Total Revenue (USD, thousands)

Cost of Goods Sold (COGS) (USD, thousands)

SG&A (USD, thousands)

Research and Development (R&D) (USD, thousands)

Depreciation and Amortization (D&A) (USD, thousands)

Interest Expense (USD, thousands)

Operating Income (EBIT) (USD, thousands)

Net Income (USD, thousands)

EPS - Basic (USD)

EPS - Diluted (USD)

c9c70edcc4a4863ad4d5e6c515681cde365de5372dc41a4d4fdd48d268c8f9dd

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

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9cac2e82ddd3ba36ed2125e862db5295d11e774d3a3dcb272a59017f33a22c59

4d7b83d43ce5351030a8d818ef60815a9ccc4b887e1a8bf27fe6d7220de92c98

**Impinj, Inc.** is a technology company specializing in connecting everyday items to the Internet using its RAIN RFID platform. The company enables businesses and consumers to analyze, optimize, and innovate by providing real-time data about items such as apparel, automobile parts, luggage, and shipments. Impinj sells a range of products, including endpoint ICs, reader ICs, readers, gateways, and software solutions, which collectively support a boundless Internet of Things.  **[0000950170-24-116657_pi-ex99_1.htm:1]** **[0000950170-24-086062_pi-ex99_1.htm:1]** **[0000950170-24-047599_pi-ex99_1.htm:1]** **[0000950170-23-055204_pi-ex99_1.htm:1]** 

1. **Endpoint ICs** - Provides integrated circuits (ICs) used in tags and inlays, primarily sold to inlay manufacturers and tag OEMs.  **[0000950170-23-034747_pi-20230630.htm:55]** **[0000950170-24-013874_pi-20231231.htm:30]** **[0000950170-23-055214_pi-20230930.htm:57]** **[0000950170-23-002614_pi-20221231.htm:27]**   
2. **Systems** - Offers reader ICs, readers, gateways, test and measurement solutions, and software/cloud services, sold to OEMs, ODMs, solution providers, VARs, and system integrators.  **[0000950170-23-034747_pi-20230630.htm:55]** **[0000950170-24-013874_pi-20231231.htm:30]** **[0000950170-23-055214_pi-20230930.htm:57]** **[0000950170-23-002614_pi-20221231.htm:27]**

