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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-37824

IMPINJ, INC.

(Exact name of registrant as specified in its charter)


Delaware		91-2041398
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
400 Fairview Avenue North, Suite 1200, Seattle, Washington		98109
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (206) 517-5300

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	PI	The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April 17, 2026, 30,459,185 shares of common stock were outstanding.

Table of Contents

IMPINJ, INC.

QUARTERLY REPORT ON FORM 10-Q

Table of Contents


		Page
	Risk Factor Summary	3

	PART I. — FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Income (Loss)	6
	Condensed Consolidated Statements of Cash Flows	7
	Condensed Consolidated Statements of Changes in Stockholders' Equity	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
	PART II. — OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	47
	Signatures	48

Table of Contents

Risk Factor Summary

Our business is subject to numerous risks and uncertainties, including those highlighted in the section of this report captioned “Risk

Factors.” These risks include, but are not limited to, the following:

•

we operate in a very competitive market;

•

RAIN adoption is concentrated in key markets and the extent and pace of RAIN market adoption beyond those markets is uncertain;

•

our ability to develop and sell enterprise solutions at scale is nascent;

•

poor product quality could result in significant costs to us and impair our ability to sell our products;

•

end users and partners must design our products into their products and business processes;

•

an inability or limited ability of end user systems to exploit RAIN information may adversely affect the market for our products;

•

alternative technologies may enable products and services that compete with ours;

•

we obtain the products we sell through a limited number of third parties with whom we do not have long-term supply contracts;

•

the availability of silicon wafers and other key inputs to our business can fluctuate and shortages can adversely affect our revenue and/or gross margins;

•

changes in global trade policies could have a material adverse effect on us;

•

we must attract and retain employees with specialized knowledge and experience to compete effectively;

•

we rely on a small number of customers for a large share of our revenue;

•

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;

•

our growth strategy depends in part on the success of strategic relationships with third parties and their continued performance and alignment;

•

if we are unable to protect and enforce our intellectual property, then our business could be adversely affected;

•

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;

•

we have a history of losses and have only achieved profitability periodically and we cannot be certain that we will attain or sustain profitability in the future;

•

we have a history of significant fluctuations in our quarterly and annual operating results;

•

geopolitical disruptions could impact our product supply, ability to sell and/or customer or market demand;

•

our principal stockholders and management beneficially own a significant percentage of our stock and are able to exercise significant influence over matters subject to stockholder approval; and

•

we may not have sufficient cash flow or access to cash necessary to satisfy our obligations under the $190.0 million aggregate principal amount 0% convertible senior notes due 2029, or the 2025 Notes and $57.3 million aggregate principal amount 1.125% convertible senior notes due 2027, or the 2021 Notes, and our current and future indebtedness may restrict our business.

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited).

IMPINJ, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value, unaudited)


	March 31, 2026			December 31, 2025
Assets:
Current assets:
Cash and cash equivalents	$	32,295		$	48,206
Short-term investments		99,544			127,130
Accounts receivable, net		72,354			70,785
Inventory		86,300			84,961
Prepaid expenses and other current assets		8,545			8,135
Total current assets		299,038			339,217
Long-term investments		103,385			103,766
Property and equipment, net		49,672			50,290
Intangible assets, net		8,815			9,501
Operating lease right-of-use assets		20,500			20,896
Other non-current assets		671			795
Goodwill		20,443			20,721
Total assets	$	502,524		$	545,186
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable	$	15,442		$	13,614
Accrued compensation and employee related benefits		10,827			9,936
Accrued and other current liabilities		3,352			3,664
Current portion of operating lease liabilities		1,521			776
Current portion of long-term debt		—			96,745
Current portion of deferred revenue		1,358			1,791
Total current liabilities		32,500			126,526
Long-term debt		241,470			184,141
Operating lease liabilities, net of current portion		22,078			22,536
Deferred tax liabilities, net		1,929			2,062
Deferred revenue, net of current portion		641			690
Total liabilities		298,618			335,955
Commitments and contingencies (Note 6)
Stockholders' equity:
Preferred stock, $0.001 par value — 5,000 shares authorized, no shares issued and outstanding at March 31, 2026 and December 31, 2025		—			—
Common stock, $0.001 par value — 495,000 shares authorized, 30,459 and 30,222 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively		30			30
Additional paid-in capital		627,840			606,852
Accumulated other comprehensive income		1,457			2,509
Accumulated deficit		(425,421	)		(400,160	)
Total stockholders' equity		203,906			209,231
Total liabilities and stockholders' equity	$	502,524		$	545,186

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)


	Three Months Ended March 31,
	2026			2025
Revenue	$	74,250		$	74,277
Cost of revenue		37,791			37,596
Gross profit		36,459			36,681
Operating expenses:
Research and development		28,724			25,314
Sales and marketing		9,757			8,055
General and administrative		12,609			12,396
Amortization of intangibles		537			485
Total operating expenses		51,627			46,250
Loss from operations		(15,168	)		(9,569	)
Other income, net		2,666			2,060
Induced conversion expense		(11,938	)		—
Interest expense		(773	)		(1,223	)
Loss before income taxes		(25,213	)		(8,732	)
Income tax benefit (expense)		(48	)		281
Net loss	$	(25,261	)	$	(8,451	)

Net loss per share — basic	$	(0.83	)	$	(0.30	)
Net loss per share — diluted	$	(0.83	)	$	(0.30	)
Weighted-average shares outstanding — basic		30,292			28,639
Weighted-average shares outstanding — diluted		30,292			28,639

See accompanying notes to Condensed Consolidated Financial Statements.

Table of Contents

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands, unaudited)


	Three Months Ended March 31,
	2026			2025
Net loss	$	(25,261	)	$	(8,451	)
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on investments		(586	)		394
Foreign currency translation adjustment		(466	)		1,175
Total other comprehensive income (loss)		(1,052	)		1,569
Comprehensive loss	$	(26,313	)	$	(6,882	)

See accompanying notes to Condensed Consolidated Financial Statements.

