Impinj Inc. (PI)

Impinj Inc. Q1 2025 Financial Analysis

Report Date: April 30, 2025
Period Covered: Q1 2025 (ending March 31, 2025)

Executive Summary

Impinj reported Q1 2025 revenue of $74.277 M, down 3.3% YoY, with gross profit of $36.681 M (49.4% margin, up from 48.9%). Operating loss narrowed to $9.569 M from $11.733 M a year ago. After $45 M litigation settlement income and $1.223 M interest expense, the company achieved net income of $8.451 M vs. a loss of $33.344 M in Q1 2024.

Profit & Loss Analysis

• Revenue decline driven by Systems sales (–14.7% YoY) and flat Endpoint sales (–0.5%).
• Gross margin improved slightly on lower indirect costs, offsetting product-mix headwinds.
• R&D spend rose 12.4% YoY to $25.314 M as Impinj accelerates next-gen chip and software development.
• SG&A fell 12.7% YoY to $20.451 M on lower marketing, G&A and one-time restructuring costs.

Balance Sheet & Debt

• Cash, cash equivalents and short-term investments total $1.479 B, providing a multi-year runway.
• Long-term convertible notes due 2027 carry a net balance of $283.905 M (up 0.15% from December 2024).
• Working capital stands at $280.4 M, with no material short-term liquidity concerns.

Reasons for Profit Turnaround

1. Litigation Settlement: $45 M one-time gain from NXP settlement in Q1 2025.
2. Cost Discipline: Reduced marketing/G&A and completed restructuring reserves.
3. Strong Interest Income: Higher yields on invested cash balances boosted non-op income.

Pros & Cons

Pros:

• Robust cash position (> $1.4 B) supports continued R&D and market expansion.
• Return to GAAP profitability demonstrates operating leverage.
• Leading market share in RAIN RFID endpoint chips.

Cons:

• Revenue growth remains lumpy and dependent on large system deployments and supply chain cycles.
• Continued heavy R&D investment will pressure margins absent faster revenue ramp.
• Exposure to wafer shortages, tariff volatility and evolving RFID standards.

Q1 2025 revenue by segment:

• Endpoint ICs: $61.218 M (82.4% of total; –0.5% YoY)
• Systems (readers/gateways, test solutions): $13.059 M (17.6% of total; –14.7% YoY)

Gross profit: $36.681 M (49.4% margin; +0.5 pp YoY) Operating expenses:

• R&D: $25.314 M (+12.4% YoY)
• Sales & Marketing: $8.055 M (–20.8% YoY)
• G&A & amortization: $12.881 M (–7.2% YoY)

Impinj’s Q1 return to profitability—driven by a one-time litigation gain and improved cost structure—demonstrates its path toward positive cash flow generation. The company’s $1.48 B liquidity cushion and modest convertible debt load ($283.9 M) position it to invest aggressively in next-generation RAIN RFID chips, software and cloud services. However, top-line growth remains pressured by uneven large-scale system deployments and component supply constraints. Key near-term catalysts include broader enterprise RFID adoption, new product launches (e.g., Gen2X enhancements) and expansion of licensing revenue. Risks include tariff shifts, wafer shortages, evolving standards, and continued dependency on a handful of large customers. Maintaining operating discipline while scaling sales and marketing will be critical to sustain the growth trajectory and margin expansion into 2025 and beyond.