Impinj Q3 Revenue Rises 17% on Endpoint IC Growth

Impinj (NASDAQ: PI) reported third-quarter 2026 revenue of $112.1 million, up 17% from $96.1 million a year earlier, as stronger endpoint IC sales more than offset lower systems revenue. The RAIN RFID technology provider also returned to GAAP profitability, posting net income of $4.7 million compared with a $12.8 million loss in the prior-year quarter.

Endpoint IC revenue, the company’s largest revenue source, increased 23% year over year to $97.3 million and was slightly above the $96.4 million recorded in the second quarter. Systems revenue, which includes reader ICs, readers, gateways, label production systems and software, fell 14% from a year earlier to $14.8 million, although it rose from $12.0 million sequentially.

Profitability Improves From Prior Year

GAAP gross margin reached 52.8%, compared with 50.3% in the third quarter of 2025. Non-GAAP gross margin was 54.9%, up from 53.0% a year earlier but below 60.9% in the second quarter. The second-quarter figure benefited by 7.3 percentage points from $17 million of licensing revenue, according to the presentation.

GAAP diluted earnings were $0.15 per share, reversing a loss of $0.44 per share a year earlier. The year-over-year improvement also reflected a decline in induced conversion expense to $1.8 million from $15.0 million. Stock-based compensation increased to $16.1 million from $14.6 million.

On a non-GAAP basis, net income rose to $22.1 million from $17.7 million, while diluted earnings increased to $0.69 per share from $0.58. Adjusted EBITDA was $24.5 million, compared with $19.1 million in the prior-year period, though it declined from $30.7 million in the second quarter.

Research and development spending continued to rise. GAAP R&D expense increased to $30.6 million from $25.7 million a year earlier, while non-GAAP R&D reached $21.5 million, up from $17.8 million.

Cash Generation and Strategic Priorities

Impinj generated $25.6 million in operating cash flow during the quarter and spent $5.0 million on property and equipment, resulting in free cash flow of $20.6 million. That compared with free cash flow of $18.0 million a year earlier. Free cash flow for the 12 months ended September 30 totaled $65.6 million.

The company had $228.3 million in cash and investments and $191.0 million of convertible debt as of September 30, 2026. Impinj described its manufacturing model as scalable and asset-light.

Management’s strategy remains centered on developing whole-platform solutions for large “lighthouse” enterprises, using those deployments to win endpoint IC business and then working with partners to extend similar solutions to other customers. The company is focusing on retail, supply chain and logistics, and food applications, while seeking recurring revenue through cloud services and offerings such as its Authenticity Solution Engine.

The presentation did not provide quantitative forward guidance. Impinj estimated that RAIN technology connected more than 42 billion items in 2025, representing about 0.4% of items it considers connectable. The company said its own endpoint IC shipment volume grew 9% in 2025.

Future performance remains subject to uncertainties including enterprise adoption of RAIN technology, the timing and success of new products and capabilities, silicon wafer and reader-component availability, and the enforceability of the company’s intellectual property rights. Impinj also cautioned that its non-GAAP measures are supplemental to GAAP results and may not be comparable with similarly named measures used by other companies.