Impinj Reports Fourth Quarter and Full Year 2020 Financial Results

Rhea-AI Summary

Impinj, Inc. (NASDAQ: PI) reported its fourth-quarter and full-year 2020 financial results, revealing revenue of $36.4 million for Q4 and $138.9 million for the entire year. Despite a challenging year due to Covid-19, the company maintained a GAAP gross margin of 47.8% in Q4. Full-year losses were significant, with a GAAP net loss of $51.9 million. The first quarter of 2021 forecasts show cautious optimism amid ongoing uncertainties. The company noted achieving product milestones and solidifying its market position.

Positive

• Introduced two new product families in 2020.
• Achieved significant end-user success milestones.

Negative

• GAAP net loss of $51.9 million in 2020.
• Adjusted EBITDA loss of $11.5 million for the full year.
• Q4 net loss of $15.7 million, or $0.68 per diluted share.

Impinj, Inc. (NASDAQ: PI), a leading provider and pioneer of RAIN RFID solutions, today released its financial results for the fourth quarter and year ended December 31, 2020.

“Our fourth-quarter results capped a strong close to a turbulent year,” said Chris Diorio, Impinj co-founder and CEO. “Despite the Covid-19 headwinds, Impinj exited 2020 having invested in our opportunity, introducing two new product families, achieving significant end-user success milestones and solidifying our structural advantage.”

Fourth Quarter 2020 Financial Summary

• Revenue of $36.4 million
• GAAP gross margin of 47.8%; non-GAAP gross margin of 50.4%
• GAAP net loss of $15.7 million, or loss of $0.68 per diluted share using 23.2 million shares
• Adjusted EBITDA loss of $3.1 million
• Non-GAAP net loss of $3.5 million, or loss of $0.15 per diluted share using 23.2 million shares

Full Year 2020 Financial Summary

• Revenue of $138.9 million
• GAAP gross margin of 46.9%; non-GAAP gross margin of 49.0%
• GAAP net loss of $51.9 million, or loss of $2.28 per diluted share using 22.8 million shares
• Adjusted EBITDA loss of $11.5 million
• Non-GAAP net loss of $12.8 million, or loss of $0.56 per diluted share using 22.8 million shares

A reconciliation between GAAP and non-GAAP information is contained in the tables below. Additionally, descriptions of these non-GAAP financial measures are provided in the “Non-GAAP Financial Measures” sections below.

First Quarter 2021 Financial Outlook

Impinj provides guidance based on current market conditions and expectations; actual results may differ materially. Please refer to the comments below regarding forward-looking statements. The following table presents Impinj’s financial outlook for the first quarter of 2021 (in millions, except per share data):

		Three Months Ending
		March 31, 2021
Revenue		$41.0 to $43.0
GAAP Net loss		($13.8) to ($12.8)
Adjusted EBITDA loss		($3.0) to ($1.5)
Non-GAAP net loss		($3.5) to ($2.0)
GAAP Weighted-average shares — basic and diluted		23.75 to 23.85
GAAP Net loss per share — basic and diluted		($0.58) to ($0.53)
Non-GAAP Weighted-average shares — basic and diluted		23.75 to 23.85
Non-GAAP Net loss per share — basic and diluted		($0.15) to ($0.08)

A reconciliation between GAAP and non-GAAP is provided in the "Non-GAAP Financial Measures" section below.

Conference Call Information

Impinj will host a conference call today, Feb. 10, 2021 at 5:00 p.m. ET / 2:00 p.m. PT for analysts and investors to ask questions on its fourth quarter and full year 2020 results, as well as its outlook for its first quarter of 2021. Open to the public, investors may access the call by dialing +1-412-317-5196. A live webcast of the conference call will also be accessible on our website at investor.impinj.com. Following the webcast, an archived version will be available on the website for one year. A telephonic replay of the call will be available one hour after the call and will run for five business days and may be accessed by dialing +1-412-317-0088 and entering passcode 10150880.

