RFID manufacturer Impinj (NASDAQ: PI) reported Q2 CY2025 results beating Wall Street’s revenue expectations, but sales fell by 4.5% year on year to $97.89 million. On top of that, next quarter’s revenue guidance ($92.5 million at the midpoint) was surprisingly good and 7.4% above what analysts were expecting. Its non-GAAP profit of $0.80 per share was 13.6% above analysts’ consensus estimates.

Is now the time to buy Impinj? Find out by accessing our full research report, it’s free.

Company Overview

Founded by Caltech professor Carver Mead and one of his students Chris Diorio, Impinj (NASDAQ: PI) is a maker of radio-frequency identification (RFID) hardware and software.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Impinj grew its sales at an exceptional 18.2% compounded annual growth rate. Its growth beat the average semiconductor company and shows its offerings resonate with customers, a helpful starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.

We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Impinj’s annualized revenue growth of 6.5% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, Impinj’s revenue fell by 4.5% year on year to $97.89 million but beat Wall Street’s estimates by 4.3%. Despite the beat, the drop in sales could mean that the current downcycle is deepening. Company management is currently guiding for a 2.8% year-on-year decline in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 5.4% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and suggests its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

Product Demand & Outstanding Inventory

Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.

This quarter, Impinj’s DIO came in at 212, which is 45 days above its five-year average. These numbers suggest that despite the recent decrease, the company’s inventory levels are higher than what we’ve seen in the past.

Key Takeaways from Impinj’s Q2 Results

We were impressed by Impinj’s strong improvement in inventory levels. We were also excited its EBITDA and EPS outperformed Wall Street’s estimates by a wide margin. Looking ahead, guidance for next quarter was above expectations across the board. Zooming out, we think this quarter was really strong with not much to pick on. The stock traded up 19.2% to $146.02 immediately after reporting.

Sure, Impinj had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.