Sonim Reports 25% Sequential Increase in Revenue, Continues Advancement into New Addressable Markets
Sonim Technologies (NASDAQ: SONM) reported a 25% sequential revenue increase to $16.8 million for Q1 2024. Despite this, the company's net loss widened to $2.9 million from $1.4 million in Q4 2023, and gross profit fell to $2.9 million, or 17% of revenue, down from $5.1 million, or 38% of revenue, in Q4 2023.
Sonim secured awards from every tier-one carrier in the US and Canada for its next-generation rugged smartphone. The company is advancing 13 carrier awards toward launches starting in Summer 2024, expanding its addressable market from $400 million to $52 billion.
Sonim's entry into the European market is progressing, with key hires and local distribution channels established. The company raised $3.85 million in equity at 126% above the stock's closing price on April 26, 2024, and ended the quarter with $9.3 million in cash.
Operating expenses decreased to $5.6 million from $6.4 million in Q4 2023. The company expects further revenue growth in H2 2024 from new product launches.
- Revenue increased by 25% sequentially to $16.8 million.
- Secured awards with every tier-one carrier in the US and Canada for new rugged smartphone.
- Advancing 13 carrier awards toward summer 2024 launches.
- Addressable market expanded from $400 million to $52 billion.
- Entry into the European market progressing with key hires and local distribution.
- Raised $3.85 million in equity at 126% above the stock's closing price.
- Operating expenses decreased to $5.6 million from $6.4 million in Q4 2023.
- Net loss widened to $2.9 million from $1.4 million in Q4 2023.
- Gross profit fell to $2.9 million, or 17% of revenue, down from $5.1 million, or 38% of revenue, in Q4 2023.
- Adjusted EBITDA was negative $1.6 million, compared to $0.2 million in Q4 2023.
Insights
Sonim Technologies' financial results show a 25% increase in revenue to
The operating expenses have decreased, dropping from
In summary, while the revenue growth and international market entry are positive, the increase in net loss and lower gross profit margins are concerning.
Sonim's strategic moves to secure 13 carrier awards and enter the European market are noteworthy. By expanding its portfolio and targeting new markets, the company aims to increase its addressable market from
However, the success of these initiatives hinges on execution and market acceptance of new products. With production and distribution strategies in place, the potential for growth seems substantial if these market entries are executed efficiently. Therefore, while the outlook appears promising, it’s essential to monitor the actual market performance of these devices and the company’s ability to maintain and grow its market share.
Sonim is making significant inroads with its next-generation rugged smartphones, securing awards from tier-one carriers in both the United States and Canada. These rugged devices, designed for durability, cater to a niche yet critical market segment. The company’s push into new technology markets and regions can diversify its revenue streams and reduce dependence on existing products.
However, the gross profit margin decline from
It's important for Sonim to balance its portfolio, ensuring high-margin products can compensate for the lower-margin ones. The focus on innovation in rugged technology should help maintain a competitive edge and sustain future growth.
Advancing 13 Carrier Awards Toward Launch Dates Commencing in Summer 2024
Entry Into New Product Markets and Europe Drive 2024 Growth Opportunities
Expanding Portfolio and Carrier Awards Boost Company's Addressable Market from
San Diego, California--(Newsfile Corp. - May 14, 2024) - Sonim Technologies, Inc. (NASDAQ: SONM), a leading provider of mobility solutions that include ultra-rugged and rugged phones, connected devices, consumer durable mobile devices, and accessories designed to provide extra protection for users that demand more durability in their work and everyday lives, reported financial results for the quarter ended March 31, 2024.
First Quarter 2024 and Recent Highlights
- Net revenues increased by
25% sequentially, to$16.8 million - GAAP net loss for the quarter was
$2.9 million , compared to net loss of$1.4 million in the fourth quarter 2023 due to sales product mix. - Adjusted EBITDA[†] was negative
$1.6 million , compared to$0.2 million for the fourth quarter 2023
- Secured awards with every tier-one carrier in the United States and Canada for Sonim's next-generation rugged smartphone
- Advanced 13 carrier awards toward launch dates starting in the summer of 2024, including awards supporting Sonim's entry into large new adjacent markets
- Significantly advanced Sonim's European market entry plans by expanding the European market team with key hires, commencing carrier qualification of Sonim's devices, engaging with potential customers, and establishing local distribution channels
- Ended the quarter with cash and cash equivalents totaling
$9.3 million , accounts receivable of$13.3 million , and inventory valued at$4.8 million - Raised
$3.85 million in an equity transaction with each unit priced126% above the closing price of the Company's common stock on April 26, 2024
Peter Liu, Sonim's Chief Executive Officer, said: "The first quarter demonstrated a
"We also continue to target additional design awards to further our growth opportunities with tier-one carriers on a global basis. We are quickly moving forward on our strategy to enter new targeted global territories where Sonim has not previously competed. Our entry into the robust European market has accelerated after a large provider of rugged devices ceased production, creating an immediate opportunity for Sonim to qualify its devices, take over key distribution channels and begin customer engagements. Our expanded team in Europe is moving quickly on all of these fronts as customers look for replacement solutions such as those Sonim provides."
