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IMPINJ INC (PI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $91.6M, up 30% year over year but down 4% sequentially; non-GAAP gross margin was 53.1%, adjusted EBITDA $15.0M, and non-GAAP EPS $0.48 .
  • Management flagged near-term headwinds: inventory build at inlay partners, aggressive label price shopping, and tariff-driven sourcing uncertainty, with Q1 2025 revenue guided to $70–$73M and non-GAAP EPS to $0.06–$0.11 .
  • Endpoint IC revenue of $74.1M declined 9% sequentially but rose 37% YoY; systems revenue of $17.5M grew 23% sequentially and 4% YoY, aided by a European retailer’s gateway deployment .
  • Catalysts: Gen2X launch and M800 ramp (security/performance benefits, cost/margin accretion) versus inventory digestion and lack of large new program ramps in H1 2025 .

What Went Well and What Went Wrong

  • What Went Well

    • Record annual adjusted EBITDA and free cash flow in 2024; platform strength across retail apparel, general merchandise, and supply chain/logistics; endpoint IC unit volumes +34% YoY in 2024 .
    • Systems revenue beat expectations in Q4, driven by readers/gateways/reader ICs; non-GAAP gross margin up sequentially to 53.1% on mix and improved direct margins .
    • Gen2X received strong ecosystem response; top six reader partners already deploying; enables smaller, cost-effective M800 inlays, particularly in cosmetics/accessories/food .

  • What Went Wrong

    • Q4 revenue down sequentially on partner push-outs; Q1 guide marks a bottom as channel burns a few weeks of endpoint IC inventory .
    • Aggressive label price shopping and share reallocation at end users/service bureaus created pockets of inventory and delayed orders; shorter ordering cycles increased uncertainty .
    • Geopolitical/tariff sourcing uncertainty delayed orders and compressed visibility; lack of large new program ramps in H1 2025 limits near-term acceleration .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$102.5 $95.2 $91.6
GAAP Gross Margin %56.1% 50.0% 50.5%
Non-GAAP Gross Margin %58.2% 52.4% 53.1%
GAAP EPS ($)$0.34 $0.01 ($0.09)
Non-GAAP EPS ($)$0.83 $0.56 $0.48
Adjusted EBITDA ($USD Millions)$26.8 $17.3 $15.0

Segment Breakdown

Segment MetricQ3 2024Q4 2024
Endpoint IC Revenue ($USD Millions)$81.0 $74.1
Systems Revenue ($USD Millions)$14.2 $17.5
Endpoint IC Seq. Change (%)--9%
Systems Seq. Change (%)-+23%
Endpoint IC YoY Change (%)-+37%
Systems YoY Change (%)-+4%

Key KPIs

KPIQ4 2024
Adjusted EBITDA Margin %16.4%
Cash, Cash Equivalents & Investments ($USD Millions)$239.6
Inventory ($USD Millions)$99.3
Free Cash Flow ($USD Millions)$8.5
Endpoint IC Unit Volumes (FY 2024 YoY)+34%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q4 2024$91.0–$94.0 Reiterated $91.0–$94.0 Maintained
Adjusted EBITDA ($M)Q4 2024$13.6–$15.1 Reiterated $13.6–$15.1 Maintained
Revenue ($M)Q1 2025—$70.0–$73.0 New
Adjusted EBITDA ($M)Q1 2025—$1.1–$2.6 New
Non-GAAP EPS ($)Q1 2025—$0.06–$0.11 New
Gross MarginQ1 2025—Decline modestly sequentially Lower
Endpoint IC RevenueQ1 2025—Decline sequentially Lower
Systems RevenueQ1 2025—Decline more than seasonally Lower

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
AI/Technology initiatives (Gen2X)Not highlighted in Q2/Q3 PRs Gen2X launched; strong partner deployment; embedded in M800; security/performance uplift Rising
Supply chain/logisticsBroad demand strength noted; strong results above guidance Second large NA end user increased 2024 label volumes; modest growth expected 2025; channel inventory headwinds near term Mixed near term, constructive medium term
Tariffs/MacroNot highlighted Geopolitical/tariff sourcing uncertainty delaying orders; shorter cycles Worsening near term
Product performance (M800)Record results, but SKU specifics not emphasized M800 ramp lowers ASPs yet supports margin accretion; benefits from lower-cost wafers Accretive over 2025
Regional trendsNot specified U.S. demand solid and growing; EU stable Stable-to-positive
Regulatory/legalLitigation settlement boosts FY 2024 free cash flow and earnings 2024 favorable settlement cited in results Resolved tailwind

