IMPINJ INC

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 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 vision Physical Intelligence, which we define as the real, trusted item data we deliver to enterprise AI systems. We design and sell a platform that delivers that Physical Intelligence and that we and our partners use to create solutions that identify and track items, enabling enterprises to take action and, by learning from those actions, improve their business outcomes.

Previous wording

Our mission is to connect every thing. We have enabled connectivity for more than 160 billion items to date, delivering item visibility, traceability and improved operational efficiencies for retailers, supply chain and logistics, or SC&L providers, grocers, restaurants and food-service providers, airlines, automobile manufacturers, healthcare companies and many more.

Current wording

Our mission is to connect every thing. We have enabled connectivity for more than 160 billion items to date, delivering real, trusted data about those items to retailers, supply chain and logistics, or SC&L, providers, grocers, restaurants, food-service providers, airlines, automobile manufacturers, healthcare companies and many more, enabling them to visualize everything, waste nothing and act instantly.

Previous wording

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 benefit 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, location and linked information and helping people explore and learn about the item. We believe that that connectivity will transform the world.

Current wording

We are today focused on extending item connectivity from tens of billions to trillions of items and delivering Physical Intelligence not just to enterprises but to people, so they too can benefit from their connected items. We believe the solutions we and our partners 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, location and linked information and helping people explore and learn about the item. We believe that that connectivity will transform the world.

Previous wording

We and our partner ecosystem build item-visibility solutions using products that we design and either sell or license, including silicon radios, reading systems, label production systems and intellectual property. We also offer software and cloud services, and while nascent from a standalone revenue perspective, they enable our other product offerings, and we intend to expand them as a part of our growth strategy. We sell two types of silicon 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. These ICs may also contain a cryptographic key to authenticate the item. The second are reader ICs that our partners use in embedded or 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 reading systems comprise high-performance finished readers and gateways used primarily in autonomous reading solutions. Our label production systems enable partner products and facilitate enterprise deployments. Our software and cloud service offerings focus on solutions enablement, particularly for key enterprise customers.

Current wording

We and our partner ecosystem build Physical Intelligence solutions using products that we design and either sell or license, including silicon radios, reading systems, label production systems and intellectual property. We also offer software and cloud services, and while nascent from a standalone revenue perspective, they enable our other product offerings, and we intend to expand them as a part of our growth strategy. We sell two types of silicon 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. These ICs may also contain a cryptographic key to authenticate the item. The second are reader ICs that our partners use in embedded or 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 reading systems comprise high-performance finished readers and gateways used primarily in autonomous reading solutions. Our label production systems enable partner products and facilitate enterprise deployments. Our software and cloud service offerings focus on solutions enablement, particularly for key enterprise customers.

Previous wording

We typically negotiate pricing with most of our endpoint IC OEMs with an effective date of the first quarter of the calendar year. In the past, this negotiation typically resulted in reduced revenue and gross margins in the first quarter compared to prior periods, which then normalized in subsequent quarters as we reduced costs and adjust product mix by migrating those OEMs and end users to newer, lower-cost products. Recently, and significantly due to increasing worldwide semiconductor demand, many of our vendors and subcontractors have either increased prices, signaled future price increases or both. In response, we have notified our customers of modest, impending product price increases. If we are unable to successfully increase our prices or if our customers choose competitors' products due to our higher prices, then our product margins, operating results or both may suffer.

Current wording

We typically negotiate pricing with most of our endpoint IC OEMs with an effective date of the first quarter of the calendar year. In the past, this negotiation typically resulted in reduced revenue and gross margins in the first quarter compared to prior periods, which then normalized in subsequent quarters as we reduce costs and adjust product mix by migrating those OEMs and end users to newer, lower-cost products. In the second quarter of 2026, and significantly due to increasing worldwide semiconductor demand, many of our vendors and subcontractors either increased prices, signaled future price increases or both. In response, during the second quarter, we notified our customers of modest, impending product price increases. If we are unable to successfully increase our prices or if our customers choose competitors' products due to our higher prices, then our product margins, operating results or both may suffer.

Previous wording

Endpoint IC volumes tend to be lower in the fourth quarter than in the third quarter. System sales tend to be higher in the fourth quarter and lower in the first quarter, we believe due to the availability of residual funding for capital expenditures prior to the end of many end users’ fiscal years. We saw these seasonal trends in second-half 2024 and in 2025.

Current wording

Endpoint IC volumes tend to be lower in the fourth quarter than in the third quarter. System sales tend to be higher in the fourth quarter and lower in the first quarter, we believe due to the availability of residual funding for capital expenditures prior to the end of many end users’ fiscal years. While we do not always see these seasonal trends, we did experience them in second-half 2024 and in 2025.