First Quarter 2024 Financial Results
Revenue for the first quarter of 2024 was
Gross profit for the first quarter of 2024, was
Operating expenses for the first quarter of 2024 were
Net loss in the first quarter of 2024 was
"We are well positioned to secure new sales growth opportunities through upcoming carrier launches of our new connected devices and rugged mobile phones. We recently raised incremental capital on above market terms to accelerate these efforts, in particular our strategic investment to enter the large European market where Sonim can replace a previous competitor who is no longer manufacturing devices," said Clay Crolius, Chief Financial Officer of Sonim.
Balance Sheet and Working Capital
Sonim ended the first quarter 2024 with
Subsequent to the quarter end, on April 29, 2024, the Company announced a
About Sonim Technologies, Inc.
Sonim Technologies is a leading U.S. provider of ultra-rugged, rugged and consumer durable mobile devices, including phones, wireless internet data devices, tablets and accessories designed to provide extra protection for users that demand more durability in their work and everyday lives. We currently sell our ruggedized mobility solutions to several of the largest wireless carriers in the United States-including AT&T, T-Mobile and Verizon-as well as the three largest wireless carriers in Canada-Bell, Rogers and TELUS Mobility. Our ruggedized phones and accessories are also sold through distributors in North America and Europe. Sonim devices and accessories connect users with voice, data, workflow and lifestyle applications that enhance the user experience while providing an extra level of protection. For more information, visit www.sonimtech.com.
Important Cautions Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These statements relate to, among other things, the projected revenue growth, the declaring and reaffirming of Sonim's business strategy and objectives, the timing of the availability of the new products, the successful expansion of Sonim's products in new markets, the impact of certain events on Sonim's business, and Sonim's ability to grow and to capitalize the market opportunity. These forward-looking statements are based on Sonim's current expectations, estimates and projections about its business and industry, management's beliefs and certain assumptions made by Sonim, all of which are subject to change. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "achieve," "aim," "ambitions," "anticipate," "believe," "committed," "continue," "could," "designed," "estimate," "expect," "forecast," "future," "goals," "grow," "guidance," "intend," "likely," "may," "milestone," "objective," "on track," "opportunity," "outlook," "pending," "plan," "position," "possible," "potential," "predict," "progress," "promises," "roadmap," "seek," "should," "strive," "targets," "to be," "upcoming," "will," "would," and variations of such words and similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. Factors that may cause actual results to differ materially include, but are not limited to, the following: the availability of cash on hand; potential material delays in realizing projected timelines; Sonim's material dependence on its relationship with a small number of customers who account for a significant portion of Sonim's revenue; Sonim's entry into the data device sector could divert our management team's attention from existing products; risks related to Sonim's ability to comply with the continued listing standards of the Nasdaq Stock Market and the potential delisting of Sonim's common stock; Sonim's ability to continue to develop solutions to address user needs effectively, including its next-generation products; Sonim's reliance on third-party contract manufacturers and partners; Sonim's ability to stay ahead of the competition; Sonim's ongoing transformation of its business; the variation of Sonim's quarterly results; the lengthy customization and certification processes for Sonim's wireless carries customers; various economic, political, environmental, social, and market events beyond Sonim's control, as well as the other risk factors described under "Risk Factors" included in Sonim's most recent Annual Report on Form 10-K and any subsequent quarterly filings on Form 10-Q filed with the Securities and Exchange Commission (available at www.sec.gov). Sonim cautions you not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Sonim assumes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release, except as required by law.
