美國
證券交易委員會
華盛頓特區20549
表格
截至2024年6月30日季度結束
為過渡期從 至 。
委員會檔案編號：
（依憑章程所載的完整登記名稱）
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(依據所在地或其他管轄區) |
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(國稅局雇主識別號碼) |
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(總部辦公地址) |
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（郵政編碼） |
註冊人的電話號碼，包括區號：(
根據法案第12(b)條規定註冊的證券：
每種類別的名稱 |
交易標的 |
每個註冊交易所的名稱 |
請以選項中的勾選表示登記公司是否：（1）在過去12個月內已根據1934年證券交易法第13條或第15(d)條的規定提交了應當提交的所有報告（或者在登記公司需要提交這些報告的更短時間內）；以及（2）過去90天內一直受到此類提交要求的要求。
請以勾選表示，證明申報人在過去12個月內（或申報人所需提交該等檔案的較短期間內）已按照Regulation S-t第405條要求提交每一個互動式資料檔案。
請勾選指示登記者是否為大型快速提交人、快速提交人、非快速提交人、較小的報告公司或新興成長型公司。請參閱交易所法規120億2條，了解「大型快速提交人」、「快速提交人」、「較小的報告公司」和「新興成長型公司」的定義。
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加速歸檔人 |
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非加速歸檔人 |
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小型報告公司 |
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新興成長型企業 |
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如果一家新興成長公司，請打勾表示申請人已選擇不使用根據交易所法第13(a)條提供的任何新的或修訂的財務會計準則的擴展過渡期遵守。 ☐
請勾選表示登記者是否為外殼公司（根據交易所法第120億2條定義）。 是 ☐ 否
截至2024年10月11日,
impinj inc
第10-Q表格季報告
表格 內容
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頁面 |
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3 |
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项目1。 |
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4 |
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4 |
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8 |
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9 |
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项目2。 |
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19 |
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项目3。 |
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29 |
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项目4。 |
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30 |
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项目1。 |
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31 |
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项目1A。 |
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31 |
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项目2。 |
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49 |
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项目3。 |
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49 |
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项目4。 |
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49 |
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项目5。 |
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49 |
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第6項。 |
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50 |
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51 |
2
日sk因子摘要
我們的業務受到許多風險和不確定性的影響，包括本報告中標題為“風險”一節中所強調的那些。
因素。這些風險包括但不限於以下:
3
第一部分 — 金融關聯信息
條目1。 財務報表（未經查核）。附註（未經查核）。
impinj inc
簡明綜合賬目表縮編平衡表
（以千為單位，除每股面值外，未經審計）
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2024年9月30日 |
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2023年12月31日 |
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資產： |
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流動資產: |
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現金及現金等價物 |
$ |
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$ |
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短期投資 |
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應收帳款淨額 |
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存貨 |
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預付費用及其他流動資產 |
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全部流動資產 |
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長期投資 |
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— |
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物業及設備，扣除折舊後淨值 |
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無形資產，扣除累計攤銷 |
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營運租賃權使用資產 |
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其他非流動資產 |
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商譽 |
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資產總額 |
$ |
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$ |
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負債及股東權益： |
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流動負債： |
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應付賬款 |
$ |
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$ |
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應計報酬及員工相關福利 |
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應計負債及其他流動負債 |
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營運租賃負債的流動部分 |
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長期債務的當期償還 |
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— |
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已逾期的收益當前部分 |
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流動負債合計 |
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長期負債 |
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扣除當期償還後之經營租賃負債淨額 |
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递延所得税负债，净额 |
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透過分期收入取得的未來收入，减去当前部分 |
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總負債 |
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股東權益： |
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優先股，面額$0.01，授權股數為5,000,000股，發行且流通股數為截至2024年6月30日和2023年12月31日之184,668,188股和181,364,180股。 |
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0.01 |
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資本公積額額外增資 |
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其他綜合收益累計額 |
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累積虧損 |
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股東權益總額 |
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負債總額及股東權益合計 |
$ |
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$ |
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請參閱簡明合併基本報表附註。
4
impinj inc
綜合財務報表摘要綜合損益表
(以千為單位，除每股數據外，未經審核)
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截至9月30日的三個月 |
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截至9月30日的九個月 |
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2024 |
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2023 |
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2024 |
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2023 |
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營業收入 |
$ |
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$ |
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$ |
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$ |
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營業成本 |
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毛利潤 |
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營業費用： |
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研發費用 |
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銷售和市場推廣費用 |
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總務與行政 |
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無形資產攤銷 |
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重組成本 |
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— |
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— |
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營業費用總計 |
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營運虧損 |
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其他收益，淨額 |
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訴訟和解所得 |
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— |
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— |
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利息費用 |
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稅前收入（虧損） |
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( |
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所得稅效益（費用） |
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( |
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凈利潤（損失） |
$ |
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$ |
( |
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$ |
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$ |
( |
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每股基本稀釋後凈收益（損失） |
$ |
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$ |
( |
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$ |
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$ |
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每股稀釋後凈收益（損失） |
$ |
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$ |
( |
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$ |
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$ |
( |
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基本每股流通股數加權平均 |
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稀釋每股流通股數加權平均 |
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請參閱簡明合併基本報表附註。
5
impinj inc
綜合收益（損失）縮減綜合財務報表綜合收益（損失）簡明綜合財務報表
（以千為單位，未經審計）
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截至九月三十日止三個月， |
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截至九月三十日止九個月 |
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2024 |
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2023 |
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2024 |
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2023 |
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淨收入（虧損） |
$ |
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$ |
( |
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$ |
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$ |
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其他綜合收益（虧損）（除稅）： |
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投資未實現收益（虧損） |
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外幣轉換調整 |
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其他綜合收益總額（虧損） |
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( |
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綜合收益（虧損） |
$ |
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$ |
( |
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$ |
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$ |
( |
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請參閱簡明合併基本報表附註。
6
impinj inc
綜合財務報表摘要現金流量表
（以千為單位，未經審計）
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截至9月30日的九個月 |
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2024 |
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2023 |
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營業活動： |
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凈利潤（損失） |
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$ |
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$ |
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調整淨損失為經營活動提供的淨現金流量： |
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折舊與攤提 |
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股份報酬 |
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股權重組變動費用 |
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— |
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投資折價增值或償還溢價 |
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( |
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( |
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債務發行成本攤銷 |
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推遲所得稅費用 |
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( |
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( |
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收購相關條件負債重估 |
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— |
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營運資產和負債變動，扣除取得金額淨額： |
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應收帳款 |
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( |
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存貨 |
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( |
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預付費用及其他資產 |
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( |
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應付賬款 |
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( |
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應計報酬及員工相關福利 |
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( |
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應計利益及其他負債 |
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收購相關的待定對價負債 |
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( |
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— |
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營運租賃權使用資產 |
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營業租賃負債 |
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( |
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逐步認列的收入 |
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營運活動之淨現金提供（使用）量 |
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投資活動： |
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投資購買 |
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來自投資銷售收入 |
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— |
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債券到期收回之現金增加額 |
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產銷土地及設備款項 |
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— |
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購買無形資產 |
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— |
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( |
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購買不動產和設備 |
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( |
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業務收購淨現金收入 |
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— |
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( |
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投資活動提供的（使用的）淨現金 |
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( |
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融資活動: |
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行使期權和員工股票購買計劃所得 |
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支付相關收購條件的款項 |
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( |
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籌資活動提供的淨現金 |
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匯率變動對現金及現金等價物的影響 |
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( |
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現金及現金等價物的淨增加（減少） |
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( |
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現金及現金等價物 |
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期初 |
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期末 |
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$ |
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$ |
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現金流量附註： |
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支付利息的現金 |
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尚未支付的固定資產和設備購買 |
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由取得ROU資產產生之營運租賃負債 |
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— |
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由重新衡量ROU資產產生之租賃負債 |
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— |
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— |
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收購相關條件考慮負債 |
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— |
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請參閱簡明合併基本報表附註。
7
impinj inc
股東權益變動表簡明合併財務報表
（以千為單位，未經審計）
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累計 |
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額外的 |
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其他 |
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總計 |
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普通股 |
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實收資本 |
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累計 |
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綜合 |
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股东权益 |
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股份 |
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金額 |
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資本 |
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赤字累計 |
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收入（損失） |
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股權 |
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2023年12月31日餘額 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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發行普通股股票 |
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— |
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— |
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股份報酬 |
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— |
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— |
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— |
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— |
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股權重組變動費用 |
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— |
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— |
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— |
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— |
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凈利潤 |
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— |
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— |
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— |
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— |
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其他全面損失 |
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— |
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— |
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— |
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— |
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|
|
( |
) |
|
|
( |
) |
2024年3月31日止結餘 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
發行普通股股票 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股份報酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
凈利潤 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
其他全面損失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
2024年6月30日餘額 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
發行普通股股票 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股份報酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
凈利潤 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
其他綜合收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
2024年9月30日結餘 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
累計 |
|
|
|
|
||||||
|
|
|
|
|
|
|
|
額外的 |
|
|
|
|
|
其他 |
|
|
總計 |
|
||||||
|
|
普通股 |
|
|
實收資本 |
|
|
累計 |
|
|
綜合 |
|
|
股东权益 |
|
|||||||||
|
|
股份 |
|
|
金額 |
|
|
資本 |
|
|
赤字累計 |
|
|
收入（損失） |
|
|
股權 |
|
||||||
2022年12月31日結餘 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
發行普通股股票 |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
股份報酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
淨損失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
其他綜合收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
2023年3月31日結束餘額 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
發行普通股股票 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股份報酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
淨損失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
普通股票發行，用於Voyantic收購（附註4） |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
其他綜合收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
2023年6月30日結餘 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
發行普通股股票 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股份報酬 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
淨損失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
其他全面損失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
截至2023年9月30日的結餘 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
請參閱簡明合併基本報表附註。
8
impinj inc
縮寫財務報表備註基本報表
（未經審計）
附註1. 重大會計政策摘要
報告基礎
附帶的簡明綜合基本報表包括Impinj, Inc.及其全資附屬公司。我們在合併時排除了公司間的餘額和交易。我們根據美國通用會計原則（"GAAP"）和美國證券交易委員會（"SEC"）的適用規則和法規編製了這些簡明綜合基本報表，關於中期財務報告。按照這些規則和法規的規定，一些通常包含在按照GAAP編製的財務報表中的資訊和附註披露已被縮短或省略。因此，這些中期簡明綜合基本報表應與Impinj, Inc.截至2023年12月31日的年度報告形式Form 10-k中包含的經審計合併財務報表和附帶的附註一起閱讀，該報告已於2024年2月12日提交給SEC。
根據管理層的意見，未經審計的簡明綜合中期財務報表反映了包括正常重複性調整在內的所有調整，以公正陳述我們財務狀況，營業成果和我們所呈現的現金流量的期間。中期結果未必代表全年結果或任何未來期間的結果。
估計的使用
知識產權許可
在2024年3月13日，我們與恩智浦公司（"恩智浦"）簽訂了一項解決方案和專利交叉許可協議（“解決協議”）。根據解決協議，恩智浦進行了一次性支付$
我們認定從授權使用功能性知識產權（例如上述討論的解決協議）獲得的營業收入，在控制權轉移給客戶的時候，一般是在交貨時，或者隨著使用發生。有關與恩智浦的解決協議的詳細內容，請參見附註6「承諾和條款」。
最近發布的會計準則尚未採納
在2023年11月，FASB發布了ASU 2023-07《分部報告（主題280）：改進報告性分部披露》，通過增強有關重要分部支出的披露，包括對具有單一報告分部的上市公司。該標準適用於2023年12月31日後開始的財政年度和2024年12月31日後開始的財政年度內的中期時段。我們目前正在評估該標準對我們基本報表披露的影響。
2023年12月，FASB發布了ASU 2023-09《所得稅（主題740）：改善所得稅披露》，修改了所得稅披露要求，以提高基本報表用戶數的透明度和決策有用性。此標準自2024年12月31日後開始的財政年度起生效。我們目前正在評估此標準對我們的基本報表披露是否有任何影響。
9
附註 2. 公平值衡量
會計標準將公平值定義為在衡量日期當天，在主要或最有利市場上在市場參與者之間進行有秩序交易時將獲得以賣出資產或支付以轉讓負債（退出價）的價格。標準還建立了一個公平值層次結構，要求實體在衡量公平值時最大程度地利用可觀察的輸入，並最小化使用不可觀察的輸入。可能用於衡量公平值的輸入有三個級別：
截至2024年9月30日，我們沒有任何處於第3級的金融資產或負債，並且截至2023年12月31日，只有與Voyantic Oy收購相關的收益訴求負債處於第3級。我們將此負債歸類為第3級，因為我們使用了重要不可觀察的輸入來確定公平值。
我們在估計我們的公平值衡量時採用了以下方法和假設：
現金等價物 — Cash equivalents comprise highly liquid investments, including money market funds with original maturities of less than three months at the acquisition date. We record the fair value measurement of these assets based on quoted market prices in active markets.
投資 — Our investments comprise fixed income securities, which include U.S. government agency securities, corporate notes and bonds, commercial paper, treasury bills and asset-backed securities. The fair value measurement of these assets is based on observable market-based inputs or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
長期債務 — See Note 7 for the carrying amount and estimated fair value of the Notes.