Management Commentary

  • “2024 marked our fourth consecutive year of double-digit revenue growth and another yearly revenue record… endpoint IC unit volumes grew 34% over 2023… record annual adjusted EBITDA and free cash flow” — Chris Diorio .
  • “Geopolitical uncertainty in tariffs; end users changing label-partner share allocations; aggressive label price shopping; and shorter ordering cycles disrupted partner bookings” — Chris Diorio .
  • “Systems revenue exceeded our expectations, driven by strength in reader, gateway and reader IC sales” — Cary Baker .
  • “We anticipate first-quarter gross margin to mark the low point for the year… begin benefiting from higher M800 mix and lower cost wafers” — Cary Baker .
  • “Gen2X… response from our ecosystem has been overwhelming, with our top 6 reader partners already deploying” — Chris Diorio .

Q&A Highlights

  • Inventory digestion: “We built a few weeks of excess channel inventory… driven by demand/timing; aggressive label price shopping and inlay supplier mix changes created pockets of inventory” — Cary Baker .
  • Recovery cadence: “We only guide one quarter… prudent to assume zero turns in endpoint IC; snapback scenarios exist but these problems are rarely a one-quarter issue” — Cary Baker .
  • Logistics demand and share reallocation: “Changes in logistics demand… share reallocation plus pushout resulted in channel inventory” — Cary Baker/Chris Diorio .
  • Pricing dynamics: “M800 is a lower-priced SKU… ASPs down as M800 ramps; trade-off is gross margin accretion; label price shopping amid bonding overcapacity delayed orders” — Cary Baker/Chris Diorio .
  • Tariff sourcing uncertainty: “Delayed orders due to sourcing decisions based on where tariffs might hit; shorter order cycles” — Chris Diorio .

Estimates Context

  • S&P Global consensus estimates for revenue/EPS/EBITDA were unavailable due to data access limits during this session; therefore, numerical beat/miss versus Wall Street consensus cannot be provided at this time. Management’s Q4 actuals fell within the company’s previously guided ranges and Q1 2025 guidance implies a sequential decline given inventory normalization and market dynamics .

Key Takeaways for Investors

  • Q4 execution was solid on profitability and systems strength, but sequential revenue decline and Q1 guide reflect inventory digestion and pricing/tariff headwinds; expect near-term volatility until inventories normalize .
  • Endpoint IC mix shift to M800 should pressure ASPs but support margin accretion alongside lower-cost wafers; gross margin likely bottoms in Q1 and improves through 2025 .
  • Gen2X adoption is a strategic moat enhancer (security/performance), expanding use cases and potentially driving endpoint IC share gains over time .
  • Pipeline: two large grocery opportunities (perishables and self-checkout) with potential 2026 ramps; modest volumes could start in H2 2025—watch for program milestones as medium-term growth drivers .
  • Regional setup: U.S. demand healthy; EU stable; systems visibility strong across E-family reader ICs—supports the view that Q1 headwinds are temporary .
  • Liquidity and balance sheet remain solid with $239.6M in cash/cash equivalents/investments; provides flexibility through near-term digestion .
  • Trading lens: near-term sentiment likely anchored to pace of inventory clearance and order turns; medium-term thesis rests on Gen2X/M800 adoption and grocery/general merchandise expansions .

Appendix: Source Documents

  • Q4 2024 earnings press release and financials: Impinj Reports Fourth Quarter and Full Year 2024 Financial Results .
  • Form 8-K 2.02 press release reiterating Q4 guidance (Jan 14, 2025): .
  • Q4 2024 earnings call transcript (Feb 5, 2025): – and duplicate version –.
  • Q3 2024 press release (for trend/guidance reference): .
  • Q2 2024 press release (for trend reference): –.