RFID manufacturer Impinj (NASDAQ:PI) beat Wall Street’s revenue expectations in Q3 CY2025, but sales were flat year on year at $96.06 million. The company expects next quarter’s revenue to be around $91.5 million, close to analysts’ estimates. Its non-GAAP profit of $0.58 per share was 16.8% above analysts’ consensus estimates.
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Impinj (PI) Q3 CY2025 Highlights:
- Revenue: $96.06 million vs analyst estimates of $92.76 million (flat year on year, 3.6% beat)
- Adjusted EPS: $0.58 vs analyst estimates of $0.50 (16.8% beat)
- Adjusted EBITDA: $19.06 million vs analyst estimates of $15.69 million (19.8% margin, 21.5% beat)
- Revenue Guidance for Q4 CY2025 is $91.5 million at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for Q4 CY2025 is $0.50 at the midpoint, above analyst estimates of $0.45
- EBITDA guidance for Q4 CY2025 is $16.15 million at the midpoint, above analyst estimates of $13.97 million
- Operating Margin: 0.7%, up from -0.8% in the same quarter last year
- Inventory Days Outstanding: 177, down from 212 in the previous quarter
- Market Capitalization: $7.04 billion
StockStory’s Take
Impinj’s third quarter results were met with a significant negative market reaction, reflecting investor concerns despite the company surpassing revenue and adjusted profit expectations. Management cited record endpoint IC volumes and stronger-than-expected reader sales—particularly for its Gen2X platform—as key drivers, but also acknowledged that retailer demand remained cautious and tariff pressures persisted. CEO Chris Diorio described the performance as “outperformance despite weak retailer buying patterns and tariff headwinds,” emphasizing that logistics and supply chain deployments offset softer retail trends. Notably, management highlighted the company’s ability to execute in a challenging environment without attributing the quarter’s success to broad-based demand.
Looking ahead, Impinj’s guidance is shaped by expectations for sequential revenue declines and investments in new markets, including food and e-commerce. Management emphasized that large-scale food deployments will take time to materialize, with CEO Chris Diorio explaining, “We expect modest food volumes through first half ‘26 and accelerating from there,” pointing to the complexity of rolling out solutions across thousands of stores. The company is also increasing its investments in software and cloud services to capture future recurring revenue, while preparing for near-term headwinds from project timing shifts and continued caution among end users.
Key Insights from Management’s Remarks
Management attributed the quarter’s outcome to robust supply chain and logistics deployments, progress with Gen2X, and targeted investments in software and new verticals, while noting real-time project timing adjustments by end users.
- Supply chain and logistics strength: Impinj’s largest gains came from endpoint IC and reader shipments to North American logistics customers, with a significant domestic parcel delivery rollout fully deployed in the quarter. Management noted these deployments are not yet at full attach rates, leaving room for growth as new use cases are developed.
- Retail project timing variability: While retail sales benefited from holiday season preparation, management acknowledged that partners and end users are now “buying into demand rather than ahead of it,” leading to a more cautious ordering environment. Project rollout phasing in both retail and logistics caused sequential revenue timing shifts, which are expected to continue.
- Gen2X platform adoption: The Gen2X radio protocol, integrated into the M800 endpoint ICs and E Family reader ICs, drove adoption and enabled solutions for loss prevention and conveyor sorting. Management said that Gen2X customizations are helping address challenging use cases and securing partnerships with Lighthouse accounts.
- Food vertical opportunity: The company highlighted food as its largest prospective market, citing public pilots with major grocers but warning that “complexity of rolling out at scale” means only modest volumes are expected in the near term. Innovations in tagging and packaging are seen as necessary for broader adoption in categories like produce.
- Investment in software and recurring revenue: Impinj is increasing headcount in software and cloud services, aiming to monetize data generated by its platform. The recent hire of a Senior Vice President of SaaS and Cloud Services signals intent to expand recurring revenue models beyond hardware.
Drivers of Future Performance
Impinj’s outlook centers on disciplined investment in software and cloud capabilities, the phased ramp of food vertical deployments, and the timing of large logistics and retail projects.
- Food and grocery rollouts: Management expects the food vertical to deliver only modest revenue through the first half of next year, with substantial contributions dependent on the pace and complexity of large-scale deployments. CEO Chris Diorio stated that “deployments at this kind of scale at any major enterprise take time,” referencing the multi-year nature of these initiatives.
- Software and SaaS expansion: The company is actively hiring technical talent to develop software and cloud solutions that can leverage data from its endpoint ICs and readers. Management views these investments as key to capturing higher-margin, recurring revenue streams in the medium term.
- Project timing and customer caution: Delays and real-time adjustments by large customers, particularly in retail and logistics, remain a headwind for near-term results. CFO Cary Baker noted that revenue seasonality will be less predictable as customers adapt rollouts to changing macro conditions, impacting both top-line growth and visibility.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will watch (1) the pace and scale of food and grocery sector deployments, particularly for large grocers; (2) execution on SaaS and cloud software initiatives aimed at recurring revenue; and (3) stabilization of project timing in retail and logistics, which will affect near-term growth predictability. Expansion into e-commerce and successful integration of new technical talent will also be important milestones for tracking progress.
Impinj currently trades at $215, down from $242.87 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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