[Risk Factor Summary](index=3&type=section&id=Risk%20Factor%20Summary) The company faces significant risks from market competition, supply chain dependencies, product quality, and financial instability including historical losses - The company operates in a highly competitive market with **uncertain RAIN market adoption** beyond key areas[8](index=8&type=chunk) - Significant risks include **reliance on a limited number of third-party suppliers**, potential **product quality issues**, and the need for end-users and partners to integrate products into their processes[8](index=8&type=chunk) - Financial risks involve a **history of losses**, **significant fluctuations in operating results**, and potential inability to meet obligations under convertible senior notes[8](index=8&type=chunk) [PART I. — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20%E2%80%94%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income (loss), cash flows, changes in stockholders' equity, and accompanying notes, prepared in conformity with U.S. GAAP and SEC interim reporting regulations [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a summary of the company's financial position, detailing total assets, liabilities, and stockholders' equity at specific dates Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Total assets | $508,817 | $489,080 | | Total liabilities | $321,128 | $339,216 | | Total stockholders' equity | $187,689 | $149,864 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, costs, gross profit, and net income over specified periods, including per share data Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $97,894 | $102,495 | $172,171 | $179,320 | | Cost of revenue | $41,281 | $44,979 | $78,877 | $84,256 | | Gross profit | $56,613 | $57,516 | $93,294 | $95,064 | | Income (loss) from operations | $10,874 | $9,046 | $1,305 | $(2,687) | | Net income | $11,553 | $9,963 | $3,102 | $43,307 | | Net income per share — basic | $0.40 | $0.36 | $0.11 | $1.57 | | Net income per share — diluted | $0.39 | $0.34 | $0.10 | $1.44 | - **Net income for the six months ended June 30, 2025, significantly decreased to $3.1 million from $43.3 million** in the prior-year period, primarily due to a **$45.0 million income from settlement of litigation** recognized in Q1 2024[12](index=12&type=chunk)[23](index=23&type=chunk)[47](index=47&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents the company's net income and other comprehensive income (loss) components, leading to total comprehensive income Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $11,553 | $9,963 | $3,102 | $43,307 | | Total other comprehensive income (loss) | $2,646 | $(148) | $4,215 | $(773) | | Comprehensive income | $14,199 | $9,815 | $7,317 | $42,534 | - **Total other comprehensive income significantly increased** for the six months ended June 30, 2025, to **$4.2 million from a loss of $(0.8) million** in the prior-year period, driven by foreign currency translation adjustment[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities over specified periods Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $22,717 | $105,619 | | Net cash provided by (used in) investing activities | $(31,688) | $5,465 | | Net cash provided by financing activities | $4,963 | $8,844 | | Net increase (decrease) in cash and cash equivalents | $(3,636) | $119,860 | | Cash and cash equivalents, end of period | $42,417 | $214,653 | - **Net cash provided by operating activities decreased significantly to $22.7 million** for the six months ended June 30, 2025, compared to **$105.6 million** in the prior-year period[16](index=16&type=chunk) - Investing activities shifted from providing **$5.5 million in cash in 2024 to using $31.7 million in 2025**, primarily due to increased purchases of investments[16](index=16&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section details the changes in the company's total stockholders' equity over various periods, reflecting impacts from net income and stock transactions Total Stockholders' Equity (in thousands) | Date | Total Stockholders' Equity | | :------------------- | :------------------------- | | June 30, 2025 | $187,689 | | December 31, 2024 | $149,864 | | June 30, 2024 | $116,972 | | December 31, 2023 | $34,131 | - **Total stockholders' equity increased to $187.7 million** as of June 30, 2025, from **$149.9 million** at December 31, 2024, driven by net income, issuance of common stock, stock-based compensation, and other comprehensive income[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1. Summary of Significant Accounting Policies](index=9&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements, including estimates and judgments - The financial statements are prepared in conformity with U.S. GAAP and SEC interim reporting rules, with certain information condensed or omitted[20](index=20&type=chunk) - Management makes estimates and judgments affecting reported amounts, including revenue recognition, inventory, and income taxes[22](index=22&type=chunk) - In Q1 2024, the company recorded a **$45 million payment from NXP Semiconductors N.V. as income from settlement of litigation**, and will recognize annual license fees as revenue in Q2 each year[23](index=23&type=chunk) [Note 2. Fair Value Measurements](index=11&type=section&id=Note%202.%20Fair%20Value%20Measurements) This note describes the company's fair value measurements for financial assets and liabilities, categorized by input observability - Fair value is defined as an exit price in an orderly transaction, categorized into a three-level hierarchy based on input observability[27](index=27&type=chunk) - The company had no financial assets or liabilities in Level 3 as of June 30, 2025, or December 31, 2024[28](index=28&type=chunk) Balances of Assets and Liabilities Measured at Fair Value (in thousands) | Category | June 30, 2025 (Total) | December 31, 2024 (Total) | | :----------------------- | :-------------------- | :------------------------ | | Total cash equivalents | $11,181 | $1,097 | | Total short-term investments | $150,788 | $118,661 | | Total long-term investments | $67,332 | $74,871 | | **Total** | **$229,301** | **$194,629** | [Note 3. Inventory](index=13&type=section&id=Note%203.%20Inventory) This note provides a breakdown of the company's inventory components, including raw materials, work-in-process, and finished goods Inventory Breakdown (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :------------------ | | Raw materials | $9,634 | $14,040 | | Work-in-process | $37,579 | $52,028 | | Finished goods | $48,997 | $33,278 | | **Total inventory** | **$96,210** | **$99,346** | - **Total inventory decreased to $96.2 million** as of June 30, 2025, from **$99.3 million** at December 31, 2024, primarily due to decreases in raw materials and work-in-process, partially offset by an increase in finished goods[34](index=34&type=chunk) [Note 4. Goodwill and Intangible Assets](index=13&type=section&id=Note%204.%20Goodwill%20and%20Intangible%20Assets) This note details the company's goodwill and intangible assets, including their carrying amounts, amortization, and useful lives Goodwill (in thousands) | Period | Balance at beginning of period | Foreign currency translation adjustment | Total | | :---------------------- | :----------------------------- | :-------------------------------------- | :------ | | Six Months Ended June 30, 2025 | $18,723 | $2,037 | $20,760 | | Six Months Ended June 30, 2024 | $19,696 | $(440) | $19,256 | Net Intangible Assets (in thousands) | Category | Estimated Useful Life (Years) | Gross Carrying Amount | Accumulated Amortization | Net | | :----------------------- | :---------------------------- | :-------------------- | :----------------------- | :------ | | Developed Technology | 7.25 | $13,900 | $(4,314) | $9,586 | | Patent | 3 | $250 | $(163) | $87 | | Tradename | 8 | $1,296 | $(364) | $932 | | **Total definite-lived intangible assets** | | **$15,446** | **$(4,841)** | **$10,605** | - Amortization of intangible assets was **$1.0 million** for the six months ended June 30, 2025, a **decrease from $1.9 million** in the prior-year period, due to certain acquired intangible assets having a useful life of less than 1 year[35](index=35&type=chunk)[107](index=107&type=chunk) [Note 5. Stock-Based Awards](index=14&type=section&id=Note%205.