Impinj, Inc.

Good day and welcome to the MPIN's fourth quarter and four-year 2021 earnings conference call and webcast. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Andy Kolb, Vice President and Strategic Finance. Please go ahead, sir.

Thank you, Chuck. Good afternoon, and thank you all for joining us to discuss Impinges' fourth quarter and full year 2021 results. On today's call, Chris DiOrio, Impinges' co-founder and CEO, will provide a brief overview of our market opportunity and performance. Terry Baker, Impinges' CFO, We'll follow with a detailed review of our fourth quarter and full year 2021 financial results and first quarter 2022 outlook. We will then open the call for questions. Jeff Dossett, Impinges CRO, will join us in the Q&A session. You can find management prepared remarks plus trended financial data on the investor relations section of the company's website. We will make statements in this call about future expectations and financial performance that are based on our outlook as of today. Any such statements are forward-looking under the Private Security Litigation Reform Act of 1995. While we believe we have a reasonable basis for making these forward-looking statements, our actual results could differ materially because any statements we make today are subject to risks and uncertainties. We describe these risks and uncertainties in the annual and quarterly reports we file with the SEC. We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, except as required by applicable law. On today's call, all financial metrics, except for revenue, where we explicitly state otherwise, are non-GAAP. Balance sheet and cash flow metrics are on a GAAP basis. Please refer to our earnings release for reconciliation of our non-GAAP financial metrics to the most comparable GAAP metrics. Before turning to our results and outlook, note that we will participate in the Morgan Stanley Technology, Media, and Telecom Conference on March 9th and the 34th Annual ROC Conference on March 15th. We look forward to connecting with many of you at those events. I will now turn the call over to Chris.

