Impinj at Piper Sandler Conference: RFID Growth Strategies Unveiled

On Thursday, 11 September 2025, Impinj (NASDAQ:PI) presented at the Piper Sandler 4th Annual Growth Frontiers Conference, highlighting its strategic advancements in RAIN RFID technology. The company outlined its progress in retail, logistics, and food sectors, while addressing challenges such as market volatility and tariff impacts. Impinj’s full-stack capabilities offer a competitive edge, though the company remains cautious in its guidance amid ongoing market fluctuations.

Key Takeaways

• Impinj is advancing in RAIN RFID technology across retail, logistics, and food markets.
• The M800 chip is expected to enhance gross margins by 300 basis points by 2025.
• The Digital Product Passport initiative in Europe could expand RAIN RFID use cases.
• Food sector anticipated to become the largest growth driver due to its scale and velocity.
• Impinj’s full-stack capability provides a unique competitive advantage.

Financial Results

• The endpoint IC market showed increased stability after Q1’s tariff-induced volatility.
• Impinj guided Q3 without assuming additional business turns, which typically reach 50% per quarter.
• The M800 chip offers a 25% increase in die per wafer, promising a 300 basis point gross margin boost.
• Sequential gross margin increases are expected in Q3 and Q4.

Operational Updates

• Retail Apparel: 50% to 60% of endpoint ICs shipped to retail; Old Navy and Academy Sports among new deployments.
• General Merchandise: Walmart leads with a phased approach, aiming for completion by 2026.
• Logistics: UPS spearheads growth with a $400 billion annual unit opportunity.
• Food: Kroger leads with bakery deployments; pilots underway with major grocers.
• Digital Product Passport: Europe is integrating RAIN RFID in consumer products, starting with batteries and textiles.

Future Outlook

• End markets in retail, logistics, and food are key near-term growth drivers.
• Food is projected to become the largest sector due to its extensive scale.
• The M800 chip ramp will continue into 2025 and 2026, driving margin improvements.
• The Digital Product Passport will enhance consumer engagement and expand use cases.

Q&A Highlights

• Impinj’s full-stack capability is unmatched, holding over 50% share in the reader IC market.
• In competitive opportunities, tag costs can be as low as $0.02 per inlay.

Readers are encouraged to refer to the full transcript for a detailed account of Impinj’s conference call.

Full transcript - Piper Sandler 4th Annual Growth Frontiers Conference:

Unidentified speaker: New people here. Okay, we’re live, so we’re going to go ahead and get started. We are fortunate to have the management of Impinj, ticker is PI. It’s a very exciting story. We have Cary, the CFO, with us, and Andy is sitting here. Everybody knows him, but he didn’t want to come up on the stage, so be sure to say hi to him. Cary, while I got you on the stage here, maybe give us an update on what’s going on in the endpoint IC portfolio. You know, you’ve had a very good first year, come out of some inventory problem. Maybe give us an update on where you are and how you see some of your end markets progressing through the rest of the year.

Cary, CFO, Impinj: Yeah, I think we’re starting to see more stability in the endpoint IC market. If I go back to the Q1 timeframe, we saw a lot of volatility. A lot of it was caused by tariffs, not a direct impact, but an indirect impact as our partner ecosystem was trying to figure out how to navigate it. In Q1, we guided the quarter in February. Between February and the end of the quarter, we saw a significant amount of volatility from the order patterns of our partners. We saw pull-ins, push-outs, cancellations, and reschedules in addition to normal turns business that we would expect in the quarter. As we moved into Q2, that volatility moderated quite meaningfully. We still saw changes in order patterns, but it was primarily adjustments to delivery timing or delivery location.

We still see, because of that volatility in Q2, and we still expect some in Q3, we purposely guided Q3 without assuming any additional turns in our business. We’re a business that typically turns 50% in a quarter, so think of that as starting the quarter with half the quarter booked, and then we spend the first six to seven weeks of a quarter booking and shipping in the quarter. We guide in the fourth week of the quarter, so with our stated lead times, we’d probably have, that’s Harsh’s phone, we’d probably have another two to three weeks of ability to turn business. That should give us enough flexibility to accommodate or absorb any volatility.

Unidentified speaker: Okay, great. I know you serve a lot of end markets and there’s several that are ramping. Curious if you could just take us through some of your big end markets and kind of where the penetrations are, because they seem to go up every year. I’m curious, like maybe you start with retail apparel and talk about food and everything in between.

