Impinj(PI) - 2025 Q1 - Quarterly Report

Revenue and Profit - Revenue for Q1 2025 was $74.3 million, a decrease of 3.3$76.8 million in Q1 2024[89] - Gross profit for Q1 2025 was $36.7 million, down from$37.5 million in Q1 2024, with a gross margin increase to 49.4% from 48.9%[90] Sales Performance - Endpoint IC revenue decreased by $0.3 million, primarily due to a$9.3 million decrease in average selling prices (ASPs) offset by a $9.0 million increase in shipment volumes[92] - Systems revenue decreased by$2.3 million, driven by lower shipment volumes, with gateway revenue down $2.8 million and test and measurement solutions down$1.0 million[93] - The overall endpoint IC sales volumes increased at a compounded annual growth rate of 27% from 2010 to 2024, despite experiencing declines during various periods[83] - The company expects endpoint IC sales to continue representing the majority of revenue for the foreseeable future[91] Expenses - Research and development expenses increased by $2.8 million to$25.3 million in Q1 2025, reflecting higher stock-based compensation and product development costs[96] - Sales and marketing expenses decreased by $2.1 million to$8.1 million in Q1 2025, primarily due to a reduction in stock-based compensation expenses[98] - General and administrative expenses decreased by $1.0 million to$12.4 million for the three months ended March 31, 2025, primarily due to a $2.2 million decrease in professional services related to legal fees[101] Other Financial Metrics - Amortization of intangibles decreased by$0.9 million to $485,000, attributed to the intangibles acquired from the April 3, 2023 acquisition of Voyantic Oy[102] - Restructuring costs were eliminated, with no costs reported for the three months ended March 31, 2025, compared to$1.8 million in the prior year[103] - Other income, net increased by $768,000 to$2.1 million, driven by higher interest income from increased invested balances and interest rates[104] - Income from settlement of litigation dropped to $0, a decrease of$45 million compared to the prior year due to a settlement reached with NXP[105] Cash Flow and Investments - As of March 31, 2025, the company had cash, cash equivalents, and short-term investments totaling $147.9 million, with working capital of$280.4 million[108] - Net cash used in operating activities was $11.1 million for the three months ended March 31, 2025, primarily due to$18.5 million in working capital changes[116] - The company generated $21.2 million in net cash from investing activities, resulting from investment maturities of$49.0 million[117] - Financing activities provided $5.1 million in net cash, mainly from stock-option exercises and the employee stock purchase plan[118] Commitments and Future Outlook - Purchase commitments as of March 31, 2025, totaled$31.3 million, representing noncancelable commitments to purchase inventory[121] - Macroeconomic conditions in 2023 led to softness in demand and inventory overages, impacting overall performance[82] - The company has enabled connectivity for over 120 billion items and aims to extend this to trillions of items in the future[74]