PI - Earnings call transcript Q2 2019

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Operator

Good afternoon, and welcome to the Impinj's Second Quarter 2019 Earnings Conference Call. All participants will be in listen only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Ellen Davis Hayes-Roth, Investor Relations. ahead. go Please

Ellen Davis Hayes-Roth

performance. market provide a Good President, us operator. On with thank COO all CEO Brodersen, you call, Thank our discuss afternoon and outlook. of review our Impinj's Financial joining of will and Co-Founder to XXXX Eric Diorio, will third financial XXXX Principal results Officer, Impinj's results. brief second and opportunity for follow detailed overview Chris you, Impinj's and and a second quarter quarter today's quarter XXXX

We open then the will call for questions.

financial and Impinj's Linda on Investor the Executive Consultant, join Sales along the CFO of data of section and Management's Relations transit and call Jeff Breard; Chris company's are also Impinj's are available session. website. Vice in Eric remarks, Q&A Dossett, on President the and will Marketing, prepared the with

To make statements, statements Before statements they from forward call. of and facts, those we of conference such regarding the certain our XXXX. not only such Any during this performance. forward-looking Reform looking meaning Securities this extent that please Litigation Private objectives historical note our that are of including the start, the Act outlook as plans, date we make we'll call within represent are expected the

believe SEC in Factors could file risks. for we subject forward-looking to Risk and and reasonable, differ While risks the based the are we current annual about results any section are expectations additional statements Please quarterly these materially actual with statements our make we on because any the uncertainties. information reports see

a or applicable except our or any disclaims, information, as required future We forward-looking events and obligation otherwise do expressly new undertake, statements, as whether of update alter result law. by to not

GAAP non-GAAP except measures. a all call, we metrics numbers are sheet we where today's During explicitly are Balance and state on otherwise, basis. flow for revenue, cash financial discuss, or financial

Genuity on Technology will I'd Annual attend to turning company the on August to the Growth that August to York, Boston, there. Canaccord on Oppenheimer the Investor Needham our Internet many the in August Conference Before hope We Technologies of Industrial like and New X, Institutional Dougherty Boston, note in Conference Conference you Conference XXnd results Communications XXXX on X, Minneapolis. and Annual see in the and outlook, XXth September in XxX X, XX

the Executive I Officer. Chief to now will Impinj's and turn call Co-Founder Chris? Diorio, over Chris

Chris Diorio

Thank all you, for the you Thank joining call. Ellen.

second performance another strong a business systems quarter was strong, The systems, our America. solid and growth key by endpoint apparel with Endpoint were of macro in and in tensions. side Our adoption ICs led solid retailers especially by record was trade results despite project $XX.X year-over-year highlighted and revenue, million increasing crosscurrents quarter. both gateway revenue IC North

and by enhances to our results. efficiencies, continue Retailers inventory strategic differentiator increases as RAIN the view to visibility, and that quarterly apparel segment sales. footwear supply-chain Growing performance adoption improves a contributed meaningfully

in Turning proceed next parallel. qualifications, and mean line family year. and end-user favorably progress on cycles MXXX qualification and continues ICs to features. Those adoption begin in our users, partners qualifications business positive from MXXX our and Momentum building end feedback production IC should inlay impacting our our the has both extremely our releasing family, first been performance inlay as the Impinj partner's time the

including Our broad-based by into that sales revenue other business buoyed opportunities. and a North and record supply-chain systems expectations gateway project exceeded reader by of America led with key opportunities logistics

automotive both belt, and showed on year a partner the We per the a example opportunities I'd too estimate our recently RAIN need our parts business. opportunities opportunity. with as of is early one me like part the of in and timing X,XXX automotive, small industry vision those to reader sealed of those of the predict a scope adoption inventory part automotive It to in saw I uses in Impinj-based at-scale than an X.X. to automotive boxes more being When the just which is conveyor parts one and pursuing individually today of full tagged but partners XXX broad-based is items, our many automotive, read aviation. are systems of taggable all huge opportunity is automotive item-level Industry tagged billion the second highlight

