Impinj, Inc. (PI) Q2 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call shows a positive sentiment with record EBITDA margins and improved gross margins driven by the M800 ramp and wafer cost reductions. While management avoided specifics in some areas, the outlook remains optimistic with strong partnerships and growth in logistics. The market cap suggests moderate reaction, so a 2% to 8% stock price increase is likely.

Key Financial Performance

Second quarter revenue $97.9 million, up 32% sequentially from $74.3 million in first quarter 2025 and down 4% year-over-year from $102.5 million in second quarter 2024. The decline year-over-year was not explicitly explained.

Second quarter endpoint IC revenue $84.6 million, up 38% sequentially from $61.2 million in first quarter 2025 and down 5% year-over-year from $89.4 million in second quarter 2024. Excluding licensing revenue, endpoint IC product revenue grew 12% sequentially and declined 8% year-over-year. The year-over-year decline was attributed to macro softness and tariff-related sourcing challenges.

Second quarter systems revenue $13.3 million, up 2% sequentially from $13.1 million in first quarter 2025 and up 1% year-over-year from $13.1 million in second quarter 2024. The year-over-year increase was driven by reader strength.

Second quarter gross margin 60.4% compared with 52.7% in first quarter 2025 and 58.2% in second quarter 2024. The sequential increase was driven primarily by licensing revenue, while the year-over-year increase was driven by endpoint IC product mix, specifically a richer mix of M800, and licensing revenue.

Second quarter operating expense $31.5 million compared with $32.6 million in first quarter 2025 and $32.8 million in second quarter 2024. The decrease year-over-year was due to good fiscal discipline.

Second quarter adjusted EBITDA $27.6 million compared with $6.5 million in first quarter 2025 and $26.8 million in second quarter 2024. Adjusted EBITDA margin was 28.2%, a new quarterly record. Excluding licensing revenue, adjusted EBITDA margin was 14.2%. The year-over-year increase was not explicitly explained.

Second quarter GAAP net income $11.6 million. The year-over-year change was not explicitly explained.

Second quarter non-GAAP net income $24.5 million or $0.80 per share on a fully diluted basis. The year-over-year change was not explicitly explained.

Cash, cash equivalents and investments $260.5 million compared with $232.5 million in first quarter 2025 and $220.2 million in second quarter 2024. The year-over-year increase was not explicitly explained.

Inventory $96.2 million, down $2.3 million from the prior quarter. The year-over-year change was not explicitly explained.

Second quarter capital expenditures $6.5 million. The year-over-year change was not explicitly explained.

Free cash flow $27.3 million. The year-over-year change was not explicitly explained.

You have reached the limit Upgrade to access full content

Get started

Operating Highlights

M800 and Gen2X: M800 and Gen2X are driving demand for Impinj's products and platform. M800 is used for superior performance on hard-to-read items, while Gen2X improves read range, speeds inventory, and enhances tag population management. These technologies are being piloted for further improvements and are expected to be key components of the industry's future.

Endpoint ICs: Second quarter book-to-bill ratio was strong, with sequential endpoint IC unit volume growth driven by M800's performance and Gen2X support. Revenue for endpoint ICs was $84.6 million, up 38% sequentially.

Readers and Gateways: Second quarter revenue increased sequentially, driven by new use cases at a European retailer and retail demand for loss analytics. Revenue growth is expected to continue in the third quarter.

Retail and Supply Chain: New use cases were won at a European retailer and a North American supply chain end user, driving meaningful revenue in the second and third quarters. Retail loss analytics also contributed to demand.

Food Industry: Opportunities for growth in food, focusing on product freshness, supply chain efficiencies, and consumer self-checkout, are driving deployments and pilots.

Financial Performance: Second quarter revenue was $97.9 million, up 32% sequentially. Adjusted EBITDA margin set a new record at 28.2%. Cash and investments increased to $260.5 million.

Cost Management: Operating expenses were $31.5 million, below expectations due to fiscal discipline. Product gross margin increased to 60.4%, driven by licensing revenue and a richer mix of M800.

Solutions Strategy: Focus on using the platform to solve enterprise challenges, such as loss prevention and inventory management, is central to Impinj's strong results and outlook.

Market Leadership: Efforts to extend technology lead, market share, and platform adoption are ongoing, with a focus on delighting enterprise customers and managing macroeconomic challenges.

You have reached the limit Upgrade to access full content

Get started

Risk or Challenges

Tariffs: The company faces headwinds from tariffs, which could impact costs and profitability.

Inflation: Inflationary pressures are mentioned as a challenge, potentially affecting operational costs and pricing strategies.

Supply Chain Disruptions: Supply chain disruptions are highlighted as a risk, which could affect the availability of components and delivery timelines.

Macro Softness: The company acknowledges macroeconomic softness, which could impact demand and revenue growth.

End of Life for Product Line: The end of life for the indie shipment volumes in the reader ICs segment is noted, which could affect revenue from this product line.

Tariff-Related Sourcing Challenges: Tariff-related sourcing challenges are mentioned, which could complicate procurement and increase costs.

Volatility in Revenue Guidance: The company assumes minimal turns at the midpoint of revenue guidance due to continuing tariff-related uncertainty and volatility.

