Impinj Inc (PI) 2023 Q2 法說會逐字稿

Welcome to the Impinj Second Quarter 2023 Earnings Conference Call and Webcast. All participants will be in listen-only mode. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Mr. Andy Cobb, Vice President, Strategic Finance. Please go ahead.

歡迎參加 Impinj 2023 年第二季度收益電話會議和網絡廣播。所有參與者都將處於僅聽模式。 （操作員說明）請注意，正在記錄此事件。現在我想將會議交給戰略財務副總裁安迪·科布先生。請繼續。

Thank you, MJ. Good afternoon, and thank you all for joining us to discuss Impinj's Second Quarter 2023 results. On today's call, Chris Diorio, Impinj's Co-Founder and CEO, will provide a brief overview of our market opportunity and performance. Cary Baker, Impinj's CFO, will follow with a detailed review of our second quarter 2023 financial results and third quarter outlook. We will then open the call for questions. Jeff Dossett, Impinj's COO will join us for the Q&A. You can find management's prepared remarks plus trended financial data on the company's Investor Relations website.

謝謝你，喬丹。下午好，感謝大家加入我們討論 Impinj 2023 年第二季度的業績。在今天的電話會議上，Impinj 聯合創始人兼首席執行官 Chris Diorio 將簡要概述我們的市場機會和業績。 Impinj 首席財務官 Cary Baker 將詳細回顧我們 2023 年第二季度的財務業績和第三季度的前景。然後我們將開始提問。 Impinj 首席運營官 Jeff Dossett 將參加我們的問答。您可以在公司的投資者關係網站上找到管理層準備好的評論以及趨勢財務數據。

We will make statements in this call about financial performance and future expectations that are based on our outlook as of today. Any such statements are forward-looking under the Private Securities Litigation Reform Act of 1995. While we believe we have a reasonable basis for making these forward-looking statements, our actual results could differ materially because any such statements are subject to risks and uncertainties. We describe these risks and uncertainties in the annual and quarterly reports we file with the SEC. We do not undertake and expressly disclaim any obligation to update or alter our forward-looking statements, except as required by law.

我們將在本次電話會議中根據我們今天的展望發表有關財務業績和未來預期的聲明。根據《1995 年私人證券訴訟改革法案》，任何此類聲明均具有前瞻性。雖然我們相信我們有合理的基礎來做出這些前瞻性聲明，但我們的實際結果可能會存在重大差異，因為任何此類聲明都存在風險和不確定性。我們在向 SEC 提交的年度和季度報告中描述了這些風險和不確定性。除非法律要求，否則我們不承擔並明確否認任何更新或更改我們的前瞻性陳述的義務。

On today's call of financial metrics, except for revenue or where we explicitly state otherwise are non-GAAP. Balance sheet and cash flow metrics or GAAP. Please refer to our earnings release for a reconciliation of the non-GAAP financial metrics to the most comparable GAAP metrics. Before turning to our results and outlook, note that we will participate in the 12th Annual Needham Virtual Industrial Tech, robotics and Clean Tech one-on-one conference on August 4, the Oppenheimer 26th Annual Technology Internet and Communications Conference on August 8; the Canaccord Genuity 43rd Annual Growth Conference on August 10 in Boston, the Jefferies Semiconductor, IT Hardware and Communications Technology Summit on August 29 and 30 in Chicago. The Goldman Sachs Communacopia in Technology Conference on September 6 in San Francisco, the Piper Sandler Growth Frontiers Conference on September 12 in Nashville and Lake Street 7 Conference on September 14 in New York. We look forward to connecting with many of you at those events.

在今天的財務指標中，除了收入或我們明確說明的其他指標外，均非公認會計原則。資產負債表和現金流量指標或 GAAP。請參閱我們的收益發布，了解非 GAAP 財務指標與最具可比性 GAAP 指標的調節表。在討論我們的業績和展望之前，請注意，我們將參加 8 月 4 日舉行的第 12 屆尼德姆虛擬工業技術、機器人和清潔技術年度一對一會議，8 月 8 日參加奧本海默第 26 屆年度技術互聯網和通信會議； 8 月 10 日在波士頓舉行的 Canaccord Genuity 第 43 屆年度增長大會，8 月 29 日至 30 日在芝加哥舉行的 Jefferies 半導體、IT 硬件和通信技術峰會。高盛 Communacopia 技術會議於 9 月 6 日在舊金山舉行，Piper Sandler 增長前沿會議於 9 月 12 日在納什維爾舉行，Lake Street 7 會議於 9 月 14 日在紐約舉行。我們期待在這些活動中與你們中的許多人建立聯繫。

I will now turn the call over to Chris.

我現在將把電話轉給克里斯。

Thank you, Andy, and thank you all for joining the call. Second quarter revenue set a new record with record systems revenue more than offsetting weaker than anticipated endpoint IC revenue. The primary driver of the system's revenue strength was the loss prevention deployment at the visionary European retailer. The primary driver of the endpoint IC weakness was larger than anticipated retail apparel inventory destocking. We expect the impacts of that inventory destocking to persist at least through the third quarter. Focusing first on endpoint IC's Second quarter revenue declined sequentially, coming in slightly below our expectations.

謝謝你，安迪，也感謝大家加入這次通話。第二季度收入創下新紀錄，創紀錄的系統收入足以抵消終端 IC 收入低於預期的影響。該系統收入優勢的主要驅動力是這家富有遠見的歐洲零售商的防損部署。端點 IC 疲軟的主要驅動因素是零售服裝庫存去庫存量超出預期。我們預計庫存去庫存的影響至少會持續到第三季度。首先關注端點 IC，第二季度收入環比下降，略低於我們的預期。

The magnitude of the retail inventory destocking became apparent late in the quarter, not just to us but also to our inlay partners, some of whom had requested upside ICs as recently as April. That destocking more than offset sequential IC growth at our second large North American supply chain and logistics enterprise customer and us seeding several hundred million Impinj 775 ICs into multiple authentication applications.