待定先決條件 — The contingent consideration liability is related to our acquisition of Voyantic Oy (see Note 4: Goodwill and Intangible Assets). We paid the contingent consideration amount of $
以下表格展示了按照公允價值反覆進行評估的資產和負債餘額，按公允價值層次內的水平，截至提供的日期（以千元計）。
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||||||||||||||||||||||||||
|
|
一級 |
|
|
二級 |
|
|
等級 3 |
|
|
總計 |
|
|
一級 |
|
|
二級 |
|
|
等級 3 |
|
|
總計 |
|
||||||||
現金等價物： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
貨幣市場基金 |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||||
美國國債 |
|
|
|
|
|
7,973 |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
商業本票 |
|
|
|
|
|
30,815 |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
現金等價物總額 |
|
|
|
|
|
38,788 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
短期投資： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
美國政府機構證券 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
美國國債 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
洋基債券 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
代理機構債券 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
資產支持證券 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
$ |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
商業本票 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
短期投資總額 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
長期投資： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
美國政府機構證券 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
美國國債 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
$ |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
總長期投資 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
總計 |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
收購相關的條件性負債 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
公平價值的總負債 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
10
以下表格提供了有關負債的額外信息，根據公司使用Level 3數據來判斷公允價值（以千為單位）。
|
|
截至9月30日的九個月 |
|
|
|
|
2024 |
|
|
1月1日的餘額 |
|
$ |
|
|
由於再評估，應變價項下可變債負債的公允價值變化 |
|
|
|
|
已支付的應變債負債款項 |
|
|
( |
) |
截至9月30日之餘額 |
|
$ |
|
|
在收購日期，我們使用不可觀察的數據記錄了與Voyantic Oy收購有關的應變債負債的公允價值，並使用了Monte Carlo模擬期權定價框架，包括有關財務預測、折扣率和預測營業收入和毛利的合同條款和假設。制定和判定Level 3公允價值測量和公允價值計算的不可觀察數據是管理層的責任，並得到第三方估值專家的協助。在2024年第二季度，我們支付了應變債負債，截至2024年9月30日，應變債負債的金額為$
截至2023年12月31日，應付的條件性考量負債為$
我們預計短期投資將在報告日後的1年內到期，長期投資將在1至3年內到期。詳見附註7關於我們可轉換債券到期的攜帶金額和估計公允價值的情況
投資
下表列出按照表示日期（以千位）列出我們財務資產的成本或攤銷成本，毛未實現收益，毛未實現虧損和總估計公允價值
|
2024年9月30日 |
|
|||||||||||||
|
成本或 |
|
|
毛額 |
|
|
毛額 |
|
|
Total Estimated |
|
||||
|
攤銷後成本 |
|
|
未實現收益 |
|
|
未實現虧損 |
|
|
公平價值 |
|
||||
描述： |
|
|
|
|
|
|
|
|
|
|
|
||||
貨幣市場基金 |
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
美國政府機構證券 |
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
美國國債 |
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
$ |
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
商業本票 |
|
|
|
|
|
|
|
— |
|
|
|
|
|||
總計 |
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
|
2023年12月31日 |
|
|||||||||||||
|
Cost or |
|
|
毛額 |
|
|
毛額 |
|
|
總估計 |
|
||||
|
攤銷後成本 |
|
|
未實現收益 |
|
|
未實現虧損 |
|
|
公平價值 |
|
||||
描述： |
|
|
|
|
|
|
|
|
|
|
|
||||
貨幣市場基金 |
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||
美國政府機構證券 |
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
美元債券型 |
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
機構債券型 |
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
資產支持證券 |
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
||
總計 |
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
||
持有不足12個月的可轉讓證券估計公允價值為 〔數字〕 美元的連續虧損
11
N注3. 庫存
下表提供截至所示日期的庫存明細（以千計）：
|
|
|
|
|
|
|
||
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||
原材料 |
|
$ |
|
|
$ |
|
||
在製品 |
|
|
|
|
|
|
||
成品 |
|
|
|
|
|
|
||
19,782 |
|
$ |
|
|
$ |
|
||
注4. 商譽和無形資產
在2023年4月3日，我們以總購買價格$收購了Voyantic Oy的所有股份。
收購相關的交易費用爲$
本次收購對我們報告的營業收入或淨損失金額沒有重大影響，因此我們沒有提供歷史和備考披露。
商譽代表購買價格超過採用購買法會計處理的企業合併中獲得的淨資產公允價值的部分。
|
|
截至9月30日的九個月 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
期初餘額 |
|
$ |
|
|
$ |
|
||
收購新增 |
|
|
— |
|
|
|
|
|
外幣兌換調整 |
|
|
|
|
|
( |
) |
|
10,500,000 |
|
$ |
|
|
$ |
|
||
截至 截至2024年9月30日，無形資產包括以下內容（以千計）:
|
|
預計使用年限爲幾年 |
|
總賬面價值 |
|
|
累計攤銷 |
|
|
淨值 |
|
|||
有限壽命的無形資產： |
|
|
|
|
|
|
|
|
|
|
|
|||
未完成訂單 |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
||
客戶關係 |
|
|
|
|
|
|
( |
) |
|
|
— |
|
||
開發的科技 |
|
|
|
|
|
|
( |
) |
|
|
|
|||
專利 |
|
|
|
|
|
|
( |
) |
|
|
|
|||
商標 |
|
|
|
|
|
|
( |
) |
|
|
|
|||
總的有限壽命無形資產 (1) |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
(1) 外國無形資產的賬面價值受外幣換算的影響 |
|
|||||||||||||
我們按直線法在其使用年限內對可識別的有形資產進行攤銷。我們無形資產的加權平均使用年限約爲
12
截至 截至2024年9月30日，預計未來五年及以後的無形資產攤銷費用如下：
|
|
預計攤銷 |
|
|
|
|
(以千爲單位) |
|
|
2024 |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
然後 |
|
|
|
|
總計 |
|
$ |
|
|
注意 5. 股票獎勵
限制性股票單位
我們授予具有服務控件的限制性股票單位（"RSUs"）和具有市場和服務控件的RSUs（"MSUs"）。
下表總結了RSUs和MSUs的活動情況 2024年9月30日止九個月內的活動情況（以千爲單位）：
|
|
|
基礎股票數量 |
|
|||||
|
|
|
限制性股票單位(RSUs) |
|
|
MSUs |
|
||
2023年12月31日未行使的股票期權 |
|
|
|
|
|
|
|
||
已授予 |
|
|
|
|
|
|
|
||
歸屬 |
|
|
|
( |
) |
|
|
( |
) |
被取消 |
|
|
|
( |
) |
|
|
( |
) |
截至2024年9月30日爲止尚未行使 |
|
|
|
|
|
|
|
||
股票補償費用
下表列出了在我們所呈現的合併損益表中包含的股票薪酬費用的詳細信息（以千爲單位）：
|
截至9月30日的三個月 |
|
|
截至9月30日的九個月 |
|
||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
營收成本 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
研發費用 |
|
|
|
|
|
|
|
|
|
|
|
||||
銷售和營銷費用 |
|
|
|
|
|
|
|
|
|
|
|
||||
一般和行政費用 |
|
|
|
|
|
|
|
|
|
|
|
||||
總股權補償費用 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
13
附註6：承諾和不確定事項
有關我們的承諾和或有事項的信息，請參見我們截至2023年12月31日的10-k表年度報告的第二部分，第8項（基本報表及補充數據，第12條，承諾與或有事項）。除下面討論的「與第三方的義務」和「訴訟」外，我們截至2023年12月31日的10-k表年度報告中所披露的承諾和或有事項沒有重大變化。
與第三方的義務
我們與第三方製造商生產產品。我們承諾購買 $
訴訟
不時，我們會面臨各種法律程序或索賠，這些都是在正常的業務過程中產生的。當管理層相信我們已承擔責任的可能性很大，並且可以合理估計損失金額時，我們會計提負債。截至2024年9月30日和2023年12月31日。我們未識別任何重大的非暫時性減值損失。減值損失已包括在其他收入（費用）淨額中，在綜合利潤表中。請參閱註釋2，以了解其他收入（費用）淨額的詳細信息。
專利侵權索賠及反訴
impinj對恩智浦的專利侵權索賠
從2019年到2023年，我們與主要的終端IC競爭對手恩智浦半導體公司（NXP Semiconductors N.V.，或稱恩智浦）進行了積極的專利訴訟。在此期間，我們在加利福尼亞和德克薩斯的聯邦法院對恩智浦的子公司提起了三起專利侵權訴訟。我們的投訴聲稱某些恩智浦的終端IC侵犯了我們的多項美國專利。作爲回應，恩智浦在特拉華州的聯邦法院對我們提起訴訟，後轉至華盛頓州，並在德克薩斯州對我們進行反訴，同時對我們在中國的子公司提起了三起訴訟。恩智浦的投訴聲稱我們某些終端IC侵犯了他們自己的多項美國或中國專利，或是他們從第三方獨家授權的美國專利，以對我們進行主張。
到2023年，我們在這些訴訟中獲勝。在2023年進行的三次美國審判中，加利福尼亞和德克薩斯的陪審團裁定，恩智浦的終端IC侵犯了我們獲得審理的五項專利，而華盛頓和德克薩斯的陪審團裁定我們沒有侵犯恩智浦在法庭上指控我們侵犯的三項專利。此外，在2023年，恩智浦撤回了對我們在中國提起的所有三起案件。
在2024年3月13日，當時中國和德克薩斯的其他審判待決，而中國和美國的審判後動議和上訴也在進行中，我們和恩智浦達成了和解協議。根據該協議，我們和恩智浦同意終止並撤回所有待決的訴訟，互相解除在2024年3月31日之前所有專利侵權索賠，並授予彼此非獨佔的、全球性的專利許可，以製造、讓製造、進口、使用、出售和賣出各自的產品和服務，受協議條款的限制。和解協議將在大約十年的時間內有效，直到一組指定的impinj專利（「指標專利」）的所有有效索賠到期。任何一方可以在另一方實質性違約協議條款時終止和解協議，如果恩智浦成功設計出所有指標專利的有效索賠，也可以終止和解協議。
根據和解協議，恩智浦向我們支付了一次性金額 $
我們將和解協議的對價分配給和解協議的各個元件。我們在2024年第一季度的簡明合併運營報表中記錄了 $
14
注意事項 7. 開多期債務
可轉換資本性債券
在2021年11月，我們發行了$
下表列出了截至所示日期的2021年債券的未償本金金額和賬面價值（單位：千）:
|
|
2024年9月30日 |
|
|
2023年12月31日 |
|
||||||||||||||||||
|
|
本金金額 |
|
|
尚未攤銷的債務發行費用 |
|
|
淨賬面價值 |
|
|
本金金額 |
|
|
尚未攤銷的債務發行費用 |
|
|
淨賬面價值 |
|
||||||
2021年票據 |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
2021年票據的進一步細節如下：
發行 |
|
到期日 |
|
利率 |
|
首次利息支付日期 |
|
有效利率 |
|
半年度利息支付日期 |
|
每1000美元本金的初始兌換率 |
|
初始轉換價格 |
|
|
股份數量（以百萬爲單位） |
|
2021年票據 |
|
|
|
|
|
|
|
$ |
|
|
||||||||
|
||||||||||||||||||
2021年票據是優先無擔保義務，不包含任何財務契約，受契約（契約）的約束。扣除初始債務發行成本、費用和支出後的2021年票據的總淨收益爲$
2021年債券條款
2021年票據的持有者可以選擇在任何時間，將其相應的2021年票據轉換，直到各自的轉換日期前的最後一個業務日，前提是滿足以下情況：
如果我們普通股的最後報告銷售價格至少爲
在某些情況下，在與構成根本變更的特定公司事件相關的情況下轉換其2021年票據的持有人，有權要求提高轉換比例。此外，在構成根本變更的公司事件發生時，2021年票據的持有人可以要求我們以等於的回購價格回購其全部或部分2021年票據。
15
我們的普通股超過了
與票據相關的利息支出如下（以千計）：
|
|
截至9月30日的三個月 |
|
|
截至9月30日的九個月 |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
2021 年注意事項 |
|
|
2021 年注意事項 |
|
|
2021 年注意事項 |
|
|
2021 年注意事項 |
|
||||
債務發行成本的攤銷 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
現金利息支出 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
利息支出總額 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
截至2024年9月30日和2023年12月31日與2021年票據相關的應計利息s $
我們估計2021年票據的公允價值爲 $
通話上限
在發行2019年票據方面，我們與某些金融交易對手進行了私下談判的上限看漲期權交易。上限看漲期權交易通常旨在減少2019年票據轉換或結算時我們普通股的潛在攤薄，或抵消我們在轉換2019年票據時需要支付的超過本金的任何現金支付 請注意，視情況而定，減免或抵消的上限取決於上限價格。但是，如果我們普通股的每股市場價格超過上限看漲期權交易的上限價格，那麼我們的股票將經歷一定的稀釋和/或上限看漲期權將無法完全抵消潛在的現金支付，在每種情況下，只要我們普通股的每股市場價格超過上限價格。儘管我們已經回購了2019年票據，但上限看漲期權仍未兌現。上限看漲交易的初始上限價格爲美元
16
注意8。每股淨利潤（損失）
對於所呈現的時期，以下表格提供了計算基本每股和稀釋每股淨利潤（損失）所使用的分子和分母的調解（以千爲單位，除每股數額外）：
|
|
截至9月30日的三個月 |
|
|
截至9月30日的九個月 |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
分子： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
淨利潤（損失） |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
利息增加部分 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
歸屬於普通股股東的淨利潤（損失） |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
分母： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
基本稀釋的加權平均普通股份在外流通 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
稀釋效應爲： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
股票計劃 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
2021年票據 |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
稀釋的加權平均普通股份在外流通 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
每股基本淨利潤（虧損） |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
每股攤薄淨利潤（虧損） |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
基本每股淨收益（虧損）是使用我們的淨利潤（虧損）和我們的加權平均未償的普通股股份計算的。
擴展每股淨收益（虧損）是使用歸屬於普通股股東的淨利潤（虧損），根據如轉換方法下適用於我們可轉債的利息費用再加回，如具有稀釋效應的情況下，以及我們加權平均未償的普通股份包括股權獎勵和員工股票購買計劃股份的稀釋效應，根據庫存方法確定情況和我們的可轉債使用如轉換方法下的影響，如果具有稀釋效應。在我們確認淨損失的時期，我們從每股虧損中排除尚未履行的股權獎勵和與我們的可轉債相關的潛在股份結算影響，因爲它們的包含會對稀釋效應產生作用。
以下表格展示了我們的普通股等價物中被排除在稀釋每股淨收益（虧損）計算之外的未償股份，截至提供日期，因爲它們的影響會造成反稀釋效應（以千計）：
|
|
截至9月30日的三個月 |
|
|
截至9月30日的九個月 |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
股票期權 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
RSUs，MSUs和PSUs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
員工股票購買計劃股票 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
2021年票據 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
注 9. 段 部 信息
我們有