9a97f052746a26ced4a155945541301ef9c16e1b16d737d6b7dd7b94838945d1

| Name            | Position                     | Start Date       | Short Bio                                                                                                                                                                                                                     |
|-----------------|-----------------------------|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Chris Diorio    | Director, CEO, Vice Chair   | April 2000 (Director), November 2014 (CEO), September 2013 (Vice Chair) | Chris Diorio, Ph.D., co-founded Impinj, Inc. and has served as a Director since **April 2000**, CEO since **November 2014**, and Vice Chair since **September 2013**. He holds a B.A. in Physics and a Ph.D. in Electrical Engineering.  **[0000950170-24-047629_pi-20240424.htm:9]** **[0000950170-24-044084_pi-20240412.htm:9]** **[0000950170-24-042589_pi-20240405.htm:9]**  |
| Cary Baker      | Chief Financial Officer     | February 2020    | Cary Baker has been CFO of Impinj, Inc. since **February 2020**. He previously held CFO roles at RealNetworks, HEAT Software, and NetMotion Software. He holds an M.B.A. and a B.S. in Finance.  **[0000950170-24-047629_pi-20240424.htm:27]** **[0000950170-24-044084_pi-20240412.htm:27]** **[0000950170-24-042589_pi-20240405.htm:27]** **[0001193125-23-118680_d480589ddef14a.htm:29]**                   |
| Jeff Dossett    | Chief Revenue Officer       | June 2020        | Jeff Dossett has served as CRO at Impinj, Inc. since **June 2020**. He previously held roles as EVP of Sales and Marketing and SVP of Marketing and Business Development at Impinj.  **[0000950170-24-047629_pi-20240424.htm:27]** **[0000950170-24-044084_pi-20240412.htm:27]** **[0000950170-24-042589_pi-20240405.htm:27]**                                  |
| Hussein Mecklai | Chief Operating Officer     | February 6, 2022 | Hussein Mecklai has been COO at Impinj, Inc. since **February 6, 2022**. He joined the company under an employment agreement on **November 13, 2018**.  **[0001193125-23-118680_d480589ddef14a.htm:35]** **[0001193125-23-118680_d480589ddef14a.htm:43]**                                                                  |
| Cathal Phelan   | Director, Chief Innovation Officer | September 2019 (Director), January 2023 (CIO) | Cathal Phelan has served as a Director at Impinj, Inc. since **September 2019** and as Chief Innovation Officer since **January 2023**. He previously held leadership roles at RAPT Touch Inc. and Cypress Semiconductor.  **[0000950170-24-047629_pi-20240424.htm:10]** **[0000950170-24-047629_pi-20240424.htm:26]**  |
```

b1b27ded3aef820038713a1fa788294f1cd65555e77d63063967f126eda5cf88

1. Your third quarter gross margin decreased to **52.4% from 58.2% in the second quarter**, primarily due to licensing revenue in Q2; with the expected decline in endpoint IC revenue and lower E-family reader IC sales due to project timing, how do you plan to stabilize and improve gross margins in the upcoming quarters?  **[PI_3403410_3]** **[PI_3403410_4]** 

2. You mentioned that the **authentication opportunity in Asia has been slower to adopt than originally hoped**, and that you will be redoubling efforts to ramp authentication; what specific challenges are you facing in driving adoption of your authentication products, and how do you plan to overcome them to meet your growth expectations?  **[PI_3403410_20]** 

3. Given that the **M800 ramp is looking promising** with two major inlay partners getting certification, but the pace of adoption depends on customer certification and product launches, what risks do you see in achieving widespread adoption of M800, and how are you mitigating potential delays in the certification process?  **[PI_3403410_14]** 

4. With the announcement of Qualcomm's support for **RAIN RFID in mobile devices** and your excitement about the consumer opportunity, but acknowledging that the entire ecosystem needs to be ready, what concrete steps are you taking to ensure your company is prepared to capitalize on this opportunity, and what is the expected timeline for significant revenue contribution from this segment?  **[PI_3403410_9]** **[PI_3403410_10]** **[PI_3403410_6]** 

5. Considering that you've increased your second half 2024 wafer purchases to fulfill stronger-than-anticipated demand, but **inventory levels rose by $7.6 million to $88.4 million**, how do you plan to manage inventory risk if demand fluctuates, and what safeguards are in place to prevent excess inventory impacting your balance sheet?  **[PI_3403410_4]** 

dd5e2cd3411bb6d8b5bd7459e0bc53c2b246bef5304148c85bb3a5c189d787e2

### **1. Q3 2024 Earnings Call**
- **Issued Period**: Q3 2024  
- **Guided Period**: Q4 2024  
- **Guidance**:
  - **Revenue**: $91 million to $94 million (**31% increase** at the midpoint compared to Q4 2023).  **[PI_3403410_4]** 
  - **Adjusted EBITDA**: $13.6 million to $15.1 million.  **[PI_3403410_4]** 
  - **Non-GAAP Net Income**: $13.4 million to $14.9 million.  **[PI_3403410_4]** 
  - **Non-GAAP Fully Diluted EPS**: $0.45 to $0.49.  **[PI_3403410_4]** 
  - **Gross Margin**: Expected to increase sequentially, with a potential Q4 gross margin around **53%**.  **[PI_3403410_11]** **[PI_3403410_4]** 
  - **Endpoint IC Revenue**: Expected to decline but on the favorable side of normal seasonality.  **[PI_3403410_3]** 
  - **Systems Revenue**: Expected to increase sequentially.  **[PI_3403410_4]** 