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IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)


	Three Months Ended March 31,
	2026			2025
Operating activities:
Net loss	$	(25,261	)	$	(8,451	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		3,845			3,521
Stock-based compensation		14,691			12,522
Accretion of discount or amortization of premium on investments		(188	)		(590	)
Amortization of debt issuance costs		517			414
Induced conversion expense related to convertible notes		11,938			—
Deferred tax expense		(103	)		(93	)
Changes in operating assets and liabilities:
Accounts receivable		(1,601	)		(220	)
Inventory		(1,355	)		896
Prepaid expenses and other assets		(202	)		870
Accounts payable		1,402			(6,623	)
Accrued compensation and employee related benefits		913			(13,401	)
Accrued and other liabilities		(832	)		405
Operating lease right-of-use assets		390			653
Operating lease liabilities		292			(887	)
Deferred revenue		(466	)		(159	)
Net cash provided by (used in) operating activities		3,980			(11,143	)
Investing activities:
Purchases of investments		(21,223	)		(25,910	)
Proceeds from maturities of investments		48,700			49,000
Purchases of property and equipment		(1,747	)		(1,863	)
Net cash provided by investing activities		25,730			21,227
Financing activities:
Payment of 2021 Notes		(47,031	)		—
Proceeds from exercise of stock options and employee stock purchase plan		3,010			5,847
Payments of taxes on restricted stock units		(1,553	)		(787	)
Net cash provided by (used in) financing activities		(45,574	)		5,060
Effect of exchange rate changes on cash and cash equivalents		(47	)		120
Net increase (decrease) in cash and cash equivalents		(15,911	)		15,264
Cash and cash equivalents
Beginning of period		48,206			46,053
End of period	$	32,295		$	61,317

Supplemental disclosure of cashflow information:
Cash paid for interest		152			—
Purchases of property and equipment not yet paid		1,403			940

See accompanying notes to Condensed Consolidated Financial Statements.

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IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, unaudited)


											Accumulated
					Additional						Other			Total
	Common Stock				Paid-in			Accumulated			Comprehensive			Stockholders'
	Shares		Amount		Capital			Deficit			Income (Loss)			Equity
Balance at December 31, 2025		30,222	$	30	$	606,852		$	(400,160	)	$	2,509		$	209,231
Issuance of common stock		237		—		3,010			—			—			3,010
Stock-based compensation		—		—		14,691			—			—			14,691
RSU tax withholding		—		—		(1,553	)		—			—			(1,553	)
Induced conversion on 2021 Notes (Note 7)						4,840									4,840
Net loss		—		—		—			(25,261	)		—			(25,261	)
Other comprehensive loss		—		—		—			—			(1,052	)		(1,052	)
Balance at March 31, 2026		30,459	$	30	$	627,840		$	(425,421	)	$	1,457		$	203,906

											Accumulated
					Additional						Other			Total
	Common Stock				Paid-in			Accumulated			Comprehensive			Stockholders'
	Shares		Amount		Capital			Deficit			Income (Loss)			Equity
Balance at December 31, 2024		28,504	$	29	$	541,090		$	(389,313	)	$	(1,942	)	$	149,864
Issuance of common stock		423				5,847			—			—			5,847
Stock-based compensation		—		—		12,522			—			—			12,522
RSU tax withholding		—		—		(787	)		—			—			(787	)
Net loss		—		—		—			(8,451	)		—			(8,451	)
Other comprehensive income		—		—		—			—			1,569			1,569
Balance at March 31, 2025		28,927	$	29	$	558,672		$	(397,764	)	$	(373	)	$	160,564

See accompanying notes to Condensed Consolidated Financial Statements.

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IMPINJ, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements include Impinj, Inc. and its wholly owned subsidiaries. We have eliminated intercompany balances and transactions in consolidation. We have prepared these Condensed Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles, or GAAP, and applicable rules and regulations of the Securities and Exchange Commission, or the SEC, regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2025 included in Impinj, Inc.’s Annual Report on Form 10-K, which was filed with the SEC on February 9, 2026.

The unaudited condensed consolidated interim financial statements, in the opinion of management, reflect all adjustments, comprising normal recurring adjustments, necessary to state fairly our financial position, results of operations and our cash flows for the periods presented. Interim results are not necessarily indicative of the results for a full year or for any other future period.

Use of Estimates

Preparing financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and related disclosures as of the date of the financial statements, as well as the reported revenue and expenses during the periods presented. We evaluate our estimates on an ongoing basis, including those related to revenue recognition, sales incentives, the fair value of assets acquired, liabilities assumed, contingent consideration in business combinations, inventory excess and obsolescence and income taxes. To the extent there are material differences between our estimates, judgments or assumptions and our actual results, our financial statements will be affected.

Recently Adopted Accounting Standards

In December 2023, the FASB released Accounting Standard Update, or ASU, 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which amends income tax disclosure requirements to enhance the transparency and decision usefulness for users of the financial statements. The standard is effective for fiscal years beginning after December 31, 2024. We adopted ASU 2023-09 on January 1, 2025 using the retrospective transition method. We have adjusted the financial statements to reflect the application of the new accounting guidance for all periods presented (See Note 7 of our Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2025).

In November 2024, the FASB released ASU 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20), which improves the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt - Debt with Conversion and Other Options. The standard is effective for fiscal years beginning after December 31, 2025, and early adoption is permitted. We early adopted ASU 2024-04 on January 1, 2025, using the prospective transition approach. As a result of our adoption, we accounted for the exchange of the 2021 Notes in September 2025 described below, as an induced conversion. See Note 7 for additional details of this exchange transaction.

Recently Issued Accounting Standards Not Yet Adopted

In November 2024, the FASB released ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which amends disclosure requirements related to the disaggregation of income statement expenses in the notes to financial statements. In January 2025, the FASB released ASU 2025-01, clarifying that the standard is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. We are currently evaluating any impact of this standard on our financial statement disclosures.

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Note 2. Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

•

Level 1 — Quoted prices in active markets for identical assets or liabilities.

•

Level 2 — Assets and liabilities valued based on observable market data for similar instruments, such as quoted prices for similar assets or liabilities.

•

Level 3 — Unobservable inputs that are supported by little or no market activity; instruments valued based on the best available data, some of which is internally developed, and considers risk premiums that a market participant would require.

We did not have any financial assets or liabilities in Level 3 as of March 31, 2026 or December 31, 2025.

We applied the following methods and assumptions in estimating our fair value measurements:

Cash Equivalents — 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.

Investments — Our investments comprise fixed income securities, which include U.S. government agency securities, corporate notes and bonds, commercial paper and treasury bills. 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.

Long-term Debt — See Note 7 for the carrying amount and estimated fair value of the 2021 Notes and 2025 Notes.

