Impinj (PI) 25 Oct 232023 Q3 Earnings call transcript

Welcome to the Impinj Third Quarter 2023 Financial Results Earnings Conference Call and Webcast. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Mr. Andy Cobb, Vice President, Strategic Finance. Please go ahead.

MJ. you, Thank thank Impinj's and for us joining Good Quarter you XXXX discuss Third Results. to afternoon, all On today's and call, provide Chris Diorio, Impinj's Co-Founder overview our a and of market opportunity performance. brief CEO, will will follow XXXX quarter and Cary Baker, results Impinj's with detailed our financial review outlook. quarter a fourth third of CFO,

for We the Q&A. call Dossett, CRO, questions. then will the will Impinj's Jeff open join for us

the remarks company's management's You prepared plus trended data can Relations Investor on website. find financial

and in Any this Litigation that call forward-looking We future will performance outlook today. expectations of based financial of under make such our on XXXX. statements Reform Act Securities are about are the as Private statements

such we our to risks statements these uncertainties have the believe these annual basis reasonable law. and disclaim alter forward-looking with uncertainties. required except we We reports SEC. and actual we obligation for as and We differ statements, our to describe to in making file expressly any and are undertake While or results update statements, risks subject any not a the because quarterly forward-looking do by materially

financial earnings all reconciliation non-GAAP sheet metrics metrics, GAAP comparable and financial -- to flow for to where we revenue call, a explicitly non-GAAP. state cash today's On are refer the most please Balance release or for otherwise our are except metrics of metrics.

forward Baird's Before to will turning look over to with you Industrial connecting Conference Global we in turn November our note on in Chris. now participate outlook, call there. results We to and many will the X Chicago. that I of

you all for Thank the you, joining thank Andy, call. and

the been execution we while XXXX pleased results, our than that We year, exceeded guide. reflect entering our profitability this beat guide quarter. I challenging more our revenue midpoint am our has As I with anticipated far disappointed and on I'm

to rebound XXXX CAGR, the XX% a green and a in market growth leader our consistent endpoint year full XXXX difficult quarter, see in macro. IC anticipated we historical unit forward, Looking volume our despite be the expect volumes with fourth shoots industry's remain

To We will also crisis Churchill, continue have one improving are "We our I go management. this letting well. company, always good Challenging made stronger demand not and doubt no waste." as have periods to quote Winston inventory us a and forecasting a

endpoint on ICs. first Focusing

Third declined American exceeded retail unit the apparel the our strong expectations large at slightly quarter Weakness retailer the general American in eclipsed logistics North revenue our softness sequentially. ramp but supply customer. market, at volume and overall chain large merchandise North second growth in

less at inventory IC of was partners had we inlay decline me While anticipated. the than our aggregate declined,

quarter, demand apparel shoots fourth green partners. driving retail the and are inlay improving to Looking at our

While North it to of expect deliver least into inlay that appears is a behind in the is inventory America, at IC reducing to quarter continue retail as in inventory partners improving said, their call too that fourth the retail our destocking it bottom, us. demand. That the worst even we early they

the merchandise see XXXX, into Looking a expansion. growth retail, XXX% we driving and both tagging parcel buoyed and letter by tracking general in self-checkout secular

to Turning systems.

macro to revenue deployments. Third below slowing headwinds, our primarily reader expectations and gateway slightly due quarter was partner-led

retailer. successfully enterprise Our at prevention the on parcel visionary led bright be supply global retailer, engagements second the Asia-based expanding spot, European and self-checkout loss end to at a and by continue user, self-checkout logistics tracking chain has deployments the at concluded

continued in decline our the enterprise our expect timing due Looking gateway in unfavorable delivery fourth partner-led reader to reader we end weakness deployments to and quarter, revenue to users. and a sequential

solutions our unsolvable in we out, working problems. further with enterprises will leverage that entire investing Lighthouse hand-in-hand business platform, previously to solve continue Looking their

ahead. further that volumes, that trend we remain in our on yield solutions systems into expect recurring Those and in IC and confident enterprise efforts focus years the XXXX. will paid dividends in continue XXXX, to both endpoints I dividends

to reader quarter continuing we older macro Impinj their product revenue due from transition demand our line and IC new our as partners Indy to expected, in primarily declined our China weak family. Third

