Impinj NASDAQ: PI reported record second-quarter revenue, adjusted EBITDA and earnings per share, supported by demand for its RAIN RFID Endpoint IC products across retail, supply chain and logistics markets. Management also projected strong sequential growth in the third quarter, citing bookings strength, an accelerating custom ASIC ramp and expected inventory rebuilding by inlay and label partners.
Second-quarter revenue rose 46% sequentially and 11% year over year to a record $108.4 million. GAAP net income totaled $12.2 million, while non-GAAP net income reached a record $27 million, or $0.86 per diluted share. Adjusted EBITDA was a record $30.7 million, representing a 28.3% margin.
Endpoint IC Demand Drives Revenue Growth
Endpoint IC revenue reached a record $96.4 million, up 53% from the first quarter and 14% from a year earlier. Excluding licensing revenue, Endpoint IC product revenue increased 26% sequentially and 16% year over year, exceeding the company’s expectations.
Chris Diorio, Impinj’s co-founder and CEO, said Endpoint IC unit volume also set a quarterly record. He attributed the demand to retail apparel, general merchandise, supply chain and logistics, and food-related applications. Diorio said retail apparel remains in mainstream adoption and continues to add volume, while supply chain and logistics, general merchandise and food are growing more rapidly on a percentage basis.
“For the second consecutive quarter, Endpoint IC bookings also hit an all-time high,” Diorio said, adding that the company sees continued market expansion as well as demand from inlay partners rebuilding IC inventories toward normal levels.
Systems revenue was $12 million, up 8% sequentially but down 10% from the prior-year period. The company said strength in Reader IC revenue offset weakness in label production systems. Diorio said enterprise demand lifted Reader IC performance above expectations and that Reader ICs are expected to be Impinj’s fastest-growing product line in the third quarter.
Supply Chain ASIC Ramp and Inventory Visibility
Impinj said a custom ASIC program for its second-largest North American supply chain and logistics end user is progressing ahead of schedule. Diorio said inlay partners are filling their supply chains and that full conversion to the custom IC is expected during the third quarter.
CFO Cary Baker said the custom IC transition gives the company better visibility into channel inventory than it had when the customer used Impinj’s general-purpose M800 product. That general-purpose product could be used across several end markets, complicating efforts to distinguish inventory intended for supply chain customers from inventory held for apparel, general merchandise and food applications.
Baker said the company has learned that inlay-partner purchasing for this customer tends to peak from the second quarter into the third quarter, followed by a steeper fourth-quarter decline as the ecosystem prepares for an annual request-for-proposal process. He said the company’s improved channel visibility will need to be demonstrated through the first quarter of 2027.
Diorio also highlighted the potential for fixed-reading solutions in supply chain operations, point-of-sale settings and store exits. He said the company’s technology can deliver “hard event data,” such as confirmation that a specific item reached a specific location at a certain time, which could improve enterprise AI models.
Food Programs Expand Across Grocers
Management emphasized the food market as an emerging opportunity. Diorio said three of the five largest U.S. grocers have publicly announced pilots or deployments involving RAIN RFID technology across bakery, deli or meat categories.
The company is supporting four types of food programs:
- Store replenishment programs led by quick-service restaurants, focused on product availability and freshness.
- In-store inventory programs at supermarkets, focused on stocking and expiration dates.
- Loss-identification programs designed to flag unscanned items at point of sale.
- Automated self-checkout initiatives, including one involving a large vertically integrated European grocer.
Diorio said some enterprises in store replenishment and in-store inventory have progressed to chain-wide deployments, although their Endpoint IC consumption remains modest relative to current RAIN industry volumes. Loss-identification and automated self-checkout programs remain in proof-of-concept stages, according to the company.
Beyond food, Diorio cited over-the-counter pharmaceuticals, cosmetics, and health and beauty as sizable general-merchandise categories that have not yet been broadly deployed. He said Impinj is conducting internal work to support those applications, while noting that no retailer had announced plans to proceed with those categories.
Margins, Cash Position and Third-Quarter Outlook
Second-quarter gross margin was a record 60.9%, compared with 52.4% in the first quarter and 60.4% a year earlier. The sequential improvement was primarily driven by licensing revenue. Excluding licensing revenue, product gross margin was 53.6%, compared with 52.6% in the second quarter of 2025.
Baker said the year-over-year product-margin improvement reflected a richer mix of Impinj M800 products, partially offset by lower systems revenue mix. He expects product gross margin to improve sequentially again in the third quarter, driven in part by the continued M800 ramp.
Operating expenses totaled $35.3 million in the second quarter, roughly flat sequentially and up from $31.5 million a year earlier. Impinj ended the quarter with $263.7 million in cash equivalents and investments, inventory of $91.5 million, and free cash flow of $29.2 million.
For the third quarter, Impinj forecast revenue of $105.5 million to $108.5 million. The company expects adjusted EBITDA of $20.7 million to $22.2 million and non-GAAP net income of $18.5 million to $20 million, or $0.59 to $0.63 per diluted share.
Management said temporary tariff-related pull-ins contributed to second-quarter demand but were not a meaningful driver of growth. Baker said bookings strength reflected broad retail apparel and general-merchandise expansion, the supply chain custom IC ramp, and some customer orders extending into the fourth quarter beyond the company’s typical six-to-eight-week lead times.
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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