The following table presents the balances of assets and liabilities measured at fair value on a recurring basis, by level within the fair value hierarchy, as of the dates presented (in thousands):


	March 31, 2026						December 31, 2025
	Level 1		Level 2		Total		Level 1		Level 2		Total
Cash equivalents:
Money market funds	$	1,022	$	—	$	1,022	$	21,209	$	—	$	21,209
Total cash equivalents		1,022		—		1,022		21,209		—		21,209
Short-term investments:
U.S. Government agency securities		—		7,480		7,480		—		7,480		7,480
U.S. Treasury securities		—		15,864		15,864		—		25,390		25,390
Corporate notes and bonds		—		65,805		65,805		—		67,962		67,962
Commercial paper		—		10,395		10,395		—		26,298		26,298
Total short-term investments		—		99,544		99,544		—		127,130		127,130
Long-term investments:
U.S. Government agency securities		—		5,850		5,850		—		6,851		6,851
Corporate notes and bonds		—		97,535		97,535		—		96,915		96,915
Total long-term investments		—		103,385		103,385		—		103,766		103,766
Total	$	1,022	$	202,929	$	203,951	$	21,209	$	230,896	$	252,105

We expect short-term investments to mature within 1 year and long-term investments within 1 to 3 years of the reporting date.

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Investments

The following tables present the cost or amortized cost, gross unrealized gains, gross unrealized losses and total estimated fair value of our financial assets as of the dates presented (in thousands):


	March 31, 2026
	Cost or		Gross		Gross			Total Estimated
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Description:
Money market funds	$	1,022	$	—	$	—		$	1,022
U.S. Government agency securities		13,344		—		(14	)		13,330
U.S. Treasury securities		15,864		3		(3	)		15,864
Corporate notes and bonds		163,580		124		(364	)		163,340
Commercial paper		10,396		2		(3	)		10,395
Total	$	204,206	$	129	$	(384	)	$	203,951


	December 31, 2025
	Cost or		Gross		Gross			Total Estimated
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Description:
Money market funds	$	21,209	$	—	$	—		$	21,209
U.S. Government agency securities		14,339		2		(10	)		14,331
U.S. Treasury securities		25,378		17		(5	)		25,390
Corporate notes and bonds		164,563		383		(69	)		164,877
Commercial paper		26,285		14		(1	)		26,298
Total	$	251,774	$	416	$	(85	)	$	252,105

Marketable securities in a continuous loss position for less than 12 months had an estimated fair value of $150.3 million and $0.4 million in unrealized losses as of March 31, 2026, and an estimated fair value of $74.9 million and $0.1 million in unrealized losses as of December 31, 2025. There were no marketable securities in a continuous loss position for greater than 12 months as of March 31, 2026. Marketable securities in a continuous loss position for greater than 12 months had an estimated fair value of $8.5 million and immaterial unrealized losses as of December 31, 2025.

Note 3. Inventory

The following table presents the detail of inventories as of the dates presented (in thousands):



	March 31, 2026		December 31, 2025
Raw materials	$	25,303	$	19,721
Work-in-process		26,418		24,648
Finished goods		34,579		40,592
Total inventory	$	86,300	$	84,961

Note 4. Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in business combinations accounted for under the purchase method of accounting. The following table presents goodwill as of March 31, 2026 (in thousands):


	Three Months Ended March 31,
	2026			2025
Balance at beginning of period	$	20,721		$	18,723
Foreign currency translation adjustment		(278	)		654
Total	$	20,443		$	19,377

As of March 31, 2026, intangible assets comprised the following (in thousands):

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	Estimated Useful Life in Years	Gross Carrying Amount		Accumulated Amortization			Net
Definite-lived intangible assets:
Developed Technology	7.25	$	13,640	$	(5,644	)	$	7,996
Patent	3	$	250	$	(226	)		24
Tradename	8	$	1,272	$	(477	)		795
Total definite-lived intangible assets (1)		$	15,162	$	(6,347	)	$	8,815
(1) Foreign intangible asset carrying amounts are affected by foreign currency translation

We amortize identifiable intangible assets with finite lives over their useful lives on a straight-line basis. Amortization of intangible assets was $0.5 million for the three months ended March 31, 2026 and $0.5 million for the three months ended March 31, 2025.

As of March 31, 2026, the estimated intangible asset amortization expense for the next five years and thereafter is as follows:


	Estimated Amortization
	(in thousands)
2026		1,555
2027		2,040
2028		2,040
2029		2,040
2030		1,100
Thereafter		40
Total	$	8,815

Note 5. Stock-Based Awards

Restricted Stock Units

We grant restricted stock units, or RSUs, with a service condition, and RSUs with market and service conditions, or MSUs.

The following table summarizes activity for RSUs and MSUs for the three months ended March 31, 2026 (in thousands):


	Number of Underlying Shares
	RSUs			MSUs
Outstanding at December 31, 2025		771			219
Granted		414			94
Vested		(137	)		(60	)
Forfeited		(23	)		(3	)
Outstanding at March 31, 2026		1,025			250

Stock-Based Compensation Expense

The following table presents the detail of stock-based compensation expense amounts included in our Condensed Consolidated Statements of Operations for the periods presented (in thousands):


	Three Months Ended March 31,
	2026		2025
Cost of revenue	$	387	$	526
Research and development expense		7,173		7,019
Sales and marketing expense		2,368		270
General and administrative expense		4,763		4,707
Total stock-based compensation expense	$	14,691	$	12,522

Note 6. Commitments and Contingencies

For information on our commitments and contingencies, see Note 12 of our Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our commitments and

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contingencies as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, except for “Obligations with Third Parties” and “Litigation” as discussed below.

Obligations with Third Parties

We manufacture products with third-party manufacturers. We are committed to purchase $33.9 million of inventory as of March 31, 2026.

Litigation

From time to time, we are subject to various legal proceedings or claims that arise in the ordinary course of business. We accrue a liability when management believes that it is both probable that we have incurred a liability and we can reasonably estimate the amount of loss. As of March 31, 2026 and December 31, 2025, we did not have accrued contingency liabilities. The following is a description of our significant legal proceedings.

Patent Infringement Claims and Counterclaims

Impinj Patent Infringement Claims Against NXP

From 2019 to 2023, we engaged in active patent litigation against our primary endpoint IC competitor, NXP Semiconductors N.V., or NXP. During this time, we filed three patent infringement lawsuits against subsidiaries of NXP in federal courts in California and Texas, and in response NXP filed lawsuits against us in the U.S. and our subsidiary in China.

In three U.S. trials held in 2023, juries in California and Texas returned verdicts that NXP endpoint ICs infringed five of our patents that made it to trial, and juries in Washington and Texas ruled that we did not infringe any of the three patents NXP accused us in court of infringing.

