Sonendo, Inc. Reports Second Quarter 2024 Financial Results and Raises Full Year Revenue Guidance
Recent Highlights
-
Generated
$8.3 million total revenue for second quarter of 2024 and carried over a healthy console backlog for the second straight quarter; - Drove substantial increases in GAAP gross margin and adjusted gross margins (non-GAAP) to 37.5% and 40.7%, respectively, based primarily on lower manufacturing and console warranty costs;
-
Significantly reduced GAAP operating loss to
$6.7 million and adjusted EBITDA (non-GAAP) loss to$5.7 million , a 61% and 55% improvement, respectively, compared to the second quarter of 2023; and -
Raised 2024 full year revenue guidance range to
$31 to$32 million , from prior guidance of$29 to$31 million
“We are very encouraged by the early results of the strategic reset we embarked earlier this year,” said
Second Quarter 2024 Financial Results
Except as otherwise indicated, the GAAP and non-GAAP financial measures presented in this press release exclude discontinued operations associated with the Company’s divestiture of its TDO practice management software segment in
Total revenue was
GAAP gross margin for the second quarter of 2024 increased to 37.5%, compared to a negative gross margin of 5.5% for the second quarter of 2023. During the second quarter of 2024 and 2023, respectively, the Company recorded in cost of sales
Total operating expenses for the second quarter of 2024 totaled
Operating loss totaled
Net loss from continuing operations totaled
Free cash flow burn (non-GAAP), which the Company defines as the sum of net cash used in operating activities and purchases of property and equipment, totaled
As of
2024 Financial Guidance
For the full year 2024, the Company is increasing its expectations for total revenue from continuing operations to be in the range of
Webcast and Conference Call Information
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For more information about
Forward Looking Statements
This press release includes forward-looking statements (statements which are not historical facts) within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, express or implied forward-looking statements relating to the Company’s anticipated business and financial performance on an on-going basis and Sonendo’s 2024 financial guidance. You are cautioned that such statements are not guarantees of future performance and that our actual results may differ materially from those set forth in the forward-looking statements. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions; speak only as of the date they are made; and, as a result, are subject to risks and uncertainties that may change at any time. Factors that could cause the Company’s actual results to differ materially from these forward-looking statements are described in detail in our registration statements, reports and other filings with the
Use of Non-GAAP Financial Measures
Sonendo’s financial results are prepared in accordance with generally accepted accounting principles in
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) |
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2024 |
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2023 |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
|
$ |
15,703 |
|
|
$ |
14,009 |
|
Short-term investments |
|
|
8,533 |
|
|
|
32,773 |
|
Accounts receivable, net |
|
|
4,528 |
|
|
|
4,790 |
|
Inventory |
|
|
11,798 |
|
|
|
11,074 |
|
Prepaid expenses and other current assets |
|
|
1,025 |
|
|
|
1,969 |
|
Current assets of discontinued operations |
|
|
927 |
|
|
|
656 |
|
Total current assets |
|
|
42,514 |
|
|
|
65,271 |
|
Property and equipment, net |
|
|
766 |
|
|
|
461 |
|
Operating lease right-of-use assets |
|
|
2,899 |
|
|
|
2,703 |
|
Other assets |
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|
124 |
|
|
|
128 |
|
Non-current assets of discontinued operations |
|
|
— |
|
|
|
9,597 |
|
Total assets |
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$ |
46,303 |
|
|
$ |
78,160 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
|
$ |
931 |
|
|
$ |
1,142 |
|
Accrued expenses |
|
|
1,874 |
|
|
|
3,072 |
|
Accrued compensation |
|
|
1,550 |
|
|
|
2,413 |
|
Operating lease liabilities |
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|
983 |
|
|
|
1,250 |
|
Current portion of term loan |
|
|
10,800 |
|
|
|
24,900 |
|
Other current liabilities |
|
|
1,592 |
|
|
|
1,844 |
|
Current liabilities of discontinued operations |
|
|
— |
|
|
|
700 |
|
Total current liabilities |
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|
17,730 |
|
|
|
35,321 |
|
Operating lease liabilities, net of current |
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|
1,765 |
|
|
|
1,423 |
|
Term loan, net of current |
|
|
8,511 |
|
|
|
12,467 |
|
Other liabilities |
|
|
428 |
|
|
|
530 |
|
Total liabilities |
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|
28,434 |
|
|
|
49,741 |
|
Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, |
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|
— |
|
|
|
— |
|
Common stock, |
|
|
73 |
|
|
|
64 |
|
Additional paid-in-capital |
|
|
461,938 |
|
|
|
458,357 |
|
Accumulated other comprehensive loss |
|
|
(2 |
) |
|
|
11 |
|
Accumulated deficit |
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|
(444,140 |
) |
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|
(430,013 |
) |
Total stockholders’ equity |
|
|
17,869 |
|
|
|
28,419 |
|
Total liabilities and stockholders’ equity |
|
$ |
46,303 |
|
|
$ |
78,160 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) (In thousands, except share and per share data) |
