primarily to decreased endpoint IC and systems revenue. Gross margin increased, due primarily to endpoint IC product mix, specifically a higher contribution from M800, an increase in high-margin licensing revenue compared to the prior-year period, and lower indirect costs in the current year.
Current wording
Gross profit decreased, due primarily to decreased endpoint IC revenue. Gross margin increased, due primarily to lower indirect costs in the current year compared to the prior-year period.
Previous wording
Research and development expense decreased $0.3 million, due primarily to a decrease of $1.1 million in personnel expenses related to lower bonus achievement compared to the prior-year period, partially offset by an increase of $0.8 million in product development costs due to timing.
Current wording
Research and development expense increased $0.2 million, due primarily to increases of $1.2 million in product development costs due to timing and an increase $0.8 million in infrastructure costs, partially offset by a decrease of $1.9 million in personnel expenses related to lower bonus achievement compared to the prior-year period.
Previous wording
Research and development expense increased $2.5 million, due primarily to increases of $1.4 million in product development costs due to timing; $1.3 million in stock-based compensation expense, primarily related to increased outstanding equity grants; and $0.9 million in infrastructure costs. These increases were partially offset by a decrease of $1.2 million in personnel expenses related to lower bonus achievement compared to the prior-year period.
Current wording
Research and development expense increased $2.8 million, due primarily to increases of $2.6 million in product development costs due to timing; $1.7 million in infrastructure costs; and $1.2 million in stock-based compensation expense, primarily related to increased outstanding equity grants. These increases were partially offset by a decrease of $2.9 million in personnel expenses related to lower bonus achievement compared to the prior-year period.
Previous wording
Sales and marketing expense decreased $1.1 million, due primarily to a decrease of $0.8 million in stock-based compensation expense related to timing of annual equity grants and lower expense resulting from the retirement of Chief Revenue officer in the first quarter of 2025, and a decrease of $0.4 million in personnel expenses related to lower bonus achievement compared to the prior-year period.
Current wording
Sales and marketing expense decreased $0.5 million, due primarily to a decrease of $0.5 million in stock-based compensation expense related to timing of annual equity grants and lower expense resulting from the retirement of our Chief Revenue Officer in the first quarter of fiscal year 2025.
Previous wording
Sales and marketing expense decreased $3.2 million, due primarily to a decrease of $3.0 million in stock-based compensation expense, driven by forfeitures related to the company's Chief Revenue Officer retiring in the first quarter of fiscal year 2025 and the resulting lower ongoing expense, and a decrease of $0.4 million in personnel expenses related to lower bonus achievement compared to the prior-year period.
Current wording
Sales and marketing expense decreased $3.7 million, due primarily to a decrease of $3.4 million in stock-based compensation expense, driven by forfeitures related to the retirement of our Chief Revenue Officer in the first quarter of fiscal year 2025 and the resulting lower ongoing expense, and a decrease of $0.5 million in personnel expenses related to lower bonus achievement compared to the prior-year period.
Previous wording
General and administrative expense decreased $1.4 million, due primarily to a decrease of $1.0 million in personnel expenses related to lower bonus achievement compared to the prior-year period and a decrease of $0.4 million in stock-based compensation expense related to timing of annual equity grants.
Current wording
General and administrative expense decreased $0.4 million, due primarily to a decrease of $1.0 million in personnel expenses related to lower bonus achievement compared to the prior-year period, partially offset by an increase of $0.2 million in stock-based compensation expense related to timing of annual equity grants and an increase of $0.2 million in professional services related to consulting fees.
Previous wording
General and administrative expense decreased $2.4 million, due primarily to a decrease of $2.2 million in professional services related to legal fees and a decrease of $1.0 million in personnel expenses related to lower bonus achievement compared to the prior-year period. This decrease was partially offset by an increase of $0.7 million in stock compensation expense related to increased outstanding equity grants.
Current wording
General and administrative expense decreased $2.8 million, due primarily to a decrease of $2.0 million in professional services related to legal fees and a decrease of $2.0 million in personnel expenses related to lower bonus achievement compared to the prior-year period. This decrease was partially offset by an increase of $0.9 million in stock compensation expense related to increased outstanding equity grants.
Previous wording
The decrease in restructuring costs relates to the restructuring we initiated on February 7, 2024. There were no restructuring costs for the six months ended June 30, 2025. See Note 11 Restructuring for further information.
Current wording
The decrease in restructuring costs relates to the restructuring we initiated on February 7, 2024. There were no restructuring costs for the nine months ended September 30, 2025. See Note 11 Restructuring for further information.
Previous wording
Other income, net, increased from the prior period due to increased interest income given higher invested balances and higher interest rates.
Current wording
Other income, net, increased from the prior period due to increased interest income given higher invested balances.