  - **Operating Expense**: Expected to increase sequentially.  **[PI_3403410_4]** 

---

### **2. Q2 2024 Earnings Call**
- **Issued Period**: Q2 2024  
- **Guided Period**: Q3 2024  
- **Guidance**:
  - **Revenue**: $91 million to $94 million (**42% increase** at the midpoint compared to Q3 2023).  **[PI_3394154_3]** 
  - **Adjusted EBITDA**: $13.8 million to $15.3 million.  **[PI_3394154_3]** 
  - **Non-GAAP Net Income**: $13.5 million to $15 million.  **[PI_3394154_3]** 
  - **Non-GAAP Fully Diluted EPS**: $0.46 to $0.50.  **[PI_3394154_3]** 

---

### **3. Q1 2024 Earnings Call**
- **Issued Period**: Q1 2024  
- **Guided Period**: Q2 2024  
- **Guidance**:
  - **Revenue**: $96 million to $99 million (**27% quarter-over-quarter increase** at the midpoint, including the licensing payment; **7% quarter-over-quarter increase** at the midpoint, excluding it).  **[PI_3380635_4]** 
  - **Adjusted EBITDA**: $23.9 million to $25.4 million.  **[PI_3380635_4]** 
  - **Non-GAAP Net Income**: $21.7 million to $23.2 million.  **[PI_3380635_4]** 
  - **Non-GAAP Fully Diluted EPS**: $0.72 to $0.77.  **[PI_3380635_4]** 

---

### **4. Q4 2023 Earnings Call**
- **Issued Period**: Q4 2023  
- **Guided Period**: Q1 2024  
- **Guidance**:
  - **Revenue**: $72 million to $75 million (**4% quarter-over-quarter increase** at the midpoint compared to Q4 2023).  **[PI_3372656_4]** 
  - **Adjusted EBITDA**: $3 million to $4.5 million.  **[PI_3372656_4]** 
  - **Non-GAAP Net Income**: $2.2 million to $3.7 million.  **[PI_3372656_4]** 
  - **Non-GAAP Fully Diluted EPS**: $0.08 to $0.13.  **[PI_3372656_4]** 
  - **Gross Margins**: Expected to sequentially increase from Q4 2023.  **[PI_3372656_3]** 
  - **Operating Expense**: Expected to increase sequentially, driven by annual payroll tax and bonus accrual resets, with litigation expense expected to decline sequentially.  **[PI_3372656_3]** 

--- 

This table summarizes the issued and guided periods along with the guidance details for the last four earnings calls.

51d6a2bd46b306830274b974c6d33234cb312a895138bff14068e359b673b7e9

454ede3493f417d87563154b212640cbf202000c2afc134142739e057e5184bf

1. **Endpoint IC Growth Outlook**  
   **Q:** Are you seeing any slowdown in endpoint IC growth into Q3 and Q4?  
   **A:** Management is not seeing any pullback in customer demand and expects solid third-quarter product revenue growth extending to endpoint ICs.  **[PI_3394154_10]**  They have outperformed normal seasonality in Q1 and Q2, with endpoint IC volumes up **14%** in Q1 and **21%** in Q2.  **[PI_3394154_9]**  While they anticipate typical seasonality in Q4, they see broad strength and remain optimistic.  **[PI_3394154_10]** 

2. **Margin Outlook**  
   **Q:** What is the outlook for gross margins in Q3 and beyond?  
   **A:** They expect product gross margins to increase sequentially in Q3 but note they are currently below their targeted **53–54%** range.  **[PI_3394154_12]**  This is due to a stronger mix of lower-margin endpoint IC revenue and a higher percentage of lower-margin older SKUs.  **[PI_3394154_12]**  Efforts to address these issues should mostly be completed before entering Q4.  **[PI_3394154_12]** 

3. **Competition and NXP**  
   **Q:** Does NXP's strong results impact your market share, and can they work around your IP?  
   **A:** Management feels good about their market position and demand for their products and platform.  **[PI_3394154_16]**  They can't comment on market share changes until the end of the year.  **[PI_3394154_16]**  While companies can design around IP with significant effort, Impinj has a large number of patents, making it challenging.  **[PI_3394154_16]** 

4. **Food Vertical Opportunities**  
   **Q:** How are early implementations and pilots in the food vertical progressing?  
   **A:** The food opportunity is moving more quickly than previously anticipated.  **[PI_3394154_11]**  They are seeing promising opportunities in pallet and case tagging for food freshness and are now witnessing item-level pilots in stores.  **[PI_3394154_11]**  While they can't provide a specific time frame for deployments, they are excited about the potential.  **[PI_3394154_11]** 

5. **Wafer Supply and Inventory**  
   **Q:** What is your longer-term visibility on wafer supply?  
   **A:** They are increasing wafer orders to stay ahead of growing demand and have good support from their foundry partner.  **[PI_3394154_13]**  They are better at forecasting and purchasing ahead.  **[PI_3394154_13]**  Currently, they target carrying **180 days** of forward inventory on the balance sheet, which provides insulation from semiconductor cycles.  **[PI_3394154_13]** 

6. **Systems Business Outlook**  
   **Q:** What's the outlook for the systems business into Q3? Is there a pickup?  
   **A:** They expect systems revenue to increase quarter-over-quarter in Q3.  **[PI_3394154_8]**  While reader IC revenue will be modestly lower due to winding down prior-generation ICs, they anticipate all other systems product lines to grow sequentially.  **[PI_3394154_8]**  They are encouraged by the traction they're seeing and hope the recent low point is behind them.  **[PI_3394154_8]** 

7. **Response to Distributor's Comments**  
   **Q:** How are you growing faster than a large distributor who lowered growth expectations?  
   **A:** Management highlights their close relationships with leading enterprises, which are paying dividends in silicon volumes.  **[PI_3394154_6]**  They partner with eight large inlay suppliers and dozens of smaller ones, providing broad market reach.  **[PI_3394154_6]**  They note they don't always align with this distributor's public comments each quarter.  **[PI_3394154_6]** 

8. **M800 Series Impact**  
