Impinj, the Seattle chipmaker that supplies more UHF RAIN RFID tag chips than any other vendor, sold a record number of them in the three months to 30 September 2026 and still could not get in front of the orders. Tag chip revenue reached $97.3m, a quarterly record, up 24% from $78.8m in the same period of 2025.
Impinj (Nasdaq: PI) published the results on 28 October 2026. RAIN RFID is the industry’s name for passive UHF RFID, the battery-free technology behind retail stock counting and parcel sortation. An endpoint IC, Impinj’s term for a tag chip, is the radio-on-a-chip inside a label: it carries the item’s identity and draws its power from the reader’s field.
Total revenue was also a record, at $112.1m, up 17% year on year from $96.1m. Non-GAAP gross margin was 54.9%, against 53.0% a year earlier. GAAP net income was $4.7m, or $0.15 per diluted share, against a $12.8m GAAP loss a year earlier; non-GAAP net income was $22.1m, or $0.69 per diluted share. Adjusted EBITDA was $24.5m, a margin of 21.9% and inside the company’s long-term target range. The previous record, set in the second quarter of 2026, leaned on $17m of licensing revenue; this one did not.
The squeeze is behind the wafer, not in front of it
Co-founder and chief executive Chris Diorio was blunt about the shortfall on the earnings call that followed. “We met, but were unable to get ahead of, market need, despite us ramping our back-end wafer post-processing throughput as quickly as we could,” he said, according to the call transcript.
That is not a wafer shortage, and Diorio said so plainly when an analyst pressed. “We have sufficient wafer supply. We’re getting good support from our wafer foundry partner. This is the back end, the post-processing once we get the wafer: the thinning, bumping, dicing, testing, all those things that we have to do to the wafer to make it usable by our partners who take a bare IC and put it down on a label.” The bottleneck sits between a finished wafer and a bare die an inlay maker can attach to an antenna.
Impinj has enough capacity in the back-end steps where it owns the equipment. The shortfall is in the shared steps it buys from third-party post-processors, where capacity is tight because the wider semiconductor market is busy. The ramp runs at least three quarters, the one just reported and the two after it, with capital expenditure stepping up in the first quarter of 2027 to raise throughput, diversify sites and bring some bought-in steps in house. Bookings for the M800, Impinj’s current high-performance endpoint IC family, already run somewhat into the first quarter of 2027.
Chips up, readers down
Systems revenue, meaning readers and gateways, went the other way: $14.8m, up 23% sequentially from $12m in the second quarter of 2026 but down 15% year on year from $17.3m. Reader IC revenue beat expectations and was the fastest-growing product line, pulled along by enterprise demand for partner-built readers. The split echoes the sector’s second-quarter 2026 earnings: silicon is where the volume growth has landed.
Fourth quarter guidance
Impinj guided fourth-quarter 2026 revenue to between $104m and $107m, against $92.8m in the fourth quarter of 2025, a 14% year-on-year increase at the midpoint, with adjusted EBITDA of $19.2m to $20.7m and non-GAAP earnings of $0.55 to $0.60 per diluted share. Endpoint IC revenue should dip modestly but stay on the favourable side of normal seasonality, and gross margin should rise again as the M800 reaches its terminal mix, its peak share of endpoint IC sales, and higher-margin specialty endpoint ICs return after what the company called a multi-year drought.
Systems revenue, unusually for a fourth quarter, is guided down. Chief financial officer Cary Baker said “project timing has shifted a couple programs to the right”, and the large strategic customers Impinj calls lighthouse accounts are expected to burn down reader and gateway stock. Both effects should reverse in early 2027. Diorio’s summary in the release was that “M800’s market strength, resilient retail demand, growth at our lighthouse accounts and Gen2X momentum all contributed to those record results”. Gen2X is Impinj’s set of enhanced RAIN RFID features for faster, more reliable item identification.
Lighthouse accounts, food and a new commercial chief
Lighthouse accounts, enterprises that take the whole Impinj platform rather than just chips, now generate more than 20% of total revenue. Diorio described three without naming them: a visionary European retailer, a second large North American supply chain and logistics end user and an Asian retailer. That logistics end user’s conversion to a custom Impinj endpoint IC was essentially completed in the quarter, with international expansion still ahead. Baker said the custom chip gives Impinj much better sight of how that customer’s channel manages inventory, which he blamed for mid-teens sequential endpoint IC declines in the first quarters of 2025 and 2026.
Food added two new names, one in store replenishment and one in in-store inventory, two of the four programme types Impinj recognises alongside loss identification and automated self-checkout. Diorio relayed figures Kroger, the US grocery chain, gave at its investor day: its bakery pilot delivered nearly 70% faster inventory counts, 50% lower waste, approximately 200 basis points of sales lift and nearly 50 basis points of category share gain. Impinj’s own software remains in beta at lighthouse accounts and “not yet generating meaningful revenue”, with general availability a time frame Diorio measured in “months, not quarters”.
Aileen Ryan joins Impinj as chief commercial officer on 1 December 2026, leading lighthouse account success and solutions go-to-market. She is the outgoing president of the RAIN Alliance, the industry body for UHF RAIN RFID, which she led for four years.
Read more at https://investor.impinj.com/news/press-release/2026/Impinj-Reports-Third-Quarter-2026-Financial-Results/default.aspx