luggage Association's tracking. unanimously IATA Transport in for The readers Air airlines baggage IATA deploy to International June, RAIN the meeting and resolution handlers to inlays airports global to using bag mishandlings. and RAIN adopt At XXth tags approved with commits ground annual reduce

by can billion global bags the expect The more especially RAIN aviation the thousands large-scale annually airports of years. four tagging resolution in baggage the RAIN a opportunity deployments. for bellwether spans reach I'm is systems needs. this and I its will Without choosing drive be lines, adoption industry industries logistics specifying four energized facilities. a other industry and time such initiative tracking marquis to for believe than opportunity similarly

meeting in automate realizing the Italy I events and engage and consumers. sit from RAIN end operations is the in and that a using of Internet's in consortium the Impinj's GSX highlighted transition optimize sponsor Alliance asked RAIN closed data vision, quarter data to world second and the included collection, data connecting a intranets, opportunity our a suppliers that I the to is the both disjoint every than in Internet users challenge GSX guide. in believe to events open Internet Colorado. virtualizing corporate Alliance and as concomitant Things, at which stores drive I open item industry of Key the I Connect about in spoke also what RAIN vision to history the of Internet. fact rather today and

ongoing advance Impinj and the step aviation AutoTune, Integra, the June, first within in UCODE patent X ICs Alliance trillions and direction innovations data-sharing everyday X citing key UCODE NXP U.S. FastID that USA, a as These infringement license. as against needs items. and a reach designs require will circuit In the NXP's of patents misappropriate such and our initiatives we a that lawsuit and well Internet's RAIN Enduro of our I as without patents expanding cover implementations. the XX of GSX industry believe vision of filed to further that

Our further work continue patents investment, hard and significant our firm them as defend advance we to with are innovating of hard-earned the RAIN even we will invested -- fruits dedication the determination and market.

seconds. inlay Turning antenna hour connectivity to future curing everyday its for This announced another innovations the Industrial adhesive Adhesives, Mühlbauer machines eight to yet items. innovation Monza reduces XXX,XXX and new to that trillions per IC that produce to today's up rate. new a in the May, on bond enables than and DELO step to adhesive costs to Impinj double X.X This enable from a of assembly represents our RAIN efforts reduce more inlays line single in time

to marked team like team past and about remain in by ahead. Impinj efforts as In solid thank the I'm record quarter confident closing, opportunities quarter for in a market driving always behind another this our With I their execution, vision. us excited our would our bold and I position

now over financial outlook. Eric? to turn our review detailed call the I Eric and for will third quarter

Eric Brodersen

Thank you, Chris.

XX.X% and XXXX. $XX.X second with first compared million, million Second compared with XX.X% a quarter XXXX quarter grew revenue was company record. in $XX.X year-over-year, quarter-over-quarter quarter million in Revenue $XX.X grew

in second with quarter $XX in IC compared first million, XXXX. Second X.X% endpoint growing XX.X% was revenue quarter-over-quarter, XXXX quarter year-over-year and quarter $XX.X million $XX.X compared growing million with

with key led $XX.X Second $X.X million quarter was million a by quarter American gateway compared in year-over-year, systems second XXXX, North revenue project.

quarter-over-quarter On million first XXXX. grew XX.X%, revenue in compared basis, $XX.X a systems quarter with

gross quarter a on year-over-year Second flat basis. margin XX% was both and quarter-over-quarter

quarter in was quarter XXXX. $XX.X second XXXX million and compared Total $XX.X million, operating in first quarter with second $XX.X million expense

invest in We continue balancing to our our desire our opportunity. operating expense with

of Research improvement for was $X.X XXXX. was in in $X.X million and loss ongoing compared the and second loss million. second quarter million. a expense adjusted in $X million $XXX,XXX, million. for with and -- we our Sales reflects a EBITDA and marketing $X me quarter $X.X was million focus invest excuse $X.X The on Adjusted EBITDA as quarter development administrative of was General expense year-over-year $X.X million execution growth. first XXXX