China to focused to Looking down with Indy-based demand our on soft and emerging remaining we're the That efamily similar reader fully said, of with revenue product the selling sales traction wins partners pleased our efamily-based fourth quarter, see IC quarter their ramping third inventory our we before with designs. and pace opportunities. of design

while parties award with denying our jury verdict to Impinj The California dispute of China. to X favor prevailed holding patent, and instructing our rulings retrial ordering on agree but Court requested a our post-trial the Dutch intellectual validity NXP's infringement request injunction in we appealed from California damages We to issued property injunction an in and Washington, and to in an are our Turning affiliate. patent the royalty NXP, the on pursuing its ongoing favor. second a upholding for further and verdict willfulness denial,

patents The Impinj X from next X of first Texas involving X a recently starts versus trials week. patents third party NXP licensed

position demand volume remain successful in confident the a strong annual quarter despite our for the signs growth litigation fourth expect retail In improvement, IC remain our to through outcome. impacting closing, optimistic macro endpoint we future. see headwinds of the anticipate seeing we and and outlook, Overall, unit

I and and As each industry platform a leading no of doubt stronger. our excitement have the I we future, them will company so position strategy for strength said market our been we cycles through and again. have of before have the do as earlier, through With come

my the you. honored and to team outlook, for Before fortune again financial review I Cary? I effort member Cary driving incredible fourth constant Impinj the of with your bold our good I'd work call turn for like our to quarter every feel thank by to over vision.

call, Chris, Thank and results quarter afternoon, quarter outlook. will financial today's and review financial fourth I everyone. On our good you, third

down XXXX. $XX.X was million down revenue second million, in $XX $XX from and million XXXX Third third sequentially compared quarter XX% X% quarter in year-over-year with quarter

in from quarter million, Third quarter quarter compared sequentially third million IC second X% and down million $XX.X was with revenue down endpoint in XX% $XX.X $XX.X XXXX. XXXX year-over-year

year, inlay partner quarter forward, revenue sequentially, we see demand Looking this expect an improving drive to fourth typically while declined increase. we endpoint IC

Third year-over-year in X% from XXXX revenue XX% in sequentially quarter compared million quarter XXXX. $XX.X was second million million, and $XX.X systems down $XX.X down with quarter third

revenue was slightly by our systems weakness reader in driven business. quarter below expectations, our Third Speedway

sequential reader across IC On decreased increased while decreased. On reader all revenue and revenue year-over-year basis, lines. Gateway product revenue a basis, a

ahead, expect a fourth Looking revenue partner-led led by we sequential decline business. our in in quarter weakness systems reader

mix driven product specifically compared third a fixed costs. by revenue XX.X% Third decrease quarter was with driven in costs. lower smaller The XX.X% margins on IC lower IC and lower The systems product and specialty by sequential driven increased year-over-year quarter was margins gross margin quarter second XXXX in was endpoint XX.X% decrease XXXX. and by industrial

Looking to we margin gross the expect fourth quarter, our to increase.

and expense Third quarter XXXX. $XX management [ million compared operating second was across million major functions all operating in in expense. Effective ] million drove quarter lower-than-expected third $XX.X spend quarter $XX.X the XXXX with

expense $XX.X $X.X General was marketing and was development million. million. was expense and expense Sales litigation and $X.X expense million. million, including $X.X Research administrative of

increase operating We expect increased quarter to in sequential part litigation due in a spend. expense fourth

execution strength adjusted Third million EBITDA team. was $XXX,XXX of our the compared $XX in a positive the testament both model the headwinds adjusted significant and to quarter revenue is XXXX. quarter with Delivering this of our business quarter and $X.X quarter second despite million third EBITDA in XXXX

GAAP $XX.X net loss was quarter million. Third

a Third diluted fully quarter share was or basis. net income non-GAAP $XXX,XXX per on $X.XX

with with investments $XXX.X from ended Turning We balance and XXXX. the prior cash, compared quarter quarter. XXXX million to Inventory quarter in in million the cash equivalents and of $XXX.X down third third the totaled million $XXX.X $XXX.X million million, quarter sheet. second $X.X

was activities negative operating $X.X $X.X due by was equipment cash Third million. quarter $X.X net totaled purchases Property cash and Free flow million. million.