Previous wording

Revenue and gross profit increased, due primarily to increased endpoint IC revenue partially offset by decreased systems revenue. The endpoint IC revenue increase was driven primarily by increased shipment volumes while the systems revenue decrease was driven primarily by decreased gateway revenue. Gross margin increased from higher endpoint IC gross margin due to product mix. Income from operations decreased slightly, due primarily to increased operating expenses. The operating expense increase was due to higher research and development, sales and marketing and general and administrative costs.

Current wording

Revenue and gross profit increased, due primarily to increased endpoint IC revenue partially offset by decreased systems revenue. The endpoint IC revenue increase was driven primarily by increased shipment volumes while the systems revenue decrease was driven primarily by decreased shipment volumes. Gross margin increased from higher product margins, partially offset by revenue mix. Income from operations increased, due primarily to increased revenue, partially offset by increased operating expenses. The operating expense increase was due to higher research and development, general and administrative and sales and marketing costs.

Previous wording

Revenue and gross profit increased, due primarily to increased endpoint IC revenue partially offset by decreased systems revenue. The endpoint IC revenue increase was driven primarily by increased shipment volumes while the systems revenue decrease was driven primarily by decreased reader IC and gateway revenue. Gross margin increased from higher endpoint IC gross margin due to product mix. Loss from operations increased, due primarily to increased operating expenses. The operating expense increase was due to higher research and development, sales and marketing and general and administrative costs.

Current wording

Revenue and gross profit increased, due primarily to increased endpoint IC revenue partially offset by decreased systems revenue. The endpoint IC revenue increase was driven primarily by increased shipment volumes while the systems revenue decrease was driven primarily by decreased shipment volumes. Gross margin increased from higher product margins, partially offset by revenue mix. Loss from operations increased, due primarily to increased operating expenses, partially offset by increased revenue. The operating expense increase was due to higher research and development, sales and marketing and general and administrative costs.

Previous wording

Endpoint IC revenue increased $13.8 million, due to a $24.0 million increase in shipment volumes and a $1.0 million increase in licensing revenue, partially offset by an $11.2 million decrease from lower ASP from product mix and new customer pricing that went into effect at the beginning of the year.

Current wording

Endpoint IC revenue increased $18.5 million, due to a $24.8 million increase in shipment volumes, partially offset by a $6.2 million decrease from lower ASP from product mix and new customer pricing that went into effect at the beginning of the year.

Previous wording

Systems revenue decreased $3.3 million primarily due to a decrease of $2.5 million in reader IC revenue and a $2.3 million decrease in gateway revenue. These decreases were partially offset by a $1.2 million increase in reader revenue.

Current wording

Systems revenue decreased $2.5 million, due primarily to a decrease in shipment volumes. Gateway revenue decreased $1.6 million and reader revenue decreased $1.5 million. These decreases were partially offset by an increase of $0.9 million in reader IC revenue.

Previous wording

Endpoint IC revenue increased $11.8 million, due to a $16.0 million increase in shipment volumes and a $1.0 million increase in licensing revenue, partially offset by a $5.2 million decrease from lower ASP from product mix and new customer pricing that went into effect at the beginning of the year.

Current wording

Endpoint IC revenue increased $32.3 million, due to a $48.8 million increase in shipment volumes and a $1.0 million increase in licensing revenue, partially offset by a $17.4 million decrease from lower ASP from product mix and new customer pricing that went into effect at the beginning of the year.

Previous wording

Gross profit increased primarily due to increased endpoint IC revenue. Gross margin increased, due primarily to endpoint IC product mix, specifically a higher contribution from M800 compared to the prior-year period, partially offset by revenue mix.

Current wording

Gross profit increased, due primarily to increased endpoint IC revenue. Gross margin increased, due primarily to endpoint IC product mix, specifically a higher contribution from M800 compared to the prior-year period, and an increase in systems margin due to customer mix. These increases were partially offset by revenue mix.

Previous wording

Gross profit increased primarily due to increased endpoint IC revenue. Gross margin increased, due primarily to endpoint IC product mix, specifically a higher contribution from M800 compared to the prior-year period, partially offset by revenue mix.

Current wording

Gross profit increased, due primarily to increased endpoint IC revenue. Gross margin increased, due primarily to endpoint IC product mix, specifically a higher contribution from M800 compared to the prior-year period, partially offset by revenue mix.