%20Stock-Based%20Awards) This note presents the company's stock-based compensation expense across various categories for specified periods Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenue | $539 | $534 | $1,065 | $987 | | Research and development expense | $6,065 | $6,543 | $13,084 | $11,805 | | Sales and marketing expense | $1,984 | $2,802 | $2,254 | $5,211 | | General and administrative expense | $4,435 | $4,826 | $9,142 | $8,492 | | **Total stock-based compensation expense** | **$13,023** | **$14,705** | **$25,545** | **$26,495** | - **Total stock-based compensation expense decreased to $25.5 million** for the six months ended June 30, 2025, from **$26.5 million** in the prior-year period[38](index=38&type=chunk) [Note 6. Commitments and Contingencies](index=14&type=section&id=Note%206.%20Commitments%20and%20Contingencies) This note discloses the company's significant purchase commitments and potential liabilities from legal proceedings and settlements - The company is committed to purchase **$23.6 million of inventory** as of June 30, 2025[40](index=40&type=chunk) - In March 2024, Impinj and NXP Semiconductors N.V. entered into a Settlement and Patent Cross-License Agreement, terminating all pending patent infringement proceedings[45](index=45&type=chunk) - Under the settlement, NXP paid Impinj a **one-time $45.0 million** and agreed to annual license fee payments, with Impinj recognizing **$15.0 million and $16.0 million** in revenue for the first and second annual license fees in Q2 2024 and 2025, respectively[46](index=46&type=chunk)[47](index=47&type=chunk) [Note 7. Long-term debt](index=16&type=section&id=Note%207.%20Long-term%20debt) This note provides details on the company's long-term debt, specifically the 2021 Convertible Senior Notes, including terms and interest expense 2021 Convertible Senior Notes (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Principal Amount | $287,498 | $287,500 | | Unamortized debt issuance costs | $(3,177) | $(4,007) | | Net Carrying Amount | $284,321 | $283,493 | | Estimated Fair Value | $358,800 | $408,700 | - The 2021 Notes bear a **fixed interest rate of 1.125% per year**, payable semi-annually, and mature on May 15, 2027[48](index=48&type=chunk)[122](index=122&type=chunk) Interest Expense Related to 2021 Notes (in thousands) | Expense Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Amortization of debt issuance costs | $416 | $409 | $830 | $816 | | Cash interest expense | $809 | $808 | $1,618 | $1,617 | | **Total interest expense** | **$1,225** | **$1,217** | **$2,448** | **$2,433** | [Note 8. Net Earnings Per Share](index=18&type=section&id=Note%208.%20Net%20Earnings%20Per%20Share) This note presents the calculation of basic and diluted net earnings per share, including factors affecting dilution Net Earnings Per Share (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income attributable to common stock holders | $11,553 | $9,963 | $3,102 | $45,740 | | Weighted average common shares outstanding, basic | 29,008 | 27,889 | 28,824 | 27,623 | | Weighted average common shares outstanding, diluted | 29,655 | 29,422 | 29,550 | 31,718 | | Net earnings per share — basic | $0.40 | $0.36 | $0.11 | $1.57 | | Net earnings per share — diluted | $0.39 | $0.34 | $0.10 | $1.44 | - **Diluted EPS for the six months ended June 30, 2025, was $0.10, a significant decrease from $1.44** in the prior-year period, largely influenced by the litigation settlement income in 2024[57](index=57&type=chunk) Antidilutive Common Stock Equivalents Excluded from Diluted EPS (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | RSUs, MSUs and PSUs | 470 | 114 | 904 | 737 | | Employee stock purchase plan shares | 16 | — | 16 | — | | 2021 Notes | 2,589 | 2,589 | 2,589 | — | [Note 9. Segment Information](index=18&type=section&id=Note%209.%20Segment%20Information) This note describes the company's operating segments and provides a breakdown of revenue by product category - The company operates as a single reportable and operating segment focused on developing and selling RAIN products and services[60](index=60&type=chunk) Revenue Categories (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Endpoint ICs | $84,619 | $89,392 | $145,837 | $150,898 | | Systems | $13,275 | $13,103 | $26,334 | $28,422 | | **Total revenue** | **$97,894** | **$102,495** | **$172,171** | **$179,320** | - Endpoint IC sales are expected to represent the majority of revenue for the foreseeable future[89](index=89&type=chunk) [Note 10. Deferred Revenue](index=19&type=section&id=Note%2010.%20Deferred%20Revenue) This note explains the company's deferred revenue, detailing changes in balances from deferrals and recognition - Deferred revenue represents contracted revenue not yet recognized, including extended warranty, enhanced product maintenance, and advance payments on NRE services[63](index=63&type=chunk) Changes in Deferred Revenue (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :----------------------------- | :----------------------------- | | Balance at beginning of period | $1,968 | $1,985 | | Deferral of revenue | $1,804 | $1,630 | | Recognition of deferred revenue | $(1,261) | $(1,347) | | **Balance at end of period** | **$2,511** | **$2,268** | [Note 11. Restructuring](index=19&type=section&id=Note%2011.%20Restructuring) This note outlines the company's restructuring activities, including employee termination benefits and associated costs - In February 2024, the company initiated a strategic restructuring, including a **reduction-in-force affecting approximately 10% of employees**, incurring **$1.8 million in charges** for employee termination benefits[65](index=65&type=chunk) - Restructuring payments were completed in Q2 2024, and no restructuring costs were incurred for the six months ended June 30, 2025[65](index=65&type=chunk)[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, discussing its business vision, mission, product offerings, factors affecting performance, and detailed analysis of revenue, gross profit, operating expenses, and liquidity [Our Business](index=20&type=section&id=Our%20Business) This section describes Impinj's vision for a "Boundless Internet of Things," its mission to connect every item, and its platform offerings including silicon RAIN radios, systems, software, and intellectual property - Impinj's vision is a 'Boundless Internet of Things' where every item is wirelessly connected to the cloud, with ownership, history, and linked information seamlessly available[70](index=70&type=chunk) - The company's mission is to connect every thing, having enabled connectivity for **over 120 billion items** to date, focusing on extending item connectivity from tens of billions to trillions[71](index=71&type=chunk) - Impinj designs and sells a platform including silicon RAIN radios (endpoint ICs and reader ICs), manufacturing/test/encoding/reading systems, software, cloud services, and intellectual property[72](index=72&type=chunk)[74](index=74&type=chunk) [Factors