我們的首席執行官審查有關我們的營業收入類別、終端集成電路，包括許可收入，以及定義爲讀取集成電路、讀取器、網關、測試和測量解決方案以及軟件和雲服務的系統的信息。
|
截至9月30日的三個月 |
|
|
截至9月30日的九個月 |
|
||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
端點集成電路 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
系統 |
|
|
|
|
|
|
|
|
|
|
|
||||
總營業收入 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
17
N注10. 遞延收入
遞延收入，包括對延長保修、增強產品維修和非經常性工程（"NRE"）服務合同的預付款項的單獨不重要金額，代表尚未確認的合同收入。我們確認了 $
下表展示了所指期間遞延收入的變化（以千計）：
|
截至9月30日的九個月 |
|
|||||
|
2024 |
|
|
2023 |
|
||
期初餘額 |
$ |
|
|
$ |
|
||
來自Voyantic收購的期初餘額 |
|
— |
|
|
|
|
|
收入遞延 |
|
|
|
|
|
||
認定的遞延收入 |
|
( |
) |
|
|
( |
) |
期末餘額 |
$ |
|
|
$ |
|
||
備註11. 關聯方交易
2023年6月23日，我們從一家關聯方收購了一項專利，該關聯方的董事會成員擔任行政領導職務。 該專利涉及我們的端點IC產品，收購價格爲$。 該專利包含在指示專利中，有效期至2026年7月17日，沒有續約權。 該專利包含在我們的無形資產中，截至財務報表日的合併資產負債表上
注12. 重組
2024年2月7日，我們啓動了一項戰略重組，以使財務、業務和研發目標與長期增長對齊，包括裁員，影響約
截至2024年9月30日的累積重組成本摘要如下表所示（單位：千）：
|
|
2024年9月30日結束的九個月 |
|
|
重組成本 |
|
$ |
|
|
非現金支付 |
|
|
( |
) |
現金支付 |
|
|
( |
) |
截至2024年9月30日的累計重組費用 |
|
$ |
— |
|
18
項目2。 管理層的討論與分析 財務狀況和經營業績。
本報告包含根據《1933年證券法》第27A條和《1934年證券交易法》第21E條修訂的某些前瞻性陳述。包含「可能」、「相信」、「預期」、「期望」、「打算」、「計劃」、「項目」、「預測」、「業務展望」、「估計」或類似表達的陳述構成前瞻性陳述。您應仔細閱讀這些陳述，因爲它們討論未來預期，包含未來運營或財務狀況的預測或陳述其他「前瞻性」信息。這些陳述涉及我們的未來計劃、目標、預期、意圖和財務表現以及支撐這些陳述的假設。它們包括但不限於關於以下內容的陳述：
我們的實際結果可能與任何前瞻性聲明中包含的或暗示的結果有實質性差異。可能導致或有助於這些差異的因素包括本報告中以下以及其他地方討論的因素，包括第二部分第1A項（風險因素）中討論的因素。
考慮到這些前瞻性聲明中固有的重大不確定性和風險，您不應將這些聲明視爲我們或其他任何人會在任何特定時間範圍內，或根本上，實現我們的目標和計劃的陳述或保證，也不應將其視爲未來事件的預測。此外，我們或其他任何人都不對前瞻性聲明的準確性和完整性承擔責任。我們沒有義務公開更新任何前瞻性聲明，無論是由於新信息、未來事件還是其他原因，除非法律要求。
我們的業務
我們的願景是創造一個每個企業製造、運輸和銷售的物品，以及每個人擁有、使用和回收的物品，都會無線且普遍地連接到雲端的世界。並且在這個世界中，這些物品的所有權、歷史和關聯信息能夠無縫地提供給企業和個人。我們稱這個廣泛的願景爲無限的物聯網，或稱爲物聯網。我們設計並銷售一個平台，使得無線物品與雲端的連接成爲可能，讓我們和我們的合作伙伴在物聯網解決方案上進行創新。
截至目前，我們已連接了超過1000億個物品，爲零售商、供應鏈和物流、餐廳和食品服務提供商、航空公司、汽車製造商、醫療保健公司等提供物品可見性，並提高了運營效率。我們今天致力於將物品連接從數百億擴展到數萬億，並將物品數據不僅傳送給企業，也傳送給個人，使他們也能從其連接的物品中獲得價值。我們相信我們正在啓用的無限Iot將在不久的將來使人們普遍訪問每個物品的基於雲的數字孿生體，每個數字孿生體都存儲物品的歷史和關聯信息，幫助人們探索和學習有關物品的信息。我們相信，這種連接將改變世界。
我們與合作伙伴生態系統一起構建項目可見性解決方案，使用我們設計的產品，這些產品我們要麼出售，要麼許可，包括硅RAIN無線電；製造、測試、編碼和讀取系統，軟件和雲服務， encapsulate我們的解決方案知識和知識產權。我們賣出兩種類型的硅集成電路，或稱IC，無線電。第一種是存儲序列號的端點IC，用於無線識別物品。我們的合作伙伴將端點IC嵌入物品或其包裝中。這些IC還可能包含一個加密密鑰來驗證物品的真實性。第二種是讀取IC，我們的合作伙伴在成品讀取器中使用，以無線發現、清點和交互端點IC。這些讀取器還可以保護物品或消費者，例如通過驗證物品的真實性或通過在消費者首先提供密碼之前使端點IC無響應來使物品私密化。我們的製造、測試和編碼系統使合作伙伴的產品得以實現並促進企業的部署。我們的讀取
19
系統由高性能成品閱讀器和網關組成，提供自主閱讀解決方案。我們的軟件和雲服務專注於解決方案的實現。
我們賣出我們的產品，可以單獨出售，也可以作爲一個完整平台提供，主要通過我們的合作伙伴生態系統。該生態系統包括原始設備製造商（OEM）、標籤服務局、原始設備製造商（ODM）、系統集成商（SI）、增值轉售商（VAR）、獨立軟件供應商（ISV）和其他解決方案合作伙伴。
我們的硅基無線電遵循RAIN行業板塊的空氣接口標準，以實現其核心功能。我們通過在產品中增加差異化功能，並在整個平台上支持或許可這些功能，從而爲我們的無線電和解決方案創造合作伙伴和企業的偏好，以提供超越競爭對手產品組合的解決方案能力和性能。
影響我們業績的因素
庫存供應
我們的營業收入大部分來自我們的合作伙伴嵌入在企業產品中的終端集成電路，因此受宏觀經濟趨勢的影響。此外，我們大部分產品，包括終端集成電路和系統，都是通過合作伙伴和分銷商銷售的，這限制了我們對企業需求的可見性。我們與這些合作伙伴和分銷商密切合作，以儘可能準確地了解情況，但準確預測我們的產品需求並及時識別市場變化仍然是一個挑戰。因此，我們有時會經歷庫存過剩或短缺。庫存過剩會增加費用，使我們面臨產品過時和/或增加儲備的風險，並對我們的業務產生負面影響。庫存短缺可能導致長交貨期、錯失機會、市場份額損失和/或客戶關係受損，這同樣會對我們的業務產生負面影響。
在2021年和2022年，我們端點IC需求增加，而全球晶圓需求也增加，導致許多半導體公司面臨晶圓短缺，包括我們。這些晶圓短缺阻止了我們完全滿足客戶需求，在一些情況下導致客戶取消訂單，選擇備選供應商或從我們的競爭對手購買。在2023年，宏觀經濟狀況導致需求萎縮和庫存過剩。
產品採用和單位增長率
企業在零售服裝、我們最大的市場和SC&L方面已經大力採用RAIN技術，但採用率和單位增長率一直不平穩和不可預測。2010年至2023年，我們整體端點IC銷量以26%的複合年增長率增長；然而，在不同時期我們經歷了不均勻的增長率。
儘管零售行業的步伐不均，SC&L及其他行業的採用和增長率各不相同，但我們相信長期趨勢是持續的RAIN採用和增長，我們打算在可預見的未來繼續投資於開發新產品和擴展我們的產品線。然而，我們無法預測歷史年度增長率是否代表未來增長的速度。
我們的系統業務，至少對於閱讀器和網關，顯著依賴於在獨立最終用戶處的大規模部署，並且部署時機導致我們的系統營業收入在每年之間有很大的波動。例如，我們在2019年從一個大型美國SC&L供應商的網關部署中產生了14%的總營業收入。我們在2020年沒有類似的項目收入。同樣，在2021年第二季度，我們從一個大型位於歐洲的全球零售商的基於RAIN的自助結賬和損失防範項目收入中產生了13%的營業收入。在2022年、2023年或2024年前三季度，我們沒有類似的項目收入。
季節性和定價
我們通常在日曆年第一季度與大多數終端IC OEM進行定價談判。過去，此談判通常導致第一季度的營業收入和毛利較之前時期有所減少，隨後在我們降低成本並通過將這些OEM和最終用戶轉移到更新、成本更低的產品來調整產品組合的情況下，在隨後的季度得以恢復正常。
IC終端用戶數量在第四季度通常低於第三季度。 系統銷售額在第四季度往往較高，在第一季度較低，這可能是因爲在許多最終用戶財政年度結束之前，對資本支出的剩餘資金可供使用。
我們在2023年沒有看到這些季節性趨勢。我們確實預計，由於宏觀經濟條件的變化和項目啓動的時間，營業收入在季度之間會繼續波動，這可能會影響未來的季節性趨勢。
20
業務運營結果
下表呈現了我們所報告的期間內的經營結果：
|
|
截至9月30日的三個月 |
|
|
截至9月30日的九個月 |
|
||||||||||||||||||
(以千爲單位，除了百分比) |
|
2024 |
|
|
2023 |
|
|
變化 |
|
|
2024 |
|
|
2023 |
|
|
變化 |
|
||||||
收入 |
|
$ |
95,198 |
|
|
$ |
65,005 |
|
|
$ |
30,193 |
|
|
$ |
274,518 |
|
|
$ |
236,888 |
|
|
$ |
37,630 |
|
毛利潤 |
|
$ |
47,569 |
|
|
$ |
30,768 |
|
|
$ |
16,801 |
|
|
$ |
142,633 |
|
|
$ |
118,112 |
|
|
$ |
24,521 |
|
毛利率 |
|
|
50.0 |
% |
|
|
47.3 |
% |
|
|
2.7 |
% |
|
|
52.0 |
% |
|
|
49.9 |
% |
|
|
2.1 |
% |
營業損失 |
|
$ |
(769 |
) |
|
$ |
(15,834 |
) |
|
$ |
15,065 |
|
|
$ |
(3,456 |
) |
|
$ |
(28,645 |
) |
|
$ |
25,189 |
|
截至2024年9月30日的三個月與截至2023年9月30日的三個月相比
營業收入和毛利潤增加，主要是由於終端IC營業收入增加，部分抵消了較低的系統營業收入。終端IC營業收入增加主要是由於終端IC出貨量比去年同期增加。系統營業收入下降，主要是由於出貨量下降。毛利率增加主要是由於當前年度的庫存過剩和過時費用較去年同期減少。營業虧損減少，主要是由於毛利潤增加，部分抵消了營業費用增加。營業費用增加是由於研發成本增加，部分抵消了一般和管理費用、銷售和營銷費用以及無形資產攤銷費用的降低。
截至2024年9月30日的九個月與截至2023年9月30日的九個月相比
營業收入和毛利潤增加，主要是由於終端IC營業收入的增加，部分抵消了系統營業收入的下降。與去年同期相比，終端IC營業收入的增加主要是由於許可收入以及終端IC的出貨量增加。系統營業收入下降，主要是由於出貨量減少。毛利率提高，主要得益於高毛利的許可收入貢獻。營業損失下降，主要是由於毛利潤增加和營業費用略有減少。營業費用的減少主要是由於一般和行政費用、銷售與市場費用以及無形資產攤銷的降低，部分被研發和重組費用的增加抵消。
收入
|
|
截至9月30日的三個月 |
|
|
截至9月30日的九個月 |
|
||||||||||||||||||
(以千爲單位) |
|
2024 |
|
|
2023 |
|
|
變化 |
|
|
2024 |
|
|
2023 |
|
|
變化 |
|
||||||
端點集成電路 |
|
$ |
80,966 |
|
|
$ |
48,592 |
|
|
$ |
32,374 |
|
|
$ |
231,864 |
|
|
$ |
180,546 |
|
|
$ |
51,318 |
|
系統 |
|
|
14,232 |
|
|
|
16,413 |
|
|
|
(2,181 |
) |
|
|
42,654 |
|
|
|
56,342 |
|
|
|
(13,688 |
) |
總營業收入 |
|
$ |
95,198 |
|
|
$ |
65,005 |
|
|
$ |
30,193 |
|
|
$ |
274,518 |
|
|
$ |
236,888 |
|
|
$ |
37,630 |
|
我們目前幾乎所有的營業收入都來自於終端集成電路、讀卡器集成電路、讀卡器、網關、測試和測量解決方案以及許可的銷售。我們主要將終端集成電路和測試測量解決方案賣給內嵌製造商；我們的讀卡器集成電路主要通過分銷商賣給OEM和ODM；而我們的讀卡器和網關則主要通過分銷商賣給解決方案提供商、增值經銷商和系統集成商。我們預計，終端集成電路的銷售將在可預見的未來佔據我們營業收入的大部分。
截至2024年9月30日的三個月與截至2023年9月30日的三個月相比
終端IC的營業收入增加了3240萬美元，主要由於出貨量增加了3820萬美元，部分被由於產品組合導致的每單位平均銷售價格降低580萬美元所抵消，並且在較小程度上受到對舊產品的短期價格激勵影響。
系統收入減少220萬美元，主要是由於出貨量減少。 閱讀器和網關的收入分別減少了100萬美元和290萬美元，而非經常性工程收入減少了40萬美元。 這些減少部分被閱讀器 IC 和測試測量解決方案收入分別增加了150萬美元和60萬美元抵消。
21
Nine months ended September 30, 2024 compared with nine months ended September 30, 2023
Endpoint IC revenue increased $51.3 million due to a $54.5 million increase in shipment volumes and a $15.0 million increase in licensing revenue that did not occur in the prior-year period, partially offset by a $18.2 million decrease in ASP due primarily to product mix shift, and to a lesser extent, short-term pricing incentives on legacy products.
Systems revenue decreased by $13.7 million due primarily to a decrease in shipment volumes. Reader and gateway revenues decreased $7.9 million and $8.2 million, respectively, and nonrecurring engineering revenue decreased $0.8 million. These decreases were partially offset by an increase of $3.5 million from test and measurement solutions revenue.
Gross Profit and Gross Margin
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands, except percentages) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Cost of revenue |
|
$ |
47,629 |
|
|
$ |
34,237 |
|
|
$ |
13,392 |
|
|
$ |
131,885 |
|
|
$ |
118,776 |
|
|
$ |
13,109 |
|
Gross profit |
|
|
47,569 |
|
|
|
30,768 |
|
|
|
16,801 |
|
|
|
142,633 |
|
|
|
118,112 |
|
|
|
24,521 |
|
Gross margin |
|
|
50.0 |
% |
|
|
47.3 |
% |
|
|
2.7 |
% |
|
|
52.0 |
% |
|
|
49.9 |
% |
|
|
2.1 |
% |
Cost of revenue includes costs associated with manufacturing our endpoint ICs, reader ICs, readers, gateways and test and measurement solutions, including direct materials and outsourced manufacturing costs as well as associated overhead costs such as logistics, quality control, planning and procurement. Cost of revenue also includes charges for excess and obsolescence and warranty costs. Our gross margin varies from period to period based on the mix of endpoint IC and systems; underlying product margins driven by changes in mix, ASPs or costs; as well as from inventory excess and obsolescence charges.
Three months ended September 30, 2024 compared with three months ended September 30, 2023
Gross profit increased, due primarily to increased endpoint IC revenue, partially offset by decreased systems revenue. Gross margin increased, due primarily to lower excess and obsolescence charges compared to the prior-year period.
Nine months ended September 30, 2024 compared with nine months ended September 30, 2023
Gross profit increased, due primarily to increased endpoint IC revenue partially offset by decreased systems revenue. Gross margin increased, due primarily to high-margin licensing revenue recognized in the year that did not occur in the prior year.
Operating Expenses
Research and Development
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Research and development |
|
$ |
25,492 |
|
|
$ |
21,588 |
|
|
$ |
3,904 |
|
|
$ |
72,935 |
|
|
$ |
67,426 |
|
|
$ |
5,509 |
|
Research and development expense comprises primarily personnel expenses (salaries, benefits and other employee related costs) and stock-based compensation expense for our product-development personnel; product development costs which include external consulting and service costs, prototype materials and other new-product development costs; and an allocated portion of infrastructure costs which include occupancy, depreciation and software costs. We expect research and development expense to increase in absolute dollars in future periods as we continue to focus on new product development and introductions.
Three months ended September 30, 2024 compared with three months ended September 30, 2023
Research and development expense increased $3.9 million, due primarily to increases of $2.8 million in personnel expenses related to higher bonus achievement; $1.4 million in stock-based compensation expense primarily related to increased outstanding equity grants; and $0.3 million in infrastructure costs; partially offset by a decrease of $0.6 million in product development costs due to timing.
