Impinj Q1 Earnings Call Highlights

Key Points

• Record endpoint IC bookings and a 1,700-basis-point market-share gain were driven by a custom ASIC ramp at a large North American supply-chain customer; ASIC shipments were meaningful in Q1 and are expected to more than double in Q2 with full conversion by year-end, enabling Impinj to push upstream with ICs, readers and solution software.
• Q1 revenue was $74.3 million (flat YoY, down 20% QoQ) with adjusted EBITDA of $3.4 million and a GAAP net loss of $25.3 million, but management guided Q2 revenue of $103–106 million and sharply higher profitability (non-GAAP EPS $0.77–0.82), helped by a $17 million license payment that will materially boost gross margin.
• End-market momentum includes early retail "rebuy" after destocking, a bakery rollout set to double deployed stores, and a promising European grocery pilot for full-store RFID self-checkout that management calls a potentially "massive" long-term opportunity.

Impinj NASDAQ: PI reported what management described as a “solid” first quarter of 2026, with revenue and adjusted EBITDA above the top end of the company’s guidance range, alongside record endpoint IC bookings. On the earnings call, executives pointed to a custom ASIC ramp for a large North American supply chain and logistics customer, early signs of retail “rebuy” after a lengthy destocking period, and some customers placing orders further out amid lengthening competitor lead times.

Record endpoint IC bookings and market share gains

Co-Founder and CEO Chris Diorio said endpoint IC bookings reached an all-time record in the quarter, driven by several factors including “the custom ASIC ramp” at what he described as the company’s “second-largest North American supply chain and logistics end user,” Impinj’s “market-leading share position,” retailer revisions, and customers booking beyond standard lead times as competitor lead times lengthened.

Diorio also cited updated industry data. He said the RAIN Alliance released 2025 industry volumes, and Impinj’s market share “grew 1,700 basis points over 2024,” which he characterized as a springboard for second-quarter demand. He added that the company is approaching the second half of 2026 “prudently,” modeling multiple scenarios given macro uncertainty.

In Q&A, CFO Cary Baker said the strong first-quarter bookings reflected an ecosystem-wide ramp of the custom ASIC, the beginnings of retail rebuy “after a prolonged period of de-stocking,” and inlay partner request times moving toward the higher end of standard lead times. Baker also said some customers booked beyond standard lead times, “likely in response to lengthening lead times from our competitor,” but added that the company believes “the orders match the demand.”

Custom ASIC ramp and expanding enterprise solution focus

Diorio said Impinj shipped “meaningful volumes” of the custom ASIC in the first quarter and expects those volumes to “more than double” in the second quarter, with the end user “on track to fully convert to that ASIC before year-end.” He added that the ASIC creates an opportunity to move “upstream” to the customer’s customers by delivering “ICs, readers, and solution software” to improve visibility and traceability across a “double-digit number of accounts.”

Discussing product and platform development, Diorio said the company is growing its software and solutions teams to address “end-to-end enterprise systems problems.” He also said Impinj upgraded the processor and memory in its flagship reader to better support machine learning “at the edge,” and emphasized that these enterprise solutions “almost invariably need Gen2X,” which he said helps drive preference for Impinj endpoint ICs.

He also highlighted ongoing Gen2X-related improvements, including a forthcoming update to reader ICs and readers that he said can improve “M800 tag read range by up to 25%.”

End-market commentary: retail, food, and grocery self-checkout

On retail apparel, Diorio said Impinj expects endpoint IC demand to increase in the second quarter. He noted “multiple new end users” speaking publicly about RAIN adoption, including a “large European brand” with which Impinj is engaged. He also described Gen2X benefits in retail, including work with a “large Asia-based lifestyle brand” to “dramatically improve item readability” and pursue a “significant share shift opportunity.”

In general merchandise, Diorio said Impinj is focused on cosmetics, personal care, and health, aiming to unlock incremental endpoint IC opportunities while demonstrating Gen2X benefits.

In food, Diorio said volumes are growing “modestly as expected,” and that a bakery rollout is on track to double the number of deployed stores this year. He also described an early-stage European grocery opportunity: Impinj and its partners “beat the self-checkout readability targets” set by a European grocer, enabling progress toward a store pilot decision. Diorio called full-store grocery self-checkout “a massive opportunity,” though he stressed it is still early and the testing so far has been lab-based.

Asked about the size and timeline of the European grocery opportunity, Diorio said it is “very large” and involves “full store, every item tagging and consumer self-checkout.” He added that the grocer controls a significant portion of its supply chain, making it an “ideal candidate” to tag all items.