On March 13, 2024, while additional trials were pending in the U.S., we and NXP entered into a settlement agreement, or the Settlement Agreement. Subject to the terms of the Settlement Agreement, we and NXP granted each other non-exclusive, worldwide patent licenses to make, have made, import, use, offer for sale and sell our respective products and services. NXP agreed to pay us a one-time amount of $45.0 million and agreed to make annual license fee payments until a specified set of Indicator Patents expire (in about 2034) or until NXP earlier terminates the agreement. NXP can terminate the license on any April 1 during the term of the agreement if by that date it has successfully designed out all valid claims of the Indicator Patents. The annual license fee is to increase by a fixed percentage each year after 2024 for the remaining term of the Settlement Agreement. We have no obligation to pay NXP under the Settlement Agreement.

We will recognize the license fee, which relates to annual usage of the license from April 1 to March 31 of each applicable year, as revenue in the second quarter of each year until the Settlement Agreement terminates.

Note 7. Long-term debt

Convertible Senior Notes

In November 2021, we issued $287.5 million aggregate principal amount of convertible promissory notes due May 15, 2027, or the 2021 Notes, and in September 2025, we issued $190.0 million aggregate principal amount of convertible promissory notes due September 15, 2029, or the 2025 Notes, and collectively, the Notes.

The following table presents the outstanding principal amount and carrying value of the Notes as of the dates indicated (in thousands):


	March 31, 2026							December 31, 2025
	Principal Amount		Unamortized debt issuance costs			Net Carrying Amount		Principal Amount		Unamortized debt issuance costs			Net Carrying Amount
2021 Notes	$	57,302	$	(363	)	$	56,939	$	97,498	$	(753	)	$	96,745
2025 Notes		190,000		(5,469	)		184,531		190,000		(5,859	)		184,141
Total Debt	$	247,302	$	(5,832	)	$	241,470	$	287,498	$	(6,612	)	$	280,886
Short-term Debt		—		—			—		97,498		(753	)		96,745
Long-term Debt	$	247,302	$	(5,832	)	$	241,470		190,000		(5,859	)		184,141

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Further details of the Notes are as follows:


Issuance	Maturity Date	Interest Rate	First Interest Payment Date	Effective Interest Rate	Semi-Annual Interest Payment Dates	Initial Conversion Rate per $1,000 Principal	Initial Conversion Price		Number of Shares (in millions)
2021 Notes	May 15, 2027	1.125%	May 15, 2022	1.72%	May 15; November 15	9.0061	$	111.04	0.5
2025 Notes	September 15, 2029	0%	N/A	0.84%	N/A	3.7398	$	267.39	0.7

The Notes are senior unsecured obligations and do not contain any financial covenants. Each series of Notes is governed by an indenture (collectively, the “Indentures”). The 2025 Notes do not bear regular interest and the principal amount of the 2025 Notes does not accrete. The total net proceeds from the 2021 Notes and the 2025 Notes, after deducting initial debt issuance costs, fees and expenses, were $278.4 million and $183.6 million, respectively. We used approximately $183.6 million of the 2021 Notes net proceeds, excluding accrued interest, 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 us offering the 2021 Notes. We used approximately $17.6 million, excluding accrued interest, to repurchase the remaining $9.9 million aggregate principal amount of the 2019 Notes in June 2022. We used the remainder of the net proceeds from the 2021 Notes for general corporate purposes. We used the 2025 Notes net proceeds, and cash on hand to exchange $190.0 million aggregate principal amount of the 2021 Notes for approximately $190.0 million in cash, representing the principal amount exchanged, and approximately 811,000 shares of our common stock, representing the exchange value in excess thereof, and also paid accrued and unpaid interest thereon, in privately negotiated transactions concurrently with the 2025 Notes offering.

Terms of the Notes

The holders of each series of Notes may convert their respective Notes at their option at any time prior to the close of business on the business day immediately preceding the respective conversion dates under the following circumstances:

•

during any fiscal quarter (and only during such fiscal quarter), if the last reported sale price of our common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable conversion price on each applicable trading day;

•

during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of the applicable series of Notes for each trading day was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for such series of Notes on each such trading day;

•

prior to the close of business on the second scheduled trading day immediately preceding the redemption date if we call the applicable series of Notes for redemption; or

•

upon the occurrence of specified corporate events, as described in the Indenture governing the applicable series of Notes.

None of the circumstances in the above paragraphs were met during the three months ended March 31, 2026.

Regardless of the foregoing circumstances, holders may convert all or any portion of the 2021 Notes, in increments of $1,000 principal amount, on or after February 15, 2027, and may convert all or any portion of the 2025 Notes, in increments of $1,000 principal amount, on or after June 15, 2029, until the close of business on the second scheduled trading day immediately preceding the maturity date for the applicable series of Notes.

We may redeem all or any portion of the 2021 Notes for cash, at our option, on or after November 20, 2024, and all or any portion of the 2025 Notes for cash, at our option, on or after March 20, 2028, if the last reported sale price of our common stock has been at least 130% of the conversion price for the applicable series of Notes for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period at a redemption price equal to 100% of the principal amount of the Notes being redeemed, plus any accrued and unpaid interest to, but excluding, the redemption date for such Notes.

Holders who convert their Notes in connection with certain corporate events that constitute a make-whole fundamental change (as defined in the Indenture governing each series of Notes) are, under certain circumstances, entitled to an increase in the conversion rate for such Notes. Additionally in the event of a corporate event constituting a fundamental change (as defined in the Indenture governing each series of Notes), holders of the Notes may require us to repurchase all or a portion of their Notes of such series at a repurchase price equal to 100% of the principal amount of the Notes of such series being repurchased, plus any accrued and unpaid interest to, but excluding, the repurchase date.

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Accounting for the Notes

We account for each series of Notes as a single liability measured at its amortized cost. We presented the unamortized issuance costs as a direct deduction from the face amount of the Notes. We amortize the issuance costs to interest expense over the respective term of each series of Notes using the effective interest rate method.

Interest expense related to the Notes was as follows (in thousands):


	Three Months Ended March 31, 2026				Three Months Ended March 31, 2025
	2025 Notes		2021 Notes		2021 Notes
Amortization of debt issuance costs	$	389	$	127	$	414
Cash interest expense		—		257		809
Total interest expense	$	389	$	384	$	1,223

Accrued interest related to the 2021 Notes as of March 31, 2026 and December 31, 2025 was $0.2 million and $0.1 million, respectively. There is no accrued interest for the 2025 Notes. We record accrued interest in accrued liabilities in our consolidated balance sheet.

We estimate the fair value of the 2021 Notes to be $69.4 million and $159.1 million as of March 31, 2026 and December 31, 2025, respectively, which we determined through consideration of quoted market prices. We estimate the fair value of the 2025 Notes to be $164.5 million and $195.6 million as of March 31, 2026 and December 31, 2025, respectively, which we determined through consideration of quoted market prices. The fair value for the Notes is classified as Level 2, as defined in Note 2.

