Impinj(US:PI)2025-04-24 02:17Financial Data and Key Metrics Changes - First quarter revenue was $74.3 million, down 19% sequentially from $91.6 million in Q4 2024, and down 3% year over year from $76.8 million in Q1 2024 [22] - First quarter endpoint IC revenue was $61.2 million, down 17% sequentially from $74.1 million in Q4 2024, and down slightly year over year from $61.5 million in Q1 2024 [22] - First quarter systems revenue was $13.1 million, down 25% sequentially from $17.5 million in Q4 2024, and down 15% year over year from $15.3 million in Q1 2024 [23] - First quarter gross margin was 52.7%, compared to 53.1% in Q4 2024 and 51.5% in Q1 2024 [24] - First quarter GAAP net loss was $8.5 million, while non-GAAP net income was $6.3 million or $0.21 per share on a fully diluted basis [27] Business Line Data and Key Metrics Changes - Endpoint IC revenue exceeded expectations driven by turns orders, with a forecast for sequential increase in Q2 [22][23] - Systems revenue exceeded expectations due to strength in both Reader and Reader IC sales, but a decline is expected in Q2 [23] - First quarter adjusted EBITDA was $6.5 million, compared to $15 million in Q4 2024 and $6.7 million in Q1 2024 [27] Market Data and Key Metrics Changes - The company holds the number one endpoint IC market share, capturing 85% of the industry's 2024 unit volume growth [11] - The geographic shift in sourcing products from China to other regions represents roughly 15% of endpoint ICs, with the company’s exposure being much less [14] Company Strategy and Development Direction - The company aims to extend its technology lead, market share, and platform adoption while managing business with a steady hand [20] - The focus remains on investing in enterprise solutions that transform the industry, particularly in retail, supply chain, and logistics [8][19] - The company is adjusting investments away from China and toward the U.S. and Europe to capitalize on growth opportunities [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the ongoing tariff and political uncertainties but believes the company is well-positioned to navigate these challenges [18] - There is a belief that enterprises using the company's platform will outperform those that do not, similar to past experiences during COVID [8] - The company expects second quarter revenue between $91 million and $96 million, reflecting a quarter-over-quarter increase of 26% at the midpoint [32] Other Important Information - The company ended Q1 with cash, cash equivalents, and investments of $232.5 million, down from $239.6 million in Q4 2024 [28] - First quarter capital expenditures totaled $1.9 million, and free cash flow was negative $13 million, primarily due to unfavorable working capital timing [28] Q&A Session Summary Question: How are you thinking about the impact of tariffs on demand? - Management indicated that they are not seeing a material pull-ahead in demand and believe enterprises are under-shipping consumer demand due to geographic shifts in sourcing [36][40] Question: What is the outlook for inventory levels? - Management stated that channel inventory is not high relative to consumer demand and that partners are adjusting their inventory strategies due to tariffs [60][62] Question: What are the expectations for the second half of the year? - Management expressed uncertainty but noted that if consumer demand holds, they expect bookings growth and channel inventory normalization [70][96] Question: How is the M800 ramp progressing? - The M800 is expected to ramp nicely, with potential gross margin benefits as it becomes a volume runner later in the year [83][84] Question: What are the new opportunities for 2025 or 2026? - Management highlighted food as a significant opportunity but noted that it may not materialize until 2026 or 2027, with a focus on fixed reading solutions in supply chains [102][104]