Impinj, Inc.

Welcome to the InPinge fourth quarter and full year 2022 earnings conference call and webcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist 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 telephone keypad. 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 Cobb, Vice President, Strategic Finance. Please go ahead.

Thank you, MJ. Good afternoon, and thank you all for joining us to discuss Impinj's fourth quarter and full year 2022 results. On today's call, Chris DiOrio, Impinj's co-founder and CEO, will provide a brief overview of our market opportunity and performance. Kerry Baker, Impinj's CFO, We'll follow with a detailed review of our fourth quarter and full year 2022 financial results and first quarter 2023 outlook. We will then open the call for questions. Jeff Dossett, Impinged CRO, will join us for the Q&A. You can find management's prepared remarks plus trended financial data on the investor relations section of the company's website. We will make statements in this call about financial performance and future expectations that are based on our outlook as of today. Any such statements are forward-looking under the Private Securities 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 such statements are subject to risks and uncertainties. While 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 law. On today's call, all financial metrics except for revenue or where we explicitly state otherwise are non-GAAP. Balance sheet and cash flow metrics are GAAP. Please refer to our earnings release for a reconciliation of non-GAAP financial metrics to the most comparable GAAP metrics. Before turning to our results and outlook, note that we will participate in Susquehanna's 12th Annual Technology Conference on March 2nd in New York and the 35th Annual Roth Conference on March 13th in Dana Point. Also, we will host an Investor Day on June 13th in Seattle. Please save the date. 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. Fourth quarter 2022 capped a very strong year for Entinge. We delivered record revenue in both the fourth quarter and for the full year. We delivered sequential double-digit revenue growth in second, third, and fourth quarters. We delivered record adjusted EBITDA in the third and fourth quarters. We delivered our 75 billionth endpoint IC, another milestone on our journey to connect every item in our everyday world. And we have record backlog entering 2023. Our strong support for and shipments to enterprise end users drove those results despite persistent wafer and component shortfalls. As we look into 2023, we see significant end-user opportunities for our platform, and we expect those opportunities to pay further dividends in the form of continued strong endpoint IC volume growth. Starting with endpoint ICs, 2022 demand held strong with program expansions and new programs more than offsetting retail inventory headwinds. Fourth quarter endpoint IC revenue exceeded our expectations setting a record for the fifth consecutive quarter. We anticipate significant endpoint IC volume growth in 2023, despite macroeconomic cross-currents and retailers' ongoing inventory reductions. The bulk of that growth is rooted in our platform focus on supply chain and logistics package tracking, as well as retail self-checkout and loss prevention. On the wafer front, we are seeing improved supply. As anticipated, Our inlay partners layered on additional bookings as our wafer visibility improved, creating record year-end backlog. With that improved supply, we can and will ramp shipments into that strong demand. That said, our shipment volumes will remain constrained at least into second half 2023 due to wafer delivery timing and teething issues as we ramp our expanded 300 millimeter post-processing to volume production. Turning now to systems, fourth quarter reader and gateway revenue exceeded our expectations, led by deliveries to the visionary European retailers self-checkout and loss prevention deployment, and despite component shortfalls constraining shipments. Looking forward, although we anticipate less schedule and cost variability as component shortfalls abate, a few components remain stubbornly tight, and we do not expect supply to normalize until second half 2023. Like for the fourth quarter, we entered first quarter with significant reader backlog. Reader IC revenue set a record for the third consecutive quarter, driven by impinged e-family strength as our partners built products ahead of their product launches. Looking into first quarter, we expect lower e-family volumes as those partners follow the typical product cadence seeding the market followed by subsequent strength as they ramp production volumes. We expect first quarter strength in our Indy reader ICs to more than offset the eFamily decline. Looking further into 2023, we expect our eFamily to significantly outpace and rapidly replace our Indy family. On the product front, in November, we announced the Impinj M780 and M781. our latest 300 millimeter endpoint ICs. They extend our M700 product line with extended product identifiers and significant user memory. We also introduced our patent pending Impinj Core 3D antenna reference design portfolio that enables omnidirectional reading for all M700 ICs, improving item readability. On the project front, The visionary European retailer continued deploying, contributing strong fourth quarter gateway revenue. We expect this project to deliver a strong first quarter revenue, then step down as this deployment phase approaches completion. We anticipate future self-checkout and loss prevention opportunities with this retailer at other brands and in new geographies. The Asia-based global retailer self-checkout deployment also generated meaningful fourth quarter revenue. And in supply chain and logistics, we continue to expect the second large North American end user to both continue their system deployment and drive large endpoint IC volumes in 2023 and beyond. Turning to our organization, I would like to start by welcoming Kahal Philan as our Chief Innovation Officer. Kahal will focus on long-term innovation and intellectual property strategy, as well as remain on our board of directors. Welcome, Kahal. It's a pleasure to have you on our executive team. In December, we published our second corporate citizenship statement, outlining our commitments to people, culture, the environment, and governance. Last year, we strengthened our ESG Programs Foundation by formalizing our board's oversight of ESG matters, measuring and reporting our Scope 1 and Scope 2 emissions, and adopting a new supplier code of conduct. In 2023, we will focus on corporate culture and environmental sustainability and anticipate meaningful progress on both. Last, and certainly not least, I want to congratulate my dear friend and APING co-founder, Dr. Carl Rameed, on his 2022 Kyoto Prize in Advanced Technology. This award is a wonderful honor for a gem of a person who is also one of the fathers of modern IC design and computing, in addition to his many contributions to engineering, physics, and applied science. Carver, it makes me so very happy to see you win this well-deserved award. Congratulations. Before I close, I'd like to thank every member of the Impinj team for the grit you showed every day of 2022. Our results are a testament to your grace under pressure, facing challenge after challenge. To each of you, every member of this company you have built, I'd like to offer my heartfelt thank you. In closing, 2022 was a banner year for Impinj. We delivered record revenue and adjusted EBITDA while launching new products, investing in our team, and unlocking new opportunities. As we continue driving our bold vision to connect every item in our everyday world, I remain confident in our market demand and position and energized by the opportunities ahead. I will now turn the call over to Kerry for our financial review and first quarter outlook. Kerry?