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Three Months Ended |
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Six Months Ended |
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2024 |
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2023 |
|
2024 |
|
2023 |
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Revenue, net |
|
$ |
8,314 |
|
|
$ |
8,763 |
|
|
$ |
15,361 |
|
|
$ |
17,441 |
|
Cost of sales |
|
|
5,198 |
|
|
|
9,248 |
|
|
|
10,244 |
|
|
|
15,948 |
|
Gross profit (loss) |
|
|
3,116 |
|
|
|
(485 |
) |
|
|
5,117 |
|
|
|
1,493 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
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Selling and marketing |
|
|
4,072 |
|
|
|
7,693 |
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|
9,216 |
|
|
|
15,674 |
|
General and administrative |
|
|
4,163 |
|
|
|
6,416 |
|
|
|
9,080 |
|
|
|
12,549 |
|
Research and development |
|
|
1,568 |
|
|
|
2,764 |
|
|
|
3,757 |
|
|
|
5,691 |
|
Total operating expenses |
|
|
9,803 |
|
|
|
16,873 |
|
|
|
22,053 |
|
|
|
33,914 |
|
Operating loss |
|
|
(6,687 |
) |
|
|
(17,358 |
) |
|
|
(16,936 |
) |
|
|
(32,421 |
) |
Other expense, net: |
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|
|
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|
|
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Interest and financing costs, net |
|
|
(759 |
) |
|
|
(739 |
) |
|
|
(2,699 |
) |
|
|
(1,318 |
) |
Loss before income tax expense |
|
|
(7,446 |
) |
|
|
(18,097 |
) |
|
|
(19,635 |
) |
|
|
(33,739 |
) |
Income tax expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss from continuing operations, net of tax |
|
|
(7,446 |
) |
|
|
(18,097 |
) |
|
|
(19,635 |
) |
|
|
(33,739 |
) |
Income from discontinued operations, net of tax |
|
|
81 |
|
|
|
407 |
|
|
|
5,508 |
|
|
|
678 |
|
Net loss |
|
$ |
(7,365 |
) |
|
$ |
(17,690 |
) |
|
$ |
(14,127 |
) |
|
$ |
(33,061 |
) |
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Other comprehensive income (net of tax): |
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Unrealized (loss) gain on short-term investments |
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(1 |
) |
|
|
(25 |
) |
|
|
(13 |
) |
|
|
31 |
|
Comprehensive loss |
|
$ |
(7,366 |
) |
|
$ |
(17,715 |
) |
|
$ |
(14,140 |
) |
|
$ |
(33,030 |
) |
Net loss per share from continuing operations – basic and diluted |
|
$ |
(0.08 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.21 |
) |
|
$ |
(0.36 |
) |
Net income per share from discontinued operations – basic and diluted |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.06 |
|
|
$ |
0.01 |
|
Net loss per share – basic and diluted |
|
$ |
(0.08 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.35 |
) |
Weighted-average shares outstanding – basic and diluted |
|
|
95,429,233 |
|
|
|
93,684,289 |
|
|
|
95,085,847 |
|
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|
93,538,676 |
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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (unaudited; in thousands; except percentage) |
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Three Months Ended |
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Six Months Ended |
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|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Gross profit (loss) |
|
$ |
3,116 |
|
|
$ |
(485 |
) |
|
$ |
5,117 |
|
|
$ |
1,493 |
|
Gross margin |
|
|
37.5 |
% |
|
|
(5.5 |
%) |
|
|
33.3 |
% |
|
|
8.6 |
% |
|
|
|
|
|
|
|
|
|
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Adjustments: |
|
|
|
|
|
|
|
|
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Excess and obsolete inventory reserve related to recently discontinued products |
|
|
241 |
|
|
|
2,917 |
|
|
|
241 |
|
|
|
2,917 |
|
Impairment of long-lived assets |
|
|
15 |
|
|
|
— |
|
|
|
161 |
|
|
|
— |
|
Stock-based compensation expense |
|
|
8 |
|
|
|
79 |
|
|
|
310 |
|
|
|
218 |
|
Adjusted gross profit |
|
$ |
3,380 |
|
|
$ |
2,511 |
|
|
$ |
5,829 |
|
|
$ |
4,628 |
|
Adjusted gross margin |
|
|
40.7 |
% |
|
|
28.7 |
% |
|
|
37.9 |
% |
|
|
26.5 |
% |
|
|
|
|
|
|
|
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Loss from continuing operations, net of tax |
|
$ |
(7,446 |
) |
|
$ |
(18,097 |
) |
|
$ |
(19,635 |
) |
|
$ |
(33,739 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
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Interest and financing costs, net |
|
|
759 |
|
|
|
739 |
|
|
|
2,699 |
|
|
|
1,318 |
|
Depreciation and amortization |
|
|
73 |
|
|
|
397 |
|
|
|
128 |
|
|
|
750 |
|
Excess and obsolete inventory reserve related to recently discontinued products |
|
|
241 |
|
|
|
2,917 |
|
|
|
241 |
|
|
|
2,917 |
|
Stock-based compensation expense |
|
|
635 |
|
|
|
1,422 |
|
|
|
2,433 |
|
|
|
2,766 |
|
Impairment of long-lived assets |
|
|
15 |
|
|
|
— |
|
|
|
161 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
(5,723 |
) |
|
$ |
(12,622 |
) |
|
$ |
(13,973 |
) |
|
$ |
(25,988 |
) |
|
|
|
|
|
|
|
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|
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Cash Flows |
|
|
|
|
|
|
|
|
||||||||
Cash flow used in operating activities |
|
$ |
(6,718 |
) |
|
$ |
(9,365 |
) |
|
$ |
(17,407 |
) |
|
$ |
(26,341 |
) |
Purchases of property and equipment |
|
|
(15 |
) |
|
|
(417 |
) |
|
|
(161 |
) |
|
|
(627 |
) |
Free cash flow (burn) |
|
$ |
(6,733 |
) |
|
$ |
(9,782 |
) |
|
$ |
(17,568 |
) |
|
$ |
(26,968 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240807264818/en/
Investor Contact:
IR@Sonendo.com
Source: