Impinj, Inc. earnings

Management highlights

- Chris DiOrio noted first quarter results were solid with revenue and adjusted EBITDA exceeding guide range, endpointIC bookings record. - Discussed market opportunities in supply chain and logistics, retail apparel, general merchandise, food. - Mentioned growing software and solutions teams, upgrading reader processor and memory, advancing Gen2x. - Highlighted progress in various sectors and engagement with new end users. - Kerry Baker provided detailed financial review including revenue, gross margin, operating expense, adjusted EBITDA, balance sheet details.

Guidance

- Expect second quarter revenue between 103 and 106 million, a year-over-year increase of 7% at the midpoint. - Expect adjusted EBITDA between $27.8 and $29.3 million. - Expect non-GAAP net income between $24.6 and $26.1 million, reflecting non-GAAP fully diluted earnings per share between $0.77 and $0.82. - Expect second quarter product gross margin to increase sequentially. - Expect similar operating expense to first quarter in second quarter.

Segment performance

First quarter revenue was $74.3 million. EndpointIC bookings hit an all-time record. First quarter endpoint IC revenue was $63.2 million, down 16% sequentially but up 3% year-over-year. Systems revenue was $11 million, down 37% sequentially and 15% year-over-year. First quarter gross margin was 52.4%. Total first quarter operating expense was $35.5 million. First quarter adjusted EBITDA was 3.4 million. First quarter gap net loss was 25.3 million. First quarter non-gap net income was 4.4 million or 14 cents per share on a fully diluted basis. EndpointIC market share grew 1,700 basis points over 2024. Inlay partner inventory declined sequentially. Supply chain and logistics: custom ASIC volumes shifted in first quarter and expected to more than double in second, with end user on track to convert to ASIC by year end. Retail apparel: endpoint IC demand expected to increase in second quarter with multiple new end users. General merchandise: focused on cosmetics, personal care, health. Food: volumes growing modestly with bakery rollout on track.

Risks & headwinds

- Unpredictable macro environment could impact actual results. - Indirect cost of goods sold increased in first quarter due to short-term endpoint IC production issue. - Macroeconomic factors could affect consumer demand and order patterns.

Analyst Q&A

• Q: On record bookings and visibility into September quarter,

  A: Kerry said strong Q1 bookings driven by ecosystem ramping custom ASIC and retail rebuys, 2Q bookings off to good start.

• Q: On growth margin factors,

  A: Annual price negotiations mostly complete, capacity utilization issue fixed, expect product gross margin increase in Q2.

• Q: On improvement in Q2 product gross margin,

  A: 100 basis points from production issue, M800 ramp, lost revenue scale back, higher systems revenue contribute.

• Q: On OPEX in second half,

  A: Expect OPEX to follow normal seasonal patterns.

• Q: On retail situation,

  A: Chris said see retail strength with rebuys and new program growth.

• Q: On NXP royalty,

  A: Don't know if NXP's new chip violates IP, guardedly optimistic for next year's payment.

• Q: On European grocery opportunity,

  A: Excited about large opportunity, met and exceeded readability targets, waiting for store pilot decision.

• Q: On ASIC opportunity moving upstream,

  A: Second large North American supply chain end user as partner, opportunity to pull into other accounts.

• Q: On competitive landscape,

  A: Competitor ICs had channel issues, our product portfolio and Gen2x will drive market success.

• Q: On 2026 factors,

  A: Chris ranked enterprise solutions, Gen2x, retail, general merchandise and food as key factors.

• Q: On macro concern and order patterns,

  A: Not seeing current impact, but being prudent, no current pullbacks.

• Q: On European food opportunity and DPP,

  A: Grocery opportunity doesn't require DPP, DPP delegated act for textiles in 2027 with grace period, expect to be key part of DPP but at measured pace.