22
Nine months ended September 30, 2024 compared with nine months ended September 30, 2023
Research and development expense increased $5.5 million, due primarily to increases of $6.1 million in personnel expenses from higher bonus achievement and higher headcount; $2.7 million in stock-based compensation expense primarily related to increased outstanding equity grants; and $1.0 million in infrastructure costs; partially offset by a decrease of $4.1 million in product development costs due to timing.
Sales and Marketing
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Sales and marketing |
|
$ |
9,888 |
|
|
$ |
10,073 |
|
|
$ |
(185 |
) |
|
$ |
29,891 |
|
|
$ |
30,678 |
|
|
$ |
(787 |
) |
Sales and marketing expense comprises primarily personnel expenses (salaries, incentive sales compensation, or commission, benefits and other employee-related costs) and stock-based compensation expense for our sales and marketing personnel; travel, advertising and promotional expenses; and an allocated portion of infrastructure costs which include occupancy, depreciation and software costs.
Three months ended September 30, 2024 compared with three months ended September 30, 2023
Sales and marketing expense was comparable for the periods with offsetting fluctuations. Personnel expenses decreased resulting from a decrease in headcount, which was offset by higher bonus achievement and commissions.
Nine months ended September 30, 2024 compared with nine months ended September 30, 2023
Sales and marketing expense decreased $0.8 million, due primarily to decreases of $0.6 million in personnel expenses resulting from a decrease in headcount, partially offset by higher bonus achievement and commissions.
General and Administrative
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
General and administrative |
|
$ |
12,452 |
|
|
$ |
13,532 |
|
|
$ |
(1,080 |
) |
|
$ |
39,040 |
|
|
$ |
45,098 |
|
|
$ |
(6,058 |
) |
General and administrative expense comprises primarily personnel expenses (salaries, benefits and other employee related costs) and stock-based compensation expense for our executive, finance, human resources and information technology personnel; legal, accounting and other professional service fees; travel and insurance expense; and an allocated portion of infrastructure costs which include occupancy, depreciation and software costs.
Three months ended September 30, 2024 compared with three months ended September 30, 2023
General and administrative expense decreased $1.1 million, due primarily to a decrease of $3.8 million in professional services related to legal fees. This decrease was partially offset by increases of $1.5 million in personnel expenses related to higher bonus achievement and $1.0 million in stock compensation expense related to increased outstanding equity grants.
Nine months ended September 30, 2024 compared with nine months ended September 30, 2023
General and administrative expense decreased $6.1 million, due primarily to a decrease of $12.3 million in professional services related to legal fees and transaction expenses in the current year. This decrease was offset by an increase of $3.5 million in personnel expenses from higher bonus achievement, higher headcount and higher taxes associated with equity vesting, and an increase of $2.4 million in stock-based compensation expense, from increased outstanding equity grants.
Amortization of Intangibles
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Amortization of intangibles |
|
$ |
506 |
|
|
$ |
1,409 |
|
|
$ |
(903 |
) |
|
$ |
2,411 |
|
|
$ |
3,555 |
|
|
$ |
(1,144 |
) |
23
2024年9月30日結束的三個月，與2023年9月30日結束的三個月相比
無形資產攤平減少了90萬美元。這個減少與我們於2023年4月3日收購Voyantic Oy時所獲得的無形資產有關。某些獲得的無形資產的使用年限不足1年，導致前一年期間攤銷費用增加。
截至2024年9月30日的九個月與截至2023年9月30日的九個月相比
無形資產攤銷額減少110萬美元。該減少與我們於2023年4月3日收購Voyantic Oy時所獲得的無形資產有關。某些獲得的無形資產壽命不足1年，導致上一年度週期的攤銷費用增加。
重組成本
|
|
截至九月三十日止三個月， |
|
|
截至九月三十日止九個月 |
|
||||||||||||||||||
(以千計) |
|
2024 |
|
|
2023 |
|
|
變更 |
|
|
2024 |
|
|
2023 |
|
|
變更 |
|
||||||
重組成本 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,812 |
|
|
$ |
— |
|
|
$ |
1,812 |
|
2024年9月30日結束的三個月，與2023年9月30日結束的三個月相比
截至2024年和2023年9月30日三個月，沒有進行重組費用。
截至2024年9月30日的九個月與截至2023年9月30日的九個月相比
重組成本增加與我們在2024年2月7日發起的重組相關。詳情請參見第12條注釋《重組》。
其他收入，凈利潤
|
|
截至九月三十日止三個月， |
|
|
截至九月三十日止九個月 |
|
||||||||||||||||||
(以千計) |
|
2024 |
|
|
2023 |
|
|
變更 |
|
|
2024 |
|
|
2023 |
|
|
變更 |
|
||||||
其他收入淨額 |
|
$ |
2,416 |
|
|
$ |
1,090 |
|
|
$ |
1,326 |
|
|
$ |
5,830 |
|
|
$ |
3,620 |
|
|
$ |
2,210 |
|
其他收入，主要包括我們短期投資的利息收入。
2024年9月30日結束的三個月，與2023年9月30日結束的三個月相比
其他收入, 淨值由於投資餘額增加和利率期貨提高而增加。
截至2024年9月30日的九個月與截至2023年9月30日的九個月相比
其他收入, 淨值由於投資餘額增加和利率期貨提高而增加。
訴訟和解所得
|
|
截至九月三十日止三個月， |
|
|
截至九月三十日止九個月 |
|
||||||||||||||||||
(以千計) |
|
2024 |
|
|
2023 |
|
|
變更 |
|
|
2024 |
|
|
2023 |
|
|
變更 |
|
||||||
訴訟解決收入 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
45,000 |
|
|
$ |
— |
|
|
$ |
45,000 |
|
2024年9月30日結束的三個月，與2023年9月30日結束的三個月相比
截至2024年9月30日和2023年，訴訟收入為零。
24
截至2024年9月30日的九個月與截至2023年9月30日的九個月相比
訴訟和解所得的收入增加，與2024年3月13日與NXP的和解協議相關。有關更多詳情，請參見附註6《承諾和條件》。
利息費用
|
|
截至九月三十日止三個月， |
|
|
截至九月三十日止九個月 |
|
||||||||||||||||||
(以千計) |
|
2024 |
|
|
2023 |
|
|
變更 |
|
|
2024 |
|
|
2023 |
|
|
變更 |
|
||||||
利息支出 |
|
$ |
1,219 |
|
|
$ |
1,213 |
|
|
$ |
6 |
|
|
$ |
3,652 |
|
|
$ |
3,633 |
|
|
$ |
19 |
|
利息費用主要由我們的債務上的現金利息和債務發行成本攤銷組成。
2024年9月30日結束的三個月與2023年9月30日結束的三個月相比
期間內利息費用大致相當。
2024年9月30日結束的九個月與2023年9月30日結束的九個月相比
期間內利息費用大致相當。
所得稅費用
|
|
截至九月三十日止三個月， |
|
|
截至九月三十日止九個月 |
|
||||||||||||||||||
(以千計) |
|
2024 |
|
|
2023 |
|
|
變更 |
|
|
2024 |
|
|
2023 |
|
|
變更 |
|
||||||
所得稅優惠（費用） |
|
$ |
(207 |
) |
|
$ |
195 |
|
|
$ |
(402 |
) |
|
$ |
(194 |
) |
|
$ |
472 |
|
|
$ |
(666 |
) |
我們受美國聯邦和州政府所得稅以及國外司法管轄權所得稅的約束。與前一年的同期相比，截至2024年9月30日的三個月和九個月的所得稅支出分別增加了40萬美元和70萬美元，這是由於我們估計的有效稅率的變化。
非通用會計原則財務指標
我們的主要非依據通用會計準則的業績指標包括調整後的EBITDA和非通用會計淨利潤（損失），如下所定義。我們將調整後的EBITDA和非通用會計淨利潤（損失）作為評估我們核心業務表現和趨勢、準備和核准我們的年度預算以及制定短期和長期營運計劃的主要指標。我們認為這些指標提供了有用的資訊，以便進行業務的期間對期間比較，讓投資者和其他人能夠理解和評估我們的營運成果，就像我們的管理層和董事會一樣。我們呈獻這些非通用會計財務指標，並不意味著要單獨考慮，或作為取代根據通用會計原則準備的財務結果，而我們的非通用會計指標可能與其他公司使用的同類非通用會計指標不同。
25
調整後的稅前利潤減除折舊及攤銷後的費用
我們將調整後的EBITDA定義為根據美國通用會計原則確定的凈利潤（損失），排除了適用於所示期間的股票酬勞成本影響；折舊和攤銷；重整成本；和解收入及相關成本；誘使轉換費用；其他收入，淨額；利息費用；收購相關費用和相關購買會計調整；以及所得稅效益（費用）。截至2023年12月31日的年度，我們修改了調整後的EBITDA定義，以排除與我們Voyantic Oy收購相關的費用，相關的購買會計調整和無形資產攤銷。截至2024年3月31日的三個月，我們進一步修改了調整後的EBITDA定義，以排除和解收入。我們排除了這些項目，因為我們認為它們不反映我們的核心運營，而我們排除它們使我們更能一致地評估我們的營運績效。我們的調整後的EBITDA定義修訂並未對以前報告期的調整後EBITDA產生影響，因為在此前期間並未影響可比性的類似性質。
The following table presents a reconciliation of net loss to adjusted EBITDA:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Net income (loss) |
|
$ |
221 |
|
|
$ |
(15,762 |
) |
|
$ |
15,983 |
|
|
$ |
43,528 |
|
|
$ |
(28,186 |
) |
|
$ |
71,714 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other income, net |
|
|
(2,416 |
) |
|
|
(1,090 |
) |
|
|
(1,326 |
) |
|
|
(5,830 |
) |
|
|
(3,620 |
) |
|
|
(2,210 |
) |
Interest expense |
|
|
1,219 |
|
|
|
1,213 |
|
|
|
6 |
|
|
|
3,652 |
|
|
|
3,633 |
|
|
|
19 |
|
Income tax expense (benefit) |
|
|
207 |
|
|
|
(195 |
) |
|
|
402 |
|
|
|
194 |
|
|
|
(472 |
) |
|
|
666 |
|
Depreciation and amortization |
|
|
3,247 |
|
|
|
3,668 |
|
|
|
(421 |
) |
|
|
10,155 |
|
|
|
9,734 |
|
|
|
421 |
|
Stock-based compensation |
|
|
14,841 |
|
|
|
12,307 |
|
|
|
2,534 |
|
|
|
41,336 |
|
|
|
35,679 |
|
|
|
5,657 |
|
Restructuring costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,812 |
|
|
|
— |
|
|
|
1,812 |
|
Acquisition related expense |
|
|
— |
|
|
|
4 |
|
|
|
(4 |
) |
|
|
986 |
|
|
|
1,676 |
|
|
|
(690 |
) |
Purchase accounting adjustments |
|
|
— |
|
|
|
112 |
|
|
|
(112 |
) |
|
|
— |
|
|
|
388 |
|
|
|
(388 |
) |
Income on settlement of litigation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(45,000 |
) |
|
|
— |
|
|
|
(45,000 |
) |
Adjusted EBITDA |
|
$ |
17,319 |
|
|
$ |
257 |
|
|
$ |
17,062 |
|
|
$ |
50,833 |
|
|
$ |
18,832 |
|
|
$ |
32,001 |
|
Non-GAAP Net Income (Loss)
We define non-GAAP net income as net income (loss), excluding, if applicable for the periods presented, the effects of stock-based compensation; depreciation and amortization; restructuring costs; settlement income and related costs; induced conversion expense; acquisition related expense and related purchase accounting adjustments; and the corresponding income tax impacts of adjustments to net income (loss).
During the year ended December 31, 2023, we revised our definition of non-GAAP net income to adjust for acquisition related expenses, related purchase accounting adjustments and amortization of intangibles in connection with our Voyantic Oy acquisition. During the three months ended March 31, 2024, we further revised our definition of non-GAAP net income to exclude settlement income. The revisions to our definition of non-GAAP net income did not impact non-GAAP net income for any previously reported periods because there was no impact of a similar nature in such prior periods affecting comparability.
Additionally, during the year ended December 31, 2023, we revised our definition of non-GAAP net income (loss) to adjust for income tax effects of adjustments to net income (loss), calculated at the statutory rate for current and historical periods. We have revised the prior period amounts to conform to our current period presentation.
26
The following table presents a reconciliation of net loss to non-GAAP net income (loss):
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Change |
|
|
2024 |
|
|
2023 |
|
|
Change |
|
||||||
Net income (loss) |
|
$ |
221 |
|
|
$ |
(15,762 |
) |
|
$ |
15,983 |
|
|
$ |
43,528 |
|
|
$ |
(28,186 |
) |
|
$ |
71,714 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization |
|
|
3,247 |
|
|
|
3,668 |
|
|
|
(421 |
) |
|
|
10,155 |
|
|
|
9,734 |
|
|
|
421 |
|
Stock-based compensation |
|
|
14,841 |
|
|
|
12,307 |
|
|
|
2,534 |
|
|
|
41,336 |
|
|
|
35,679 |
|
|
|
5,657 |
|
Restructuring costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,812 |
|
|
|
— |
|
|
|
1,812 |
|
Acquisition related expense |
|
|
— |
|
|
|
4 |
|
|
|
(4 |
) |
|
|
986 |
|
|
|
1,676 |
|
|
|
(690 |
) |
Purchase accounting adjustments |
|
|
— |
|
|
|
112 |
|
|
|
(112 |
) |
|
|
— |
|
|
|
388 |
|
|
|
(388 |
) |
Income on settlement of litigation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(45,000 |
) |
|
|
— |
|
|
|
(45,000 |
) |
Income tax effects of adjustments (1) |
|
|
(1,410 |
) |
|
|
(207 |
) |
|
|
(1,203 |
) |
|
|
(4,434 |
) |
|
|
(1,990 |
) |
|
|
(2,444 |
) |
Non-GAAP net income |
|
$ |
16,899 |
|
|
$ |
122 |
|
|
$ |
16,777 |
|
|
$ |
48,383 |
|
|
$ |
17,301 |
|
|
$ |
31,082 |
|
(1) The tax effects of the adjustments are calculated using the statutory rate, taking into consideration the nature of the item and relevant taxing jurisdiction. |
|
|||||||||||||||||||||||
Liquidity and Capital Resources
As of September 30, 2024, we had cash, cash equivalents and short-term investments of $170.3 million, comprising cash deposits held at major financial institutions and short-term investments in a variety of securities, including U.S. government securities, treasury bills, corporate notes and bonds, commercial paper, and money market funds. As of September 30, 2024, we had working capital of $(2.0) million, down from $39.4 million as of June 30, 2024. The decrease was driven by purchases of long-term investments in third-quarter 2024.
Historically, we have funded our operations primarily through cash generated from operations and by issuing equity securities, convertible-debt offerings and/or borrowing under our prior senior credit facility.
We believe, based on our current operating plan, that our existing cash, cash equivalents and short-term investments will be sufficient to meet our anticipated cash needs for at least the next 12 months. Over the longer term, we plan to continue investing to enhance and extend our platform. If our available funds are insufficient to fund our future activities or execute our strategy, then we may raise additional capital through equity, equity-linked or debt financing, to the extent such funding sources are available. Alternatively, we may need to reduce expenses to manage liquidity; however, any such reductions could adversely impact our business and competitive position.