Before highlight our and items quarter to a fourth outlook. our I want results guidance, turning to unique few to

third IC their made progress First, in our as quarter. Chris inventory mentioned, partners reducing endpoint

partner to in their quarter. endpoint to ramping and MXXX to the will the in large MXXX continue on XXXX. position them number expect us reducing inlay We currently designs in begin inventory capitalize IC certification reduction the well That fourth of

than higher systems Second, our IC inventory more decreased endpoint with third offsetting quarter inventory. inventory lower

quarter, small fourth systems increase IC anticipate than the we our in endpoint more again, inventory. inventory, further offsetting to reducing inventory a with Looking declining overall

are confident normalize recovers. will inventory We demand as

investors, them. as are Finally, strong we ESG our At to view the surveying committed build ESG. partnership to we of map ESG materiality launched our and with all matters a recently to strongly ESG time, a our customers cross-section journey for our is a on same that important stakeholders Impinj the first road assessment, employees of future.

Turning to our outlook.

the expect third quarter-over-quarter and million We million $XX.X a increase quarter revenue X% midpoint. $XX.X million fourth $XX between at quarter with compared XXXX, in

of expect EBITDA loss profit a $XXX,XXX. of between $XXX,XXX and We adjusted a

line, of share a of a between income of and between non-GAAP and fully expect million bottom the loss reflecting On $X.XX. a non-GAAP $X.X of profit net $X.XX profit diluted earnings per we $XXX,XXX, a loss

I open the to our Impinj thank for and to MJ? the now will investors, our call turn session. the ongoing question-and-answer In your our closing, want to operator suppliers I support. team, you, customers, the

[Operator comes Piper Instructions] Today's from first Harsh Kumar question Sandler. with

Cary better team Impinj, insight. progress you It guys time sound and lot Chris, is this a at the looks like around.

Harsh. you, Thank

words, talked script, Had out inventory a you destocking been about partners. How in left the do you much Could you sense might in your you quarter? December have working revenues -- you the quick to think In a quarter? in want December And guys us Chris. left other this how is real And it know were in question. have where if happened, us the none Thanks, give could December know give had of you would take I much but quarter? how I at on inlay the the system? in you much of the your

the for thanks question. Cary. Harsh, This is

I'll I think one. take that

had out progress of on some burned healthy, remains in channel into We those behind. in of large and time QX and expected aggregate, environment fluid are going point. track at less based inventory the take number of giving our more I QX than inventory more down estimate exiting anticipate demand, we in quarter. a In on burning smaller partners though, mix. or partners year may that schedule this to Our demand of we on the however, partners, reasonably healthy. channel take specific will our down Based because demand, very our and ahead was inventory little not channel We're weeks of get a estimates our some

end at good but day, we're on progress the -- channel the reducing inventory. So making of

this December, on your then And you'll which kind this good think it's you? bottom food your one, of plan. -- mentioned, telling one excited the time as we're that and what had you category validation topic, afternoon. back actually hear around, seem is how comment believable you by done And outside get in on starting as they And I a to just issues Great. And was voted to your one your you get be well. the about close but like I largest on a up, original also pretty of this thoughts of I also, largest seem imply partners second this was curious, to also seeing are of do can are think you they to the retail And look apparel line. I'll that? customers you then are Could independent things

Harsh. Thanks, Yes.

we of We end largest same just Germany our IoT obviously met seeing was but users. our talk to to the event at our talk we with thing. the in So week, several wireless and last customers partners, are roughly users. I end Indy also direct

demand still macro improving too out early Although direct. do difficult, our environment we call bottom. We is it's prepared still in or there and to remarks, see as said the

are up sales out users bit. simulate. to is data, the data normalize. and starting Import picking end U.S. least see little in Our at starting to They a things

so we're those shoots. green feeling And

too bottom. to said, So call it's early like we

America Asia behind to as And I large, but I'd add in that parts Europe correction. feels are is terms mixed, because well ahead certain they're behind of North it guess of seems obviously be the like to just well. and

but tell, personally things there will that time pretty market. feeling are in good improving I'm So out the

side? the On food

ahead, sorry. Go I'm

that no, was No, no, it.

Okay.

chain food tag categorizing at those are to food side, There case One logistics forward. food items primarily food we carton and do opportunity. what call we around. the And food moving the in see because and opportunities tracking supply is in aspects direct and X are it's items have opportunities are On food. opportunities those also item the level. pallet There we been as an moving

on to our premature them they're citing have get bit little because opportunities I We starting feel commented can out they And forward, on on them certainly it's some directly not going these there. But a to are of when guarantee are be personally as come that they of going. think we actually some opportunities, just I calls preference carton much dry our of said, now like keep our of on focus individual course, But I on the food but movement, large. where which, premature. pallet and see it's is powder is quite the I be right to the be to box larger, kind could which

The from Hari comes with Goldman next question Toshiya Sachs.

endpoint follow up right, think have forward. going about partner mentioned I some your sell-in smaller exit relatively to guess business partners all? your I preliminary would perhaps selling How inventory well. I wanted your of exit the second then IT think on we be helpful spot and about I a all, to with any you of IC sell-through QX? guess, partners your healthy inlay healthy XXXX the that year. QX. you on inventory should super end the expect year large assuming endpoint how Cary, I sequential your starting and, you're but year thoughts of to at large And your first in for the as that inventory, excess partners Did think I in in catch And maybe the into, guess, to of business

This Cary. Thanks, is Yes. Toshiya.