Affecting Our Performance](index=22&type=section&id=Factors%20Affecting%20Our%20Performance) This section discusses macroeconomic factors, demand forecasting challenges, unpredictable RAIN adoption rates, and seasonality that impact the company's performance - Macroeconomic factors, including trade measures and tariffs, can negatively affect the business, especially for endpoint ICs embedded in imported products[77](index=77&type=chunk) - Challenges in forecasting demand and timely identification of market shifts can lead to inventory overages or shortages, impacting expenses, obsolescence, lead times, and customer relationships[78](index=78&type=chunk) - RAIN adoption and unit growth rates are uneven and unpredictable, with endpoint IC sales volumes increasing at a **27% CAGR from 2010-2024** but experiencing declines in various periods[80](index=80&type=chunk) - Seasonality impacts revenue, with endpoint IC volumes typically lower in Q4 and system sales higher in Q4, but macroeconomic conditions may alter these trends in 2025[84](index=84&type=chunk)[85](index=85&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) This section analyzes the company's revenue, gross profit, gross margin, and income from operations, highlighting key changes and contributing factors for the reported periods Key Financial Results (in thousands, except percentages) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (3M) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (6M) | | :-------------------------- | :------------------------------- | :------------------------------- | :---------- | :----------------------------- | :----------------------------- | :---------- | | Revenue | $97,894 | $102,495 | $(4,601) | $172,171 | $179,320 | $(7,149) | | Gross profit | $56,613 | $57,516 | $(903) | $93,294 | $95,064 | $(1,770) | | Gross margin | 57.8% | 56.1% | 1.7% | 54.2% | 53.0% | 1.2% | | Income (loss) from operations | $10,874 | $9,046 | $1,828 | $1,305 | $(2,687) | $3,992 | - Revenue decreased for both the three and six months ended June 30, 2025, primarily due to **lower endpoint IC revenue driven by lower ASP**, partially offset by higher systems revenue in the three-month period[87](index=87&type=chunk)[88](index=88&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - Gross margin increased for both periods, mainly due to **product mix within endpoint ICs (higher M800 contribution)** and an **increase in high-margin licensing revenue**[87](index=87&type=chunk)[88](index=88&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - Income from operations increased for both periods, primarily due to **decreased operating expenses**, despite decreased gross profit[87](index=87&type=chunk)[88](index=88&type=chunk) Operating Expenses (in thousands) | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (3M) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (6M) | | :-------------------------- | :------------------------------- | :------------------------------- | :---------- | :----------------------------- | :----------------------------- | :---------- | | Research and development | $24,652 | $24,924 | $(272) | $49,966 | $47,443 | $2,523 | | Sales and marketing | $8,738 | $9,827 | $(1,089) | $16,793 | $20,003 | $(3,210) | | General and administrative | $11,828 | $13,223 | $(1,395) | $24,224 | $26,588 | $(2,364) | | Amortization of intangibles | $521 | $496 | $25 | $1,006 | $1,905 | $(899) | | Restructuring costs | $0 | $0 | $0 | $0 | $1,812 | $(1,812) | - Other income, net, increased for the six-month period due to **higher interest income from increased invested balances and higher interest rates**[111](index=111&type=chunk) - Income from settlement of litigation decreased by **$45.0 million** for the six-month period as the prior year included the one-time settlement with NXP[113](index=113&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, working capital, and future capital needs, including cash flow activities and purchase commitments - As of June 30, 2025, the company had **$193.2 million in cash, cash equivalents, and short-term investments**, and **$319.7 million in working capital**[118](index=118&type=chunk) - The company believes existing cash and investments will be sufficient for anticipated needs for at least the next 12 months, with plans for continued investment in platform enhancement and expansion[120](index=120&type=chunk) Summary of Cash Flows (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $22,717 | $105,619 | | Net cash provided by (used in) investing activities | $(31,688) | $5,465 | | Net cash provided by financing activities | $4,963 | $8,844 | - Primary cash requirements are for operating expenses and capital expenditures, with purchase commitments totaling **$29.9 million** as of June 30, 2025[129](index=129&type=chunk)[131](index=131&type=chunk) [Off-Balance-Sheet Arrangements](index=30&type=section&id=Off-Balance-Sheet%20Arrangements) This section confirms the absence of off-balance-sheet arrangements, such as relationships with unconsolidated entities or structured finance - The company has not had any relationships with unconsolidated entities, structured finance, or special-purpose entities since inception[132](index=132&type=chunk) [Critical Accounting Policies and Significant Estimates](index=30&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Estimates) This section highlights the critical accounting policies and significant estimates that require management judgment and can materially affect reported financial amounts - Financial statements are prepared in accordance with GAAP, requiring management to make estimates and assumptions that affect reported amounts[133](index=133&type=chunk) - Estimates are evaluated on an ongoing basis, and material differences between estimates and actual results could affect financial statements[133](index=133&type=chunk)[134](index=134&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, including interest rate risk, inflation risk, and foreign currency exchange risk, and management's strategies to mitigate these risks [Interest Rate Risk](index=32&type=section&id=Interest%20Rate%20Risk) This section assesses the company's exposure to interest rate fluctuations on its investments and convertible notes - The company invests excess cash in money market funds, U.S. government securities, corporate bonds, notes, and commercial paper, prioritizing principal preservation and liquidity[136](index=136&type=chunk) - With **$193.2 million in cash, cash equivalents, and short-term investments** as of June 30, 2025, the company does not expect a material effect on its portfolio or results from an immediate **10% increase in interest rates** due to the short-term nature of investments[137](index=137&type=chunk) - The convertible notes have fixed interest rates, so a hypothetical **100 basis point increase in interest rates** would not impact interest expense[138](index=138&type=chunk) [Inflation Risk](index=32&type=section&id=Inflation%20Risk) This section evaluates the impact of inflation on the company's business and its ability to offset rising costs through pricing adjustments - Inflation has not had a material effect on the business to date, as higher product costs have been substantially offset by increasing product selling prices[139](index=139&type=chunk) - Inability to fully offset significant future inflationary pressures through price increases could adversely affect the business, financial condition, and results of operations[139](index=139&type=chunk) [Foreign Currency Exchange Risk](index=32&type=section&id=Foreign%20Currency%20Exchange%20Risk) This section