Sources of Funds
From time to time, we may explore additional financing sources and ways to reduce our cost of capital, including equity, equity-linked and debt financing. In addition, in connection with any future acquisitions, we may pursue additional financing which may be debt, equity or equity-linked financing or a combination thereof. We can provide no assurance that any additional financing will be available to us on acceptable terms.
2021 Notes
In November 2021, we issued convertible notes due 2027 in an aggregate principal amount of $287.5 million which we refer to as the 2021 Notes. The 2021 Notes are our senior unsecured obligation, bearing interest at a fixed rate of 1.125% per year, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2022. The 2021 Notes are convertible into cash, shares of our common stock or a combination thereof, at our election, and will mature on May 15, 2027 unless earlier repurchased, redeemed or converted in accordance with the indenture terms.
The net proceeds from the 2021 Notes were approximately $278.4 million after initial debt issuance costs, fees and expenses. We used approximately $183.6 million of the net proceeds to repurchase approximately $76.4 million aggregate principal amount of convertible notes due 2026, or the 2019 Notes, through individual privately negotiated transactions concurrent with the 2021 Notes offering. We used $17.6 million to repurchase the remaining $9.85 million aggregate principal of the 2019 Notes through individual privately negotiated transactions in June 2022. We will use the rest of the net proceeds for general corporate purposes.
For further information on the terms of this debt, please refer to Note 7 to our condensed consolidated financial statements included elsewhere in this report.
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Cash Flows
The following table shows a summary of our cash flows for the periods indicated:
|
|
Nine Months Ended September 30, |
|
|||||
(in thousands) |
|
2024 |
|
|
2023 |
|
||
Net cash provided by (used in) operating activities |
|
$ |
115,687 |
|
|
$ |
(50,809 |
) |
Net cash provided by (used in) investing activities |
|
|
(148,705 |
) |
|
|
101,480 |
|
Net cash provided by financing activities |
|
|
11,897 |
|
|
|
7,890 |
|
Operating Cash Flows
For the nine months ended September 30, 2024, we generated $115.7 million of net cash from operating activities. These net cash proceeds were due primarily to $96.9 million of net income adjusted for non-cash items and $18.8 million in working capital due primarily to higher accounts payable, accrued compensation and lower inventory, partially offset by higher accounts receivable.
For the nine months ended September 30, 2023, we used $50.8 million of net cash from operating activities. This net cash usage was due primarily to $67.0 million in working capital due primarily to higher inventory and lower accounts payable and $16.2 million of net loss adjusted for non-cash items.
Investing Cash Flows
For the nine months ended September 30, 2024, we used $148.7 million of net cash from investing activities. This net cash usage was due to purchases of investments of $154.3 million, cash paid for equipment purchases of $13.0 million, partially offset by cash generated by investment maturities of $18.6 million.
For the nine months ended September 30, 2023, we generated $101.5 million of net cash from investing activities. These net cash proceeds were due primarily to investment maturities of $127.5 million and investment sales of $13.4 million, partially offset by cash paid for the Voyantic Oy acquisition of $23.4 million and net property and equipment purchases of $16.0 million.
Financing Cash Flows
For the nine months ended September 30, 2024, we generated $11.9 million of net cash from financing activities. These net cash proceeds were due to stock-option exercises and our employee stock purchase plan, offset by $4.6 million of cash paid for the earnout payment related to the Voyantic Oy acquisition.
For the nine months ended September 30, 2023, we generated $7.9 million of net cash from financing activities. These net cash proceeds were due primarily to $7.9 million from stock-option exercises and our employee stock purchase plan.
Cash Requirements and Contractual Obligations
Our primary cash requirements are for operating expenses and capital expenditures. Our operating expenses have generally increased as we invest in developing products and technologies that we believe have the potential to drive long-term business growth.
Convertible Notes – As of September 30, 2024 the principal balance outstanding on the 2021 Notes is $287.5 million. Refer to Note 7 of our Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for maturity date, stated interest rate and additional information on our 2021 Notes.
Operating Lease Obligations – Our lease portfolio comprises primarily operating leases for our office space. For additional information regarding our operating leases, see Note 11 of our Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2023.
Purchase Commitments – Purchase commitments as of September 30, 2024 total $32.9 million and comprise noncancelable commitments to purchase inventory.
Off-Balance-Sheet Arrangements
Since inception, we have not had any relationships with unconsolidated entities, such as entities often referred to as structured finance or special-purpose entities, or financial partnerships that would have been established for the purpose of facilitating off-balance-sheet arrangements or for another contractually narrow or limited purpose.
Critical Accounting Policies and Significant Estimates
We have prepared our condensed consolidated financial statements in accordance with GAAP. Our preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue,
28
expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates and assumptions. For information on our critical accounting policies and estimates, see Part II, Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of our Annual Report on Form 10-K for the year ended December 31, 2023.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risks in the ordinary course of our business.
Interest Rate Risk
Under our current investment policy, we invest our excess cash in money market funds, U.S. government securities, corporate bonds and notes and commercial paper. Our current investment policy seeks first to preserve principal, second to provide liquidity for our operating and capital needs and third to maximize yield without putting our principal at risk. We do not enter into investments for trading or speculative purposes.
We had cash, cash equivalents and short-term investments of $170.3 million as of September 30, 2024. Our investments are exposed to market risk due to fluctuations in prevailing interest rates, which may reduce the yield on our investments or their fair value. Because most of our investment portfolio is short-term in nature, we do not believe an immediate 10% increase in interest rates would have a material effect on the fair market value of our portfolio, and therefore we do not expect our results of operations or cash flows to be materially affected by a sudden change in market interest rates.
Our convertible notes have fixed interest rates, thus a hypothetical 100 basis point increase in interest rates would not impact interest expense.
Inflation Risk
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. To date, we have been able to substantially offset higher product costs by increasing our product selling prices. If our product costs became subject to significant future inflationary pressures, then we may not be able to fully offset these higher costs through price increases. Our inability or failure to do so could adversely affect our business, financial condition and results of operations.
29
Foreign Currency Exchange Risk
We are subject to risks associated with transactions that are denominated in currencies other than our functional currency and the effects of translating amounts denominated in a foreign currency to the U.S. dollar as a normal part of our reporting process. The functional currency of the majority of our foreign subsidiaries is the U.S. dollar. Accordingly, gains and losses resulting from remeasuring transactions denominated in currencies other than U.S. dollars are included in other income, net on the consolidated statements of operations. One of our European subsidiaries utilize Euros as their functional currency, which results in a translation adjustment that we include as a component of accumulated other comprehensive income. For any of the periods presented, we did not have material impact from exposure to foreign currency fluctuation. As we grow operations, our exposure to foreign currency risk will likely become more significant.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, including our chief executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. Disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures, our chief executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2024.
Changes in Internal Control over Financial Reporting
There were no changes that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the three months ended September 30, 2024.
Limitations on Controls
Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.
30
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
In the normal course of business, we may be named as a party to various legal claims, actions and complaints. We cannot predict whether any resulting liability will have a material adverse effect on our financial position, results of operations, cash flows, market position or stock price.
Item 1A. Risk Factors.
You should carefully consider the following risk factors, in addition to the other information contained in this report, including the section of this report captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes. If any of the events described in the following risk factors and the risks described elsewhere in this report occur, then our business, operating results and financial condition could be materially impacted. This report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements due to factors that are described below and elsewhere in this report.
Risks Relating to Our Platform, Products and Technologies
We operate in a very competitive market.
Our primary competitors are:
These competitors include companies that have much greater financial, operating, research and development, marketing and other resources than us. To gain market share, they could discount their products and accept lower margins, or they could maintain margins by achieving cost savings through better, more efficient designs or production methods. They could devote more resources than we can to product development, promotion, sales and support. They could also bundle other technologies, including those we do not have in our product portfolio, with their RAIN products.
Our partners, including our OEMs, ODMs, distributors, SIs, VARs and solution partners, may choose to compete with us rather than purchase our products, which would not only reduce our customer base but also increase competition in the market. Companies in adjacent markets or newly formed companies may decide to enter our market, particularly as RAIN adoption grows. Further, the Chinese government has made development of the Chinese semiconductor industry a priority, potentially increasing competition for us globally while possibly restricting our ability to participate in the Chinese market.
RAIN adoption is concentrated in key markets and the extent and pace of RAIN market adoption beyond those markets is uncertain.
Our financial performance depends on the pace of end-user RAIN adoption in key markets, such as retail apparel (our largest market), retail general merchandise and SC&L. Although RAIN has been adopted to some degree by end users in those markets, those end users as well as the markets themselves are subject to business cycles and macroeconomic trends. Continued RAIN adoption by those end users and in those markets may be at risk if and when negative business or economic conditions arise.
The RAIN opportunity is still developing. RAIN adoption, as well as adoption of our platform and products, depends on many factors, including the extent to which end users understand and embrace the benefits that RAIN offers; whether the benefits of RAIN adoption outweigh the cost and time to replace or modify end users’ existing systems and processes; and whether RAIN products and applications meet end users’ current or anticipated needs.
We have, at times, anticipated and forecasted a pace of end-user adoption that exceeded the actual pace of adoption. We expect continued difficulty forecasting the pace of adoption. As a result, we may be unable to accurately forecast our future operating results including revenue, gross margins, cash flows and—profitability, any or all of which could negatively impact our financial performance.
We must introduce new products, product enhancements and services to compete effectively.
31
We introduce new products and services to advance our business, satisfy increasingly demanding end-user requirements and grow RAIN market adoption. We commit significant resources developing and introducing these new products and services, and to improving the performance and reliability of, and reducing the costs of, our existing products and services.
Whether our new or enhanced products and services will succeed is uncertain. Our success developing the technologies, processes or capabilities necessary or desired for new or enhanced products and services, or licensing or otherwise acquiring them from third parties, and our ability to introduce new or enhanced products and services before our competition, depends on many factors, including:
When we introduce new products and services, our success in ramping adoption depends, in part, on us making those products and services easy for our partners and end users to deploy and use. For example, for our new M800-family endpoint ICs, we are currently significantly supporting our inlay partners to produce high-performing, high-quality inlays. Until our partners are able to deploy our products widely, adoption and our operating results could suffer.
Our ability to deliver enterprise solutions at scale are nascent.
We believe we are still at a very early stage in our ability to deliver enterprise solutions. We are developing solutions for retail self-checkout and loss prevention and SC&L package routing that have been, or that we expect to be, deployed by the industry-leading enterprise end users. However, to fully capitalize on our platform's potential, we must make our current offerings repeatable across multiple enterprises as well as deliver additional solutions to enterprise needs. We must also develop relationships with top-tier solution partners to gain access to and address challenging new use cases. If we do not succeed in identifying, developing, selling and deploying enterprise solutions, particularly solutions that rely on autonomous reading, with top-tier partners and end users and across a range of markets and use cases, then our business prospects will suffer.
Delivering enterprise solutions requires a network of partner products and services that complement our own product offerings and that together address enterprise needs. Convincing enterprises to partner with us to solve their business problems—including evaluation, design, deployment, operations and services, as well as integrating RAIN data into the enterprise's information systems—requires tight coordination among our and our partners' sales, marketing, operations and engineering teams. We, or our partners, may be unable to successfully acquire customers for our enterprise solutions, or successfully address our market opportunity. Although we have partners who can successfully introduce our platform, or aspects of it, to their customers, even today their knowledge of our platform and RAIN in general is often still nascent. If we do not build our network of solutions, and partners to deliver those solutions, and broaden our efforts to deliver solutions that leverage our platform in large, complex enterprise opportunities, then our business prospects will suffer.
We rely on endpoint IC sales to generate most of our revenue.
We derive, and expect to continue to derive, most of our revenue from our endpoint ICs. If demand declines, or if we are unable to procure enough wafers to meet the demand we have, or if we are unable to raise prices to offset cost increases, then our business and operating results will suffer. In addition, the continued adoption of, and demand for, our endpoint ICs, derives in part from us demonstrating the benefits of using our systems. If we fail to establish those benefits then we may be unsuccessful in countering competitive endpoint IC price pressures and our business and operating results could be adversely affected.
The average selling prices of our products could fluctuate substantially.
The average selling price, or ASP, of our products has historically decreased with time or to meet end-user demands, encourage adoption, address macroeconomic conditions or respond to competitive pressure. As demand for older products declines, or as competition from competitors with lower product costs or lower profitability expectations increases, or during times of oversupply, ASPs may decline quickly.
32
To compete profitably we must continually improve our technology and processes, reduce unit costs in line with lower selling prices, and introduce new, higher margin products. If we are unable to offset ASP reductions with increased sales volumes or reduced product costs, or if we are unable to introduce new products that command higher prices and better gross margins, then our overall revenue and gross margins will suffer.
Though less common, we have also increased prices from time to time, especially during times of increasing wafer costs. For example, we raised prices in 2021, 2022 and 2023 to accommodate higher costs. We may be required to raise prices again if macroeconomic conditions, including inflation, create upward pressure on our product costs. Increased prices could dampen adoption and market growth.
Pricing commitments and other restrictive provisions in our customer agreements could adversely affect our operating results.
In the ordinary course of our business, we enter into agreements containing pricing terms that could, in some instances, adversely affect our operating results and gross margins. For example, some contracts specify future IC, reader or gateway pricing or contain most-favored-customer pricing for certain products. Other agreements contain exclusivity terms that prevent us from pursuing certain business with other customers during the exclusivity period. Reducing prices or offering favorable terms to one customer could adversely affect our ability to negotiate favorable terms with other customers.
Changes in our product mix could adversely affect our overall gross margin.
Endpoint IC sales, which constitute and likely will continue to constitute the majority of our product revenue, have, for the most part, lower gross margins than our systems product sales. Our overall product gross margins are affected by product mix, which can fluctuate based on supply and demand, competitive pressures and end-user needs and demand. A shift in sales mix away from our higher margin products to lower margin products, either within our endpoint IC product portfolio or from our systems business to our endpoint ICs, could negatively affect our gross margins.
Poor product quality could result in significant costs to us and impair our ability to sell our products.
Our products must meet increasingly demanding specifications for quality, reliability and performance. Our products are both highly technical and deployed in large, complex systems in which errors, defects or incompatibilities can be problematic for our partners and end users.
If we are unable to identify or correct errors, defects, incompatibilities or other problems in our products, we could experience:
Moreover, if we encounter product quality issues, then we may be required to incur significant time and costs to diagnose, test and fix the issues. There can be no assurance that such remediation efforts would be successful. Even if successful, these efforts could further constrain our ability to supply our partners and end users with new products until we have resolved the issues.
End users and partners must design our products into their products and business processes.
Persuading end users or partners to design our products into their business processes or products requires educating them about RAIN’s and our products’ value. They may use other technologies or products and may not be receptive to introducing RAIN into their business processes or products. Even when convinced, they often undertake long pilot programs and qualifications prior to placing orders. These pilot programs and qualifications can be time-consuming and expensive, and there is no assurance they will
33
result in an order for our products. If we fail to develop new products that adequately or competitively address end users’ or our partners’ needs, then we may not receive product orders, which could adversely affect our business, prospects and operating results.
Our visibility into the length of the sales and deployment cycles for our products is limited.
