Impinj(US:PI)2024-10-24 02:21Financial Data and Key Metrics Changes - Third quarter revenue was $95.2 million, down 7% sequentially from $102.5 million in Q2 2024, and up 46% year-over-year from $65 million in Q3 2023 [9] - Third quarter adjusted EBITDA was $17.3 million, compared to $26.8 million in Q2 2024 and $300,000 in Q3 2023, with an adjusted EBITDA margin of 18.2% [12] - Third quarter GAAP net income was $200,000, while non-GAAP net income was $16.9 million or $0.56 per share on a fully diluted basis [12] Business Line Data and Key Metrics Changes - Third quarter endpoint IC revenue was $81 million, down 9% sequentially from $89.4 million in Q2 2024, and up 67% year-over-year from $48.6 million in Q3 2023 [9] - Third quarter Systems revenue was $14.2 million, up 9% sequentially from $13.1 million in Q2 2024, but down 13% year-over-year from $16.4 million in Q3 2023 [10] Market Data and Key Metrics Changes - Endpoint IC product revenue exceeded expectations, with unit volumes setting a new quarterly record as parcel shippers and retailers prepared for the holiday season [5] - The company expects endpoint IC revenue to decline modestly in Q4 due to typical seasonal trends, partially offset by market strength [6] Company Strategy and Development Direction - The company is focused on investing in enterprise solutions, including software and cloud services, which are seen as key to long-term success [7] - The company remains optimistic about the food tagging market, viewing it as a significantly larger opportunity than current markets [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued secular endpoint IC growth and category expansion, with a strong pipeline of enterprise accounts [9] - The management highlighted the importance of authentication and security in the market, indicating a need for increased efforts in these areas [64] Other Important Information - The company ended Q3 with cash, cash equivalents, and investments of $227.4 million, up from $220.2 million in Q2 2024 [12] - Third quarter gross margin was 52.4%, compared to 58.2% in Q2 2024, with expectations for sequential improvement in Q4 [10][11] Q&A Session Summary Question: Systems business outlook for Q4 - Management expects fourth quarter Systems revenue to increase sequentially due to seasonal strength and ongoing deployments from a visionary European retailer [16][17] Question: Food tagging opportunity - Management highlighted strong positioning in the food market, with significant opportunities in quick-serve restaurants and grocery stores [18][19] Question: Drivers of September quarter results - Management noted broad-based industry adoption across supply-chain, logistics, retail, and apparel sectors as key drivers of strong results [22][23] Question: Qualcomm partnership implications - Management discussed the positive impact of Qualcomm's public statement on RAIN technology, enhancing its position as a data carrier for digital product passports [28][29] Question: M800 certification update - Two major inlay partners have received certification for the M800, with expectations for more certifications soon, indicating a healthy ramp for the product [43][44] Question: Authentication opportunity in Asia - Management indicated that the authentication opportunity is critical for future growth, with ongoing replenishments expected in Q4 [63][64]