IMPINJ INC

Impinj operates in the RAIN RFID market, a segment of the broader Internet of Things industry focused on wireless item-to-cloud connectivity. The company spearheaded developing the RAIN air-interface standard, lobbied governments to allocate radio spectrum, and cofounded the RAIN Alliance, which as of December 31, 2025 had more than 150 member companies. The industry uses free spectrum in 81 countries encompassing roughly 95% of the world's GDP. RAIN adoption is concentrated in key markets such as retail apparel, the company's largest market, retail general merchandise, supply chain and logistics, and food, though the extent and pace of adoption beyond those markets remains uncertain.

Impinj believes it is the only company with an integrated platform spanning endpoint ICs, reader ICs, readers and gateways, tag production systems, and software and cloud services. Primary competitors include NXP B.V., Kiloway, Quanray, Shanghai Fudan Microelectronics Group, Alibaba, and Alien Technology Corporation in endpoint ICs; Phychips Inc and Shanghai Fudan Microelectronics Group in reader ICs; and CISC Semiconductor GmbH in tag production systems. As of December 31, 2025, the company's intellectual property portfolio included 285 issued and allowed U.S. patents, nine issued international patents, 20 pending U.S. patent applications, and 19 pending international patent applications.

Impinj generates revenue primarily from sales of hardware products, with endpoint IC sales constituting the majority of product revenue and expected to remain so for the foreseeable future. The company also generates revenue from software, extended warranties, enhanced maintenance, support services, NRE development services, and licensing intellectual property, though these are not material. Products are sold primarily through a global partner ecosystem comprising OEMs, tag service bureaus, ODMs, systems integrators, VARs, independent software vendors, and other solution partners, with the company selling endpoint ICs directly to inlay and tag OEMs, reader ICs through distribution to handheld- and fixed-reader OEMs and ODMs, readers and gateways through distribution to solutions providers, VARs and SIs, and tag production systems directly to inlay and tag OEMs, certification bodies, and enterprises.

Endpoint ICs are miniature radios-on-a-chip that sell for pennies and wirelessly connect items, storing a serialized number and optionally including features such as user data storage, security, authentication, loss prevention, privacy protection, and value-added Impinj custom capabilities. For the year ended December 31, 2025, endpoint IC revenue was $299,806,000 ¹, compared to $305,915,000 ² in 2024 and $234,426,000 ³ in 2023. The company has enabled connectivity for more than 150 billion items to date. The endpoint IC product family includes the Impinj M830 and M850, introduced in 2023, with approximately 25% more die per wafer than the M700 family.

Systems revenue, comprising finished readers, reader ICs, software and services, and tag production systems, was $61,269,000 ⁴ for the year ended December 31, 2025, compared to $60,172,000 ⁵ in 2024 and $73,113,000 ⁶ in 2023. Reader ICs are sold for tens of dollars, while readers and gateways sell for hundreds to thousands of dollars. The company's readers and gateways are certified for operation in more than 40 countries worldwide. The Voyantic Oy entity, acquired in April 2023, is a leading provider of tag production systems sold primarily to inlay partners. Software and cloud service offerings, while nascent from a standalone revenue perspective, enable other product offerings and the company intends to expand them as part of its growth strategy.

In September 2025, Impinj completed a privately negotiated exchange of $190,000,000 ⁷ principal amount of the 2021 Convertible Notes, or the 2021 Note Exchange, and issued $190,000,000 ⁸ aggregate principal amount of 0% convertible senior notes due 2029, or the 2025 Notes. Net proceeds from the 2025 Notes were approximately $183,600,000 ⁹ after initial debt issuance costs, fees, and expenses. The company used net proceeds and cash on hand to exchange $190,000,000 ¹⁰ aggregate principal amount of the 2021 Notes for approximately $190,000,000 ¹¹ in cash and approximately 811,000 ¹² shares of common stock, and also paid approximately $11,200,000 ¹³ of cash on hand to pay the cost of capped call transactions entered into in connection with issuing the 2025 Notes. In April 2023, the company completed its acquisition of Voyantic Oy, a global provider of RFID inlay and label design, manufacturing, and test systems. On February 7, 2024, the company initiated a restructuring, incurring $1,812,000 ¹⁴ in restructuring costs during 2024. In March 2024, the company entered into a Settlement Agreement with NXP, recording $45,000,000 ¹⁵ in income from settlement of litigation during 2024.

For the fiscal year ended December 31, 2025, total revenue was $361,075,000 ¹⁶, compared to $366,087,000 ¹⁷ in 2024 and $307,539,000 ¹⁸ in 2023. Gross profit was $189,677,000 ¹⁹ in 2025 versus $188,855,000 ²⁰ in 2024, with gross margin of 52.5% ²¹ compared to 51.6% ²² in the prior year. Net loss was $10,847,000 ²³ in 2025, compared to net income of $40,838,000 ²⁴ in 2024 and a net loss of $43,366,000 ²⁵ in 2023. Basic and diluted loss per share was $0.37 ²⁶ in 2025, compared to basic earnings per share of $1.46 ²⁷ and diluted earnings per share of $1.39 ²⁸ in 2024. Loss from operations was $737,000 ²⁹ in 2025, compared to $7,069,000 ³⁰ in 2024. Net cash provided by operating activities was $58,746,000 ³¹ in 2025, compared to $128,310,000 ³² in 2024.