零售庫存去庫存的規模在本季度末變得顯而易見，不僅對我們如此，對我們的鑲嵌合作夥伴也如此，其中一些合作夥伴早在四月份就要求增加 IC。庫存的減少足以抵消我們第二大北美供應鍊和物流企業客戶的連續 IC 增長，以及我們將數億個 Impinj 775 IC 植入多個身份驗證應用中。

Looking to the third quarter, our endpoint IC share at our enterprise customers remains strong. At the same time, we and our inlay partners now anticipate softer-than-expected third quarter retail demand recovery. Those partners build IC safety stock, anticipating a stronger recovery. And as our wafer supply has grown, they are burning down roughly a month's worth of ICs primarily in the third quarter, but with a tail into the fourth. Also, the curve of new program launches shifted to the right by the 2022 product shortfalls, created an adoption air pocket that the industry is still working through.

展望第三季度，我們的端點 IC 在企業客戶中的份額仍然強勁。與此同時，我們和我們的鑲嵌合作夥伴現在預計第三季度零售需求復蘇將弱於預期。這些合作夥伴建立了 IC 安全庫存，預計會出現更強勁的複蘇。隨著我們晶圓供應的增長，他們主要在第三季度燒毀大約一個月的集成電路，但會在第四季度結束。此外，由於 2022 年產品短缺，新項目發布曲線向右移動，造成了行業仍在努力解決的採用氣穴。

Our enterprise wins are insufficient to overcome these headwinds. And as a result, our third quarter endpoint IC revenue will decline sequentially. Importantly, despite these headwinds, we do not know of a single end user who has pulled back from RAIN RFIB. Said another way, our long-term opportunity remains strong, and we expect growing adoption to drive demand after these corrections are behind us. We also expect greater than 25% 2023 endpoint IC unit volume growth.

我們的企業勝利不足以克服這些阻力。因此，我們第三季度端點 IC 收入將環比下降。重要的是，儘管存在這些不利因素，我們還不知道有哪個最終用戶退出了 RAIN RFIB。換句話說，我們的長期機會仍然強勁，我們預計在這些調整過去後，採用率的不斷提高將推動需求。我們還預計 2023 年端點 IC 單位銷量增長將超過 25%。

Turning to systems. Second quarter reader and gateway revenue exceeded our expectations, driven by better-than-anticipated component availability. The additional supply allowed us to deliver more gateways into the visionary European retailers self-checkout and loss prevention deployment than we had expected as well as fulfill our prior period reader backlog. It also allows our team to shift their focus to new opportunities for our solutions offerings. Regardless, for the third quarter, we expect a sequential decline in reader and gateway revenue due to delivery timing to the visionary European retailer and our return to typical reader and gateway backlog entering the quarter the latter after nearly 2 years of component supply constraints.

轉向系統。由於組件可用性好於預期，第二季度讀卡器和網關收入超出了我們的預期。額外的供應使我們能夠為有遠見的歐洲零售商自助結賬和防損部署提供比我們預期更多的門戶，並滿足我們前期的讀者積壓。它還使我們的團隊能夠將重點轉移到我們解決方案產品的新機會上。無論如何，對於第三季度，我們預計讀卡器和網關收入將連續下降，原因是向有遠見的歐洲零售商的交付時間，以及我們在近兩年的組件供應限制之後進入本季度的典型讀卡器和網關積壓情況。

Our second quarter reader IC revenue remained healthy with robust demand for printer encoders in North America, offsetting weak macro demand in China. Looking to third quarter, we see the printer and coder demand mostly fulfilled while China remains soft. Our Chinese reader partners built Indi reader IC inventory ahead of our planned end of life and are today focused on selling Ind-based product inventory rather than ramping Impinj e-family-based designs. That Indi focus will drive a sequential decline in third quarter reader IC revenue. Like for readers and gateways, our reader IC supply is normalized and we entered the third quarter with typical reader IC backlog.

我們第二季度的讀卡器 IC 收入保持健康，北美對打印機編碼器的需求強勁，抵消了中國疲弱的宏觀需求。展望第三季度，我們看到打印機和打碼機的需求基本得到滿足，而中國市場仍然疲軟。我們的中國讀卡器合作夥伴在我們計劃的使用壽命結束之前建立了 Indi 讀卡器 IC 庫存，目前專注於銷售基於 Ind 的產品庫存，而不是增加基於 Impinj e 系列的設計。 Indi 的這一重點將導致第三季度讀取器 IC 收入連續下降。與讀卡器和網關一樣，我們的讀卡器 IC 供應已正常化，進入第三季度時，讀卡器 IC 積壓情況較為典型。

Turning to new products. Last week, we launched the Impinj M800 Series RAINRFID endpoint IC's, the first ICs in the series, the Impinj MA30 and MA50 are the most advanced in the market with performance and features designed to help enterprises read the right tag at the right place at the right time. In addition to 25% more die per wafer than the Impinj M700, the M800 has 30% lower power consumption, allowing businesses to use a single small tag across a broad range of items. With enhanced tag reliability, manufacturer ability and drop in compatibility with M700 antennas, we expect the M800 to drive additional rent adoption. It is also a key component of our long-term growth and margin targets.

轉向新產品。上週，我們推出了 Impinj M800 系列 RAINRFID 端點 IC，這是該系列中的首款 IC，Impinj MA30 和 MA50 是市場上最先進的，其性能和功能旨在幫助企業在正確的位置讀取正確的標籤。合適的時間。除了每個晶圓上的芯片數量比 Impinj M700 多 25% 之外，M800 的功耗還降低了 30%，使企業能夠在多種物品上使用單個小標籤。隨著標籤可靠性、製造商能力的增強以及與 M700 天線兼容性的下降，我們預計 M800 將推動更多的租金采用。這也是我們長期增長和利潤目標的關鍵組成部分。

Turning to intellectual property. We are the innovation leader in our industry with more than 300 issued and allowed patents. I am pleased to say we successfully defended our leadership position by prevailing in 2 separate trials. In June, a federal jury in Washington found that Impinj endpoint ICs do not infringe an NXP patent. In July, a federal jury in California found that NXP endpoint ICs do infringe on Impinj patents, one willfully. The California jury awarded Impinj approximately $18.9 billion in damages and lost profits, and we have asked the court for injunctive relief. We now turn our attention to the upcoming Texas trials against NXP.