Management’s prepared written remarks, along with quarterly financial data, will be made available on our website at investor.impinj.com commensurate with this release.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding the market for RAIN RFID, our strategy, prospects, the impact of Covid-19, and financial considerations for the first quarter of 2021 and future periods.

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance.

The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the U.S. Securities and Exchange Commission. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update this information unless required by law.

About Impinj

Impinj (NASDAQ: PI) helps businesses and people analyze, optimize, and innovate by wirelessly connecting billions of everyday things — such as apparel, automobile parts, luggage, and shipments — to the Internet. The Impinj platform uses RAIN RFID to deliver timely data about these everyday things to business and consumer applications, enabling a boundless Internet of Things. www.impinj.com

Impinj is a registered trademark of Impinj, Inc. All other trademarks are the property of their owners.

IMPINJ, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except par value, unaudited)
	December 31, 2020				December 31, 2019 (1)
Assets:
Current assets:
Cash and cash equivalents	$	23,636			$	66,898
Short-term investments		82,453				49,597
Accounts receivable, net		25,003				23,735
Inventory		36,329				34,153
Prepaid expenses and other current assets		3,943				2,386
Total current assets		171,364				176,769
Property and equipment, net		16,531				17,442
Operating lease right-of-use assets		13,761				16,501
Other non-current assets		2,079				453
Goodwill		3,881				3,881
Total assets	$	207,616			$	215,046
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable	$	10,144			$	5,600
Accrued compensation and employee related benefits		5,529				5,859
Accrued and other current liabilities		1,468				4,107
Current portion of operating lease liabilities		3,641				3,380
Current portion of deferred revenue		6,811				551
Total current liabilities		27,593				19,497
Long-term debt, net of current portion		54,556				50,876
Operating lease liabilities, net of current portion		15,266				18,907
Deferred revenue, net of current portion		277				213
Other long-term liabilities		805				314
Total liabilities		98,497				89,807
Stockholders' equity:
Common stock, $0.001 par value		23				22
Additional paid-in capital		423,759				387,926
Accumulated other comprehensive income		3				34
Accumulated deficit		(314,666	)			(262,743	)
Total stockholders' equity		109,119				125,239
Total liabilities and stockholders' equity	$	207,616			$	215,046
(1) Certain immaterial amounts on our condensed consolidated balance sheets in prior periods have been reclassified to conform with current period presentation.

IMPINJ, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data, unaudited)
		Three Months Ended								Year Ended
		December 31,								December 31,
		2020				2019				2020				2019
Revenue		$	36,448			$	40,821			$	138,923			$	152,836
Cost of revenue			19,034				20,889				73,783				78,834
Gross profit			17,414				19,932				65,140				74,002
Operating expenses:
Research and development			14,971				11,202				48,590				38,880
Sales and marketing			8,086				8,063				28,663				32,642
General and administrative			8,743				7,488				34,958				24,141
Total operating expenses			31,800				26,753				112,211				95,663
Loss from operations			(14,386	)			(6,821	)			(47,071	)			(21,661	)
Other income, net			66				295				650				1,242
Interest expense			(1,392	)			(531	)			(5,413	)			(1,794	)
Loss on debt extinguishment			—				(576	)			—				(576	)
Loss before income taxes			(15,712	)			(7,633	)			(51,834	)			(22,789	)
Income tax expense			(5	)			(47	)			(89	)			(198	)
Net loss		$	(15,717	)		$	(7,680	)		$	(51,923	)		$	(22,987	)
Net loss per share — basic and diluted		$	(0.68	)		$	(0.35	)		$	(2.28	)		$	(1.05	)
Weighted-average shares — basic and diluted			23,218				22,173				22,819				21,847

