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Impinj Reports Fourth Quarter and Full Year 2020 Financial Results

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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

View source version on businesswire.com: https://www.businesswire.com/news/home/20210210005856/en/

Contacts

Investor Relations
ir@impinj.com
+1-206-315-4470

Media Relations
Jill West
Vice President Strategic Communications
+1 206-834-1110
jwest@impinj.com