   **Q:** What are the commercial implications of the M800's performance improvements?  
   **A:** M800 volumes are currently small but growing sharply.  **[PI_3394154_14]**  The M800 achieves **20–25%** greater read range and unlocks opportunities previously difficult to solve.  **[PI_3394154_14]**  Examples include improved readability of densely packed items in supply chains and solving readability challenges in food applications.  **[PI_3394154_14]** 

9. **Second Logistics Customer Progress**  
   **Q:** Can you provide an update on the second large North American logistics customer?  
   **A:** Their deployment is proceeding as anticipated, and they remain committed to a full rollout  **[PI_3394154_5]** **[PI_3394154_7]** . Management sees them increasing their label consumption and identifies opportunities for reader ICs.  **[PI_3394154_5]**  For the time frame to reach full penetration, they refer to the customer's own public statements.  **[PI_3394154_5]** 

10. **Self-Checkout Opportunities**  
    **Q:** Have you seen increased interest in IC-based self-checkout?  
    **A:** They are seeing self-checkout opportunities in retail stores, which enhance customer satisfaction.  **[PI_3394154_15]**  Effective loss prevention at store exits is required, and they have effectively solved this problem.  **[PI_3394154_15]**  There's a pull from the retail market, and they focus on ensuring robust solutions for broader adoption.  **[PI_3394154_15]** 

11. **Digital Passport in Europe**  
    **Q:** Any updates on the digital passport initiative in Europe?  
    **A:** Impinj is working closely with the RAIN Alliance and European standards bodies to get RAIN approved as a data carrier for digital product passports.  **[PI_3394154_15]**  The initial target is consumer mobile devices to enable consumers to read tagged items, with significant push from the community and pull from enterprises.  **[PI_3394154_16]** 

a1593de001a1a756c8693a5d1edfa4b6e29ec15f85bb835433b96de1fd1feea5

Endpoint IC Sales Volumes CAGR (%)

0ba1e2c4f232a517198f9493bb6b1a7624127edb2555614207b203393c2dda79

Americas

- United States

Asia Pacific

- China and Hong Kong

- Malaysia

EMEA

Europe, Middle East, Africa

Total Revenue

e2e23bd287279e1dd036ae10d63053ccb73e3ab11d45a688bdac0c0c0f41c9ef

Endpoint ICs

Systems

- Product Revenue

- Development, Service, Licensing

76665cd2f67834ab96fb91dd53a9dfe2749b4919509cd1ba014d8172e133b921

- **Strong Demand and Growth in Endpoint ICs**: Impinj's endpoint IC volumes have significantly outperformed normal seasonality, with Q1 volumes up **14% sequentially** and Q2 volumes up **21% sequentially**.  **[PI_3394154_9]**  They expect continued strength in Q3, indicating robust market demand and growth potential.  **[PI_3394154_9]**
- **Progressing Key Customer Deployments**: The second large North American supply chain and logistics end user is proceeding as anticipated, remains committed to a full rollout, and is **increasing their label consumption and fixed reader footprint**, driving demand for both Impinj's endpoint ICs and e-family reader ICs.  **[PI_3394154_5]**  This progression signifies continued revenue growth opportunities and strong customer relationships.  **[PI_3394154_5]**
- **Innovation with M800 Series Unlocking New Opportunities**: The M800 series ICs offer **20–25% greater read range**, enabling Impinj to unlock opportunities and solve problems that were previously difficult to address, such as improving readability in densely packed retail supply chain boxes and food item tagging.  **[PI_3394154_15]**  This technological advancement positions Impinj for future growth and market leadership.  **[PI_3394154_15]**

9e9eb10ba31ccc9e1cd673a74e8706a26aef1755f7e1341a6ff2fa13601ed3d1

- **M800 Volume Ramp is Slower Than Expected, Delaying Gross Margin Improvements**: The company's M800 endpoint IC is expected to bring approximately **300 basis points of gross margin accretion** as it becomes a volume runner. However, the ramp is taking multiple years, with volumes still small and the impact on gross margin not visible at this point. This delay could prolong the period during which gross margins remain below target levels.  **[PI_3380635_17]**
- **Gross Margins Below Target Due to Unfavorable Product Mix and Slow Systems Recovery**: Gross margins are currently running below the targeted **53% to 54% range**, partly because the systems business recovery typically lags the endpoint IC recovery. Endpoint IC revenue, which carries a slightly lower gross margin than the corporate average, has grown as a percentage of total revenue. Additionally, lower-margin **200-millimeter volume-running SKUs**, which are two generations old, are higher as a percent of revenue in Q2 and likely in Q3. The continued sale of older, lower-margin products could keep gross margins below target levels.  **[PI_3380635_10]**
- **Uncertain Recovery in Retail Apparel Market May Affect Revenue Growth**: While there is restocking in retail apparel, footwear, and general merchandise, partners only signal **"cautious optimism"** for the second half of the year. There is uncertainty about whether the uptick in demand will be sustained. If the recovery in the retail apparel market does not persist, it could negatively impact the company's revenue growth.  **[PI_3380635_13]**