So healthy. to reasonably bit are a smaller year more the The partners to take larger exit inlay partners, little time. got yes, we the you expect going inlay

stick the I remains a recovered of dynamic. at just our we're to about GICs soft. early not exited endpoint first we As The unlike to quarter what in to And did, COVID. before quarter, time. the starting stages think we while in The market just guide a systems we but knitting and saw systems are that's very still going be to hope remaining here we're X improvement see ICs now our We're what recovery. as

on this at So our we're forward not for guidance going BD to point. far lean too

endpoint I into we you looking as as want point said will where to, with prepared is my our about this respect where to ICs. I far remarks XXXX, leaning to

cited into ] well, in ] tagging see is parcel self-checkout course, but expansion the retail apparel we XX% more [ due in merchandise, XXXX, general than growth [ as as then Looking driving a seeing a well. secular tracking just that to anticipate X% and by and of both in we driver retail and tagging self-checkout, pickup driven

but And are XXXX, right as I so we guardedly go as that's think now. optimistic to want for we far

That's Got it. fair and very helpful.

not coming was QX the going of touch puts the about hoping can As on QX years? your And being about expectations for my next family couple costs or gross wafer sequentially. the follow-up year. costs that quarters, you your walk only forward? you on kind can MXXX for Cary, but over over pricing couple say, if profile, can But next starting up of gross your of margin next talked margins, you through I of kind profile in also how and takes, talked you help

with QX, as margin So start to to look I increase. I going gross think is

we'd to said impacted back think that you be I QX X If my margin, by things. on guidance

then And operating cost product, structure. IC. reader cost mix particularly had First, fixed we our scale against lower we softer revenue of have in a

get million. I subscale the guide product at of so mix think I look a we're we but normalizes, that back, still some our into of midpoint As $XX QX,

dynamic. little So We'll of right but getting the that bit that's is anticipate a our lift, to I the us don't targeted XX% back now. level see

retail us the get first that that level normal. As XX% revenue of to back year, I the revenue that XXXX, targeted full And this mix we I start half range. were gross expect in growing margin. in as we would scale I again our to I the to of into And the into market realization to expect takes continue be back to expect as grow eventually look the recovers.

expect layers further of to at I We're in, top process. margin gross of early of on the MXXX or very the improve. the ramp. Most that, certification in MXXX still days the our are Now qualification as partners

not I we're our will the this point start shipping that way as they qualification will their ramping. you demand So to on shipping process progress that MXXXs then really up start keep on make date through and in ramp. will at

our partners certifications those as opportunity on of is started, out front right now, Cary quite smaller approvals opportunities approval MXXX, says, the ramp for really have we're cycle relative are ramp direct And in large. The in in which overall and when for really now. we And to accelerate. there Yes. part, for to we most and it the they're MXXXs waiting now, approvals right has not shipping but going April through, all start coming the the yet, expect is cycle

The Ricchiuti next Jim & question with from Company. Needham comes

could demand you Earlier in talked I that. wondering you're on management. your was and script, inventory taking you if elaborate improve steps to about just forecasting

with start as will well. the demand let in probably I'll layer I and Cary forecasting

view. level of of doing the set kind the taking into market, that higher and what lot were trends I industry's and significantly rely on for view our now I to forecasting said year, should the as it last On what our week, we I did, is the our to who just macro partner earlier anticipate we in at What learning both basis it It demand well. the semi-partnerships chain supply many it of -- us. more directly, in I'm on a partners and a this side, had market, overall it's trends who was direct enterprise have they a the seen When at didn't market better of should our the account the the trends users market, see And on We magnitude decline. were do just macro least it turned is want have than personally, ourselves. the end wasn't a view, didn't and at was feeling retail leveraging coming for experience coming. basically are logistics We industry's relying seen use we coming. and our saying conference

forward-looking more doing be what a terms in macro perspective. larger So we're from of

frankly, terms I'm working engagement to partners expected not because, of do question them the We macro. everything make understanding an did top into the market and we the could management? be, that their anything a with selling saying we right but past. quite that's want what overall inventory to want you into retail in with understanding I on did broad do Cary, our they selling layer wrong We're in demand of we're on to of now. what and

this Yes, Cary. is Jim, Yes.