Capped Call Transactions

In connection with issuing the 2019 Notes and the 2025 Notes, we entered into privately negotiated capped call transactions with certain financial counterparties. The capped call transactions are generally expected to reduce the potential dilution to our common stock upon any conversion of the 2019 Notes or the 2025 Notes, and/or offset any cash payments we would be required to make in excess of the principal amount of converted 2019 Notes or 2025 Notes, as the case may be, with such reduction and/or offset subject to a cap based on the cap price. If, however, the market price per share of our common stock exceeds the cap price of the respective capped call transactions, then our stock would experience some dilution and/or such capped call transactions would not fully offset the potential cash payments, in each case, to the extent the then-market price per share of our common stock exceeds the cap price.

The capped call transactions we entered into in connection with the 2019 Notes remain outstanding even though we have repurchased the 2019 Notes, to reduce the potential dilution of the remaining 2021 Notes. The initial cap price of these capped call transactions is $54.20 per share, subject to certain adjustments under the terms of these capped call transactions. These capped call transactions expire over 40 consecutive scheduled trading days ending on December 11, 2026.

The initial cap price of the capped call transactions, entered into in connection with the 2025 Notes, is $340.32 per share, subject to certain adjustments under the terms of these capped call transactions. These capped call transactions expire on September 15, 2029. We recorded the cost of $11.2 million incurred in connection with the 2025 capped call as a reduction to additional paid-in capital.

The capped call transactions are separate transactions, and not part of the terms of the 2019 Notes or the 2025 Notes. These transactions meet the criteria for classification in equity, are not accounted for as derivatives and are not remeasured each reporting period.

Partial Exchange of the 2021 Notes

In September 2025, we entered into privately-negotiated exchanges with certain holders of our outstanding 2021 Notes with respect to the exchange of $190.0 million principal amount of the 2021 Notes, or the 2021 Note Exchange. We accounted for the 2021 Note Exchange transaction as an induced conversion in accordance with Accounting Standards Codification 470-20, Debt with Conversion and Other Options (ASC 470-20), as amended for ASU 2024-04, or ASC 470-20, as amended, which we early adopted on January 1, 2025, using the prospective transition approach. In connection with the induced conversion, we paid approximately $190.0 million in cash, representing the principal amount exchanged, issued approximately 811,000 shares of our common stock, representing the exchange value in excess thereof, and also paid accrued and unpaid interest thereon. As a result of the induced conversion, we recorded $15.0 million in induced conversion expense, which is included in the Consolidated Statements of Operations. We did not receive any cash proceeds from issuing the shares of common stock but recognized additional paid-in-capital of $13.1 million representing the induced conversion expense, net of approximately $2.0 million of unamortized debt issuance costs related to the converted 2021 Notes.

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Partial Repurchase of the 2021 Notes

In March 2026, we entered into separate, privately-negotiated repurchase agreements with certain holders of our outstanding 2021 Notes to repurchase approximately $40.2 million principal amount of the 2021 Notes, or the 2021 Note Repurchase. We accounted for the 2021 Note Repurchase as an induced conversion in accordance with ASC 470-20, as amended. In connection with the induced conversion, we paid approximately $47.2 million in cash (including accrued and unpaid interest). As a result of the induced conversion, we recorded $11.9 million in induced conversion expense, which is included in the Condensed Consolidated Statements of Operations. The induced conversion expense represents the fair value of the consideration issued upon conversion in excess of the fair value of the securities issuable under the original terms of the 2021 Notes. We accounted for the remaining cash consideration under the original terms of the 2021 Notes under the general conversion accounting guidance, where the difference between the carrying amount of the 2021 Notes retired, including unamortized debt issuance costs of $0.3 million, and the cash consideration paid, was recorded in additional paid-in capital.

Note 8. Net Loss Per Share

For the periods presented, the following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net loss per share (in thousands, except per share amounts):


	Three Months Ended March 31,
	2026			2025
Numerator:
Net loss	$	(25,261	)	$	(8,451	)
Denominator:
Weighted average common shares outstanding, basic		30,292			28,639
Dilutive effect of:
Stock plans		—			—
Convertible notes		—			—
Weighted average common shares outstanding, diluted		30,292			28,639

Net loss per share — basic	$	(0.83	)	$	(0.30	)
Net loss per share — diluted	$	(0.83	)	$	(0.30	)

Basic net loss per share is calculated using our net loss and our weighted average outstanding common shares.

Diluted net loss per share is calculated using our net loss attributable to common stockholders with interest charges applicable to our convertible debt added back under the if converted method, if dilutive, and our weighted average outstanding common shares including the dilutive effect of stock awards and employee stock purchase plan shares as determined under the treasury stock method and of our convertible notes using the if converted method, if dilutive. In periods when we recognize a net loss, we exclude the impact of outstanding stock awards and the potential share settlement impact related to our convertible notes from the diluted loss per share calculation as their inclusion would have an antidilutive effect.

The following table presents the outstanding shares of our common stock equivalents excluded from the computation of diluted net loss per share as of the dates presented because their effect would have been antidilutive (in thousands):


	Three months ended March 31,
	2026		2025
Stock options		404		632
RSUs, MSUs and PSUs		1,275		1,164
Employee stock purchase plan shares		19		18
2021 Notes		516		2,589
2025 Notes		711		—

Note 9. Segment Information

We have one reportable and operating segment: Developing and selling our RAIN products and services. We identified our operating segment based on how our chief operating decision-maker, or CODM, manages our business, makes operating decisions and evaluates our operating performance. Our chief executive officer acts as the CODM and reviews financial and operational information on an entity-wide basis. Accordingly, we have determined we have a single reportable and operating segment.

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Our CODM reviews information about our revenue categories: Endpoint ICs, including licensing revenue, and systems, defined as reader ICs, readers, gateways, tag production systems and software. The following table presents our revenue categories for the indicated periods (in thousands):


	Three Months Ended March 31,
	2026		2025
Endpoint ICs	$	63,209	$	61,218
Systems		11,041		13,059
Total revenue	$	74,250	$	74,277

Significant Segment Expenses

As our CODM manages operations on a consolidated basis, consolidated net loss as reported in our Statement of Operations is the GAAP measure that we use to make operating decisions and evaluate operating performance. The significant expense categories which we use to manage operations are those reflected in our Condensed Consolidated Statement of Operations.