Previous 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 six months ended June 30, 2025. See Note 6 Commitments and Contingencies for further information.
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 nine months ended September 30, 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 $0.2 million for the three months ended June 30, 2025 and income tax benefit increased $0.1 million for the six months ended June 30, 2025, each compared to the prior-year periods, due to changes in income (loss).
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 September 30, 2025 and income tax benefit increased $0.4 million for the nine months ended September 30, 2025, each compared to the prior-year periods, due to changes in income (loss).
Previous wording
As of June 30, 2025, we had cash, cash equivalents and short-term investments of $193.2 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 June 30, 2025, we had working capital of $319.7 million.
Current wording
As of September 30, 2025, we had cash, cash equivalents and short-term investments of $190.1 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, 2025, we had working capital of $220.0 million.
Previous wording
In November 2021, we issued convertible notes due 2027 in an aggregate principal amount of $287.5 million which we refer to as the 2021 Notes. The 2021 Notes are our senior unsecured obligation, bearing interest at a fixed rate of 1.125% per year, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2022. The 2021 Notes are convertible into cash, shares of our common stock or a combination thereof, at our election, and will mature on May 15, 2027 unless earlier repurchased, redeemed or converted in accordance with the indenture terms.
Current wording
In November 2021, we issued convertible notes due 2027 in an aggregate principal amount of $287.5 million, or the 2021 Notes. The 2021 Notes are our senior unsecured obligation, bearing interest at a fixed rate of 1.125% per year, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2022. The 2021 Notes are convertible into cash, shares of our common stock or a combination thereof, at our election, and will mature on May 15, 2027 unless earlier repurchased, redeemed or converted in accordance with the terms of the terms of the Indenture governing the 2021 Notes.
Previous wording
For the six months ended June 30, 2025, we generated $22.7 million of net cash proceeds from operating activities. These net cash proceeds were due primarily to $35.4 million of net income adjusted for non-cash items. partially offset by a $12.7 million decrease in working capital due primarily to higher accrued compensation and accounts payable.
Current wording
For the nine months ended September 30, 2025, we generated $43.6 million of net cash proceeds from operating activities. These net cash proceeds were due primarily to $55.6 million of net income adjusted for non-cash items, partially offset by a $12.0 million decrease in working capital due primarily to lower accrued compensation.
Previous wording
For the six months ended June 30, 2025, we used $31.7 million of net cash for investing activities. This net cash was used for purchases of investments of $107.1 million and equipment purchases of $8.4 million, partially offset by cash generated from investment maturities of $83.8 million.
Current wording
For the nine months ended September 30, 2025, we used $29.2 million of net cash for investing activities. This net cash was used for purchases of investments of $146.3 million and equipment purchases of $11.3 million, partially offset by cash generated from investment maturities and sales of $128.4 million.
Previous wording
For the six months ended June 30, 2025, we generated $5.0 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 $1.8 million taxes paid to cover RSU vesting.
Current wording
For the nine months ended September 30, 2025, we used $9.1 million of net cash from financing activities. This net cash was used for payment of our 2021 Notes of $190 million, premiums paid for capped call transactions of $11.2 million and $2.6 million in taxes paid to cover RSU vesting. This net cash usage was offset by $183.7 million of net proceeds from issuance of our 2025 Notes and $11.0 million of proceeds from stock-option exercises and our employee stock purchase plan.
Previous wording
Convertible Notes – As of June 30, 2025, the principal balance outstanding on the 2021 Notes is $287.5 million. Refer to Note 7 of our Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for maturity date, stated interest rate and additional information on our 2021 Notes.
Current wording
Convertible Notes – As of September 30, 2025, the principal balance outstanding on the 2021 Notes and 2025 Notes is $97.5 million and $190.0 million, respectively. Refer to Note 7 of our Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for maturity date, stated interest rate and additional information on the Notes.
Previous wording
Purchase Commitments – Purchase commitments as of June 30, 2025 total $29.9 million and comprise noncancelable commitments to purchase inventory.
Current wording
Purchase Commitments – Purchase commitments as of September 30, 2025 total $24.6 million and comprise noncancelable commitments to purchase inventory.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
In September 2025, we issued convertible notes due 2029 in an aggregate principal amount of $190.0 million, or the 2025 Notes. The 2025 Notes are our senior unsecured obligation, bearing no regular interest. The 2025 Notes are convertible into cash, shares of our common stock or a combination thereof, at our election, and will mature on September 15, 2029 unless earlier repurchased, redeemed or converted in accordance with the terms of the Indenture governing the 2025 Notes.
Current report — wording carried from elsewhere
For further information on the terms of this debt, please refer to Note 7 to our condensed consolidated financial statements included elsewhere in this report.