Retail volumes grew modestly in anticipation of the upcoming holiday season, with a cautious outlook. Third-quarter is expected to be the peak for supply chain, logistics, and retail endpoint IC volumes, followed by a modest decline in the fourth quarter. Partner channel inventory remains healthy, with a slight decrease in the third quarter. Reader IC revenue met expectations in the third quarter, with a rich e-family mix. However, conservative ordering by Chinese partners is expected to lower revenue in the fourth quarter.
Longer-term growth is expected in the e-family segment, with multiple overhead reading deployments leveraging Gen2X technology. Strong third-quarter revenue was led by lighthouse accounts in solutions. Significant reader revenue was seen in the third quarter, but a step-down is expected in the fourth quarter due to project phasing. Despite stretched timelines, end users continue to seek help with business challenges, driving the need for software solutions.
Gen2X is a key focus, offering customization opportunities for retail loss prevention, supply chain logistics, and other applications. The flexibility of Gen2X has enabled solutions for various market verticals and use cases. The company is enhancing Gen2X for food and e-commerce applications, introducing differentiated endpoint ICs to address key market demands. The food sector presents a significant opportunity, with deployments driving pallet, case, and item-level tagging solutions.
The company is well-positioned for market expansion, with a focus on retail, supply chain, logistics, food, and other applications. Gen2X technology and software solutions are driving revenue growth, adjusted EBITDA, and market leadership. The company is investing in technical and business talent to develop software solutions and capitalize on recurring revenue opportunities. The recent addition of Arthur Valdez to the board brings expertise in global supply chain and logistics operations, enhancing the company’s vision of connecting everything.
Third-quarter revenue was $96.1 million, down 2% sequentially. Endpoint IC revenue was $78.8 million, down 7% sequentially. Systems revenue was $17.3 million, up 30% sequentially. Third-quarter gross margin was 53%, primarily driven by licensing revenue. Operating expenses were $31.8 million, with an increase expected in the fourth quarter. Adjusted EBITDA was $19.1 million, with a margin of 19.8%. GAAP net loss was $12.8 million, while non-GAAP net income was $17.7 million.
The company expects fourth-quarter revenue between $90 million and $93 million, with adjusted EBITDA between $15.4 million and $16.9 million. Non-GAAP net income is expected to be between $14.7 million and $16.2 million. The company continues to focus on driving growth in key sectors and leveraging its technology and software solutions for market expansion. Future opportunities in food, e-commerce, and other applications are expected to drive revenue growth and market leadership.
Read more at Yahoo Finance: Impinj (PI) Q3 2025 Earnings Call Transcript