We have limited visibility into end user sales and deployment cycles, and these cycles are often longer than we anticipate. Many factors contribute to our limited visibility, including the time our partners and end users spend evaluating our products, the time educating them on RAIN’s benefits and the time integrating our products with end users’ systems. The length and uncertain timing of the sales and deployment cycles can lead to delayed product orders. In anticipation of those orders, we may incur substantial costs before the sales cycle is complete and before we receive any customer orders or payments, if we receive them at all.
An inability or limited ability of end user systems to exploit RAIN information may adversely affect the market for our products.
A successful end-user deployment requires not only tags and readers or gateways, but RAIN integration with information systems and applications that create business value from the RAIN data. Unless third parties continue developing and advancing business analytics tools, and end users enhance their information systems to use these tools, RAIN deployments could stall. Our efforts to foster third-party development and deployment of these tools could fail. In addition, our guidance to business-analytics providers for integrating our products with their tools could prove ineffective.
Solution providers and SIs are essential to the RAIN market. They provide deployment know-how to enable end users to successfully deploy RAIN solutions. Integrating our products with end-user information systems could prove more difficult or time-consuming than we or they anticipate, which could delay deployments.
Alternative technologies may enable products and services that compete with ours.
Technology developments may affect our business negatively. Breakthroughs in legacy RFID technologies or markets, including those using low frequency or high frequency RFID technology, or in other radio technologies, could adversely affect RAIN market growth and demand for our products. Likewise, new technologies may enable lower-cost ICs than our products. If we are unable to innovate using new or enhanced technologies or are slow to react to changes in existing technologies or in the market, or if we have difficulty competing with advances in new or legacy technologies, then our development of new or enhanced products could be impacted and result in product obsolescence, decreased revenue and reduced market share.
Significant changes in RAIN standards bodies, standards or qualification processes could impede our ability to sell our products and services.
We have historically taken a leadership position in developing RAIN industry standards, including with GS1 and ISO, and have designed our products to comply with those standards. We could lose that leadership position; our influence in standards development could diminish; or we could choose not to participate in certain standards activities.
New or changed industry standards could affect us negatively. If industry standards diverge from our or the RAIN market’s needs, then our products may fail to keep pace with the market or cause end users to delay their deployments. Moreover, the adoption or expected adoption of new or changed standards could slow sales of our existing products before we can introduce new products that meet the new or changed standards. New standards or changes to existing standards could also limit our ability to implement new features in our products. The lost opportunities as well as time and expense to develop new products or change our existing products to comply with new or changed standards could be substantial, and we may not ultimately succeed in developing products that comply with the new or changed standards.
Certain organizations develop requirements for RAIN tags and test tags against those requirements. For example, the ARC Program at Auburn University develops tag performance and quality requirements for end users that engage them. Some participants in the RAIN market are ARC sponsors, but we are not among them. If ARC or a similar organization fails to certify or delays certifying tags incorporating our endpoint ICs, adoption and sales of our products could suffer.
Changes in government spectrum regulations or in their enforcement could adversely affect our ability to sell our products.
Our readers and gateways are collectively certified for use in more than 40 countries worldwide, including the United States, Canada, Mexico, China, Japan, South Korea and every country in the European Union, or the EU.
Our products operate in spectrum bands in which governments permit the use of RFID/RAIN technology. If spectrum regulations or the application or enforceability or such regulations should change, or if our products were found to be noncompliant despite being certified, we could need to redesign our products, potentially resulting in significant costs, including costs associated with obsolete inventory. Regulatory changes may also cause us to forego opportunities, adversely affecting our business.
In April 2024, NextNav Inc. asked the Federal Communications Commission, or the FCC, to initiate a proceeding that would consider whether to reconfigure the 902–928 MHz ISM spectrum, or Lower 900 MHz Band, in which RAIN and other unlicensed
34
services operate to enable a terrestrial backup to the U.S. Global Positioning System. To pay for the backup system, NextNav also asked for a license to use certain spectrum bands, including parts of the Lower 900 MHz Band used for RAIN operations, to deliver 5G broadband services. If approved as proposed, this ISM spectrum reconfiguration could interfere with RAIN radio transmissions and negatively impact the RAIN industry.
We and other RAIN providers and end users, as well as other Lower 900 MHz Band users, have already registered our opposition to NextNav’s petition and asked the FCC to reject it quickly. If the FCC declines to do so then we expect there to be a protracted decision-making process. The FCC would be required to consider all relevant comments and material of record before it decides whether to proceed with the proposal, issue a new or modified proposal, or take no action on the proposal. The fate of NextNav’s petition is uncertain at this time, but if the FCC were to adopt NextNav's proposal and customers were not able to consistently use our RAIN products without interference, then our business would be significantly and negatively affected.
Sales of some of our products could cannibalize revenue from other products.
Some of our partners develop products that compete with our products. For example, some of our OEM partners use our reader ICs to build and sell readers and gateways that compete with our readers and gateways. Similarly, some of our partners use our readers to build and sell gateways that compete with our gateways. If we fail to manage such conflicts successfully, then our business and operating results could be negatively affected.
Our licensing program is nascent.
While we believe we have valuable RAIN intellectual property and aspire to monetize that intellectual property by licensing it to third parties, including third parties who compete with us to some extent, our experience in doing so is nascent, and our ability to grow licensing revenue remains subject to numerous risks and uncertainties. To materially grow our licensing program and revenues, we will need to maintain and grow our intellectual property portfolio and continue to research and develop RAIN innovations that will generate and maintain demand for licenses to our technology and features. We will also need to develop and maintain an ability to monitor infringement of our intellectual property rights by others and possibly seek enforcement action against those who attempt to infringe our intellectual property rights. These enforcement actions could require significant investments in management time and attention as well as cash as we incur legal and other expenses. They could also compete with our objectives in other areas of our business such as wanting to maintain close, strategic relationships with important partners or end users of our products. These are just some of the risks and uncertainties we face with respect to our nascent licensing program.
We currently derive a substantial share of our licensing revenues from NXP, our primary endpoint IC competitor, based on our Settlement Agreement with them. For more information regarding the terms of our Settlement Agreement with NXP, please refer to Note 6 of our condensed consolidated financial statements included elsewhere in this report. If NXP were to breach its license payment obligations, or if NXP were to design around our intellectual property rights and exercise its right to terminate our license before the end of the agreement's 10-year term, our licensing revenues would decline and our overall results of operations and cash flows would suffer.
Risks Relating to Our Personnel and Business Operations
We obtain the products we sell through a limited number of third parties with whom we do not have long-term supply contracts.
Our ability to secure cost-effective, quality products in a timely manner could be adversely affected by many factors, including:
If our suppliers fail to manufacture our products at reasonable prices or with satisfactory quality levels, then our ability to bring those products to market and our reputation could both suffer. If supplier capacity diminishes, whether from equipment failures, closures, bankruptcy, capacity allocation, in response to public health events (such as Covid-19), catastrophic loss of facilities or otherwise, then we could have difficulty fulfilling orders, our revenue could decline and our growth prospects could be impaired. Transitioning our product manufacturing to new providers would take many months and, in the case of ICs, could take years. Any
35
transition would require a requalification by our customers or end users, which could also adversely affect our ability to sell our products as well as our operating results.
Shortages of silicon wafers, integrated-circuit (IC) post-processing capacity or components used in our readers and gateways may adversely affect our ability to meet demand for our products and adversely affect our revenue and/or gross margins.
Wafer shortfalls limit sales and may cause market-share losses. We expect wafer capacity in at least some of the semiconductor nodes we use to be tight for the foreseeable future. We procure wafers on a purchase-order basis, so our wafer supply is not guaranteed, and we may not receive adequate supply from our foundry partners when shortages occur.
Wafer shortages may also artificially increase bookings as customers over-order our products, and then cause sales declines as those customers consume their accumulated inventory. Additionally, if our suppliers charge us more but we are unable to raise our prices to cover those higher costs, our gross margins and other financial results could suffer.
Shortages of our silicon products can also occur due to post-processing constraints. To convert the wafers we receive from our foundry partner into saleable ICs, we perform additional steps including testing, thinning, bumping and dicing. If our third-party suppliers are unable to efficiently perform these steps, and our production capacity is constrained as a result, we may be unable to satisfy demand for our products and our financial results could suffer.
We have also experienced shortages and price increases for components we use in our readers and gateways, as well as in packaging and test capacity for our reader ICs, and we may continue to experience such shortages and price increases in the future. Any such shortages or price increases will negatively impact our product availability and costs and our financial results will suffer.
We bear inventory risks because our products have relatively long lead times, demand for our products are hard to accurately forecast, and we rely on partners to sell and distribute our products.
We maintain inventory to meet customer demand. To guard against wafer shortages, and to allow for production risks given the relatively long lead times for our many of our products, we may invest in inventory to support anticipated business growth, like we did with endpoint IC inventory in 2017, 2020 and late 2022/early 2023. When we introduce new products, we may also initially carry higher inventory or have slower inventory turns depending on market acceptance.
We typically order products from our suppliers based on partner forecasts before we receive purchase orders. However, many of our partners have difficulty accurately forecasting their demand and the timing of that demand, and sometimes cancel orders or reschedule product shipments, in some cases with little or no advance notice to us. Partners will also sometimes give us soft commitments for large orders that do not materialize. We have additional uncertainty arising from competition and from unanticipated external events, such as macroeconomic trends or events and changes in regulatory standards, all of which can adversely affect demand and consequently our inventory levels, sales and operating results.
High inventory levels can increase expenses or reserves and expose us to a higher risk of product obsolescence, especially when we introduce new products and technologies. If we are unable to sell the inventory we purchased, or if we must sell it at lower prices, then our business will be negatively impacted.
Acquisitions could result in operating difficulties, dilution and other harmful consequences.
We regularly evaluate potential strategic transactions, and we may pursue them if complementary to our business. For example, in April 2023 we completed our acquisition of Voyantic Oy, a global provider of RFID (primarily RAIN and NFC) inlay and label design, manufacturing and test systems. Strategic transactions could be material to our financial condition and operating results. We have limited experience executing acquisitions. Integrating an acquired company, business or technology may create unforeseen operating difficulties and expenditures. Acquisition-related risks include:
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Foreign acquisitions involve additional risks beyond those above, including those related to integrating operations across different cultures and languages, currency risks and the economic, political and regulatory risks associated with other countries. Also, the anticipated benefit of any acquisition, domestic or foreign, may not materialize. Future acquisitions or dispositions could result in potentially dilutive issuances of our equity securities, debt incurrence, contingent liabilities or amortization expenses or goodwill write-offs, any of which could harm our financial condition. Future acquisitions may require us to obtain additional equity or debt financing, which may not be available on favorable terms or at all.
Changes in global trade policies could have a material adverse effect on us.
Changes in U.S. and foreign laws and policies governing foreign trade, manufacturing, development and investment in the jurisdictions where we currently develop and sell products, and any negative consequences resulting from such changes, could materially affect our business.
The U.S. government has imposed significant tariffs on a variety of items imported from other countries, particularly China. China responded by imposing significant tariffs on a variety of items imported from the United States. These tariffs could materially and adversely affect our ability to compete internationally. Although the United States and China signed a preliminary trade agreement in early 2020, the tariffs remain in place as negotiations between the countries continue. The future of these tariffs, as well as the possibility for new tariffs, remains uncertain. Changes in U.S. and Chinese industrial policy also contribute to uncertainty regarding the global trade environment.
Other causes of uncertainty include the effects of sanctions and other actions against Russia after Russia invaded Ukraine. While we do not today have business with Russian partners or end users, the effect of these sanctions on global trade and macroeconomic conditions generally—such as increasing energy costs and inflation—could nevertheless negatively affect our business.
We are subject to risks inherent in operating abroad and may not be able to successfully maintain or expand our international operations.
In 2023, we derived 72% of our total revenue from sales outside the United States. We anticipate growing our business, in part, by growing our international operations, which presents a variety of risks, including:
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We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets.
We must export and import our products in compliance with U.S. export controls, including the Commerce Department’s Export Administration Regulations and economic and trade sanctions established by the Treasury Department’s Office of Foreign Assets Controls, as well as similar controls established in the countries in which we do business. For example, the U.S. Commerce Department recently strengthened rules regarding semiconductor- and supercomputer-related products and restrictions against sending certain chips and chip-related technology and software to China without an export license. The modifications included an expansion of the products and destinations that require licensing. In addition, the United States and other countries continue to expand the economic sanctions and export control restrictions imposed against Russia and Belarus and certain Russian nationals and entities after Russia invaded Ukraine. We must undertake additional diligence efforts to comply with these rules, which may be time-consuming and result in delayed or lost opportunities. We may not always be successful in obtaining necessary export or import licenses, and our failure to obtain required export or import approval for our products or limitations on our ability to export or sell our products may harm our domestic and international sales and negatively affect our revenue.
Tariffs could also have a material impact on our product costs and decrease our ability to sell our products to existing or potential customers as well as harm our ability to compete internationally. For more information, see “Changes in global trade policies could have a material adverse effect on us.” Any changes in our product or in export or import regulations or legislation; shifts or changes in enforcement; or changes in the countries, persons or technologies targeted by these regulations could delay us introducing new products in international markets, decrease use of our products by, or decrease our ability to export or sell our products to, existing or potential customers with international operations, adversely affecting our business and results of operations.
Instability or deterioration in the political, social, business or economic conditions in key jurisdictions could harm our supply or development of products.
Deterioration in the political, social, business or economic conditions in any jurisdictions in which we have significant suppliers, distributors or end users—including as a result of natural disasters, labor strikes, public health crises, geopolitical events or other developments—could slow or halt product shipments or disrupt our ability to manufacture, test or post-process our products., as well as our ability to effectively and timely execute on end user deployments. We outsource our manufacturing and production to suppliers in a small number of Asian jurisdictions, including Thailand, Malaysia, Taiwan and China. Some of these jurisdictions experienced significant restrictions during the Covid-19 pandemic. These jurisdictions have also experienced significant changes in political, social, business or economic conditions in the past and may experience them in the future.
We could be forced to transfer our manufacturing, testing and post-processing activities to more stable, and potentially more costly, regions or find alternative suppliers.
We source a significant portion of our wafers from suppliers in Taiwan, and our supply of wafers and other critical components may be materially and adversely affected by diplomatic, geopolitical and other developments between China and Taiwan. Notably, China has refused to renounce the use of military force against Taiwan, and there can be no assurance that relations between China and Taiwan will not deteriorate further, particularly in light of ongoing tensions between the United States and China. Any such developments could materially and adversely affect our business, financial condition and results of operations.
Our business operations could be adversely affected by public health outbreaks and pandemics, or by natural disasters.
Starting in 2020, Covid-19 created significant worldwide economic volatility, uncertainty and disruption, and presented our business with several risks and challenges. Although the Covid-19 global health emergency officially ended in 2023, experts caution that Covid-19 remains a public health risk, and the extent to which any public health outbreak or pandemic could impact future market demand and our business results is uncertain.