we're can channel. doing channel distribution channel it, to talk inventory the We're so So how partners, inlay in beyond inform which side, call better going, reaching our closer and to, stay trending, on we inform planning also to how our the we levels run model, sudden increasing will, their understand We're swings well. our of partners the multiple if customers as things. frequency reporting, channel help inventory All their to of in an will our direct inventories, of into in partners the further the inventory how to is our inventory level the effort you and demand partners demand are.

recently it. comment I'd you can't RFID their it. just Got curious RFID of for out use working to if perspective you specifically your talked about their Chris, get just if And on question, this this Can solution. at you're comments application. My about all walk about technology talk Amazon follow-up them? with be

question, with associated part us the associated been anything us. is I obviously say can't publicly with about any and particular not of identified opportunity the that to Jim, has first

solution broader sense. whatever I makes or will want In terms it, both and RAIN opportunity, logical the just the a Vision. you always have of to RFID that different firmly the opportunities, call walk-out just include It of combination believed

cost items The attached way. use item that, individual can like the to product items, If because is not example, the a take for is just is for know exactly meat cost something RFID, you the Vision you what can average attack. system what tell the or RAIN you its

anything item. prevention you opportunities, it loss stealing being The and stealing tell the the person item can't can For can the vision identify we person typically tell you is the stolen, but system, not about much it. about

driving opportunity, forward, going the overall an blend technologies include see I provide So X the just loss into. to walk-out prevention which to as will we're opportunity together

the particular And positive in say have self-checkout experience. this RFID without several frankly, checkout of speed consumers speaking It's their experience. those consumer customer I all combination and one will delight and last quite and about that comments, to shopping rely thing. to So around week conversations opportunity I meetings a overall any same company's systems again drive Vision on overall to an

next The question with Genuity. Canaccord Walkley from Mike comes

shoot good going comments. a Great. to I'm bit. to But switch It's hear some little the gears green Chris, of

Just And trying the a agreement a happen a the frame with potential updates about to know this and Can monetary talked how NXP. us back injunction time? you're maybe NXP, go royalty with with down with meet the You us feel customers you're share you reach there? your you opportunity help maybe over you junction the award, something is of to type them if demand, you potential think about you could mentioned the junction after maybe shouldn't able road? could I the

I'll pause thank to can. and here questions to for that but going few up, to answer I'm difficult thick answer Yes, it right then you. Mike, a of of in given to I'll we're kind me I'll I bit back what a say because follow things, you now. it the turn those are little And

in ongoing get the the case. out of came still to the but and roughly instructed to would be of amount the and parties on in in actual In profits. loss that million said to [ profits awarded be there discuss million, appeals, be $XX.X The went initially monetary with sales some award us that the should terms back roughly $XX be ] in judge are included there lost and together California California, and damages foreign the that damages jury subject

larger. case against the did NXP are not Dutch USA. much who's sales include California NXP It was Our affiliate,

filed We patents need we affiliate. the against same to NXP on suit litigate patents Dutch have So the in that don't anymore. case

loss scheduled -- not and and look to hopefully been forward damages coming that but significantly getting happening lost us. And case profits additional damages be will soon awarded yet, that litigating We and patent the amounts of we just profits. has to

on this time. In I I'd the terms the thick construed it of can't at of way comment and Like I another or with really one in we're settlements say NXP, damage. anything or could said, be anything

to we NXP, would overall the of for they our can't terms as I grow speak and market that obviously fully the in feel time, patents We with the it go I but I in obviously infringed. In sound intellectual same note are continue want very protect At to see market, imagine service important forward. partners inlay our will And was both are we property. and to is California, discussion well. one bureaus. of to the be

So a to we're and to NXP best there's and can in to anything eventual our resolution as at can we bit or we if market. and our property, we see I same navigating we outcome. if confident delicate drive want the navigating more, trying in best you confident a not this answer go can it a are the time, in much but intellectual case, want have as I But you back that to follow-up situation, the I'm respect where little dynamic turn to further.

