Impinj, Inc.

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 2023 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, will follow with a detailed review of our fourth quarter and full year 2023 financial results and first quarter 2024 outlook. We will then open the call for questions. Jeff Dossett, Impinja's 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. Whereas 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. 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 our non-GAAP financial metrics to the most comparable GAAP metrics. Before returning to our results and outlook, note that we will participate in Susquehanna's 13th Annual Technology Conference on February 29th in New York, Loop Capital's 6th Annual Investor Conference on March 11th, and the 36th Annual Roth Conference on March 18th in Dana Point. 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. We exited 2023 on an upswing with fourth quarter revenue and profitability above both our third quarter results and fourth quarter guidance. Our focus on silicon and enterprise solutions paid dividends and strong fourth quarter end point IC volumes led by our two strategic verticals, retail and supply chain and logistics. We will sharpen that focus as we enter 2024, increasing our investment in silicon and enterprise solutions, while streamlining our organization to accelerate our pace and improve our profitability. Every January, we kick off the year with the National Retail Federation Trade Show in New York. This year, Rainer Appadie felt like the belle of the ball. Solution providers across the show touted use cases from inventory visibility to self-checkout. End users cited delighting customers with just walk out and retail necessities like loss identification. Coming off the significant retail inventory destocking that characterized 2023, the excitement at NRF was palpable. Although I still feel it is premature to call the retail downturn over, The green shoots I cited last quarter feel a shade greener post-NRF, buoyed by secular growth opportunities in supply chain and logistics, retail general merchandise, apparel, and a long tail of other applications. From my perspective, Impinj stood out as the leading range silicon provider and enterprise solutions enabler, which is precisely where we want to be. Turning to silicon, Our 2023 EndpointIC unit volume growth exceeded our industry's historical 29% CAGR with opportunity expansion and inlay partner inventory rebuilds more than offsetting the retail destocking headwinds. Fourth quarter EndpointIC revenue exceeded our expectations as growth in retail demand outpaced headwinds from some inlay partners still dialing in their inventory levels. Looking forward, we anticipate first quarter to again deliver modest endpoint IC unit volume growth. For reader ICs, our revenue held firm despite continued macroeconomic headwinds in China as partners transitioned from older Indy-based products to new e-family designs. Fourth quarter also showed strong test and measurement product deliveries to our inlay partners as they expand their inlay manufacturing capacity. We believe those capacity expansions bode well for the long-term endpoint IC opportunity. Before we turn to solutions, I would be remiss and not against citing our multiple intellectual property trial wins against our primary endpoint IC competitor, NXP. With steadfast determination, we intend to pursue the dispute to a long-term successful outcome. Moving to solutions, The visionary European retailers' ongoing rollout of our self-checkout and loss prevention solution contributed strong fourth quarter gateway revenue. We expect this deployment, their third today, to conclude in the second quarter, even as it accelerates their embedded tagging ramp. We anticipate future self-checkout and loss prevention opportunities with this retailer and other brands and geographies. In general merchandise, the large North American retailer continued their rollout albeit at a slower pace than they and we originally expected, primarily due to the breadth of their supplier base and large diversity in the products being tagged. Regardless, they continue making progress. Finally, in supply chain and logistics, we expect the second large North American supply chain and logistics end user to increase their label volumes in 2024. We expect all of these projects to provide a tailwind to our 2024 Endpoint IC revenue. On the product front, Impinj M800 deliveries are poised to ramp as our inlay partners finish their quals and begin shipping production inlays. The M800 is our best performing and most feature-rich Endpoint IC ever and, so far, customer feedback has been very positive. Although we are assuming the M800 will follow a typical multi-year ramp, we remain hopeful that our hard work on product performance and market readiness will accelerate that ramp. We also continue shifting our focus away from channel readers and gateways to our reader ICs and enterprise solutions. The former as partner products built on those ICs become increasingly able to unlock channel opportunities and the latter leveraging our readers and gateways as indispensable elements of whole platform solutions. Turning to new market drivers, Late last year, the European Commission and European Parliament provisionally included the Digital Product Passport, or DPP, in the EU's revised sustainability product legislation. DPP will provide information about a product's sustainability and traceability and help consumers and businesses make informed purchasing decisions. We expect a phased introduction, including apparel, to start in 2027. we already see leading European retailers planning for and investing ahead of it. We believe DPP is a pivotal opportunity for us because rain, already used extensively in retail apparel, can provide the information required by DPP. We also believe DPP can be the impetus for post-purchase consumer rain use cases. We began investing in DPP-related R&D in 2023 and will continue doing so in 2024. In closing, 2023 was another year of solid growth despite market headwinds, with annual revenue crossing the $300 million threshold for the first time. We delivered four quarters of positive adjusted EBITDA, successfully defended our IP, introduced market-leading new products, and are well down the path to normalizing our inventory levels. Looking forward, we are sharpening our strategic focus to improve our profitability and increase our competitiveness. As we continue driving our bold vision to connect every item in our everyday world, I remain confident in our market 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?