Cary, CFO, Impinj: Today, 50% to 60% of the endpoint ICs we ship go into the retail market. It is our most penetrated vertical. Think of retail as an opportunity of 80 billion units per year.

Unidentified speaker: Like apparel?

Cary, CFO, Impinj: Apparel, retail apparel.

Unidentified speaker: Retail apparel, okay.

Cary, CFO, Impinj: Thank you. We’re roughly 40% penetrated by volume, but on a brand basis, we’re close to north of 90% penetrated by volume. Most apparel retailers have deployed. Most apparel retailers are not 100% deployed. They’re somewhere on their journey. A few years ago, retail apparel was probably 75% of our mix. It’s come down because we’ve had two new verticals step in. We’ve had general merchandise, which is a $325 billion unit opportunity per year, and we’ve had logistics, which is a $400 billion unit opportunity per year. Here, these two verticals are low single-digit % penetrated, but we’ve got some of the premier players in the respective places leading the charge. In general merchandise, Walmart is the first player to move forward, and in logistics, UPS is the first major player to move forward in that way.

The final vertical, which is in much earlier days with no meaningful penetration right now, is food. This is an opportunity that is bigger than all three of the other verticals collectively combined. We’re still in the pilot or pre-pilot stages of food, but we are seeing some movement there.

Unidentified speaker: Give me an idea how big a market are we talking? Are we hugging a trillion units a year?

Cary, CFO, Impinj: For sure, easily.

Unidentified speaker: Easily. This would be starting at groceries, going all the way to packaged foods and things of that nature. What kind of, you’ve started to see some action, quote unquote, in the food market. What are you seeing and where are you seeing some implementations in the food category?

Cary, CFO, Impinj: Yeah, so food, early days of food looks a lot like the early days of apparel. It’s the same use case. It’s using a handheld reader to track inventory on the store floor. If we go back to the early days of apparel, it started in fast fashion. Those are the apparel retailers that have more perishable items. Their apparel items are perishable on a seasonal basis. They also control their supply chain. They have the easiest ability to make a decision to start tagging. Food has a lot of those similar properties. We’re seeing food start in grocery stores on perishable items. Here, the perishability is not measured in quarter. It’s measured in days. We’re also seeing grocers start where they control the supply chain.

Think the four outside walls of a grocery store, the bakery, the proteins, the deli, categories like that where they produce, package, and label the items behind the counter. They’re able to make the decision to move forward, and that’s where we’re seeing the traction in food so far.

Unidentified speaker: You’ve actually talked about, you work with some of the bigger guys in the food category. Do you feel comfortable sharing some of the bigger names that are actually doing some food things with you?

Cary, CFO, Impinj: Yeah, the largest public pilot today is Kroger’s bakery deployment. This kicked off late last year, has been ramping. I think the most recent public comments put them at about 700 stores with the bakery pilot. There are other pilots that are not public today that are going on, but think of those in the 10 to 20 to maybe 50 store range. Food, one of the many reasons we’re excited about food is while we have one major customer piloting, we see a lot of activity behind that right now. We think 8 out of the 10 largest grocers today are either piloting or exploring a RAIN deployment.

Unidentified speaker: Appreciate it, Cary. In general merchandise, you’re working with the big guy, the biggest retailer in the country. Maybe talk about how their view of RFID and the importance of RFID for them, RAIN RFID in particular, and where you are with that category, with that particular retailer?

Cary, CFO, Impinj: Yeah, this is our large North American retailer. They started with an apparel deployment in early 2020, now tag most of their apparel items, and they’ve since made the decision to move into general merchandise. They’ve announced two phases of general merchandise, tagging items like toys, home goods, electronics, lawn and garden, stationery, categories like that. The endpoint IC ramp for those categories started last year. It ramped last year. It’s ramping again this year. It probably won’t complete until sometime in 2026. There are currently assessments going on of what categories could be included in phase three. We are increasingly confident there will be a phase three. They will announce the timing of that and the categories that are included.

Unidentified speaker: Okay, that was one of my questions. What were you looking forward to in the next few phases?

Cary, CFO, Impinj: Yeah, for sure.

