Impinj, Inc.

Welcome to Impinja's fourth quarter and full year 2024 financial results conference call and webcast. All participants will be in a 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 a touch-tone phone, and to withdraw your question, please press star, then two. Please note that this event is being recorded. Due to Mr. Andy Cobb's laryngitis, I would now like to turn the conference over to Ms. Tracy Moran, Senior Investor Relations Manager. Please go ahead.

Thank you, Nick. Good afternoon, and thank you all for joining us to discuss Impinj's fourth quarter and full year 2024 results. On today's call, Chris DiOrio, Impinj's co-founder and CEO, will provide a brief overview of our market opportunity and performance. Carrie Baker, Impinges CFO, will follow with a detailed review of our fourth quarter and full year 2024 financial results and first quarter 2025 outlook. We will then open the call for questions. Andy Cobb, Impinges Vice President of Strategic Finance, will join us for the Q&A. Hussein Meklai, who normally joins us, unfortunately has the flu so cannot be here today. 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. All balance sheet and cash flow metrics except for free cash flow are GAAP. Please refer to our earnings release for a reconciliation of non-GAAP financial metrics for the most comparable GAAP metrics. Before turning to our results and outlook, Note that we will participate in Susquehanna's 14th Annual Technology Conference on February 27th in New York, the Cantor Global Technology Conference on March 11th in New York, and the 37th Annual Roth Conference on March 18th in Vanna Point. We look forward to connecting with many of you at those events. I will now turn the call over to Chris.

Thank you, Tracy, and thank you all for joining the call. 2024 marked our fourth consecutive year of double-digit revenue growth and another yearly revenue record. Underlying that growth was market strength in retail apparel, general merchandise, and supply chain and logistics. Our infinite unit volumes grew 34% over 2023. Our top-line growth, combined with strong operating leverage and our favorable litigation settlement, drove record annual adjusted EBITDA and free cash flow. 2024 also ushered in two major market catalysts. First, start of item level food tech. Second, impinge Gen 2X, which dramatically expands the landscape of enterprise solutions we and our partners can deliver. The long-term secular tailwinds underlying our industry remain strong, and our leadership position in it is as strong as ever. That said, we faced headwinds at the end of the fourth quarter, that will spill into first. Cued political uncertainty in Paris, end users changing label partner share allocations, aggressive label price shopping, and shorter ordering cycles disrupted partner bookings. First quarter impact includes some partners having extra M.IC inventory and asking us to reschedule orders. Compounded by no large new programs ramping in first half 2025, we cannot sustain our prior 34% end-point SE unit volume growth pace in the first quarter. So, our focus is helping our inlay partners clear a few weeks of inventory and together navigating the geopolitical and tariff landscape. And through it all, using our best-in-class products, enterprise solutions leadership, and Gen2x to regain momentum and increase market share as we accelerate out of a disappointing first quarter. For 2025, we continue to anticipate solid industry rain label expansion, driven by growth in retail apparel, general merchandise, and supply chain and logistics, buoyed by modest but growing food volumes. Recent conversations with our enterprise and service bureau partners suggest that U.S. retail demand is solid. U.S. demand for rain labels is healthy and growing, and the EU, if not growing, is at least stable. Our eFamily Reader IC order book is strong across all large partners and geographies, bullying our belief that our first quarter endpoint IC headwinds are temporary. Turning to solutions, today we are directly engaged with two large grocery chains, one focused on perishables and the other on seamless self-checkout. Imagine grocery checkout as easy as today's apparel checkout at our visionary European retailer. In terms of potential end point AC volumes, both are larger than any program that has come before. And in terms of the overall opportunity, food is huge. One, if not both, of these enterprises may ramp in 2026. In general merchandise, the large North American retailers multi-category rollout continues, with compliance increasing quarterly and room to grow in 2025. In supply chain and logistics, second-large North American end-user increased their label volumes in 2024, and we expect modest growth in 2025 as they continue their autonomous reading journey using our e-family reader ICs. The visionary European retailers' ongoing rollout of our self-checkout and loss-prevention solution grew in the fourth quarter, driving strong gateway revenue, but will decline in the first quarter if that program completes successfully. That said, our opportunity in new RAIN-based use cases with them is far from over, including their ongoing embedded tagging ramp. In addition to our direct engagements, we have partners using our eFamily reader ICs and Gen2x to expand existing use cases, like loss prevention, and enable previously challenging use cases, like always-on overhead reading in retail stores. Those partner engagements further expand our platform's footprint and create multiple NFWC share gain opportunities for us. Our December launch of Gen2x was a bellwether event for our industry. Gen2x dramatically enhances the performance and security of rain systems. The response from our ecosystem has been overwhelming, with our top six reader partners already deploying Gen2x and others, including prior competitors, working with us to deliver clear benefits to end users. Gen2x is embedded natively in our M800, so unlocking it simply requires reader enablement. Gen2x enables smaller, more cost-effective M800 inlays for most use cases, but especially for cosmetics, accessories, and food, adding to our recurring InfluenIC opportunity. We already have multiple enterprises piloting and using Gen2x, with more on the way. On the organizational front, Jeff Gossett, our Chief Revenue Officer, announced his retirement after eight years at Impinj. Jeff, we will miss you, but know that we will continue your mission to build peerless solutions engineering and sales teams that leverage our platform to win into life Fortune 100 enterprises. Kahan Richardson, a seven-year Impinj veteran, we lead the sales organization. In closing, 2024 was another year of strong revenue growth and free cash flow. We delivered record adjusted EBITDA and earnings per share, successfully resolved our patent litigation and delivered market leading products and innovations. Looking forward, we see first quarter headwinds. But we have been through tough times before. Each time we press our competitive advantages to emerge a stronger company in a stronger market position. This time we are better positioned with a far more seasoned team than we have ever been to do so. 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. Before I turn the call over to Kerry for our financial review and first quarter outlook, I'd like to again thank every member of the Impinj team for your constant effort driving our bold vision. As always, I feel honored by my incredible good fortune to work with you. Terry?