Key Highlights

  • Consensus EPS of 0.61 sits within third-quarter non-GAAP EPS guidance of 0.59 to 0.63, against second-quarter 0.86.
  • Consensus revenue of USD 107.16 million sits within third-quarter guidance of USD 105.5 million to USD 108.5 million.
  • Management guided third-quarter adjusted EBITDA of USD 20.7 million to USD 22.2 million, against USD 30.7 million last quarter.
  • Second-quarter revenue was USD 108.4 million, up 11%, with endpoint IC revenue of USD 96.4 million, up 14%.

Impinj (NASDAQ:PI) reports third-quarter results on Wednesday, Oct. 28, after the market closes. Consensus stands at EPS of 0.61 on revenue of USD 107.16 million, and the company has a market capitalization of USD 5.26 billion.

Impinj provides item-visibility solutions built on silicon radios, reading systems, label production systems and intellectual property. Second-quarter revenue was USD 108,371 thousand against USD 97,894 thousand, and net income was USD 12,220 thousand against USD 11,553 thousand.

Estimates Against Third-Quarter Guidance

The EPS estimate of 0.61 is within third-quarter non-GAAP EPS guidance of 0.59 to 0.63, and below second-quarter non-GAAP EPS of 0.86. The estimates table does not state its EPS basis, and second-quarter diluted EPS was 0.39.

The revenue estimate of USD 107.16 million is within third-quarter revenue guidance of USD 105.5 million to USD 108.5 million. Management also guided third-quarter adjusted EBITDA of USD 20.7 million to USD 22.2 million.

What Management Guided and What It Left Open

Management said third-quarter product revenue guidance reflects 17% sequential growth at the midpoint, and that reader IC is projected to be the fastest-growing product line in the third quarter on enterprise demand. It said conversion to a custom ASIC for a second large North American logistics customer is scheduled for completion in the third quarter.

Management left open channel inventory visibility, citing prior first-quarter issues centered on the second large supply chain and logistics customer. It also said that ecosystem typically sees a steeper decline in fourth-quarter consumption ahead of its annual RFP process.

Endpoint IC, Systems and Margin Detail

Endpoint IC revenue was USD 96.4 million, up 14% year over year and 53% sequentially, and systems revenue was USD 12.0 million. Non-GAAP gross margin was 60.9% and non-GAAP product gross margin was 53.6%.

Adjusted EBITDA was USD 30.7 million at a 28.3% margin. Non-GAAP research and development expense was USD 20.2 million, sales and marketing was USD 7.1 million and general and administrative was USD 8.1 million. Three of the five largest U.S. grocers have announced pilots or deployments.

Income Statement Lines and Cash Position

Gross profit was USD 63,533 thousand against USD 56,613 thousand, and operating expenses were USD 53,029 thousand against USD 45,739 thousand. Operating income was USD 10,504 thousand against USD 10,874 thousand, and net income was USD 12,220 thousand against USD 11,553 thousand. Basic EPS was 0.40 against 0.40, and interest expense was USD 631 thousand against USD 1,225 thousand.

Cash and investments were USD 263.7 million against USD 235.2 million in the previous quarter, and free cash flow was USD 29.2 million. Inventory was USD 91.5 million. The estimates table lists a market capitalization of USD 5.26 billion.

Markers for the Release

Reported EPS against 0.61 and revenue against USD 107.16 million are the headline comparisons. Other markers are endpoint IC revenue, adjusted EBITDA and channel inventory commentary.