Unidentified speaker: It seems like it’s happening. You know, retail apparel is one of the categories. Actually, I always like to poll and see if you guys that are listening to the story have any questions. It’d be great if you have any, just feel free to jump in and ask away, and I’ll do that intermittently as we go through the presentation. Fire away if you have any questions. If not, then I wanted to ask about retail apparel. It’s probably the most economically sensitive item, which is subject to tariffs and subject to the economy because it’s mostly discretionary. How do you, where do you stand on what you’re seeing in this particular category? It’s also a big portion of your revenues at, what is it, 50 something % growth, yeah.

Cary, CFO, Impinj: Even with the softer macro environment or the more uncertain environment, we still see progress in retail apparel. We see the expansion programs. As I mentioned, most brands have adopted, but most are not 100% deployed. We also see net new deployments. This year we saw Old Navy announce, we saw Academy Sports and Outdoor announce. There’s still progression there. As retailers reach the 100% penetrated with their deployment, we see them start moving from the base use case, which is the handheld reader doing inventory visibility on the store floor, to move into other categories like loss or other solutions like loss prevention or overhead reading.

Unidentified speaker: Okay, great. What about other kind of like, there’s this term that’s floating around called DPP, out of Digital Product Passport, I believe, out of Europe. Maybe talk about how real that is and what it would mean for you and what does DPP stand for? What are they trying to accomplish over there in Europe with this particular terminology?

Cary, CFO, Impinj: It’s Digital Product Passport.

Unidentified speaker: Digital product passport, yeah.

Cary, CFO, Impinj: It means tracking an item from cradle to grave. Think about from manufacture to purchase to ultimately recycling. One of the key tenets of digital product passport is that we have to put reading capabilities into the hands of the consumer. The industry has been supported by Qualcomm in that way. Qualcomm most recently announced that they’re putting RAIN reading capabilities into their new Dragon Wing mobile IoT processor. We believe this is a first step to putting reading capabilities into mobile consumer devices. When that happens, it opens up many more use cases. Think about it from a shopper perspective. You now can validate yourself the authenticity of the item. You can see where the fabric was made. You can learn about the care instructions for that item. From a retailer perspective, you can now introduce loyalty programs. You can make style recommendations.

You can even create buyback programs to help with second-hand items. From a recycler perspective, you now are more easily able to sort the items into the various recycling categories. There are likely many more use cases that we haven’t even thought of at this point. It’s still very early days. This is a much longer outlook, but we’re very excited about the potential of consumer reading.

Unidentified speaker: It’s literally tagging everything. Everything that comes into Europe or the Eurozone will be tagged at that point in time.

Cary, CFO, Impinj: Yes, they’re phasing this in. They started out with lithium-ion batteries, and then they’re going into textiles. Textiles is great because that plays well with our apparel customers.

Unidentified speaker: Got it. Okay. You have a chip that you guys introduced not too long ago, Impinj M800 chip, that’s doing kind of wonderful things to you, supposed to do wonderful things to your margin structure. Maybe talk about what’s so special about this chip. Like what is the deal with it? Why does it work so much better? Why is it cheaper? Where is it in terms of adoption? What it can do for your margins?

Cary, CFO, Impinj: Okay, so Harsh is referring to the M800 endpoint IC, and it’s really, think of it as a family of endpoint IC. This is our smallest, most sensitive endpoint IC that we produce and the smallest, most sensitive IC on the market. Think of sensitivity as the performance of the IC. The higher the sensitivity, the smaller the antenna required to get the same read range. As we’re moving from hang tags into parallel to embedded tagging items or tagging items on food, the footprint the antenna can take is smaller and smaller. The M800 is well suited to participate in these opportunities. The M800, because it’s the smallest size, also creates a cost advantage to us. When compared to our M700, the M800’s predecessor, we get 25% more die per wafer. The wafer cost is the largest portion of our endpoint IC BOM. That’s a significant cost advantage.

We’re able to offer the M800 to our customers at a price slightly lower than the M700 to spur adoption, but also save that cost advantage for us. When the M800 ramps to kind of the lead chip in the Impinj portfolio, we anticipate 300 basis points of gross margin accretion. We’re ramping that today. We think at some point in 2025, Impinj will, the M800 will cross over to over the 50% threshold. It won’t blend 50% for the full year, and it won’t reach its terminal mix until next year. You’re going to start seeing that in our gross margin in the second half of the year. On a product basis, we signaled that gross margin would increase sequentially in Q3 and then do so again in Q4. That is the M800 ramp.