Previous wording

Research and development expense increased $8.0 million, due primarily to increases of $5.3 million in personnel expenses due to higher headcount and higher bonus achievement compared to the prior-year period, an increase of $2.0 million in stock-based compensation expense, primarily related to increased outstanding equity grants, and an increase of $1.2 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 $4.9 million, due primarily to increases of $4.5 million in personnel expenses due to higher headcount and bonus achievement compared to the prior-year period, an increase of $1.2 million in stock-based compensation expense, due primarily to increased outstanding equity grants, and an increase of $0.5 million in infrastructure costs, partially offset by a decrease of $1.3 million in product development costs due to timing.

Previous wording

Research and development expense increased $4.6 million, due primarily to increases of $2.8 million in personnel expenses due to higher headcount and higher bonus achievement compared to the prior-year period, an increase of $1.9 million in stock-based compensation expense, primarily related to increased outstanding equity grants, and an increase of $0.6 million in infrastructure costs, partially offset by a decrease of $0.7 million in product development costs, due to timing.

Current wording

Research and development expense increased $12.9 million, due primarily to increases of $9.8 million in personnel expenses due to higher headcount and higher bonus achievement compared to the prior-year period, an increase of $3.2 million in stock-based compensation expense, due primarily to increased outstanding equity grants, and an increase of $1.7 million in infrastructure costs, partially offset by a decrease of $1.9 million in product development costs due to timing.

Previous wording

Sales and marketing expense increased $2.8 million, due to an increase of $2.8 million in stock-based compensation expense related to lower expense in the prior-year period from the retirement of our Chief Revenue Officer.

Current wording

Sales and marketing expense increased $3.7 million, due primarily to an increase of $3.1 million in stock-based compensation expense and an increase of $0.8 million in personnel expense. Stock-based compensation expense increased due to lower expense in the prior-year period due to the retirement of our Chief Revenue Officer and increased outstanding equity grants in the current-year period. Personnel expense increased due to higher bonus achievement compared to the prior-year period.

Previous wording

General and administrative expense increased $1.6 million, due primarily to an increase of $0.8 million in stock-based compensation expense, primarily related to increased outstanding equity grants, an increase of $0.4 million in professional service costs and an increase of $0.2 million in infrastructure costs.

Current wording

General and administrative expense increased $1.1 million, due primarily to an increase of $0.8 million in personnel expenses, due primarily to higher headcount and higher bonus achievement compared to the prior-year period.

Previous wording

General and administrative expense increased $1.8 million, due primarily to an increase of $0.9 million in stock-based compensation expense, primarily related to increased outstanding equity grants, an increase of $0.6 million in professional service costs and an increase of $0.2 million in infrastructure costs.

Current wording

General and administrative expense increased $2.9 million, due primarily to an increase of $1.1 million in stock-based compensation expense, due primarily to increased outstanding equity grants, an increase of $0.9 million in personnel expenses, due primarily to higher headcount and higher bonus achievement compared to the prior-year period and an increase of $0.5 million in professional service costs.

Previous wording

Other income, net, increased $0.2 million, due to increased interest income given higher invested balances.

Current wording

Other income, net, increased $0.7 million, due primarily to increased interest income given higher invested balances throughout the period.

Previous wording

In March 2026, we completed a privately negotiated induced conversion of $40.2 million principal amount of the 2021 Notes. We accounted for the 2021 Note Repurchase 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 $11.9 million in induced conversion expense, which is included in the Condensed Consolidated Statements of Operations. 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 Notes. See Note 7 to our Condensed Consolidated financial statements included elsewhere in this report for further information.

Current wording

In September 2026, we completed a privately negotiated induced conversion of $56.3 million principal amount of the 2021 Notes, for which we recorded $1.8 million in induced conversion expense, included in the Condensed Consolidated Statements of Operations. In September 2025, we completed a privately negotiated induced conversion of $190.0 million principal amount of the 2021 Notes, for which we recorded $15.0 million in induced conversion expense, included in the Condensed Consolidated Statements of Operations. The induced conversion expenses represent 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 Notes. See Note 7 to our Condensed Consolidated financial statements included elsewhere in this report for further information related to each transaction.

Previous wording

Interest expense decreased by $0.6 million, due primarily to decreased interest on our convertible debt, primarily from the 2021 Note Exchange transaction, which was completed in September 2025 and the 2021 Note Repurchase, which was completed in March 2026.

Current wording

Interest expense decreased by $0.5 million, due primarily to decreased interest on our convertible debt, primarily from the 2021 Note Exchange transaction, which we completed in September 2025 and the 2021 Note Repurchases, which we completed in March 2026 and September 2026.

Previous wording

Interest expense decreased by $1.4 million, due primarily to decreased interest on our convertible debt, primarily from the 2021 Note Exchange transaction, which was completed in September 2025 and the 2021 Note Repurchase, which was completed in March 2026.