IMPINJ, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited)
		Year Ended
		December 31,
		2020				2019
Operating activities:
Net loss		$	(51,923	)		$	(22,987	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation			4,504				4,809
Stock-based compensation			25,675				18,486
Accretion of discount or amortization of premium on short-term investments			224				(506	)
Amortization of debt issuance costs and debt discount			3,680				206
Loss on debt extinguishment			—				576
Changes in operating assets and liabilities:
Accounts receivable			(1,268	)			(5,273	)
Inventory			(2,176	)			10,572
Prepaid expenses and other assets			(3,081	)			(524	)
Deferred revenue			6,324				(70	)
Accounts payable			3,491				1,046
Accrued compensation and employee related benefits			(330	)			(1,486	)
Operating lease right-of-use assets			2,740				2,153
Operating lease liabilities			(3,380	)			(3,038	)
Accrued liabilities and other liabilities			(1,357	)			744
Net cash provided by (used in) operating activities			(16,877	)			4,708
Investing activities:
Purchases of investments			(82,735	)			(72,413	)
Proceeds from maturities of investments			49,522				61,743
Purchases of property and equipment			(3,074	)			(2,429	)
Net cash used in investing activities			(36,287	)			(13,099	)
Financing activities:
Proceeds from issuance of 2019 Notes, net of issuance costs			—				83,475
Premiums paid for capped call transactions			—				(10,126	)
Principal payments on finance lease obligations			(257	)			(522	)
Payments on term and equipment loans			—				(28,192	)
Proceeds from term loans, net of debt issuance costs			—				3,991
Proceeds from exercise of stock options and employee stock purchase plan			10,159				9,133
Net cash provided by financing activities			9,902				57,759
Net increase (decrease) in cash and cash equivalents			(43,262	)			49,368
Cash and cash equivalents
Beginning of period			66,898				17,530
End of period		$	23,636			$	66,898

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements prepared and presented in accordance with U.S. generally accepted accounting principles, or GAAP, our key non-GAAP performance measures include adjusted EBITDA and non-GAAP net income (loss), as defined below. We use adjusted EBITDA and non-GAAP net income (loss) as key measures to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operating plans. We believe these measures provide useful information for period-to-period comparisons of our business to allow investors and others to understand and evaluate our operating results in the same manner as our management and board of directors. Our presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from similarly termed non-GAAP measures used by other companies.

Adjusted EBITDA

We define adjusted EBITDA as net income (loss) determined in accordance with GAAP, excluding, if applicable for the periods presented, the effects of stock-based compensation; depreciation; investigation costs; restructuring costs; settlement and related costs; other income, net; interest expense; loss on debt extinguishment; and income tax benefit (expense). In second-quarter 2020, we revised our definition of adjusted EBITDA to exclude litigation settlement costs for the class-action and derivative lawsuits, including related costs. We have excluded these costs and expenses because we do not believe they reflect our core operations and us excluding them enables more consistent evaluation of our operating performance. Excluding settlement and related costs did not impact non-GAAP net income (loss) previously reported for prior periods preceding the revision.

Non-GAAP Net Income (Loss)

We define non-GAAP net income (loss) as net income (loss), excluding, if applicable for the periods presented, the effects of stock-based compensation; depreciation; investigation costs; restructuring costs; settlement and related costs; amortization of debt discount related to the equity component of our convertible notes; and prepayment penalty on debt extinguishment. In second-quarter 2020, we revised our definition of non-GAAP net income (loss) to exclude litigation settlement costs for the class-action and derivative lawsuits, including related costs. Excluding settlement and related costs did not impact non-GAAP net income (loss) previously reported for prior periods preceding the revision.

GAAP requires that certain convertible debt instruments that may be settled in cash on conversion be accounted for as separate liability and equity components in a manner that reflects our non-convertible debt borrowing rate. This accounting results in the debt component being treated as though it was issued at a discount, with the debt discount being amortized as additional non-cash interest expense over the debt instrument term using the effective interest method. As a result, we believe that excluding this non-cash interest expense attributable to the debt discount in calculating our non-GAAP net income (loss) is useful because this interest expense is not indicative of our ongoing operational performance.