Help That's about for switch us question. second gears it. very helpful. think my I'll

in early come know have and is 'XX when 'XX or tell? Cary, how you on MXXX, overall for time endpoint versus team. the you pricing like any QX we're negotiate products to new in to at and the pricing we too now, thoughts should think it maybe just I the Just about in start

at a can is that. shot this Cary. I Mike, take

by decline you Those able over to been the range. annually, it, gross below if back go And improve cost mid-single-digit that's accompanied maintain years, historically, seen So multiple we've wafer been ASPs declines we've and have margin how years. to call downs.

of of environment. And as gone discussion, we're our inflationary are conversations, year. couple we still wafer now, actually expecting a which not not those in go pricing We years, a Over same. the that up. as constant -- our down but in into been happening our we've we model. just in partners, integrity have last And ASPs environment inflationary goal into those cost as remains next maintain of an as types dialogue need with go our happening to they're or result, the however, margin the We're

comes The from with MKM. next question Scott ROTH Searle

a on a tough job nice environment. Congratulations in

Thank you.

Scott. you, Thank

in digging some little the green in on Maybe more, clear could bit terms was terms the cycle a and if -- wondering shoots of you to services that's going little level, the to you're authenticity the up of timing I on for that interest details such starting adoption the start decks what forward? MXXX in seeing how as more teeing a adoption. of bit additional dive

start I'll jump in. I'll others and here, let So

that is overall better to this we're about excitement the that reliability, quality, partners of terms direct It about very in partners, had really better MXXX So out have guys itself, you performance, high multiple there said product. MXXX just excited about and talk created sensitivity, level an product our of I market. and services me shift. incredible better has

first do of we really first the just badly prior some the time not cautious. in our Well, Every node. chip it's that node, I where MXXX because about and feel did our that in something you time this we chip, did It's ways, we a are. And one. XX-nanometer good you're in ones. really any first surprising

So turned don't pull the you we all MXXX stops, out out stops. we and and all pull the

and designs. in see direct the inlay of leading product. customers at where lot of Europe at ARC Our market, inlay in both U.S. certification, Auburn in our the lab are at in partners designs There end we a University are for the that their have partners is multiple the same. and in Those in it terms of enthusiasm

Cary I'm guardedly end paced rapidly qualification early It's a will year. at bit and to next of to see the the excite optimistic MXXX starting how by those quickly little early starting pace our adoption And so but inlays through will be significant ramp that we the But a -- noted, certification expect pace, get ramp users. volume. as become key

In opportunity, authentication an built series our is the with authentication which is our basically of engine MXXX, terms in. that MXXX

food product specialty through the cases on used will use go and they multiple number adoption We qualified typical care shipped significant have we market. S-curve and where in Gibson now of and in applications. that market. the are market, the tax We've kind of right opportunities We health then get seeded there, of a the up. tracking, and the picks then see it

market we're so and seeding the getting that in going. And

others. also in apparel fashion We pharmaceutical and opportunities and and there footwear other see out applications

So I product. am excited for that

we pace That first we've get our general offering as going said, a is well. them completely I because partners and educate think little the super bit I are customers for expect done should see. thing and it's got of terms front rapid They time. the to That's a purpose are of take a this market. don't in of you really, what now new what we've adoption and authentication to of basically in because

is a who you is can't what fun have that made any to citing counterfeit at had newest course, the do that. dinner that things level of the into like. our capability that's the changer, future, as details, a put one and partner are the authentication has a week there's we've and way currency? fact, to to we're chip its And against And game do. with of really Just you that But not got lot partners prepared of last MXXX to I opportunity thinking without and out be the raise opportunity well, -- to again chip in you and protect I come of, me currency this

are in this customers could Perfect. you been And to start got still look ballpark think follow-up, if Yes, despite benchmarks that merchandise, general big up. this range. of that start to to indicated it an thinking Very that other of in that ramp headwinds, of inflection growth XXXX? you've items be us endpoint of historic to the the coming wondering anticipating in year IC start a some I'm some big board, terms customer see beyond historically? we in which we terms accelerate a logistics about has XX% on CAGR, kind should helpful. the XXXX, give year Is you're I you we as how as

to respect with excitement future, for We for almost is to no quote feel it venture. with I'm excitement with prepared XXXX. the prediction Lincoln

X to As ourselves. you'd I we far but my of want ahead at a prepared And I anything said time. don't quarter too guide in add? get Cary, us remarks,

still that in just to now. on, are but reiterate for market endpoint seeing business, said, programs is the secular -- or while started Chris there as ICs are dynamic the to recover. for still pretty opportunities while roll retail I'd the We're systems softness right additional starting that growth our

we're just the to on into too given going at nature, this that So off leaving point. hold future dynamic far

them And not bit. sorry. but a optimism the little with Lincoln I misquoted said think future, in I exactly,

It okay. guys excitement have optimism. That's like some and sounds you

thank you. So

Scott. do. We Thanks, Thank you.