92023f17898d173f3f56350b4e70eed55e97747fa22b355f6f965ae51dd4b8f1

- **Impinj's new M800 endpoint IC** is expected to boost gross margins by approximately **300 basis points** when fully ramped, due to significant cost advantages from the die shrink. Customer feedback has been overwhelmingly positive, and the company is pricing the M800 slightly below the M700 to accelerate adoption.  **[PI_3372656_7]** **[PI_3372656_14]**
- **Inlay partners' inventories have normalized**, with large partners exiting the year relatively healthy, allowing Impinj to ship closer to demand in the first quarter. **Retail inventory destocking is starting to taper**, suggesting potential for increased demand and sales growth.  **[PI_3372656_9]** **[PI_3372656_5]**
- **Strong systems pipeline** and ongoing enterprise solution projects are expected to drive future revenue growth. Increased sales activity and detailed project planning indicate robust demand, with opportunities for continued gains with large end users, such as the second large North American supply chain and logistics customer increasing label volumes in 2024.  **[PI_3372656_16]** **[PI_3372656_6]**

092fc546cc51539e891b3ab57e3ee80ca94a5e2b8ec16f8f788e4266085183e2

- **Strong adoption and ramp of the M800 product**: The M800 endpoint IC is seeing promising growth, with two major inlay partners obtaining certification and designing multiple inlays. Additional customers are nearing certification, and customers are pleased with the product, leading to a healthy ramp growing as expected.  **[PI_3403410_14]**
- **Broad-based industry adoption across multiple sectors**: The company is experiencing strong financial results due to supply chain and logistics strength, steady growth in retail general merchandise, secular growth in apparel, and growth in long-tail applications. This broad-based industry adoption demonstrates the company's market leadership.  **[PI_3403410_7]**
- **Robust pipeline of enterprise customers due to solutions focus**: The company's significant investment in solutions, including systems, software, and cloud services, is paying dividends. There is a large pipeline of Fortune 500 and Fortune 100 enterprises engaging with the company to address unmet business needs, positioning the company for future growth.  **[PI_3403410_17]**

64805b929c7d3119be088ab9e4848e3706e2ef13a3593e897b676a189f3864c3

1. **Q3 Results Drivers**  
   **Q:** What drove your strong Q3 performance?  
   **A:** Management highlighted broad-based growth with no single driver; they saw supply chain and logistics strength, steady growth in retail general merchandise, secular growth in apparel, long-tail applications, and solutions efforts paying dividends.  **[PI_3403410_7]** 

2. **Q4 Systems Outlook**  
   **Q:** Will systems revenue grow in Q4?  
   **A:** Yes, they expect systems revenue to increase sequentially in Q4 due to seasonality, increased volume from a visionary European retailer's self-checkout and loss prevention rollout, and elongated Indy reader IC end-of-life process adding a tailwind.  **[PI_3403410_5]** 

3. **Qualcomm Partnership Impact**  
   **Q:** What are the implications of the Qualcomm partnership?  
   **A:** The partnership advances RAIN RFID as a data carrier for digital product passports. Initial opportunities are in enterprise mobile devices, with consumer mobile to follow. It positions RAIN for broad-based adoption, though implementation in phones won't be the pacing factor.  **[PI_3403410_9]** 

4. **Food Industry Opportunity**  
   **Q:** How significant is RFID adoption in food?  
   **A:** Management is excited about the food opportunity, seeing adoption in quick-serve restaurants, food supply chains, and grocers. While initial volumes in 2025 won't be huge, they believe there will be meaningful volumes, starting on a path in a market order of magnitude larger than general merchandise.  **[PI_3403410_6]** **[PI_3403410_13]** 

5. **M800 Chip Ramp**  
   **Q:** What's the status of the M800 chip certification?  
   **A:** Two major inlay partners have received certification and are designing multiple inlays and products. Additional customers are close to certification. The M800 ramp is promising, and customers are pleased with the product.  **[PI_3403410_14]** 

6. **Authentication ICs in Asia**  
   **Q:** Are authentication ICs gaining traction in Asia?  
   **A:** They are shipping high-margin authentication endpoint ICs into Asia-based pilots, providing a tailwind to Q4 gross margin. While adoption has been slower than hoped, replenishments are occurring, and management believes authentication is critically important going forward.  **[PI_3403410_11]** **[PI_3403410_20]** 

7. **Retailers Piggybacking Adoption**  
   **Q:** Are other retailers adopting RFID due to large retailer initiatives?  
   **A:** Yes, other general merchandise retailers are piggybacking by requiring products to be tagged as they place RFQs. Since they already use RFID in apparel, they can quickly add new categories, accelerating adoption.  **[PI_3403410_18]** **[PI_3403410_19]** 

8. **Logistics Customer Adoption**  
   **Q:** What's the status with your second logistics customer?  
   **A:** While unable to cite specifics, the customer is executing strongly and not fully deployed. Endpoint IC volumes are expected to increase in 2024 and 2025. A decline in reader IC revenue in Q4 is due to project timing and not indicative of underlying demand.  **[PI_3403410_8]** 

9. **Gross Margin and Seasonality**  