$X.XX Non-GAAP was the share $XXX,XXX or was share second using GAAP shares. net million million. loss for quarter for of $X.X weighted income diluted XX.X second net count quarter average per the

cash the and $XX.X million million with XXXX. of quarter balance $XX.X the We cash, investments short-term sheet. prior and to compared the quarter in second $XX.X Turning ended in with equivalents million, second quarter

from totaled down $X.X million, quarter $XX.X XXXX. million from Inventory second million $XX.X the quarter and down prior

We inventory of a half further albeit internal at XXXX. year-end expect decline the to than by slower first pace

say come in I Before in way. the quarter few to of million XX first records quarter about XXXX months. revenue far from four the transition the I revenue to have $XX.X words we second past million $XX.X citing We want guidance, how grew in XXXX third along to quarter a

XX, achieved December EBITDA shipped endpoint and to growing device lead innovations of and its commitment We the in industry. family IC our we two XXXX. MXXX announced proud excellence execution leading team's as billionth adjusted this by connectivity endpoint Impinj incredibly our with year, this IC We continue XX I'm to of and the dedication, we quarter. industry March millionth profitability our

our to outlook. Turning

$XX a XX% third expect $XX year-over-year million at the midpoint million, the between We quarter revenue and improvement of range.

a adjusted $XXX,XXX. a to of expect $XXX,XXX and EBITDA loss positive be We between

non-GAAP per $X.XX bottom plus net $XXX,XXX million on diluted XX.X the positive reflecting weighted earnings minus non-GAAP $XXX,XXX, million a and count XX.X average loss of a and we expect income shares. between line, On to $X.XX between a of share share of a

our team, suppliers, our question-and-answer customers, ongoing for to and support. the turn the our open our thank your operator the to want I closing, to call I'll In investors now session.

Operator

ahead. now Searle comes begin We the Our go first [Operator Please Scott from Instructions] question-and-answer session. question with Capital. Roth will

Scott Searle

taking that and third in a are you Hey what sounds question. in sequentially wondering systems had Is more outlook sequential of seeing Is around the from impact endpoint, on seeing couple as looking an my of systems of side. Hey, into what standpoint nature? sequential certainly my for like quarter? good to September you're the give And Nice into guys. it hands that basis? a in that terms one-time quarter, the the afternoon. the the Kind I the we're follow-ups. get then takes Thanks had you're positive quarter just

Chris Diorio

as question I first is overall, the So continue? or just understand the opportunity? -- is project question, it to opportunity Is is the of correct? And the one-time one do is And that kind large businesses. Scott second a our outlook systems how for the we

Scott Searle

Yeah.

Chris, it seasonality quarter, the systems? read Just and had look into that is into second you continuing? How when between How here. much trying quarter of the nice because a to ICs third does

Chris Diorio

Okay.

combined business by how is second So, super quarter growing. saying, with start pleased the I'm quarter delivered to I strong a guess, you at said. we're second results we the guidance, as going looking And just third and quarter

heading into about In good strength opportunities revenue, business yes in feel terms quarter. forward. going IC systems our third of we project-based see endpoint kind we project-based And and both of

how So overall, with is we're pleased going. the business

in slower endpoint we we we a of picking of seasonality terms fourth see overall kind fourth the typically in we head ICs and -- in little into see bit the as And see quarter business, revenue up quarter. systems to typically typically the

year-over-year year. of Although, the must come can a one variability any on kind basis

Scott Searle

on you just it very to and an maybe rapid both inlay standpoint making customer and are sounds you, follow a Got a guys up the from like MXXX, progress standpoint.

ramp see start some in It you swapping the a if you or out bit to are traction to starting existing you I'm designs up new sounds with little wondering provide customers', could new more like color, XXXX. wins? revenues

of And the maybe by how half second quickly that's going mix to phase any terms revenues? XXXX, in do of the have of idea in you