IMPINJ, INC. RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (in thousands, except percentages, unaudited)
		Three Months Ended								Year Ended
		December 31,								December 31,
		2020				2019				2020				2019
GAAP Gross margin			47.8	%			48.8	%			46.9	%			48.4	%
Adjustments:
Depreciation			1.4	%			1.1	%			1.4	%			1.3	%
Stock-based compensation			1.2	%			0.7	%			0.7	%			0.5	%
Non-GAAP Gross margin			50.4	%			50.6	%			49.0	%			50.2	%
GAAP Net loss		$	(15,717	)		$	(7,680	)		$	(51,923	)		$	(22,987	)
Adjustments:
Depreciation			1,102				1,172				4,504				4,809
Stock-based compensation			10,174				6,673				25,675				18,486
Other income, net			(66	)			(295	)			(650	)			(1,242	)
Interest expense			1,392				531				5,413				1,794
Loss on debt extinguishment			—				576				—				576
Income tax expense			5				47				89				198
Settlement and related costs			—				—				5,359				—
Adjusted EBITDA		$	(3,110	)		$	1,024			$	(11,533	)		$	1,634
GAAP Net loss		$	(15,717	)		$	(7,680	)		$	(51,923	)		$	(22,987	)
Adjustments:
Depreciation			1,102				1,172				4,504				4,809
Stock-based compensation			10,174				6,673				25,675				18,486
Amortization of debt discount			929				140				3,566				140
Prepayment fees on debt extinguishment			—				470				—				470
Settlement and related costs			—				—				5,359				—
Non-GAAP Net income (loss)		$	(3,512	)		$	775			$	(12,819	)		$	918
Non-GAAP Net income (loss) per share:
Basic		$	(0.15	)		$	0.03			$	(0.56	)		$	0.04
Diluted		$	(0.15	)		$	0.03			$	(0.56	)		$	0.04
GAAP and non-GAAP Weighted-average shares — basic			23,218				22,173				22,819				21,847
GAAP Weighted-average shares — diluted			23,218				22,173				22,819				21,847
Dilutive shares from stock plans			—				657				—				705
Non-GAAP Weighted-average shares — diluted			23,218				22,830				22,819				22,552

IMPINJ, INC. RECONCILIATIONS OF GAAP FINANCIAL OUTLOOK TO NON-GAAP FINANCIAL OUTLOOK (in thousands, except per share data, unaudited – calculated at the midpoint of the outlook range)
		Three Months Ending
		March 31,
		2021
GAAP Net loss		$	(13,250	)
Adjustments:
Forecasted Depreciation			1,200
Forecasted Stock-based compensation			7,840
Forecasted Restructuring costs			1,510
Forecasted Interest expense			525
Forecasted Other income, net			(25	)
Forecasted Income tax expense			—
Adjusted EBITDA loss		$	(2,200	)
GAAP Net loss		$	(13,250	)
Adjustments:
Forecasted Depreciation			1,200
Forecasted Stock-based compensation			7,840
Forecasted Restructuring costs			1,510
Non-GAAP Net loss		$	(2,700	)
GAAP Net loss per share — basic and diluted		$	(0.56	)
Non-GAAP Net loss per share — basic and diluted		$	(0.11	)
GAAP weighted-average shares — basic and diluted			23,800
Non-GAAP weighted-average shares — basic and diluted			23,800

 

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FAQ

What were Impinj's earnings for Q4 2020?

Impinj reported Q4 2020 earnings of $36.4 million, with a GAAP net loss of $15.7 million.

What is the full-year revenue for Impinj in 2020?

The full-year revenue for Impinj in 2020 was $138.9 million.

What is Impinj's guidance for Q1 2021?

Impinj provided guidance for Q1 2021 based on current market conditions, indicating cautious expectations.

How did Impinj perform financially in 2020?

Impinj incurred a GAAP net loss of $51.9 million in 2020, with significant losses in both Q4 and full-year metrics.