   **Q:** What is the gross margin outlook and seasonality effects?  
   **A:** Q4 gross margin is expected around **53%** due to a richer systems mix and high-margin authentication ICs. Long-term, the M800 will contribute to gross margin accretion. Endpoint IC pricing negotiations are underway. Q1 seasonality for endpoint ICs is expected to be flattish.  **[PI_3403410_11]** **[PI_3403410_16]** 

8f77fab74f3a9fcb8ba8a58e9297ba845dee738fef157f050114a8803fd7ec20

1. **NXP Settlement and Licensing Opportunities**  
   **Q:** What's the industry's feedback post-settlement with NXP, and are there more licensing opportunities?  
   **A:** There are additional licensing opportunities on our IP front and cloud services, which can generate recurring revenue.  **[PI_3380635_9]**  Licensing is core to our strategy.  **[PI_3380635_9]**  The industry was relieved by our settlement with NXP, as it removes uncertainty and potential impediments, helping the industry move forward.  **[PI_3380635_9]** 

2. **Gross Margin Outlook**  
   **Q:** How should we think about gross margin trends with M800 ramping and systems mix?  
   **A:** Next quarter's gross margins will increase due to the license revenue.  **[PI_3380635_10]**  Excluding that, product-level gross margins are modeled flat quarter-over-quarter.  **[PI_3380635_10]**  Currently, we're below our targeted **53%-54%** range due to being slightly below scale and the systems business recovery lagging endpoint ICs.  **[PI_3380635_10]**  Lower-margin 200mm SKUs are higher as a percent of revenue in Q2 and likely Q3, but as M800 ramps, we'll see benefits.  **[PI_3380635_10]**  Overall, we remain confident in our gross margin targets.  **[PI_3380635_10]** 

3. **M800 Ramp and Gross Margin Impact**  
   **Q:** Has your thinking on M800's impact on gross margins changed as it scales?  
   **A:** M800 benefits from a lower cost basis, translating into approximately **300 basis points** of gross margin accretion as it ramps.  **[PI_3380635_17]**  An endpoint IC ramp takes multiple years to reach volume status.  **[PI_3380635_17]**  M800 is ramping into Q2, but volumes are still small, so the impact on gross margin isn't visible yet.  **[PI_3380635_17]**  It's too early to project precise timing, but we're encouraged and will keep you updated.  **[PI_3380635_17]** 

4. **OpEx and License Payment Guidance**  
   **Q:** What should be the expected OpEx going forward, and how should we model next year's license payment?  
   **A:** Our Q2 OpEx is clean, with immaterial litigation spend, and the business is normalizing after Q1 reorganization.  **[PI_3380635_15]**  For the second half, assume modest growth as we continue investing.  **[PI_3380635_15]**  Regarding the expected license payment next year, while NXP has the ability to design out, it's not easily done.  **[PI_3380635_15]**  We don't expect a huge increase in the payment, but it's fair to model it at this point, and we'll keep you updated.  **[PI_3380635_15]** 

5. **M&A and Growth Opportunities**  
   **Q:** Are you looking at M&A to accelerate growth in newer markets?  
   **A:** While we can't discuss specific opportunities, we're always open to areas that strengthen our platform.  **[PI_3380635_16]**  The Viant acquisition was a natural addition, aligning well with our platform.  **[PI_3380635_16]**  Additional cash doesn't significantly change our approach; it's about identifying opportunities that make sense.  **[PI_3380635_16]**  If we see a beneficial opportunity, we'll pursue it.  **[PI_3380635_16]** 

6. **Retail Apparel Market Recovery**  
   **Q:** Is the retail apparel market normalized, or are we still recovering inventory?  
   **A:** We are seeing restocking in apparel, footwear, and general merchandise to match an uptick in consumer demand.  **[PI_3380635_13]**  Whether this trend continues is too early to call.  **[PI_3380635_13]**  Partners signal strength into Q2 and cautious optimism for the second half but await confirmation of demand sustainability.  **[PI_3380635_13]**  We see multiple drivers, including embedded tagging and our solutions efforts, which are contributing to our results.  **[PI_3380635_13]** 

7. **Large North American Retailer Adoption**  
   **Q:** How is the implementation with the large North American retailer going, and what are its industry implications?  
   **A:** Tagging partners report steady gains in tagging more general merchandise categories and a modest uptick in overall consumer demand.  **[PI_3380635_5]**  Some categories progress faster than others, but we're optimistic about continued progress this year.  **[PI_3380635_5]**  Historically, this customer leads the industry, and others follow their moves; despite past setbacks from **2013-2019**, we expect their actions to set benchmarks for others.  **[PI_3380635_5]** 

8. **Logistics Customer Ramp**  
   **Q:** Will the second logistics customer grow with you steadily this year, and when will you reach full penetration?  
   **A:** It's difficult to predict consistent quarterly growth due to initial challenges.  **[PI_3380635_6]**  However, we see strong commitment from the customer to digitize their entire operations and fundamentally change their business.  **[PI_3380635_6]**  We have multiple opportunities with this customer, and their adoption could influence others in the logistics industry.  **[PI_3380635_6]** 

9. **Food Applications Growth**  