You have reached the limit Upgrade to access full content

Get started

Guidance & Outlook

Sequential Revenue Growth: The company expects sequential revenue growth in the third quarter, driven by demand for endpoint ICs, reader ICs, readers, and gateways.

Endpoint IC Product Revenue: Third quarter endpoint IC product revenue is expected to increase sequentially, in line with typical seasonality.

Systems Revenue: Third quarter systems revenue is expected to increase sequentially, led by strong reader and gateway demand.

Product Gross Margin: Third quarter product gross margin is expected to increase sequentially, driven by higher M800 mix and sell-through of lower-cost wafers. Further gross margin benefits are anticipated in the fourth quarter.

Adjusted EBITDA: Third quarter adjusted EBITDA is expected to be between $15.6 million and $17.1 million.

Non-GAAP Net Income: Third quarter non-GAAP net income is expected to be between $14 million and $15.5 million, reflecting non-GAAP fully diluted earnings per share between $0.47 and $0.51.

Market Opportunity Expansion: The company sees expanding market opportunities, particularly in the food sector, driven by product freshness, supply chain efficiencies, and consumer self-checkout, leading to pallet and case-level deployments and item-level pilots.

Gen2X Technology: Gen2X is expected to be a key component of the industry's future, driving demand for the company's products and platform.

You have reached the limit Upgrade to access full content

Get started

Shareholder Return Plan

Dividends: No specific mention of a dividend program or any related metrics in the transcript.

Share Buyback: No specific mention of a share buyback program or any related metrics in the transcript.

You have reached the limit Upgrade to access full content

Get started

Key Q&A

Q:How much of the beat in 2Q was turns related and how much was due to strength?

A:In 2Q, there were more turns than expected, but adjustments to delivery timing and location also contributed. For 3Q guidance, no additional turns are assumed at the midpoint, but there is room to absorb potential order adjustments.

Q:What factors contributed to the substantial margin increase, and which is more significant: wafer pricing or M800 proliferation?

A:The M800 ramped nicely in 2Q and is expected to continue in 3Q and 4Q, contributing to gross margin improvement. Wafer cost reductions are also starting to benefit margins as older inventory is sold through.

Q:Do you agree with the North American partner's view on slower apparel and retail growth but faster food and logistics growth?

A:Yes, the company agrees with the partner's market observations but notes some differences in supply chain corrections and mix shifts. They feel good about their market position and partnerships.

Q:What are the economics of Gen2X, and is it about faster M800 transition or other benefits?

A:Gen2X is focused on enabling enterprise solutions that were previously unsolvable, driving a faster transition to M800 and improving readability and footprint.

Q:What is the impact of overhead reading solutions on readers and endpoint ICs, and what is the channel inventory situation?

A:Overhead reading is primarily a reader IC opportunity, enhancing endpoint IC market share. Channel inventory decreased in 2Q despite expectations of a modest build, and it is considered healthy.

Q:Are there more big deals in the logistics vertical, and what is the pipeline?

A:Yes, there are more opportunities in logistics, but the focus is on broadening to include all supply chain customers, not just logistics companies.

Q:What were the license revenues in Q2, and how did they compare to last year?

A:License revenues in Q2 were $16 million, up from $15 million last year.

Q:What is driving the improvement in product gross margins in Q3 and Q4?

A:The improvement is driven by the M800 ramp and lower-cost wafers, as older inventory is sold through.

Q:What is the timeline for food adoption at the item level, and what are the key factors?

A:Item-level food adoption is expected to drive meaningful volumes by 2026. Key factors include Gen2X and the ROI in categories like bakery, deli, and proteins.

Q:What is the outlook for big box retailers and general merchandise expansion?

A:The large North American retailer continues to expand in announced categories and pilot new ones. There is trickle-down adoption to other retailers and suppliers.

Q:Review of Unclear Management Responses

A:Management avoided providing specific percentages or detailed breakdowns for turns in 2Q and 3Q guidance. They also did not provide a clear timeline for broader food adoption beyond 2026 or specific details on big box retailer expansions.

You have reached the limit Upgrade to access full content

Get started

Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

PI Transcript

Impinj, Inc. (PI) Presents at UBS Global Technology and AI Conference 2025 Transcript

Neutral12-3

Impinj, Inc. (PI) Q3 2025 Earnings Call Transcript

Unknown10-29

The earnings call presents a mixed sentiment. While there is optimism in sequential revenue growth, market opportunity expansion, and Gen2X technology, concerns arise from unclear management responses, Q4 weakness, and challenges in deployment timing. The Q&A reveals potential growth in food sector partnerships but lacks precise guidance. The market cap suggests a moderate reaction, leading to a neutral prediction.

Impinj, Inc. (PI) Presents At Goldman Sachs Communacopia + Technology Conference 2025 Transcript

Neutral9-10

Impinj, Inc. (PI) Q2 2025 Earnings Call Transcript

Positive7-30

PI Report

Frequently Asked Questions

Where does this earnings call transcript come from?

All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.

How soon is the transcript available after the earnings call ends?

Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.

Is the transcript edited or altered in any way?

No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.

Why do some answers appear as “Unclear” or “Inaudible”?

When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.

Who creates the AI Summary and Key Q&A highlights shown above the transcript?

They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.