Chris Diorio

the in take the then production qual, the cycle. their qual. we're And qual, our do do time. customers Those now our right approval inlay their So, we ramp things partners productions do our Because end qualification ramp start. on

expect impact we rates. XXXX current our So we -- the expect to that

allow many I both. the existing We as cases actually in the or feel opportunities deployments, favorable of those or augment or opportunities supplement on opportunities that the family kind open terms either mean We but do in us of up features in and capabilities expect as not a new features only -- performance based impact. the MXXX its both capabilities to of well

Scott Searle

and sort could I positive. the what then was impact little the And is you. clearly hop would bit color queue. more could provide back a expect maybe in of XXXX? if IATA news you one you I'll last I an of Got wondering in in if But terms

year starting a adoption of us different idea down an Are there billion of carriers plus. per about to being visibility that we've there talked the what maybe of And is -- give four curve? bags number number

Do of the could potentially you quarter. have sales build-outs you're system of talking out, airports? an what look idea in about as Thanks. terms Nice thousands supporting

Chris Diorio

Thanks, Scott.

of pace opportunity spans, say beyond facility, deployment, which the any move and So as airports of airlines in as thousands kind the -- of -- individual the the the at pace can really -- how growth year. to those visibility of well more the And rate airlines and we'll of I the next depend overall going get go. as adoption think kind is on

made IATA made several point additional they expectations made hopes statements some I terms major see to of some quickly. terms relatively has and airports heading. that in their in add don't their have the adoption to anything some has But they've beyond at where we IATA this of statements And time. think statements, in deploy

Like I said, to any. things we as think don't time we'll share play some this have have information we'll but -- I at out more

Scott Searle

Hey, to made themselves? the Do unilaterally be be by there. are individual by decisions various one Chris to just you made the follow-up quick going the they Thanks. expect airlines airports? Or

Chris Diorio

able mean is U.S. generally airport rollout, make basically the of their them. have any In in I over airport control the world own U.S. the -- decisions particular in airport where on they supports depends because that airports that are located. the the to airlines answer for part The

are airports those airports. Overseas common-used

And makes it's actually so decision. out the airport the roll that

that decision out roll to airports and for made make that out So all that I because airports reason, that common-use for important the roll are to impetus I it's out. to that are begin to made the decision announcement I board airlines ought their be roll could -- on the when the critically

Scott Searle

Great, you. thank

Operator

The next question …

Linda Breard

Scott. you, Thank

Scott Searle

Thank you.

Operator

Hettenbach question from Excuse go comes me. Morgan The Stanley. Please ahead. next Craig with

Craig Hettenbach

Yes. Thank you.

look anything at side. project existing in unique of you're on new American features with of kind doing whether I business, that Is referenced it's terms your North if the So or that things that customer? in you there systems

Eric Brodersen

Eric. Thanks, project Yes, logistics is North is particular this can extremely we and is in Craig, what supply share this are chain I the excited yes, it space. American about and

versus logistics confidentiality And more really into the chain balance business, can itself. of transitions, supply can't from the the locationing, that, to customer but for the on variance say of I reasons, core capabilities and share So broadly we we continue our sell about a across platform focusing identity.

sweat of motion. within spot our really right the sales So

Craig Hettenbach

the on situated it. Got it new half follow-up around been a as the expect into broadly a and and And and back channel-partner perspective, coming you from on of lead-time inventory then year. the today just down to inventory customer commentary down anything Can from you touch just just a is take how has feel you perspective?

Eric Brodersen

into lead-time good continue lead-time right position track six-week those standpoint. and we very on to a with From channel to channel normal times break the two course. we to be let's -- standard a continue what touch lead standpoint, right a inventory of targeted as that overall matter Let's in feel pieces. four- work our From perspective, about are healthy at in inventory we the

Craig Hettenbach

Got it. you. Thank

Eric Brodersen

Craig. Thanks, you. Thank

Linda Breard

Thanks, Craig.