Note 10. Deferred Revenue

Deferred revenue, comprising individually immaterial amounts for extended warranty, enhanced product maintenance and advance payments on nonrecurring engineering, or NRE, services contracts, represents contracted revenue that has not yet been recognized. We recognized $0.8 million of revenue related to amounts included in deferred revenue as of December 31, 2025 for the three months ended March 31, 2026. We recognized $0.6 million of revenue related to amounts included in deferred revenue as of December 31, 2024 for the three months ended March 31, 2025.

The following table presents the changes in deferred revenue for the indicated periods (in thousands):


	Three Months Ended March 31,
	2026			2025
Balance at beginning of period	$	2,481		$	1,968
Deferral of revenue		304			505
Recognition of deferred revenue		(786	)		(617	)
Balance at end of period	$	1,999		$	1,856

Note 11. Related-Party Transactions

On December 22, 2025, we signed a goods and services agreement with Microchip Technology Incorporated, of which a member of our board of directors holds both an executive leadership and board of directors position. As of March 31, 2026, we have prepaid $2.0 million for goods and services related to this agreement. No amounts have been recorded in the Condensed Consolidated Statements of Operations.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements containing words such as “may,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “project,” “projections,” “business outlook,” “estimate,” or similar expressions constitute forward-looking statements. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition or state other “forward-looking” information. These statements relate to our future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements. They include, but are not limited to, statements about:

•

our market opportunity;

•

the adoption of RAIN technology and solutions;

•

our ability to compete effectively against competitors and competing technologies;

•

our market share and product leadership;

•

our business model, strategic plans and product-development plans;

•

the impact of tariffs, trade measures, geopolitical, inflationary and other macroeconomic conditions;

•

our future financial performance, including our average selling prices, or ASPs, gross margins and the dependency of our future financial performance on macroeconomic conditions or industry trends, including tariffs;

•

the performance of third parties on which we rely for product development, manufacturing, assembly and testing; and our relationship with other third parties on which we rely for product distribution, sales, integration and deployment;

•

our ability to adequately protect our intellectual property;

•

the regulatory environment for our products and services; and

•

our leadership in industry and standards-setting bodies.

Our actual results may differ materially from those contained in or implied by any forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report, including those factors discussed in Part II, Item 1A (Risk Factors).

Considering the significant uncertainties and risks inherent in these forward-looking statements, you should not regard these statements as a representation or warranty by us or anyone else that we will achieve our objectives and plans in any specified time frame, or at all, or as predictions of future events. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Our Business

Our vision is a world in which every item that enterprises manufacture, transport and sell, and that people own, use and recycle, is wirelessly and ubiquitously connected to the cloud. And a world in which the ownership, history and linked information for every one of those items is seamlessly available to enterprises and people. We call our expansive vision a Boundless Internet of Things, or IoT. We design and sell a platform that enables that wireless item-to-cloud connectivity and with which we and our partners innovate IoT solutions.

Our mission is to connect every thing. We have enabled connectivity for more than 150 billion items to date, delivering item visibility, traceability and improved operational efficiencies for retailers, supply chain and logistics, or SC&L providers, restaurants and food-service providers, airlines, automobile manufacturers, healthcare companies and many more.

We are today focused on extending item connectivity from tens of billions to trillions of items and delivering item data not just to enterprises but to people, so they too can benefit from their connected items. We believe the Boundless IoT we are enabling will, in the not-too-distant future, give people ubiquitous access to cloud-based digital twins of every item, each storing the item’s history, location and linked information and helping people explore and learn about the item. We believe that that connectivity will transform the world.

We and our partner ecosystem build item-visibility solutions using products that we design and either sell or license, including silicon radios, reading systems, tag production systems and intellectual property. We also offer software and cloud services, and while nascent from a standalone revenue perspective, they enable our other product offerings and we intend to expand them as a part of our growth strategy. We sell two types of silicon radios. The first are endpoint ICs that store a serialized number to wirelessly identify an

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item. Our partners embed endpoint ICs into an item or its packaging. These ICs may also contain a cryptographic key to authenticate the item. The second are reader ICs that our partners use in embedded or finished readers to wirelessly discover, inventory and engage the endpoint ICs. Those readers may also protect an item or consumer, for example by authenticating the item as genuine or privatizing the item by rendering the endpoint IC unresponsive without the consumer first providing a password. Our reading systems comprise high-performance finished readers and gateways used primarily in autonomous reading solutions. Our tag production systems enable partner products and facilitate enterprise deployments. Our software and cloud service offerings focus on solutions enablement, particularly for key enterprise customers.

We sell our products, individually or as a whole platform offering, primarily with or through our partner ecosystem. That ecosystem comprises original equipment manufacturers, or OEMs, tag service bureaus, original device manufacturers, or ODMs, systems integrators, or SIs, value-added resellers, or VARs, independent software vendors, or ISVs, and other solution partners.

Our radios follow the RAIN industry’s air-interface standard for their core reading functionality. We create partner and enterprise preference for our radios and solutions by adding differentiated features into them, supporting those features across our platform and licensing them where appropriate, to deliver solutions capabilities and performance that surpasses mix-and-match solutions built from competitor products. We have also introduced a set of compatible extensions to the RAIN industry’s air-interface standard, which we call Gen2X, that enhance the performance and protection of our solutions. The RAIN industry, on both the reader and solutions side, has broadly embraced Gen2X.

Factors Affecting Our Performance

Macroeconomic Factors

We are subject to impacts from the evolving macroeconomic environment, including uncertainty and volatility in trade measures and tariffs, as well as military conflicts or blockades, inflation and geopolitical tensions. Because most of our revenue derives from endpoint ICs that our partners embed into or onto items, to the extent that those items are impacted, positively or negatively, by trade measures, tariffs and inflation, we are impacted as well. While the impact that recent trade measures, military conflicts or blockades, inflation and geopolitical tensions will have on our business and financial results is difficult to predict, they could negatively affect our business and financial results. We continue to monitor the broader impacts of these measures on our business, our supply chain and our results of operations. See risk factors “Changes in global trade policies could have a material adverse effect on us.” and “Instability or deterioration in the political, legal, social, business or economic conditions in the U.S. or in key jurisdictions could harm our business.” in Part II, Item 1A. of this report for further information.

Inventory Supply

We sell most of our products, both endpoint ICs and systems, through partners and distributors, limiting our visibility to actual enterprise demand. Although we work closely with those partners and distributors to gain as accurate a view as possible, correctly forecasting demand for our products and identifying market shifts in a timely manner remains a challenge. This challenge can be exacerbated when major end users adjust the mix of inlay providers from which they procure inlays incorporating our endpoint ICs.