Thank you, Andy, and thank you all for joining the call. In Pinch Cap 2021, with record fourth quarter and full year revenue and bookings, despite the disruptive impact of COVID-19 and waiver supply shortfalls on our supply chain, we ended the year with three consecutive quarters of double-digit revenue growth, as well as record bookings in three out of four quarters, culminating with record backlog entering 2022. Our results were driven by strong impinged execution and enterprises accelerating their investments in supply chain visibility, omnichannel performance, and operational efficiencies. We delivered our 60 billionth endpoint IC, another milestone on our journey to connect every item in our everyday world. If not for the wafer supply shortfalls, we would have delivered even more. Despite that constraint, we orchestrated a strong quarter and a strong year and that strength continues into 2022. Fourth quarter endpoint IC revenue exceeded our expectations with record bookings despite us instituting cost pass-throughs starting in October. Retail demand remains strong with retailers large and small turning to RAIN RFID to improve both in-store and supply chain inventory visibility and to accelerate omnichannel fulfillment. We also saw a growing adoption for mainstream supply chain and logistics providers, with the key adoption drivers being productivity gains, shipment tracking accuracy, and capacity expansion. Full-year endpoint IC revenues had an annual record, with year-over-year percentage growth at its highest pace since 2016. Looking forward, we see bellwether enterprises broadening their use cases and driving our endpoint IC demand. But for the second and third quarters, fourth quarter endpoint IC demand exceeded shipments by more than 50%. And with our inlay partners periodically lines down, and both their and our inventory levels measured in mere days, we continue to believe they would increase their bookings if we had more supply. Unfortunately, as of today, we don't. Our first half 2022 wafer supply remains relatively unchanged. 200 and 300-millimeter wafer supply commitments that should allow us to equal or exceed fourth quarter 2021 shipment levels through mid-2022. But those shipment levels fall far short of our rapidly growing demand. And although our foundry partner continues to prioritize us for upside wafers, with both we and they hopeful for relief in the process notes we use, to date that relief has not come, at least not sized to our need. Regardless, we continue expanding our 300-millimeter post-processing capacity to stay ahead of our opportunity, even after successfully quintupling that capacity in 2021. We will be ready when the wafers finally do come. Fourth quarter systems revenue also exceeded our expectations. Reader IT revenue was a bright spot, continuing its recovery from the first half 2021 supply shortfall. We still expect supply of our prior generation indie reader ICs to catch up to demand in first quarter 2022 and supply of our new e-family reader ICs to catch up to growing demand in second half 2022. We have high expectations for the latter now with more than 100 design wins. Fourth quarter reader and gateway supply was better than we expected, contributing to our strong systems performance. That said, We continue navigating difficult component shortfalls that increase schedule variability and costs while we wait for key components to complete our product builds. We currently do not see supply normalizing or necessarily even improving in the first or second quarters. Like for fourth quarter, we entered first quarter with significant reader backlog that we must fulfill in a constrained supply environment even as demand remains strong. On the project front, Follow-on orders for our rain loss prevention product for the visionary European retailer contributed nicely to fourth quarter revenue. The customer is happy with the product performance and what it means for their store to the future and, we hope, will deploy more broadly. The second large North American supply chain and logistics customer continued deploying, contributing modest fourth quarter revenue and a broadening of partner-led revenue in both retail and supply chain and logistics, Our two target markets was a bright spot in our fourth quarter. We are very pleased to see growing leverage from these partner-led deals. Beyond our strong results, 2021 was a fantastic year for RAINN. I am perhaps most excited by AmerisourceBergen launching its RFID tagging service. To my knowledge, their launch marks the first time a major corporation is sharing information about their RAINN tagged items with people. You and me, unconstrained. I think back to the many years I've championed a vision of digital twins for physical items and what it means for the Internet of Things. Power of rain, item visibility in every person's hand, available information about every connected item, a massive inflection opportunity, and I can see it materializing. I am absolutely thrilled. 2021 was marked by other big stories as well. For example, the CEO of the world's largest package delivery company announced a plan to add rain tags to all their packages to drive efficiencies and eliminate 20 million manual scans a day. An Accenture report stated that 93% of North American retailers are piloting or deploying rain. And we know that few of those retailers are fully deployed, signaling huge opportunities ahead. Despite COVID-19 and the operational challenges, and the stress we all feel, I do believe someday we'll look back and say, 2021 was a big year for Impinj and for the rain market overall. On the organizational side, we made two major announcements last week. First, I would like to congratulate Hussain Mekli on his promotion from Executive Vice President of Engineering to Chief Operating Officer, with Engineering and Operations now reporting to him. For the past three years, Hussain championed the development of the Impinj platform, delivering groundbreaking endpoint ICs, reader ICs, readers, and gateways. And most recently, he spearheaded growing our operations capacity across our product lines. Congratulations, Hussain. Second, I'd like to thank current director Steve Senge, who has agreed to serve as Impinj's next board chair, effective at our upcoming general meeting. Steve's experience as Microchip's long-term CEO and current executive chair brings an extraordinary level of knowledge and insight to Impinj. Also, I'd like to welcome Mira Rao, who just joined our board. Mira was previously CFO at Monolithic Power Systems, and she brings significant executive and board-level experience to Impinj. Steve, thank you. And Mira, welcome. Finally, long-term board members Peter Van Offen and Teresa Weiss have decided not to stand for reelection this year. We will continue benefiting from their guidance for the remainder of their terms. I want to express my heartfelt appreciation to both Peter and Teresa for their support and guidance to me personally, as well as for their many contributions to Entinge over the years. I will miss them on our board, and I wish them both the very best. Before I close, I'd like to thank every member of the Impinj team for their incredible effort every day of 2021. Your spirit and dedication in the face of COVID-19, the unparalleled supply chain disruptions, and inadequate product supply amazes me. Our record results are a testament to your grace under pressure. So to each and every Impinj team member, I'd like to give my heartfelt thank you. In closing, 2021 was a solid year driving our bold vision. We delivered record bookings, revenue, and adjusted EBITDA while launching key new products, investing in our team, building our 300-millimeter post-processing capacity, and accelerating our M700 series ramp. As we continue working side by side with our ecosystem partners to navigate both growing demand and ongoing supply chain disruption, I remain confident in our market position and energized by the opportunities ahead. I will now turn the call over to Kerry for our detailed financial review and first quarter outlook.