addresses the company's exposure to foreign currency exchange rate fluctuations from transactions and translation adjustments - The company is exposed to foreign currency exchange risk from transactions in non-functional currencies and translation adjustments, though no material impact was observed in the presented periods[140](index=140&type=chunk) - The functional currency for most foreign subsidiaries is the U.S. dollar, with gains and losses from remeasurement included in other income, net[140](index=140&type=chunk) - The Voyantic subsidiary uses Euros as its functional currency, resulting in translation adjustments included in accumulated other comprehensive income[140](index=140&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of disclosure controls and procedures and internal control over financial reporting, confirming their effectiveness and noting no material changes during the quarter, while also acknowledging inherent limitations of control systems [Evaluation of Disclosure Controls and Procedures](index=32&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms management's conclusion on the effectiveness of the company's disclosure controls and procedures - Management, including the CEO and CFO, concluded that disclosure controls and procedures were **effective at a reasonable assurance level** as of June 30, 2025[141](index=141&type=chunk) [Changes in Internal Control over Financial Reporting](index=32&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes to the company's internal control over financial reporting during the most recent fiscal quarter - There were no changes that materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the three months ended June 30, 2025[142](index=142&type=chunk) [Limitations on Controls](index=32&type=section&id=Limitations%20on%20Controls) This section acknowledges the inherent limitations of disclosure controls and internal control over financial reporting, emphasizing that they provide reasonable, not absolute, assurance - Disclosure controls and internal control over financial reporting are designed to provide reasonable, not absolute, assurance of achieving control objectives[144](index=144&type=chunk) - Management recognizes that any control system is based on judgments and assumptions and cannot provide absolute assurance against misstatements or fraud[144](index=144&type=chunk) [PART II. — OTHER INFORMATION](index=35&type=section&id=PART%20II.%20%E2%80%94%20OTHER%20INFORMATION) This section provides additional information not included in the financial statements, covering legal proceedings, risk factors, and other disclosures [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the company is subject to various legal claims in the ordinary course of business, but cannot predict whether any resulting liability will have a material adverse effect on its financial position, results of operations, cash flows, market position, or stock price - The company is subject to various legal claims in the ordinary course of business, but cannot predict whether any resulting liability will have a material adverse effect on its financial position, results of operations, cash flows, market position, or stock price[147](index=147&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) This section details numerous risks and uncertainties that could materially impact the company's business, operating results, and financial condition, categorized into risks relating to platform/products, personnel/operations, intellectual property, privacy/cybersecurity, financial position/capital needs, U.S. federal income tax, and securities ownership/trading [Risks Relating to Our Platform, Products and Technologies](index=35&type=section&id=Risks%20Relating%20to%20Our%20Platform%2C%20Products%20and%20Technologies) This section outlines risks associated with the company's competitive market, RAIN adoption, reliance on endpoint IC sales, declining ASPs, and nascent licensing program - The company operates in a **very competitive market** against larger competitors like NXP, EM Microelectronic, and Kiloway for endpoint ICs, and Phychips Inc for reader ICs[149](index=149&type=chunk)[155](index=155&type=chunk) - RAIN adoption is concentrated in key markets (retail apparel, SC&L), and the **pace of adoption beyond these markets is uncertain** and has historically been difficult to forecast[151](index=151&type=chunk)[153](index=153&type=chunk) - The company relies heavily on **endpoint IC sales for most of its revenue**, making it vulnerable to demand declines or inability to procure wafers[161](index=161&type=chunk) - **Average selling prices (ASPs) of products have historically decreased**, requiring continuous improvement in technology, cost reduction, and introduction of new, higher-margin products to maintain profitability[162](index=162&type=chunk)[163](index=163&type=chunk) - The company's licensing program is nascent, with a **substantial share of current licensing revenue derived from NXP**, posing risks if NXP breaches obligations or designs around Impinj's IP[185](index=185&type=chunk)[186](index=186&type=chunk) [Risks Relating to Our Personnel and Business Operations](index=43&type=section&id=Risks%20Relating%20to%20Our%20Personnel%20and%20Business%20Operations) This section details risks related to reliance on third-party manufacturers, supply chain shortages, global trade policies, international operations, and geopolitical developments - The company relies on a **limited number of third-party manufacturers** for products and does not have long-term supply contracts, exposing it to risks of capacity shortages, supply disruptions, and quality issues[187](index=187&type=chunk)[188](index=188&type=chunk) - Shortages of silicon wafers, IC post-processing materials, or components for readers and gateways can adversely affect the ability to meet demand, leading to market-share losses and impact on gross margins[189](index=189&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Changes in global trade policies, including tariffs, could have a material adverse effect, particularly on products containing endpoint ICs imported from China[200](index=200&type=chunk)[202](index=202&type=chunk) - Operating abroad presents risks such as changes in regulatory requirements, trade laws, political instability, and difficulties in enforcing contracts, especially given **77% of 2024 revenue was from outside the U.S.**[203](index=203&type=chunk)[204](index=204&type=chunk)[209](index=209&type=chunk) - The company sources a **significant portion of wafers from Taiwan**, making it vulnerable to diplomatic and geopolitical developments between China and Taiwan[212](index=212&type=chunk) [Risks Relating to Our Relationships with Partners and End Users](index=49&type=section&id=Risks%20Relating%20to%20Our%20Relationships%20with%20Partners%20and%20End%20Users) This section addresses risks stemming from reliance on a small number of customers, indirect sales channels, strategic partnerships, and brand reputation - The company relies on a **small number of customers for a large share of its revenue**; in 2024, sales to **three major customers accounted for 60% of total revenue**[216](index=216&type=chunk) - Selling primarily through partners limits the company's ability to directly assess and affect end-user demand, and partners may prioritize competitors' products or provide inaccurate demand forecasts[219](index=219&type=chunk)[220](index=220&type=chunk) - Growth strategy depends on successful strategic relationships with third-party solution providers, SIs, VARs, and software providers, and direct engagements with end users could