RAIN radio-frequency identification solutions provider Inpinj (PI +3.48%) reported its first-quarter results after the market closed on May 4. Revenue grew at a brisk pace driven by growing unit volume, and the company reiterated its guidance for unit sales in 2017. Revenue guidance for the second quarter was a bit weak, calling for a significant slowdown, but growth could accelerate going forward if the company's technology continues to catch on. Here's what investors need to know about Impinj's first-quarter report.
Impinj results: The raw numbers
|
Metric |
Q1 2017 |
Q1 2016 |
Year-Over-Year Change |
|---|---|---|---|
|
Revenue |
$31.7 million |
$21.6 million |
46.7% |
|
Net income attributable to common shareholders |
($2.2 million) |
($5.2 million) |
N/A |
|
Non-GAAP EPS |
$0.01 |
($0.10) |
N/A |
Data source: Impinj.
Image source: Impinj.
What happened with Impinj this quarter?
Revenue continued to grow quickly, but so did costs.
- GAAP gross margin was 52.9% during the first quarter, up from 51.3% during the first quarter of 2016.
- Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $0.25 million, up from a loss of $0.82 million during the prior-year period.
- GAAP operating expenses soared 44.7%, growing slightly slower than revenue.
- Impinj had $83.5 million of cash on the balance sheet at the end of the quarter.
- The company still expects to ship between 7.8 billion and 8 billion endpoint ICs during 2017, up 32% at the midpoint compared to 2016.
Impinj provided the following guidance for the second quarter:
- Revenue is expected between $32.4 million and $33.9 million compared to $26 million during the second quarter of 2016.
- Adjusted EBITDA is expected between a loss of $0.6 million and a gain of $0.9 million.
- Non-GAAP earnings per share (EPS) is expected between a loss of $0.02 and a gain of $0.05.
What management had to say
Impinj co-founder and CEO Chris Diorio commented on the company's first-quarter performance:
We delivered a solid first quarter, with revenue growing 47% over last year driven by the team's strong execution and continued market adoption of our platform. We are pleased with the steady progress toward our vision of digital life for everyday items, and we will continue investing in this massive market opportunity to further enhance our leading market position.
During the conference call, Diorio expounded on his vision for the company and its technology:
Impinj's vision is digital life for everyday items. Our mission is to wirelessly connect those items to applications. We are literally extending the reach of the internet by a factor of a hundred everyday items, and delivering to the digital world each items' unique identity, location, and authenticity, which we call Item Intelligence. Our platform enables that connectivity, and delivers that Item Intelligence to a broad and diverse range of business and consumer applications.
Looking forward
Impinj is expecting revenue growth to slow down in the second quarter, with the company's guidance representing year-over-year growth of around 26% at the midpoint. That's not too far off from the 32% unit growth the company expects for the full year.
Impinj is still a young company, and its technology is in the initial stages of catching on. During the conference call, Diorio discussed some companies that were opting for RFID technology. Macy's was one example, with the retailer set to tag all store merchandise by the end of 2017. Growth could certainly accelerate going forward if more companies do the same.