   **Q:** How should we think about food applications moving faster than expected?  
   **A:** Though I previously thought the food opportunity would move slowly due to its size, it's advancing quicker than expected.  **[PI_3380635_8]**  The successful adoption of RAIN technology in retail has proven the case and is paving the way in food.  **[PI_3380635_8]**  We're excited about the current opportunities and will share more insights as we learn.  **[PI_3380635_8]** 

10. **Digital Product Passport and Mobile Integration**  
    **Q:** Tell us more about Digital Product Passport in textiles, applications, economics, and potential size.  
    **A:** Regulations requiring textile traceability from manufacturing to recycling begin in **2027**.  **[PI_3380635_11]**  DPP aims to give consumers information on item sustainability, enabling informed choices.  **[PI_3380635_11]**  We believe DPP will drive significant consumer engagement opportunities.  **[PI_3380635_11]**  Our goal is to make existing tags on apparel the data carrier for DPP, but we need consumers to be able to read them, necessitating readers in mobile phones.  **[PI_3380635_11]**  I'm hopeful that increased pressure will lead to RAIN reading in phones, opening new opportunities beyond DPP.  **[PI_3380635_11]** 

11. **DPP Implementation Milestones**  
    **Q:** What are the DPP milestones ahead, and has the focus shifted from batteries to textiles?  
    **A:** Batteries are going first with DPP, using QR codes as the data carrier.  **[PI_3380635_14]**  Textiles are next, a much bigger category, but the data carrier hasn't been decided yet—it could be multiple options including RFID.  **[PI_3380635_14]**  Committees are working to determine this.  **[PI_3380635_14]**  RAIN RFID has benefits like visibility and is already on apparel items, but not integrated into mobile phones yet.  **[PI_3380635_14]**  Large enterprises in Europe are pushing for RAIN readers in phones.  **[PI_3380635_14]**  Over the next **1-2 years**, we'll see if RAIN is classified as a data carrier for DPP.  **[PI_3380635_14]** 

12. **Mobile Integration and Licensing Payments**  
    **Q:** Will you sell ICs into mobiles for DPP, and are future license payments volume-dependent?  
    **A:** Regarding licensing, the payments are a fixed amount increasing modestly each year.  **[PI_3380635_12]**  On mobile ICs, it's too early to say if there's an opportunity for our silicon in phones.  **[PI_3380635_12]**  Regardless, we're focusing on leveraging our platform and have enterprise-level engagements.  **[PI_3380635_12]**  We'll aim to get our silicon in phones, but even if not, we'll work with retailers, phone providers, and manufacturers to be part of the overall solution.  **[PI_3380635_12]** 

13. **Logistics Customer Stage 2 Deployment**  
    **Q:** What is the significance of the logistics customer deploying RFID readers in vehicles?  
    **A:** While we prefer customers to discuss their own deployments  **[PI_3380635_7]** , we see platform opportunities with this customer and multiple silicon touchpoints.  **[PI_3380635_7]** 

f3847c7a8b1ae3e1c3143c155055e4acb63e78e0ae057fb333aeaadd6fe7280e

1. **Inventory Levels and Endpoint IC Revenue Growth**  
   **Q:** Is the inventory correction over, and what's the outlook for endpoint IC revenue?  
   **A:** The company reports that their large inlay partners have **exited the year with healthy inventory levels**.  **[PI_3372656_9]**  They expect to **ship closer to demand in Q1**, marking their **third consecutive quarter of sequential endpoint IC revenue growth**.  **[PI_3372656_12]**  While upticks have been modest, they are **encouraged by progress in demand**.  **[PI_3372656_12]**  They are not modeling a retail rebound in the first half but note that **green shoots look greener** this quarter.  **[PI_3372656_12]** 

2. **M800 Product Launch and Gross Margin Impact**  
   **Q:** How will the M800 launch affect penetration rates and gross margins?  
   **A:** Customer feedback on the M800 has been **overwhelmingly positive**, and initial production shipments are expected this quarter.  **[PI_3372656_7]**  When fully ramped, the M800 is anticipated to deliver approximately **300 basis points of gross margin accretion**.  **[PI_3372656_7]**  However, they do not expect to see a **visible gross margin impact in the first half of the year**  **[PI_3372656_14]** , aiming instead for acceleration in adoption over the next six months.  **[PI_3372656_14]** 

3. **Organizational Restructuring and Cost Reductions**  
   **Q:** What does streamlining the organization entail, and what efficiencies are expected?  
   **A:** The company has **reduced headcount by about 10%** to realign along silicon and enterprise solutions.  **[PI_3372656_11]**  This move is intended to **drive profitability and growth** while supporting partners more profitably.  **[PI_3372656_8]**  They still expect OpEx to step up in Q1 due to annual resets but anticipate **lighter labor-related spending and reduced litigation costs**.  **[PI_3372656_11]** 

4. **Litigation with NXP and IP Protection**  
   **Q:** Can you update us on the NXP lawsuits and potential monetary awards?  
   **A:** The company has **prevailed in all three trials** against NXP in Washington, California, and Texas.  **[PI_3372656_13]**  There have been **jury awards for damages, lost profits, and ongoing royalties**, but final judgments have not yet been entered.  **[PI_3372656_13]**  They are prepared to **continue litigation to a successful outcome**, emphasizing the need to defend their intellectual property.  **[PI_3372656_13]** 

5. **Systems Business and Pipeline Outlook**  