create conflicts with partners[222](index=222&type=chunk)[223](index=223&type=chunk) - Failure to maintain or enhance brand recognition and reputation, especially due to product supply shortages or price increases, could harm business and relationships with partners and end users[224](index=224&type=chunk) [Risks Relating to Our Intellectual Property](index=52&type=section&id=Risks%20Relating%20to%20Our%20Intellectual%20Property) This section covers risks concerning the company's ability to protect and enforce its intellectual property, potential disputes, industry standards, third-party licenses, and open-source software use - The company's success depends on its ability to obtain, maintain, and enforce intellectual property rights, primarily focused on U.S. patents, limiting assertion capabilities in significant foreign markets[228](index=228&type=chunk) - Intellectual property disputes are complex, costly, and time-consuming, potentially leading to significant damages, licensing requirements, or adverse effects on RAIN adoption[230](index=230&type=chunk)[232](index=232&type=chunk)[235](index=235&type=chunk) - Participation in industry standards organizations (e.g., GS1, ISO) may require providing royalty-free or RAND licenses for necessary intellectual property, potentially devaluing patents[237](index=237&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk) - Reliance on third-party license agreements for patents, software, and technology means impairment or termination could cause production or shipment delays[240](index=240&type=chunk) - The use of open-source software may expose the company to additional risks, including disclosure requirements and lack of warranties, potentially weakening intellectual property rights[241](index=241&type=chunk) [Risks Relating to Privacy and Cybersecurity](index=55&type=section&id=Risks%20Relating%20to%20Privacy%20and%20Cybersecurity) This section addresses risks related to privacy concerns, evolving regulations, and potential security breaches impacting the company's reputation and operations - Privacy and security concerns related to RAIN, such as unauthorized data collection or tracking, could damage the company's reputation and deter customers[243](index=243&type=chunk)[244](index=244&type=chunk) - Evolving government regulations and guidelines on consumer privacy and cybersecurity (e.g., CCPA, GDPR, EC recommendations for RFID) may require product design changes or constrain new features[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) - Security breaches or incidents impacting company systems or third-party services could lead to operational disruptions, regulatory investigations, claims, and significant costs, harming business and reputation[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) [Risks Relating to Our Financial Position and Capital Needs](index=57&type=section&id=Risks%20Relating%20to%20Our%20Financial%20Position%20and%20Capital%20Needs) This section discusses risks concerning the company's history of losses, volatile operating results, and potential need for additional capital, which could lead to dilution or restrictive covenants - The company has a **history of losses** since its inception in 2000 and cannot be certain of attaining or sustaining profitability in the future, dependent on RAIN adoption and market share[254](index=254&type=chunk) - **Significant fluctuations in quarterly and annual operating results** are common due to sales volatility, limited forecasting ability, and various external factors, making financial planning difficult[255](index=255&type=chunk)[256](index=256&type=chunk) - The company may need to raise additional capital in the future, which could result in **dilution for stockholders**, restrictive debt covenants, or an inability to meet business objectives if not available on favorable terms[259](index=259&type=chunk)[260](index=260&type=chunk)[262](index=262&type=chunk) [Risks Relating to U.S. Federal Income Tax](index=60&type=section&id=Risks%20Relating%20to%20U.S.%20Federal%20Income%20Tax) This section addresses risks related to limitations on using net operating losses and R&D credits, potential changes in tax laws, and additional income tax liabilities - The company's ability to use **net operating losses (NOLs)** and **research and development (R&D) credits** to offset future taxable income may be limited by ownership changes (Sections 382 and 383 of the Code)[264](index=264&type=chunk)[265](index=265&type=chunk) - Changes in tax laws, such as the Inflation Reduction Act of 2022 (**1% excise tax on stock buybacks, 15% alternative minimum tax**) and the requirement to capitalize R&D expenditures, could materially affect the company's tax liabilities and operating results[267](index=267&type=chunk) - The company may be subject to additional income tax liabilities if taxing authorities successfully assert that sales and use, value-added, or similar taxes should have been collected in certain jurisdictions[270](index=270&type=chunk) [Risks Relating to Owning or Trading Our Securities](index=62&type=section&id=Risks%20Relating%20to%20Owning%20or%20Trading%20Our%20Securities) This section discusses risks associated with the volatility of the common stock price, potential dilution from convertible notes, significant influence of principal stockholders, and anti-takeover provisions - The market price of the common stock has been and is likely to remain volatile, influenced by factors such as operating performance, industry trends, new product announcements, and litigation[273](index=273&type=chunk)[275](index=275&type=chunk) - Transactions related to the 2021 Notes, including conversions into stock or hedging activities by financial counterparties, may affect the stock's value and could lead to dilution[277](index=277&type=chunk)[278](index=278&type=chunk) - Executive officers, directors, and principal stockholders beneficially owned **approximately 54.3% of the outstanding common stock** as of June 30, 2025, allowing them to exercise significant influence over stockholder approval matters[280](index=280&type=chunk) - Anti-takeover provisions in charter documents and state law could prevent, delay, or impede an acquisition, potentially constraining the stock price[282](index=282&type=chunk)[284](index=284&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds during the period - No unregistered sales of equity securities or use of proceeds occurred during the period[286](index=286&type=chunk) [Item 3. Defaults Upon Senior Securities](index=66&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section reports no defaults upon senior securities - There were no defaults upon senior securities[287](index=287&type=chunk) [Item 4. Mine Safety Disclosures](index=66&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that this item is not applicable to the registrant - This item is not applicable to the registrant[288](index=288&type=chunk) [Item 5. Other Information](index=67&type=section&id=Item%205.%20Other%20Information) This section discloses information regarding securities trading plans of directors and executive officers, specifically a Rule 10b5-1 trading arrangement adopted by the CEO Securities Trading Plans of Directors and Executive Officers | Name and Title | Character of Trading Arrangement | Date Adopted | Date Terminated | Duration | Aggregate Number of Shares of Common Stock to be Purchased or Sold Pursuant to Trading Arrangement | | :--- | :--- | :--- | :--- | :--- | :--- | | Chris Diorio, Ph.D., Director, Chief Executive Officer and Vice Chair | Rule 10b5-1 Trading Arrangement | May 28, 2025 | - | February 27, 2026 | Up to 39,096 | [Item 6. Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, certifications, and XBRL documents - The report includes various exhibits such as Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, Separation and Release of Claims Agreement, certifications of principal executive and financial officers, and Inline XBRL documents[293](index=293&type=chunk) [Signatures](index=69&type=section&id=Signatures) This section contains the required signatures for the Form 10-Q, certifying its submission pursuant to the Securities Exchange Act of 1934 - The report is signed by Cary Baker, Chief Financial Officer, on July 30, 2025[297](index=297&type=chunk)

