Impinj (PI) 3Q16 Earnings Takeways – Pure Play on IoT

Impinj (PI) delivered strong 3Q that exceeded management’s earnings and revenue guidance. Accelerating demand for their endpoint IC as well as connectivity products contributed to record quarterly revenue of just over $31 million, a +50.1% increase YoY. Gross Margins increased +110bps YoY and +20bps QoQ to 53.6%, attributed to customer adoption of newer products as well as added layers of connectivity to existing platforms. Q4 revenue guidance implies +43% YoY growth.

Notably, for CY16E, Impinj anticipates endpoint IC unit sales of 5.6-5.8BB (prior 4.9-5.1B chips), up +63% YoY, and the Company continues to believe in its +25% long-term revenue growth target and will provide an end-point estimate for CY17 during the Dec-quarter conference call.

Impinj’s platform enables connectivity to billions of everyday items with RAIN adoption accelerating across many industries. Macy’s recently announced that by the start of 2017, they plan to have more than 60% of all items in most of their stores RAIN connected and, by the end of 2017 to have 100% of all items in all stores RAIN connected. In the automotive sector, Daimler, Audi and Ford all use RAIN for various applications from part tracking and ordering to delivery automation. Other industries using Impinj’s RFID tracking products include garment and healthcare.