Impinj Inc. (PI) shares plummeted 22.87% in the pre-market trading on Thursday, following the company's mixed fourth-quarter earnings report and disappointing guidance for the first quarter of 2025.

While Impinj reported record annual revenue growth and metrics like adjusted EBITDA and free cash flow for 2024, investors were spooked by signs of slowing demand and excess inventory issues that could impact the company's near-term performance.

For Q4 2024, Impinj slightly missed Wall Street's revenue estimates of $92.95 million, reporting sales of $91.6 million, although its adjusted earnings per share of $0.48 met analyst consensus. However, the company's guidance for Q1 2025 fell significantly short of expectations, with projected revenue of $70-$73 million, well below the estimated $92.6 million, and adjusted EPS guidance of $0.06-$0.11, missing the $0.43 estimate.

According to the earnings call, Impinj faced headwinds at the end of Q4, including geopolitical uncertainty and tariffs affecting partner bookings. More importantly, the company expects a sequential decline in endpoint IC revenue in Q1 2025 due to excess inventory at partners and a lack of large new program ramps. Aggressive label price shopping and shorter ordering cycles have also disrupted partner bookings and delayed orders.