Impinj’s PI third-quarter 2024 adjusted earnings of 56 cents per share beat the Zacks Consensus Estimate by 19.15%. The reported figure also marked an improvement from the year-ago quarter’s break-even results.

PI’s earnings beat the Zacks Consensus average Estimate in the trailing four quarters, which is commendable.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Revenues increased 46.4% year over year to $95.2 million and beat the consensus mark by 2.36%.

However, PI shares lost 4.99% in after-hours trading on Thursday, following its underwhelming guidance for the fourth quarter of 2024.

On a year-to-date basis, PI shares have surged 147.1%, outpacing the Zacks Computer and Technology sector’s rise of 27.7%.

PI’s Third-Quarter Insights

Year-over-year top-line growth was driven by increased demand for Impinj's products and services, an expanded customer base, and large-scale implementations of its RFID solutions.

A substantial part of Impinj's revenues is generated from Endpoint ICs, which its partners integrate into enterprise products. Endpoint IC revenues (85.1% of total revenues) reached $81 million, down 9% sequentially but up 67% year over year.

Systems revenues (14.9% of total revenues) were $14.2 million, up 9% sequentially but down 13% year over year. These revenues increased management expectations, driven by strong sales in test and measurement and reader ICs.

The adjusted gross margin improved by 190 basis points (bps) year over year to 52.4%.

Adjusted EBITDA for the third quarter was $17.3 million compared with $0.3 million in the year-ago quarter.

Total operating expenses were unchanged at $32.5 million.

Balance Sheet

As of Sept. 30, 2024, Impinj had cash, cash equivalents, and investments worth $227.4 million, up from $220.2 million as of June 30, 2024.

The current portion of long-term debt was $283.1 million as of Sept. 30, 2024, compared with $282.7 million as of June 30, 2024.

The third-quarter capital expenditure was $5.4 million and the free cash flow was $4.7 million.

PI Provides Sluggish Q4 Guidance

For the fourth quarter, Impinj expects revenues between $91 million and $94 million, indicating a 31% year-over-year increase at the midpoint. Adjusted EBITDA is projected between $13.6 million and $15.1 million.

PI anticipates Endpoint IC revenues to decline but Systems revenues to increase sequentially.

For the current quarter, PI expects the gross margin to increase sequentially, driven by reduced 200-millimeter endpoint IC volume, a larger mix of systems revenues, and Endpoint IC replenishments into Asia-based authenticity pilots.

PI anticipates non-GAAP earnings of 45-49 cents.

Zacks Rank & Stocks to Consider

Currently, Impinj carries a Zacks Rank #3 (Hold).

AudioEye AEYE, Onto Innovation ONTO and Check Point CHKP are some better-ranked stocks in the broader Zacks Computer & Technology sector.

AudioEye, Onto Innovation, and Check Point currently carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AudioEye’s shares have surged 330.4% year to date. AEYE is set to report third-quarter 2024 results on Nov. 7.

Onto Innovation shares have gained 73.5% year to date. ONTO is set to report third-quarter 2024 results on Oct 31.

Check Point shares have gained 34.4% year to date. CHKP is set to report its third-quarter 2024 results on Oct. 29.

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