[Financial Highlights and Outlook](index=1&type=section&id=Financial_Highlights_and_Outlook) [Second Quarter 2025 Financial Summary](index=1&type=section&id=Second_Quarter_2025_Financial_Summary) Impinj achieved strong Q2 2025 financial results, with revenue and adjusted EBITDA exceeding guidance, driven by investments in technology and market adoption - Second quarter 2025 revenue and adjusted EBITDA **exceeded company guidance**[2](index=2&type=chunk) - The company remains focused on expanding **technology leadership, market share, platform adoption**, and enhancing enterprise customer satisfaction[2](index=2&type=chunk) [Third Quarter 2025 Financial Outlook](index=1&type=section&id=Third_Quarter_2025_Financial_Outlook) Impinj provided its Q3 2025 financial outlook, projecting revenue between $91.0M and $94.0M, and detailing GAAP/non-GAAP gross margin, net income/loss, and EPS Third Quarter 2025 Financial Outlook (in millions of dollars, except per share data) | Metric | Range (in millions of dollars) | | :--------------------------------- | :----------------: | | Revenue | $91.0 to $94.0 | | GAAP Net Loss | ($2.2) to ($0.7) | | Adjusted EBITDA Income | $15.6 to $17.1 | | GAAP Diluted Net Loss Per Share | ($0.07) to ($0.02) | | Non-GAAP Net Income | $14.0 to $15.5 | | Non-GAAP Diluted Net Income Per Share | $0.47 to $0.51 | - GAAP gross margin is projected at **57.8%**; non-GAAP gross margin is projected at **60.4%**[4](index=4&type=chunk) [Corporate Information](index=2&type=section&id=Corporate_Information) [Conference Call Information](index=2&type=section&id=Conference_Call_Information) Impinj will host a conference call and webcast on July 30, 2025, to discuss Q2 2025 results and Q3 outlook, with replay services available - The conference call and webcast will be held on **July 30, 2025, at 5:00 PM ET / 2:00 PM PT**[6](index=6&type=chunk) - Investors can participate by calling **+1-412-317-1863** or visiting the company's website at **investor.impinj.com**[6](index=6&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking_Statements) This press release contains forward-looking statements on strategy, investments, market conditions, and Q3 2025 guidance, with risks that may cause actual results to differ materially - Forward-looking statements cover **company strategy, investment plans, market conditions**, and **financial guidance for Q3 2025 and future periods**[8](index=8&type=chunk) - Actual results may differ materially from projections due to **known and unknown risks and uncertainties**, and reported results should not be considered indicative of future performance[9](index=9&type=chunk) - Potential risks and uncertainties are detailed in the **"Risk Factors" section of the company's 10-K and 10-Q reports**[10](index=10&type=chunk) [About Impinj](index=3&type=section&id=About_Impinj) Impinj (NASDAQ: PI) is a leading RAIN RFID provider and IoT pioneer, connecting billions of items to the internet for analysis, optimization, and innovation - Impinj provides timely data for everyday items through its **RAIN RFID platform**, enabling the boundless IoT[11](index=11&type=chunk) - The company helps businesses and individuals **analyze, optimize, and innovate** by connecting everyday items like apparel, automotive parts, luggage, and shipments[11](index=11&type=chunk) [Contact Information](index=3&type=section&id=Contact_Information) Contact information for investor relations and media relations is provided - Investor Relations contact: **Andy Cobb, CFA**, Phone: **+1-206-315-4470**, Email: **ir@impinj.com**[12](index=12&type=chunk) - Media Relations contact: **Emily Schauer**, Phone: **+1 206-209-2923**, Email: **eschauer@impinj.com**[12](index=12&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed_Consolidated_Financial_Statements) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed_Consolidated_Balance_Sheets) As of June 30, 2025, Impinj's total assets and equity increased, while total liabilities decreased due to long-term debt reclassification and reduced current liabilities Key Balance Sheet Data (as of June 30, 2025 vs December 31, 2024, in thousands of dollars) | Metric | June 30, 2025 | December 31, 2024 | Change | Change Rate | | :----------------------- | :-------------: | :-------------: | :----: | :------: | | **Assets:** | | | | | | Total Assets | $508,817 | $489,080 | +$19,737 | +4.03% | | **Liabilities and Stockholders' Equity:** | | | | | | Total Liabilities | $321,128 | $339,216 | -$18,088 | -5.33% | | Total Stockholders' Equity | $187,689 | $149,864 | +$37,825 | +25.24% | | **Current Liabilities:** | | | | | | Total Current Liabilities | $30,051 | $331,177 | -$301,126 | -90.93% | | Current Portion of Long-Term Debt | — | $283,493 | -$283,493 | -100.00% | | Long-Term Debt | $284,321 | — | +$284,321 | N/A | - Current liabilities significantly decreased, primarily due to the reclassification of the current portion of long-term debt from **$283,493 thousand** as of December 31, 2024, to **zero** as of June 30, 2025, with a corresponding increase in long-term debt[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed_Consolidated_Statements_of_Operations) Impinj achieved Q2 2025 net income growth, but H1 net income significantly decreased year-over-year due to prior-year litigation settlement income, despite controlled operating expenses Key Statements of Operations Data (in thousands of dollars, except per share data) | Metric | Q2 2025 | Q2 2024 | Q2 YoY Change | H1 2025 | H1 2024 | H1 YoY Change | | :----------------------- | :--------: | :--------: | :----------: | :--------: | :--------: | :----------: | | Revenue | $97,894 | $102,495 | -4.49% | $172,171 | $179,320 | -3.99% | | Cost of Sales | $41,281 | $44,979 | -8.22% | $78,877 | $84,256 | -6.41% | | Gross Profit | $56,613 | $57,516 | -1.57% | $93,294 | $95,064 | -1.86% | | Total Operating Expenses | $45,739 | $48,470 | -5.63% | $91,989 | $97,751 | -5.90% | | Operating Income (Loss) | $10,874 | $9,046 | +20.20% | $1,305 | ($2,687) | N/A | | Litigation Settlement Income | — | — | N/A | — | $45,000 | -100.00% | | Net Income | $11,553 | $9,963 | +15.96% | $3,102 | $43,307 | -92.84% | | Diluted Net Income Per Share | $0.39 | $0.34 | +14.71% | $0.10 | $1.44 | -93.06% | - Operating income for Q2 2025 increased by **20.20% year-over-year**, indicating improved operational efficiency[16](index=16&type=chunk) - The significant decrease in first-half net income was primarily due to **$45,000 thousand in litigation settlement income** in the first half of 2024, with no such income in the first half of 2025[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed_Consolidated_Statements_of_Cash_Flows) For the six months ended June 30, 2025, Impinj's operating cash flow decreased, and investing cash flow shifted to a net outflow, resulting in a notable decline in cash and equivalents Key Cash Flow Statement Data (for the six months ended June 30, 2025, in thousands of dollars) | Metric | H1 2025 | H1 2024 | YoY Change | Change Rate | | :----------------------- | :--------: | :--------: | :--------: | :------: | | Net Cash Provided by Operating Activities | $22,717 | $105,619 | -$82,902 | -78.49% | | Net Cash Provided by (Used in) Investing Activities | ($31,688) | $5,465 | -$37,153 | N/A | | Net Cash Provided by Financing Activities | $4,963 | $8,844 | -$3,881 | -43.88% | | Net Increase (Decrease) in Cash and Cash Equivalents | ($3,636) | $119,860 | -$123,496 | N/A | | Cash and Cash Equivalents at End of Period | $42,417 | $214,653 | -$172,236 | -80.24% | - Operating cash flow decreased primarily due to a **decline in net income** and changes in accounts payable and accrued compensation and employee-related benefits[18](index=18&type=chunk) - Investing cash flow shifted from a net inflow last year to a **net outflow**, primarily due to increased purchases of investments[18](index=18&type=chunk) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP_Financial_Measures) [Non-GAAP Metric Definitions](index=7&type=section&id=Non-GAAP_Definitions) Impinj uses Adjusted EBITDA, non-GAAP net income (loss), free cash flow, and adjusted free cash flow as key non-GAAP metrics to supplement GAAP financials, assessing core operations and liquidity - Adjusted EBITDA is defined as GAAP net income (loss), excluding **stock-based compensation, depreciation and amortization, restructuring costs, settlement income, other income (expense) net, interest expense, acquisition-related expenses**, and **income tax effects**[20](index=20&type=chunk) - Non-GAAP net income (loss) is defined as GAAP net income (loss), excluding **stock-based compensation, depreciation and amortization, restructuring costs, settlement income, acquisition-related expenses**, and the **corresponding income tax effects of these adjustments**[21](index=21&type=chunk) - Free cash flow is defined as **net cash provided by operating activities less purchases of property and equipment**; adjusted free cash flow further subtracts **cash proceeds from litigation settlement income**[22](index=22&type=chunk) [Reconciliations of GAAP to Non-GAAP Financial Measures](index=10&type=section&id=Reconciliations_of_GAAP_to_Non-GAAP_Financial_Measures) [Gross Margin, Net Income, and Adjusted EBITDA Reconciliation](index=10&type=section&id=Gross_Margin%2C_Net_Income%2C_and_Adjusted_EBITDA_Reconciliation) Impinj provides reconciliations of GAAP gross margin, net income, and Adjusted EBITDA to non-GAAP metrics, offering a clearer view of operational performance by excluding non-cash items GAAP to Non-GAAP Gross Margin Reconciliation (in %) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------- | :--------: | :--------: | :--------: | :--------: | | GAAP Gross Margin | 57.8% | 56.1% | 54.2% | 53.0% | | Adjustment: Depreciation and Amortization | 2.0% | 1.6% | 2.2% | 1.7% | | Adjustment: Stock-Based Compensation | 0.6% | 0.5% | 0.6% | 0.6% | | Non-GAAP Gross Margin | 60.4% | 58.2% | 57.0% | 55.3% | GAAP Net Income to Adjusted EBITDA Reconciliation (in thousands of dollars) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------- | :--------: | :--------: | :--------: | :--------: | | GAAP Net Income | $11,553 | $9,963 | $3,102 | $43,307 | | Adjustment: Depreciation and Amortization | $3,709 | $2,999 | $7,230 | $6,908 | | Adjustment: Stock-Based Compensation | $13,023 | $14,705 | $25,545 | $26,495 | | Adjustment: Litigation Settlement Income | — | — | — | ($45,000) | | Adjusted EBITDA | $27,606 | $26,829 | $34,080 | $33,514 | GAAP to Non-GAAP Net Income Reconciliation (in thousands of dollars, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------- | :--------: | :--------: | :--------: | :--------: | | GAAP Net Income | $11,553 | $9,963 | $3,102 | $43,307 | | Adjustment: Depreciation and Amortization | $3,709 | $2,999 | $7,230 | $6,908 | | Adjustment: Stock-Based Compensation | $13,023 | $14,705 | $25,545 | $26,495 | | Adjustment: Litigation Settlement Income | — | — | — | ($45,000) | | Non-GAAP Net Income | $24,516 | $25,313 | $30,820 | $31,484 | | Non-GAAP Diluted Net Income Per Share | $0.80 | $0.83 | $1.04 | $1.07 | [Free Cash Flow Reconciliation](index=11&type=section&id=Free_Cash_Flow_Reconciliation) Impinj provides reconciliations of GAAP operating cash flow to free cash flow and adjusted free cash flow, illustrating cash available after deducting capital expenditures and settlement income GAAP Operating Cash Flow to Free Cash Flow Reconciliation (in thousands of dollars) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------------- | :--------: | :--------: | :--------: | :--------: | | Net Cash Provided by Operating Activities | $33,860 | $45,479 | $22,717 | $105,619 | | Adjustment: Purchases of Property and Equipment | ($6,540) | ($1,366) | ($8,403) | ($7,568) | | Free Cash Flow | $27,320 | $44,113 | $14,314 | $98,051 | | Adjustment: Litigation Settlement Income | — | — | — | ($45,000) | | Adjusted Free Cash Flow | $27,320 | $44,113 | $14,314 | $53,051 | [Reconciliations of GAAP to Non-GAAP Financial Outlook](index=13&type=section&id=Reconciliations_of_GAAP_to_Non-GAAP_Financial_Outlook) Impinj provides reconciliations of GAAP net loss to non-GAAP net income in its Q3 2025 financial outlook, presenting non-GAAP profitability expectations by adjusting for key non-cash and non-recurring items Third Quarter 2025 GAAP Net Loss to Adjusted EBITDA Reconciliation (in thousands of dollars) | Metric | Q3 2025 Outlook (Midpoint) | | :----------------------- | :--------------------: | | GAAP Net Loss | ($1,397) | | Adjustment: Depreciation and Amortization | $3,700 | | Adjustment: Stock-Based Compensation | $14,670 | | Adjustment: Interest Expense | $1,227 | | Adjustment: Other Income (Expense) Net | ($2,000) | | Adjustment: Income Tax Expense | $100 | | Adjusted EBITDA | $16,300 | Third Quarter 2025 GAAP Net Loss to Non-GAAP Net Income Reconciliation (in thousands of dollars, except per share data) | Metric | Q3 2025 Outlook (Midpoint) | | :----------------------- | :--------------------: | | GAAP Net Loss | ($1,397) | | Adjustment: Depreciation and Amortization | $3,700 | | Adjustment: Stock-Based Compensation | $14,670 | | Adjustment: Income Tax Impact | ($2,253) | | Non-GAAP Net Income | $14,720 | | Non-GAAP Diluted Net Income Per Share | $0.49 |

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Impinj (PI) due to lower revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Impinj is expected to report quarterly earnings of $0.71 per share, reflecting a year-over-year decrease of 14.5%, with revenues projected at $93.97 million, down 8.3% from the previous year [3]. - The earnings report is scheduled for July 30, and better-than-expected results could lead to a stock price increase, while missing estimates may result in a decline [2]. Estimate Revisions - The consensus EPS estimate has been revised 100% lower in the last 30 days, indicating a collective reassessment by analysts [4]. - The Most Accurate Estimate for Impinj is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.94%, suggesting bearish sentiment among analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, particularly when combined with a favorable Zacks Rank [10]. - Impinj currently holds a Zacks Rank of 4, making it challenging to predict an earnings beat [12]. Historical Performance - In the last reported quarter, Impinj exceeded expectations by delivering earnings of $0.21 per share against an expected $0.09, resulting in a surprise of +133.33% [13]. - Over the past four quarters, the company has consistently beaten consensus EPS estimates [14]. Conclusion - While Impinj does not appear to be a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [17].