轉向知識產權。我們是行業的創新領導者，擁有 300 多項已頒發和授權的專利。我很高興地說，我們在兩項單獨的審判中獲勝，成功捍衛了我們的領導地位。 6 月，華盛頓聯邦陪審團發現 Impinj 端點 IC 並未侵犯恩智浦專利。 7 月，加利福尼亞州的一個聯邦陪審團發現 NXP 端點 IC 確實侵犯了 Impinj 的專利，而且是故意的。加州陪審團裁定 Impinj 獲得約 189 億美元的損害賠償和利潤損失，我們已請求法院頒發禁令救濟。我們現在將注意力轉向即將到來的德克薩斯州針對恩智浦的審判。

In closing, from today's vantage point, we see several headwinds driving lower third quarter revenue. At the same time, our long-term opportunity remains strong, and we see some green shoots in retail apparel. We, as a company, have been through industry cycles before and have come through those cycles stronger. With confidence in our growing opportunity and our leading position in it, I have no doubt we will do so again.

最後，從今天的角度來看，我們看到一些不利因素導致第三季度收入下降。與此同時，我們的長期機會仍然強勁，我們看到零售服裝領域出現了一些萌芽。作為一家公司，我們以前經歷過行業周期，並且在這些週期中變得更加強大。憑藉對我們不斷增長的機會和我們在其中的領先地位的信心，我毫不懷疑我們會再次這樣做。

Before I turn the call over to Cary for our financial review and third quarter outlook, I'd like to again thank every member of the Impinj team for your constant effort driving our bold vision. I feel honored by my incredible good fortune to work with you. Cary?

在我將電話轉給 Cary 進行財務審查和第三季度展望之前，我要再次感謝 Impinj 團隊的每一位成員，感謝你們為推動我們大膽願景所做的不懈努力。能夠與您共事，我感到無比榮幸。卡里？

Thank you, Chris, and good afternoon, everyone. On today's call, I will review our second quarter financial results and third quarter financial outlook. Second quarter revenue was $86 million, up slightly sequentially compared with $85.9 million in first quarter 2023 and up 44% year-over-year from $59.8 million in second quarter 2022. Second quarter endpoint IC revenue was $64.9 million, down 3% sequentially compared with $67 million in first quarter 2023 and up 51% year-over-year from $42.9 million in second quarter 2022.

謝謝克里斯，大家下午好。在今天的電話會議上，我將回顧我們第二季度的財務業績和第三季度的財務前景。第二季度收入為 8600 萬美元，較 2023 年第一季度的 8590 萬美元略有增長，較 2022 年第二季度的 5980 萬美元同比增長 44%。第二季度端點 IC 收入為 6490 萬美元，較上一季度下降 3% 2023 年第一季度為 6700 萬美元，較 2022 年第二季度的 4290 萬美元同比增長 51%。

Looking to the third quarter, we expect a sequential decline in endpoint IC revenue driven by Inlay partners safety stock reductions and weak retail apparel demand more than offsetting growth from our platform wins. Second quarter systems revenue was $21.1 million, up 12% sequentially compared with $18.8 million in first quarter 2023 and up 24% year-over-year from $16.9 million in second quarter 2022. Second quarter systems revenue exceeded our expectations, driven by better-than-anticipated component availability, allowing us to service reader and gateway demand.

展望第三季度，我們預計，由於 Inlay 合作夥伴安全庫存減少和零售服裝需求疲軟，端點 IC 收入將連續下降，這足以抵消我們平台勝利帶來的增長。第二季度系統收入為 2110 萬美元，較 2023 年第一季度的 1880 萬美元環比增長 12%，較 2022 年第二季度的 1690 萬美元同比增長 24%。 -預期的組件可用性，使我們能夠滿足讀卡器和網關的需求。

On a sequential basis, reader revenue increased, while reader IC and Gateway revenue decreased. On a year-over-year basis, Gateway revenue increased while Reader-IC and reader revenue decreased. Systems included Voyantic revenue starting second quarter. Looking ahead, we expect a sequential decline in third quarter systems revenue with declines in all product lines. Second quarter gross margin was 53.3% compared with 52.4% in first quarter 2023 and 54.7% in second quarter 2022. The sequential increase was driven by endpoint IC product mix. The year-over-year decrease was driven by lower endpoint IC product margins, specifically a smaller specialty and industrial IC mix and lower systems product margins driven by increased costs.

環比來看，讀卡器收入增加，而讀卡器IC和網關收入下降。與去年同期相比，網關收入增加，而讀卡器IC和讀卡器收入下降。從第二季度開始，系統包括 Voyantic 收入。展望未來，我們預計第三季度系統收入將連續下降，所有產品線都會下降。第二季度毛利率為 53.3%，而 2023 年第一季度為 52.4%，2022 年第二季度為 54.7%。環比增長是由端點 IC 產品組合推動的。同比下降的原因是端點 IC 產品利潤率下降，特別是專業和工業 IC 組合規模較小，以及成本增加導致的系統產品利潤率下降。

Looking to the third quarter, we expect our gross margin to decline. Total second quarter operating expense was $35.9 million compared with $36.4 million in first quarter 2023 and $28.8 million in second quarter 2022. Research and development expense was $16.8 million. Sales and marketing expense was $7.7 million. General and administrative expense was $11.3 million. Litigation expense was $4.3 million. Despite litigation expense being similar to second quarter, we expect a sequential decline in third quarter operating expense as we tighten our belt on spending.

展望第三季度，我們預計毛利率將下降。第二季度運營費用總額為 3590 萬美元，而 2023 年第一季度為 3640 萬美元，2022 年第二季度為 2880 萬美元。研發費用為 1680 萬美元。銷售和營銷費用為 770 萬美元。一般及行政費用為 1130 萬美元。訴訟費用為 430 萬美元。儘管訴訟費用與第二季度相似，但隨著我們收緊支出，我們預計第三季度運營費用將連續下降。

Second quarter adjusted EBITDA was $10 million compared with $8.6 million in first quarter 2023 and $3.8 million in second quarter 2022. Second quarter adjusted EBITDA margin was 11.6%. Second quarter GAAP net loss was $8.1 million. Second quarter non-GAAP net income was $9.3 million or $0.33 per share on a fully diluted basis.

