Harsh V. Kumar

Harsh V. Kumar inquired about the Q1 guidance, specifically the $17-$18 million miss relative to street expectations, asking for a breakdown of the impact from custom chip timing, order shifts at the second logistics customer, and excess inventory. He also questioned management's confidence in a quick Q2 turnaround for end markets like food and apparel, given the current hits.

Answer

Chris Diorio, CEO, stated that 2026 is viewed differently from 2025, with a focus on growth and pressing their competitive lead, clarifying that the custom chip for the second-largest North American supply chain and logistics end user is already shipping. Cary Baker, CFO, detailed that the Q1 endpoint IC revenue decline is primarily due to lower volume from inlay partners burning down a few weeks of inventory (approximating $5 million per week impact), with lesser effects from yearly price reductions ($2 million) and product mix. He noted strong January turn orders and moderated rescheduling behavior. Chris Diorio added that food volumes show modest but inexorable growth, retail apparel inventory burn-down is expected to normalize based on retailer input, and new accounts are coming online. In supply chain and logistics, the inventory correction is expected, and the new IC will add volumes.

Harsh V. Kumar asked for a breakdown of the first quarter guidance miss, specifically the impact from the custom chip, inventory, and timing. He also questioned the confidence in a quick turnaround for food, apparel, and logistics markets by the second quarter.

Answer

Chris Diorio, Impinj's CEO, stated that 2026 is expected to be a growth year, with the custom chip already shipping. Cary Baker, Impinj's CFO, detailed the Q1 revenue guide, attributing the high-teens sequential decline in Endpoint IC revenue primarily to lower volume from logistics partners burning down inventory (approx. $5 million per week), with lesser impacts from annual price reductions ($2 million) and product mix. He noted strong January turn orders and moderated rescheduling behavior. Chris Diorio added that confidence in a turnaround stems from retailer input on inventory normalization, new apparel accounts (Abercrombie & Fitch, Aritzia, Old Navy, Academy Sports), and the new custom IC for supply chain and logistics.