Operator

Please from Mike Your with go next Canaccord comes ahead. Genuity. question Walkley

Mike Walkley

Thank strong you the and congrats on quarter.

Eric Brodersen

Mike. Hi,

Mike Walkley

this on chance incremental type large And a the gateways And any customer is quite a endpoint North how maybe done, Can share have you color occur? systems build-out Just is following strong large duration, once endpoint give going you'll opportunity? this longer project? are up again given on any American can much it's that of the opportunity gateway you to project. that

Chris Diorio

about Yeah. When Thanks, as can before, course periods span we time Mike. with periods, year. said longer the span deployments, across of project-based we've they the they can talk

that projects we we manage it's way just So time. consistent really the something at large-scale look and the with all

be factor but breakout of terms that it endpoint time. this In certainly overall will endpoint yes, a consumption, something will we not business, at our in

Mike Walkley

this color the systems first Thanks. has larger systems just I just year. build of half can pipeline of may revenue quite provide to you on mean impressive deals that, be the been Great. some And on these

keep be to going comps pipeline because to the come against business the have term longer Thank up that few just given growing, quarters? last tougher the you're huge some in you. You acceleration

Jeff Dossett

Jeff Dossett. is This Craig.

I use and verticals. range reflect is of of we healthy think bookings opportunities. healthy the I'd transition a the way range industry strong have backlog, does it broadening characterize across a of a it And cases pipeline

good So today. about the we feel pipeline

Mike Walkley

me line. Last on Thanks. for and I'll Great. question the pass

some any large readers fair deals Thank of win airports, environment Just these you in how you. deals? to think competitive do you're both share your in for updates gateway the and positioned of and endpoint on the those

Jeff Dossett

opportunities positioned again. feel Jeff in that significant are competitive we We the confident around would be environment significant on the is call quarter. in I'd globe. no, that the this the technology of very to out this Craig, the teams say no our emerging of strength change still the merits to well our go-to-market and globe participate around

Mike Walkley

Okay. Thank much. you very

Linda Breard

Mike. Thanks,

Chris Diorio

Thank you.

Operator

Markets. Steves question next with Mitch ahead. go Please from RBC Capital Your comes

Mitch Steves

North to thanks American my retail wanted focus the I Hey, just on taking for question. win.

in be or over is guess going understand guess I the this XX it look be specific only rollout, deployment to rolled is the the should that months? the entire clear Just do kind is U.S. cities. like what we terms like of where there of How next out to I

Jeff Dossett

Hey, and want this this is specifically I retail we and logistics North to as Mitch, a American to referred chain project a clarify supply that Jeff. just not opportunity.

Mitch Steves

Okay. are and apparel retailers footwear Because transcript the continuing the -- to ramp. says

Jeff Dossett

feel your apparel are publicly mean, mentions be as increasingly and script retailers particular clarifying Mitch. footwear very and the retail these leading RFID, growth driver I benefits commenting ahead. on and leaders of question, brands strong continues the for RAIN Thanks to good the market performance and among in about and a we opportunities

Mitch Steves

as three for your is And three. be guess what then quick give the guys? of of of in percentage it. markets Do of idea mix kind you and total you rough about a the typically the in have secondly terms those guys airlines big retail healthcare terms what I is revenue? then a update Got You mind do on you us Okay. end revenue talk

Jeff Dossett

each Jeff percentages markets manufacturing smart within strength logistics break automotive and say key the and I Industry What or specifically to in and and to Mitch, will is includes aviation. We continued supply that our vertical out in X.X the as for again. don't our often sectors. of some is referred revenue of more it's addition drivers this chain retail to

Mitch Steves

follow-up just it. then jump I'll Got guess, one I more out.