Impinj plans to continue developing solutions to previously unsolved enterprise business problems, focusing on solutions repeatability with top-tier partners, particularly in retail self-checkout and loss prevention and supply chain and logistics package routing. The company has launched features in Gen2X, a set of compatible extensions to the RAIN air-interface standard introduced in 2024 that enhance performance and protection, which the RAIN industry on both the reader and solutions side has broadly embraced. The company intends to continue investing in endpoint IC and reader IC performance, differentiated features, cost reduction, and platform integration to win opportunities across markets and geographies.

The company plans to continue investing in differentiated product capabilities, services, solutions software, cloud services for item authentication and device and solution management, and tag production systems to enhance the platform's reach and breadth and enable new use cases and recurring-revenue opportunities. While software and cloud services are nascent from a standalone revenue perspective, the company intends to expand them as part of its growth strategy. The company also plans to continue developing enterprise solutions for retail self-checkout and loss prevention and supply chain and logistics package routing that have been deployed by industry-leading enterprise end users.

The filing does not contain specific margin or cost outlook targets for future periods.

The company outsources most of its product manufacturing to third parties, with Taiwan Semiconductor Manufacturing Company Limited manufacturing endpoint IC wafers primarily in Taiwan since 2003 and reader IC wafers in Asia since 2021, both on a purchase-order basis without long-term supply agreements. Plexus Corp. manufactures readers and gateways in Asia since 2005 pursuant to non-exclusive purchase agreements that automatically renew each year. The company manufactures tag production systems in Finland at Voyantic Oy. As of December 31, 2025, the company had 457 employees in the Americas, Europe, and Asia Pacific, with 255 employees in research and development.

Research and development expense was $102,615,000 ³³ for the year ended December 31, 2025, and the company expects this expense to increase in absolute dollars in future periods as it continues to focus on new product development and introductions. Capital expenditures for property and equipment were $12,861,000 ³⁴ in 2025. The company has never declared or paid a cash dividend on its common stock and does not anticipate paying any cash dividends for the foreseeable future. The filing does not disclose a share repurchase authorization amount.

The company faces structural headwinds including the uncertain pace of RAIN market adoption beyond key markets, which has historically been slower than anticipated. Changes in global trade policies, including tariffs and trade restrictions, could have a material adverse effect, with the company noting that a minimum 10% reciprocal tariff applies to nearly all U.S. imports from trade partners except Canada and Mexico as of the filing date, and higher tariffs are in effect on goods from China, Canada, and Mexico. The company derived 79% ³⁵ of total revenue from sales outside the United States in 2025, exposing it to risks inherent in operating abroad including changes in regulatory requirements, trade laws, tariffs, and geopolitical tensions.

The company faces constraints from its reliance on a limited number of third-party suppliers without long-term supply contracts, particularly for silicon wafers from TSMC, and the cyclical availability of wafers can limit sales and cause market-share losses. The company also faces risks from the concentration of revenue among a small number of customers, with sales to three major customers accounting for 61% ³⁶ of total revenue in 2025. Additionally, the company has a history of significant fluctuations in quarterly and annual operating results and limited visibility into future sales.

The company operates in a highly competitive market with primary competitors including NXP, Kiloway, Quanray, Shanghai Fudan Microelectronics Group, Alibaba, and Alien in endpoint ICs, and faces risks from competitors with greater financial resources who could discount products or bundle other technologies. RAIN adoption is concentrated in key markets and the pace of adoption beyond those markets is uncertain, with the company having historically anticipated a pace of adoption that exceeded actual results. The company relies on a small number of customers for a large share of revenue, with sales to three major customers accounting for 61% ³⁷ of total revenue in 2025, and on a limited number of third-party suppliers without long-term supply contracts, particularly TSMC for silicon wafers. Changes in global trade policies, including tariffs, could have a material adverse effect, with the company noting that a minimum 10% reciprocal tariff applies to nearly all U.S. imports and higher tariffs on goods from China, and that 79% ³⁸ of total revenue in 2025 came from sales outside the United States. The company has a history of losses and only achieved profitability periodically, with federal U.S. net operating loss carryforwards of $275,800,000 ³⁹ and U.S. federal research and development credit carryforwards of $43,700,000 ⁴⁰ as of December 31, 2025, subject to a full valuation allowance.

Management's message emphasizes the company's vision of a Boundless Internet of Things where every item is wirelessly connected to the cloud, and its mission to connect every thing. Key strategic priorities for the period ahead include continuing to develop enterprise solutions for previously unsolved business problems with a focus on repeatability with top-tier partners, investing in RAIN silicon performance and differentiated features, and investing in platform preference through differentiated product capabilities, services, software, cloud services, and tag production systems. Management also highlights the introduction of Gen2X extensions to the RAIN air-interface standard in 2024, which enhance performance and protection and have been broadly embraced by the RAIN industry.