In addition, other disasters, whether natural or manmade, could decrease demand for our products, disable our facilities, disrupt operations or cause catastrophic losses. We have facilities in areas with known seismic activity, such as our headquarters in Seattle, Washington. We have facilities in areas with known flooding, such as our office in Shanghai, China. We have a wafer post-processing
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subcontractor in Thailand, a region with a known, and recent, history of flooding. A loss at any of these or other of our or our suppliers’ facilities could disrupt operations, delay production and shipments, reduce revenue and engender potentially large expenses. We do not carry insurance covering potential losses caused by pandemics, earthquakes, floods or other disasters.
Risks Relating to Our Relationships with Partners and End Users
We rely on a small number of customers for a large share of our revenue.
We sell our endpoint ICs directly to inlay and tag OEMs and ODMs. We sell our reader ICs to OEMs and ODMs and our readers and gateways to solution providers, VARs and SIs, all primarily through distribution. If we fail to retain our endpoint IC, reader IC, reader or gateway partners or distributors or fail to establish relationships with new partners, then our business, financial condition or operating results could be harmed.
In 2023, sales to tag OEMs Avery Dennison and Arizon accounted for 33% and 11% of our total revenue, respectively. Sales concentration to a small number of OEMs decreases our bargaining power and increases the risk that our pricing or sales could decline based on actions taken by our competitors or our own failure to compete effectively.
Our competitors’ relationships with, or acquisitions of, these partners or distributors could interfere with our relationships with them. Any such interference could impair or delay our product sales or increase our cost of sales.
We engage directly with some end users. Their projects, often involving large purchases of our readers and gateways, are often discrete deployments that can result in significant sales for periods of time. They also increase the volatility of our revenue and operating results. If we are unable to replace project-based revenue with new revenue streams, or if end users with large projects change or delay those projects without providing us with adequate notice, then our sales could decline from period to period and harm our stock price.
Our ability to affect or determine end-user demand is limited in part because we sell and fulfill primarily through partners and rarely directly to end users.
End users drive demand for our products but because we sell our products primarily through partners, we are one step removed from those end users and are often unable to directly assess and affect their demand. Our partners may choose to prioritize selling our competitors’ products over ours, or they may offer products that compete with our products or limit sales of our products. If our partners do not sell enough of our products or if they choose to decrease their inventories of our products, then our sales to those partners and our revenue will decline.
Our partners may not properly forecast end users’ demand for our products.
Our reserve estimates for products stocked by our distributors are based primarily on reports provided to us by those distributors, typically monthly. If the inventory and resale information our partners and distributors provide is inaccurate, or if we do not receive it in a timely manner, then we may not have a reliable view of products being sold to end users which could negatively impact our operating results. If our partners overestimate demand, they may invest in building too much capacity, which would put pricing pressure on the RAIN industry. In the short term, our partners might purchase more of our products than they need, increasing their inventory and reducing our future sales to them, and distributors may, subject to time and quality limitations, seek to return products in exchange for other products. If our partners underestimate demand, we may not be able to satisfy their needs and that of their customers, and adoption might suffer. In either case, our business and operating results could be negatively affected.
Our growth strategy depends in part on the success of strategic relationships with third parties and their continued performance and alignment.
We invest in relationships with solution providers, SIs, VARs and software providers whose product and/or solution offerings complement ours and through which we often fulfill our product sales. Our business will be harmed if we fail to develop and grow these partner relationships. For example, our operating results may suffer if our efforts developing partner relationships increase our costs but do not increase revenue. Partner relationships may also include exclusivity provisions, multiple levels of distribution, discounted pricing or investments in other companies. The cost of developing and maintaining these partner relationships may go unrecovered and our efforts may not generate a corresponding revenue increase.
Occasionally we also engage directly with end users, often at their request, to help them develop solutions for challenging use cases. Such direct engagements could cause, or could be perceived to cause, conflicts with partners that could harm our partner relationships and our business, results of operations or financial condition.
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If we fail to maintain or enhance our brand recognition or reputation on which our business depends, then our business could be harmed.
We believe that building our brand and reputation is key to our relationships with partners and end users and our ability to attract new partners and end users. We also believe that our brand and reputation will be increasingly important as market competition increases. Our success depends on a range of factors, including:
Product supply shortages have challenged our ability to meet market needs and we have increased prices in response to our suppliers increasing their prices to us. Our inability to supply partners and end users with products they need, and/or our need to increase our prices could result in long-lasting, negative consequences to our relationships with those partners and end users, to RAIN adoption and to our business overall.
Increasing attention to environmental, social and governance and regulatory matters may cause us to incur additional costs or expose us to additional risks.
Investors, governmental and nongovernmental organizations, partners and end users are increasingly focusing on environmental, social and governance, or ESG, practices. Our ESG practices may not meet their standards, and they as well as advocacy groups may campaign for us to change our business or practices to address their ESG-related concerns. Our failure, or perceived failure, to adequately respond to any such campaigns could harm our business and reputation and negatively impact the market price of our securities. Moreover, with the continued evolution of ESG practices and reporting and disclosure requirements, our costs related to those ESG practices and reporting and disclosure requirements could increase, which could negatively affect our operating results. For example, the SEC has adopted final rules regarding climate-related disclosures in public companies’ periodic reporting, and compliance with these rules—including the implementation of necessary internal controls and reporting procedures—may lead to increased expenses and additional demands on our management and board of directors.
We are subject to disclosure and reporting requirements for companies that use “conflict” minerals mined from the Democratic Republic of Congo and adjoining countries in their products, whether or not these products are manufactured by third parties. These requirements could affect the sourcing and availability of minerals that are used in the manufacture of our products. We have to date incurred costs and expect to incur significant additional costs associated with complying with the disclosure requirements, including for example, due diligence in regard to the sources of any conflict minerals used in our products, in addition to the cost of remediation and other changes to products, processes or sources of supply as a consequence of such verification activities. Additionally, we may face reputational challenges with our customers and other stakeholders if we are unable to sufficiently verify the origins of all minerals used in our products through the due diligence procedures that we implement. We may also face challenges with government regulators and our customers and suppliers if we are unable to sufficiently verify that the metals used in our products are conflict free.
Risks Relating to Our Intellectual Property
If we are unable to protect and enforce our intellectual property, then our business could be adversely affected.
Our success depends in part upon our ability to obtain, maintain and enforce our patents, copyrights, trade secrets, trademarks and other intellectual property rights and prevent third parties from infringing, misappropriating or circumventing those rights. We have historically focused on filing U.S. patent applications, for many reasons, including the fact that a significant portion of RAIN products are sold for use in the United States. We have only a small number of foreign patents and applications. We also only have registered trademarks and domain names in select countries where we believe filing for such protection is appropriate. By focusing our intellectual property protection on the United States and a small number of foreign countries, we have a limited ability to assert intellectual property rights outside the United States, including in some significant foreign markets such as China or Europe. Moreover, the global manufacturing and distribution systems for tags or labels incorporating our endpoint IC products could complicate our efforts to enforce our U.S. patents.
As we increasingly work with third parties, possibly including parties that compete with us to an extent, to advance our technical innovations and features, we cannot guarantee that our efforts to protect our intellectual property will be completely effective.
We cannot guarantee that:
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Monitoring and addressing unauthorized use of our intellectual property is difficult and costly, and litigation to enforce our intellectual property rights is time consuming, distracting, expensive and uncertain. Our failure to identify unauthorized use of, or otherwise adequately protect our intellectual property could adversely affect our business.
We have been and may in the future be party to intellectual property disputes which could be time consuming and costly to prosecute, defend or settle, result in the loss of significant rights, and adversely affect RAIN adoption or adoption of our products or platform.
Patent litigation is complex and uncertain. We may or may not prevail in patent-related proceedings and such proceedings may result in increased legal expenses, additional demands on our management’s time and attention, and negative effects on our relationships with partners or end users. If any pending or future proceedings result in an adverse outcome, our intellectual property rights could be weakened and we could be required to:
Even if we do prevail in patent-related proceedings, verdicts and judgments can be modified or even reversed by trial or appellate courts. License agreements entered in settlement of patent litigation, particularly any entered into with our competition, may not be as effective over the long term in providing us with all the benefits we bargained for when we entered into them.
Many companies in our industry, as well as nonpracticing entities, hold patents and other intellectual property rights and may pursue, protect and enforce those intellectual property rights. We receive invitations to license patent and other intellectual property rights to technologies that could be important to our business. We also receive assertions against us, our partners and end users claiming we or they infringe patent or other intellectual property rights. If we decline to accept an invitation to license or to refute an asserted claim, then the offering or claiming party may pursue litigation against us.
Intellectual property disputes have adversely affected RAIN adoption in the past and could disrupt growth prospects in the future. In 2011, Round Rock Research filed lawsuits against 11 end users, including Walmart and Macy’s, for RAIN-related patent infringement. Despite the subsequent availability of an industry-wide license, we believe those lawsuits adversely affected demand for our products from 2011 to 2019. Subsequent litigation, including our patent litigation against NXP between 2019 and early 2024, may not have had as pronounced effects on demand as the Round Rock litigation, but could have dampened RAIN growth particularly in categories beyond those where RAIN is already established such as retail apparel. We, our partners, suppliers or end users could continue to be involved in intellectual property disputes in the future which could adversely affect our operating results and growth prospects.
Many of our agreements require us to indemnify and defend partners and end users from third-party infringement claims and pay damages in the case of adverse rulings. These damages could be sizable and disproportionate to the business we derive from those partners or end users. Moreover, we may not know whether we are infringing a third party’s intellectual property rights due to the
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large number of RAIN-related patents or other systemic factors. For example, patent applications in the United States are maintained in confidence for up to 18 months after filing or, in some instances, for the entire time prior to patent issuance. Consequently, we may not be able to account for such rights until after a patent issues.
Intellectual property policies of industry standards organizations in whose working groups we participate could require us to provide royalty-free licenses of some to our intellectual property.
When participating in GS1, ISO, RAIN and other industry-standards organizations, it is a general policy that those who participate in developing a protocol or standard must license, either royalty-free or under reasonable and nondiscriminatory, or RAND, terms, intellectual property that is necessary to implement all or part of the protocol or standard. The standards body may require that the license be granted to members, as in the case of GS1, or to all parties, as in the case of ISO, that implement the protocol or standard.
As a participant in developing GS1 EPCglobal UHF Gen2, UHF Gen2 V2, UHF Gen2 V3, tag data standards, low-level reader protocol and other GS1 EPCglobal protocols, we agreed to license to other GS1 EPCglobal members, on a royalty-free basis, those of our patents necessary to practice those protocols, subject to us receiving reciprocal royalty-free rights from the other GS1 EPCglobal member practicing the protocol. As a participant in developing ISO standards, we agreed to license on a RAND basis those of our patents necessary to practice those standards, subject to us receiving a reciprocal RAND license from the other entity practicing the standard.
Although the policies themselves seek to advance protocol or standards development, disputes can arise because it may not be clear whether certain intellectual property is necessary to practice a protocol or standard. Such uncertainty could complicate us asserting our not-necessary patents against others, or to use those patents in our own defense, thereby devaluing our intellectual property. Further, some GS1 EPCglobal members declined to license their intellectual property on royalty-free terms, instead retaining the right to license their technology on RAND terms. These members may choose to assert their intellectual property, in which case we will need to defend ourselves within the confines of the GS1 and ISO intellectual property policies.
We rely on third-party license agreements which, if impaired or terminated, could cause production or shipment delays that could harm our business.
We have license agreements with third parties for patents, software and technology we use in our operations and in our products. For example, we license tools from design-automation software vendors to design our silicon ICs. Third-party licenses for patents, software and other technology important to our business may not continue to be available on commercially reasonable terms or may not be available at all. Loss of any such licenses could cause manufacturing interruptions or delays or reductions in product shipments until we can develop, license, integrate and deploy alternative technologies which, if even possible, could harm our business and operating results.
Our use of open-source software may expose us to additional risks and weaken our intellectual property rights.
Our products, processes and technology sometimes use or incorporate software that is subject to an open-source license. Certain open-source licenses require a user who intends to distribute the open-source software as a component of the user’s software to disclose publicly part or all of the user’s source code. In addition, certain open-source software licenses require the user of such software to make derivative works of the open-source software available to others at low or no cost. Open-source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of their code, opening us to business risks that could materially harm our operating results.
We cannot guarantee that we have incorporated open-source software in a manner that is consistent with our policies and procedures relative to such open-source software, or in a manner that will not subject us to liability.
Risks Relating to Privacy and Cybersecurity
Privacy and security concerns relating to RAIN could damage our reputation and deter current or potential customers from using our products.
Privacy advocates and others have raised and may continue raising concerns about RAIN compromising consumer privacy or facilitating theft. These concerns include unauthorized parties potentially collecting personal information or personal data, tracking consumers, stealing identities or causing other issues relating to privacy or data protection. Any such incident could cause our or our partners’ or end users’ operations to be disrupted and subject us or them to regulatory investigations or proceedings and claims, demands or litigation; consequently, we could face potential liability and significant costs and expenses to remediate or otherwise respond to the incident. Any failure or perceived failure to comply with any privacy- or security-related laws, regulations or contractual or other obligations to which we are or may be subject may result in regulatory actions, claims or litigation; legal and other costs; substantial time and resources; and fines, penalties or other liabilities. Any actions or concerns about security and privacy may be expensive to defend, cause us to expend substantial time and resources and damage our reputation and operating results or negatively impact overall RAIN industry development, even if unfounded.
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We cannot be sure that any limitation-of-liability provisions in our agreements with customers, contracts with third-party vendors and service providers or other contracts are enforceable or adequate or will protect us from any liabilities or damages against claims relating to a security breach or other privacy- or security-related issue.
Government regulations and guidelines and other standards relating to consumer privacy and cybersecurity may adversely impact adoption of our products, require us to make design changes or constrain our ability to implement new and desired product features, and actual or alleged violations of laws relating to privacy or cyber security may result in claims, proceedings and liability.
Our partners and end users are subject to laws and regulations related to collecting, storing, transmitting and using personal information and personal data, as well as to additional laws and regulations that address privacy and cybersecurity related to RFID in general. Because RAIN is a type of RFID, we believe these laws and regulations apply to RAIN.
The European Commission, or the EC, has issued guidance to address privacy concerns about RFID. In May 2009, the EC issued a recommendation that retailers in the EU inform their customers when RFID tags are either on or embedded within products. In April 2011, the EC signed a voluntary agreement with private and public entities to develop privacy guidelines for companies using RFID in the EU. Whereas compliance is voluntary, our partners and end users that do business in the EU prefer products that comply with the guidelines. If our products do not comply or enable compliance with the guidelines, then our business may suffer.
More generally, the data security and privacy legislative and regulatory landscape in the United States, EU and other jurisdictions continues evolving. Aspects of key privacy laws and regulations—including the California Consumer Privacy Act of 2018, the California Privacy Rights Act, similar privacy laws enacted in other states and the EU General Data Protection Regulation—remain unclear as of the date of this report and continue evolving, potentially with far-reaching implications. Laws and regulations relating to privacy, data protection and security; related industry standards and guidelines; and continued evolution of these laws, regulations, standards, guidelines and other actual and asserted obligations, as well as their interpretation and enforcement, may require us to modify our products, practices and policies, which we may not be able to do on commercially reasonable terms or at all, and otherwise could cause us to incur substantial costs and expenses. Any failure or perceived failure by us or any third parties with which we do business to comply with these laws and regulations or other actual or asserted obligations may result in claims or litigation; actions against us by governmental entities; legal and other costs; substantial time and resources and fines, penalties or other liabilities. Any such actions may be expensive to defend, may incur substantial legal and other costs and substantial time and resources and likely would damage our reputation and adversely affect our business, financial condition and results of operations.