第二季度調整後 EBITDA 為 1000 萬美元，而 2023 年第一季度為 860 萬美元，2022 年第二季度為 380 萬美元。第二季度調整後 EBITDA 利潤率為 11.6%。第二季度 GAAP 淨虧損為 810 萬美元。第二季度非 GAAP 淨利潤為 930 萬美元，或完全攤薄後每股 0.33 美元。

Turning to the balance sheet. We ended the second quarter with cash, cash equivalents and investments of $114.9 million compared with $164.7 million in first quarter 2023 and $183.7 million in second quarter 2022. Inventory totaled $112.3 million, up $26.5 million from the prior quarter, with wafer delivery timing and the initial M800 ramp contributing to the increase. Net cash paid for Voyantic totaled $23.4 million. Second quarter net cash used by operating activities was $22.5 million. Property and equipment purchases totaled $5.7 million. Free cash flow was negative $28.2 million, including $25.3 million for inventory growth.

轉向資產負債表。截至第二季度末，我們的現金、現金等價物和投資為 1.149 億美元，而 2023 年第一季度為 1.647 億美元，2022 年第二季度為 1.837 億美元。庫存總計 1.123 億美元，比上一季度增加 2650 萬美元，考慮到晶圓交付時間和最初的 M800 斜坡有助於增加。為 Voyantic 支付的淨現金總計 2,340 萬美元。第二季度經營活動使用的淨現金為 2250 萬美元。財產和設備採購總額為 570 萬美元。自由現金流為負 2,820 萬美元，其中包括庫存增長造成的 2,530 萬美元。

Before turning to our third quarter guidance, I want to highlight a few items unique to our results and outlook. First, we anticipate third quarter gross margin to decline by approximately 300 basis points due primarily to lower revenue on fixed cost and less reader ICs. As our revenue recovers, we are confident that our gross margin will recover with it, and we remain confident in the long-term margin targets I outlined at our Investor Day.

在轉向我們的第三季度指導之前，我想強調我們的業績和前景所特有的一些項目。首先，我們預計第三季度毛利率將下降約 300 個基點，這主要是由於固定成本收入下降和讀卡器 IC 減少。隨著我們的收入恢復，我們有信心我們的毛利率也會隨之恢復，並且我們對我在投資者日概述的長期利潤率目標仍然充滿信心。

Second, we have updated our non-GAAP net income to include estimated taxes based on statutory tax rates. Given our NOLs, we expect our cash tax payments to remain well below this estimated rate at least for the next few years. Please see our trended file for a retrospective view of our non-GAAP net income following this revised tax treatment. Third, we have reduced our wafer purchases, adjusted our wafer delivery timing and are focused on better aligning our inventory to our outlook. We expect those efforts to impact fourth quarter inventory. We currently expect third quarter inventory to be similar to second quarter.

其次，我們更新了非公認會計原則淨利潤，包括根據法定稅率估算的稅費。考慮到我們的 NOL，我們預計至少在未來幾年內我們的現金納稅額將遠低於這一估計稅率。請參閱我們的趨勢文件，了解修訂後的稅務處理後我們的非公認會計準則淨利潤的回顧。第三，我們減少了晶圓採購，調整了晶圓交付時間，並專注於更好地調整庫存以適應我們的前景。我們預計這些努力將影響第四季度的庫存。我們目前預計第三季度庫存將與第二季度相似。

Finally, based on our revised view of market demand, we believe our inlay partners have roughly a month's worth of excess IC safety stock. Our third quarter guidance assumes progress rightsizing that safety stock with a tail into the fourth quarter.

最後，根據我們對市場需求的修正看法，我們相信我們的鑲嵌合作夥伴擁有大約一個月的多餘 IC 安全庫存。我們的第三季度指引假設安全庫存規模調整的進展將持續到第四季度。

Turning to our outlook. We expect third quarter revenue between $63 million and $66 million compared with $68.3 million in third quarter 2022, a 6% year-over-year decline at the midpoint. We expect an adjusted EBITDA loss between $3.3 million and $1.8 million. On the bottom line, we expect non-GAAP net loss between $3.2 million and $1.7 million, reflecting non-GAAP fully diluted loss per share between $0.12 and $0.06.

轉向我們的展望。我們預計第三季度收入在 6300 萬美元至 6600 萬美元之間，而 2022 年第三季度收入為 6830 萬美元，中值同比下降 6%。我們預計調整後 EBITDA 損失在 330 萬美元至 180 萬美元之間。就利潤而言，我們預計非 GAAP 淨虧損在 320 萬美元至 170 萬美元之間，反映出非 GAAP 完全攤薄每股虧損在 0.12 美元至 0.06 美元之間。

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

最後，我要感謝 Impinj 團隊、我們的客戶、我們的供應商以及您（我們的投資者）的持續支持。我現在將呼叫轉給接線員以開始問答環節。喬丹？

Thank you very much. We will now begin the question-and-answer session.(Operator Instructions) At this time, we will pause momentarily to assemble our roster. Today's first question comes from Harsh Kumar with Piper Sandler.

非常感謝。我們現在開始問答環節。（操作員指示）此時，我們將暫停片刻以集合我們的名單。今天的第一個問題來自 Harsh Kumar 和 Piper Sandler。

I had 2. Chris and Cary, one for you. So I think if I'm reading this correctly, I think we're thinking there's about a month's worth of inventory safety stock at the inlay partners -- but then today is, what, July 26. So there's a whole month or so left. I can understand this sort of tails into the third quarter. But I guess I'm trying to understand your comment about this might dovetail into the fourth quarter as well, this inventory correction. I was wondering if you could provide some color around why it might spill into the fourth quarter? And why won't the logistics uptick that you might be anticipating with that rollout not come as a positive and sort of offset this decline.