Just to here. clarify

So if of retail out and is I percentage higher filings you going airlines the I retail do to think look healthcare think guys about and XXXX the in say percentage? you lower had a let's or end to be revenue markets original

Jeff Dossett

We logistics of opportunity. opportunities helps market a chain will retail the driver which among smart manufacturing, and do continue and to strong think diversify I supply and adoption growing to see growth a ahead. be growth

Mitch Steves

Thank it. Got you.

Chris Diorio

And would as Mitch, it's opportunity as about tracking bags add move. that particular just think the you aviation around I a it's logistics think you through airports they about items as moving opportunity, really

Operator

Your with next Jim question comes Please Ricchiuti ahead. Company. from & go Needham

Jim Ricchiuti

you. afternoon. any Good Hi. American QX? logistics had in was you say QX all North maybe Thank revenues whether in this project to Can or it you

Eric Brodersen

we've call Jim, Eric. this is second this This project. is highlighted the

our So referenced we call it first today. in and also quarter

Jim Ricchiuti

in guys RFP that also had was there question into talk project up went bake-off was out the a this. What revenues? was an And So for do this you this the the the you what like? come ahead some deciding when I business? Eric started to factor –six, selection being the what little you terms nine of did was QX think When you see the winning months bit leading of process about can -- to

Eric Brodersen

process I little time. engage standpoint then don't perhaps this this talk Why we've about But customer from Jeff, think been a and a bit can with long-standing some is project this on customer the for lead a itself. that I

really think the account a to support the process capabilities would standpoint Jeff from our I at about from say the to And add and And scale. so highlights? customer and a of want any I platform selling you engagement process point standpoint, it's that ability

Jeff Dossett

broader followed marketplace particular the variety that ability this aside their that of our partners our stand of like wide capabilities Impinj integrate time. Eric's as pretty technologies at they available and customers much to by the context is select and contributions customer of say in customers I'd To a a I typical using think, Jim, assessment transformation. data the the opportunity enterprise-wide RAIN criteria work a including this in point, the enabled to

that business think the was their to into commitment to a enterprise I effort ability So integrate reflect Impinj's its systems to and and to critical partners factor. customers

Jim Ricchiuti

healthy get able But that's I again, is just systems, The the you expressed size is but I'm not have on other in is are you sense that's is to only with project to like a project large something that this trying the leverageable is leverage and this sounds win? you near how term question feel other be endpoints. It customers? this pipeline pretty to going

Jeff Dossett

enables for upon Again, within this platform. its a learned We about other is its and that and the learn partners a integrated we've build of out lot lot in with customer deployment comprehensive enterprise solutions Jeff. to certainly the and this based the context to customers Impinj and opportunity us

I customers the as So leverageable is end and we think life in of partners implementations real our by learning other engage by that deeply in more the our customers marketplace.

Jim Ricchiuti

the for to question of color some on in in regions. quarter perhaps major terms and can business wondering out give looking geographic if I'm me. QX you the your Final

Chris Diorio

So, versus third Chris. first change heading We any continuous opportunities. quarter I distributions in quarter. second Jim, don't this versus the we or even quarter growth see geographic of think into worldwide terms see is

it and geographies. in our kind and the hasn't now asking mouth, but things trade materially still you on in across been board trade maybe strong that So the I macro our geographically the same see in of just crosscurrents growth of terms as -- may whether putting right We that's a a the are your affecting going business. words of business affecting be all

Jim Ricchiuti

across So you board in Chris, was the growth fairly the regions QX, into saw uniform? the

Chris Diorio

bit a based consistent little we driver. the other revenue opportunity in and things, on cited a revenue on America as North varies it because based uniform, fairly say won't I project being

Jim Ricchiuti

Perfect.

Chris Diorio

are are all just I all and of the see say, all growing? the look in they Are all significantly. geographies Yeah, they Yeah, they geographies opportunities if growing. But are at them healthy? healthy. all We

Jim Ricchiuti

Okay.

Congrats a quarter. on lot. Okay. a Thanks

Chris Diorio

you, Thank Jim.

Linda Breard

Thank you.