Unidentified speaker: Okay, so 300 basis points ultimately when it’s fully ramped, and that could be a decent margin driver. Again, I’m going to just real quickly poll to see if anybody’s got any questions for Impinj or Cary. If not, then let me ask you about Gen2X. It’s a big product protocol. I was with Chris, the CEO, founder. He was extremely proud of it, and I asked him, you know, jokingly asked him, it was just a marketing term. He said, no, no, no, I spent a lot of time on it, and you know, obviously put in a lot of technical effort into it. Maybe you can, in simplistic terms, talk about what does Gen2X do to the efficiency, the power, and readability of RAIN RFID.

Cary, CFO, Impinj: Gen2X is a suite of features native in our M800 that embrace and extend the industry protocol. Think about it at the highest level as improving readability, reading speed, reading range, and authenticity. This was a suite of solutions that was underlying in our larger platform deployments. Think loss prevention with the visionary European retailer or the logistics deployment with our second large logistics provider. We think this will be exceptionally well suited for reading use cases as we move away from handheld reading where a human is in the loop into fixed or autonomous reading. In a retail environment, overhead reading, loss prevention, in a logistics environment, readers on the trucks or readers on the conveyor belts. In a simple way of how Gen2X works, in the normal Gen2 reading environment, the tags are constantly responding to the reader. They’re saying, I’m here, I’m here.

In Gen2X, what we’ve been able to do is enable the reader to send a signal to the tag to tell once the tag’s been read to stop responding so that the reader can focus on the other tags in the environment, which increases speed and increases read range.

Unidentified speaker: It’s pretty good stuff. You’re the only one because you’re the only one that does both sides of the RF chain, because you do the reader ASIC and then you do the endpoint, and there’s nobody else in the industry. Just compare. Now that we’re talking about this angle, competitively, is there anyone that stacks up in the RFID area that’s got full-stack capability like you guys?

Cary, CFO, Impinj: No, quite simply no. You’re exactly right. Gen2X is features on the endpoint IC that are engaged by functionality on the reader. You have to be, Impinj has to be on both sides of the radial link for it to work. We naturally sell a significant amount of readers into the market between our fixed readers and our reader ICs. We’ve also purposely licensed the reading technology for Gen2X to the reading community. Zebra, as an example, has access to Gen2X. They were part of our press release when we launched Gen2X. The reading environment now is more pervasive in its ability to support Gen2X, and the M800 is the only IC that offers Gen2X.

Unidentified speaker: What would be your share in the reader IC market, roughly, if I had to press you on it?

Cary, CFO, Impinj: North of 50%.

Unidentified speaker: Okay, great. Awesome. One of the things that I get a lot is how do you bring the cost of the total tag down? You guys have done a good job bringing the cost of the IC down. The inlay guys are working with you to also bring the size of the antenna down. Where does their tag today stand at in terms of an ASP to an average customer? Where are some of the points that cost can be compressed at to bring the cost of the tag down?

Cary, CFO, Impinj: We provide input into that in a couple of ways. One is just reducing the cost of the chip. As we shrink the size and we’re able to offer a lower price point, that helps that equation. By making the endpoint IC more sensitive, which requires, as I mentioned earlier, a smaller antenna to get the same read range, that helps our inlay partners take cost out. We’ve also seen a lot of investment into capacity at the inlay level, which has created a more competitive pricing environment downstream for us. Today, in the most competitive opportunities, it’s not unusual to see a sub-$0.02 inlay being offered to the market. I think that’s helped the food opportunity move at the pace that it is, which is much sooner than we anticipated.

Unidentified speaker: Great. You’ve got a bunch of end markets that are rising, general merchandise. I mean, retail apparel is somewhat penetrated, but still increasing, food, logistics. Which one end market are you most excited about for 2025 and then 2026?

Cary, CFO, Impinj: I love all my children equally. I would say it’s, I think all three of them are going to be key contributors to growth in the near term. I think even apparel is going to be a key contributor. The volumes in the near term will primarily be driven by apparel and the volume growth, just because there’s so much penetration in apparel, but it’s not 100% yet. There is just inertia in those categories. Over the mid to long term, at some point food takes over. It’s just such a big opportunity. The velocity is so high in food that it can’t help but be the largest category.

Unidentified speaker: Great. We’ve got about six minutes left. I’ll just finally pull one final time for anybody that may have a question for Impinj Management, but if not, then I’ll wrap it up. Thanks, Cary. Thank you. Thanks, everybody, for your time and coming here.

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