   **Q:** What is the outlook for the systems business and pipeline opportunities?  
   **A:** For Q1, they expect **similar systems revenue as in Q4**.  **[PI_3372656_16]**  The first half will benefit from last-time shipments related to a product's end-of-life and the conclusion of Phase II of a European retailer's deployment.  **[PI_3372656_16]**  The systems pipeline **remains strong**, with increased sales activity and project planning.  **[PI_3372656_16]**  Historically, the **endpoint IC business recovers before the systems business** after economic downturns.  **[PI_3372656_16]** 

6. **Digital Product Passport (DPP) Opportunity**  
   **Q:** How do you view the DPP opportunity in future growth?  
   **A:** They are **very excited** about the DPP opportunity.  **[PI_3372656_17]**  DPP requires retailers to provide **true traceability through a product's lifecycle**, and their technology can support this need.  **[PI_3372656_17]**  DPP doesn't end at point of sale but extends to an item's end of life, opening up **post-purchase consumer use cases**.  **[PI_3372656_17]**  The real opportunity is **further out in time**, with regulations on the apparel side coming into force around **2027**.  **[PI_3372656_18]** 

19d8561af20334ee1af4f7d0a90dc88314f4f1a247e3f80ad8bf8a8389bce636

- One of Impinj's key distributors and inlay partners, **Avery Dennison**, reported a slowdown in **intelligent label** growth and customer rollouts shifting to the right, which could indicate a potential **market slowdown** and negatively impact Impinj's future revenue growth.  **[PI_3394154_6]** ,  **[PI_3394154_7]**
- **Gross margins** are currently below the company's target range of **53% to 54%**, running below due to a higher mix of low-margin endpoint IC revenue and older, lower-margin products. This could continue to pressure **profitability**.  **[PI_3394154_12]**
- **Competition from NXP** could intensify now that the **lawsuit** is settled, and NXP might develop **IP workarounds** in the next three years, potentially eroding Impinj's **market share** and affecting future growth.  **[PI_3394154_16]**

3818f9eb9976dc86537ee1a91f775c84f6afba2a965c020bde30d600e521da25

- The adoption of Impinj's authentication solutions has been **slower than originally hoped for**, which may impact future growth in this critical area.  **[PI_3403410_20]**
- **Reader IC revenue is expected to decline in the fourth quarter** due to project timing at a large supply chain and logistics end user, potentially signaling challenges in this segment.  **[PI_3403410_8]**
- The integration of RAIN RFID into consumer mobile devices is **expected to take longer than anticipated**, with readiness across the entire community and backend services posing challenges.  **[PI_3403410_9]**

92b49fc3f2eb611c1024f210e93767070c99fc925ea8ab28e86f2978a7049b32

- The settlement with NXP provides a significant cash influx, including a one-time **$45 million** payment and an annual licensing fee starting at **$15 million**, enhancing cash reserves, adding high-margin licensing revenue, reducing litigation expenses, and improving profitability and free cash flow.  **[PI_3380635_4]** **[PI_3380635_9]**
- The ramp of the M800 chip is expected to improve gross margins by approximately **300 basis points** due to its lower cost basis, with volumes anticipated to double in the second quarter and continue increasing, positively impacting financial performance.  **[PI_3380635_8]** **[PI_3380635_10]**
- Accelerating growth opportunities in the food sector present potential for meaningful increases in endpoint IC volumes, as several food chains are adopting RAIN RFID technology for inventory management, shelf life, and freshness tracking faster than anticipated.  **[PI_3380635_7]** **[PI_3380635_8]**

d118b548c7254928784d86b94a3b3ea2bdcb7f465907b45ef1efe08b79b37b4a

- **Uncertainty in Retail Market Recovery Timing**: The company is cautious about predicting the timing of a retail market recovery. Management stated they are "**not modeling a retail rebound in the first half of the year**" and that it's "**too early to predict the pace of the ramp**" for new products like the M800  **[PI_3372656_12]** ,.  **[PI_3372656_7]**  This uncertainty could impact near-term revenue growth.
- **Potential Decline in Systems Revenue Due to Project Completion**: A major European retailer's loss prevention deployment is expected to conclude in the second quarter of 2024. Management expressed concern that future phases "**may not line up perfectly with the conclusion of Phase III**," leading them to take "**a conservative approach right now**".  **[PI_3372656_16]**  This could result in a gap in systems revenue in the second half of the year.
- **Restructuring and Headcount Reductions Indicate Internal Challenges**: The company is undergoing restructuring, including a workforce reduction of about **10%**, to streamline operations and adjust investments in the channel reader business. Management acknowledged that "**it's painful, very painful to go through a headcount reduction**".  **[PI_3372656_11]**  This could signal internal challenges and potential disruptions.

b48f1c1a700ae03e1c00e60137c09c02b9d5b235608543449779762209dd7f6e

Impinj Inc (PI)

Financials