Eric Brodersen

you. Thank

Operator

comes ahead. from Jaffray. go Jensen The Troy Piper with Please question next

Troy Jensen

congrats gentlemen, and GAAP result the return profitability. on to Hey,

Chris Diorio

you. Thank

Linda Breard

Thank you.

Eric Brodersen

Thank you.

Troy Jensen

would violating for with start you, or that IP guess to sometime. Chris NXP Hey, I your quite argue is

what guess, why after guys do curious I'm for IP this cost think legal And going you the I So it? would now be you are luggage?

Chris Diorio

going and will with part say first the something costs. close then to I'm on out So Linda legal the

I same community noted we refused forth the time with filed steadfastly in at to put time to we to As years as the in during or we've really that letter and discussion open with been negotiate lawsuit, for trying a NXP us two that they an engage to engage us.

we we And determination file to came choice but so finally the that suit. had to no

correct choice. situation about So, a you are to your us we've something and no basically while assessment left they in known that the try for and do we

Linda Breard

perspective, as watching then as our company. There's guidance would what spend closely we lot of Troy, in of and part OpEx impact our are legal is a a and a move And monitoring factors that it's say, always spend that regular can I from that is forward. contemplated obviously we that

Troy Jensen

understand the if takes margin for And right. you're you here. the the and one maybe and while do going then of programs new to it MXXX, MXXX think just on But penetrate I more out here. the of business, what impact's Understood. Back margin? the be you to All think becomes gross a Eric the on existing kind

Eric Brodersen

comment and far profitability, but that launch us. margins for to for critical a representation I I product customer it's framework little can up. going of some of that we're business Jeff bit think a our as think that gross sets that exact those think think model It's overall you after, the period I deals the qualification the out and important of on how cycles of about sort

Jeff Dossett

Monza immediately in seen generation impact is sixth would experience new a a introduction. Yes, our in I think I what significant haven't families that product we introducing of a add product

In know to tend products very I well. believe as a have fact our life long you

we for its ICs. what a latest most ICs existing for as of is performance endpoint see of adoption time market ramps actually continued some layering the demand So, in

having So, favorable anticipate the later in MXXX impact earlier, Chris year. over But do the time. realized Impinj is the said significantly we as a impact

Chris Diorio

in Later XXXX.

Jeff Dossett

In XXXX. Thanks clarifying. for

Troy Jensen

In XXXX.

it. get I and right. Okay, All again congrats. Thanks

Chris Diorio

Thanks Troy. Thank you.

Operator

with comes Please go The next question Anderson Company. Charlie from & ahead. Dougherty

Charlie Anderson

a for my as thanks congrats my Yes, quarter. questions strong really taking well and on

Chris Diorio

you. Thank

Eric Brodersen

you. Thank

Charlie Anderson

interesting So, pickup on thought certainly the was customer by or -- this script Chris seeing supply in systems helping that automotive and a I lot chain this logistics. you of that's new in we're mentioned

RAIN supply wonder in I with are back people is markets of RFID what today? adoption chain us those for just if you two could So, using logistics end and rough automotive step help a sketch where and

And then how much then grow look markets? end being used to there look headroom how opportunities compared those you how two that to When follow-up. does got today? your I of is it in And pipeline at is have a

Chris Diorio

Yes sure. Thanks Charlie.

been vertical the As going of you XX% in speak about apparel I think years. we space retail leading on are public, retail apparel typically where terms think I adoption being has for we on the talk about in a when I out roughly and penetrated that think

the supply at chain in some probably are terms look and penetrated days of of way board, kind I the overall As early opportunity. logistics across we X%

chain pipeline. are and in that significant of in think aviation is of just you kind supply where about board, upside, days, reflected in our opportunities the across space we If and overall lots automotive early upside the

across things Without these chain space. do that is the the and how we opportunities to far into of projecting out over are the feel say logistics to kind hard going will future, and time of how quickly there there board happen. it's great go adoption But supply