Additionally, if we fail to develop products that meet end-user privacy requirements, then end users may choose not to use our products.
Although the Gen2 V3 protocol includes features for addressing consumer privacy and authenticating a tag, and although we have incorporated custom features in our products designed to further protect consumer privacy, a third party may still breach these features, including as implemented in our products, in which case our reputation could be damaged and our business and prospects could suffer.
A breach of security or other security incident impacting our systems or others used in our business could have an adverse effect on our business.
We face risks of security breaches and incidents from a variety of sources including viruses, ransomware, hacking, malicious code, supply-chain attacks as well as social engineering or other employee or contractor negligence, malfeasance or unintentional acts. Accidental or willful security breaches or incidents, or unauthorized access to our facilities or information systems, or to others used in our business, could compromise the security of those facilities or information systems and the confidentiality, integrity and availability of confidential, personal or proprietary information. These risks may be heightened in connection with geopolitical tensions and events.
The consequences of loss, unavailability, misuse, corruption or other unauthorized processing of confidential, personal or proprietary information could include, among other things, unfavorable publicity, reputational damage, difficulty marketing or selling our products, customer allegations of breach of contract, loss or theft of intellectual property, claims and litigation, governmental and regulatory investigations and other proceedings and fines, penalties and other damages and liabilities. Any of these consequences could have a material adverse effect on our business, financial condition, reputation and business relationships.
We rely on third-party services to store and process data on our behalf, and on third-party security systems in a variety of applications. Our platform operates in conjunction with, and depends on, third-party products, services and components for security. The cybersecurity threat environment continues evolving, especially with heightened activity by state-sponsored actors. If we, our platform, or any of the third parties on which we rely suffers or is believed to have suffered a security breach or incident, vulnerability, error, ransomware or malicious event, then we could face increased costs, claims, liability, reduced revenue and harm to our reputation.
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We devote resources to detect and prevent security breaches and other security-related incidents. In the event of an actual or perceived security breach or incident we may need to expend significant resources to mitigate, notify third parties of, and otherwise address the breach or incident, its root cause and take steps to prevent further breaches or incidents. Our insurance may not adequately cover claims relating to an actual or perceived security breach or incident and any breach or incident may increase our insurance costs as well as reduce or eliminate the future availability of such insurance, harming our business and reputation.
Risks Relating to Our Financial Position and Capital Needs
We have a history of losses and have only achieved profitability periodically. We cannot be certain that we will attain or sustain profitability in the future.
We have incurred losses since our inception in 2000, with a net loss of $43.4 million for the year ended December 31, 2023, and an accumulated deficit of $430.2 million as of December 31, 2023. Although we reported GAAP net income for the first three quarters of 2024, there can be no assurance that we will be able to sustain profitability in the future. Our ability to attain or sustain profitability depends on numerous factors, many of which are out of our control, including continued RAIN industry adoption and us maintaining or growing our market share. Our costs to support operations, product development and business and personnel expansion in sales, engineering and marketing are significant and are likely to increase as we invest to grow the market and our share of it, reduce our costs and improve our operations. If we fail to increase our revenue or manage our expenses, or if our investments in growing the market or our share of it fail, then we may not attain or sustain profitability.
We have a history of significant fluctuations in our quarterly and annual operating results.
Our history shows significant sales volatility and a limited ability to forecast sales. We anticipate that, for the foreseeable future, our visibility to future sales, including volumes and prices, will continue to be limited. That limited visibility may cause fluctuations in our operating results and differences between actual and expected quarterly or annual operating results.
Many factors, some outside our control, may cause or contribute to fluctuations in our quarterly and annual operating results. These fluctuations make financial planning and forecasting difficult. These fluctuations may also cause unanticipated decreases in our available cash, which could negatively affect our business and prospects. Material factors that contribute to fluctuations in our operating results include:
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A substantial portion of our operating expenses are fixed in the short term, and as a result, fluctuations in revenue or unanticipated expenses can have a material and immediate impact on our profitability and negatively affect our operating results, which could cause the price of our common stock to decline.
We may need to raise additional capital, which may not be available on favorable terms or at all.
In the future, we may need to raise additional capital, including pursuant to shelf registration statements we may file from time to time with the SEC, potentially diluting our stockholders, restricting our operations or otherwise adversely affecting our business.
Debt financing, if available, may include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, expending capital or declaring dividends, or may impose financial covenants that limit our ability to achieve our business objectives.
Our management has broad discretion in how to invest and spend our cash and cash equivalents and the proceeds from financings, including on capital expenditures, product development, working capital and other general corporate purposes. We may spend our cash and cash equivalents in ways that our stockholders may not agree with or that do not yield favorable returns.
If we need additional capital but cannot raise it on acceptable terms, if at all, then we may not be able to meet our business objectives, financial obligations or both. If we raise additional capital but do not deploy it effectively then our business, financial condition, results of operations and prospects could be harmed and the market price of our common stock could suffer.
Risks Relating to U.S. Federal Income Tax
Our ability to use net operating losses and research and development credits to offset future taxable income and income taxes may be limited.
As of December 31, 2023, we had federal U.S. net operating loss carryforwards, or NOLs, of $230.5 million and U.S. federal research and development credit carryforwards of $30.5 million, which we may use to reduce future taxable income or income taxes. We have established a valuation allowance against the carrying value of these deferred tax assets. The U.S. federal NOLs and U.S. federal research and development credit carryforwards began expiring in 2020.
Under Sections 382 and 383 of the U.S. Internal Revenue Code, or the Code, a corporation that experiences a more-than 50% ownership change by one or more stockholders or groups of stockholders who own at least 5% of a company's stock over a three-year testing period is limited in its ability to use its pre-change NOLs and other tax assets to offset future taxable income or income taxes. If we undergo a future ownership change then our ability to use our NOLs and credit carryforwards could be limited by Sections 382 and 383 of the Code. Our NOLs may also be limited under state law. As a result of these limitations, we may not be able to utilize a material portion of, or possibly any of, our NOLs and/or credit carryforwards to reduce future taxable income or income taxes.
We could be subject to additional income tax liabilities.
We are subject to income taxes in the United States and certain foreign jurisdictions. During the ordinary course of business, we use significant judgment in evaluating our worldwide income tax obligations and we conduct many transactions for which the ultimate tax determination is uncertain. Although we believe our tax determinations are proper, the final determination of any tax audits and any possible litigation could be materially different from our historical income tax provisions and accruals. The results of an audit or litigation could have a material effect on our operating results or cash flows in the period or periods for which that determination is made.
Changes in tax laws could have a material adverse effect on our business, cash flow, results of operations or financial conditions.
We are subject to tax laws, regulations and policies of several taxing jurisdictions. Changes in tax laws, as well as other factors, could cause us to experience fluctuations in our tax obligations and effective tax rates and otherwise adversely affect our tax positions and results of our operations. For example, in August 2022, as part of the Inflation Reduction Act of 2022, the United States enacted a 1% excise tax on stock buybacks and a 15% alternative minimum tax on adjusted financial statement income. Additionally, beginning in 2022, the Code eliminated the right to deduct research and development expenditures and instead requires taxpayers to capitalize and amortize U.S. and foreign research and development expenditures over five and 15 tax years, respectively. We have accounted for
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these changes in accordance with our understanding of the guidance available as of the date of this filing and as described in more detail in our financial statements.
The CHIPS and Science Act, enacted August 9, 2022, provides tax credits for semiconductor manufacturing activities within the United States, but because we outsource our semiconductor manufacturing we do not expect to be entitled to these tax credits.
Many countries, as well as organizations such as the Organization for Economic Cooperation and Development, have implemented or proposed changes to existing tax laws, including a 15% global minimum tax. Any of these developments or changes in U.S. federal, state or international tax laws or tax rulings could adversely affect our effective tax rate and our operating results. There can be no assurance that our effective tax rates, tax payments or tax credits and incentives will not be adversely affected by these or other developments or changes in law.
Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, value-added or similar taxes.
We do not collect sales and use, value-added or similar taxes in all jurisdictions in which we have sales, based on our belief that such taxes are either not applicable or an exemption from such taxes applies. Certain jurisdictions may assert that such taxes are applicable, which could result in tax assessments, penalties and interest, and we may be required to collect such taxes in the future, including as a result of a change in law. Such tax assessments, penalties and interest or future requirements may negatively affect our operating results.
Risks Relating to Our Financial Reporting and Disclosure
Any failure to maintain an effective system of disclosure and internal controls over financial reporting, or our ability to produce timely and accurate financial statements, could adversely affect investor confidence in us.
As a public company, we must maintain effective disclosure controls and procedures and internal control over financial reporting. Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud.
Any failure to implement and maintain effective disclosure controls and procedures and internal control over financial reporting, including identifying material weaknesses, could cause investors to lose confidence in the accuracy and completeness of our financial statements and reports, which could adversely affect the market price of our common stock. We could also be subject to sanctions or investigations by The Nasdaq Stock Market, the SEC and other regulatory authorities.
Risks Relating to Owning or Trading Our Securities
The market price of our common stock has been and will likely continue to be volatile, and the value of your investment could decline significantly.
The trading price of our common stock has fluctuated and is likely to continue to fluctuate substantially. The following factors, in addition to general risks and other risks described in this report, may have a material effect on the trading price of our common stock:
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Technology stocks like ours have experienced extreme price and volume fluctuations, often unrelated or disproportionate to the company’s underlying operating performance. Stock price volatility can cause stockholders to institute securities class-action litigation or stockholder derivative litigation, as occurred to us between 2018 and 2020. If any of our stockholders were to sue us, the defense and disposition of the lawsuit could be costly and divert the time and attention of our management, harm our operating results and negatively impact the trading price of our common stock.
Transactions relating to the 2021 Notes may affect our stock’s value.
If the 2021 Notes are converted by holders, then we are entitled to deliver cash, stock or any combination of cash or stock, at our election. If we elect to deliver stock, the ownership interests of our existing stockholders will be diluted, and public market sales of stock issued upon a conversion could decrease our stock price. Anticipated future conversions of the 2021 Notes into stock could also decrease our stock price, as could short selling by holders of the 2021 Notes to hedge their positions.
In December 2019, we issued the 2019 Notes. When we did so, we entered into privately negotiated capped-call transactions with financial counterparties to mitigate the dilutive impact on the Company above a given stock price. We left those capped-call transactions intact after we acquired the remainder of the outstanding 2019 Notes in June 2022. From time to time, the financial counterparties to the capped calls may modify their hedge positions by entering into or unwinding various derivative transactions involving our stock or by purchasing or selling our stock or other securities of ours in secondary market transactions prior to the maturity of the capped calls. This activity could cause a decrease in our stock price.
For more information on the 2019 Notes, the 2021 Notes and the capped-call transactions, see Note 7 of our condensed consolidated financial statements included elsewhere in this report.
Our principal stockholders and management own a significant percentage of our stock and are able to exercise significant influence over matters subject to stockholder approval.
As of September 30, 2024, our executive officers, directors and principal stockholders, together with their respective affiliates, beneficially owned approximately 47.2% of our stock. As a result, our executive officers, directors and principal stockholders may be able to significantly influence, in their capacity as stockholders, matters requiring approval by our stockholders, including electing directors and approving mergers, acquisitions or other transactions. They may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests. This ownership concentration could have the effect of delaying or preventing a change in our control or otherwise discouraging a potential acquirer from attempting to obtain control of us, which in turn could have a material adverse effect on our stock price. This ownership concentration could also prevent attempts by our stockholders to replace or remove our board of directors or management.
We may not have sufficient cash flow or access to cash necessary to satisfy our obligations under the 2021 Notes, and our current and future indebtedness may restrict our business.
Our ability to make scheduled payments of the principal of, to pay interest on or to refinance any current or future indebtedness, including the 2021 Notes, or to make cash payments in connection with any conversion of the 2021 Notes or upon any fundamental change if holders require us to repurchase their 2021 Notes for cash, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate sufficient future cash from operations to service our indebtedness and make necessary capital expenditures. If we are unable to generate sufficient cash flow, then we may be required to pursue other alternatives, such as selling assets, restructuring indebtedness or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance any of our indebtedness, including the 2021 Notes, will depend on the
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capital markets and our financial condition at that time. We may not be able to pursue these alternatives on favorable terms or at all, which could result in us defaulting on our debt obligations.
Our existing and future indebtedness could have important consequences to our stockholders and significant effects on our business. For example, it could:
Anti-takeover provisions in our charter documents and under Delaware or Washington law could prevent, delay or impede an acquisition of us and constrain our stock price.
Provisions of our certificate of incorporation and our bylaws may delay or discourage transactions involving an actual or potential change in our control or in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. These provisions could, therefore, adversely affect our stock price. Among other things, our certificate of incorporation and bylaws:
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder. Likewise, because our principal executive offices are located in Washington, the anti-takeover provisions of the Washington Business Corporation Act may apply to us under certain circumstances now or in the future. These provisions prohibit a “target corporation” from engaging in any of a broad range of business combinations with any stockholder constituting an “acquiring person” for a period of five years following the date on which the stockholder became an “acquiring person.”
Our bylaws include provisions that could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our bylaws provide that, unless we otherwise consent in writing, the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action
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asserting a claim against us arising pursuant to the Delaware General Corporation Law, our certificate of incorporation or our bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. The choice of forum provision may limit stockholders’ ability to bring a claim in a judicial forum favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Securities Trading Plans of Directors and Executive Officers
Name and Title |
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Character of Trading Arrangement (1) |
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Date Adopted |
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Date Terminated |
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Duration (2) |
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Aggregate Number of Shares of Common Stock to be Purchased or Sold Pursuant to Trading Arrangement |
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- |
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Up to |
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- |
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Up to |
(1) Except as indicated by footnote, each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” is intended to satisfy the affirmative defense of Rule 10b5-1(c), as amended (the “Rule”).
(2) Except as indicated by footnote, each trading arrangement permits transactions through and including the earlier of (a) the execution or expiration of all trades specified under the trading arrangement or (b) the date listed in the table. Each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” only permits transactions upon expiration of the applicable mandatory cooling-off period under the Rule.
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Item 6. Exhibits
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Incorporation by Reference |
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Exhibit Number |
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Exhibit Description |
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Form |
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Date |
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Number |
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Filed Herewith |
3.1(a) |
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8-K |
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6/12/2020 |
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3.1 |
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3.1(b) |
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8-K |
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6/7/2024 |
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3.1 |
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3.2 |
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Amended and Restated Bylaws of Impinj, Inc. adopted as of February 23, 2023 |
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8-K |
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2/23/2023 |
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3.1 |
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31.1 |
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X |
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31.2 |
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X |
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32.1* |
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X |
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32.2* |
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X |
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101 |
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Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q. |
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X |
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104 |
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Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set. |
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X |
* The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Impinj, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Impinj, Inc. |
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Date: October 23, 2024 |
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By: |
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/s/ Cary Baker |
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Cary Baker Chief Financial Officer (principal financial officer and duly authorized signatory) |
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