我有兩個。克里斯和卡里，一個給你。所以我想，如果我沒看錯的話，我想我們認為鑲嵌合作夥伴大約有一個月的庫存安全庫存——但今天是，什麼，7 月 26 日。所以還剩下一個月左右的時間。我可以理解第三季度出現這種情況。但我想我正在嘗試理解您對此的評論也可能與第四季度的庫存調整相吻合。我想知道你是否可以提供一些解釋為什麼它可能會蔓延到第四季度？為什麼您可能預期的物流增長不會帶來積極的影響並在一定程度上抵消這種下降。

This is Cary. I'll take that question. Looking into our third quarter, our guide assumes that Endpoint IC revenue is going to be down in the mid-20s sequentially. There are going to be a few factors driving that sequential decline. So I want to unpack each of those right now. First, in the second quarter, we shipped several hundred million higher ASP M775 authentication ICs as we seeded multiple applications ahead of their commercial launch. The timing and success of those launches will determine when more product is pulled. And then second, to your point, we're attempting to burn down as much of the excess safety stock as possible. Based on our current view of demand, we anticipate burning down roughly 2 to 3 weeks in Q3. Unfortunately, both of those factors are masking growth from the large project ramps and logistics and general merchandise.

這是卡里。我來回答這個問題。展望第三季度，我們的指南假設端點 IC 收入將連續下降 20 多歲。有幾個因素會導致連續下降。所以我現在想把這些都拆開。首先，在第二季度，我們在商業發布之前播種了多個應用程序，因此交付了數億個更高的 ASP M775 身份驗證 IC。這些發布的時機和成功將決定何時推出更多產品。其次，就您的觀點而言，我們正在嘗試盡可能多地消耗多餘的安全庫存。根據我們目前對需求的看法，我們預計第三季度將消耗大約 2 到 3 週的時間。不幸的是，這兩個因素都掩蓋了大型項目坡道以及物流和一般商品的增長。

I guess I'll add that our partners have need for specific products, not all our ICs are identical. So we're still fulfilling orders. And so the burn down of that IC inventory is -- it doesn't happen over 2 months. It's going to tail into the fourth quarter. As Cary said, we're going to take as much of it out in the third quarter as we can, but there will be a tail end at the fourth.

我想我要補充一點，我們的合作夥伴需要特定的產品，並非我們所有的 IC 都是相同的。所以我們仍在履行訂單。因此，IC 庫存的消耗不會超過 2 個月。事情將持續到第四季度。正如卡里所說，我們將在第三季度盡可能多地採取行動，但第四季度將會出現尾聲。

I got you. And then one of your large customers, I guess, reported yesterday, they talked about a pretty substantial growth. So I guess kind of going back into your answer to the first question that I asked, is there -- is the logistics ramp already inventoried in some manner at some of your customers? Is that part of the safety stock that you're referring to? Or is it safety stock comments are related to sort of the debacle in retail that is basically happening in the industry due to macroeconomic factors.

我接到你了。然後我猜你的一位大客戶昨天報告說，他們談到了相當可觀的增長。所以我想回到你對我問的第一個問題的回答，是否存在——物流坡道是否已經以某種方式在你的一些客戶那裡進行了庫存？這是您所指的安全庫存的一部分嗎？或者安全庫存評論是否與由於宏觀經濟因素而在該行業基本上發生的零售業崩潰有關。

So I'll try and take that and Jeff might step in. So we continue to deliver ICs into that enterprise deployment, obviously, through our partners. As that large partner of ours reported yesterday, they are also sitting on IC safety stock. So even though there is -- for them, some demand growth in the market, and I noted green shoots in my prepared remarks, our expectation is that our partners fulfill those green shoots and as well as existing demand by reducing their inventory. So the comments they made are consistent with what we are seeing and saying, which is that there's some excess inventory in the channel. -- significantly built up as a consequence of our inlay partners being worried about IC supply up until very recently and about IC tightness going forward. They build safety stock, now that we've got inventory, they're going to be focused on burning it down a bit. So that retail recovery for us at least is pushed beyond the third quarter.

因此，我將嘗試採取這一措施，傑夫可能會介入。因此，顯然，我們將繼續通過我們的合作夥伴將 IC 交付到企業部署中。正如我們的大型合作夥伴昨天報導的那樣，他們也持有 IC 安全庫存。因此，儘管對他們來說，市場需求有所增長，而且我在準備好的發言中指出了新芽，但我們的期望是我們的合作夥伴通過減少庫存來滿足這些新芽和現有需求。所以他們的評論與我們所看到和所說的一致，即渠道中有一些過剩的庫存。 ——由於我們的鑲嵌合作夥伴直到最近才擔心 IC 供應以及未來 IC 的緊張，因此出現了顯著的增長。他們建立了安全庫存，既然我們已經有了庫存，他們將集中精力將其消耗掉一點。因此，至少我們的零售復甦被推遲到第三季度之後。

I would just add that we don't always line up with Avery Dennison's prints. And that's for a variety of reasons, including us selling to the broader market or probably more importantly, as we ship in front of their demand. And our shipments can proceed our partners' demand by up to 90 days, and that can be even further elongated when new programs are coming online. So you have to factor that timing in. And I would point you back to a comment that Chris made in his prepared remarks, we're anticipating greater than 25% endpoint IC unit growth in 2023 on a year-over-year basis.

我想補充一點，我們並不總是與艾利丹尼森的印刷品保持一致。這是出於多種原因，包括我們向更廣泛的市場銷售，或者可能更重要的是，因為我們在他們的需求之前發貨。我們的發貨時間可以滿足合作夥伴的需求長達 90 天，當新項目上線時，這個時間甚至可以進一步延長。因此，您必須考慮到這個時間點。我想向您指出 Chris 在準備好的講話中發表的評論，我們預計 2023 年端點 IC 單位的同比增長將超過 25%。

The next question comes from Jim Ricchiuti with Needham & Company.

下一個問題來自 Needham & Company 的 Jim Ricchiuti。

Cary, I wanted to follow up on just that point about your expectation for 25% endpoint unit volume growth in '23. What has it been through the first 6 months. And just based on the way your expectations for Q3, what does that translate to? Because it would seem to suggest, I think, some recovery outside of the soft retail market in Q4. Maybe you could help with that.

