Impinj's Q4 2024: Discrepancies in Inventory Management, Gross Margins, and Revenue Forecasts

These are the key contradictions discussed in Impinj's latest 2024Q4 earnings call, specifically including: Inventory Management and Demand Forecasting, and Gross Margin Expectations:



Revenue and Unit Volume Growth:
- Impinj reported $91.6 million in fourth-quarter revenue, a 4% sequential decrease but a 30% year-over-year increase.
- Endpoint IC unit volumes grew 34% over 2023, driven by market strength in retail apparel, general merchandise, and supply chain and logistics.
- The decline was due to geopolitical uncertainty, tariffs, changing label partner allocations, aggressive label price shopping, and shorter ordering cycles.

Endpoint IC Revenue Performance:
- Fourth-quarter endpoint IC revenue was $74.1 million, down 9% sequentially compared with the third quarter but up 37% year-over-year.
- The sequential decline was a result of partner pushout requests and a lull in new programs ramping up, impacting the endpoint IC unit volume growth pace.

Systems Revenue and Product Mix:
- Fourth-quarter systems revenue was $17.5 million, up 23% sequentially and 4% year-over-year, driven by strength in reader gateway and reader IC sales.
- The expected decline in the first quarter is due to the completion of the self-checkout and loss prevention deployment at the visionary European retailer.

Financial Performance and Outlook:
- Impinj delivered record annual adjusted EBITDA and free cash flow, driven by strong revenue growth and favorable litigation settlement.
- For the first quarter of 2025, revenue is expected between $70 million and $73 million, with adjusted EBITDA between $1.1 million and $2.6 million.
- The outlook reflects challenges in working through excess channel inventory and adjusting to market uncertainties, with a focus on clearing inventory and navigating geopolitical and tariff landscapes.