The a next Instructions] with question Harsh [Operator is follow-up Sandler. from Kumar Piper

asked the I question go just for growth to endpoint the wanted that was back about in Chris, to IC XXXX.

for I'm XX% I XXXX. think me if but that heard Is endpoint wrong, accurate? correct the I IC -- in growth business

number at We be XX%. What with historical we said said industry's was to been we IC What expect didn't ourselves CAGR volumes volume The endpoint peg historical our XX%. basically But our implying the we we're has consistent that. unit CAGR. that our something like general CAGR outtake unit of X% something not number. within range vicinity without industry and historical is citing like an accuracy volume a or around in

exceeded But historical has CAGR XX%. the

years, right years what year back of it's If range brings. you and XX% the in on depending each now, look

we And so expect ourselves.

be general CAGR. volume unit volume EBIT exceed range historical the to of our expect in We the growth XX% and

the of looking model, be my number it, So implies for even and quarter, how uptick am here I XX as or Is my the in missing we sequential significant guidance should of XX I'm neighborhood December pretty that model XX%, looking question middle? a sequential XX% the close about reason I'm uptick. think I this in somewhere me at something asked XX% to that at call was to to or in your the

think unit type of a be something revenue in quarter. but Last in not the I year, that that may because volume increase last the it's fourth missing not volume.

this unit year make unit you'd we QX if could for you on volume the growth, you So what volumes. thinking to have And are commentary that estimate made sure throughout then for roughly normalized we've that.

Cary's ran I them one want down what long-term But fact have see a opportunity, even everybody still we brings, significantly market, growth growth continuing value North deliver our of and of point the to unit user about of opportunity. market driving market we're RFID track down we is confidence unfortunate remain that in we're in downturn. We specialty. that end users current It's with add. we being able future. to in because us in is the volumes forward that we're why the terms long-term market on to gives in large a see significant go the logistics long-term in our sell. which manufacture, down at the I'll We're spot massive is to pain able And about opportunity. transport improvements the the point to on proposition our enterprise supply in add excited channel this press that overall, end but through retail bullish

the be and then want so That coming do for everything XX, would call numbers about about I think or on about industry you citing a XXXX, I the talk volume what's as Maybe off guys. XXs. yourself than as good XXXX volume unit shoots How for expect a help -- would was But green you us industry are but year question your Understood, to things, think are And sort you to that's growth we pressed I excess? unit it, numbers rate? you jumped you wasn't in it. the should better could the button the to in interesting, don't high that's of ask, growth XXXX bottom, how rate rebounds? what of of citing had some know but

unit difficult Field call where just through turnaround. prepared in be, to early in anticipate. very to this growth to early It's unit going it's seriousness, in far it a we to since of can't year will bottom. significant too We on growth the and be. year-over-year fully out trend. volume but remarks, that be a estimate XXXX that difficult too predict. No, no There us going pace we our But all shoots. year, in similar everything. exactly exactly every green really will environment the for coming it's year. it's we're that industry of volumes, many factors I can CAGR to depends and retail, in said see market there. next of we grown follow it, just much is the There's larger where in a and where terms factors spend. our unit turns what What than terms of that I say doubt in we terms terms so of in just variables of magnitude be we are has too have XXXX spend, believe government macro can't us, It peg volume

Winkler from The next [ Natalie question with Jefferies. ] comes

is just of was beyond one the in end this on given sort market, right? your any the now? what first you opportunities the logistics with other potential about And there? sounds market? demand It kind that ramp project Could this of speak we disappointment. further current retail lot How will -- customers engagement that inflection maybe see some is like do a see this think point end which of you're of right potential the of is at weak, like you the is logistics in So you ramping where seeing guys

Jeff. is this Natalie,

and is the deployments what the enterprise would we've the which and monitoring competitive that marketplace. think and in impact chain industry say first is I of is I logistics opportunity the what pace very their closely is others will to But same supply reiterate engaged new said I'd in often, predict. what doing that are timing hard industry