Charlie Anderson

then terms And in of…

Eric Brodersen

supply today course, has the about that contributed terms entire for improving think chain opportunity and is to upon supply level I they're of visibility overall In some expanding the RAIN based Impinj of logistics, inventory if chain location think the across I what in doing platform and visibility time and of logistics. in each

distribution use so marketplace to to key I trend. end manufacture -- think that's center a store So, or

transitions supply-chain So, logistics. dock throughout things like and door

is continuous supply visibility the So, throughout chain.

examples deployments process in knowing manufacturing, manufacturing many And an work in things where manufacturing for of critical. work are or progress we smart in see is in increasingly environment

are items key So, of next the being out with so and location RAIN to tool manufacturing enhanced tracking, delivery, location manufacturing transitions process enabled transition of within the tracking point work the deployments. into then are and that in

Chris Diorio

Hey much. the on pile thing I because Charlie one do want question I to started to this this too example. say But not about

developing inventory So, -- this the yes. many? what's parts? one box? In we're I said doing? the because box, the parts. reading wow X,XXX. had in vision. that's said X,XXX great. our and thinking said, it how box? partners how plane, I for call, He partner it really me can said And automotive just reliably on in and the field data He cited the said sealed highlighted one why it narrowed said the box was I technology said where grow He our X,XXX of me, system He Then showed and a I I has just items a

Charlie Anderson

color. guys. great Thanks That's

on potentially these there. So partnership reduce the really did you it's the then, could mention MXXX, that have with able were to IC, to my understanding can where smaller think you one too some reduce then, inlays? of build time recently so you Chris that cost a smaller And I a inlays,

those things aren't Thanks. the all what cost So opportunity or kind call of reduce in still bring can inlay it in I we can together, market that much the how let's there in putting today? does -- these about overall, And wonder, label?

Chris Diorio

Yeah.

to answer happy I'm question. that So,

competitors. we cited ICs So, as to as as type say MXXX many will I'm one, of more of number than IC, twice wafers things: our prior I Impinj our have call, any family guess of two going and the on

they have designing on, IC. get on partners our introduced these with product early inlays into can experience the we that so So, inlay

that qual in I so same their and out proceeding basically want that process introduced qual. can So, talk their build get early actually our the up the parts, We time expand. qualification they to about as

well. I'm going in handling performance excited and they're out doing are this about getting small it. undertakings IC so And how

performance about When more the can get the inlay talk size actually you a can range when sensitive inlay the still longer get itself, maintain get read shrinking and or sensitive of improved you performance. we shrink and more IC IC, of you a either

goes of size that inlay as the So, and as the of and inlay shrinking the materials the in well the packing itself on those things. cost reduces

overall inlay time that on but the an reductions whether cost are I reduces assembly be, it going adhesive more sensitive you spur So, and much pushing cost, to industry. in as in we next continue IC -- the be to a that cite direction precisely reductions for should first, that us reduce to can on can't the more expect in for that as push could to the -- what the cost sensitive industry we adoption or happens inlay

Charlie Anderson

then one right. ways. different mix quick that has is different more just, guys between I and me, of for you few question's way Thanks. But All business been specific then asked in times, system? there know few just And a a can endpoint QX and be a one the

Jeff Dossett

what than really publish we our other in So, quarterly there isn't. filings,

competitive For mix. the say not overall that prefer the more reasons, either the only anything to mix about we information we're we're and disclosing, disclosing ASP or

Charlie Anderson

Thanks much. Perfect. so Okay.

Jeff Dossett

Charlie. Thank you,

Linda Breard

Charlie. you, Thank

Operator

question-and-answer concludes to This back turn our like remarks. Diorio I session. Chris would closing the over for to conference any

Chris Diorio

now. Thank for call thanks joining a Impinj to solid and you quarter you Bye all for special all. another Thank execution. today's of the team

Operator

now has today's presentation. conference concluded. The for you Thank attending

disconnect. now may You

Impinj (PI) 29 Jul 192019 Q2 Earnings call transcript