Financial Data and Key Metrics Changes - The meeting discussed the approval of Ernst and Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, indicating a focus on maintaining strong financial oversight [11] - The board of directors recommended a vote for the advisory compensation of named executive officers, which will influence future compensation decisions [12] Business Line Data and Key Metrics Changes - No specific data on business line performance was provided during the meeting [14] Market Data and Key Metrics Changes - No specific market data or key metrics changes were discussed during the meeting [14] Company Strategy and Development Direction and Industry Competition - The company is focused on maintaining a strong governance structure by electing directors and approving independent auditors, which is crucial for long-term strategic planning [9][11] - The advisory vote on executive compensation reflects the company's commitment to aligning management incentives with shareholder interests [12] Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during the meeting [14] Other Important Information - The meeting was held virtually, and all proposals were approved, including the reelection of six directors [15][16] - The results of the voting will be reported on a Form 8-K filing with the US Securities and Exchange Commission within four business days [16] Q&A Session Summary Question: Are there any questions or comments? - There were no questions or comments from shareholders during the meeting, leading to the conclusion of the official business [14]

Industry Overview - The Zacks Electronics - Semiconductors industry is experiencing growth driven by the proliferation of AI, Generative AI, IoT, and industrial revolution 4.0, benefiting companies like Broadcom, Lam Research, and Impinj [1] - The industry is facing challenges such as macroeconomic factors, end-market volatility, inventory corrections, and geopolitical tensions, particularly tariffs affecting trade with China [1] Demand Drivers - Increasing demand for AI-supportive chips from hyperscalers is a significant growth driver, alongside the rising need for consumer electronic devices like smartphones and robotics [1] - The demand for advanced manufacturing processes and energy-efficient computing power is being fueled by the growing popularity of AI and the emergence of Gen AI and Agentic AI [3] - Smart devices require high processing power and low power consumption, which is beneficial for the semiconductor industry [4] Advanced Packaging and Manufacturing - The demand for advanced semiconductor packaging and test technologies is rising due to trends towards miniaturization and improved performance [5] - The complexity of semiconductor manufacturing processes is increasing as manufacturers aim to maximize yields at lower costs, driven by the adoption of cloud computing, IoT, and AI [6] Market Performance - The Zacks Electronics - Semiconductors industry ranks 85, placing it in the top 35% of over 250 Zacks industries, indicating bullish near-term prospects [7][8] - The industry's earnings estimates have increased by 3.5% since August 31, 2024, reflecting positive analyst sentiment [9] - Over the past year, the industry has outperformed the S&P 500 and the broader Zacks Computer and Technology sector, appreciating 17.7% compared to 10.9% for the S&P 500 [11] Valuation Metrics - The industry is currently trading at a forward 12-month price-to-earnings ratio of 28.75X, higher than the S&P 500's 21.49X and the sector's 26.45X [14] Company Highlights - Impinj, with a Zacks Rank 1, is benefiting from its strong position in the endpoint IC market and innovative product offerings, with a 7.5% increase in earnings estimates for 2025 [17][19] - Broadcom, ranked 2, is seeing strong demand for AI-related solutions and has maintained steady earnings estimates for fiscal 2025 [22][23] - Lam Research, also a Zacks Rank 2, is capitalizing on strengths in 3D DRAM and advanced packaging technologies, with a 4.2% increase in earnings estimates for fiscal 2026 [26][27]

Group 1 - Impinj (PI) shares have increased by 52.5% in the past four weeks, closing at $117.52, with a mean price target of $149.50 indicating a potential upside of 27.2% [1] - The mean estimate consists of eight short-term price targets with a standard deviation of $55.04, where the lowest estimate is $100 (14.9% decline) and the highest is $251 (113.6% increase) [2] - Analysts show strong agreement in revising earnings estimates higher, with the Zacks Consensus Estimate for the current year increasing by 102.6% over the past month [11][12] Group 2 - The Zacks Rank for PI is 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] - While price targets are often viewed as important, they can mislead investors, and analysts may set overly optimistic targets due to business incentives [7][8] - A low standard deviation in price targets indicates a high degree of agreement among analysts regarding the stock's price movement, serving as a starting point for further research [9]

Core Viewpoint - Impinj (PI) has experienced a significant share price increase of 77% over the past month, outperforming both the Zacks Computer and Technology sector and the Zacks Electronics - Semiconductors industry [1] Group 1: Financial Performance - Impinj's revenues and profitability exceeded guidance in Q1 2025, supported by a strong position in the endpoint IC market and innovative product offerings [2] - The company has issued a positive outlook for Q2 2025, expecting total revenues of $91-$96 million, which represents a 26% quarter-over-quarter increase, and non-GAAP earnings per share between 68 cents and 76 cents [8] Group 2: Product Development - The M800 series, utilizing next-generation Gen2X technology, is gaining traction and is expected to become a primary volume driver for Impinj [3] - Gen2X technology has increased overhead reading solution area coverage by 44% and is projected to improve gross margin by up to 300 basis points due to its efficiency and scalability [4] Group 3: Market Position and Strategy - Impinj is strategically expanding into supply chain and logistics, which is becoming a key growth catalyst as demand for advanced RFID solutions rises [6] - This expansion aligns with global digital transformation initiatives, leading to sustainable adoption and long-term revenue growth [7] - The company is positioned at the forefront of RFID advancements, reinforcing its leadership in delivering scalable, high-performance solutions for complex enterprise environments [5]

Group 1 - Impinj (PI) shares have increased by 0.2% over the past four weeks, closing at $90.84, with a mean price target of $149.50 indicating a potential upside of 64.6% [1] - The mean estimate consists of eight short-term price targets with a standard deviation of $55.04, where the lowest estimate of $100 suggests a 10.1% increase, and the highest estimate predicts a surge of 176.3% to $251 [2] - Analysts have shown increasing optimism regarding PI's earnings prospects, with a strong agreement in revising EPS estimates higher, which correlates with potential stock price movements [11] Group 2 - Over the last 30 days, four earnings estimates for PI have been revised upward, resulting in a Zacks Consensus Estimate increase of 102.6% [12] - PI holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for near-term upside [13] - While the consensus price target may not be a reliable indicator of the extent of PI's gains, it does provide a directional guide for price movement [13]

Group 1 - Impinj, Inc. (NASDAQ: PI) reported strong results and provided reassuring guidance for Q2 2025, leading to a more than 15% increase in share price after hours [1] Group 2 - The marketplace highlights a portfolio of undervalued investment opportunities, focusing on stocks with rapid growth potential driven by top-quality management [2] - The marketplace continues to grow rapidly, offering high-quality, actionable stock picks that emphasize value [3]

Financial Performance & Growth - Impinj's annual revenue has grown from $138.9 million in 2020 to $366.1 million in 2024, representing a 27% CAGR[16] - In Q1 2025, systems revenue was $13.1 million and endpoint ICs revenue was $61.2 million[90] - The non-GAAP gross margin for Q1 2025 was 52.7%[94] - The adjusted EBITDA for Q1 2025 was $6.5 million[101] - Non-GAAP EPS (diluted) for Q1 2025 was $0.21[105] Market Opportunity & Strategy - Impinj estimates that RAIN-enabled connectivity was used for over 52 billion items in 2024, representing approximately 0.5% of connectable items[46] - The company has sold over 120 billion endpoint ICs[17, 52] - The company's strategy involves developing whole-platform solutions, winning endpoint IC opportunities, engaging partners, and competing aggressively for the rest of the endpoint IC market[18] Financial Resources - As of March 31, 2025, Impinj had $232.5 million in cash and investments[111] - As of December 31, 2024, Impinj had $190.3 million in federal NOLs[111] - The trailing twelve-month (TTM) adjusted free cash flow was $44.3 million[111]