IMPINJ INC [PI] Filings

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Accelerated filer

Non-accelerated filer

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Emerging growth company

10-Q 1 pi-20230930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-37824

IMPINJ, INC.

(Exact name of registrant as specified in its charter)


Delaware		91-2041398
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
400 Fairview Avenue North, Suite 1200, Seattle, Washington		98109
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (206) 517-5300

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	PI	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of October 13, 2023, 27,055,862 shares of common stock were outstanding.

Table of Contents

IMPINJ, INC.

QUARTERLY REPORT ON FORM 10-Q

Table of Contents


		Page
	Risk Factor Summary	3

	PART I. — FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Loss	6
	Condensed Consolidated Statements of Cash Flows	7
	Condensed Consolidated Statements of Changes in Stockholders' Equity	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
	PART II. — OTHER INFORMATION
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	51
Item 4.	Mine Safety Disclosures	51
Item 5.	Other Information	51
Item 6.	Exhibits	52
	Signatures	53

Table of Contents

Risk Factor Summary

Our business is subject to numerous risks and uncertainties, including those highlighted in the section of this report captioned “Risk

Factors.” These risks include, but are not limited to, the following:

•

we operate in a very competitive market;

•

RAIN RFID (“RAIN”) adoption is concentrated in key industries and the extent and pace of RAIN market adoption beyond those industries is uncertain;

•

our abilities to deliver platform solutions at scale are nascent;

•

poor product quality could result in significant costs to us and impair our ability to sell our products;

•

end users and partners must design our products into their products and business processes;

•

an inability or limited ability of end user systems to exploit RAIN information may adversely affect the market for our products;

•

alternative technologies may enable products and services that compete with ours;

•

we obtain the products we sell through a limited number of third parties with whom we do not have long-term supply contracts;

•

shortages of silicon wafers and components used in our readers and gateways may adversely affect our ability to meet demand for our products and adversely affect our revenue and/or gross margins;

•

we rely on a small number of customers for a large share of our revenue;

•

our ability to affect or determine end-user demand is limited in part because we sell and fulfill primarily through partners and rarely to end users;

•

our growth strategy depends in part on the success of strategic relationships with third parties and their continued performance and alignment;

•

if we are unable to protect our intellectual property, then our business could be adversely affected;

•

we may become party to intellectual property disputes which could be time consuming, costly to prosecute, defend or settle, result in the loss of significant rights, and adversely affect RAIN adoption or adoption of our products or platform;

•

we have a history of losses and have only achieved profitability intermittently and we cannot be certain that we will attain or sustain profitability in the future;

•

we have a history of significant fluctuations in our quarterly and annual operating results;

•

our executive officers, directors and principal stockholders, together with their affiliates, beneficially owned approximately 54.6% of our outstanding common stock as of September 30, 2023, and as a result are able to exercise significant influence over matters subject to stockholder approval; and

•

we may not have sufficient cash flow or access to cash necessary to satisfy our obligations under the $287.5 million aggregate principal amount 1.125% convertible senior notes due 2027, or the 2021 Notes, and our current and future indebtedness may restrict our business.

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited).

IMPINJ, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value, unaudited)


	September 30, 2023			December 31, 2022
Assets:
Current assets:
Cash and cash equivalents	$	78,100		$	19,597
Short-term investments		35,129			154,148
Accounts receivable, net		48,482			49,996
Inventory		106,806			46,397
Prepaid expenses and other current assets		4,446			5,032
Total current assets		272,963			275,170
Long-term investments		—			19,200
Property and equipment, net		44,923			39,027
Intangible assets, net		14,727			—
Operating lease right-of-use assets		10,326			10,490
Other non-current assets		1,613			1,969
Goodwill		19,049			3,881
Total assets	$	363,601		$	349,737
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable	$	11,017		$	25,024
Accrued compensation and employee related benefits		7,702			9,048
Accrued and other current liabilities		9,306			2,925
Current portion of operating lease liabilities		3,308			3,122
Current portion of deferred revenue		2,425			2,250
Total current liabilities		33,758			42,369
Long-term debt		281,449			280,244
Operating lease liabilities, net of current portion		10,205			11,066
Deferred tax liabilities, net		3,062			118
Deferred revenue, net of current portion		327			349
Total liabilities		328,801			334,146
Commitments and contingencies (Note 6)
Stockholders' equity:
Preferred stock, $0.001 par value — 5,000 shares authorized, no shares issued and outstanding at September 30, 2023 and December 31, 2022		—			—
Common stock, $0.001 par value — 495,000 shares authorized, 27,020 and 26,098 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		27			26
Additional paid-in capital		450,746			403,599
Accumulated other comprehensive loss		(1,002	)		(1,249	)
Accumulated deficit		(414,971	)		(386,785	)
Total stockholders' equity		34,800			15,591
Total liabilities and stockholders' equity	$	363,601		$	349,737