Current wording

Interest expense decreased by $1.6 million, due primarily to decreased interest on our convertible debt, primarily from the 2021 Note Exchange transaction, which we completed in September 2025 and the 2021 Note Repurchases, which we completed in March 2026 and September 2026.

Previous wording

We are subject to federal and state income taxes in the United States and foreign jurisdictions. Income tax benefit increased $0.2 million for the three months ended June 30, 2026 and decreased $0.1 million for the six months ended June 30, 2026 compared to the prior-year periods, due to changes in effective tax rates for each period.

Current wording

We are subject to federal and state income taxes in the United States and foreign jurisdictions. Income tax expense increased $0.1 million for the three months ended September 30, 2026 and income tax benefit decreased $0.2 million for the nine months ended September 30, 2026 compared to the prior-year periods, due to changes in effective tax rates for each period.

Previous wording

As of June 30, 2026, we had cash, cash equivalents and short-term investments of $133.0 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, 2026, we had working capital of $211.6 million.

Current wording

As of September 30, 2026, we had cash, cash equivalents and short-term investments of $113.0 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, 2026, we had working capital of $299.0 million.

Previous wording

In September 2025, we completed the 2021 Note Exchange, and in March 2026, we completed the 2021 Note Repurchase. We accounted for the 2021 Note Exchange and the 2021 Note Repurchase as induced conversions 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. Refer to below discussion of 2025 Notes for further information.

Current wording

In September 2025, we completed the 2021 Note Exchange, and in March 2026 and September 2026, we completed the 2021 Note Repurchases. We accounted for the 2021 Note Exchange and the 2021 Note Repurchases as induced conversions 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. Refer to below discussion of 2025 Notes for further information.

Previous wording

For the six months ended June 30, 2026, we generated $35.6 million of net cash proceeds from operating activities. These net cash proceeds were due primarily to $38.1 million of net income adjusted for non-cash items, partially offset by a $2.5 million decrease in working capital due primarily to higher inventory, partially offset by higher accounts payable and accrued compensation and employee related benefits.

Current wording

For the nine months ended September 30, 2026, we generated $61.2 million of net cash proceeds from operating activities. These net cash proceeds were due primarily to $64.5 million of net income adjusted for non-cash items, partially offset by a $3.3 million decrease in working capital due primarily to higher accounts receivable and prepaid expenses and other assets, partially offset by lower inventory and higher accrued compensation and employee related benefits.

Previous wording

For the six months ended June 30, 2026, we generated $0.5 million of net cash proceeds from investing activities. These net cash proceeds were due to investment maturities of $90.6 million, partially offset by investment purchases of $85.9 million and equipment purchases of $4.2 million.

Current wording

For the nine months ended September 30, 2026, we generated $30.1 million of net cash proceeds from investing activities. These net cash proceeds were due to investment maturities of $115.1 million and proceeds from sales of investments of $45.2 million, partially offset by investment purchases of $121.0 million and equipment purchases of $9.2 million.

Previous wording

For the six months ended June 30, 2026, we used $45.6 million of net cash from financing activities to purchase a portion of our 2021 Notes for $47.0 million and pay $1.8 million in taxes to cover RSU vesting, partially offset by proceeds of $3.2 million from stock-option exercises and our employee stock purchase plan.

Current wording

For the nine months ended September 30, 2026, we used $100.7 million of net cash from financing activities to purchase a portion of our 2021 Notes for $103.6 million and pay $2.4 million in taxes to cover RSU vesting, partially offset by proceeds of $5.3 million from stock-option exercises and our employee stock purchase plan.

Previous wording

Convertible Notes – As of June 30, 2026, the principal balance outstanding on the 2021 Notes and 2025 Notes is $57.3 million and $190.0 million, respectively. Refer to Note 7 to our Condensed Consolidated Financial Statements included elsewhere in this report for maturity date, stated interest rate and additional information on the Notes.

Current wording

Convertible Notes – As of September 30, 2026, the principal balance outstanding on the 2021 Notes and 2025 Notes is $1.0 million and $190.0 million, respectively. Refer to Note 7 to our Condensed Consolidated Financial Statements included elsewhere in this report for maturity date, stated interest rate and additional information on the Notes.

Previous wording

Purchase Commitments – Purchase commitments as of June 30, 2026 total $35.8 million and consist primarily of noncancelable commitments to purchase inventory.

Current wording

Purchase Commitments – Purchase commitments as of September 30, 2026 total $44.1 million and consist primarily of noncancelable commitments to purchase inventory.