Cary，我想跟進一下您對 23 年端點單位銷量增長 25% 的預期。前六個月經歷了什麼？根據您對第三季度的預期，這意味著什麼？因為我認為，這似乎表明第四季度零售市場疲軟之外出現了一些復甦。也許你可以幫忙。

Jim, thanks for the question. So you will see in our 10-Q that our volume is up roughly 70% on a year-to-date basis through the first 2 quarters of the year. When you map that into our 25% year-over-year number, you'll see that yes, there is a step down in the back half of the year. We announced at our Investor Day in the middle of June that we had increased our life-to-date shipments by about 10 billion units. So you can assume that through the first half of the year, we did a little bit more than 10 billion units, called 11 billion units in the first half of the year.

吉姆，謝謝你的提問。因此，您會在我們的 10 季度中看到，今年前 2 個季度我們的銷量較年初至今增長了約 70%。當您將其映射到我們 25% 的同比數字時，您會發現，是的，今年下半年出現了下降。我們在 6 月中旬的投資者日上宣布，我們迄今為止的出貨量已增加了約 100 億台。所以你可以假設，整個上半年，我們的銷量略高於100億台，稱為上半年110億台。

The follow-up I have is just -- I'm trying to understand how you get to your adjusted EBITDA guidance for Q3 at these low levels of revenue and lower gross margins. And maybe you could talk a little bit about how we should think about the OpEx in Q3 as it relates to the bigger areas? And then the question is, as you come out of this, are you -- is your intent to maintain these OpEx levels at lower than previous levels that perhaps we were thinking?

我的後續行動是——我試圖了解在收入水平和毛利率較低的情況下，如何得出第三季度調整後的 EBITDA 指導。也許您可以談談我們應該如何考慮第三季度的運營支出，因為它與更大的領域相關？然後問題是，當您走出困境時，您是否打算將這些運營支出水平維持在低於我們之前可能認為的水平？

Great question, Jim. So as I noted, we are tightening our belt on spending and OpEx is coming down in the third quarter. I also signaled that the litigation expense would be roughly flat in Q3. So Q2 was $4.3 million, so assume that same level of litigation spend. Absent that litigation spend, my guide would have been in the black for the third quarter. But yes, we are tightening our belt on spending given this lower revenue line.

好問題，吉姆。正如我所指出的，我們正在收緊支出，運營支出在第三季度有所下降。我還表示第三季度的訴訟費用將大致持平。因此，第二季度的金額為 430 萬美元，因此假設訴訟支出水平相同。如果沒有訴訟支出，我的指南將在第三季度實現盈利。但是，是的，鑑於收入線較低，我們正在收緊支出。

The next question comes from Mike Walkley with Canaccord Genuity.

下一個問題來自 Canaccord Genuity 的 Mike Walkley。

Maybe just shifting a little bit to the systems business with the strategic European retailer? Or is it a pause? Or are they pretty much done rolling out the systems? And maybe you could remind us what a more normalized system quarterly cadence is for your business?

也許只是稍微轉向歐洲戰略零售商的系統業務？或者說是一個停頓？或者他們已經基本完成了系統的推出嗎？也許您可以提醒我們，對於您的業務來說，更標準化的系統季度節奏是什麼？

They are not done, and I'm going to hand it over to Jeff to just tell you a little bit about the pacing.

他們還沒有完成，我將把它交給傑夫，讓他告訴你一些關於節奏的事情。

Yes. Thanks for your question, Mike. In the second quarter, we and our European visionary retailer, we're completing the second phase of their overall deployment while beginning the third phase into additional brands. So in second quarter, we had that layering effect of shipping into the end of the first phase and the beginning ramp of the third phase, whereas in the third quarter, we'll be shipping into the ramping third phase, resulting in a step down from 2Q to 3Q. But again, this customer is quite satisfied with the deployment to date and increasing its investment across its overall brand and store footprint.

是的。謝謝你的提問，邁克。在第二季度，我們和我們的歐洲有遠見的零售商將完成其總體部署的第二階段，同時開始進入其他品牌的第三階段。因此，在第二季度，我們在第一階段結束和第三階段開始階段產生了分層效應，而在第三季度，我們將進入第三階段，從而導致下降從第二季度到第三季度。但同樣，該客戶對迄今為止的部署非常滿意，並增加了對其整體品牌和商店足蹟的投資。

Mike, this is Chris. I'll add that the size of the third quarter deployment into the third phase is larger than we did in second. So the pacing is increasing for that third phase, but we're losing the benefit of continuing to fulfill the second phase, which is essentially completed.

邁克，這是克里斯。我要補充一點，第三季度部署到第三階段的規模比第二階段更大。因此，第三階段的節奏正在加快，但我們正在失去繼續完成第二階段的好處，第二階段基本上已經完成。

And maybe just a little bit into the endpoint side. I think you talked about some of the new opportunities would lead to a Q4 seasonally up from Q3, absent kind of these inventory adjustments. Is that still the case on the new opportunities, so we think about Q4 up a little bit from that and then up a little bit because it's maybe 1 to 2 weeks clearing versus 2 to 3 weeks clearing of inventory. Is that a good framework to think about Q4 endpoints?

也許只是一點點進入端點側。我認為您談到了一些新的機會將導致第四季度比第三季度季節性上升，如果沒有這些庫存調整。新機會的情況是否仍然如此，所以我們認為第四季度會比第四季度稍微上升一點，然後再上升一點，因為可能需要 1 到 2 週的庫存清理時間，而庫存的清理時間為 2 到 3 週。這是一個思考第四季度端點的好框架嗎？

So Mike, we're not guiding Q4 at this time. We're really saying, a lot it's too early for us to predict Q4, given the dynamics that we're going through still coming after the COVID, institution supply, recovery, inventory destocking and our partners burning down inventory. When you put it all together, we're going to be watching and see where -- what on the enterprise opportunities are in fourth quarter and growth there. The overall macro retail and our partners' ability to basically rightsize their inventory and put all those pieces together. We'll have a better view of fourth quarter as we get further along. But as of right now, we're not guiding anything associated with fourth quarter.