Investor Contact
Matt Kreps
Darrow Associates Investor Relations
mkreps@darrowir.com
M: 214-597-8200
Media Contact
Anette Gaven
Sonim Technologies
M: 619-993-3058
pr@sonimtech.com
SONIM TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 2024 AND DECEMBER 31, 2023 (UNAUDITED)
(IN THOUSANDS EXCEPT SHARE AND
PER SHARE AMOUNTS)
| March 31, 2024 | | December 31, 2023 | ||||
| Assets | ||||||
| Cash and cash equivalents | $ | 9,252 | $ | 9,397 | ||
| Accounts receivable, net | 13,337 | 25,304 | ||||
| Non-trade receivable | 564 | 961 | ||||
| Inventory | 4,823 | 6,517 | ||||
| Prepaid expenses and other current assets | | 1,561 | | | 1,608 | |
| Total current assets | 29,537 | 43,787 | ||||
| Property and equipment, net | 102 | 71 | ||||
| Right-of-use assets | - | 55 | ||||
| Contract fulfillment assets | 9,611 | 9,232 | ||||
| Other assets | 3,135 | | 2,898 | |||
| Total assets | $ | 42,385 | | $ | 56,043 | |
| Liabilities and stockholders' equity | ||||||
| Accounts payable | $ | 9,079 | $ | 19,847 | ||
| Accrued liabilities | 11,884 | 12,233 | ||||
| Current portion of lease liability | - | 55 | ||||
| Deferred revenue | 12 | | 12 | |||
| Total current liabilities | 20,975 | 32,147 | ||||
| Income tax payable | 1,571 | | 1,528 | |||
| Total liabilities | 22,546 | | 33,675 | |||
| Commitments and contingencies (Note 8) | ||||||
| Stockholders' equity | ||||||
| Common stock, | 43 | 43 | ||||
| Preferred stock, | - | - | ||||
| Additional paid-in capital | 272,662 | 272,285 | ||||
| Accumulated deficit | (252,866 | ) | (249,960 | ) | ||
| Total stockholders' equity | 19,839 | | 22,368 | |||
| Total liabilities and stockholders' equity | $ | 42,385 | $ | 56,043 |
SONIM TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
| Three Months Ended March 31, | ||||||
| 2024 | 2023 | |||||
| Net revenues | $ | 16,776 | $ | 25,801 | ||
| Cost of revenues | 13,874 | 21,626 | ||||
| Gross profit | 2,902 | 4,175 | ||||
| Operating expenses: | ||||||
| Research and development | 456 | 105 | ||||
| Sales and marketing | 2,492 | 1,757 | ||||
| General and administrative | 2,643 | 1,980 | ||||
| Total operating expenses | 5,591 | 3,842 | ||||
| Net income (loss) from operations | (2,689 | ) | 333 | |||
| Other income (expense), net | (92 | ) | 7 | |||
| Net income (loss) before income taxes | (2,781 | ) | 340 | |||
| Income tax expense | (125 | ) | (113 | ) | ||
| Net income (loss) | $ | (2,906 | ) | $ | 227 | |
| Net income (loss) per share: | ||||||
| Basic | $ | (0.07 | ) | $ | 0.01 | |
| Diluted | $ | (0.07 | ) | $ | 0.01 | |
| Weighted-average shares used in computing net income (loss) per share: | ||||||
| Basic | 43,193,720 | 40,907,047 | ||||
| Diluted | | 43,193,720 | | 41,095,901 | | |
Non-GAAP Financial Measures
In addition to our financial results determined in accordance with U.S. GAAP, we believe the following non-GAAP and operational measures are useful in evaluating our performance-related metrics and present them as a supplemental measure of our performance.
Adjusted EBITDA
We define Adjusted EBITDA as net loss adjusted to exclude the impact of stock-based compensation expense, depreciation and amortization, interest expense, and income taxes. Adjusted EBITDA is a useful financial metric in assessing our operating performance from period to period by excluding certain items that we believe are not representative of our core business, such as certain material non-cash items and other adjustments, such as stock-based compensation.
We believe that Adjusted EBITDA, viewed in addition to, and not in lieu of, our reported GAAP results, provides useful information to investors regarding our performance and overall results of operations for various reasons, including: non-cash equity grants made to employees at a certain price do not necessarily reflect the performance of our business at such time, and as such, stock-based compensation expense is not a key measure of our operating performance; and non-cash depreciation and amortization are not considered a key measure of our operating performance. We use Adjusted EBITDA: as a measure of operating performance; for planning purposes, including the preparation of budgets and forecasts; to allocate resources to enhance the financial performance of our business; to evaluate the effectiveness of our business strategies; in communications with our board of directors concerning our financial performance; and as a consideration in determining compensation for certain key employees.
Adjusted EBITDA has limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include: it does not reflect all cash expenditures, future requirements for capital expenditures or contractual commitments; it does not reflect changes in, or cash requirements for, working capital needs; it does not reflect interest expense on our debt or the cash requirements necessary to service interest or principal payments; and other companies in our industry may define and/or calculate this metric differently than we do, limiting its usefulness as a comparative measure.
Set forth below is a reconciliation from net loss to Adjusted EBITDA for the respective periods (in thousands):
| Three Months Ended | ||||||
| March 31, 2024 | December 31, 2023 | |||||
| Net loss | $ | (2,906 | ) | $ | (1,353 | ) |
| Depreciation and amortization | 880 | 956 | ||||
| Stock-based compensation | 324 | 458 | ||||
| Interest expense | - | 4 | ||||
| Income taxes | 125 | 93 | ||||
| Adjusted EBITDA | $ | (1,577 | ) | $ | 158 | |
[*] Sources: QY Research, Industry Today; Insight Partners; GSA; Ericsson; Internal Estimates based on Market Pricing; Statista & Bank My Cell; North America + Europe Android Smartphone estimate valuation (Not including Samsung or Apple)
[†] Non-GAAP financial measure. An explanation and reconciliation of non-GAAP financial measures are presented at the end of this press release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/209081
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