See accompanying notes to condensed consolidated financial statements.

Table of Contents

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenue	$	65,005		$	68,270		$	236,888		$	181,210
Cost of revenue		34,237			30,835			118,776			83,494
Gross profit		30,768			37,435			118,112			97,716
Operating expenses:
Research and development		21,588			18,766			67,426			55,124
Sales and marketing		10,073			9,326			30,678			28,239
General and administrative		13,532			11,087			45,098			33,888
Amortization of intangibles		1,409			—			3,555			—
Total operating expenses		46,602			39,179			146,757			117,251
Loss from operations		(15,834	)		(1,744	)		(28,645	)		(19,535	)
Other income, net		1,090			774			3,620			1,367
Induced conversion expense		—			—			—			(2,232	)
Interest expense		(1,213	)		(1,205	)		(3,633	)		(3,716	)
Loss before income taxes		(15,957	)		(2,175	)		(28,658	)		(24,116	)
Income tax benefit (expense)		195			(24	)		472			(67	)
Net loss	$	(15,762	)	$	(2,199	)	$	(28,186	)	$	(24,183	)

Net loss per share — basic and diluted	$	(0.59	)	$	(0.09	)	$	(1.06	)	$	(0.95	)
Weighted-average shares outstanding — basic and diluted		26,920			25,743			26,639			25,384

See accompanying notes to condensed consolidated financial statements.

Table of Contents

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands, unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Net loss	$	(15,762	)	$	(2,199	)	$	(28,186	)	$	(24,183	)
Other comprehensive gain (loss), net of tax:
Unrealized gain (loss) on investments		223			(504	)		1,060			(1,691	)
Foreign currency translation adjustments		(900	)		—			(813	)		—
Total other comprehensive gain (loss)		(677	)		(504	)		247			(1,691	)
Comprehensive loss	$	(16,439	)	$	(2,703	)	$	(27,939	)	$	(25,874	)

See accompanying notes to condensed consolidated financial statements.

Table of Contents

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)


	Nine Months Ended September 30,
	2023			2022
Operating activities:
Net loss	$	(28,186	)	$	(24,183	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		9,733			4,456
Stock-based compensation		35,679			32,230
Accretion of discount or amortization of premium on investments		(1,600	)		301
Amortization of debt issuance costs		1,206			1,203
Induced conversion expense related to convertible notes		—			2,232
Deferred tax expense		(662	)		—
Changes in operating assets and liabilities, net of amounts acquired:
Accounts receivable		2,683			(5,218	)
Inventory		(59,239	)		(9,967	)
Prepaid expenses and other assets		1,407			45
Accounts payable		(10,054	)		1,107
Accrued compensation and employee related benefits		(1,904	)		1,571
Accrued and other liabilities		1,677			1,252
Operating lease right-of-use assets		1,990			2,490
Operating lease liabilities		(2,501	)		(3,064	)
Deferred revenue		(1,038	)		2,358
Net cash provided by (used in) operating activities		(50,809	)		6,813
Investing activities:
Purchases of investments		—			(159,837	)
Proceeds from sales of investments		13,372			—
Proceeds from maturities of investments		127,449			79,508
Proceeds from sale of property and equipment		234			—
Purchases of intangible assets		(250	)		—
Purchases of property and equipment		(15,968	)		(5,975	)
Business acquisitions, net of cash acquired		(23,357	)		—
Net cash provided by (used in) investing activities		101,480			(86,304	)
Financing activities:
Proceeds from exercise of stock options and employee stock purchase plan		7,890			12,462
Payment of 2019 Notes		—			(17,564	)
Net cash provided by (used in) financing activities		7,890			(5,102	)
Effect of exchange rate changes on cash and cash equivalents		(58	)		—
Net increase (decrease) in cash and cash equivalents		58,503			(84,593	)
Cash and cash equivalents
Beginning of period		19,597			123,903
End of period	$	78,100		$	39,310