邁克，我們目前不指導第四季度。我們實際上是在說，考慮到我們在新冠疫情、機構供應、復甦、庫存去庫存以及我們的合作夥伴銷毀庫存之後仍在經歷的動態，現在預測第四季度還為時過早。當你把所有這些放在一起時，我們將觀察第四季度的企業機會和增長情況。整體宏觀零售以及我們的合作夥伴基本上調整庫存規模並將所有這些部分整合在一起的能力。隨著進展的進一步，我們將對第四季度有更好的看法。但截至目前，我們還沒有提供與第四季度相關的任何指導。

The next question comes from Mark Lipacis with Jefferies.

下一個問題來自 Jefferies 的馬克·利帕西斯 (Mark Lipacis)。

Question on the ramp of the 2 new larger programs. Can you give us a sense like how do those ramp -- like how long before you get to what you would consider to be fully ramped at those customers and before you kind of grow more organically with your customer growth. And I'm wondering, is this like does this happen like in 1 quarter or 2 quarters it does take a year or so to ramp? And then could you give a sense of how big they could ultimately be -- could either of these be like 10% customers? Or does it not impact your top line ultimately to that degree? Any color you could give on that.

關於兩個新的大型項目的升級問題。您能否讓我們了解一下這些增長是如何進行的——比如您需要多長時間才能達到您認為對這些客戶的全面增長，以及隨著客戶的增長而更加有機地增長。我想知道，這種情況是否會在一個季度或兩個季度發生，需要一年左右的時間才能實現？然後你能想像一下他們最終會有多大嗎？其中任何一個都可能是 10% 的客戶嗎？或者它最終不會對您的收入產生那樣的影響？你可以給它任何顏色。

So for these large customers, the ramps take typically years. I mean they really do. When we're talking the size of some of these enterprises, for them to fully roll out even just the phases of the deployments that they've got planned, it takes a long time. And that's a positive thing. Don't think about it negatively. You've got giant customers who are rolling out across their enterprise. They're transforming -- they're digitally transforming their enterprise. And that takes time. We see systems opportunities persist over multiple quarters. We see endpoint IC volumes ramping -- both of the ones we talked about have IC volumes already ramping. They are ramping in third quarter. They will ramp again in the fourth quarter. We see that ramping sustained. And even when we've done a phase we're not done. Because as Jeff just noted, we're in the third phase of a rollout at our visionary European retailer, and that's still simply on loss prevention in self-checkout. There are other opportunities with that retailer, with other retailers, other use cases. And we see the same thing with all of our large-scale enterprise deployments as they start playing right in RFID, see the benefits of transforming their enterprises. They come up with additional opportunities and use cases and our job as Impinj is to ensure those customers are wildly successful in their deployments. And that is our focus because if they are widely successful, then we'll be wildly successful with them. And we're going to make sure they're successful.

因此，對於這些大客戶來說，升級通常需要數年時間。我的意思是他們確實這麼做了。當我們談論其中一些企業的規模時，即使只是他們計劃的部署階段，他們也需要很長時間才能完全推出。這是一件積極的事情。不要消極地思考它。您擁有正在整個企業範圍內推廣的大客戶。他們正在轉型——他們正在對他們的企業進行數字化轉型。這需要時間。我們看到系統機會在多個季度持續存在。我們看到端點 IC 數量不斷增加——我們討論的兩個端點 IC 數量都已經在增加。他們在第三季度正在崛起。他們將在第四季度再次崛起。我們看到這種增長持續。即使我們已經完成了一個階段，但我們還沒有完成。因為正如傑夫剛剛指出的那樣，我們富有遠見的歐洲零售商正處於推出的第三階段，這仍然只是自助結賬中的防損。該零售商、其他零售商、其他用例還有其他機會。我們在所有大型企業部署中都看到了同樣的情況，因為他們開始在 RFID 中發揮作用，看到了企業轉型的好處。他們提出了額外的機會和用例，而我們作為 Impinj 的工作就是確保這些客戶在部署中取得巨大成功。這就是我們關注的焦點，因為如果他們取得了廣泛的成功，那麼我們也會與他們一起取得巨大的成功。我們將確保他們取得成功。

Next question comes from Scott Searle with Roth MKM.

下一個問題來自 Roth MKM 的 Scott Searle。

Maybe to follow up on some of the earlier comments, I'm trying to understand what a normalized level of endpoint IC demand looks like today? It looks like it's probably in that $60 million range or so. And then you've got other systems deployments that are ongoing the European retailer, U.S. logistics provider, et cetera. So I guess on 2 questions. What is the real normalized level of that IC demand where we're starting today. And then as we get into the beginning of next year and some of these other projects start to ramp up, what is non-retail apparel look like in terms of your mix? I think – even Denison was pretty upbeat yesterday about the nonretail apparel mix growing at a 50% plus clip. I'm wondering if you could provide us with some idea of what you think your mix is excited and the growth rate looks like there?

也許為了跟進一些早期的評論，我試圖了解當今端點 IC 需求的正常水平是什麼樣的？看起來大概在 6000 萬美元左右。然後，歐洲零售商、美國物流提供商等正在進行其他系統部署。所以我猜有兩個問題。我們今天開始的 IC 需求的真正標準化水平是多少？然後，當我們進入明年初，其中一些其他項目開始增加時，從您的組合來看，非零售服裝是什麼樣的？我認為——就連 Denison 昨天也對非零售服裝組合以 50% 以上的速度增長感到非常樂觀。我想知道您是否可以向我們提供一些您認為您的組合令人興奮的想法以及那裡的增長率？

Yes. So first question, Scott, this is Cary. I'd highlight the transition from Q2 to Q3 on the endpoint IC growth has a couple of factors that are impacting what is the real demand in that. First, as I mentioned before, we shipped several hundred of those high ASP M775 authentication ICs in Q2. That was seeding an opportunity before the commercial launches. So we won't see that level of volume immediately following in Q3. We wait to see the rebound in the volume until those products are actually pulled through by the commercial launches. So that comes down. We also see -- we also see on the IC safety stock pulling that down, it's about a month right now. We're trying to pull it down by 2 to 3 weeks. So that's masking real demand in the quarter. What's offsetting that partially is the ramps of the big projects. And think of that as logistics. Think of that as general merchandise, the logistics is much bigger than the ramp of logistics is much bigger than general merchandise right now. Last year, the industry shipped 34 billion units in total. We won't know what the industry ships this year until early part of Q1. But as impinges right now, we're modeling greater than 25% endpoint IC unit growth on a year-over-year basis.