We also sometimes experience inventory overages or shortages. Inventory overages can increase expenses, expose us to product obsolescence and/or increased reserves and negatively affect our business. Inventory shortages can cause long lead times, missed opportunities, market-share losses and/or damaged customer relationships, also negatively affecting our business.

In 2021 and 2022, demand for our endpoint ICs increased while worldwide wafer demand also increased, leading to wafer shortfalls for many semiconductor companies, including us. These wafer shortfalls prevented us from fully meeting customer demand and, in some cases, caused customers to cancel orders, qualify alternative suppliers or purchase from our competitors. In 2023, macroeconomic conditions led to softness in demand and inventory overages.

Product Adoption and Unit Growth Rates

Enterprises have significantly adopted RAIN in retail apparel, our largest market, and SC&L, but the rate of adoption and unit growth rates have been uneven and unpredictable. From 2010 to 2025, our overall endpoint IC sales volumes increased at a 26% compounded annual growth rate; however, we have experienced declines in endpoint IC sales volumes during various periods.

Regardless of the uneven pace of retail, SC&L and other industry adoption and growth rates, we believe the long-term trend is continued RAIN adoption and growth and we intend to continue investing in developing new products and expanding our product offerings for the foreseeable future. However, we cannot predict whether historical annual growth rates are indicative of the pace of future growth.

Our systems business, at least for readers and gateways, depends significantly on large-scale deployments at discrete end users, and deployment timing causes large yearly variability in our systems revenue. For example, we generated 14% of total 2019 revenue from a gateway deployment at a large North American SC&L provider. We did not have comparable project-based revenue in 2020. Similarly, in second-quarter 2021, we generated 13% of our revenue from a project-based gateway deployment for RAIN-based

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self-checkout and loss prevention at a large Europe-based global retailer. While we continue generating project-based revenue, we did not see it at a comparable percentage in 2022 to 2025, or in the first quarter of fiscal year 2026.

Seasonality and Pricing

We typically negotiate pricing with most of our endpoint IC OEMs with an effective date of the first quarter of the calendar year. In the past, this negotiation typically resulted in reduced revenue and gross margins in the first quarter compared to prior periods, which then normalized in subsequent quarters as we reduced costs and adjust product mix by migrating those OEMs and end users to newer, lower-cost products.

Endpoint IC volumes tend to be lower in the fourth quarter than in the third quarter. System sales tend to be higher in the fourth quarter and lower in the first quarter, we believe due to the availability of residual funding for capital expenditures prior to the end of many end users’ fiscal years.

We saw these seasonal trends in second-half 2024 and in 2025. We expect continued quarter-to-quarter revenue and gross margin variability due to macroeconomic conditions, program-launch timing and our ability to migrate OEMs and end users to newer, lower cost products. These factors, among others, may impact seasonal trends.

Results of Operations

The following table presents our results of operations for the periods indicated:


	Three Months Ended March 31,
(in thousands, except percentages)	2026			2025			Change
Revenue	$	74,250		$	74,277		$	(27	)
Gross profit	$	36,459		$	36,681		$	(222	)
Gross margin		49.1	%		49.4	%		(0.3	)%
Loss from operations	$	(15,168	)	$	(9,569	)	$	(5,599	)

Three months ended March 31, 2026 compared with three months ended March 31, 2025

Revenue and gross profit decreased, due primarily to decreased systems revenue partially offset by higher endpoint IC revenue. The systems revenue decrease was driven primarily by decreased shipment volumes while the endpoint IC revenue increase was driven primarily by increased shipment volumes. Gross margin decreased due to high indirect costs in the period partially offset by higher endpoint IC gross margin due to product mix. Loss from operations increased, due primarily to decreased revenue and increased operating expenses. The operating expense increase was due primarily to higher research and development and sales and marketing costs.

Revenue


	Three Months Ended March 31,
(in thousands)	2026		2025		Change
Endpoint ICs	$	63,209	$	61,218	$	1,991
Systems		11,041		13,059		(2,018	)
Total revenue	$	74,250	$	74,277	$	(27	)

We currently derive substantially all our revenue from sales of endpoint ICs, reader ICs, readers, gateways, tag production systems and licensing. We sell our endpoint ICs and tag production systems primarily to inlay manufacturers; our reader ICs primarily to OEMs and ODMs through distributors; and our readers and gateways to solutions providers, VARs and SIs, also primarily through distributors. We expect endpoint IC sales to represent the majority of our revenue for the foreseeable future.

Three months ended March 31, 2026 compared with three months ended March 31, 2025

Endpoint IC revenue increased $2.0 million, due to a $7.9 million increase in shipment volumes offset by a $5.9 million decrease from lower ASP due to product mix and new customer pricing that went into effect at the beginning of the year.

Systems revenue decreased $2.0 million due primarily to a decrease in shipment volumes. Reader IC revenue decreased $2.6 million and gateway revenue decreased $1.1 million. These decreases were partially offset by an increase of $0.8 million in reader revenue and $0.6 million in tag production systems revenue.

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Gross Profit and Gross Margin


	Three Months Ended March 31,
(in thousands, except percentages)	2026			2025			Change
Cost of revenue	$	37,791		$	37,596		$	195
Gross profit		36,459			36,681			(222	)
Gross margin		49.1	%		49.4	%		(0.3	)%

Cost of revenue includes costs associated with manufacturing our endpoint ICs, reader ICs, readers, gateways and tag production systems, 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 March 31, 2026 compared with three months ended March 31, 2025

Gross profit and gross margin decreased, due primarily to higher indirect costs in the current year compared to the prior-year period and revenue mix, partially offset by higher endpoint IC gross margin due to product mix.

Operating Expenses

Research and Development


	Three Months Ended March 31,
(in thousands)	2026		2025		Change
Research and development	$	28,724	$	25,314	$	3,410

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 March 31, 2026 compared with three months ended March 31, 2025

Research and development expense increased $3.4 million, due primarily to increases of $2.6 million in personnel expenses due to higher headcount, an increase of $0.6 million in infrastructure costs and an increase of $0.2 million in stock-based compensation expense, primarily related to increased outstanding equity grants.

Sales and Marketing


	Three Months Ended March 31,
(in thousands)	2026		2025		Change
Sales and marketing	$	9,757	$	8,055	$	1,702

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 March 31, 2026 compared with three months ended March 31, 2025

Sales and marketing expense increased $1.7 million, due primarily to an increase of $2.1 million in stock-based compensation expense related to lower expense in the prior-year period from the retirement of our Chief Revenue Officer. This increase is partially offset by a decrease of $0.4 million in personnel expenses.