Supplemental disclosure of cashflow information:
Cash paid for interest		1,617		$	1,803
Purchases of property and equipment not yet paid		1,539			2,519
Operating lease liabilities arising from obtaining ROU assets		979			—
Lease liabilities arising from remeasurement of ROU assets		159			—
26,396 shares of common stock issued for Voyantic Oy acquisition		3,579			—
Acquisition-related contingent consideration liability		4,602			—

See accompanying notes to condensed consolidated financial statements.

Table of Contents

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, unaudited)


										Accumulated
					Additional					Other			Total
	Common Stock				Paid-in		Accumulated			Comprehensive			Stockholders'
	Shares		Amount		Capital		Deficit			Income (loss)			Equity
Balance at December 31, 2022		26,098		26		403,599		(386,785	)		(1,249	)	$	15,591
Issuance of common stock		483		1		4,519		—			—			4,520
Stock-based compensation		—		—		10,224		—			—			10,224
Net loss		—		—		—		(4,358	)		—			(4,358	)
Other comprehensive loss		—		—		—		—			644			644
Balance at March 31, 2023		26,581	$	27	$	418,342	$	(391,143	)	$	(605	)	$	26,621
Issuance of common stock		211		—		1,233		—			—			1,233
Stock-based compensation		—		—		13,148		—			—			13,148
Net loss		—		—		—		(8,066	)		—			(8,066	)
Common stock issued for Voyantic acquisition (Note 4)		27		—		3,579		—			—			3,579
Other comprehensive loss		—		—		—		—			280			280
Balance at June 30, 2023		26,819	$	27	$	436,302	$	(399,209	)	$	(325	)	$	36,795
Issuance of common stock		201		—		2,137		—			—			2,137
Stock-based compensation		—		—		12,307		—			—			12,307
Net loss		—		—		—		(15,762	)		—			(15,762	)
Other comprehensive loss		—		—		—		—			(677	)		(677	)
Balance at September 30, 2023		27,020	$	27	$	450,746	$	(414,971	)	$	(1,002	)	$	34,800


										Accumulated			Total
					Additional					Other			Stockholders'
	Common Stock				Paid-in		Accumulated			Comprehensive			Equity
	Shares		Amount		Capital		Deficit			Income (loss)			(Deficit)
Balance at December 31, 2021		24,737	$	25	$	351,422	$	(362,484	)	$	(39	)	$	(11,076	)
Issuance of common stock		483		—		4,611		—			—			4,611
Stock-based compensation		—		—		11,314		—			—			11,314
Net loss		—		—		—

IMPINJ INC [PI] Filings
10-Q	[2023-10-25]
10-Q	[2023-07-26]
10-Q	[2023-04-26]
10-K	[2023-02-13]
10-Q	[2022-10-26]
10-Q	[2022-07-27]
10-Q	[2022-04-27]
10-K	[2022-02-14]
10-Q	[2021-10-27]
10-Q	[2021-07-28]
10-Q	[2021-04-28]
10-K	[2021-02-17]
10-Q	[2020-10-28]
10-Q	[2020-07-29]
10-Q	[2020-04-27]
10-K	[2020-03-02]
10-Q	[2019-11-04]
10-Q	[2019-07-29]
10-Q	[2019-04-29]
10-K	[2019-02-28]
10-Q	[2018-10-29]
10-Q	[2018-09-12]
10-Q	[2018-05-08]
10-K	[2018-03-15]
10-Q	[2017-11-09]
10-Q	[2017-08-14]
10-Q	[2017-05-11]
10-K	[2017-03-03]
S-1	[2016-11-17]
10-Q	[2016-11-07]
10-Q	[2016-09-02]
S-1	[2016-06-02]