First-quarter financial results

Baker reported first-quarter revenue of $74.3 million, down 20% sequentially from $92.8 million in the fourth quarter of 2025 and flat year-over-year. Endpoint IC revenue was $63.2 million, down 16% sequentially and up 3% year-over-year. Baker said endpoint IC revenue exceeded expectations, “driven by turns orders,” and he expects second-quarter endpoint IC revenue to increase sequentially “on the favorable side of normal seasonality.”

Systems revenue was $11.0 million, down 37% sequentially and down 15% year-over-year. Baker said systems revenue missed expectations “due primarily to the timing of Lighthouse Enterprise CapEx spend,” and the company expects systems revenue to increase sequentially in the second quarter.

Gross margin was 52.4% versus 54.5% in the prior quarter and 52.7% a year earlier. Baker attributed the sequential decline primarily to higher indirect costs, annual endpoint IC price declines, and mix. He said an endpoint IC production issue reduced back-end capacity utilization, increasing indirect cost of goods sold, but noted the issue “is fixed and behind us.” In Q&A, he estimated the underutilization charge had an impact of “roughly 100 basis points” on first-quarter margin.

Operating expense totaled $35.5 million, compared with $34.2 million in the prior quarter and $32.6 million in the year-ago quarter. Baker said opex was below expectations due to “good fiscal discipline and timing of spend.” Adjusted EBITDA was $3.4 million, down from $16.4 million in the fourth quarter of 2025 and $6.5 million in the first quarter of 2025, with an adjusted EBITDA margin of 4.5%.

On the bottom line, Baker reported a GAAP net loss of $25.3 million and non-GAAP net income of $4.4 million, or $0.14 per fully diluted share.

Impinj ended the quarter with $235.2 million in cash, equivalents, and investments, compared with $279.1 million at the end of the fourth quarter of 2025. Inventory was $86.3 million, up $1.3 million sequentially. Capital expenditures were $1.7 million and free cash flow was $2.2 million.

Baker also noted that in March the company repurchased $40.2 million aggregate principal of its 1.125% convertible notes due May 2027 using cash on hand, which he said reduced dilution by roughly 400,000 shares.

Second-quarter outlook and other notable items

For the second quarter of 2026, Impinj guided revenue to $103 million to $106 million, compared with $97.9 million in the second quarter of 2025, representing 7% year-over-year growth at the midpoint. The company guided adjusted EBITDA to $27.8 million to $29.3 million. It also guided non-GAAP net income to $24.6 million to $26.1 million, or $0.77 to $0.82 in non-GAAP diluted EPS.

In discussing margin, Baker said product gross margin is expected to increase sequentially in the second quarter. He also referenced a $17 million license payment, noting it would drive “an outsized gross margin increase” in the quarter. In Q&A, CEO Diorio and Baker discussed the payment in the context of NXP’s products and Impinj’s IP. Diorio said Impinj does not yet know whether NXP’s new IC has “designed out” Impinj’s intellectual property, and he said NXP still has older ICs in the market that were found to use Impinj IP. Baker clarified the payment “this year was $17 million, up from $16 million last year,” while Diorio said he was “guardedly optimistic” about another payment next year but could not speak beyond that.

On expenses, Baker said the company expects operating expense in the second quarter to be similar to the first quarter, with the back half of the year stepping up in line with normal seasonal patterns and continued investment, “primarily in the engineering line.”

Throughout the call, management repeatedly highlighted macro uncertainty as a reason for caution around the second half outlook. Diorio said the company is not currently seeing macro-related pullbacks in orders, but it is “modeling a bunch of different scenarios” and wants to remain prudent given factors outside its control.

About Impinj NASDAQ: PI

Impinj, Inc, headquartered in Seattle, Washington, develops Radio Frequency Identification (RFID) solutions designed to connect everyday items to the internet. Founded in 2000, the company pioneered RAIN RFID technology with a focus on transforming supply chain and inventory processes across retail, healthcare, airport baggage handling and manufacturing. Impinj's platform comprises RAIN RFID tag chips, fixed and handheld RFID readers, gateways, antennas and connectivity modules that enable real-time visibility of tagged items.

Impinj's product portfolio is built around its core RAIN RFID ecosystem, offering tag chips for high-volume production (Monza series), reader chips for integration into third-party devices and complete reader and gateway systems (Speedway series and xArray).

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