So platform I'm can supply and how improve their engagement competitiveness that logistics by the Impinj with have level them we help in considering difficult chain a organizations encouraged other RFID that Rain of and are market.

one have This I'm is -- sorry. I'm Chris. is have this Natalie, going one to thing. Chris. I

it's one caused the end our of a number small users been go. or the history, at case generally have to industry's look you If segment that

I day. it look all Macy's the then [ would ] and it's in was suit. at Delta Airlines opportunity, if member Marks in & So and aviation, Decathlon or look Spencer led at joined I follow then Klamerance and back and retail If airlines by

during like, number by automotive of of in that's was the stalled been space we setback drive Now companies time. by the It same for had COVID to automotive that example, small a course, with Volkswagen the forward.

to pulled the get a on so to our user decides and And adopt end uses. basically industry proves tends giant

and so while watching again. that's comments, going what's happen engaging. closely guarantee I are And here to others To are Jeff's can't

supply opportunity so this logistics doing space. we And pursue and and make everything we're first the to then everything we in chain else successful can to can

of how maybe provide is that on potential revenue there? Volante are like kind super guys update seeing Awesome. how could acquisition, one, then integration And you And been? This an you helpful. or second the any has

helping with are So Teams forward, Luca, acquired running just on and Integration and financial integration, to in last be the in that it. process design we them on easing ensure fine the they we that of sufficiently them going Atlantic the the with deploy perspective, performance spent we and hope market, ICs the reliability CEO. well. the focused my go as the to for was time are are of Volante is just set the integration from HR, the improving and integration, significantly their quality, labels labels We working is I users both well because with week business Atlantic And going together. deployment base them. integration, to started the enterprise that end IT reliable before

very the adding the we the is already IC, to so which the drive focused a have integration close high ability endpoint for bear, equation focus performance future, IC to and a gateways quality, software. solutions reliability the adoption by through that the enterprise teams And we bringing and and company as readers, and that our were between to

a puzzle the just a that whole of we it's piece makes think stronger solution. So

And Cary. Natalie, this is

that outlined the it's checking all boxes from the it's a to operating margin benefits addition accretive, accretive, In final gross us. perspective, just strategic Chris it's for margin

They good are team. a

Searle Scott with MKM. from ROTH follow-up a is question Next

ago? kind quick front bit Harsh's little a year were Chris, is us to that and tended to depending customers Just at some it's where been on general question months could the follow the it side. from bit erratic quarter-to-quarter. direction big a us of little this how was frame or build. a XX if on or maybe continues how be I the the the a pipeline give help we does like sometimes business project on you are, seems But the versus today, like systems wondering lumpy look of up little and metrics opportunity where start system it's the on --

going where an the on I'm and to of start strategic comment any start to Yes. with just perspective, but pipeline, strategically. we to of say I'd that overall Jeff terms with off want hand are to you kind in then I'll like

end We, and of successfully large deploy on and likes end chain as customers. them a logistics company, North the users enterprise are that our solution a delights completely to American users our enterprise supply enabling focused solutions,

that broad over And of that in solution such learnings market can problem, and on use time, that to really And and which flow tip gets to then us so drives business ICs into next is business remarks to us drive our as the drive hard solution of our systems step the enable case. use problems, reader the in one. invent our my prepared the down case, use accounts that those then I the solutions spear particular adoption helps we that said to case

you what that. and as gateways, Jeff give systems opportunity. enterprise But We words the on business things doing the maybe kind say that I'll we and don't in numbers like think a with where focus terms and is few about pipeline overall typically solutions. let on readers of So we're of are

at is as the pipeline, large reflects our Yes. overall engaging systems enterprise is pipeline -- is of proportion I'd Chris' pipeline that these our are opportunities visionary that with large represented would of is channel is reflected previously the problems macroeconomic Thanks, rate say To that gateway the that impact of pipeline. our strategy to currently in is it the Chris. enterprises the broader our reader I pipeline broader pipeline increasing. engagements some strong. start increasingly is our and with same the engagement systems of by strong. not being lighthouse in enterprise unsolved point, growing that It solve

the improve, growth predict and can't a the when macroeconomic think reader in to broader conditions I think I in return pipeline. XXXX gateway overall when, we'll sometime partner-led but see channel

for over back and CEO, question our Chris would like concludes and questions. Co-Founder turn the This any closing to to Diorio I remarks. conference

and I'd today. safe you, the hope our ones you and you to joining for call joining for I and you thank are and Thank well, remain loved all call. MJ. like Bye-bye. thank your

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