是的。第一個問題，斯科特，這是卡里。我想強調的是，端點 IC 增長從第二季度到第三季度的轉變有幾個因素影響著真正的需求。首先，正如我之前提到的，我們在第二季度發貨了數百個高 ASP M775 身份驗證 IC。這是在商業發布之前播下的機會。因此，我們不會在第三季度立即看到這種交易量水平。我們等待看到銷量的反彈，直到這些產品真正通過商業發布而得以實現。所以這就下來了。我們還看到 - 我們還看到 IC 安全庫存拉低了這一點，現在大約一個月了。我們正在努力將其縮短 2 至 3 週。因此，這掩蓋了本季度的實際需求。大型項目的進度部分抵消了這一影響。並將其視為物流。把它想像成一般商品，物流比現在的物流坡道大得多。去年，該行業總出貨量為340億台。直到第一季度初，我們才能知道該行業今年的出貨量。但從目前的影響來看，我們正在建模端點 IC 單位同比增長超過 25%。

And Cary, then just a follow-up. Is there exiting this year, given the ramp of customers into general merchandise and logistics, does that start to get to 50% of the mix at this point in time once we get back to normalized levels? And one other, just on the pricing front, typically, you have pricing negotiations going into the -- from the fourth quarter into the first quarter. That hasn't happened in the last couple of years because of wafer availability issues, does that return as we go into '24?

而卡里，則只是後續行動。鑑於客戶進入百貨和物流領域的數量增加，今年是否會退出？一旦我們回到正常水平，這一比例是否會在此時開始達到 50%？另一方面，就定價而言，通常情況下，你會從第四季度到第一季度進行定價談判。由於晶圓可用性問題，過去幾年這種情況並未發生，當我們進入 24 世紀時，這種情況是否會再次出現？

So Scott, I'm going to take the first part of your question and then hand over to Jeff and Cary to talk about the pricing and the negotiations. Retail apparel is still by our estimate, only about 25% penetrated. So there's still huge growth opportunities in that market. Retail general merchandise has enormous growth opportunities and then supply chain and logistics layers on top, we still see retail as being the primary driver of an volumes. We also see -- we see long-term secular growth in our industry. It's a long-term opportunity. We have confidence in that long-term opportunity. adoption has increased and will increase over time. So we're going to manage through this downturn. We're going to come out strong to the other side. We're going to be delivering into those opportunities. We're going to leverage our strengths, and we're confident in the future. But as we just noted on the call, given the dynamics that are a consequence of the inventory shortfalls, let me take that back, that are a consequence of the product shortfalls we had in 2022. We now entered an over-inventory situation at our partners as they're burning down their safety stock, now seeing that we have enough wafers, there's some gyrations that we have to work through. We're going to work through as much of them as we can in the third quarter. There will be a tail end of the fourth, and we'll report out as soon as we know more information about the fourth on our next call. and provide more visibility going forward. But the long-term opportunity in front of us remains strong. To the second part of your question, in terms of pricing and when do negotiations happen?

斯科特，我將回答你問題的第一部分，然後交給傑夫和卡里討論定價和談判。據我們估計，服裝零售業的滲透率仍約為 25%。因此該市場仍然存在巨大的增長機會。零售百貨擁有巨大的增長機會，然後是供應鍊和物流層，我們仍然認為零售是銷量的主要驅動力。我們還看到——我們看到我們行業的長期長期增長。這是一個長期的機會。我們對這一長期機會充滿信心。採用率已經增加，並且會隨著時間的推移而增加。因此，我們將度過這次低迷期。我們會堅強地走向另一邊。我們將抓住這些機會。我們將發揮我們的優勢，對未來充滿信心。但正如我們剛剛在電話中指出的那樣，考慮到庫存短缺造成的動態，讓我收回這一點，這是我們 2022 年產品短缺的結果。我們現在進入了庫存過剩的情況。合作夥伴正在消耗安全庫存，現在看到我們有足夠的晶圓，我們必須解決一些問題。我們將在第三季度盡可能多地解決這些問題。第四場比賽將會結束，一旦我們在下次電話會議上了解有關第四場比賽的更多信息，我們就會立即報告。並提供更多的未來可見性。但我們面前的長期機遇仍然強勁。關於你問題的第二部分，在定價方面以及何時進行談判？

Yes. You're absolutely correct, Scott. Historically, price negotiations have occurred late in the fourth quarter and result in low to mid-single-digit ASP declines in the first quarter. That hasn't been the case in the last couple of years as our cost has increased in order to maintain the integrity of our margin model, we pass those costs on to our customers. I don't want to project what's going to happen right now, but our goal, I would reiterate, is maintaining the integrity of the margin model. So it's tough to do that unless we see a cost decline for Impinj.

是的。你是完全正確的，斯科特。從歷史上看，價格談判發生在第四季度末，導致第一季度平均售價出現低至中個位數的下降。過去幾年情況並非如此，因為為了保持利潤模型的完整性，我們的成本增加了，我們將這些成本轉嫁給了我們的客戶。我不想預測現在會發生什麼，但我重申，我們的目標是保持利潤模型的完整性。因此，除非我們看到 Impinj 的成本下降，否則很難做到這一點。

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

我們的問答環節到此結束。我想將會議轉回聯合創始人兼首席執行官 Chris Diorio 發表閉幕詞。

Thank you, MJ. I'd like to thank you all for joining the call today. I hope you and your loved ones are and remain safe and well. Thank you.

謝謝你，喬丹。我要感謝大家今天加入電話會議。我希望您和您所愛的人保持安全和健康。謝謝。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。