General and Administrative


	Three Months Ended March 31,
(in thousands)	2026		2025		Change
General and administrative	$	12,609	$	12,396	$	213

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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 March 31, 2026 compared with three months ended March 31, 2025

General and administrative expense was comparable for the periods.

Amortization of Intangibles


	Three Months Ended March 31,
(in thousands)	2026		2025		Change
Amortization of intangibles	$	537	$	485	$	52

Three months ended March 31, 2026 compared with three months ended March 31, 2025

Amortization of intangibles was comparable for the periods.

Other Income, Net


	Three Months Ended March 31,
(in thousands)	2026		2025		Change
Other income, net	$	2,666	$	2,060	$	606

Other income, net, comprises primarily interest income on our short-term investments.

Three months ended March 31, 2026 compared with three months ended March 31, 2025

Other income, net, increased $0.6 million, due to increased interest income given higher invested balances.

Induced Conversion Expense


	Three Months Ended March 31,
(in thousands)	2026		2025		Change
Induced conversion expense	$	11,938	$	—	$	11,938

Three months ended March 31, 2026 compared with three months ended March 31, 2025

In March 2026, we completed a privately negotiated induced conversion of $40.2 million principal amount of the 2021 Notes. We accounted for the 2021 Note Repurchase as an induced conversion in accordance with Accounting Standards Codification 470-20, Debt with Conversion and Other Options (ASC 470-20) as amended for ASU 2024-04. As a result of the induced conversion, we recorded $11.9 million in induced conversion expense, which is included in the Condensed Consolidated Statements of Operations. The induced conversion expense represents the fair value of the consideration issued upon conversion in excess of the fair value of the securities issuable under the original terms of the 2021 Notes. See Note 7 to our Condensed Consolidated financial statements included elsewhere in this report for further information.

Interest Expense


	Three Months Ended March 31,
(in thousands)	2026		2025		Change
Interest expense	$	773	$	1,223	$	(450	)

Interest expense comprises primarily cash interest and amortization of debt issuance costs on our debt.

Three months ended March 31, 2026 compared with three months ended March 31, 2025

Interest expense decreased by $0.5 million, due primarily to decreased interest on our convertible debt, primarily from the 2021 Note Exchange transaction, which was completed in September 2025.

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Income Tax Expense


	Three Months Ended March 31,
(in thousands)	2026			2025		Change
Income tax benefit (expense)	$	(48	)	$	281	$	(329	)

We are subject to federal and state income taxes in the United States and foreign jurisdictions. Income tax expense increased $0.3 million for the three months ended March 31, 2026, compared to the prior-year period, due to changes in effective tax rates for each period.

On July 4, 2025, President Trump signed Public Law No. 119-21 - An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14, or “H.R.1”, into law. One key provision, applicable to us, is the treatment of domestic research and experimental expenditures, which can now be capitalized or expensed. As previously required under the Tax Cuts and Jobs Act, we capitalized research and development expenditures in the years ended December 31, 2022 through December 31, 2024. With the enactment of H.R.1, we began deducting domestic Section 174 costs in 2025.

Liquidity and Capital Resources

As of March 31, 2026, we had cash, cash equivalents and short-term investments of $131.8 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 March 31, 2026, we had working capital of $266.5 million.

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, or 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 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 terms of the Indenture governing the 2021 Notes. The net proceeds from the 2021 Notes were approximately $278.4 million after initial debt issuance costs, fees and expenses.

In September 2025, we completed the 2021 Note Exchange, and in March 2026, we completed the 2021 Note Repurchase. We accounted for the 2021 Note Exchange and the 2021 Note Repurchase as induced conversions in accordance with Accounting Standards Codification 470-20, Debt with Conversion and Other Options (ASC 470-20) and in accordance with ASU 2024-04: Debt—Debt with Conversion and Other Options (Subtopic 470-20) - Induced Conversions of Convertible Debt Instruments, which we early adopted as of January 1, 2025. Refer to below discussion of 2025 Notes for further information.

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.

2025 Notes

In September 2025, we issued convertible notes due 2029 in an aggregate principal amount of $190.0 million, or the 2025 Notes. The 2025 Notes are our senior unsecured obligation, bearing no regular interest. The 2025 Notes are convertible into cash, shares of our common stock or a combination thereof, at our election, and will mature on September 15, 2029 unless earlier repurchased, redeemed or converted in accordance with the terms of the Indenture governing the 2025 Notes.

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The net proceeds from the 2025 Notes were approximately $183.6 million after initial debt issuance costs, fees and expenses. We used the net proceeds and cash on hand to exchange $190.0 million aggregate principal amount of the 2021 Notes for approximately $190.0 million in cash, representing the principal amount exchanged, and approximately 811,000 shares of our common stock, representing the exchange value in excess thereof, and also paid accrued and unpaid interest thereon, in individual privately negotiated transactions concurrent with the 2025 Notes offering. In addition, we used approximately $11.2 million of cash on hand to pay the cost of the capped call transactions entered into in connection with the issuance of the 2025 Notes.

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.

Cash Flows

The following table shows a summary of our cash flows for the periods indicated:


	Three Months Ended March 31,
(in thousands)	2026			2025
Net cash provided by (used in) operating activities	$	3,980		$	(11,143	)
Net cash provided by investing activities		25,730			21,227
Net cash provided by (used in) financing activities		(45,574	)		5,060

Operating Cash Flows

For the three months ended March 31, 2026, we generated $4.0 million of net cash proceeds from operating activities. These net cash proceeds were due primarily to $5.4 million of net income adjusted for non-cash items, partially offset by a $1.5 million decrease in working capital due primarily to higher inventory and accounts receivable, partially offset by higher accounts payable.

Investing Cash Flows

For the three months ended March 31, 2026, we generated $25.7 million of net cash proceeds from investing activities. These net cash proceeds were due to investment maturities of $48.7 million, partially offset by investment purchases of $21.2 million and equipment purchases of $1.7 million.

Financing Cash Flows

For the three months ended March 31, 2026, we used $45.6 million of net cash from financing activities to purchase a portion of our 2021 Notes for $47.0 million and pay $1.6 million in taxes to cover RSU vesting, partially offset by proceeds of $3.0 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 March 31, 2026, the principal balance outstanding on the 2021 Notes and 2025 Notes is $57.3 million and $190.0 million, respectively. Refer to Note 7 to our Condensed Consolidated Financial Statements included elsewhere in this report for maturity date, stated interest rate and additional information on the 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, 2025.

Purchase Commitments – Purchase commitments as of March 31, 2026 total $41.7 million and consist primarily of 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.

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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, 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, 2025.

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 $131.8 million as of March 31, 2026. 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.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

IMPINJ INC 10-Q